Russia-Ukraine war: Japan and Switzerland to join sanctions against Russia

The Russian invasion of Ukrainian has stretched into a fifth day.

 A model airplane is displayed on EU and Russian flags with words "Airspace closed" in this illustration taken, February 27, 2022. (photo credit: REUTERS/DADO RUVIC/ILLUSTRATION)
A model airplane is displayed on EU and Russian flags with words "Airspace closed" in this illustration taken, February 27, 2022.

In an indication of the fallout of a fresh round of sanctions, the European Central Bank on Monday warned that Sberbank Europe, a unit of Russia's Sberbank SBER.MM, and two other subsidiaries under its watch "are failing or likely to fail".

The ECB said it was "owing to a deterioration of their liquidity situation", while Austria's Financial Market Authority said it imposed a moratorium on Sberbank Europe, which is based in the country.

European stocks slumped on Monday as Western countries imposed tough new sanctions on Russia following its invasion of Ukraine, while soaring oil prices fed into fears of runaway inflation.

By 0810 GMT, the pan-European STOXX 600 index .STOXX fell 2.1%. The German DAX dropped .GDAXI dropped 2.0%, while the UK's FTSE 100 fell 0.9%.

Crude oil jumped almost 5% while Russia's rouble plunged nearly 30% to a record low after Western nations imposed sanctions including blocking big Russian banks from the SWIFT global payments system.

 An Ukrainian Territorial Defence fighter examines a destroyed Russian infantry mobility vehicle GAZ Tigr after a fight in Kharkiv on February 27, 2022.  (credit: SERGEY BOBOK/AFP via Getty Images) An Ukrainian Territorial Defence fighter examines a destroyed Russian infantry mobility vehicle GAZ Tigr after a fight in Kharkiv on February 27, 2022. (credit: SERGEY BOBOK/AFP via Getty Images)

European banks most exposed to Russia, including Austria's Raiffeisen Bank RBIV.VI, UniCredit CRDI.MI and Societe Generale SOGN.PA, dropped between 6.3% and 15.8%, while the wider euro zone banking index .SX7E fell 5.2%.

Britain said on Monday it was taking further measures against Russia in concert with the United States and European Union, effectively cutting off Moscow's major financial institutions from Western financial markets.

Britain banned any British entities from undertaking transactions with the Russian central bank, finance ministry and wealth fund, and said it would prevent Russian companies from issuing transferable securities and money market instruments in the United Kingdom.

"The UK Government will immediately take all necessary steps to bring into effect restrictions to prohibit any UK natural or legal persons from undertaking financial transactions involving the CBR, the Russian National Wealth Fund, and the Ministry of Finance of the Russian Federation," the government said.

Britain said it would have "a power to prevent designated banks from accessing Sterling and clearing payments through the UK."

Britain will lead international efforts to see Russia suspended from the global police agency Interpol, interior minister Priti Patel said on Monday, after the invasion of Ukraine.

"The Ukrainian government has today requested that the Russian government be suspended from its membership of Interpol and we will be leading all international efforts to that effect," Patel told parliament.

"These measures demonstrate our determination to apply severe economic sanctions in response to Russia's invasion of Ukraine," finance minister Rishi Sunak said.

The new sanctions also include further restrictions against Russian financial institutions and a set of measures to strengthen trade restrictions against Russia. More designations will be announced this week, Britain said.

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UK stocks dropped on Monday after Western nations imposed tough new sanctions on Russia for its invasion of Ukraine, while oil major BP slid following its decision to exit the oil-rich country by abandoning its stake in Russian oil giant Rosneft.

The blue-chip FTSE 100 .FTSE fell 1.0% in early trading, while the domestically focussed mid-cap index .FTMC dropped 0.8%.

Oil major BP BP.L declined 4.9% after it said it had decided to exit its 19.75% stake in Rosneft ROSN.MM after Russia's invasion of Ukraine.

The Russian central bank on Monday raised its key interest rate to 20% from 9.5% to counter risks of rouble depreciation and higher inflation.

The rouble hit a low of 120 to the dollar on electronic currency trading platform EBS after President Vladimir Putin ordered his military command to put nuclear-armed forces on high alert on Sunday, while the West imposed harsh sanctions against Russia.

The Russian finance ministry and the central bank plan to order domestic exporting companies to sell their foreign exchange revenues from Feb. 28, they both said in a statement on Monday.

The exporters should sell 80% of all forex revenues they are receiving under their export contracts, the statement said.

Greece on Monday closed its airspace for all Russian aircraft in line with a European Union decision, the country's civil aviation authority said.

Only humanitarian and emergency flights will be allowed under a notice issued by the Greek authority. The notice will apply for three months, the authority said.

Japan is to join the international sanction on Russian central bank by limiting transactions, prime minister Fumio Kishida said on Monday after speaking with Ukraine's President Volodymyr Zelenskiy by telephone.

Kishida also said Japan will put sanctions on Belarusian individuals and organizations including President Alexander Lukashenko, as well as limit exports given the country's "evident involvement in the invasion" of Ukraine.

Switzerland's President Ignazio Cassis announced that Switzerland will be joining EU sanctions decisions against Putin, Mishustin and Lavrov, according to Ria News.

He also announced that from 5 p.m. Moscow time Switzerland will be closing its airspace to all flights from Russia and any aircraft with Russian markings.

The International Olympic Committee said on Monday its executive board had recommended that international sports federations ban Russian and Belarusian athletes and officials from competing in events.

The IOC said it made the decision "in order to protect the integrity of global sports competitions and for the safety of all the participants."

The IOC also urged federations to ensure that no athlete or sports official from Russia or Belarus would be allowed to take part under the name of Russia or Belarus.

The Ukrainian central bank said on Monday it had asked European central banks and the fast money transfer system Western Union to stop the supply of foreign currency notes to Russia and Belarus in the wake of the invasion of Ukraine.

"I believe that for peace in Ukraine our colleagues and partners will stop supplying cash foreign currency to the banks of the aggressor countries," central bank governor Kyrylo Shevchenko said in a statement.

Canada banned its banks from any transactions with the Bank of Russia and blocked the assets of the NWF and transactions with them.