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President Joe Biden said on Sunday that the Group of Seven would ban Russian gold imports in retaliation for Moscow’s war on Ukraine.
G-7 leaders will meet on the opening day of the summit on Sunday to discuss how to secure energy supplies and tackle inflation, seeking to prevent the response to Russia’s invasion from hurting global allies in hopes of punishing the Kremlin.
According to senior Biden administration officials, gold is Russia’s second largest export and banning imports would make it more difficult for the country to participate in global markets.
Gold has been Russia’s biggest export behind energy in recent years, reaching nearly $19 billion, or about 5% of global gold exports in 2020, according to the White House.
About 90% of Russian gold exports went to G-7 countries. Of these Russian exports, more than 90%, or nearly $17 billion, were exported to the UK. The United States imported less than $200 million worth of gold from Russia in 2019 and less than $1 million in 2020 and 2021.
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British Prime Minister Boris Johnson said G-7 countries imposing a ban on Russian gold will “directly hit Russian oligarchs and strike at the heart of Putin’s war machine”.
“Putin is wasting his dwindling resources on this useless and barbaric war. He is funding his ego at the expense of the Ukrainian and Russian people,” Johnson said. “We must deprive the Putin regime of its funding.”
According to Britain, the value of gold exports to the Russian elite has skyrocketed in the months since Moscow launched the war as wealthy Russians try to evade Western sanctions.
The ban will be officially announced at the leaders meeting for the annual summit on Tuesday.
Biden arrived in Germany’s scenic Bavarian Alps early Sunday morning to join his G-7 counterparts for the annual meeting. The ongoing global impact of Russia’s war on Ukraine should be a central point of discussion. The US president and international allies are working to present a united front in support of Ukraine.
White House National Security Council spokesman John Kirby said Saturday the summit will address inflation and other “challenges in the global economy in the wake of Mr. Putin’s war – but also how to continue to hold Mr Putin accountable”.
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“There will be muscle movements,” Kirby said aboard Air Force One during Biden’s flight to Germany.
Energy price caps designed to limit Russian oil and gas profits that Moscow can use in its invasion will be discussed.
A senior German official said the US price cap suggestion was the subject of intense discussion regarding its exact functioning and its fit with US, EU, UK, Canadian and Japanese sanctions regimes.
Officials are also expected to talk about how to secure climate change commitments while meeting energy supply needs.
“There is no weakening of climate commitments,” Kirby said.
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Biden will also officially launch a global infrastructure partnership on Sunday aimed at countering China’s influence in the developing world. The president introduced the initiative at last year’s G-7 summit and dubbed it “Building a Better World.”
Kirby said Biden and other world leaders would announce the first projects that would benefit from what the administration sees as an “alternative to infrastructure models that sell debt traps to low- and middle-income partner countries, and advance America’s economic competitiveness and our national security.”
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After the summit wraps up on Tuesday, Biden will travel to Madrid to meet with leaders of the 30 NATO nations to discuss strategy regarding Russia’s war on Ukraine.
The Associated Press contributed to this report.