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27 Jun, 2022 09:53

Germany puts brake on G7 Russian gold ban

Chancellor Olaf Scholz says the measure has to be decided by the EU, not the Group of Seven leading Western economies
Germany puts brake on G7 Russian gold ban

The US proposal to ban the export of gold from Russia to European countries should be discussed within the EU and not decided by the Group of Seven (G7), German Chancellor Olaf Scholz said in an interview with the TV channel ZDF on Monday.

We are discussing this issue, but it will also have to be discussed within the EU. Therefore, this is not a matter where the G7 will make a final decision,” Scholz stated, noting, however, that those who support anti-Russia sanctions can rely on the fact that the EU will “continue to make sanctions more specific.

Banning Russian gold was first proposed last week by US President Joe Biden as a way to put more pressure on Moscow for its military operation in Ukraine. Then, in a statement on Sunday, London announced that the UK, US, Japan and Canada plan to ban new imports of Russian gold. The ban is expected to come into force shortly and apply to both newly mined and refined gold.

Last week, the head of the European Council, Charles Michel, also said that the EU was mulling an embargo of Russian gold in its new round of anti-Russia sanctions but noted that no final decision has been made.

Russia, which accounts for about 8.5% of global gold production, is the third largest producer after China and Australia. Some analysts say that, similar to what happened with energy, a ban on Russian gold imports will backfire on those who impose it.

Previous Western sanctions have already effectively closed off European and US markets to Russian gold, although experts say that a G7 ban, were it to be passed, could completely cut Russia’s access to the world’s top two gold trading centers, London and New York. However, as with oil and gas, Russia could redirect exports to non-G7 buyers, such as China, India, and the Middle East.

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