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US widens sanctions on Russia, EU takes time to think over

Published time: July 16, 2014 20:29
Edited time: July 17, 2014 00:52

US President Barack Obama.(AFP Photo / Jewel Samad )

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The Obama administration has widened the list of sanctions unilaterally targeting individuals as well as financial institutions and defense companies which the US believes are involved in destabilizing the situation in Ukraine.

The US has moved to impose tougher sanctions against Russia over the tense situation in Ukraine. The widened set of restrictions have been placed on the country's largest oil producer Rosneft and major bank Vnesheconombank among others.

Wednesday's announcement came only moments after a meeting concluded in Brussels between EU delegates, who soon after announced their own plan to wage penalties against Russia. Efforts to immediately impose broad, sectorial sanctions favored by hard-liners were rejected, however, in lieu of establishing a timetable that may allow for the EU to penalize Russia after the end of the month.

On Wednesday, the European Council asked that the European Investment Bank "suspend the signature of new financing operations in the Russian Federation." Additionally, the Council revealed it will announce by the end of July what Russian entities and persons will be targeted by its own sanctions.

Meanwhile, among the individuals Washington has blacklisted are Minister for Crimean Affairs Oleg Savelyev, Deputy Chairman of the State Duma (Russian Parliament) Sergei Neverov, presidential aide Igor Shchegolev and Donetsk People's Republic (DPR) PM Aleksandr Boroday.

Speaking of the new restrictions being levied during a press conference from the White House on Wednesday afternoon, US Pres. Barack Obama said the latest sanctions are targeted, but "designed to have maximum impact on Russia while limited any spillover affect on American companies" or allies.

"Russian leadership will see once again that its actions in Ukraine has consequences," added Obama. "We live in a complex world and at a challenging time. None of these challenges lend themselves to quick or easy solutions, but all of them require American leadership."

"The US will continue to offer our strong support to Ukraine," Pres. Obama insisted.

Blacklisted defense sector companies include "Almaz-Antey" corporation, the "Kalashnikov" concern and Instrument Design Bureau, as well as companies and NGOs such as “Izhmash","Basalt" and Uralvagonzavod.

Another financial institution added to the sanction list is OAO Gazprombank, a company specializing in private banking and corporate financing services.

Production of AK machine-guns, designed by Mikhail Kalashnikov in 1947, at the Izhevsk Machine Building Factory.(RIA Novosti / Vladimir Vyatkin)

In its press release, the US Department of Treasury says that new sanctions were adopted in response to the “continued attempts to destabilize eastern Ukraine” and the “ongoing occupation of Crimea.”

In particular, the US aims to limit access to US capital markets by Russian banks – Gazprombank OAO and VEB – as well as energy companies OAO Novatek and Rosneft.

Washington explains that it has imposed sanctions against DPR and LPR because they are not recognized by Kiev, despite having achieved an overwhelming victory in self-determination votes.

“Treasury designated the “Lugansk People’s Republic” and the “Donetsk People’s Republic,” which have asserted governmental authority over parts of Ukraine without the authorization of the Government of Ukraine; and Aleksandr Boroday, the self-declared “prime minister” of the Donetsk People’s Republic, for threatening the peace, security, stability, sovereignty, and territorial integrity of Ukraine,” the press release says.

Feodosiya Enterprises, a key shipping facility in the Crimean peninsula, has also been blacklisted as complicit in the “misappropriation of state assets of Ukraine”.

US says that the aim is to increase the “isolation” of Russian companies.

“By imposing sanctions on entities within the financial services and energy sectors, the Treasury has increased the cost of economic isolation for key Russian firms that value their access to medium- and long-term US sources of financing. By designating firms in the arms or related materiel sector, Treasury has cut these firms off from the US financial system and the US economy.”

US Treasury Building in Washington, DC.(AFP Photo / Brendan Smialowski)

Sergei Ryabko, the deputy foreign minister of the Russian Federation, added in a statement Wednesday that "arrogance and cynicism - are the two words that best characterize US policy toward Russia."

"No Fuss, we take it calmly, carefully," Ryabkov said of the sanctions, adding that "such actions affect Americans" and US interests, and will hamper “the achievement of foreign policy and economic goals that they have set for themselves.”

President of Rosneft Igor Sechin called the sanctions “unlawful”, claiming they will “harm” the American partners of the Russian company, reiterating Russian President's remarks at BRICS summit.

“The decision on the inclusion of Rosneft in the sanctions list is unreasonable, subjective and illegal in the absence of the company's role in Ukraine's crisis,” he said. “This move is also detrimental to the US shareholders and American banks who collaborate [with Rosneft] under the loan agreements. "