The Group of Seven (G7) finance ministers held an online meeting on Wednesday (October 1st), agreeing to take united action to increase pressure on Russia to end the Russia-Ukraine war.
In a joint statement, the finance ministers announced that the G7 would implement significant escalation of sanctions. These actions will not only target countries continuing to purchase Russian energy but also commit for the first time to coordinate the use of frozen “Russian Sovereign Assets” (RSAs) within their respective legal frameworks to support Ukraine.
The G7 condemned Russia’s escalating actions, including violations of NATO airspace, intensified attacks on civilians, and the destruction of Ukrainian government and diplomatic infrastructure, deeming such unacceptable behaviors as “undermining efforts for peace.”
One of the central objectives of this action is to target Russia’s major source of revenue – energy exports. According to the joint statement, the G7 will focus on buyers “continuing to increase Russian oil purchases” and entities that facilitate circumventing sanctions.
This signifies the G7’s sanctions scope officially expanding from Russia itself to third-party countries purchasing Russian energy.
“We collectively believe it is time to exert maximum pressure on Russia’s oil exports – its primary source of revenue,” the statement read. “We will target those buyers who have continued to increase Russian oil purchases since Russia’s invasion of Ukraine, as well as those facilitating the circumvention of sanctions.”
Prior to this, the United States had urged other G7 member countries to impose high tariffs on countries importing large quantities of Russian oil, especially China and India, to undermine Russia’s war funding.
“We are each taking bold steps by imposing restrictions on key sectors of the Russian economy and its supporters to increase the economic costs of Russia’s war effort, including energy, finance, military industrial base, special economic zones, as well as enablers and profiteers,” the statement stated.
The finance ministers also emphasized that G7 countries are “seriously considering” imposing restrictions on countries and entities supporting Russia’s war effort, including sanctions on refined products derived from Russian oil.
The statement underlined: “We collectively believe that trade measures (including tariffs and import/export bans) are crucial in our efforts to cut off Russia’s income.”
The G7 also pledged to take concrete measures to “significantly reduce” their respective imports of Russian energy, with a goal of “phasing out” gradually.
In the financial realm, the G7 made new commitments. The statement indicated that in addressing Ukraine’s financing needs, the G7 will coordinate the use of frozen Russian state assets’ entire value within their legal frameworks to support Ukraine, ensuring the realization of a “just and lasting peace.”
This coordinated action to utilize frozen assets is seen as a further financial blow to Russia. Previously, the G7 and the European Union (EU) had primarily utilized interest or earnings from frozen Russian assets to aid Ukraine (as loan guarantees or future repayment sources) without directly tapping into the principal assets. The new statement indicates that the G7’s next steps will explore expanding the utilization scope of these assets within their regulatory frameworks.
The G7 finance ministers will reconvene on October 15th during the “International Monetary Fund/World Bank Annual Meeting” in Washington D.C. to further advance actions in these areas, including implementing trade restrictions on countries assisting Russia’s war.