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US, Europe impose tough new sanctions on Russia

(Xinhua/Agencies) Updated: 2014-07-30 10:04

US, Europe impose tough new sanctions on Russia

US President Barack Obama speaks to reporters about new sanctions imposed on Russia as he departs the White House in Washington on July 29, 2014.[Photo/Agencies]


WASHINGTON - Spurred to action by the downing of the Malaysian airliner, the European Union approved dramatically tougher economic sanctions Tuesday against Russia, including an arms embargo and restrictions on state-owned banks. US President Barack Obama swiftly followed with an expansion of US penalties targeting key sectors of the Russian economy.

Building on measures unveiled two weeks ago, the United States expanded its sanctions to more Russian banks and defense companies, and blocked the exports of specific goods and technology to Russia 's energy sector, Obama told reporters at the White House.

He said that the United States is formally suspending credit that encourages exports to Russia and financing for economic development projects in Russia.

"Today is a reminder that the United States means what it says and we will rally the international community in standing up for the rights and freedom of people around the world," Obama said.

"If Russia continues on this current path, the costs on Russia will continue to grow," Obama said.

The US Treasury Department said in a statement that the US imposed sanctions against three state-owned Russian banks, namely Bank of Moscow, Russian Agricultural Bank, and VTB Bank OAO. The move prohibits US persons from providing new financing to the three financial institutions, limiting their access to US capital markets.

The Treasury Department also designated and blocked the assets of United Shipbuilding Corporation, a defense technologies firm based in St. Petersburg.

"The major sanctions we're announcing today will continue to ratchet up the pressure on Russia, including the cronies and companies that are supporting Russia's illegal actions in Ukraine, " Obama said, adding that the existing sanctions had made a weak Russian economy even weaker.

The new punitive measures came after the European Union announced earlier in the day that it has agreed a package of " significant" additional restrictive measures targeting sectorial cooperation and exchanges with Russia.

These decisions will limit access to EU capital markets for Russian state-owned financial institutions, impose an embargo on trade in arms, establish an export ban for dual-use goods for military end users, and curtail Russian access to sensitive technologies particularly in the field of the oil sector, according to?a statement by the European Council.

The new package reinforces the recently expanded listing of persons and entities "undermining Ukrainian territorial integrity and sovereignty," the statement said.

It also strengthens the restriction of investment and trade with Crimea and Sevastopol and the reassessment of the Russia-EU bilateral cooperation "with a view to reducing the level of the cooperation," said the statement.

The package is meant as "a strong warning" and "a powerful signal" to Russia that "destabilizing Ukraine or any other Eastern European neighboring country will bring heavy costs to its economy, " according to the statement.

The EU also emphasized that it remains ready to "reverse" its decisions, and reengage with Russia "when it starts contributing actively and without ambiguities to finding a solution to the Ukrainian crisis."

The United States has accused Russia of supporting militants in eastern Ukraine who were allegedly responsible for the downing of a Malaysian jetliner that killed 298 people on board.

While the West claimed that pro-independence insurgents in eastern Ukraine shot down the airliner with a surface-to-air missile, Russia challenged the allegations, demanding the United States make public relevant satellite pictures.

On Tuesday, Obama denied that the West is at a new Cold War with Russia, emphasizing that "it is a very specific issue related to Russia's unwillingness to recognize that Ukraine can chart its own path."

US Secretary of State John Kerry said earlier Tuesday that the fighting between Ukrainian forces and the rebels in the eastern region has prevented investigators from obtaining necessary evidence from the crash site of Malaysia Airlines Flight 17.

"While the Russians have said that they want to de-escalate the conflict, their actions have not shown a shred of evidence that they really have a legitimate desire to end the violence and end the bloodshed," Kerry said after a meeting with Ukrainian Foreign Minister Pavlo Klimkin at the State Department.

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