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G7 Leaders Announce Ban on Russian Gold as Summit Begins

Britain, the United States, Japan and Canada announced a ban on imports of Russian gold, sales of which totalled $15bn last year, at the start of the G7 three-day summit on Sunday


Hong Kong arrested two men of money laundering after they traded around 8 tonnes of gold and palladium. File photo: Ilya Naymushin, Reuters.

 

Members of the Group of Seven nations announced a ban on Sunday on imports of Russian gold as the G7 summit in the Bavarian Alps got underway – shadowed by war in Ukraine and the threat of energy shortages and a possible food crisis.

The move by Britain, the United States, Japan and Canada aims to tighten the sanctions on Moscow and cut off its funding for the invasion, which began more than four months ago.

“The measures we have announced today will directly hit Russian oligarchs and strike at the heart of Putin’s war machine,” British Prime Minister Boris Johnson said in a statement.

“We need to starve the Putin regime of its funding. The UK and our allies are doing just that.”

A senior US official said the G7 would make an official announcement on the gold import ban on Tuesday.

“This is a key export, a key source of revenue for Russia in terms of their ability to transact with the global financial system,” the official said.

Russian gold exports were worth 12.6 billion pounds ($15.45 billion) last year and wealthy Russians have been buying bullion to reduce the financial impact of Western sanctions, the British government said.

The ban on Russian gold was welcomed by the Ukrainian president’s chief of staff Andriy Yermak, but with a fatal missile strike on Kyiv on Sunday, he urged the G7 to be more aggressive and to impose an embargo on Russian gas.

As well as the gold import ban, G7 leaders were also having “really constructive” talks on a possible price cap on Russian oil imports, a German government source said.

 

Message of Unity

The three-day summit takes place against an even darker backdrop than last year, when British, Canadian, French, German, Italian, Japanese and US leaders met for the first time since the start of the Covid-19 pandemic.

Soaring global energy and food prices are hitting economic growth in the wake of the conflict in Ukraine, with the United Nations warning of an unprecedented global hunger crisis.

Climate change, an increasingly assertive China and the rise of authoritarianism are also set to be on the agenda.

G7 leaders are expected to show a united front on supporting Ukraine for as long as necessary and cranking up pressure on the Kremlin, though they will want to avoid sanctions that could stoke inflation and exacerbate the cost-of-living crisis affecting their own people.

“The main message from the G7 will be unity and coordination of action,” an EU official said.

The G7 leaders are also expected to discuss options for tackling rising energy prices and replacing Russian oil and gas imports.

The summit also provides an opportunity for German Chancellor Olaf Scholz to demonstrate more assertive leadership on the Ukraine crisis.

Scholz vowed a revolution in German foreign and defence policy after Russia’s invasion in February, promising to bolster the military and send weapons to Ukraine. But critics have since accused him of dragging his feet and sending mixed messages.

 

Global Partners

This year Scholz has invited Senegal, Argentina, Indonesia, India and South Africa as partner nations at the summit.

“The summit must send not only the message that NATO and the G7 are more united than ever, but also that the democracies of the world stand together against Putin’s imperialism, just as they do in the fight against hunger and poverty,” Scholz told German parliament this week.

Many countries of the global south are concerned about the collateral damage from western sanctions.

An EU official said G7 countries would impress upon the partner countries that food price spikes hitting them were the result of Russia’s actions and that there were no sanctions targeting food. It was also a mistake to think of the Ukraine war as a local matter.

“It’s more than this. It’s questioning the order, the post Second World War order,” the official said.

 

• Reuters with additional editing by Jim Pollard

Note: This report was updated, with the photo and headline changed on June 26, 2022 following developments at the G7 summit.

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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