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G-7 restricts more goods but avoids near-total Russia export ban

G-7 restricts more goods but avoids near-total Russia export ban
Police officers patrol Red Square, near the Kremlin, in Moscow, Russia, on Tuesday, Feb. 15, 2022. Russia announced the start of a pullback of some forces after drills that raised U.S. and European alarm about a possible military assault on Ukraine. Photographer: Andrey Rudakov/Bloomberg

(Bloomberg) -- Group of Seven nations have decided against imposing a near-outright ban on exports to Russia and will instead widen existing restrictions on key goods, according to people familiar with the matter.

G-7 envoys had discussed flipping the existing sanctions regime around, with all exports barred unless exempted. Under the current criteria all exports are allowed unless sanctioned. The exemptions would have included medicines, agricultural goods and food.

However, the latest draft of a statement that G-7 leaders are set to adopt at their summit in Hiroshima that started Friday doesn’t include the provision.

The move would have been too complicated for some members to implement given different legal and regulatory systems, including those in the European Union, the people said. Such a near-total ban would also have required the agreement of all EU states.

The G-7 will instead broaden the list of banned goods to restrict items critical to Russia’s war in Ukraine, including those used on the battlefield, such as exports of industrial machinery and tools, according to the draft statement. The G-7 will also further target key sectors, such as manufacturing, construction, transportation and business services.

Beyond hitting Moscow’s revenue, a main focus of the G-7 is to close sanctions loopholes and strengthen enforcement, especially in regards to third countries through which Russia is importing banned goods.

G-7 to Chase Russia’s Diamonds While Stopping Short of Total Ban

As part of those efforts, the G-7 is also set to announce that members will work together to restrict trade in Russian diamonds, and take action against countries they believe materially support Moscow’s war.

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