G-7 will declare a boycott on gold export to Russia

G-7 will declare a boycott on gold export to Russia

In reaction to the situation in Ukraine, the G-7 will declare a boycott on Russian gold.

The latest in a series of penalties that the club of democracies believes would further isolate Russia economically over its invasion of Ukraine. 

President Joe Biden said on Sunday that the United States and other Group of Seven significant nations would restrict imports of gold from Russia.

As the leaders meet for their annual summit, a formal statement was anticipated for Tuesday.

MORE: Vladimir Putin schedules his first foreign trip since the Ukraine war.

To prevent the impact of Russia’s invasion of Ukraine from fracturing the international coalition attempting to punish Moscow, Biden and his counterparts will meet on Sunday, the first day of the summit, to discuss how to secure energy supplies and combat inflation.

Russian missile attacks on the Ukrainian capital occurred on Sunday, hours before the meeting was scheduled to begin officially. According to Kyiv Mayor Vitali Klitschko, at least two residential structures were hit. They were Russia’s first such attacks in three weeks.

According to senior Biden administration officials, gold is Moscow’s second-largest export after energy, and a restriction on imports would make it harder for Russia to engage in international markets. 

Before the announcement, the officials discussed specifics while maintaining their anonymity.

Tuesday will see the U.S. Treasury released a decision to forbid the entry of new gold into the country, further isolating Russia from the rest of the world’s economies by barring its participation in the gold market, according to a senior administration official.

According to British Prime Minister Boris Johnson, the embargo on Russian gold would “directly hurt Russian billionaires and strike at the core of Putin’s war machine.” But, of course, Johnson was alluding to Russian President Vladimir Putin.

“Putin is wasting his limited resources on this cruel and useless conflict. He is supporting his ego at the cost of the people of Russia and Ukraine, “said Johnson. “We must stop providing financial support to the Putin administration.”

According to the White House, gold will account for almost $19 billion, or approximately 5% of global gold exports, in 2020, making it the second-largest export from Russia in recent years behind energy.

Ninety percent of Russian gold shipments were bound for the G-7 nations. Over 90%, or over $17 billion, of these Russian exports went to the U.K. 

The U.S. imported less than $200 million in gold from Russia in 2019 and less than $1 million each in 2020 and 2021.

Biden joined his peers for the annual gathering of the top democratic economies in the globe early on Sunday morning in Germany’s scenic Bavarian alps. 

Their conversations will be dominated by the effects of the horrific conflict in Ukraine. 

As the war approaches its fourth month, Biden and the allies want to put out a unified face in favor of Ukraine.