New EU sanctions to target Russian oil, defence

The FT reports that Europe’s latest sanctions will target a number of key Russian oil and defense industry companies and banks. The new round of economic sanctions is due to be imposed by Brussels Tuesday.

The Wall Street Journal also reported on the latest round of sanctions, referring to leaked EU documents.

Rosneft, Gazpromneft and Transneft are among the oil sector companies, included in the sanction list the Wall Street Journal said it examined. They will reportedly be banned from raising funds with the maturity period exceeding 30 days. The same restriction will be imposed on five Russian state-controlled banks, including Sberbank and VTB Bank, already forbidden from raising bank loans in the European Union member states for longer than 90 days, the newspaper said Sunday.

Russian defense industry access to the EU capital markets will also be seriously complicated, according to the documents cited by the Wall Street Journal. Oboronprom aerospace holding, United Aircraft Corporation and Uralvagonzavod scientific industrial corporation are among the defense industry companies Wall Street Journal said would be able to get a bank loan with maximum maturity of 30 days in the European Union.

Nine companies, producing equipment for the Russian army, including Kalashnikov, Sirius and Stankoinstrument, will reportedly no longer be able to purchase dual-use technology (with possible military applications) from the EU member nations.

Brussels and Washington started to impose economic sanctions against Moscow since Crimea’s reunification with Russia in March, which the West considers illegal, and Russia claims to be fully legitimate. The latest round of restrictions has, in particular, limited capital raising in the European Union for a number of Russian banks.

As a responsive measure, Moscow issued a one-year ban on certain food products importation from the United States, the European Union, Australia, Canada and Norway.

New Sanctions against Russia in energy or finance sectors could trigger an asymmetric response from Moscow, such as closing its airspace, Russia’s Prime Minister Dmitry Medvedev told the Vedomosti newspaper in an interview released Monday.

“It is them [the West], who should be asked whether there will be new sanctions. But if there are sanctions, linked with energy, [or] further restrictions on our finance sector, we will have to respond asymmetrically. For instance, [with] restrictions in transport area. We act on the premise of friendly relations with our partners, and this is why the sky above Russia is open for flights. But if we are restricted, we will have to answer,” Medvedev added.

The prime minister argued that certain Western airlines could go bankrupt in case they are banned to use Russia’s airspace.

“But this is a bad option. I just would like our partners to realize it at a certain moment. Especially, [considering the fact] that the sanctions do not help to establish peace in Ukraine. They miss [beside the mark], and an absolute majority of the politicians understand it. There are just an inertness of thinking and, unfortunately, the will to use force in international affairs,” Medvedev stressed.