sanctions – Page 2

Sanctions run counter to G20, international law, WTO, GATT

The sanctions that some G20 countries have taken against Russia run counter to the principles of G20, the Russian president, Vladimir Putin, reminded partners at the organisation’s summit currently held in Brisbane, Australia.

More importantly, Putin said, sanctions run counter to international law.

Such punitive measures may only be introduced through the United Nations and its Security Council, he said.

Moreover, they violate WTO principles as well as the General Agreement on Tariffs and Trade, the GATT.

Ironically the United States itself created the latter at a certain point, but it is currently crudely violating its principles.

Regrettably, Putin said, today’s world exists within a very narrow horizon of planning, in particular, in the sphere of politics and security.

“Everybody lives from election to election. This is a very narrow planning horizon. It leaves no opportunities for taking a broader perspective, for looking into a more distant future. That’s bad. But I hope that we shall discuss this,” he added.

At the just-ended APEC summit, discussions were held on international problems, sanctions and on bilateral problems with most participants in attendance.

President Putin reminded his audience tha the GDP of the BRICS countries calculated at the purchasing power parity is greater than that of the G7. The GDP of BRICS is $37.4 trillion, while that of the G7 is $34.5 trillion.

German business leaders abandoning Merkel

German chancellor, Angela Merkel, is under pressure from leading industrialists to roll back sanctions against Russia, as some of her backers switch their support to her party’s Eurosceptic rival, the Alternative for Germany (AfD).

Merkel’s aides say she has been “annoyed” by phone calls from chief executives of large companies, demanding a relaxation of Germany’s stance towards the Kremlin in order to preserve £59bn a year in trade with Russia.

However, senior business figures, including Heinrich Weiss, head of the supervisory board of SMS, an engineering company with 13,000 employees, have switched their support from Merkel’s Christian Democrats to the AfD, which opposes sanctions.

SMS is heavily involved in both Russia and Ukraine, where a deal worth up to £118m was jeopardised by as US-led putsch.

Weiss, 72, was chairman of the Christian Democrats’ economic advisory council under Merkel’s predecessor Helmut Kohl.

“The sanctions policy is irrational because it will never influence Russian actions in Ukraine, but it is doing lasting damage to German businesses and jobs,” a senior SMS executive told The Sunday Times.

Another prominent businessman to join the AfD is Hans Wall, founder of a street furniture and outdoor advertising company, who has various business interests in Russia. He was formerly a supporter of the Free Democrats, Merkel’s junior coalition partners.

Merkel faced another setback last month when the heads of several German multinationals — including the pharmaceuticals group Bayer, BASF chemicals and the energy giant Eon — travelled to Moscow with other western businessmen to meet Dmitry Medvedev, the prime minister.

That was seen as a slap in the face for Merkel’s policy. “The last thing we need is a parallel foreign policy by industry,” one of her aides told Der Spiegel magazine.

About 300,000 jobs in Germany are believed to depend on trade with Russia.

Merkel last week rejected any lifting of sanctions and called for them to be extended.

But some of her neighbours are wavering: Austria, Hungary, Slovakia, Bulgaria, Greece and Cyprus have all indicated they would not support further sanctions because of trade with Moscow or dependence on Russian gas.

Rifts show as sanctions bite EU

The foreign ministers of the European Union’s 28 member states will consider the situation around the EU’s anti-Russian sanctions for Moscow’s position on Ukrainian events at a meeting on November 17, the EU’s high representative for foreign affairs and security policy, Federica Mogherini, said Tuesday.

Austrian Chancellor Werner Faymann spoke on Tuesday against the imposition of new anti-Russian sanctions over Moscow’s position on the situation in Ukraine.

Faymann made the statement to journalists after a government meeting.

He said Vienna believes in the negotiating process to settle the situation in Ukraine, the Austria Press Agency (APA) reported.

The sanctions have had a significant impact on the Austrian economy.

