Ministers are planning tougher sanctions against Russia, targeting UK-based oligarchs, high-tech exports and sovereign debt, after a package unveiled by Boris Johnson came under attack from Conservative MPs for failing to hit Vladimir Putin’s power base hard enough. On Tuesday the UK prime minister announced asset freezes on five Russian banks and three high net worth individuals after Putin ordered troops to enter Ukraine. Speaking in the Commons, Johnson also placed sanctions on members of the Russian Duma who backed recognition of two Russian-controlled territories in eastern Ukraine, and said British businesses would be banned from trading in them. But the former Tory party leader Iain Duncan Smith was among a group of MPs who said Putin had to be hit harder now rather than holding back and ratcheting up measures later. Mark Harper, the former chief whip, called for “further and stronger measures even if President Putin does no more”. Keir Starmer said Putin had already crossed a line, adding: “If we do not respond with a full set of sanctions now, Putin will once again take away the message that the benefits of aggression outweigh the costs.” Tom Keatinge, of the defence thinktank Rusi, said: “I think we can safely say we have taken a peashooter to a gunfight. The whole reason for the discussion of sanctions in recent weeks has been to deter Putin and if, when we get the first chance to use these sanctions, we only tickle his feet, then what is the point? If we ever had the upper hand I am afraid today we have lost it.” Western officials defended the package, put together in meetings with Washington and Brussels, saying it was “a first step that will progressively isolate Russia from the global financial system”. Planned future UK measures would hit the banking and finance sectors, ban high-tech exports and sanction a wider range of people and companies in defence, energy and elsewhere regarded as of strategic significance to Russia. One proposal is to to stop shipments to Russia of chips, computers, consumer electronics, telecommunications equipment and other items made anywhere in the world if they were produced using US, UK or EU technology. A similar measure was deployed against the Chinese technology firm Huawei. The officials were reluctant to spell out what will trigger the next round of sanctions, however. Overall the measures, and Johnson’s promises to go further, mark a slow turning of the tide after five years of prevaricating over the role of Russian money in Britain. The sanctioned banks are Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank, Johnson said. Promsvyazbank is a top 10 Russian bank, which services 70% of state contracts signed by the Russian ministry of defence. The three individuals are Gennady Timchenko, Igor Rotenberg and Boris Rotenberg. All three have previously been sanctioned by the US. Treasury officials had no details of the scale of the assets the individuals or banks held in the UK.
The sanctions list cited Timchenko’s shareholding in Bank Rossiya. He is also a board member and shareholder of PAO Novatek, the largest gas producer in Russia not directly controlled by the Russian state. Novatek is among 31 Russian companies whose shares are listed on the London Stock Exchange, giving international investors easier access. The price of its London-listed shares fell 8% on Tuesday, a much steeper drop than shares in Novatek’s main listing in Moscow, which fell by only 1.2%, suggesting concerns about the London listing. Timchenko was the founder of Gunvor Resources, a major commodities trading company based in Geneva. He sold his shares in Gunvor in 2014 when he was sanctioned by the US following Russia’s annexation of the Crimea region of Ukraine. Challenged by Labour over why the sanctions did not go further, including targeting the Chelsea football club owner Roman Abramovich, Johnson told the Commons that the billionaire was “already facing sanctions” but later admitted he “misspoke”. Downing Street said the prime minister would correct the parliamentary record. Asked why he had played tennis with Russian entrepreneurs to raise money for the Conservative party, Johnson said he was committed to ensuring party funding came only from the UK. Justifying the sanctions on Tuesday, the prime minister said of Putin: “In a single inflammatory speech, he denied that Ukraine had any tradition of genuine statehood, claimed that it posed a direct threat to the security of Russia and hurled numerous other false accusations and aspersions.” He said Russian tanks and armed personnel carriers had “since been spotted” in the self-proclaimed republics, adding: “The house should be in no doubt that the deployment of these forces in sovereign Ukrainian territory amounts to a renewed invasion of that country. And by denying Ukraine’s legitimacy as a state and presenting its very existence as a mortal threat to Russia, Putin is establishing the pretext for a full-scale offensive.” Many Tory MPs called for more arms to be sent to Ukraine, and Johnson stressed the UK would support Ukrainian resistance.