EU Enforces Sanctions on Russia

Business | September 12, 2014, Friday // 08:07|  views

EU leaders have added they could renounce the measures if the ceasefire between Ukrainian troops and pro-Russian separatists in the country's east continues. Photo by EPA/BGNES

Fresh sanctions targeting key sectors of Russia's economy were introduced on Friday, with the EU adding it could lift them in case of a continuous deescalation in Ukraine.

New measures will see the current blacklist expanded by 24 more Russian officials and rebel leaders, who will be imposed visa bans and asset freezes.

The EU earlier said the list would be 119-strong after the new names were added.

Self-proclaimed "Donetsk People's Republic" leader Alexander Zakharchenko, "Luhansk People's Republic" Prime Minister Gennadiy Tsypkalov and the head of Russia's Liberal Democratic Party Vladimir Zhirivonsky and a number of MPs from the Russian State Duma are among the new entries, as well as other high-profile representatives of the two "republics".

They also include defense manufacturer Rostec CEO Sergey Chemezov, described in the document annoucing the bans as "one of [Russian] President Putin's known close associate (sic!)."

After the sanctions were made public the Official Journal of the European Union on Friday, in a statement EU officials elaborated the measures are targeting people individuals actively involved in actions or policies "undermining or threatening the terriotial integrity, sovereignty and independence of Ukraine."

Major oil companies Rosneft, Gazprom Neft and Transneft, and five state banks will be barred from financial markets.

Measures preventing Sberbank, Gazprombank, Vneshekonombank, Rosselhozbank and VTB from securing funding on financial markets have also been boosted.

EU deals with the abovementioned oil concerns and twelve defense companies (including OPK Oboronprom, United Aircraft Corporation and Uralvagonzavod) will be limited, and companies from the bloc will not be able to sell dual-use products to Russia.

The US could follow and issue new restrictions targeting defense, finance and energy.

Russian media reports suggest Washington could impose measures on Sberbank and fave other major financial companies.

Outgoing EU Council President Herman van Rompuy has added a detailed assessment will be made until the end of September as to whether a fragile truce is being upheld in Ukraine's east.

A more stable situation could result in the reversal of some or all sanctions, the Bulgarian National Radio's Brussels correspondent has reported him as saying.

After last week's ceasefire deal which Kiev struck with Donbass rebels, Ukrainian President Petro Poroshenko says most Russian troops, supposedly sent to help separatists, have pulled back from the country.

However, NATO maintains some 1000 troops from Ukraine's eastern neighbor remain there, and 20 000 more are still stationed at the Russian side of the border.

Russian President Vladimir Putin's Spokesman Dmitry Peskov noted the newest measures could neither be understood nor explained against the backdrop of Russia's efforts to wind down tensions in the Donbass.

The country's Foreign Ministry also commented [RU] on the sanctions in a statement, describing the move as a sign the EU is "detached from reality".

"An evident course is being established by certain powers within the European Union to further strain the already tense relations with the Russian Federation. Now that the fragile peace process in Ukraine has begun, an exchange of captives has started, now that all effort is seemingly redirected from piling up mutual accusations and escalation of sanctions to promotion of the search for ways out of Ukraine's internal conflict, such steps look particularly inappropriate and short-sighted," the diplomatic service said.

Moscow also asserted the "anti-Russian" measures will not be left without an adequate response.

Prime Minister Dmitry Medvedev earlier warned Russia's airspace could be sealed off for Western flights.

Counter-measures could also include imports of cars from the EU.

A ban on food imports from EU countries, but also from the US and various other states is currently in force.

Ratings agency Fitch has warned Russia could lose up to USD 120 B of foreign capital in 2014 and USD 100 in 2015 from the new restrictions.

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Tags: Rostec, Putin, Vladimir Putin, Sergey Chemezov, Gennadiy Tsypkalov, Alexander Zakharchenko, sanctions, Russia, Ukraine, EU, Herman van Rompuy, Petro Poroshenko, Dmitry Medvedev, Rosneft, Gazprom Neft, Transneft, Sberbank, US, Donbass, NATO, Fitch, OPK Oboronprom, United Aircraft Corporation, Uralvagonzavod, Sberbank, Gazprombank, Vneshekonombank, Rosselhozbank, VTB


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