Singapore to Impose Restrictions on Russian Financial and Crypto Transactions

In a rare move, Singapore is going to introduce restrictions on certain Russian financial transactions and crypto operations aimed at evading sanctions. The decision comes amid officially expressed concerns that Moscow’s invasion of Ukraine is a threat to the security of small states around the world.

For the first time in decades, as acknowledged by a former diplomat, Singapore is taking steps to sanction another nation without approval from the United Nations Security Council. The city state is preparing to do that against Russia over its military invasion of Ukraine, the South China Morning Post reported, quoting the Ministry of Foreign Affairs which stated:

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.

In an announcement published Saturday, the department detailed that the measures include the introduction of export controls on items that can be used for military purposes as well as restrictions on doing business with selected Russian banks — VTB Bank, Vnesheconombank, Promsvyazbank, and Bank Rossiya — and non-bank entities. Their assets and funds in Singapore shall be frozen.

Providing financial services facilitating fund raising by the Russian government, the central bank or affiliated entities will not be permitted. Restrictions will also apply to some sectors of the economies of the two breakaway Ukrainian regions, Donetsk and Lugansk, which Russia decided to recognize as independent states.

Furthermore, certain crypto flows may also be affected as the ministry revealed it was prohibiting payment service providers operating with digital assets, including NFTs, from facilitating transactions that could be used to evade the measures applicable to all other financial companies.

The move comes after Singapore’s Foreign Minister Vivian Balakrishnan told the parliament on the last day of February that Russia’s show of force threatens a world order that “would be profoundly inimical to the security and survival of small states,” the publication notes.

Singapore’s trade with Russia reached $3.7 billion last year, according to official data provided by the Ministry of Trade and Industry. Imports from the Russian Federation and Ukraine combined represented only around 0.8% of total received by the island nation.

The report further reveals that Singapore’s major banking institutions are already restricting trade financing for Russian raw materials. That includes a halt on issuing in U.S. dollars for trades involving oil and liquefied natural gas.

Sanctions have been raining down on Russia since the beginning the military assault on Ukraine. Most of them have been imposed by the U.S., EU and their allies. Singapore is so far the only Southeast Asian nation to introduce similar measures despite the majority of the members of the Association of Southeast Asian Nations (Asean) condemning Russia’s attack at the U.N.

Do you think more Asean countries will join Singapore in imposing sanctions on Russia for its military invasion of Ukraine? Tell us in the comments section below.