August 10, 2022

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Will the seven-nation policy succeed in banning Russian gold?

Will the seven-nation policy succeed in banning Russian gold?

The British government announced on Sunday that it was blocking Russia’s gold imports, along with the United States, Canada and Japan, as part of new sanctions against Moscow in response to military action in Ukraine.

On the first day of the G7 summit in the German capital, Berlin, a four-part decision was made to discuss strategies to protect the power supply and tackle inflation.

In this case, the US President has announced Joe BidenOn Sunday, his country and a group of seven countries banned the import of Russian gold, the second largest Russian export after energy, which said in a tweet on Twitter: “I have imposed. United States The G7 will jointly announce that it will ban the import of Russian gold, a major export that brings billions of dollars to Russia, at an unprecedented cost to Putin to lose the revenue needed to finance his war against Ukraine.

For his part, British Prime Minister Boris Johnson, who will meet with the leaders of the major industrialized powers in Germany for three days, said, “These actions will directly target the rich of Russian power and overthrow the machinery of government.” Putin Militancy “.

“Putin is wasting his declining resources in this barbaric and useless war. He is feeding his illusion at the expense of the Ukrainian and Russian people,” he added in a statement.

“We have to drain the financial resources for Putin’s regime. This is what we are doing with our allies,” Johnson said.

Observers and economists question the feasibility of this move, considering it more of a campaign than a definitive punitive measure that will have a painful and practical impact on the country. Russian economy.

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They stressed that when sanctions were imposed on Russia’s black gold, the price of oil and its derivatives, such as petrol and diesel, would rise significantly around the world, adding to the problem. To the scene of the severe crisis affecting the world economy.

Commenting on this, former diplomat and US affairs expert Masood Malouf told Sky News Arabia, “In general, sanctions have proved that the countries that impose them do not produce the results they expect and trust. Because, it happened Venezuela For example, in Iraq under Saddam Hussein, and of course in Russia now. “

According to Maalouf, Biden uses: “The embargo was a political tool because he announced the embargo on Russian gold before the summit of the seven-nation summit, which was later adopted by the rest of the group, and it is a decision that will often not lead to the desired outcome in the future, especially in Russia.” I immediately acknowledge that the policy of imposing sanctions on Russia will not work quickly, but that it seeks to weaken Russia’s economic capabilities as much as possible and to attack the sources of funding for the war in Ukraine. “

He continued: “The ban on Russian gold will not have a direct and strong negative impact on the Russians, especially in the coming months, but in the medium term, the Russian economy may also be affected to some extent, because gold exports are an important and important sector in its sectors, especially the country that imports the most gold from Russia.” Since Britain, Moscow may feel some economic downturn, but it will most likely be affected Russian peopleThe Russian leadership will not be affected by this and, therefore, will not contribute to changing its positions and policies.

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In the end, the decision will be binding on only seven countries, as the former ambassador explains, “and it is not possible for these countries to impose sanctions on other countries that have signed an agreement with Russia and bought gold from it.”

In turn, Russian researcher and economist Lana Batfon told Sky News Arabia: “Most EU countries do not buy gold nuggets directly from Russia, which is one of the world’s five largest gold producers. Importantly, according to Russian customs data, the countries that import the most gold from Russia are primarily Switzerland and the United Kingdom, where Russian gold exports, especially London, which includes the world’s largest gold hub, and other European countries do not buy Russian gold in the first place.

He added: “In addition, the movement of gold is like the movement of oil, so it cannot be monitored and controlled, unlike the movement of bank accounts, for example, and so on. Ukrainian crisis Regulation of the Russian gold sector has begun, and the summit seeks to end this pressure by approving a ban on the purchase of gold from Moscow.

However, the Russian economist adds: “But in reality, various Western and European countries cannot impose a complete and complete ban on Russian gold. There are no reserves. Gold makes the consequences of ignoring Russian gold tolerable, so this decision can only be used in the best possible way.

Russia produces about 10 percent of the world’s gold mines each year. Its gold has tripled since it annexed Crimea in 2014.

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Russia’s latest embargo on gold imports is part of a series of sanctions targeting Moscow since the start of the war in Ukraine on February 24.

Russia is the world’s second-largest gold producer, producing more than 331 tonnes last year, according to World Gold Council data.

But the Russian Ministry of Finance produced 346.42 tons of gold in 2021, reaching 340.17 tons from 2020.

Moscow has $ 100 billion to $ 140 billion in gold reserves, which is approximately 20% of the official US estimate of the Russian Central Bank.