Economic consequences of Russia's aggression

as of 17.00 June 27th, 2022

General economic indicators

RF central bank recognizes that managing economic situation is challenging for them — head of CBR called the crisis of 2022 “one of the most significant challenges facing the RF economy since the 90s”. Along with -10% GDP contraction, CBR baseline scenario suggests that exports of goods and services may fall by 17-21% in 2022 and imports to drop 32.5-36.5% in 2022. In April, Russia’s GDP fell by 3% year on year, after growing by 1.3% in March, by 4.1% in February and 5.6% in January.
RF economy’s GDP projections converge to -10% in consensus reports, suggesting that the effect of sanctions is smaller than intended. Median estimate of 35 forecasters (compiled by FocusEconomics) is 10.2%. The European Commission also published its forecast, expecting a 10.4% fall of Russia’s GDP in 2022 (range: between -4.5% and -16%).
According to IMF calculations, in 2022 Russia’s GDP will fall by about 8.5% and by 2.3% in 2023. According to WB, Russia’s GDP is expected to contract by 8.9% in 2022 and by 2% in 2023 with recovery by 2.2% in 2024. Although fiscal support to households has helped stave off a larger fall in 2022, private consumption is expected to remain depressed as income losses and supply shortages mount. Private fixed investment is expected to continue to fall amid lower foreign investment, input shortages, weakened economic prospects, and high credit costs. Import compression from the fall in domestic demand and export bans to Russia will ameliorate external financing pressures. According to EBRD, the Russian economy is forecast to contract by 10% in 2022, followed by zero growth in 2023. The growth outlook is likely to remain bleak in the absence of a peace agreement that may lead Western countries to relax sanctions, and the economy’s shift towards autarky and the loss of qualified workforce to emigration mean that the economy’s long-term growth potential will remain significantly eroded.
The US Treasury Department 9C General License, which allows Russia to make payments to US bondholders, expired on May 25. On June 22, the Russian president signed a decree establishing a new procedure for payments on foreign currency debt (Eurobonds) in rubles.
Russia defaulted on its foreign-currency sovereign debt, which resulted from Western sanctions that shut down payment routes to overseas creditors. On June 26, the grace period on about $100 million of snared interest payments due May 27 expired, a deadline considered an event of default if missed. A formal declaration would usually come from ratings firms, but European sanctions led to them withdrawing ratings on Russian entities. With the final deadline passed, focus shifts to what investors do next. They don’t need to act immediately, and may choose to monitor the progress of the war in the hope that sanctions are eventually softened. Time may be on their side: the claims only become void three years on from the payment date, according to the bond documents. Minimum impact on the US and the world economy from the potential default of Russia is expected as sanctions already prevent Russia from borrowing in international markets and matters little to Russians dealing with double-digit inflation and the worst economic contraction in years.
Experts from SOFREP military outlet estimate the cost of war for RF at $900 mln per day, which gives ~108 bln over 120 days of war. This figure includes payments to servicemen, provision of ammunition, as well as the cost of repair of lost or damaged military equipment. For comparison, EU spends $800 mln a day for RF gas and oil during the war, according to KSE.
The Bank of Russia has removed the inflation forecast for the current year. According to his forecast, annual inflation will fall to 5-7% in 2023 and return to 4% in 2024. Previously, the Central Bank of Russia estimated annual inflation to increase to 18-23% by the end of this year. Fitch predicts 18% inflation in Russia.
Net capital outflows from Russia increased to $64.2 billion in the first quarter of 2022, compared with $17.5 billion in the same period last year.
Current foreign direct investment (FDI) in Russia has almost stopped since the start of the full-scale invasion on February 24. FDI Markets data show that in the first quarter of this year Russia announced new FDI worth only $ 98.5 million, down 95.6% from the same period next year. A new study by European University Institute suggests that full withdrowal of the FDI from RF by 40 countries-allies of Ukraine would lead to -28.2% loss of GDP. FDI withdrowal, as compared to other sanctions, has rather limited effect on country-allies, while very strong effect on RF economy.

