- Russian metal producers blocked from profits from the London Metal Exchange and the Chicago Mercantile Exchange, reducing a crucial source of revenue for the Kremlin.
- Joint UK and U.S. action builds on ban of metal imports, targeting $40 billion of Russian exports of aluminium, copper and nickel.
The UK and the U.S. have together announced joint action to clamp down harder on prohibited Russian metal exports, by today bringing the world's two largest metal exchanges into the scope of the existing bans.
The London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME) will no longer trade new aluminium, copper and nickel produced by Russia. Metals are Russia's largest export commodity after energy, though their value has been decreasing since Russia's invasion of Ukraine. In 2022 they were $25 billion, dropping to $15 billion in 2023 due to the efforts of the G7 and allies to curtail the market. Today's action will go further to constrain Russia's ability to make money from its shrinking metals exports, dealing another blow to President Vladimir Putin's funding for his illegal war in Ukraine.
Jeremy Hunt, Chancellor of the Exchequer, said:
Disabling Putin's capacity to wage his illegal war in Ukraine is better achieved when we act alongside our allies. Thanks to Britain's leadership in this area, our decisive action with the U.S. to jointly ban Russian metals from the two largest exchanges will prevent the Kremlin funnelling more cash into its war machine.
Janet L. Yellen, U.S. Secretary of the Treasury, said:
Our new prohibitions on key metals, in coordination with our partners in the United Kingdom, will continue to target the revenue Russia can earn to continue its brutal war against Ukraine.
By taking this action in a targeted and responsible manner, we will reduce Russia's earnings while protecting our partners and allies from unwanted spillover effects.
The Prime Minister first announced the intention to act on banning Russian metals in May 2023. UK legislation to directly ban imports of Russian metals, including aluminium, copper and nickel was introduced in December. Separately, the U.S. put in place tariffs on various Russian metal imports.
Together, the UK and the U.S. have today gone one step further and brought both metal exchanges into the scope of these measures - reinforcing a shared commitment to constrain Russia and support Ukraine. This follows a dialogue between the two countries to maximise the impact of the policy, which is a technically complex measure requiring time to work through the details to ensure its effectiveness and minimise the risk of market disruption.
Metal exchanges provide a central role in facilitating the trading of industrial metals around the globe. The London Metal Exchange and Chicago Mercantile Exchange both have warehouses all over the world. Together, they are the world's two largest metal exchanges and set global benchmark prices for the trade of base metals.
Both the UK and U.S. measures will exempt the existing stock of Russian metal on these global exchanges so they can still be traded and withdrawn. This is to minimise the risk to market stability.
Today's announcement to strengthen the UK's existing ban on Russian metals builds on ongoing work to support Ukraine. Since Putin's full-scale invasion of Ukraine, the UK has introduced the largest and most severe package of sanctions ever imposed on any major economy. Over 2,000 individuals and entities have now been sanctioned, and it is estimated that without sanctions, Russia would have over $400 billion more to fund its war - which could be enough to do so for an additional four years. The UK has also provided almost £12 billion in military, humanitarian and economic support to Ukraine and has often been the first mover on vital lethal aid.
Sanctions Minister Anne-Marie Trevelyan said:
Today's action ratches up economic pressure on Putin, further depriving him of the key resources and revenue streams he needs to fund his illegal war in Ukraine.
We have now imposed extensive trade sanctions on Russian-origin oil, gas, gold, diamonds, iron, steel, and base metals, dealing a heavy blow to Putin's war economy. But we must continue to work with our allies to further tighten the screws on the Kremlin.
Minister for Trade Policy Greg Hands said:
The UK has already imposed the most severe package of bans that we've ever seen on a major economy, including on Russian metals which is Russia's largest export commodity after oil and gas.
Now, we're going even further. By strengthening our sanctions on Russian metals, alongside the U.S., we will reduce Russian revenue which it uses to fund Putin's war machine.
