On Apr. 12, UK GVT clamped down on metal exports alongside the US.
UK GVT, UK Treasury announced jointly with US a clamp down on prohibited Russian metal exports, bringing two largest metal exchanges into the scope of existing bans.
UK LME also announced its intention to issue guidance to outline LME’s understanding of how UK legislation and trade licenses affect the position of Russian metal for LME.
On same day, OFAC acted with the UK GVT to reduce metals revenue, see #208031.
Joint Action
Russian metal producers have been blocked from profits from UK LME and the Chicago Mercantile Exchange (CME), reducing a crucial source of revenue for the Kremlin.
UK LME and CME will not trade new aluminium, copper, nickel produced by Russia.
Metals are Russia’s largest export commodity after energy, though their value has been decreasing since Russia’s invasion of Ukraine; in 2022 they were $25 billion, dropping to $15 billion in 2023 due to the efforts of G-7 and allies to curtail market.
Today’s action will further limit Russia's revenue from declining metal exports, striking another blow to President Putin's financing of his unlawful war in Ukraine.
Metal exchanges have a central role in facilitating trading of industrial metals globally.
UK LME and CME have warehouses all over the world; together they are the world’s two largest metal exchanges and set global benchmark prices for trade of base metals.
UK-US measures exempt the existing stock of Russian metal on the global exchanges so they can still be traded and withdrawn to minimize risk to market stability.
Apr. 13, 2024 UK LME Guidance
On Apr. 13, 2024, UK LME issued notice 24/171 on warranting/trading Russian metal.
Sets out the LME’s understanding of the recently introduced UK sanctions on Russian metals and the measures which the LME is introducing to comply with the sanctions.
Sanctions reflect the intention of the UK GVT to restrict the financial benefit which the RUS GVT may receive from metals produced in Russia that are traded globally.
Sets out LME’s understanding of how the UK legislation, trade licenses and guidance affect the position of Russian metal for the LME, LME Clear, members and clients.
Amended Sanctions Package enables LME, LME Clear, UK members/clients to continue to acquire Russian warrants as long as the metal was produced before Apr. 13, 2024.
If metal was produced on or after Apr. 13, 2024, UK persons prohibited from acquiring.
Apr. 23, 2024 UK LME Further Details
On Apr. 23, 2024, UK LME published further details in respect of UK LME's response to the recently introduced UK sanctions on Russian metals under notice 24/174.
Sets out UK LME’s further understanding of how the UK legislation, trade licenses and guidance affect the position of Russian metal for LME, LME Clear, members and clients.
Following implementation of new measures in response to amended sanctions package, LME engaged with market participants, to ensure the measures implemented to comply with UK sanctions regime continue to be as effective as possible.
Accordingly, UK LME considered it appropriate to make refinements to its approach.
Regulators
UK GVT; UK LME; UK LME Clear; UK Treasury
Entity Types
B/D; Bank; BS; Corp; Depo; Exch; Ins; Inv Co
Reference
Nt 24/174, 4/23/2024; Nt 24/171, 4/13/2024; PR 24/170, PR, 4/12/2024; StIn 2019/855
