Europe has banned top credit rating agencies from rating Russian sovereign debt and companies. The ban is part of the latest sanctions package from the European Union.
As a result, S&P Global Ratings will withdraw the ratings of all Russian companies before April 15, 2022. The decision comes weeks after parent company S&P Global suspended operations in Russia.
The rating agency joins other global companies leaving Russia. S&P Global also boycotted Russian companies after the European Union banned the agency from providing credit ratings to legal entities, entities or entities established in Russia.
Western sanctions have frozen most of Russia's US$640 billion worth of central bank assets. It then banned several banks from the SWIFT global payment system and made the ruble in free fall.
Not only S&P Global, Moody's and Fitch also suspended operations in Russia earlier this month. All three would risk losing their license to operate in the European Union if they violated the ban.
The trio also pulled several ratings on Russian companies that have been subject to the toughest US sanctions, namely the Office of Foreign Assets Control (OFAC). The EU move would force dozens more Russian companies to be treated the same way.
S&P Global declined to comment on the European Commission announcement when asked by Reuters. Meanwhile Moody's does not respond to emails or calls.
Only Fitch responded. "Comply with all relevant regulations for credit rating agencies," he said.
Other measures in the EU's new sanctions package include a ban on imports of Russian steel products which are currently under EU security measures. The ban is expected to eliminate Russia's export earnings by up to 3.3 billion euros, or US$330.15 million.
There is also a ban on the export of luxury goods such as luxury cars and jewellery. Including, an increase in the number of wealthy people who are sanctioned for having ties to Russian President Vladimir Putin.
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