UK bans export of luxury goods to Russia and introduces hiked import tariffs
The UK has banned the export of luxury goods to Russia, including designer handbags and works of art.
The Chancellor also outlined new import tariffs that will represent a 35 percentage point increase on current rates. The fresh tariffs will hit products like Russian vodka, fertiliser and steel.
Products no longer allowed to be exported include flashy cars and designer fashion.
Investment bank Jefferies has previously estimated that Russians account for roughly $9bn in annual luxury sales.
The value of the goods targeted is £900m ($1.2bn), the Treasury and Department for International Trade jointly said on Tuesday morning.
Chancellor Rishi Sunak said the new tariffs would “further isolate the Russian economy from global trade.”
He added: “These tariffs build on the U.K.’s existing work to starve Russia’s access to international finance, sanction Putin’s cronies and exert maximum economic pressure on his regime.”
Russia has now been denied access to Most Favoured Nation tariff treatment for key imports.
Other products to be affected by the sanctions include beverages, glass and glassware, paper, antiques and fur skins.
Shares in UK retailer Burberry were down slightly on Tuesday. Mulberry and Ted Baker also dropped a couple of percentage points.
The EU is set to impose a similar ban on the Kremlin after previously excluding luxury labels from sanctions imposed on the war-waging country.
Many luxury retailers have shut shop in Russia, including Burberry, Louis Vuitton, Hermès, Kering, Chanel and Prada.
Depriving Putin’s government of the key benefits of membership to the World Trade Organisation meant “denying him further resource for his invasion,” international trade secretary Anne-Marie Trevelyan said.
She added: “The UK stands shoulder to shoulder with our international partners in our determination to punish Putin for his barbaric actions in Ukraine, and we will continue our work to starve his regime of the funds that enable him to carry them out.”
Earlier this month, the Mayor of London urged ministers to immediately seize the assets of Russian oligarchs and sell them to fund support to Ukraine.
Sadiq Khan said property and possessions belonging to Putin allies should be seized before these Russians can have a ‘fire sale’ to dodge sanctions.
The Mayor called for possessions such as jewellery, designer clothes, cars and property to be taken.