The sanctions taken against Russia by the West over its annexation of Crimea are already having an impact, which is set to deepen in coming months.
The first round of sanctions, which came out earlier in March, were viewed as weak, but a second round announced last week seemed to have more far-reaching impact. Visa and MasterCard have stopped providing services for clients at the two Russian banks, Rossiya and SMP, which have already been targeted by sanctions.
"The actions taken by the US/EU bring Russia to the outer limit of the 'inconvenient' sanctions," Chris Weafer, senior partner at Moscow-based firm Macro-Advisory Ltd, said. "Any additional sanctions are likely to cross into the trade and economy disruption category. It is that threat which is now of greatest concern to investors and the business community."
Patriotic Russians have opened accounts at Bank Rossiya in response to the sanctions, according to Yuri Kovalchuk, the bank's chairman and one of the influential Russians targeted by sanctions.
Targeted trade bans, which are likely to be the next phase of sanctions, have not happened, but many companies seem to be behaving as though they are.
"We're not getting responses to calls or emails on deals that are supposed to close within weeks," one source at a Russian company told CNBC, speaking about Western companies whom they are supposed to buy goods from.
"There have also been numerous anecdotal reports of orders for goods and services to and from Russia being canceled and of a number of financial transactions being halted or at least delayed," Stephen Leach, emerging market economist at Citi, pointed out.
There are growing concerns that Western jobs are now at real risk if sanctions continue or are increased. Companies like Boeing, which uses Russian titanium, or General Electric, which leases aircraft to Russian airlines, may see profits dented by sanctions.
A series of meetings between the G-7 nations: Canada; France; Germany; Italy; Japan; the United Kingdom and the United States this week in Europe and Ukraine is expected to further raise tensions.
Germany, one of Russia's closest European trading partners, with more than 6,000 businesses engaged in Russia, has adopted a harder line than some expected on sanctions. The government last week indefinitely suspended a planned 100 million euro ($140-million) contract for German defense group Rheinmetall to build a training camp for Russian forces.
Russia's Deputy Defence Minister Anatoly Antonov called the decision "unconstructive" and "canceling out the positive trends developed in recent years," according to Interfax, the Russian news service.
The BGA exporters' body, Germany's main trade body warned that further economic sanctions would be a "real catastrophe" on Friday.
The impact on Russia and Ukraine's economies will not be clear for weeks, until the economic data from when the escalation in tensions began is released. However, economists have rushed to downgrade their 2014 growth forecasts for both economies.
MOSCOW, RUSSIA - MARCH 24: Russian President Vladimir Putin speaks during a state award ceremony honoring participants of the Olympic and Paralympics Games in Sochi in the Kremlin, March 24, 2014 in Moscow, Russia. Putin awarded Russian citizens and also citizens of other countries for the successful preparations of the games. Among the guests at the award ceremony were coaches, athletes, the chiefs of sports federations, journalists, officials, and constructors (Getty Images)
Within Russia, there are major concerns about the impact on confidence for consumers and businesses, and about money being taken out of the country and invested elsewhere. Investors with more stomach for risk should look at Novatek, Megafon and CTC Media, according to Weafer. All have seen their share prices hit by concerns about sanctions against major investors, but are fundamentally good businesses, he argued.
Around $45-50 billion was taken out of the country in 2014 up until the middle of March, according to Goldman Sachs, the bank charged with restoring Russia's image internationally, compared to $63 billion in the whole of 2013.
In the West, the tens of thousands of companies with Russian links may just have to grin and bear it.
Nils Andersen, chief executive of Danish shipping company Maersk, told CNBC: "If it comes to sanctions everybody involved in international commerce where Russia and areas around Russia and even Europe is involved will be affected to a large or smaller extent. We just hope that the sanction will be reasonable if any and we will have to find solutions."
- Russian troops seize Ukrainian naval base
- Why sanctions and S&P may spoil Russia's Crimea party
- Ukraine's battered economy
Meanwhile, the Kremlin has retaliated with sanctions against the West.
The Russian Foreign Ministry announced on Monday that 13 Canadians were banned from entering Russia, including the head of the Ukrainian Canadian Congress, Paul Grod, as well as politicians and aides to Prime Minister Stephen Harper. This followed a similar ban last Thursday on nine U.S. lawmakers, including House Speaker John Boehner, Senate Majority Leader Harry Reid, Senate Foreign Relations Committee Chairman Robert Menendez, and Senator John McCain.
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