Until now, Russia was the tenth most important business partner for Austria. In 2013, Austrian companies exported an aggregate of 3.5 billion Euros of products to Russia and imports reached 3.2 billion Euros. Russia had also become an increasingly important destination for Austrian direct investments.

The sanctions have particularly affected Austrian banks, who remain concerned about the possible commercial risks should Russia decide impose sanctions against the financial sectors of EU Member States, either in the form of extraordinary taxations, restrictions to capital movement or even expropriation.

It is likely that the EU sanctions and any Russian countermeasures will cost the Austrian economy in the region of 750 million Euros.

With this in mind, the Austrian government recently adopted a crisis package, including support for small and medium sized enterprises, SME’s.

The European Union’s sanctions regime against Russia is not expected to change in the near future, the new European Commission president said on Wednesday, however.

Jean-Claude Juncker said toughening or easing the sanctions is not an issue for today.

Juncker also said he would make his first visit to Kiev.

The US has urged the EU to impose several rounds of economic sanctions against Russia over the country’s alleged role in the Ukrainian crisis, while Moscow has repeatedly stated that Russia is not a party to the Ukrainian internal conflict.

German Chancellor Angela Merkel believes that latest events in Ukraine, primarily elections in self-proclaimed Donetsk and Luhansk People’s Republics, do not allow for consodering possible cancellation of sanctions imposed on Russia.

“There are no reasons to cancel them now,” she said in Berlin on Tuesday. Merkel named elections in the self-proclaimed republics “illegal,” noting that Moscow should influence militias more actively to prevent the conflict from escalation.

“Russia does not take effort at an extent we would like them to do so,” she said, noting importance of observing the Minsk agreements by all conflicting parties.

‘EU foreign policy prisoner to US threats’

The EU is trapped between anti-Russian members and threats to European companies

EU foreign policy has become a prisoner of the United States, trapped and forced to impose and maintain sanctions against Russia, prominent French economist Jacques Sapir told RIA Novosti Wednesday.

“The EU at first had no intention of moving to a sanctions regime as harsh as the US. But, the US trick was to let the threat of a possible move by the US against any EU company, doing business with Russia in US dollars hovering,” Sapir said.

Then, the EU ended up trapped between on one hand some EU countries (Poland and the Baltic countries) that are deeply anti-Russian and possible US threats against EU companies if they did not abide US sanctions. We could consider that EU foreign policy has been successfully captured by the United States.”

Late Tuesday, permanent representatives to the European Union decided against altering the existing sanctions regime against Russia.
Jacques Sapir explained that “it would be extremely difficult to cancel the sanctions “at least before a delay of 6 months.”

“To do that, the EU would have to build a “consensus” and if Poland and the Baltic countries don’t agree, sanctions could not be cancelled. But, we have to remind ourselves that the sanctions were put in place for 6 months. Once we reach this deadline (by early January 2015) the situation could evolve in another direction,” Sapir told RIA Novosti.

Sapir noted that “the sanctions process against Russia is the only way the EU could be seen to react to Russian policies on Crimea and Ukraine.” But the fact of using sanctions and “that European sanctions were, at first, only cosmetic” demonstrates the weakness of the European Union in facing the United States.

The European Union and the United States have imposed sanctions on Russia over its alleged involvement in the Ukrainian crisis, a claim Moscow has repeatedly denied.

The latest round of sanctions came into effect on September 12, targeting Russian defense companies, alongside the country’s largest banks, energy companies and certain high profile individuals.

‘The goal of sanctions is a color revolution in Russia’

The goal of Western economic sanctions is a “color revolution” in Russia, Russian Academy of Sciences presidium member, academician Yevgeny Primakov is convinced. He told TASS in a jubilee interview of conspiracy theories around oil prices, the U-turn of Russia’s economy to the East and the role of informal diplomacy in conditions of a political crisis. On October 29, Yevgeny Primakov, who consecutively headed the Foreign Intelligence Service (SVR), the Foreign Ministry and the government, turns 85.

– How large-scale can the influence of reciprocal sanctions be on the global policy and economy?

