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Russia hit with new sanctions

by New York Times News Service on July 17, 2014 10:34 AM

WASHINGTON — President Barack Obama imposed a new round of sanctions against Russia on Wednesday, targeting some of the crown jewels of the country’s financial, energy and defense industries in what officials described as the most punishing measures taken to date by the United States in retaliation for Moscow’s intervention in Ukraine.

The new actions will, among other things, restrict access to American capital markets for Russian giants like the Rosneft oil company and Gazprombank that operate worldwide. While the latest moves did not cut off entire sectors of the Russian economy, they went significantly further than the financial and travel limits imposed previously on several dozen individuals and their businesses.

The announcement reflected a decision by Obama to take more stringent steps than those taken by the United States’ European allies, which have far deeper economic ties to Russia. Meeting in Brussels, leaders of the European Union refused to match the U.S. measures and instead adopted a more tempered plan that blocks new development loans to Russia and threatens to target more Russian individuals.

The disparate moves suggested a widening gulf in the response to the Ukraine crisis and may dilute the impact of the U.S. actions. But both sides emphasized their continued solidarity on the basic demands that Moscow halt the flow of fighters and weapons across the border with Ukraine, support a cease-fire and help facilitate the release of hostages held by pro-Russian separatists.

“What we are expecting is that the Russian leadership will see, once again, that its actions in Ukraine have consequences, including a weakening Russian economy and increasing diplomatic isolation,” Obama told reporters in an early-evening appearance in the White House briefing room.

Russia quickly denounced the moves and vowed to retaliate. “We condemn those politicians and bureaucrats who are behind such actions,” Sergei A. Ryabkov, the deputy foreign minister, told the Interfax news agency. Ryabkov said that Moscow would respond with countermeasures that would be “quite painful and serious.”

The Associated Press reported that President Vladimir Putin today lamented the latest round of U.S. sanctions, saying they will stalemate bilateral relations and hurt not only Russian but also American businesses.

In televised comments today, Putin said the sanctions are “driving into a corner” relations between the two nations as well as the interests of American companies and “the long-term national interests of the U.S. government and people.”

Putin warned Washington that the sanctions will hurt American companies working in Russia.

The firms targeted by the capital market restrictions were some of the most prominent in Russia. Rosneft, owned by the state and headed by a longtime adviser to Putin, is the country’s largest oil producer. Gazprombank is the financial arm of Gazprom, the state-controlled natural gas giant, which is also headed by a Putin ally. Also targeted were VEB, the state economic development bank, and Novatek, another natural gas producer.

The administration also barred business dealings with eight state-owned defense firms; four Russian government officials, including an aide to Putin and a top official in the Federal Security Service; an oil shipping facility in Crimea, which Moscow annexed; a pro-Russian separatist leader; and the rump rebel organizations in the eastern Ukrainian cities of Donetsk and Luhansk.

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