In 2022 unemployment in Russia may more than double and exceed 9% (about 2 million jobs) for the first time in 10 years. One in five Russian companies has laid off employees. 45% of companies in Russia will reduce or stop hiring new employees by the end of 2022.
Number of the companies that have curtailed Russian operations – 1 092 (+3 per week). Number of the companies that continue Russian operations – 677 (+2 per week). Number of the companies that have reduced current operations and hold off new Investments – 457 (0 per week).
The Ministry of Finance of the RF has closed the data on expenditures under various articles of the federal budget — they claim that this will help minimize the risk of additional sanctions. The Ministry’s January-May 2022 budget release contains only aggregate figures for expenditures and revenues.
Russia’s budget deficit will reach, according to various estimates, from 1.6 to 2.7 trillion rubles by the end of the year. In April 2022 (the last available data), the federal budget deficit was formed in the amount of 262.3 billion rubles. According to the results of four months of the year, a surplus in the amount of 1.04 trillion rubles was still recorded. In April, oil and gas revenues received due to high oil prices, even taking into account the «sanctions» discounts on Russian fuel, significantly exceeded the collection of non-oil and gas revenues — 1.81 trillion rubles against 1.06 trillion rubles. In March and the first quarter of 2022, the situation was reversed. Revenues from domestic VAT in Russia fell by 54% in April (191.9 billion rubles against 414.7 billion in April last year). VAT on imported goods -212.5 billion rubles against 330.5 billion rubles the same month a year earlier.

Oil & gas

Russia’s pipeline monopoly «Transneft» has restricted access to monthly schedules of oil exports from Russian ports. According to traders, loading plans are crucial for participants in the Russian oil market, including shippers, insurers and oil buyers.
Controlled by the Ministry of Energy of the RF, the Central Dispatch Department of the Fuel and Energy Complex has stopped publishing statistics on oil production and exports for an indefinite period.
In January-May 2022, Gazprom exported 61 billion cubic meters of gas to foreign countries, which is 27.6% or 23.2 billion cubic meters less than in the same period of 2021. During this period, Gazprom produced approximately 211.4 billion cubic meters, which is 4.8% (10.6 billion cubic meters) less than last year.
The volume of Russian oil refining continues to decline — in April it decreased by 7% compared to March, to 670 thousand tons per day. According to the International Energy Agency, from July the decline in oil production in Russia may reach 3 million barrels per day or about 40% of the volume that Russia supplied to the world market before the war (about 7.5 million barrels per day).

Industry

The Russian Central bank believes that when returning to the world market after the «current crisis», Russian companies will not be able to compete with foreign ones, they will become less technological. The situation will be reminiscent of the 1990s in the Russian economy.
Although Russia has more than two dozen bearing manufacturers, 60% of bearings are still imported. As the largest Western bearing manufacturers have left Russia, the industry is struggling to adapt to new conditions. In particular, a great shortage of bearings used for the production of railway cars and locomotives leads to a halt in production.
Steel prices in Russia have fallen by 40% since the beginning of the year amid weakening demand and a strong ruble. In the summer, metallurgists expect serious losses and low capacity utilization.
In Russia, glass production fell by 30% in May due to lower construction and lower exports.
Pipe producers expect a 34% drop in exports from RF in 2022 to 1.06 mln tons.
In Russia, the so-called parallel imports (imports of goods without the permission of the copyright holder) were legalized. The law applies to a previously approved list of more than 50 product groups, including oil, cosmetics, paper, clothing, televisions, cameras and cars.
Sales of new cars and light trucks in Russia fell by 83.5% in May to 24.3 thousand cars (in May 2021, 147 thousand). In Russia, in March-April, auto parts prices rose by 30%. Due to rising prices for auto parts, 5-10% of car services may close by 2023, and most of them will work in the shadows. Russian agrarians, following the car owners, have faced a shortage of spare parts for foreign machinery, the share of which in the park reaches 30-40%. The cost of spare parts has increased by an average of 30-50%, which is due to additional costs for logistics.
Production of passenger cars in Russia in April fell8 times (by 85.4%) compared to April last year — to a record low of 19.9 thousand cars. In January-April, Russian car plants produced about 264,000 cars, which is 47.4% less than in the same period last year. At the same time, the production of trucks in April fell by 30.3% compared to the same month last year — to 12.3 thousand units.
40% of developers froze construction throughout Russia due to the sharp rise in prices for building materials and financing. For two months the cost of building and finishing materials in the segment of the office market has increased by 30-49%.
In Russia, sales are falling. For 84% of small and medium-sized businesses as well as large retailers and restaurants have suspended or refused to open new outlets due to problems with the supply of new equipment. The fitness industry is experiencing a halt in sales of new club cards — the industry expects a shortage of equipment and components. Owners of shopping malls may lose up to 30% of revenues due to the withdrawal of international chains. The demand for warehouse real estate is expected to decrease by 40-50%.
In Russia, the food industry is threatened by a shortage of phosphates, which can lead to higher food prices and deterioration of food quality.
The deficit of coated paper in Russia will be 40%: such paper is used for printing and is mainly imported from abroad, while Europe accounts for 70% of supplies.
IT companies in Russia have a shortage of foreign servers. There is also a shortage of foreign equipment for the development of communication networks, as well as equipment needed for data centers in the country.
In Russia, a serious shortage of containers is expected after departing international lines finish evacuating their fleets (37.5-66% of the container fleet). The average number of container ships in Russian waters has dropped 60% from the November peak, according to Bloomberg calculations.
In Russia, the supply of juices and milk to stores began to disrupt due to shortages of packaging materials — cardboard and tetrapack. The devaluation of the ruble and logistical problems could lead to a drop in alcohol imports to Russia by 20-40% by year and higher prices on it. Imports of fish (primarily salmon, tuna, shrimp) to Russia due to sanctions will be reduced by 28-35% year on year.
Russian textile processors have lost 85% of their raw materials for wiping cloths and regenerative fibers. The prices for Russian secondary textiles have tripled. The delivery of raw materials from Europe has risen seven to eight times.
In Russia, the insurance market will decrease by 10-30% against the background of rising interest rates, the departure of foreign companies and declining demand from customers. The advertising market in Russia may shrink by 50% or more, and for the top 6 ex-international advertising groups — by 60-90%.
Services of Russian private clinics may become up to 20% more expensive due to a shortage of imported equipment and consumables — prices for some consumables have risen by 300%. More than 93% of Russian veterinary clinics experience a shortage of drugs and vaccines for animals.
AACSB, BGA, AMBA, EFMD withdraw accreditation from all universities in Russia, thus Russians are blocked from working in foreign companies. Databases of scientific articles Scopus and Web of Science will stop sales and promotion of goods and services to Russian and Belarusian scientific organizations.
Up to a third of hotels and guest houses may not open in Crimea in the summer, Russian Kommersant reports. Hotel owners are afraid of a reduction of up to 30-40% of the projected load for the summer, they can not attract vacationers by lowering prices in conditions of significant inflation.

