Biden: G-7 bans Russian gold imports to strain Putin in Ukraine

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TELFS, Austria — President Biden and several of his Group of Seven Nations counterparts on Sunday announced a ban on new imports of Russian gold — and appeared to be moving toward a consensus on a price cap for Russian gas — to further isolate the country’s financial markets and punish President Vladimir Putin for his invasion of Ukraine.

The ban on gold imports, which could result in a tens of billions of dollars in fines, appeared to be the key new economic sanctions against Russia to get out of the summit. Administration officials declined to comment on whether further punitive action would be taken.

“The United States has imposed unprecedented costs on Putin for denying him the revenue he needs to fund his war against Ukraine,” Biden tweeted Sunday morning, noting that gold “is a major export commodity that Russia enjoys several.” brings in ten billion dollars.”

Biden and other leaders of the industrialized nations began their meetings in southern Germany on Sunday for a summit expected to be dominated by discussions about the aftermath of the war in Ukraine.

Biden, who arrived late Saturday night, attended mass with a US Army priest before starting his day with a bilateral meeting with Chancellor Olaf Scholz to discuss the war.

The two leaders made small talk as Biden, framed by the Alps, joked that he used to ski a lot but hadn’t done so in a while. “It’s beautiful,” he remarked.

The conversation then turned more serious, with Biden thanking Scholz for Germany’s determination and ability to hold the alliance together. “We have to stay together. Because Putin expected from the start that NATO and the G-7 would somehow fragment,” said Biden. “But we haven’t, and we won’t.”

In the afternoon, leaders at the summit announced a new global infrastructure investment program aiming to mobilize $600 billion in public and private investment by 2027 in energy infrastructure in low- and middle-income countries. It aims to counter ambitious spending around the world by China, which has invested heavily in Africa and Asia as part of its Belt and Road initiative.

“Our nations and our world are at a real turning point in history,” Biden said.

Some of the initial plans Biden administration officials have highlighted include a $2 billion project to develop a solar panel project in southern Angola; the construction of telecommunications cables that would connect Singapore to France via Egypt and the Horn of Africa and expand high-speed Internet access; and the construction of a large multi-vaccine manufacturing facility in Senegal.

The day also included evidence of disagreements between some of the country’s leaders, including French President Emmanuel Macron and British Prime Minister Boris Johnson.

In a statement, Downing Street said Johnson had “stressed” to Macron that “any attempt to settle the [Ukraine] Conflict now will only create lasting instability and give Putin permission to manipulate both sovereign countries and international markets in perpetuity.”

The comments appeared to be criticisms of Macron’s comments in mid-June that Ukrainian President Volodymyr Zelenskyy and his officials must eventually negotiate with Russia. Before Macron, Scholz and other European leaders traveled to the Ukrainian capital of Kyiv, those comments raised concerns among Ukrainian officials that France and Germany could push for talks with Russia as the economic toll of the war mounts.

Russia earned nearly $100 billion from fuel exports in the first 100 days of the war, the report said

French officials have dismissed those concerns, making it clear that it is up to Ukraine to determine when the time comes for talks. A spokesman for the French Presidency said Sunday that Macron and Johnson “had a conversation on Ukraine, in which the President strongly reaffirmed his determination to support Ukraine.”

France has supplied or pledged almost a quarter of its existing stockpile of Caesar artillery weapon systems to Ukraine, and the country’s reduced reliance on Russian fossil fuels allowed France to become an early advocate of an EU embargo on Russian oil.

But both Macron and Scholz have spoken to Putin on several occasions since the invasion, which caused criticism, especially in Eastern Europe.

The United States has been pushing for an agreement on a price cap on Russian oil imports to hamper Moscow’s ability to finance the war. G-7 leaders are moving towards consensus on a price cap, according to a person with knowledge of Sunday’s discussions, who spoke on condition of anonymity to discuss the private talks.

The goal is to simultaneously cap the amount nations pay for Russian oil, hoping to hamper Moscow’s ability to fund the war while trying to curb inflation at the fuel pump. Rising oil prices have taken some of the bite out of countries’ efforts to diversify from Russian energy, as Moscow is being paid more for smaller volumes.

To encourage other countries to participate, leaders discussed ways in which Russian oil that does not meet the price cap can become difficult to insure or ship.

During Sunday’s meeting, Macron stressed that a price cap should also apply to gas. Price caps on Russian natural gas flowing in pipelines to Europe are said to be easier to enforce because the infrastructure prevents it from being sold elsewhere.

Scholz has warned that an oil price cap would only make sense if all buyers were on board. “The issues to be resolved are not trivial ones,” said a German official. “But we are well on our way to finding an agreement.”

Italian Prime Minister Mario Draghi expressed concern about the potential political impact of rising prices. “The energy crisis must not provoke a return of populism,” he said, according to the interlocutor.

“Capping the price of fossil fuels imported from Russia has both a geopolitical and an economic and social objective,” Draghi said. “We have to reduce our funds for Russia. And we need to eliminate one of the root causes of inflation.”

Biden seeks a dramatic increase in aid to Ukraine

During a background briefing with reporters ahead of the summit, government officials saw the move to ban gold imports as important evidence that the world’s largest economies are prepared to continue punishing Russia, one of the world’s largest gold exporters. The official announcement will come Tuesday, according to government officials, and the US Treasury Department will make a formal decision to ban new gold imports.

“The US has brought the world together by imposing rapid and significant economic costs to deny Putin the revenue he needs to fund his war,” one of the officials said, speaking on condition of anonymity in accordance with ground rules for the briefing .

The official hinted at additional steps that could be taken to further isolate Russia, but indicated these would be in the coming weeks and not immediately at the summit.

“This is an important export, an important source of income, an important alternative for Russia in terms of its ability to do business in the global financial system,” the official said. “This move cuts off that capacity and is yet another continuing example of the types of steps the G-7 can take collectively to continue isolating Russia and cutting it off from the global economy.”

One goal of the United States and its international partners, the official said, would be to prevent Russia – which has found ways around previous sanctions – from circumventing the import ban. The fact that they have moved towards a ban on gold imports was effectively a sign that other avenues for Russia to access global financial markets were being cut off, according to government officials.

Russian oligarchs, for example, have tried to buy bullion to avoid the financial fallout from Western sanctions, and G-7 leaders hope this will send another signal to Putin’s top allies.

“The measures announced today will hit the Russian oligarchs directly and hit the heart of Putin’s war machine,” Johnson said in his own announcement to ban gold imports.

“We must starve the Putin regime of funding,” he added. “The UK and our allies are doing just that.”

Ashley Parker in Telfs and Annabelle Timsit in London contributed to this report.

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