After Russian President Vladimir Putin deployed military forces into two breakaway regions of eastern Ukraine, Britain imposed sanctions on Gennady Timchenko and two other billionaires with close ties to him. British Prime Minister Boris Johnson said Russia was heading towards “pariah status” and that the world must now brace for the next stage of Putin’s plan, saying that the Kremlin was laying the ground for a full-scale invasion of Ukraine.
He told parliament that five banks – Rossiya, IS Bank, GenBank, Promsvyazbank, and the Black Sea Bank – as well as three individuals – Timchenko and the Rotenberg brothers – had been sanctioned. However, the Conservative Prime Minister refrained from going after Russia’s largest state banks, cutting off capital to Russian businesses, or expelling other prominent Russian oligarchs from the UK. “It is absolutely vital that we hold in reserve further powerful sanctions…in view of what President Putin may do next,” Johnson said in response to calls for tougher action. Of the five targeted banks, only Promsvyazbank is on the Russian central bank’s list of systemically important credit institutions.
Sberbank and VTB reversed early losses to Avoid Sanctions
Sberbank and VTB, Russia’s two largest banks, reversed early losses to trade higher after avoiding British sanctions. The British government said Timchenko was a major shareholder in Bank Rossiya, which played a role in the destabilization of Ukraine after Russia’s 2014 annexation of Crimea. Following the annexation of Crimea, “Bank Rossiya has supported the consolidation of Crimea into the Russian Federation by integrating the financial system,” according to a statement listing the sanctions. Timchenko, like the Rotenbergs, is a close ally of Putin, according to Johnson.
Since the fall of the Soviet Union in 1991, hundreds of billions of dollars have flowed into London and Britain’s overseas territories from Russia, and London has become the Western city of choice for Russia’s and other former Soviet republics’ super-rich. “We want to stop Russian companies from being able to raise funds in sterling or indeed in dollars,” Johnson said.