More Sanctions Against Russia Over Ukraine
New sanctions on Russia
Russia News
U.S., Europe Delay Moves to Impose More Sanctions on Russia Over Ukraine
Group of Seven Promises to Move Swiftly, but Doesn't Say When or Name Targets
Updated April 25, 2014 10:37 p.m. ET
Ukraine decided not to continue a military advance on
the eastern city of Slovyansk, currently being held by pro-Russian
separatists, after Russia activated the thousands of troops it has
stationed just across the border. Photo: AP
U.S. and European leaders Friday
struggled to overcome divisions over how to expand sanctions against
Russia, a delay that Ukraine complained has emboldened Moscow to
continue fanning separatist sentiment in the country's east.
President
Barack Obama
spoke Friday with leaders of the U.K., France, Germany and Italy
to stress the need for concerted measures, and they agreed on the need
for action.
At the end of the day, the
Group of Seven, which also includes Japan and Canada, issued a statement
saying they would move swiftly to impose additional targeted sanctions.
They didn't say when or specify the targets.
But
U.S. and European officials said earlier they have identified areas of
greater common ground and suggested the new sanctions are set to come on
Monday.
"Given the urgency of securing
the opportunity for a successful and peaceful democratic vote next month
in Ukraine's presidential elections, we have committed to act urgently
to intensify targeted sanctions and measures to increase the costs of
Russia's actions," the G-7 statement said.
President Obama boards Marine One at an airbase in South
Korea on Friday. He spoke to European leaders by phone on the crisis in
Ukraine.
Getty Images
Russian officials have said sanctions are counterproductive and have brushed off their impact.
The
delay came amid further deterioration of the situation in eastern
Ukraine, where a group of military observers from the Organization for
Security and Cooperation in Europe were taken hostage by pro-Russian
militants.
U.S. officials reported an
increase in Russian military activity as well. Col.
Steve Warren,
the top Pentagon spokesman, said Friday that Russian aircraft had
entered Ukrainian airspace on several occasions over the previous 24
hours. "We call upon the Russians to take immediate steps to de-escalate
the situation," he said.
A senior
French official also warned that the focus on sanctions was distracting
the West from the more urgent task of persuading pro-Russian militants
in eastern Ukraine to lay down their arms.
Differences between U.S. and European officials have centered on the amount of financial pain to impose on President
Vladimir Putin
and the Russian economy.
The
White House is moving to sanction top officials in Mr. Putin's
government, as well as business leaders close to Mr. Putin and their
companies. The Europeans, however, are still reluctant to sanction
executives or firms for their relationship with Mr. Putin, preferring to
focus on government officials.
A
European official involved in the deliberations said European laws make
it more difficult to sanction private individuals solely for allegations
of corruption or illicit business dealings.
Neither
the U.S. nor Europe, meanwhile, is prepared yet to enact broader
sanctions that could target whole sectors of Russia's economy, which is
what Ukraine's government leaders have demanded.
U.S. officials said Russia's already weak economy lends itself to sanctions as an international response.
Underscoring
that view, Russia's central bank raised a key interest rate Friday
after Standard & Poor's Ratings Services cut the country's debt
rating to one notch above the level considered junk.
"Russia is very vulnerable," the European official said.
Mr.
Obama said at a news conference in Seoul, South Korea, that he already
has begun laying the groundwork for the broader sectoral sanctions, but
would hold that option in abeyance in case the situation in Ukraine
deteriorates further.
"We'll continue to
keep some arrows in our quiver," he said while visiting South Korea as
part of a four-country trip through Asia.
Mr.
Obama said it was apparent that even graver sanctions might not compel
Mr. Putin to change course. Previous U.S. and European sanctions have
targeted dozens of Ukrainian and Russian individuals and a few companies
with ties to Mr. Putin.
U.S. officials
said they've identified a list of Russian and Ukrainian individuals who
are complicit in what Washington says has been a destabilization
campaign against Kiev's interim government.
Hostility between Russia and Ukraine continues to
increase despite a deal to de-escalate the situation last week.
Washington Bureau Chief Jerry Seib explains how the U.S. is likely to
respond to the escalating tensions.
