EXPLAINER: How a G-7 ban on Russian gold would work

WASHINGTON (AP) — Russia appears to have defaulted on its foreign debt for the first time since the 1917 Bolshevik Revolution, and the U.S. and its allies are taking aim at the former Soviet Union's second largest export industry after energy — gold.

On Tuesday, the Group of Seven nations will formally announce a ban on Russian gold imports in the latest round of sanctions over Vladimir Putin’s invasion of Ukraine.

The U.S. says Russia has used gold to support its currency as a way to circumvent the impact of sanctions. One way to do that is by swapping gold for a more liquid foreign exchange that is not subject to current sanctions.

Some experts say since only a few countries are implementing the gold ban, the move is largely symbolic, while others, including those in the administration, say a ban on imports of Russian gold will target its ability to interact with the global financial system.

How a G-7 Russian gold ban would work:

HOW MUCH GOLD DOES RUSSIA HAVE?

Secretary of State Antony Blinken told CNN on Sunday that since gold is Russia's second most lucrative export after energy and nearly 90% of the revenue comes from G-7 countries, "cutting that off, denying access to about $19 billion of revenues a year, that’s significant.”

“It can’t acquire what it needs to modernize its defense sector, to modernize its technology, to modernize its energy exploration," Blinken said.

Russia began increasing its gold purchases in 2014, after the U.S. issued sanctions on Russia for Putin’s invasion of Crimea. Now the country holds $100 billion to $140 billion in gold reserves, which is roughly 20% of the holdings in the Russian Central Bank, according to U.S. officials.

HOW WOULD A GOLD BAN WORK?

While Russia will still able to sell gold to other countries outside the Group of...