New Penalties

Bloomberg News

Russia Weighs Response as U.S. and EU Add More Sanctions

By James G. Neuger, Daryna Krasnolutska and Ilya Arkhipov September 12, 2014

Germany's foreign Minister Frank-Walter Steinmeier, center, arrives for an informal meeting of the EU Foreign Affairs Ministers, in Milan, Italy, Friday, Aug. 29, 2014. European Union foreign ministers on Friday were set to weigh adopting a tougher stance on the Ukraine crisis amid increasing calls to beef up economic sanctions against Russia. Photographer: Luca Bruno/AP Photo

Russia threatened retaliation against a U.S. and European Union decision to stiffen sanctions, saying the move to expand penalties undermines the peace process in Ukraine.

Russia will react “calmly, appropriately” to the EU sanctions, Foreign Minister Sergei Lavrov told state TV in an interview. The EU added 15 companies, including OAO Gazprom Neft, OAO Rosneft and OAO Transneft, and 24 people to the list of those affected by its sanctions against Russia. The U.S. will also “deepen and broaden” its measures against Russia’s financial, energy and defense industries, President Barack Obama said yesterday.

The moves raise the level of confrontation and follow reprisals last month, when Russia banned a range of food imports after an earlier round of U.S. and European penalties. Russian President Vladimir Putin denies any involvement in the fighting that broke out after he annexed Crimea in March in what has become the worst crisis between Russia and its former Cold War adversaries since the fall of communism.

“The current political risks, various restrictions and barriers are worsening the situation,” Putin said today in Dushanbe, Tajikistan. “They directly harm the global business climate and reduce trust in international trade and the financial system.”

New Penalties

Under the new penalties published today in the Official Journal, the EU extended a ban on share or bond sales with a maturity of more than 30 days to the three energy companies and three industrial producers -- Oboronprom, Uralvagonzavod and United Aircraft Corp. Nine defense companies are subject to a curb on imports of dual-use technology.

The targeted individuals include Rostec Corp. Chief Executive Officer Sergei Chemezov and Vladimir Zhirinovsky, a lawmaker in Russia’s lower house of parliament.

To slap more sanctions on Russia as the peace process in Ukraine “starts to be sustainable, means to choose a path to undermine the peace process,” Lavrov said. We’ll react “calmly, appropriately. We will act to protect our own interests.”

Russia’s Economy Ministry drafted a list of goods that may be banned, including automobile imports, particularly used cars, as well as textiles and clothing, state-run RIA Novosti reported, citing Kremlin economic aide Andrei Belousov yesterday. It was also weighing restrictions on overflights to the Asia-Pacific as a response to sanctions against Aeroflot’s low-cost unit Dobrolet.

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