Ukrainian officials are pressing the
White House to impose more crippling sanctions that target large sectors
of Russia's economy, including finance, defense and energy.
The European Union,
which has already levied sanctions against more than 30 Kremlin leaders
and pro-Russian Ukrainians, is developing plans to target about 15
more. Those plans had been put on hold to see if the agreement to ease
tensions, reached April 17 in Geneva, could gain traction, but would
resume if the EU concludes the deal is dead.
"Our actions depend very much upon the situation on the ground," said
Michael Mann,
the EU's foreign-policy spokesman.
He
added, "Regrettably, recent events…do indicate in certain cases that
not everybody is determined to follow up on the Geneva agreement."
If
Moscow escalates tensions further, EU officials say they will impose
the broader economic sanctions. Officials are considering a menu of
measures that includes bans on imports of such Russian goods such as
diamonds, fertilizers, oil and gas.
The measures could also target key exports from the EU to Russia, such as sensitive equipment for Russia's energy sector.
But
each member state is lobbying the EU to exclude sanctions that would
hit its economy particularly hard. For Eastern European countries, that
would be Russia's gas exports, which account for 100% of some nations'
gas supplies. Belgium is lobbying against restrictions on Russian
diamond imports, fearing it could hurt Antwerp, the world's leading
diamond trading center.
In Friday's
conference call, the Western leaders agreed that Kiev had made progress
toward fulfilling the Geneva deal, but that Moscow had not.
President Obama spoke with four European leaders about
clamping a new round of sanctions on Russia, but senior U.S. officials
said action is unlikely on Friday as the U.S. negotiates with allies.
Austan Goolsbee, former chairman of the White House Council of Economic
Advisers, explains what it means on the News Hub.
The White House said the leaders
concluded that Russia had not publicly supported the Geneva deal, had
failed to urge armed, pro-Russian separatists to vacate public buildings
in Ukraine, and "continued to escalate the situation through its
increasingly concerning rhetoric and threatening military exercises on
Ukraine's border."
The five leaders also said that Russia still could avoid additional sanctions by swiftly implementing the Geneva deal.
In Berlin, German Chancellor
Angela Merkel
on Friday threatened Russia with additional sanctions against officials.
Speaking
ahead of a meeting with Polish Prime Minister
Donald Tusk,
Ms. Merkel said she told Mr. Putin during a phone call earlier in
the day that Russia's commitment to the Geneva agreement isn't
apparent.
"Russia has or would have the
opportunity to bring the Ukraine separatists on a peaceful path," Ms.
Merkel said. "Such signals, however, have so far failed to materialize.
We will therefore have to act."
She said that she still wants the diplomatic process with the Kremlin to continue.
"On
the other hand, in the absence of positive results, we must think about
and will think about sanctions," she said, specifying likely action to
use as asset freezes and travel bans on some Russian and Ukraine
officials.
In London, a spokesman for U.K. Prime Minister
David Cameron
said the five leaders "continued to hold open the door to a
diplomatic resolution of this crisis," but added: "In the light of
Russia's refusal to support the process, an extension of the current
targeted sanctions would need to be implemented, in conjunction with
other G-7 leaders and with European partners."
—Andrea Thomas,
Naftali Bendavid,
Matthew Dalton
and Nicholas Winning contributed to this article.
Naftali Bendavid,
Matthew Dalton
and Nicholas Winning contributed to this article.
Write to Colleen McCain Nelson at colleen.nelson@wsj.com, Stacy Meichtry at stacy.meichtry@wsj.com and Jay Solomon at jay.solomon@wsj.com
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U.S., Europe Delay Moves to Impose More Sanctions on Russia Over Ukraine
WASHINGTON/KOSTYANTYNIVKA, Ukraine
1 of 14. Pro-Russian armed men hold their weapons in front of the seized town administration building in Kostyantynivka April 28, 2014.
Credit: Reuters/Marko Djurica
President Barack Obama said the moves, which add to measures taken when Russia annexed Crimea last month, were to stop Putin fomenting rebellion in eastern Ukraine. Obama added he was holding broader measures against Russia's economy "in reserve".
