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EU and US impose new round of sanctions on Russia over Ukraine

Published time: July 29, 2014 18:58
Edited time: July 30, 2014 09:43

President of the European Council Herman van Rompuy (r) and Head of the European Commission Jose Manuel Barroso greet US President Barack Obama (c) upon arrival for the G7 summit at the European Council headquarters.(AFP Photo / Georges Gobet)

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Both the European Union and the United States announced a new round of sanctions against Moscow on Tuesday, accusing the Kremlin of supporting anti-Kiev militias in eastern Ukraine and threatening to cripple the Russian economy.

The 28-member nations tied to the EU were first to acknowledge in a statement Tuesday that they’ve agreed to impose broader sanctions to “limit access to EU capital markets for Russian State-owned financial institutions, impose an embargo on trade in arms, establish an export ban for dual use goods for military end users and curtail Russian access to sensitive technologies particularly in the field of the oil sector.”

So-called "sectorial" sanctions imposed by the EU became the most serious step against Russia, the member states have agreed. European leaders have been increasing pressure on the Russian government for several months by extending visa bans and asset freezes for a number of individuals that the EU considers responsible for Moscow's policy toward Ukraine or close to the ones who are. However, many European countries were reluctant to target entire sectors of the Russian economy, understanding that it could hurt the EU since Russia is among the Union’s major trade partners.

READ MORE: European Union agrees on Russian sectoral sanctions - top EU officials

Hours after the announcement of the European sanctions, US President Barack Obama said during an afternoon address outside of the White House that the Treasury Department was adding four names to the list of Russian Federation-affiliated entities sanctioned by Washington, including the Bank of Moscow, the Russian Agricultural Bank and VTB Bank OAO, as well as the state-owned United Shipbuilding Corporation.

Additionally, Pres. Obama said that the US would also be “blocking the exports of specific goods and technologies to the Russian energy sector,” “expanding sanctions to more banks” and “suspending credit that encourages exports to Russia.”

“Because were closely coordinating our actions with Europe, the sanctions we are announcing today will have an even bigger bite,” Obama warned.

The US has previously imposed a number of sanctions against Russia, including penalties on the nation’s largest oil producer, Rosneft, and banking giant Vnesheconombank, among others, to punish the Federation over its perceived involvement in the eastern Ukrainian conflict that in recent months has pitted the country’s own military against anti-Kiev militias. The latest round of penalties, however, is the first imposed by either the EU or US in the wake of the tragic Malaysia Airlines Flight 17 crash that cost nearly 300 passengers their lives earlier this month.

“The US continues to do everything in our power to help bring home their loved ones, support the international investigation and make sure justice is done,” Obama said of MH17 tragedy. “Since the shoot-down, however, Russia and its proxies in Ukraine have failed to cooperate with the investigation and to take the opportunity to pursue a diplomatic solution to the conflict in Ukraine.”

“These Russian-backed separatists continue to interfere in the crash investigation,” Obama added, and “continue to shoot down Ukrainian aircraft in the region.”

The president also said that US intelligence is increasingly making it clear that Russian troops are amassing near the country’s border with Ukraine, have fired artillery over international boundaries and continue to “support the separatists and encourage them and train them and arm them.”

“It does not have to be this way,” insisted Obama. “This is a choice that Russia and Pres. Putin in particular has made.”

Russia repeatedly denied accusations that it is relocating troops to the Ukrainian borders and supplying anti-Kiev militias with arms. International monitoring groups, invited by Moscow, also didn't find any evidence of violations from the Russian side.

Nevertheless, Obama said Russia should recognize that it “can be a good neighbor and trading partner with Ukraine even as Ukraine is also developing ties with Europe and other parts of the world.”

When asked if the conflict was creating the potential for another cold war, Obama answered in the negative.

“It’s not a new cold war,” Pres. Obama said. “What it is is a very specific issue related to Russia’s unwillingness to recognize that Ukraine can chart its own path."

The latest round of injunctions prohibit US citizens and companies from dealing with debt carrying maturities longer than 90 days, with regards to the banks, and freezes any assets the St. Petersburg-based shipbuilders may hold in the US.

“Russia’s actions have made a weak Russian economy even weaker,” said Obama. According to the president, sanctions already imposed against Russia have ravaged growth projections and discouraged would-be investors.

"I assure you, we will overcome any difficulties that may arise in certain areas of the economy, and maybe we will become more independent and more confident in our own strength," Russian Foreign Minister Sergei Lavrov said earlier this week on Monday. "We can't ignore it. But to fall into hysterics and respond to a blow with a blow is not worthy of a major country."