Rishi Sunak has said he is urging firms to think very carefully about how their investments in Russia "may aid the Putin regime." (Wiktor Szymanowicz/Future Publishing via Getty Images)
He said on Sunday that he welcomed commitments from major British multinationals — including energy giant BP PLC, insurer Aviva PLC and investment manager M&G PLC — to reduce or sell their holdings in Russia.
"I am urging firms to think very carefully about their investments in Russia and how they may aid the Putin regime, and I am also clear that there is no case for new investment in Russia," Sunak said. "We must collectively go further in our mission to inflict maximum economic pain - and to stop further bloodshed."
The Chancellor said his call for corporate action is part of the government's strategy to send a clear message that Putin's invasion of Ukraine will come at a huge economic cost to Russia.
Britain has already imposed sweeping sanctions on Russia. The measures include freezing assets of individuals close to Putin and preventing Russian banks from having access to sterling and clearing payments in the U.K.
Sunak and John Glen, the City minister, met asset managers last week to discuss Britain's investment in Russia, the Treasury said.
Sunak said the government recognizes that some companies could find that it takes some time to wind down their positions in Russia slowly and safely because of the raft of sanctions placed on Russia by the West. The Chancellor said that the government would give support to businesses that want to get rid of assets.
The Financial Conduct Authority said on Sunday that regulated financial firms are already taking steps to avoid new investments in the Russian economy.
"Many asset managers and pension providers have written down any Russian assets already held by the fund or scheme to zero, and some have announced that they are intending to divest themselves of such assets when it is practical to do so," the financial watchdog said.
"Major index providers have taken steps to remove Russian securities from their equity and bond indices," it added.
--Editing by Ed Harris.
For a reprint of this article, please contact reprints@law360.com.