Among those sanctioned were Igor Sechin, head of state energy firm Rosneft, and Deputy Prime Minister Dmitry Kozak. A Russian deputy foreign minister was quoted as expressing "disgust" at the White House announcement.
The United States will deny export licenses for any high-technology items that could contribute to Russian military capabilities and will revoke any existing export licenses that meet these conditions, the White House said.
It was the third round of sanctions that the United States has imposed over Crime and troop build-up on the border. All the sanctions have been aimed at individuals and businesses.
"Russia's involvement in the recent violence in eastern Ukraine is indisputable," a White House statement said.
Moscow insists that a rebellion among Russian-speakers in the east against the Kiev authorities which took power after the overthrow of a Kremlin-backed president in February is a home-grown response to a coup and denies having forces on the ground.
HOSTAGE FOREIGNERS
In eastern Ukraine on Monday, pro-Moscow rebels showed no sign of curbing their uprising, seizing public buildings in another town in the east, Kostyantynivka. The high-profile mayor of another eastern city Kharkiv, Ukraine's second biggest, was fighting for life after being shot while out bicycling.
Germany demanded Russia act to help secure the release of seven unarmed European military monitors, including four Germans, who have been held by the rebels since Friday.
U.S. officials had said the new list would include Putin's "cronies" in the hope of changing his behavior.
Obama said: "The goal is not to go after Mr. Putin personally. The goal is to change his calculus with respect to how the current actions that he's engaging in Ukraine could have an adverse impact on the Russian economy over the long haul.
"To encourage him to actually walk the walk and not just talk the talk when it comes to diplomatically resolving the crisis in Ukraine."
Nevertheless, such measures have done nothing so far to deter Putin, who overturned decades of post-Cold War diplomacy last month to seize and annex Ukraine's Crimea peninsula and has since massed tens of thousands of troops on the frontier. He acted after Ukraine's pro-Russian president was ousted in February by protesters demanding closer links with Europe.
Moscow has in the past shrugged off targeted sanctions like those Obama announced on Monday as pointless.
REBELS TAKE TOWN
The rebels took another town on Monday morning, seizing the police headquarters and municipal administration building in Kostyantynivka, an industrial city in the eastern Donetsk region. Separatists in the province have proclaimed an independent "People's Republic of Donetsk".
Reuters journalists at the scene saw about 20 gunmen controlling the administration building.
The pro-Russian mayor of Kharkiv, Gennady Kernes, 54, was shot in the back while riding his bicycle, probably by someone hidden in nearby woods, said Iryna Kushchenko, spokeswoman for the local government. His bodyguards were following in a car but were not close enough to intervene, she said.
The Interior Ministry said was being operated on and that his condition was "serious".
On Sunday, the separatist rebels paraded eight unarmed European military monitors before journalists. One, a Swede who is diabetic, was freed for medical reasons but four Germans, a Czech, a Dane and a Pole are still being held, described by the rebel leader as "prisoners of war" and NATO spies.
German Chancellor Angela Merkel's spokesman Steffen Siebert said they were held "against the law and without justification".
"We ask the Russian government to act publicly and internally for their release, to distance itself clearly from such acts and to use its influence on pro-Russian perpetrators and forces in eastern Ukraine to secure their release."
Armed rebels also occupied Donetsk television on Sunday and ordered it to start broadcasting Russian state TV.
Obama is under pressure from opposition Republicans at home to move faster on sanctions. But in taking what he described as "calibrated steps", he has emphasized the need to act in concert with European countries, which have more at stake economically and a more cumbersome process for taking decisions.
The EU does more than 10 times as much trade with Russia as the United States and buys a quarter of its natural gas from Moscow. Most EU decisions require unanimity among member states.
Western countries say the targeted sanctions are already having an effect on Russia by scaring investors into pulling out capital. The central bank has been forced to hike interest rates to prop up the ruble and Russian firms are finding it more difficult and costly to raise funds.
Shares in Rosneft fell after the sanctions move against Sechin although the broader market and the ruble rose.
(Additional reporting by Thomas Grove in Slaviansk, Natalia Zinets, Matt Robinson and Elizabeth Piper in Kiev; Writing Peter Graff; Editing by Giles Elgood and Alastair Macdonald)
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