Japan outlaws gold exports to Russia, steps up sanctions
(Kitco News) Japan's Ministry of Finance said it would ban precious metals exports to Russia as it steps up its sanctions against Moscow in response to its invasion of Ukraine.
The ban comes into force on April 5 and includes gold and other luxury items like jewelry, high-end cars, liquor, and cosmetics.
"In cooperation with the U.S. and the EU, Japan joins the sanction against Russian oligarchs and the ruling class," the ministry said on Tuesday.
The move comes after Prime Minister Fumio Kishida's commitment to step up sanctions against Russia at last week's the Group of Seven (G7) meeting.
The U.S. and Britain also sanctioned dealings with Russian gold. Last week, the U.S. Treasury banned all gold transactions with Russia's central bank.
"U.S. persons are prohibited from engaging in any transaction -- including gold-related transactions -- involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation," the Treasury said on its website.
Britain also specified that British entities could not be involved in selling Moscow's gold reserves.
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Earlier this month, Japan already curbed high-tech exports to Russia, including semiconductors and communication equipment.
And now Japan is planning to re-examine Russia's most-favored-nation trading status, which could trigger imports bans on certain Russian goods.
The U.S. House of Representatives has already backed this type of legislation earlier in March.
The reason countries are targeting gold transactions is because of the concern that Moscow could be using its gold reserves to evade sanctions, with UBS noting that it is something that hard to track.
"It will be difficult to actually see that impact in the market immediately, given the several steps," UBS precious metals strategist Joni Teves said in a CNBC interview Monday. "And also given that even in normal situations, it takes a couple of months until we see the report of changes in central bank holdings to the IMF."
According to the latest IMF data, Russia holds nearly 2,300 tonnes of gold as of the end of January — the fifth-biggest sovereign gold owner.