US Beefs up Sanctions against Russia

A raft of new and tougher economic sanctions imposed by the US against Russia will target the country’s largest oil producer, Rosneft, its third-largest bank, Gazprombank (GPB), and other energy, financial and defence firms.

President Obama announced the latest round of sanctions, which he said would target those companies responsible for the continuing support of separatists battling government forces in eastern Ukraine, after close consultations with European leaders who favoured less stringent measures.

“We have repeatedly made clear that Russia must halt the flow of fighters and weapons across the border,” said Obama. “We have to see concrete actions and not just words.”

The ultimate impact of the tougher sanctions is likely to depend on whether the European Union (EU) follows the US lead.

The targeted companies also include Russia’s second-largest gas producer Novatek, state-owned bank Vnesheconombank (VEB), which acts as payment agent for the Russian government, and eight arms firms.

The US Treasury Department said that the latest measures effectively closed medium- and long-term dollar funding to the two banks and energy companies. However the sanctions did not freeze those four companies’ assets, or otherwise prevent US companies from doing business with them.

The sanctions also stopped short of targeting Russia’s Gazprom, the world’s largest natural gas producer and provider of much of Europe’s energy supplies, which has a 36% stake in Gazprombank.

Russian president Vladi¬mir Putin responded to the announcement by telling journalists in Brasilia, where he is visiting, that “sanctions are driving Russian-American relations into a dead end.”

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