– I can’t agree with the term “reciprocal sanctions”. The sanctions imposed by the United States and their allies against Russia are one thing. And response measures taken by Russia are quite another thing. The aim of anti-Russian economic sanctions is to weaken Russia, corner us, put into practice the idea of a “color revolution” in our country. The response measures that in their scale are not comparable to anti-Russian sanctions are mainly aimed to create an atmosphere that does not favor escalation of sanctions imposed by the West. Of course, in such a situation, a signal is sent to relevant departments and businesses on the required support for the domestic producer in order to loosen our dependence on imports, especially in the food sphere.

Economic sanctions without a relevant decision of the UN Security Council are a measure that contradicts global processes – both economic ones aimed to develop interaction in the interests of all countries, and political ones who solve the problems of creating various systems of counteraction to the real threats to the security of the modern world.

– Has escalation of the conflict discredited the leading institutions of international economic cooperation – the World Trade Organization, the World Bank and the IMF? Do they require transformation?

– The development of the conflict imposed on us by the United States directly contradicts the principles that underlie the WTO, the World Bank and the IMF, but it does not mean that Russia should quit these institutions of international economic cooperation. Even in conditions of the changed global situation, Russia does not accept a course for self-isolation.

– Does the role of informal diplomacy grow in conditions of political contradictions? In particular, do you think that representatives of big business of Russia, the US and the EU will contribute to rapprochement of political positions of the countries involved in the confrontation?

– Informal diplomacy is especially important now, including at the level of Russian, American and European businesses, interested, it seems, not in destruction but in creation, in development, first of all, of economic cooperation.

– Has China retained the status of the United States’ arch geopolitical rival against the cool-off in Russian-US relations? Or is it now Russia?

– As far as economics is concerned, in the context of the existing inter-dependence of the United States and China their competition is unlikely to fade into the background, particularly so now, that the Chinese economy has taken first place. At the same time, I do not believe that one should project this situation to the worsening of relations between the United States and Russia, which by no means signifies that Russia positions itself as the United States’ main geopolitical rival.

‘Keep sanctions, Putin is winning’

Vladimir Putin has outmaneuvered his opponents and humiliated Ukraine by continuing to back pro-Russian separatists and flouting a cease-fire, making it crucial that sanctions on Russia remain firm, France’s ambassador to the U.S. said.

The Russian president “has won because we were not ready to die for Ukraine, while apparently he was,” Ambassador Gerard Araud said yesterday at a Bloomberg Government breakfast in Washington… Echoing the view of other European envoys in Washington, Araud expressed concern that the Ukraine conflict has hit an impasse, leaving Putin the winner by default.

Poroshenko is “kneeling in front of Putin with the cord around his neck and saying, ‘You know, you have won,’” and Putin is still not backing down, Araud said.

While many observers have called Putin a geopolitical chess player, he said, the Russian leader is more a “poker player really, putting all the money on the table, saying, ‘Do the same,’ and of course we blink. We don’t do the same.”

The economic sanctions against Russia must stay in place to prevent Putin from going further, said Araud, who moved to Washington in September after serving as the French ambassador to the United Nations.

“Whatever we decide is a disaster for us,” Araud said, again expressing his personal view. On one side, he said, lies France’s credibility as an arms supplier who delivers on contracts, and on the other, the difficulty of delivering a weapons system to Putin, who might use it against Ukraine or a European ally.

Araud concludes – rather ominously – and far too honestly for a paid-up member of the European elite:

“The question is there on the table: When is Putin going to stop?” Araud said. “That’s the reason that we need to keep the sanctions” because, “let’s be frank, it’s more or less the only weapon that we have. We are not going to send our soldiers in Ukraine. It does not make sense to send weapons to the Ukrainians, because the Ukrainians would be defeated real easily, so it will only prolong the war” and lead to a “still bigger Russian victory.”

The various oligarch controlled parties seem to have won a strong victory against the various Nazi parties in the elections being held by the junta currently: 44% vs 16%, but the official and final results will only be known on Wednesday.

