Russia is reported to have missed a deadline to make a debt payment, because of sanctions imposed on it.
Since Russia invaded Ukraine a wide range of measures have been announced, to limit its ability to pay for the war.
What are sanctions?
Sanctions are penalties imposed by one country on another, to stop it acting aggressively, or breaking international law.
They are among the toughest actions nations can take, short of going to war.
How is Russia being sanctioned?
Western countries have targeted wealthy individuals, banks, businesses and state-owned enterprises.
Financial measures
Russia is believed to have defaulted on a debt for the first time since 1998, after missing a key deadline.
It has the money to make a $100m (£81m) payment, but sanctions made it impossible to do so.
It follows a series of measures taken against its financial institutions.
The US has barred Russia from making debt payments using the $600m it holds in US banks, making it harder for Russia to repay its international loans.
Russia’s central bank assets have been frozen, to stop it using the $630bn (£470bn) of reserves it has in foreign currencies.
Major Russian banks have been removed from the international financial messaging system Swift, which will delay payments to Russia for its oil and gas exports.
The UK has excluded key Russian banks from the UK financial system, frozen the assets of all Russian banks, barred Russian firms from borrowing money, and placed limits on deposits Russians can make at UK banks.
Oil and gas
Russia is thought to have earned nearly $100bn (£82.3bn) from oil and gas exports during the first 100 days of the war.
Sanctions targeting its exports have been announced:
- The European Union (EU) says it will ban all imports of oil brought in by sea from Russia by the end of 2022
- The US is banning all Russian oil and gas imports
- The UK will phase out Russian oil imports by the end of 2022
- Germany has frozen plans for the opening of a major gas pipeline from Russia
- The EU said it will halt Russian coal imports by August
The EU is less keen to impose sanctions on Russian gas, because it relies on it for about 40% of its gas needs.
In March, it said it would reduce gas imports by two-thirds within a year, but has not agreed further action.
Targeting individuals
The US, EU, UK and other countries have sanctioned more than 1,000 Russian individuals and businesses. These include wealthy business leaders – the so-called oligarchs – considered close to the Kremlin, including former Chelsea FC owner Roman Abramovich.
Superyachts linked to sanctioned Russians are also being targeted.
Russian government officials and family members have also been sanctioned. Assets belonging to President Putin and Foreign Minister Sergei Lavrov are being frozen in the US, EU, UK and Canada.
The UK has also stopped the sale of “golden visas”, which allowed wealthy Russians to get British residency rights.
What other sanctions have been imposed?
Other measures include:
- A ban on the export of dual-use goods – items with both a civilian and military purpose, such as vehicle parts – by the UK, EU and US
- A ban on all Russian flights from US, UK, EU and Canadian airspace
- An import ban on Russian gold
- A ban on the export of luxury goods to Russia
- The UK has imposed a 35% tax on some imports, including vodka
Many international companies have either suspended trading in Russia, or withdrawn altogether. They include McDonalds, Coca-Cola, Starbucks, and Marks & Spencer.
Are the sanctions hurting Russia?
A deep recession is expected and Russia’s economy is expected to shrink by 10% in 2022.
Supermarket shelves in Moscow are still pretty full, BBC Russia editor Steve Rosenberg reports, although some imported items are no longer available.
International sanctions would have caused economic collapse if they’d come out of nowhere, Chris Weafer of Macro Advisory in Moscow told the BBC. But because Russia has experienced sanctions since 2014, it has been able to make some adjustments.
How has Russia reacted?
Russia has banned exports of more than 200 products, including telecoms, medical, vehicle, agricultural, electrical equipment and timber.
It is blocking interest payments to foreign investors with government bonds, and banning Russian firms from paying overseas shareholders.
And it has stopped foreign investors who hold billions of dollars worth of Russian investments from selling them.
