EU to ban credit ratings agencies from doing business with Russia

Brussels: European credit rating agencies will be prohibited from rating Russia's sovereign debt and the country's companies as part of the latest EU sanctions package, set to go into effect from Tuesday.

The ban will "result in them losing even further access to the EU's financial markets" as a result of the invasion of Ukraine, the European Commission said in a statement outlining the contents of the fourth package of punitive measures.

Companies that assign credit ratings ascertain a debtor's ability to pay back debt by making timely principal and interest payments, as well as the likelihood of defaulting on that debt.

The package agreed upon by EU leaders at a summit last week blocks Russia's access to funds from the International Monetary Fund (IMF) and the World Bank and moves to strip Russia of its "most favoured nation" status at the World Trade Organization (WTO).

The sanctions also ban EU investment in the Russian energy sector and the Kremlin's military-industrial complex. The import of Russian steel and iron and the export of luxury goods from the EU to Russia are also prohibited as part of the package.

Wary of energy supply disruptions, the bloc has resisted targeting Russian energy imports despite strong criticism from Poland, Latvia and Lithuania.