Spurred to action by the downing of the Malaysian airliner, the European Union approved dramatically tougher economic sanctions Tuesday against Russia, followed swiftly by a new round of U.S. penalties targeting key sectors of the Russian economy.
The co-ordinated sanctions were aimed at increasing pressure on Russian President Vladimir Putin to end his country’s support for separatists in eastern Ukraine whom the West blames for taking down the passenger jet nearly two weeks ago. President Barack Obama and U.S. allies also warned that Russia was building up troops and weaponry along its border with Ukraine.
“Today Russia is once again isolating itself from the international community, setting back decades of genuine progress,” Mr. Obama said. “It does not have to be this way. This a choice Russia and President Putin has made.”
In Canada, the federal government said it will impose new sanctions against Russia in coming days in co-ordination with its partners in the United States and Europe. In a statement Tuesday, Prime Minister Stephen Harper said Mr. Putin’s failure to cease backing armed rebels in eastern Ukraine constitutes a genuine threat to international peace and security.
The statement says the new sanctions would be applied against the Russian government and those closest to it. Last week, Canada announced strengthened sanctions on arms manufacturers and energy and financial entities with significant links to the Russian government.
Europe’s new actions were particularly significant given that the continent has a far stronger economic relationship with Russia than does the United States, or Canada. Until this week, the EU sanctions had lagged behind U.S. penalties, in part because of leaders’ concerns about a negative impact on their own economies.
But Europe’s calculus shifted sharply after a surface-to-air missile brought down the passenger jet, killing nearly 300 people including more than 200 Europeans.
Yet it remains uncertain whether the tougher penalties will have any impact on Russia’s actions in Ukraine – nor was it clear what other actions the U.S. and Europe were willing to take if the situation remains unchanged. U.S. officials said they believe economic pressure remains their most effective tool, and Obama reiterated his opposition to sending lethal aid to the Ukrainian military.
The new European penalties include an arms embargo on Moscow and a ban on the unapproved sale to the Russians of technology that has dual military and civilian uses or is particularly sensitive, such as advanced equipment used in deep-sea and Arctic oil drilling. To restrict Russia’s access to Europe’s money markets, EU citizens and banks will be barred from purchasing certain bonds or stocks issued by state-owned Russian banks, according to EU officials.
The specific targets of the EU actions will be published Thursday, when they will take effect.
U.S. officials said they expected Europe’s list of targets to include some of the same energy companies, defence entities and financial institutions the Obama administration hit with sanctions the day before the Malaysian airliner was shot out of the sky. The White House has been pressing Europe in recent days to bring its penalties in line with the U.S., both to increase the economic pressure on Moscow and present a united Western front.
As part of that effort, Mr. Obama also announced an expansion of the U.S. sanctions on Russian economic sectors. Among the targets were three major Russian banks: the Bank of Moscow, Russian Agricultural Bank, and VTB Bank, Russia’s second largest bank.
Administration officials said 30 per cent of the Russian banking sector’s assets were now targeted by U.S. sanctions. The main function of the sanctions is to curtail the financial institutions’ ability to access U.S. debt markets, not to block individual users from using their accounts or credit cards, according to the officials.
The U.S. also targeted the St. Petersburg-based United Shipbuilding Corporation, a defence technologies firm, and was blocking future technology sales to Russia’s oil industry. The U.S. and European officials spoke on the condition of anonymity because they were not authorized to discuss the sanctions by name.
With a report from The Canadian Press
Follow us on Twitter: