Western leaders may announce bans on Russian gold imports

Image via AP.

President Joe Biden and western allies opened a three-day summit in the Bavarian Alps on Sunday intent on keeping economic fallout from the war in Ukraine from fracturing the global coalition working to punish Russia’s aggression.

Britain’s Boris Johnson warned the leaders not to give in to “fatigue” even as Russia lobbed new missiles at Kyiv.

The leaders were set to announce new bans on imports of Russian gold, the latest in a series of sanctions the club of democracies hopes will further isolate Russia economically. They also were looking at possible price caps on energy meant to limit Russian oil and gas profits that Moscow can pump into its war effort.

Biden on Sunday was formally launching a global infrastructure partnership designed to counter China’s influence in the developing world. The initiative aims to leverage $600 billion with fellow Group of Seven countries by 2027 to spend on global infrastructure projects.

U.S. officials have long argued that China’s infrastructure initiative traps receiving countries in debt and with investments that benefit China more than their hosts.

Russia, in a pre-summit show of force, launched its first missile strikes against the Ukrainian capital in three weeks, striking at least two residential buildings, according to Kyiv Mayor Vitali Klitschko.

Biden condemned Russia’s actions as “more of their barbarism,” and stressed the need for allies to remain firm even as the economic reverberations from the war take an economic toll around the globe.

“We have to stay together, because Putin has been counting on, from the beginning, that somehow NATO and the G-7 would splinter, but we haven’t and we’re not going to,” Biden said during a pre-summit meeting with German Chancellor Olaf Scholz, who holds the G-7′s rotating presidency and is hosting the gathering.

As the G-7 leaders sat down for their opening session of the summit on Sunday, they took a light-hearted jab at Russia President Vladimir Putin. Johnson could be heard asking whether he should keep his jacket on, adding, “We all have to show that we’re tougher than Putin.” Canadian Prime Minister Justin Trudeau chimed in: “A bare-chested horseback ride.”

Over the years, the Kremlin has released several photos of the Russian leader in which he appears shirtless.

Biden and his counterparts were using the gathering to discuss how to secure energy supplies and tackle inflation triggered by the war’s fallout. The leaders also were coming together in a new global infrastructure partnership meant to provide an alternative to Russian and Chinese investment in the developing world.

Scholz told Biden that the “good message” is that “we all made it to stay united, which Putin never expected.”

“We can’t let this aggression take the form it has and get away with it,” added Biden.

Scholz, who has faced criticism at home and abroad for perceived reluctance to send Ukraine heavy weapons, said “Germany and the U.S. will always act together when it comes to questions of Ukraine’s security.”

Johnson, for his part, urged fellow leaders not to give in to “fatigue.” He has expressed concern that divisions may emerge in the pro-Ukraine alliance as the four-month-old war grinds on.

Asked whether he thought France and Germany were doing enough, Johnson praised the “huge strides” made by Germany to arm Ukraine and cut imports of Russian gas. He did not mention France.

Biden and Scholz agreed on the need for a negotiated end to the Ukraine war, but did not get into specifics on how to achieve it, said a senior Biden administration official, who requested anonymity to reveal details of a private conversation.

However, they did not have an extensive discussion about oil price caps or inflation, said the official.

Other leaders echoed Biden’s praise of coalition unity.

The head of the European Union’s council of governments said the 27-member bloc maintains “unwavering unity” in backing Ukraine against Russia’s invasion with money and political support, but that “Ukraine needs more and we are committed to providing more.”

European Council President Charles Michel said EU governments were ready to supply “more military support, more financial means, and more political support” to enable Ukraine to defend itself and “curb Russia’s ability to wage war.”

The EU has imposed six rounds of sanctions against Russia, the latest one being a ban on 90% of Russian crude oil imports by the end of the year. The measure is aimed at a pillar of the Kremlin’s finances, its oil and gas revenues.

Biden and the leaders of Britain, Canada, France, Germany, Italy and Japan, plus the EU, spent Sunday in both formal and informal settings discussing the war’s effects on the global economy, including inflation, and on infrastructure.

Biden, who arrived in Germany early Sunday, said G-7 nations, including the United States, will ban imports of gold from Russia. A formal announcement was expected Tuesday as the leaders hold their annual summit.

Senior Biden administration officials said gold is Moscow’s second biggest export after energy, and that banning such imports would make it more difficult for Russia to participate in global markets. The officials spoke on condition of anonymity to discuss details before the announcement.

Johnson said the ban will “directly hit Russian oligarchs and strike at the heart of Putin’s war machine.”

“Putin is squandering his dwindling resources on this pointless and barbaric war. He is bankrolling his ego at the expense of both the Ukrainian and Russian people,” Johnson said. “We need to starve the Putin regime of its funding.”

Gold, in recent years, has been the top Russian export after energy — reaching almost $19 billion or about 5% of global gold exports, in 2020, according to the White House.

Of Russian gold exports, 90% was consigned to G-7 countries. More than 90% of those exports, or nearly $17 billion, was exported to the UK. The United States imported less than $200 million in gold from Russia in 2019, and under $1 million in 2020 and 2021.

As for the idea of price caps on energy, Michel said, “we want to go into the details, we want to fine-tune … to make sure we have a clear common understanding of what are the direct effects and what could be the collateral consequences” if such a step were to be taken by the group.

Leaders were also set to discuss how to maintain commitments addressing climate change while also solving critical energy supply needs brought on by the war.

“There’s no watering down of climate commitments,” John Kirby, a spokesman for Biden’s National Security Council, said Saturday as the president flew to Germany.

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Republished with permission from The Associated Press.