Russia under sanctions after the war in Ukraine
The war waged by the Russian government against Ukraine is not even two weeks old and lots of consequences are already visible. First, I want to express my sympathy for the victims: the Ukrainians perishing under bombs and tanks, but also the Russian soldiers sent to a deadly war by Putin.
The rest of the world, beyond Russia few allies, has engaged in economic and technological sanctions. Our secure transactions industry plays its role in this global movement.
Russian financial institutions have been targeted by sanctions. Sberbank, the largest financial institution in Russia, has seen its European arm closed upon orders issued by the ECB, the European Central Bank. Moreover, several other Russian banks have been cut from Swift. And even the Central Bank of the Russian Federation (CBR) is under sanctions, essentially at the initiative of the USA. Consequently, the CBR has announced it will resume buying gold from the domestic market as the ruble collapses.
Visa and Mastercard have announced they suspend their operations in Russia, in compliance with US and international sanctions. As a consequence, Visa and Mastercard cards issued in Russia will no longer work abroad and Visa and Mastercard cards issued abroad will no longer work in Russia. American Express, Paypal, Discover Financial Services and Diners Club International are following Visa and Mastercard example. Mir, the Russian national payment system, which is 100% owned by the CBR, continues to operate domestic payments allowing its customers to make withdrawals and domestic transfers.
These moves also have consequences in terms of global balance of power. According to Reuters, several Russian banks, including Sberbank, Alfa Bank and Tinkoff announced they would soon start issuing cards using the Chinese UnionPay scheme coupled with Russia's own Mir network.
Besides the financial companies, many others in various tech sectors are halting their activities in Russia: Microsoft, Airbnb, Intel, AMD, Samsung, Oracle, SAP, Apple, Netflix, Spotify, TikTok … Google and YouTube are blocking RT and Sputnik contents in Europe. At the same time, the Russian government has shut down access to Facebook and Twitter in Russia.
Semiconductor manufacturing is also to be affected as, according to Techcet, Ukraine supplies more than 90% of US semiconductor-grade neon which is critical for lasers used in chip manufacturing. The company also noted 33% of US palladium, used in sensors, memory and other chips, comes from Russia.
Everyone anticipates the risk of a cyberwar in addition to the already launched classical war. According to DW, there have been at least 150 cyberattacks in Ukraine since Russia's invasion, including wipers, which delete information on a network, ransomware, DDoS, defacement attacks and fake news. However, analysts consider the impact of these cyberattacks is more psychological. Also, virus attacks cannot be limited to one country. One may remember the NotPetya virus in 2017, which already targeted Ukraine, but quickly spread globally.
Cyberattacks can go both ways. The Ukrainian government has asked for the help of volunteer hackers to target Russia. Anonymous hacker group claims they have already made some intrusions on Russian state media channels, reprogramed EV charging stations or disrupted train traffic in Belarus. Experts in cybersecurity remain on alert in anticipation of major cyberattacks that could affect financial, communication or energy infrastructures, in Ukraine and globally.
Let's not forget, while the world is after economic sanctions, people are perishing under bombs in Ukraine.