Credit ratings

The EU announced a ban on providing credit ratings to legal persons, entities, or bodies established in Russia starting from 15 April 2022. Previously:
Rating agency Standard & Poor’s (S&P) Global Ratings downgraded Russia’s foreign currency rating from CC/C to SD/SD, which means a selective default. The national currency rating remained at CC/C with a negative outlook.
Rating agency Moody’s downgrades Russia’s ratings to Ca from B3, the outlook is negative. Liabilities with such a rating are very speculative and probably in the process or very close to default, with little prospect of repayment of principal and interest.
Rating agency Fitch downgraded Russia’s Long-Term Foreign Currency Issuer Default Rating (IDR) to ‘C’ from ‘B’. The ‘C’ rating reflects Fitch’s view that a sovereign default is imminent.

Stocks, stock market

Russia can no longer register new securities and financial instruments in the civilized world as the International Association of National Numbering Agencies (ANNA) has suspended its membership.
Russia has signed a law obliging all Russian companies to delist from foreign stock exchanges and list their shares on Russian stock exchanges by 26.04.2022.
On March 29, the Supervisory Board of Moscow Stock Exchange recommended shareholders not to pay dividends for 2021.
The Association of European Energy Exchanges (Europex) excluded the St.Petersburg International Commodity Exchange (SPIMEX) from its membership.
The UK tax regulator revoked the status of a recognized stock exchange on the Moscow Stock Exchange — the decision came into force on May 5.
Clearstream and Euroclear clearing systems have blocked the accounts of the National Settlement Depository of the RF, which means that Russian investors with Eurobonds and foreign stocks will not be able to receive payments on the body of debt, coupons and dividends through these systems. From July 31, the American broker Interactive Brokers will not accept rubles to replenish client accounts.

SWIFT

On June 6, as part of the sixth package of sanctions, the EU agreed to disconnect from SWIFT the largest Russian bank — Sberbank, as well as the Credit Bank of Moscow, the Russian Agricultural Bank, and the Belarusian Bank For Development And Reconstruction.
The EU, Switzerland, Canada and Japan disconnected 7 Russian banks from the SWIFT system (VTB, Russia Bank, Otkrytie Bank, Novikombank, Promsvyazbank, Sovcombank and VEB).

