Western sanctions have begun to be imposed on Russia after Vladimir Putin recognized the independence of the Ukrainian regions of Donetsk and Luhansk and announced the deployment of "peacekeeping" troops to those areas, a move that has been seen as a prelude to an invasion
U.S. President Joe Biden announced on Tuesdaya package of measures that includes "total freeze sanctions"against two major Russian financial institutions: the Russian Military Bank and VEB, the state-owned bank responsible for supporting economic development, managing government debt, and overseeing pension funds.
Biden announced additional sanctions aimed at targeting Russia's sovereign debt, "which means we are cutting off the Russian government from Western finances."
The president considered Putin's move to be"the start of a Russian invasion," which amounts to a "flagrant violation of international law."
A Russian aluminum giant with experience dealing with U.S. sanctions has just taken a beating.
United Co. Rusal International fell as much as 22% in Hong Kong as investors monitored the dramatic escalation in the West’s standoff with Moscow over Ukraine. That is the biggest drop since April 2018, when Rusal was hit by a previous round of U.S. sanctions in response to what the U.S. Treasury called Russia’s “malign activity around the world.”
The crisis in Ukraine is increasing risks for the leading aluminum producer amid fears that rising tensions or further conflict in Ukraine could disrupt trade flows or trigger new sanctions against Russian entities. The U.S. administration said it will announce new sanctions on Tuesday, although it is unclear what they might entail.
Rusal's stock fell to its lowest level since September, when the ruble weakened and oil prices rose.
Russia's aluminum exports come largely from Rusal and account for about 5% of global production. Sanctions imposed on the company in 2018 disrupted the global market and led to higher prices, as well as complaints from manufacturers struggling to find the metal.
Read more about Russia's move to recognize two separatist republics.
While the United States and its allies have said that Russia is preparing to attack its smaller neighbor, Moscow has repeatedly denied such plans.
Aluminum rose Tuesday to its highest intraday level in more than 13 years and is nearing an all-time high. The metal rose 1.2% to $3,319 per metric ton at 11:50 a.m. Shanghai time. Nickel, of which Russia is also a major producer, rose to its highest level since 2011.
Rusal was among the largest companies the United States has ever included on its sanctions list. The previous restrictions were lifted in January 2019 after Rusal's billionaire founder, Oleg Deripaska, agreed to relinquish control.