Source: Bloomberg

German sanctions against Russia voted on pure speculation

A German parliamentarian, who is also chairman of the German Defense Committee and former member of the Yugoslavian OCSE, says the German government had no idea whether MH17 was actually shot down.

Alexander Neu, during an interview for Rossiya Segodnya, also spoke about Germany’s proclaimed neutrality in its involvement in Ukraine.

Neu requested a deputy’s inquest from the German government concerning the Boeing which was shot down over Ukraine on September 6.

The reply has now been released to the public.

It was clear from the reply that, firstly, the German government had no idea whether MH17 was actually shot down. Secondly, if it had been shot down, the government couldn’t answer who the responsible party was.

The Hague published its first interim report from the Dutch Safety Board two days later and it was announced that the plane was hit by a missile, but again it was not said by whom.

The territory where the plane’s debris fell was hit by mass shelling from Kiev’s artillery, rendering it highly unlikely that any new evidence would be found.

The conversations between the pilots and the dispatchers has also still not been released.

The German media however unanimously blamed Russia and, incredibly, it was on the basis of pure speculation that sanctions were leveled against the Russian Federation, since it is now certain that the Germans had no knowledge of who might have been responsible.

Neu also wonders why crucial information is not being released from the black boxes.

Andrej Hunko, another German member of parliament, asked the OSCE in Vienna recently whether the organization had appealed to the German government for German drone support.

The OSCE replied stating that they asked neither the German nor the French government for support via drones. In fact, they wanted no military support from these countries whatsoever.

When the German Defense Minister Von der Leien was confronted with these lies at a meeting of the parliamentary defense committee, Ms. Von der Leien repeated that the OSCE had asked for support, but she would give no specifics.

In other words, von der Leien is pushing the drones, even though the OSCE had not specifically asked for them.

Germany, France and the European Union, as well as the members of NATO are a part of the conflict, supporting the Kiev regime with instructors and intelligence assistance, and are not neutral observers.

Switzerland, the chairman of the OSCE, provides drones and so does Austria, since these countries are neutral.

Obama threatens sanctions after Zim signs Russian deal

The United States has reportedly warned Zimbabwe about its growing economic dealings with Russia after Harare recently sealed an agreement with Moscow for a US$3billion platinum mine.

According to Herald columnist Nathaniel Manheru, who is thought to be President Robert Mugabe’s spokesman George Charamba, the Obama administration threatened further sanctions against Zimbabwe over its ties with Russia.

Zimbabwe’s Pen East Investments has teamed up with Afronet, a consortium of three Russian partners, to form Great Dyke Investments, which is developing the US$3 billion Darwendale platinum project.

At full development in 2024, the mine will produce 800,000 platinum ounces, pushing Zimbabwe’s output over one million ounces, and create 8,000 jobs.

Russian foreign minister Sergey Lavrov visited Zimbabwe last month to conclude the deal with President Robert Mugabe.

However, according to Manheru, the deal could see Washington hit Harare with further sanctions.

Manheru wrote in the Saturday Herald:

“A week or two ago, the US government, through its local embassy, sent an official communication to the Zimbabwean Government, listing the full measure of sanctions the West, led by America, have slapped on Russia.

“The communication went further. It spelt out American expectations on Zimbabwe, namely that Zimbabwe was expected (read required) to support those sanctions by avoiding any association with companies sanctioned by the Americans and their Western allies. Or their subsidiaries or affiliates.

“And . . . yes you guess right, that targets the new US$3bn-plus platinum investment by the Russians at Darwendale! It (Zimbabwe) should not proceed or else we are under sanctions.”

Manheru said it was ridiculous for the US to refuse to lift sanctions against Harare and then demand support for its measures against Moscow.

“America then invites sanctioned Zimbabwe to support sanctions against Russia, itself a bird of the same feather!

“This is where I am tempted to tell the American government to go and hang, hang on a banana tree, bums up.”

Russia considers US movie boycott amid sanctions, stereotyping

Is a new cold war brewing between Hollywood and Russia?

