20th Oct 2016

EU threatens Russian oligarchs, as US hits banks and oil firms

  • Kremlin: The EU and US sanctions decisions came out within minutes of each other on Wednesday (Photo: Alex F)

EU leaders have threatened to go after Russian companies and oligarchs deemed to be helping the Kremlin wage its covert war on Ukraine.

They agreed at a summit in Brussels on Wednesday (16 July) to blacklist “entities, including from the Russian Federation, that are materially or financially supporting” the military campaign.

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They called for a “first list” of entities to be prepared “by the end of July”.

Their joint text also said they will “consider the possibility of targeting individuals ... who actively provide material or financial support” for top Kremlin officials involved in the events.

An EU diplomat told EUobserver: “This line means that, in the future, we can also start designating Russian oligarchs”.

The EU accord said two international banks - the EIB and EBRD - will block new projects in Russia.

The European Commission is also to suspend the vast majority of Russia grants and loans foreseen for 2014 to 2020 - a total of some €450 million, the EU diplomat noted.

The move is a jump forward from previous measures, which designated some 70 individuals directly involved in Ukraine events, such as pro-Russia rebel chiefs or Russian military commanders.

The decision came after sharp words from British, Lithuanian, German, and Swedish leaders on Russia’s refusal to take steps to calm the situation.

It also came moments after the US announced its new measures.

The US treasury on Wednesday locked some of Russia’s top energy firms and banks out of US financial markets.

The list includes: Russia’s biggest oil firm, Rosneft; its second largest gas company, Novatek; Gazprombank, the financial wing of its largest gas firm, Gazprom; and VEB, the bank which financed the Sochi winter Olympics.

It blocked US companies from doing any business with arms firms Bazalt; Kret; Sovezdie; Mashinostroyenia; Almaz-Antey; KBP; UVZ (the world’s largest maker of battle tanks); and iconic small arms producer Kalashnikov Concern.

It also imposed an asset freeze on four individuals, including a top Kremlin aide, Igor Shchegolev, and an intelligence chief, Sergey Beseda, said to be at the heart of Russia's Ukraine operations.

The US treasury noted that the firms have been cut off “from the US financial system and the US economy”.

US leader Barack Obama told press in Washington: “What we are expecting is that the Russian leadership will see once again that its actions in Ukraine have consequences, including a weakening economy, and increasing diplomatic isolation”.

Russia’s deputy foreign minister Sergei Ryabkov ignored the new EU measures.

But he told the Interfax news agency the US move is “outrageous and totally unacceptable”, adding that the Kremlin aims to take “acutely painful” countermeasures in response.

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