Friday, May 17, 2024
 
 

U.S. and U.K. take new steps to reduce Russia’s revenue from metals

Impacts will be gradual - Existing stocks held by metals exchanges can still be traded
Russian nickel stocks for export. The country produces six percent of global refined nickel output.

- Advertisement -

On April 12, the U.S. Department of the Treasury, in coordination with the United Kingdom, issued two new prohibitions in order to disrupt the revenue that Russia earns from its export of aluminum, copper, and nickel.

This latest action prohibits the import of Russian-origin aluminum, copper, and nickel into the United States, and limits the use of Russian-origin aluminum, copper, and nickel on global metal exchanges and in over-the-counter derivatives trading. This action solidifies the U.S. Treasury’s implementation of  the G7 Leaders’ Statement to reduce Russia’s revenues from metals.

“Our new prohibitions on key metals, in coordination with our partners in the United Kingdom, will continue to target the revenue Russia can earn to continue its brutal war against Ukraine,” said Secretary of the Treasury Janet L. Yellen in a media statement. She added, “By taking this action in a targeted and responsible manner, we will reduce Russia’s earnings while protecting our partners and allies from unwanted spillover effects.”

U.K. Exchequer swings into tandem action

“Disabling Putin’s capacity to wage his illegal war in Ukraine is better achieved when we act alongside our allies,” said Jeremy Hunt, U.K. Chancellor of the Exchequer. “Thanks to Britain’s leadership in this area, our decisive action with the U.S. to jointly ban Russian metals from the two largest exchanges will prevent the Kremlin funneling more cash into its war machine.”

As a result of the collective actions announced April 12, metal exchanges, like the London Metal Exchange (LME) and Chicago Mercantile Exchange (CME), will be prohibited from accepting new aluminum, copper, and nickel produced by Russia. Metal exchanges provide a central role in facilitating the trading of industrial metals around the globe. By taking joint action, the United States and U.K. are depriving Russia and its metals producers of an important source of revenue.

New rules issued

To implement this policy, Treasury has issued a new determination under E.O. 14068 prohibiting the importation into the United States of aluminum, copper, and nickel of Russian Federation origin produced on or after April 13, 2024 (the “metals”).  The U.S. Treasury also issued a complementary determination under Executive Order (E.O.) 14071 that prohibits the exportation, re-exportation, sale, or supply to any person located in the Russian Federation of (1) warranting services for the metals produced on or after April 13, 2024, on a global metal exchange and (2) services to acquire the metals produced on or after April 13, 2024 as part of the physical settlement of a derivative contract.

Not a panacea

The new measures will have limited impact on current Russian revenues, at least in the short term.  Existing stocks of Russian metal on global exchanges are exempt from the new measures and can still be traded and withdrawn from warehouses. Also, trade of Russian metals outside of the exchanges’ system is not restricted by the sanctions and a gradual increase in Russian metal sales to Asia has been clear since 2022.

Physical supplies of Russian metals to the U.K. itself had already dried up as Britain banned most imports in 2023. Supplies to the United States have also been miniscule as Washington imposed high tariffs on imports of Russian metals last year.

The U.S. has previously imposed sanctions on Russian main gold and diamond producers as well as several Russian copper producers.

The EU still accepts Russian primary aluminum, though some consumers have self-sanctioned.

Russia remains a major metals producer. Its share in global production is five percent of aluminum, six percent of refined nickel and four percent of copper.

 

 

 

- Advertisement -

Subscribe to our newsletter

Latest

Tackling new threats to critical energy infrastructure

The explosions that targeted the Nord Stream pipelines from...

Georgia’s “Foreign Representatives Law” moves forward amid protests

On May 14, Georgia’s parliament approved (84/150) a hotly...

North Macedonia: Sliding back towards the political dark side?

As most analysts predicted after the strong showing of...

A Green 5+1, regional water issues in Central Asia and previewing next year’s Astana International Forum

Kazakhstan’s Astana International Forum (AIF) has been postponed to 2025, as Astana...

Don't miss

Tackling new threats to critical energy infrastructure

The explosions that targeted the Nord Stream pipelines from...

Georgia’s “Foreign Representatives Law” moves forward amid protests

On May 14, Georgia’s parliament approved (84/150) a hotly...

North Macedonia: Sliding back towards the political dark side?

As most analysts predicted after the strong showing of...

A Green 5+1, regional water issues in Central Asia and previewing next year’s Astana International Forum

Kazakhstan’s Astana International Forum (AIF) has been postponed to 2025, as Astana...

Navigating the climate challenges for COP29

The impacts of climate change have become more evident...

Tackling new threats to critical energy infrastructure

The explosions that targeted the Nord Stream pipelines from Russia to Germany in September 2022 and the suspected sabotage of Baltic-connector pipeline, which supplies...

Georgia’s “Foreign Representatives Law” moves forward amid protests

On May 14, Georgia’s parliament approved (84/150) a hotly contested law on “Transparency of Foreign Interests” regulating the amount of aid local civil society...

North Macedonia: Sliding back towards the political dark side?

As most analysts predicted after the strong showing of the nationalist presidential candidate in the first-round presidential elections on April 24, VMRO-DPMNE (Internal Macedonian...

A Green 5+1, regional water issues in Central Asia and previewing next year’s Astana International Forum

Kazakhstan’s Astana International Forum (AIF) has been postponed to 2025, as Astana is diverting financial resources to assist the relief efforts after massive flooding hit several regions....

Navigating the climate challenges for COP29

The impacts of climate change have become more evident as greenhouse gas emissions (GHG) from human activities cause increased heat, drought, floods etc. Changes...

Uzbekistan to mobilize investment in environmental protection, sustainable development

NE Global sat down for an interview, in the Uzbek capital, during the 3rd Tashkent International Investment Forum (TIIF) with Aziz Abdukhakimov, Uzbekistan's Minister of Ecology,...

New wave of U.S. sanctions target Russia’s foreign suppliers and industrial base

On May 1, the U.S. Department of State together with the U.S. Treasury Department unveiled a wide-ranging new list of anti-Russia sanctions covering an...

EU sharply reduces visa access for Ethiopians

 Citing the lack of Ethiopian cooperation to facilitate repatriation of citizens deported from EU member states, the EU Council announced on April 29 a...