Boris Johnson faced widespread criticism on Tuesday that the British sanctions announced in response to Russian troops crossing into eastern Ukraine were not tough enough.
The reaction came after the UK prime minister announced punitive measures in the House of Commons that targeted five medium-sized or small Russian banks and three billionaires close to Vladimir Putin.
The move followed the Russian president’s decision on Monday night to recognise the separatist rebel enclaves in Ukraine’s Donbas region and send in the military.
But in light of Germany taking the big step of pulling the plug on the Nord Stream 2 gas pipeline earlier in the day, many British MPs were disappointed that Johnson’s promised “first barrage” of sanctions against Russia was not more robust.
Johnson claimed the measures were “draconian” but Sir Iain Duncan Smith, former Conservative leader, warned they did not go nearly far enough to “hit” the Russian government.
Duncan Smith told MPs that Britain needed to hit Russia “hard and hit them now”. Liberal Democrat leader Sir Ed Davey urged the UK to seize assets belonging to “Putin’s cronies” in London.
Sir Keir Starmer, Labor leader, “understood” why sanctions were being held back to deter further Russian aggression, but said: “A threshold has already been breached. A sovereign nation has been invaded. ”
Starmer called for Russia to be excluded from financial mechanisms such as the Swift international payments system, a ban on trading the country’s sovereign debt and for RT, the Kremlin-backed news channel, to lose its license, preventing it “from broadcasting propaganda around the world ”.
In what he described as the “first tranche” of sanctions, Johnson announced an asset freeze and a ban on entering the UK on three oligarchs: Gennady Timchenko, and Boris and Igor Rosenberg. All three are already on the US sanctions list.
Assets of five Russian banks, which Johnson claimed were involved in bankrolling the Russian invasion, were frozen with immediate effect. They include Bank Rossiya, which Britain claims is particularly close to the Kremlin, Black Sea Bank for Development and Reconstruction, IS Bank and GenBank.
The assets of Promsvyazbank, a bank with close links to Russia’s defense sector, have also been frozen. It is the only institution among the country’s top 10 biggest banks that was targeted.
Tom Keatinge, an expert in finance and security at the Royal United Services Institute think-tank, was dismissive of the UK measures. “All the talk on sanctions so far has meant to be a deterrent and we have turned up to a gunfight with a peashooter.”
Jason Hungerford, partner specializing in sanctions at Mayer Brown, agreed. “To say the UK sanctions list is underwhelming is an understatement,” he said. He added: “Clamping down on those banks is not going to change the Russian economy a whole lot. The individuals are a bit more interesting – but they have been sanctioned by the US for some time. ”
Anton Lopatin, senior director at Fitch Ratings, said: “Promsvyazbank is the largest bank in this list, but this is a bank focused on military financing. It operates with companies operating in the defense industry. Adding it to the UK sanctions list will have very little impact. ”
Johnson insisted Britain would impose much tougher sanctions if Putin ordered troops further into Ukraine. He said those measures would include “stopping Russian companies raising money on London markets or stopping them even trading in pounds and dollars”.
British officials said the sanctions package was being “closely co-ordinated” with allies and that new measures were “ready to go”. Downing Street has said Russian aggression so far did not amount to “a full-scale invasion”.
Johnson said: “We will continue to punish Russia and, in the end, I do not believe that President Putin has thought this through – I do think that he will fail.”
Subsequently, Liz Truss, UK foreign secretary, said Britain would “prohibit a range of high tech exports and further isolate Russian banks from the global economy” if Putin did not “pull back from the brink”.
Britain would also sanction members of the Russian parliament who voted to recognize the independence of Donetsk and Luhansk, while no UK individual or business would be allowed to deal with non-Kyiv-controlled regions in eastern Ukraine, she added.