Ruble exchange rate, banks

The National Bank of Ukraine has prohibited citizens and residents of the RF, Russian companies that own significant shares (from 10%), to participate in the management of insurance, leasing, financial, factoring and other companies in the non-banking sector. They are also prohibited from directly or indirectly exercising their voting rights as shareholders.
RF reserves continue to decrease, lost $60 bln during the war. For more than two months of the war RF reserves dropped from a historically max level of $643.2bn to $582 bln (-$60 bn or~9%). Russia has lost access to more than half of its gold and foreign exchange reserves. Western sanctions have frozen $ 350 billion in Russia’s gold and foreign exchange reserves, about 60% of their volume, but the aggressor may continue to support the ruble at the expense of gas and oil supplies to the EU.
The US has banned the export of US dollars to Russia, and the EU has banned the supply of euro banknotes to Russia. The UK prohibited the export to, or for use in, Russia, of Sterling or EU denominated banknotes.
Ruble continues to appreciate, but this doesnt reflect actual economic situation. Yet, RUB is not a freely converteable currency and both dollars and euro are largerly beyound acess for the RF due to sanctions. Therefore, the existing exchange rate does not reflect actual situation.
In an effort to quell the crisis, Russia’s central bank more than doubled its key interest rate from 9.5% to 17%. As of June 24, 2022, it is 9,50%.
Sberbank and other Russian banks have accelerated the closure of their branches as part of the optimization. According to experts, by the end of the year about 100 thousand employees may lose their jobs.
On April 15, the Central Bank of Russia recommended that banks refuse to pay dividends and bonuses in 2022.
Payment systems Visa, Mastercard, Google Pay, Samsung Pay, PayPal, Payoneer, MoneyGram, JCB, Paysera and transfer systems Western Union, Paysend, Wise completely stop working in Russia and stop all card transactions. American Express has blocked access to the payment system of several Russian financial institutions. Finotech application Revolut has stopped transferring money from Russia and vice versa. Foreign online stores began to block payments on Union Pay cards issued in Russia. Apple Pay and Google Pay disconnected Russian Mir
On June 7, Japan freezed the assets of two more Russian banks — Credit Bank of Moscow and Rosselkhozbank, and added another Belarusian bank to the sanctions list — Bilinvestbank. With these additions, Japan’s sanctions cover 12 Russian banks and 4 Belarusian (including Russia’s largest financial institution, Sberbank, and its largest private bank, Alfa Bank). Previously, Tokyo prohibited Japanese individuals and companies from making new investments in Russia that would give them a stake of 10% or more. Loans with a term to repayment exceeding one year are also subject to prohibition.
On May 8, the United States imposed sanctions against the Moscow Industrial Bank and its 10 subsidiaries.
New Zealand imposed sanctions on 18 financial institutions, including the CBR, the sovereign wealth fund and the country’s largest financial institutions.
On March 17, Australia imposed additional sanctions against 11 Russian banks, which occupy 80% of the market: Sberbank, Gazprombank, VEB, VTB, Rosselkhozbank, Sovcombank, Novikombank, Alfa-Bank and Moscow Credit Bank.
From May 31, the Coinbase cryptocurrency exchange will block the accounts of Russian users (with more than €10,000 on their wallets) under EU sanctions. South Korea‘s largest cryptocurrency exchanges Upbit, Bithumb, Gopax and Korbit block Russian IP addresses. The world’s largest cryptocurrency exchange Binance has closed Russian transfers and withdrawals to foreign banks, regardless of country of residence. While the US imposed sanctions against the Russian crypto-mining company Bitriver (TOP-3 in RF) on Apr 20. According to Bloomberg, the cryptocurrency market is considered too small to circumvent the sanctions imposed on Russia.

