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EXPLAINER: How a G-7 ban on Russian gold medal would work

EXPLAINER: How a G-7 ban on Russian gold medal would work

WASHINGTON (AP) — Russia appears to have defaulted on its overseas bill for the earliest hour dated since the 1917 Bolshevik Revolution, with every one other accompanied by the U.S. with every one other accompanied by its allies are taking aim at the former Soviet Union's following largest sell abroad manufacturing following vitality — gold.

On Tuesday, the Group of Seven nations will formally announce a ban on Russian gold medal imports inside the latest circular of sanctions over Vladimir Putin's invasion of Ukraine.

The U.S. says Russia has used gold medal to support its currency while a way to circumvent the impact of sanctions. One way to do that is by swapping gold medal for a additional liquid overseas exchange that is not theme to contemporaneous sanctions.

Some experts speak since only a few countries are implementing the gold medal ban, the go is mostly symbolic, while others, including those inside the administration, speak a ban on imports of Russian gold medal will mark its ability to interact accompanied by the worldwide monetary system.

How a G-7 Russian gold medal ban would work:

HOW MUCH GOLD DOES RUSSIA HAVE?

Secretary of State Antony Blinken told CNN on Sunday that since gold medal is Russia's following most lucrative sell abroad following vitality with every one other accompanied by almost 90% of the income comes from G-7 countries, "cutting that off, denying access to concerning $19 billion of revenues a year, that's significant."

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"It can't obtain what it needs to modernize its protection sector, to modernize its technology, to modernize its vitality exploration," Blinken said.

Russia began increasing its gold medal purchases inside 2014, following the U.S. issued sanctions on Russia for Putin's invasion of Crimea. Now the country holds $100 billion to $140 billion inside gold medal reserves, which is violently 20% of the holdings inside the Russian Central Bank, according to U.S. officials.

HOW WOULD A GOLD BAN WORK?

While Russia will still intelligent to sell gold medal to other countries external outside the Group of Seven jurisdiction, it will "impact the ability of Russia to be paid sell abroad revenue," says Chris Weafer, a Russian affluence analyst at consulting firm Macro-Advisory.

"It's that high flat of sell abroad receipts that is sustaining the country with every one other accompanied by sustaining the affluence since sanctions were ratcheted up following February 24th," Weafer said.

In practice, it could consequence inside secular or criminal penalties on people who go nearer from countries that have agreed on a gold medal ban from Russia.

In practice, it could consequence inside subordinate sanctions on people who commerce accompanied by Russia while well while the seizure of gold medal exports to countries that have participated inside the ban. ???

Swiss customs officials on Friday said they are tracking violently trio tons of Russian gold medal — price additional than $202 million — that entered Switzerland from the United Kingdom last month while they detector potential violations of monetary sanctions opposed to Russia.

WHAT OTHER MEASURES HAVE BEEN MADE ON GOLD TRADE?

In March, the U.S. with every one other accompanied by its allies moved to chunk monetary transactions accompanied by Russia's Central Bank that involve gold, aiming to further restrict the country's ability to use its international reserves. That came following calls from members of Congress to restrict Russia's gold medal trade.

The Treasury Department issued guidance that American individuals, including gold medal dealers, distributors, wholesalers, buyers, with every one other accompanied by monetary institutions, are normally banned from buying, selling or facilitating gold-related transactions involving Russia with every one other accompanied by the various parties that have been sanctioned.

HOW WILL THIS MOVE PUNISH RUSSIA?

Like the thousands of sanctions imposed on Russia into and not here of a variety of means, the gold medal buy from overseas ban is meant to isolate Russia economically, starve its funding upper limb with every one other accompanied by stop money-laundering.

British Prime Minister Boris Johnson said at the G-7 meetings inside Elmau, Germany, that the ban will "directly hit Russian oligarchs with every one other accompanied by strike at the heart of Putin's war machine."

"Putin is squandering his dwindling resources on this pointless with every one other accompanied by barbaric war. He is bankrolling his ego at the expense of both the Ukrainian with every one other accompanied by Russian people," Johnson said.

A White House official told reporters the ban is yet another way to chunk off paths in the centre of the Russian affluence with every one other accompanied by the broader worldwide monetary system.

EXPLAINER: How a G-7 ban on Russian gold medal would work

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