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Obama widens sanctions’ bite on Putin aides

– President Barack Obama expanded sanctions against top aides and reputed financial associates of Russian President Vladimir Putin on Thursday as punishment for the annexation of Crimea and laid the groundwork for far broader measures against “key sectors of the Russian economy” if Putin further escalates his actions in Ukraine.

The expanded measures potentially include Russia’s financial services, energy, mining, engineering and defense sectors, according to language in what was Obama’s third executive order in two weeks. If implemented, he acknowledged, they would not only significantly affect the Russian economy, “they could also be disruptive to the global economy.”

But “Russia must know that further escalation will only isolate it further from the international community,” Obama said in a brief statement on the White House South Lawn.

For now, the measures target Putin’s inner circle and stop well short of the kind of sanctions that have crippled Iran’s economy. Those would be triggered only by a wider military incursion, and Russian troops remain massed on Ukraine’s eastern and southern borders. And although Putin has said Russia has no further territorial designs on Ukraine, he has proved indifferent to Western threats.

Russia promptly retaliated by banning nine U.S. lawmakers and officials from entering the country.

“We have warned repeatedly that using sanctions is a double-edged sword and will hit the United States back,” it said in a statement on its website.

“Washington has been repeatedly assured that it is unacceptable and counterproductive to talk with our country in such a way,” the statement said. “However, the U.S. seems to continue believing blindly in the efficiency of such methods, taken from the arsenal of the past, and does not want to admit the obvious – in complete accordance with international laws and the U.N. charter, Crimean residents voted democratically for rejoining Russia.”

The Obama administration said it is reviewing a Ukrainian request for non-lethal military assistance to help deter a Russian incursion. But a senior official, one of several who briefed reporters in a conference call about the new measures, said that “nobody wants the outcome here to be a full-bore military conflict between Russia and Ukraine,” and repeated that the United States is not considering “the introduction of U.S. military forces.”

The officials spoke on the condition of anonymity to focus attention on the president’s public remarks.

The U.S. actions came as European leaders, beginning a two-day meeting in Brussels, struggled to agree on how far they are prepared to go with measures against Russia that are likely to be far more economically damaging to their countries than to the United States. As the administration tries to coordinate with Europe, the timing of Thursday’s announcement was designed in part to stiffen European spines.

Today, the European Union plans to sign an agreement with Ukraine’s interim government aimed at gradually bringing it closer to membership. The Ukraine crisis began four months ago, when pro-Europe demonstrators began protesting their then-government’s refusal to sign the agreement.

Obama will travel to Europe next week to meet with the Europeans and other allies in several forums, including the European Union, NATO and the Group of Seven industrialized nations, which has been at least temporarily downsized to exclude Russia. In the current “political circumstances,” German Chancellor Angela Merkel said Thursday, “there is no G-8.”

The U.S. sanctions announced Thursday added 20 people to a handful of Russians whose U.S. and dollar assets the administration froze this week, along with what a senior administration official described as “a crony bank that handles the funds” for wealthy Russians within and outside the government.

Among those on the list are government and business leaders who have been close to Putin, some for many years. They include some of the richest men in Russia – and one Russian, Gennady Timchenko, who is in the oil-trade business in Switzerland.

The sanctions list also includes key officials such as Sergei Naryshkin, speaker of the lower house of parliament, and Sergei Ivanov, head of the presidential administration, as well as influential Russians in the banking and business communities, including several from Putin’s hometown, St. Petersburg. Among them is Yuri Kovalchuk, a longtime Putin friend who is known as “Putin’s banker.” Kovalchuk and another person on the list, Putin aide Andrei Fursenko, are owners of Rossiya Bank, the sanctioned bank.

Senior U.S. officials said that Rossiya Bank has $10 billion in assets and that it handled financial transactions for many senior Russian officials.

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