A view of the headquarters of Sberbank in Moscow. The US hit the largest bank in Russia, a major arms maker and arctic, deepwater and shale exploration by its biggest oil companies with new sanctions yesterday.
Reuters/Washington
The US hit Russia’s largest bank, a major arms maker and arctic, deepwater and shale exploration by its biggest oil companies with new sanctions yesterday to punish Moscow for intervening in Ukraine.
The sanctions target companies including Sberbank, the country’s largest bank by assets, and Rostec, a conglomerate that makes everything from Kalashnikovs to cars, by limiting their ability to access the US debt markets.
They will also bar US companies from providing goods or services to help five Russian energy companies conduct deepwater, Arctic offshore and shale projects. The Russian companies affected are Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft.
The sanctions seek to ban co-operation with Russian oil firms on energy technology and services by companies including Exxon Mobil Corp and BP.
Russia is one of the world’s top oil producers and is the main energy supplier to Europe. Exxon signed a $3.2bn agreement in 2011 with Russian company Rosneft Oil Co to develop the Arctic.
The sanctions are the latest imposed by the US and the EU following Russia’s annexation of Crimea in March and what the West sees as an effort since to further destabilise Ukraine by backing pro-Russian separatists with troops and arms.
US officials said Washington took the steps because Russia has intensified its involvement in Ukraine by sending troops and arms to support pro-Russian separatists in the eastern part of the country and by shelling it across the border.
But a defiant Russian President Vladimir Putin called the new economic penalties “strange,” given his backing of peace efforts in eastern Ukraine, and said he was considering fresh retaliatory measures.
The US officials stressed that the sanctions could be removed if Russia, which denies sending troops into eastern Ukraine and arming the separatists, took a series of steps including the withdrawal of all of its forces from its neighbour.
“What we’re looking for with regard to Russian action is the complete removal of all military personnel, military equipment, support for military and mercenaries on the territory of Ukraine, release of all hostages,” a senior US official told reporters in a conference call explaining the sanctions.
The official, who spoke on condition of anonymity, said the US wanted to see the creation of a buffer zone on both sides of the border, which the official said was particularly important to stop shelling of Ukraine by Russia.
The new US sanctions, which for the first time targeted Russia’s Sberbank, were timed to coincide with new European Union economic penalties that included restrictions on financing for some Russian state-owned companies and asset freezes on leading Russian politicians.
The US Treasury Department said the sanctions include a ban on US individuals or companies dealing with Rostec, a major Russian technology and defense conglomerate, in debt transactions of more than 30 days maturity.
Assets also were blocked for five state-owned defense technology firms, Dolgoprudny Research Production Enterprise, Mytishchinski Mashinostroitelny Zavod, Kalinin Machine Plant, Almaz-Antey GSKB, and NIIP.
The new sanctions also tighten the financial noose on six Russian banks, including Sberbank, by barring US individuals and companies from dealing in any debt they issue of longer than 30 days maturity.
The five banks previously covered had only faced a restriction on debt maturities of more than 90 days. Like those five, Sberbank now also faces a ban on US equity financing.
The Treasury Department also imposed sanctions prohibiting US individuals and companies from dealing in new debt of greater than 90 days maturity issued by Russian energy companies Gazprom Neft and Transneft.
“These steps underscore the continued resolve of the international community against Russia’s aggression,” US Treasury Secretary Jack Lew said in a statement. “Russia’s economic and diplomatic isolation will continue to grow as long as its actions do not live up to its words.”
Russian Economy Minister Alexei Ulyukayev said Russia would appeal to the World Trade Organisation (WTO) over Western sanctions, local news agencies reported.
“The latest round of sanctions gives reason to appeal to the WTO. And we will appeal,” RIA news reported him as saying in Brussels later yesterday.
Russia will support companies affected by Western sanctions and it may divert funds from its National Wealth Fund (NWF) or from pensions to do so, local news agencies cited Ulyukayev as saying.
“Of course we will show support to our companies hit by sanctions ... There are different forms of support including various custom tariff regimes, possibly direct budget support (and) the possibility of using pension funds or the National Wealth Fund,” RIA quoted Ulyukayev as saying.
