EU approves new sanctions against Russia

The European Union has agreed to introduce new sanctions against Russia targeting oil and defence firms, but could lift them if a Ukraine ceasefire holds, EU head Herman Van Rompuy said.

A further 24 people including Russian oligarchs and Ukrainian separatists have been slapped with travel bans and asset freezes under the sanctions, which have been delayed for the past week by disagreements between EU countries.

The sanctions come into force on Friday, Van Rompuy said in a statement on Thursday, after sharp differences over whether their introduction might undercut peace efforts and with Moscow promising a forceful response.

Russia said it had already drawn up new anti-Western sanctions targeting imports of consumer goods and second-hand cars, the AFP news agency reported.

Moscow and Western powers have imposed tit-for-tat sanctions against each other over Ukraine. NATO and its allies accuse Russia of backing rebels in the five-month conflict that the UN estimates has killed more than 2,700 people in five months.

Van Rompuy said the EU could propose to “amend, suspend or repeal the set of sanctions in force, in all or in part,” depending on the results of a “comprehensive review” of the ceasefire at the end of September.

The 28 member states would then look at any such proposal “urgently”, he said.

“We have always stressed the reversibility and scalability of our restrictive measures,” he said.

The sanctions coming into effect on Friday are a toughening up of measures adopted in July after the shooting of Malaysia Airlines flight MH17 over rebel-held east Ukraine.

Reacting to the new sanctions, Russia remained committed to help enforce the peace initiative in Ukraine, Interfax news agency said, citing a Kremlin spokesman.

“Despite the EU position being non-constructive, Russia will continue to do its utmost to help enforce the existing peace
plan, as well as to stabilise the situation in the south-east of Ukraine overall,” Dmitry Peskov was quoted as saying.

Energy industry targeted

Under the latest round, the EU said three major Russian oil companies and three top defence companies would be barred from seeking debt financing from Europe.

Striking at the energy industry, Russia’s major export earner, EU companies will be barred from providing services for deep water and arctic oil exploration and production.

EU nationals and companies are also barred from extending loans to the top five Russian state-owned banks.

They will also no longer be able to trade in the banks’ bonds, shares or financial instruments with maturities of more than 30 days, a significant step up from the previous 90 days which could make it even more difficult for companies to raise fresh financing.

The move will likely make borrowing more expensive still for Russian companies, undermining an economy already in the doldrums.

A ban on the export of dual-use goods and technology was extended.

Twenty-four people including the rebel leadership in eastern Ukraine’s Donbass region, the government in Russian-annexed Crimea, “as well as Russian decision-makers and oligarchs,” were added to a list of individuals facing EU travel bans and asset freezes, it said.

The full details of the sanctions and which companies and individuals are on the list will be available Friday when they are published in the EU’s Official Journal, which gives them legal effect.