Diplomatic relations between Russia and its Western partners continue to worsen. Washington has introduced a new round of sanctions against Russia over the Alexey Navalny case. This time, the batch of penalties is targeting the Russian government debt.
The fact that Western countries have gone further down the path of sanctions pressure demonstrates their unwillingness to be on friendly terms with Russia. Thus, Navalny-related sanctions are to be imposed under the 1991 Chemical and Biological Weapons and Warfare Elimination Act which describes restrictive measures for the use of chemical weapons. However, they will become effective only in July.
These restrictions are made up of several stages. The first one implies a ban on the supply of weapons and the "termination of assistance" from the United States, except for urgent humanitarian assistance. The second stage involves tougher sanctions after 90 days unless Russia complies with the CBW Act.
In other words, as early as June, Washington will prohibit US banks from lending money to Russia’s government agencies. This means that the US will impose sanctions on the Russian sovereign debt. However, such measures will definitely affect not only Russia but also the entire global financial system. Russian federal loan bonds (OFZ) are priced in all major global indices of developing countries. Accordingly, the second stage of US punitive measures could deal a serious blow to emerging markets.
