Russia hit with tougher sanctions by US and EU

KIEV // The United States and European Union hit Russia with harsh new sanctions yesterday in a coordinated riposte to Moscow’s “unacceptable behaviour” in Ukraine.

In some of the toughest measures yet to punish Russia for allegedly fomenting an insurgency in its neighbour, Washington targeted Russia’s top bank and leading energy and technology companies, restricting access to finance and technology.

The fresh EU measures were also aimed at major Russian energy, finance and defence companies, including the oil giant Rosneft and weapons manufacturer Kalashnikov.

The ruble sank to a historic low and Moscow stock markets fell, fearful of the impact on an economy already teetering on the brink of recession.

The 28-member EU also imposed asset freezes and visa bans on a host of Russian figures, including allies of president Vladimir Putin, as well as rebels in Ukraine and Crimea, the Ukrainian region annexed by Russia.

“These steps underscore the continued resolve of the international community against Russia’s aggression,” said the US treasury secretary Jacob Lew.

Moscow responded by accusing its foes of seeking to derail a fragile ceasefire that came into force only a week ago, aimed at halting a conflict that has killed more than 2,700 people and inflicted heavy damage in towns and cities across Ukraine’s industrial heartland.

While the guns have largely fallen silent after five months of fighting between Ukrainian forces and pro-Russian rebels, the rhetoric in the worst East-West crisis since the Cold War has just grown louder.

Mr Putin said the new sanctions would have little effect and accused the West of using them as an “instrument to destabilise international relations”.

EU nations finally approved the measures after deep divisions emerged in the wake of the ceasefire, with some worried about the effect on their own economies of any reprisals by Moscow.

Brussels has now agreed it could “amend, suspend or repeal” the measures after reviewing the truce at the end of September.

Moscow has already threatened to bar EU airlines from its airspace, and has drawn up a list targeting imports of consumer goods and second-hand cars from the West.

But the European Commission head, Jose Manuel Barroso, on a visit of solidarity to Kiev just as the sanctions took effect, chided Russia over its “unacceptable behaviour” in its western neighbour.

In talks with Ukrainian president Petro Poroshenko, he described the ceasefire – the first backed by both Kiev and Moscow since the conflict erupted in April – as a positive step.

“However, it is still insufficient to guarantee sustainable peace,” he added.

The West remains deeply suspicious over Moscow’s territorial ambitions after it seized Crimea in March in the chaotic weeks that followed the ousting of Ukraine’s pro-Kremlin president.

Both Kiev and Nato say around 1,000 Russian troops are still in Ukraine in what has been described as an invasion by stealth to bolster the separatist revolt.

Ukrainian authorities say the insurgents now control territory stretching about 300 kilometres along the eastern border to the Sea of Azov after a lightning surge reportedly backed by elite Russian forces just days before the truce.

The sudden shift in fortunes, reversing a series of Ukrainian military successes, prompted suggestions that Kiev had negotiated the deal signed in the Belarussian capital Minsk from a position of weakness.

In a conciliatory gesture this week, Mr Poroshenko announced he would submit a bill to parliament granting parts of the east temporary self-rule, although vowing to keep Ukraine united.

The leaders of the self-declared “people’s republics” in the mainly Russian-speaking Donetsk and Lugansk regions say however they have no intention of abandoning the fight for full independence.

But with the West firmly on his side, Mr Poroshenko demonstrated his determination to remove his country further from Russia’s orbit by boosting ties with Brussels and Washington.

He announced the Ukrainian and European parliaments would meet on Tuesday to jointly ratify a historic association agreement that was scrapped by former pro-Kremlin president Viktor Yanukovych but will now come into effect on November 1.

Mr Yanukovych’s decision set off months of pro-western protests that eventually led to his ouster and triggered the anti-Kiev uprisings in Crimea and the east.

Mr Poroshenko also told an international conference in Kiev he hoped to secure a “special status” for Ukraine with the United States during a visit to Washington next Thursday when he meets President Barack Obama.

* Agence France-Presse