Last month, City of London clearing houses, working with Russian state-run VTB bank, issued $4 billion of Russian sovereign debt, according to data quoted by the media.

The idea is being pushed by Tom Tugendhat, the foreign affairs select committee chairman. “At present, Russia can borrow in EU and US capital markets despite western sanctions and then can support the sanctioned Kremlin-linked banks and energy companies that can no longer do so,” he said.

Tugendhat criticized the recent sale, saying that it helped Russians living overseas to repatriate capital, which he claims is the long-term goal of the Kremlin.

“One of the ways that people are getting their money out of this country is by allowing Russian sovereign debt to be sold in the UK, and that debt to be used to reimburse Russians, in a way, to bring back their money onshore, in Moscow terms. As that gold is moving towards Moscow, we are, quite extraordinarily, enabling those bond auctions, those debt auctions,” he said.

Critics of the proposal in the British Parliament are saying the ban could hurt British investors and Russia would just sell bonds in China.

Russian Deputy Finance Minister Aleksey Moiseev has said the ban would hurt Russia, but the biggest losers would be foreign investors who bought the bonds.