Trade measures, embargoes

On June 6, the EU agreed on a sixth package of sanctions. The package includes a ban on Russian oil imports, giving EU member states six months to phase out crude oil and eight months to cut other refined petroleum products. Pipeline oil is temporarily exempted from the oil embargo, as a main concession to Hungary. In addition, Bulgaria and Croatia are also granted further derogations on the imports of seaborne oil and vacuum gas oil. This oil embargo will immediately affect 75% of Russia’s oil exports to Europe and 90% by the end of the year. The decision extends the list of dual-use goods and technology that are not allowed to be exported to Russia as they could support the military and defense sector. The EU will prohibit the provision of accounting, public relationsand consultancy services.
The Parliament of Ukraine has amended the Law «On Medicinal Products» to restrict the circulation of medicinal products manufactured in the territory of the RF or the RB. Ukraine has also imposed a complete embargo on imports of goods from Russia, which will block $6 bln in foreign currency receipts to Russia annually.
On June 8, Canada impose a ban on the export of 28 services vital for the operation of the oil, gas and chemical industries, including technical, management, accounting and advertising services. On May 20, Canada has imposed sanctions that include a ban on the export of luxury goods to Russia, as well as a ban on the import of luxury goods from Russia.
On June 2, the US Department of Commerce has added 70 companies from Russia and 1 from Belarus to the «black list» of organizations whose activities are contrary to the interests of national security interests or US foreign policy. On May 11, the US expanded sanctions against Russian industry, banning the export of more than 200 items of machinery and equipment to Russia. On May 8, the US imposed sanctions on Promtechnologiya LLC, a weapons manufacturer, and seven shipping companies and a maritime towing company.
On June 22, a tranche of new trade sanctions on Russia was introduced by the UK, prohibiting on the export, supply and delivery, making available and transfer (as well as related technical assistance, financial services, funds and brokering services) of: internal repression goods and technology; goods and technology relating to chemical and biological weapons; maritime goods and technology; additional oil refining goods and technology; additional critical industry goods and technology. On May 8, the UK announced a new package of sanctions against Russia and Belarus in the amount of £1.7 billion, which relates to trade.
On May 8, the leaders of the Group of Seven countries promised to impose an oil embargo against Russia, gradually abandoning its supplies.
Canada, the UK, Australia have imposed 35% tariffs on all goods from Russia.
The US, EU, UK, Canada, Japan, Albania, Australia, Iceland, Republic of Korea, Moldova, Montenegro, New Zealand, Northern Macedonia and Norway deprived Russia of the most-favored-nation treatment (MFN) in trade. Japan has announced a similar intention.
The US, Japan and EU countries have banned the import of Russian coal.
The US have banned the import of Russian oil and gas, banned citizens from making new investments in Russia. From March 16, the US banned the export of both weak (beer, wine) and strong (rum, whiskey, vodka, tequila) alcoholic beverages, tobacco products, including cigars, any perfume and eau de toilette, fur and leather products, silk, camping equipment, luxury clothing and footwear worth more than $1,000, precious stones, pearls, silver jewelry, non-monetary gold, expensive watches, pianos and antiques, engines for ships and other equipment, some new and used vehicles (including motorcycles and mopeds).
Canada has announced plans to ban all crude oil imports from Russia. The United Kingdom will stop importing Russian coal and oil by the end of 2022, and then, if possible, gas. Denmark will refuse Russian gas as soon as possible.
Lithuania has been the first EU country to completely abandon Russian gas imports since early April 2022. Estonia will completely stop importing Russian gas by the end of 2022. From April 24, Finland limits imports of electricity from Russia by one-third. Baltic energy system operators have signed an agreement that will no longer buy electricity from Russia.
Japan has banned the export of oil refining equipment and technology and of technological products (266 goods and 26 technologies) to Russia, including semiconductors, communications equipment, sensors, radars and encryption devices, programs for machines that make microchips, effective since March 18. On May 10, Japan imposed export sanctions on 70 companies in the Russian defense sector, including the Almaz-Antey concern, the Tactical Missile Weapons Corporation, the Etalon All-Russian Research Institute, and others. Japan has banned the export of high-tech goods to Russia since May 20, including 3D printers, quantum computers and electron microscopes. Japan published a new list of goods that are prohibited from being supplied to Russia from June 17, including dump trucks, bulldozers, excavators, locomotives and other equipment for industry. On June 27, Japan has announced additional sanctions against Russia, including a ban on imports of Russian gold and a ban on the sale of goods to 90 defense-related organizations.
On March 15, the EU and UK banned the export to Russia of luxury items, including cars, haute couture fashion, works of art. On March 9, the EU imposed restrictions on exports to Russia of goods related to maritime navigation and radio communications.
The EU and Switzerland have banned the export to Russia of certain goods and services fo the energy sector, certain goods and technologies that can be used in aviation and space, as well as the supplying of certain services related to these goods, such as insurance, repairs, inspections, mediation services and financial assistance. They also imposed further trade restrictions on cast iron and steel, and banned new investments in Russia’s energy sector.
On April 7, the EU banned exports to Russia worth 10 billion euros annually (jet fuel, quantum computers and high-tech semiconductors, high-quality electronics, software, sensitive machines and transport equipment); banned imports from Russia of a number of goods and raw materials such as wood, cement, fertilizers, seeds, seafood and alcohol worth 5.5 billion euros annually; prohibited Russian companies from participating in European public procurement.
Switzerland banned imports of timber and coal, as well as goods that are important sources of income for Russia (including cement, seafood, vodka and caviar); exports of goods that could help strengthen Russia’s industrial capacity (industrial robots, chemical products).
On April 22, the UK expanded the list of goods whose imports are banned to include silver, wood products and luxury goods from Russia, including caviar. The UK banned imports of iron and steel products, as well as exports of quantum technologies, advanced materials and luxury goods since April 14.
Australia has imposed an immediate ban on exports of alumina and aluminum ores, including bauxite, to Russia.
Argentina and Chile suspended shipments of lithium ore to Russia.
Russia will lose up to $ 15 billion in arms exports due to sanctions and the fact that the world has seen the ineffectiveness of Russia’s weapons.

