Singapore to impose sanctions on Russian banks and cryptocurrency funding

Singapore will impose unilateral sanctions against Russia, a move a former diplomat said was the first time in decades that the city-state was censuring a foreign nation without backing from the UN Security Council.

Sanctions include the imposition of export controls on items that can be used as weapons, financial measures on designated Russian banks and restrictions on cryptocurrency transactions that may be used to circumvent financial sanctions, said the Ministry of Foreign Affairs on Saturday.

“For a small state like Singapore, this is not a theoretical principle, but a dangerous precedent. This is why Singapore has strongly condemned Russia’s unprovoked attack on Ukraine,” the ministry said.

The measures also ban Singapore’s financial institutions from providing services that would aid Russia’s government in raising new funds. Singapore’s trade in goods with Russia amounted to about S$5 billion ($3.7bn) in 2021, a representative from the Ministry of Trade and Industry said in an email, adding that imports from Russia and Ukraine equal 0.8 per cent of total imports to the city-state.

Singapore's sovereign wealth fund, GIC, on Saturday said it will cease investments of the government’s funds into newly-issued Russian sovereign and central bank debt. “GIC continues to assess the Russian-Ukrainian situation and will ensure compliance with all applicable laws and regulations,” a GIC spokesperson said in an e-mail.

The tiny island nation rarely imposes sanctions on other countries in the absence of binding UN Security Council approval, with Foreign Minister Vivian Balakrishnan telling parliament on February 28 that Russia’s show of force threatens a world order that “would be profoundly inimical to the security and survival of small states".

Singapore’s biggest banks are already restricting trade financing for Russian raw materials including a halt on issuing letters of credit in US dollars for trades involving oil and liquefied natural gas. Singapore Airlines has meanwhile suspended all return services with Moscow due to operational reasons.

So far, the city-state is the only South-East Asian nation to impose sanctions against Russia, although seven of the 10 countries in the Association of South-East Asian Nations voted to condemn its invasion of Ukraine at the UN General Assembly on Wednesday. Laos and Vietnam abstained. Regional leaders are wary of the potential fallout from the war, with Asean foreign ministers on Wednesday calling for an “immediate ceasefire".

We “are deeply troubled by the intensifying gravity of the situation and ensuing worsening humanitarian conditions resulting from the ongoing military hostilities". they said in a joint statement. The US, UK, EU and Asian nations have by contrast ramped up sanctions against Russia in an effort to isolate the country.