Tags: Russia | banks | Ukraine | MH17

Russia to Aid Sanctioned Banks If Needed as MH17 Probe Stymied

Wednesday, 30 July 2014 10:03 AM

Russia’s central bank said it’s ready to help lenders targeted by the U.S. and Europe in their latest round of sanctions, as Dutch experts again abandoned an attempt to visit the crash site of Malaysian Air Flight 17.

European Union governments agreed yesterday on their most sweeping sanctions against Russia to date, barring state-owned banks from selling shares or bonds in Europe, restricting the export of equipment to modernize the oil industry and barring the sale of technology with military uses. The sanctions are an attempt to get President Vladimir Putin to back down in Ukraine.

“The financial organizations function normally and render their customers a complete range of services, including funds transfers and banking-card settlements,” the central bank said in an English-language statement on its website today. “If necessary, adequate measures will be taken to support the said organizations with the view of protecting interests of their customers, depositors and creditors.”

The EU sanctions align the 28-member bloc with the actions taken by the U.S. With many European countries reliant on Russian oil and natural gas, the sanctions stopped short of the full-scale commercial warfare that could damage the European economy, which is still shaking off the euro debt crisis.

Dutch Investigators

Dutch investigators coordinated by the Organization for Security and Cooperation in Europe abandoned plans to reach the MH17 crash site from the city of Donetsk today because of what it said was heavy fighting. They’ve tried to reach the area to recover victims’ remains and investigate since last week.

A reconnaissance team determined “the situation on and along the route is too dangerous,” Pieter-Jaap Aalbersberg, who heads the mission, said in an e-mailed statement. “We’ll continue to try and reach the crash site in the coming days, but the question remains whether the situation will become safer.”

The convoy was stopped en route to the crash site, Aalbersberg said. The OSCE decided to abort the reconnaissance and return to Donetsk after considering different routes and negotiations with separatists, Aalbersberg said. Dutch-led investigators have been seeking to visit the site since July 26, but have been hindered by fighting.

Heavy Artillery

Pro-Russian rebels are amassing heavy artillery at their new firing positions near the area of the MH17 crash site, Ukrainian Defense Ministry spokesman Andriy Lysenko said in Kiev today. Lysenko also said the separatists are mining approaches to their positions near where the Malaysian jetliner came down. He and other Ukrainian officials have insisted government forces aren’t operating in a 12 mile radius surrounding the crash site.

The new sanctions will “very quickly show impact,” German Economy and Energy Minister Sigmar Gabriel told reporters in Berlin today. Russia’s economy “isn’t in very good shape,” he said.

The EU measures were followed hours later by U.S. penalties against three Russian banks and a state-owned shipbuilder, adding to restrictions announced two weeks ago. The U.S. sanctions target VTB Bank, Bank of Moscow and the Russian Agricultural Bank, as well as United Shipbuilding Corp.

The Group of Seven nations are discussing ways to coordinate sanctions applied to Russia, German government spokeswoman Christiane Wirtz said today at a regularly scheduled news conference in Berlin. The G-7 includes Japan and Canada in addition to the U.S. and the four nations already taking part in EU sanctions. Wirtz said there is “no guarantee” that the sanctions will lead to a stable Ukraine.

Russia Reacts

Russia said the U.S. sanctions aren’t legitimate and will only worsen relations between the two countries. It said the White House was acting in a “pretentious, prosecutorial manner” to provide cover for what it called a “bloody operation” by Ukraine’s government.

“The real losses from such a destructive, shortsighted policy will be felt very acutely in Washington,” Russia’s Foreign Ministry said on its website.

Investors are signaling concern about the impact of sanctions on Russia’s $2 trillion economy with government bonds headed for their worst monthly losses since May 2009.

Stocks, Ruble

Russian stocks gained and the ruble strengthened for the first time in five days as some investors saw U.S. and European Union sanctions as milder than anticipated.

The benchmark Micex Index added 2.2 percent to 1,400.39, the strongest advance in more than a month. The Moscow exchange’s main market halted trading at around 2 p.m., and authorities were investigating the cause, the exchange said. The ruble was 0.2 percent stronger against the central bank’s euro-dollar target basket at 4:56 p.m. in Moscow.

Shares in OAO Sberbank, Russia’s biggest lender, have fallen more than 10 percent in the last month. The bank isn’t on the U.S. list.

Separately in Kiev, the state statistics office said on its website today that the nation’s economy shrank 4.7 percent year-on-year in the second quarter.

Ukraine’s army made further advances on the ground, taking over the city of Avdiyivka and fighting to regain control of Pervomaysk in eastern Ukraine, the Defense Ministry said on its Facebook page today. The ministry said there were no casualties among government troops overnight.

The Donetsk regional administration said that 19 people died and 31 were wounded in the region during the last 24 hours. It didn’t specify if the victims were civilians or combatants.

Belarus President Aleksandr Lukashenko said he was willing to hold talks on the Ukraine crisis. Lukashenko said he was responding to a request made by Ukrainian President Petro Poroshenko to host discussions tomorrow to “resolve the situation.”

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Russia's central bank said it's ready to help lenders targeted by the U.S. and Europe in their latest round of sanctions, as Dutch experts again abandoned an attempt to visit the crash site of Malaysian Air Flight 17.
Russia, banks, Ukraine, MH17
Wednesday, 30 July 2014 10:03 AM
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