Airspace + aviation cooperation

Russia’s aviation industry is one of the most affected by the sanctions. Many countries closed airspace to Russian flights (including USA, UK, Canada, Australia, Albania, Iceland, Norway, Moldova, N.Macedonia, Switzerland, Montenegro and all EU countries), while R companies cannot repair and buy planes. After Feb 24, almost all international airlines and major aircraft builders left the Russian market. However, 31 airlines are still operating in Russia, and 4 more plan to resume operations in June. Most of them are from Russia’s neighboring and friendly countries.
The EU authorities have decided to completely ban the supply and leasing of aircraft, helicopters and other aircraft to Russia, as well as their insurance and maintenance. On April 11, the EU added 21 Russian airlines to the list of banned ones, including Ural Airlines, Aeroflot, Pobeda, Russia, Utair, and Nord Wind.
Russian companies have received requests from foreign lessors to return more than 500 aircraft worth a total of $20 billion. According to the European Commission, 700 Russian aircraft lost their license due to the lack of spare parts and software updates.
On May 19, the UK announced new sanctions against the Russian aviation sector, in particular, Aeroflot, Ural Airlines and Russia Airlines were blocked. Previously, the UK has imposed aviation sanctions, which give the right to detain any Russian aircraft and ban the export of aviation or space goods to Russia.
On April 7, the US Department of Commerce deprived 3 Russian airlines of export privileges: Aeroflot, Azur Air, Utair.
Rosaviatsia has stopped publishing monthly statistics on passenger traffic by air. It usually disclosed data on passenger traffic through the airports of the Moscow air hub (Sheremetyevo, Domodedovo, Vnukovo), and then through all Russian airports.
Passenger traffic of Russian airlines is falling and is expected to continue this trend as the end of the holiday season will add to the purchasing power of the asking population. In the first quarter of 2022, Russian airlines received a record total operating loss for the last eight years — 61.1 billion rubles (passenger airlines — 52.5 billion rubles., cargo — 8.6 billion rubles.). In June, passenger traffic of Russian airlines decreased by about 20% year on year.
Russian Aeroflot, which is 57% state-owned, has decided not to publish financial statements for the first quarter. Planes of the largest cargo carrier in Russia «Volga-Dnepr» completely stopped flights.

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Other transport connections

The EU’s sixth package of sanctions includes a ban on insurance related to shipping oil to third countries, which will take effect six months after the formal adoption of the measures, and aims to restrict Moscow’s options to divert its supplies elsewhere in the world.
The EU has banned access to EU ports by vessels registered under the Russian flag (except for agricultural and food products, humanitarian aid and energy). On April 17^th, 2022, in all EU states with sea or river ports, the EU directive banning the entry into ports of ships associated with the RF came into force;
The US blocked its ports to Russian vessels.
The EU has banned the work of Russian road transport operators, which will block their freight transport by road within the EU, including transit (except for pharmaceutical, medical, agricultural and food products, including wheat, humanitarian goods).
Finland canceled passenger trains, freight and postal communication Russia and closed entry to the country for all trucks with Russian license plates.
The Posts of Latvia, Poland, Sweden, Denmark, Finland and Australia, in response to Ukrposhta’s calls, have already filed the relevant documents with the Universal Postal Union to stop delivering items to and from Russia.
Russia’s largest shipping company, Sovcomflot, has sold at least 20 vessels to pay off creditors and avoid default. In total, about 40 vessels or a third of the Sovcomflot fleet are up for sale.