What sanctions could Russia face if it invades Ukraine?

Western countries have threatened a range of economic and financial sanctions against Russia if president Vladimir Putin gives the go-ahead to invade Ukraine, which the UK says is now already underway.

About 130,000 Russian troops have gathered on the Ukrainian border this winter, prompting frantic diplomatic efforts to prevent a war, with the likes of US secretary of state Antony Blinken, UK foreign secretary Liz Truss, French president Emmanuel Macron and German chancellor Olaf Scholz all visiting Moscow in the hope of persuading Mr Putin to pull back from the brink and avoid a return to Cold War hostilities.

But those efforts appear to have finally failed, with Russia moving to formally recognise the breakaway eastern regions of Donestk and Luhansk as independent states and move its own forces into those regions in the interest of “protecting” its allies.

UK defence secretary Ben Wallace said those areas have been “effectively annexed” from Ukraine while prime minister Boris Johnson has already promised that Russia will face a “barrage of sanctions”, which he is expected to unveil before Parliament on Tuesday, with the US and EU expected to take similar actions, probably targeting specific industries and businesses, as took place after the annexation of Crimea in 2014.

Russian foreign secretary Sergey Lavrov has so far dimissed the threats, declaring: “Our European, American, British colleagues will not stop and will not calm down until they have exhausted all their possibilities for the so-called ‘punishment of Russia’. They are already threatening us with all manner of sanctions or, as they say now, ‘the mother of all sanctions’.

“Well, we’re used to it. We know that sanctions will be imposed anyway, in any case. With or without reason.”

Below are some of the possible sanctions that could hit Russia if the assault on Ukrainian sovereignty does go ahead.

Swift financial exclusion

One approach that could be considered by Western allies would be to exclude Russia from the Swift global payments system.

Swift moves money from bank to bank around the globe and would be one of the toughest financial steps the allies could take, damaging Russia‘s economy immediately and in the long term.

The move could cut Russia off from most international financial transactions, including international profits from oil and gas production, which, in all, accounts for more than 40 per cent of the country’s revenue.

Asked about the Swift payment system and whether Britain would ban Russia, Mr Johnson said earlier this month: “There is no doubt that that would be a very potent weapon. I’m afraid it can only really be deployed with the assistance of the United States though. We are in discussions about that.”

Block access to US dollar

The US could block Russia from access to the US dollar. The American currency still dominates in financial transactions around the world, with trillions of dollars in play daily.

Transactions in dollars are cleared through the US Federal Reserve or through US financial institutions.

Many Russians and Russian companies would be stymied in carrying out even the most routine transactions, like making payroll or buying things, because they would have no access to the US banking system.

Previously, the US has suspended financial institutions from dollar clearing for allegedly violating sanctions against Iran, Sudan and other countries.

US president Joe Biden indicated to reporters that cutting off Russia and its citizens’ ability to deal in dollars was one of the options his country was considering.

Export controls

White House press secretary Jen Psaki has confirmed that the US is considering imposing export controls.

This would potentially cut Russia off from the technology that helps warplanes and passenger jets fly and renders smartphones smart, along with the other software and advanced electronic gear that makes the modern world run.

That could include adding Russia to the most restrictive group of countries for export control purposes, together with Cuba, Iran, North Korea and Syria, officials said.

Russia‘s ability to obtain integrated circuits, and products containing integrated circuits, would therefore be affected. The impact could extend to aircraft avionics, machine tools, smartphones, game consoles, tablets and televisions.

Energy restrictions

Mr Scholz has already announced that the Nord Stream 2 natural gas pipelinewill be blocked in retaliation for Russian aggression.

Mr Scholz said Berlin would have to “reassess” the project in light of recent developments, warning: “That will certainly take time, if I may say so.”

The 745-mile undersea pipeline directly links Russian gas to Europe via Germany and is complete but not yet operating.

Had it been given the go-ahead, Nord Stream 2 would have enabled Russia to pump an estimated additional 55 billion cubic metres of gas to Germany each year, doubling its present capacity and increasing its regional energy dominance.

Mr Biden had already warned the lucrative pipeline would be halted if Russia invaded Ukraine.

And, in a message to the European allies, Mr Johnson had said they needed to end their reliance on Russia’s natural gas in the near-future.

“What I think all European countries need to do now is get Nord Stream out of the bloodstream,” he said.

“Yank out that hypodermic drip feed of Russian hydrocarbons that is keeping so many European economies going.”

Targeting the elites

Ms Truss has previously warned “there would be nowhere to hide for Putin’s oligarchs“ if Russia did invade Ukraine.

These powerful business tycoons could well be targeted alongside Mr Putin, his family, friends and immediate inner circle.

The US and Western allies have already formed a list of who they would target if an invasion did occur.

Ms Psaki has meanwhile told reporters: “The individuals we have identified are in or near the inner circles of the Kremlin and play a role in government decision-making or are at a minimum complicit in the Kremlin’s destabilising behaviour.”

Meanwhile, Ms Truss said planned legislation will give London new powers to target companies linked to the Russian state.

Additional reporting by agencies