MH17: Ottawa expands sanctions against Russia after plane attack

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The Harper government has expanded sanctions against Russia for backing Ukrainian rebels accused of destroying Malaysia Airlines Flight 17, targeting petroleum producers and banks important to Moscow as well as arms makers with weapons used in the conflict.

These companies include arms manufacturer Almaz-Antey, maker of the Buk missile system suspected of bringing down the Malaysian plane and its 298 passengers and crew in eastern Ukraine last week.

Ottawa is also slapping punitive measures on the pro-Moscow armed separatist groups that control parts of eastern Ukraine including the Donetsk People's Republic and the Lugansk People's Republic – moves that could be a precursor to designating them as terrorist groups.

A source says the government is exploring whether Donetsk and Lugansk rebel groups might qualify as terrorist organizations under Canadian law but that this hasn't been established yet.

The new sanctions came a day after Ukraine's ambassador to Canada complained about the lack of progress made in disbursing more than $200-million in financial aid to Kiev – money promised more than four months ago.

"Frankly, I am at the end of my patience," Vadym Prystaiko told The Globe earlier this week.

He also signalled dissatisfaction at how Ukraine's request for non-lethal aid to fight the rebels – such as body armour, communications gear and medical supplies – has gone unanswered by Ottawa since March.

Mr. Prystaiko's frustration was echoed the same day by Paul Grod, president of the Ukrainian Canadian Congress.

On Thursday, however, the Ukrainian envoy declined to answer further questions on the topic with his office saying he was away until Monday.

But he issued a statement emphasizing that despite his published comments he was nevertheless "grateful for Canada's commitment, the support Canada has provided and Prime Minister Harper's strong stand which has led the international response to the crisis facing Ukraine."

Reached again after Mr. Prystaiko's comments were published, Mr. Grod said he feels Ottawa is now determined to break "the bureaucratic log-jam" that he believes has plagued disbursement of the financial aid.

Jason MacDonald, director of communications for the Prime Minister's Office, said Canada stands by its pledged aid but must obtain sufficient negotiated assurances for Canadian taxpayers that money provided to Ukraine will be used for the purposes for which they are intended.

"We will continue to work with the people of Ukraine to ensure that we can expedite the process, but the process has to be gone through."

As a result of Ottawa's new sanctions, which are similar to measures already announced by Washington, Canadians are now banned from transactions with arms-makers Kalashnikov, Almaz-Antey, KBP Instrument Design Bureau and JSC MIC NPO Mashinostroyenia.

Financial institutions and energy firms targeted include Gazprombank, the third largest bank in Russia, gas producer Novatek and Vnesheconombank, a Russian state bank.

This will make it hard for them to raise funds from Canadians.

Mr. Harper said Canada plans to continue increasing pressure on Moscow for its "illegal occupation of Ukraine's Crimean region, and its persistent, provocative military activity targeting parts of eastern Ukraine" that has drawn Kiev into an armed struggle.

"As we have seen with the downing of Malaysia Airlines Flight MH17 last week, the Putin regime's failure to end its support to armed separatist groups constitutes a very real threat to international peace and security," the Prime Minister said.

NDP foreign affairs critic Paul Dewar said he was surprised to see the Ukrainian envoy air his frustration about the lack of progress on Canada's promised financial aid and requests for non-lethal military equipment. "It's very extraordinary to see an ambassador be public about this. Normally they like to do their work behind the scenes," Mr. Dewar said. He said Canada needs to expedite the aid it promised.

Liberal Party critic Chrystia Freeland, who is of Ukrainian heritage, said Ukraine is at war and needs help quickly. "This is a moment when we have to act with real alacrity," she said. "The government needs to get a move on. It's embarrassing to me," she said, noting other countries have already stepped up and delivered financial and non-lethal aid for Ukraine.