Tuesday

12th Nov 2019

US and EU prepare to strike Russian banks, energy firms

  • Kerry (l) and Steinmeier: US sanctions ready to go, EU needs one more week to finalise options (Photo: state.gov)

The US and EU are preparing to strike at Russian banks, energy and minerals firms if Russia invades mainland Ukraine.

Speaking to US senators in Washington on Tuesday (8 April) secretary of state John Kerry used blunt terms to describe events in Ukraine's Donetsk, Kharkiv and Luhansk regions in recent days.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

“Everything that we’ve seen in the last 48 hours from Russian provocateurs and agents operating in eastern Ukraine tells us that they’ve been sent there determined to create chaos … These efforts are as ham-handed as they are transparent,” he said.

“No one should be fooled, and believe me, no one is fooled by what could potentially be a contrived pretext for military intervention just as we saw in Crimea.”

“The United States and our allies [the EU] will not hesitate to use 21st-century tools to hold Russia accountable for 19th-century behaviour,” he noted, adding: “tough new sanctions on those orchestrating this action and on key sectors of the Russian economy, in energy, banking, mining – they’re all on the table.”

In Brussels, the European Commission will on Wednesday brief EU countries’ ambassadors on preparations for what the Union calls “stage three" sanctions.

EUobserver understands the draft measures designate curbs on Russian banks and financial services firms, trade in certain commodities, bans on EU companies’ services for Russian oil and gas corporations, and a potential arms embargo.

The oil and gas sector sanctions could cover transfer of technology, investments in new exploration and infrastructure, and peripheral services such as insurance or logistics, but not an Iran-type ban on EU imports of oil and gas.

The EU is also preparing to blacklist more Russian officials from a draft list of over 100 people, 33 of whom were already put under a visa ban and asset freeze in March.

Kerry’s warning comes ahead of his meeting with Russian FM Sergei Lavrov, Ukraine’s acting foreign minister, and EU foreign affairs chief Catherine Ashton next week.

But some diplomats fear the Russian invasion could begin before the weekend.

The US ambassador to the OSCE, a multilateral body in Vienna, Daniel Baer, in a statement published on Tuesday, said elite Russian army units and airforce assets on Ukraine’s border are ready to “conduct short-notice, sustained, offensive military operations into Ukraine” with “quick-strike capability and air support to potential ground operations”.

A Kiev-based diplomat from one EU country told EUobserver: “Russia is getting ready to occupy eastern and southern Ukraine, cutting it off from the sea, and securing key Ukrainian arms industry facilities which service its own military.”

If Russia escalates, the US is ready to impose sanctions immediately on the basis of an existing White House “executive order”.

EU foreign ministers are meeting in Luxembourg on Monday. But they are playing catch-up because EU sanctions proposals are unlikely to be finalised before the middle of next week.

The options paper is being drafted by commission line departments, primarily DG energy and DG trade, and co-ordinated by the commission’s secretary general, veteran Irish official Catherine Day.

It is taking time because it includes impact assessments on potential Russian retaliations, including “asymmetric” retaliations along the lines of its recent ban on EU pork, as well as on “burden sharing” of the impact among EU countries.

It is concerned that increased EU-Russia tensions could see world oil prices spike, putting more money in Russia’s war chest.

But EU diplomats say the slow pace is also linked to political signals from leading EU countries, including France, Italy, Germany, and Spain, on how far Europe is prepared to go.

For his part, German foreign minister Frank-Walter Steinmeier, the most senior member of the centre-left SPD party in Chancellor Angela Merkel’s coalition, caused upset in Berlin by saying the EU was wrong to make Ukraine choose between closer ties with the West and membership in Russia’s “Eurasian Union”.

"That is a very problematic remark ... it was Russia and not the EU that forced Ukraine into such a choice," Andreas Schockenhoff, a Russia specialist in Merkel’s centre-right CDU party, told Reuters on Tuesday.

"Just because Russia categorically insists that Ukraine must never become a member of Nato, we shouldn't have to accommodate this," he added.

News in Brief

  1. Three new commissioner-designates pass legal scrutiny
  2. ECJ: EU countries must label Israeli settlement products
  3. Belgian asylum centre set on fire
  4. Xi Jingping in Athens promises new investment
  5. Farage's Brexit Party will not stand in Tory-held seats
  6. British founder of Syrian 'White Helmets' found dead
  7. Eight member states ask for EU aviation tax
  8. EU allocates €55m humanitarian aid to Sudan

Column

These are the crunch issues for the 2019-2024 EU commission

These developments will largely determine who will be running the world in the coming decades and perhaps generations. If the Europeans can't find an answer over the five years, they will be toast. And we haven't even mentioned climate change.

Stakeholders' Highlights

  1. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  2. Nordic Council of MinistersBrussels welcomes Nordic culture
  3. UNESDAUNESDA appoints Nicholas Hodac as Director General
  4. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  5. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  6. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  7. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  8. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  9. Nordic Council of MinistersNo evidence that social media are harmful to young people
  10. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  11. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  12. Nordic Council of MinistersEducation gets refugees into work

Latest News

  1. Pro-Israeli group scores own goal on EU retail labels
  2. New commissioners clear 'conflict of interests' hurdle
  3. Israeli labelling ruling lets consumers make choice
  4. What does Macron really want on Western Balkans?
  5. Far-right Vox celebrates, as Spain left without majority
  6. EU 'climate bank' won't rule out carbon capture
  7. New hearings for the von der Leyen commission This WEEK
  8. Bosnia wants explanation for Macron's 'time-bomb' remark

Stakeholders' Highlights

  1. Counter BalanceSign the petition to help reform the EU’s Bank
  2. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  3. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  4. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  5. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  6. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  7. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  8. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  9. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  10. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  11. Nordic Council of MinistersNordic commitment to driving global gender equality
  12. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan

Join EUobserver

Support quality EU news

Join us