Tags: Europe | Russia | Sanctions | Ukraine

EU Slaps New Economic Sanctions on Russia

Thursday, 11 Sep 2014 08:35 AM

The European Union has decided to slap new economic sanctions on Russia over what it sees as Moscow's meddling in eastern Ukraine, diplomats said Thursday.

The sanctions will further curb access to European capital markets for Russian banks and firms — specifically targeting the country's vital oil industry — limit exports of certain high-technology goods and target more officials with travel bans and asset freezes, diplomats told The Associated Press in Brussels.

The sanctions will take effect Friday following their publication in the EU's official journal but will be reversible if the situation in eastern Ukraine improves, four diplomats said independently. They spoke on condition of anonymity pending the official announcement.

Russia's stock market and its currency tumbled on the news. Russia's benchmark MICEX, which was rising Thursday morning, declined 0.7 percent after the report. The Russian ruble fell to an all-time low of 37.51 rubles against the U.S. dollar.

A summit of EU leaders almost two weeks ago called for the new sanctions, but then twice postponed to assess the impact of a cease-fire in eastern Ukraine. The United States previously said it was also considering new sanctions once the EU moves forward, and could take that step later Thursday.

The cease-fire between the Russian-backed separatists and the Ukrainian military took effect Friday but has been riddled by violations. In the most recent incident, two volleys of Grad rocket fire rang out Thursday in the rebel-held eastern city of Donetsk. The Donetsk city council confirmed multiple explosions in the morning but reported no casualties.

Meanwhile, a spokesman for Ukraine's National Security and Defense Council, Col. Andriy Lysenko, told journalists that a large swath near the Sea of Azov had come under full rebel control. While the changes likely happened before the cease-fire, it was an unusual admission by Ukraine of the scale of a rebel offensive on the coast that Kiev says was backed by Russian arms and soldiers. Russia denies the charge.

Ukrainian President Petro Poroshenko has sought to portray the cease-fire deal — reached as the rebels waged a major offensive that pushed back the Ukrainian troops — as a victory rather than a defeat, saying Wednesday about 70 percent of the Russian troops in eastern Ukraine had since withdrawn.

NATO, however, said Thursday its intelligence still shows that there are approximately 1,000 Russian troops with sophisticated weaponry like heavy artillery on Ukrainian soil. Another estimated 20,000 Russian troops are still amassed just east of the border, the alliance said.

In the new sanctions, the EU's current ban on credits and loans to Russian entities with a maturity of more than 90 days will be cut to 30 days, two diplomats said. Curbing access to western capital markets could weigh down Russia's already-flagging economic growth.

The export of some high-tech items and goods that can be used for military and civilian purposes, so-called dual-use goods, will also face further restrictions. In addition, more individuals, including Russian government officials and others close to Russian President Vladimir Putin, are also expected to be sanctioned.

Brussels has been more reluctant than Washington to sanction Russia because of its broad economic ties. Moscow is an important gas supplier for many EU nations and it is the bloc's third-largest trading partner overall. The EU's sanctions, however, have more impact than those imposed by the U.S. since the EU is by far Russia's largest trading partner.

In retaliation for earlier sanctions, Moscow banned food imports from the West, closing a market worth 10 billion euros ($13 billion) a year for European producers.

Russia has also issued a veiled threat that it could ban Western airlines from using Russian airspace if it were hit by further sanctions. That could close an important overland flight route to Asia for European airlines, leading to higher fuel costs and delays.

In the capital of Kiev, Ukrainians held posters and laid flowers Thursday in commemoration of terror victims killed in the Sept. 11 attacks in the United States and in the July 17 shooting down of Malaysia Airlines Flight 17 over eastern Ukraine.

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The European Union has decided to slap new economic sanctions on Russia over what it sees as Moscow's meddling in eastern Ukraine, diplomats said Thursday.The sanctions will further curb access to European capital markets for Russian banks and firms - specifically targeting...
Europe, Russia, Sanctions, Ukraine
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2014-35-11
Thursday, 11 Sep 2014 08:35 AM
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