MOSCOW — U.S. and European sanctions against Russia’s energy and finance sectors are strong enough to cause deep, long-lasting damage within months unless Moscow persuades the West to repeal them by withdrawing support for Ukrainian insurgents.
The U.S. and European Union released details Wednesday of new sanctions aimed at hurting Russia’s economy without doing undue damage to their own trade interests, punishment for alleged Russian support for Ukrainian rebels and Russia’s annexation of the Ukrainian peninsula of Crimea.
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SANCTION DETAILS
The EU’s new sanctions against Russia will:
BANKS AND BONDS
Prohibit the sale of bonds and shares on the EU market by banks controlled by the Russian government.
ARMS EMBARGO
Ban exports and imports of weaponry and other military goods to and from Russia.
OIL TECHNOLOGY
Prohibit the exports of certain oil exploration equipment to hamper the long-term development of Russia’s oil industry.
ASSETS AND TRAVEL
Impose asset freezes and travel bans on 95 Russian officials or pro-Russian Ukrainians held responsible for the annexation of the Crimean Peninsula or the destabilization of eastern Ukraine. They include three close associates of President Vladimir Putin: his former judo partner Arkady Rotenberg, and the two largest shareholders of Bank Rossiya – Yuri Kovalchuk and Nikolai Shamalov.
– The Associated Press
The sanctions go further than earlier penalties – which had largely targeted individuals – by broadly limiting the trade of weapons and of technology that can be used in the oil and military industries. The EU also put its capital markets off-limits to Russian state-owned banks.
The bloc blacklisted three more companies and eight additional individuals, bringing the total to 95 people and 23 entities that have been hit with EU-wide asset freezes and travel bans. They include three close associates of President Vladimir Putin: his former judo partner Arkady Rotenberg, and the two largest shareholders of Bank Rossiya; Yuri Kovalchuk and Nikolai Shamalov.
Experts said the sanctions wouldn’t have a tremendous impact in the short term, but if left in place for months will stifle development in the Russian economy and sap its financial sector. Already, economists have revised downward their predictions for Russian growth this year, with some saying the country will go into recession.
The biggest immediate impact is likely to come from the financial sanctions. U.S. officials said roughly 30 percent of Russia’s banking sector assets would now be constrained by sanctions.
The measures against Russian banks are meant to inflict just enough pain without causing them to collapse. “The aim is not to destroy these banks,” said a senior EU official.
Russia’s foreign ministry complained vocally about the sanctions, criticizing the U.S. for “advancing baseless claims” about its role in Ukraine in a “pretentious, prosecutorial manner.” It criticized the EU for allowing its policy to be “dictated by Washington.”
EU officials emphasized that while the latest measures last for one year, they can be annulled at any time – intended as an incentive for Russia to dial back its support for the Ukrainian rebels. So far, previous sanctions have had little effect on Russia’s actions in Ukraine.
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