After a string of recent movies including The Avengers, Jack Ryan: Shadow Recruit and A Good Day to Die Hard featured Russian villains, a member of the country’s parliament has suggested outlawing foreign movies that “demonize Russia and Russians.” And on Sept. 17, top Russian director Yuri Kara called for a ban on U.S. films until it lifts sanctions imposed against Russia for annexing Crimea from Ukraine. “Hollywood would exert pressure on Obama, and he would lift the sanctions,” said Kara.

Another director, Stanislav Govorukhin, who was Russian president Vladimir Putin’s campaign chief in the election two years ago, also has spoken out in favor of restrictions on Hollywood fare. “I believe that it would be good to limit the presence of Hollywood movies on Russian screens,” he said Sept. 18 at a congress of All-Russian People’s Front, a pro-Kremlin organization, which he co-chairs.

Any limit on access to the Russian market would hurt Hollywood like never before. In 2013, Russia’s box office grew to $1.3 billion, becoming the world’s sixth-largest movie market. U.S. fare accounted for more than 75 percent of the total gross.

Curtailing U.S. movies might play well with Putin, but many in the Russian entertainment community aren’t fans of possible retaliation. “Hollywood movies create steady audience flow to theaters here, leading to more screens being opened in the country, which eventually helps Russian productions,” says Alexander Akopov, head of Moscow’s AMedia.

Russia’s public chamber has said it will consider the introduction of a 40 percent quota for Russian releases. Govorukhin believes Russian releases wouldn’t be able to fully replace Hollywood films as the local film industry only produces 60 features a year, so more films made “in countries with rich film cultures,” such as Turkey, Korea, Iran and Japan, should be released in Russia, as well as more European films, he says.

In addition to the U.S. sanctions against Russia, several high-profile portrayals have rankled nationalist pride.

In 2008, Indiana Jones and the Kingdom of the Crystal Skull was attacked by communists in St Petersburg for a “distorted depiction of the Soviet Union’s foreign policy in the 1950s” and “satirized and negative portrayal of Soviet soldiers.”

British actor Kenneth Branagh is among the latest in Hollywood’s long list of Russian screen villains, playing diabolical oligarch Viktor Cherevin hell bent on destroying America in the winter release Jack Ryan: Shadow Recruit. Other recent portrayals: A sadistic former KGB agent in The Avengers; bent Russian officials in A Good Day to Die Hard; a Russian-American loan shark in Limitless and even Russian missile space debris that destroys the US space station in Gravity.

“In some films, anti-social and sometimes anti-Russian rhetoric is present, confusing the younger generation,” the chamber’s first deputy secretary Vladislav Grib was quoted as saying on Sept. 24 by the Russian news agency ITAR-TASS. “At the same time, Russian pictures have a hard time reaching the screens and sometimes they are unable to do that at all,” he added.

Akopov believes a compromise is in order. “We understand that there is no way for Hollywood to stop portraying us as the bad guys,” he says. “We just advise that Hollywood add some balance and introduce some good Russian characters into their stories too. Apart from being fair and politically correct, this approach will also help keep screens open for Hollywood in the world’s sixth largest theatrical market.”

– The Hollywood Reporter

Russia signs platinum deal with Zimbabwe

Russian Foreign Minister Sergei Lavrov has signed economic and cooperation deals in Zimbabwe.

Zimbabwe is in “desperate need of investment,” Thea Fourie, an analyst at IHS Global Insight in Johannesburg, told Bloomberg in an e-mailed statement. Mugabe “has reached out to partners such as China and Russia to fill the gap,” according to Fourie.

Trade bans and economic embargoes were placed on Mugabe and senior members of his ruling Zimbabwe African National Union-Patriotic Front party in 2002 by the US, the EU, Canada, Australia and New Zealand.

Lavrov signed a $3 billion investment deal with Mugabe that will allow Russian firms to help develop Zimbabwe’s platinum resources.

The Russian foreign minister said it’s important to recognize pluralism in the international community, as well as “the emergence of new, big players, including the African continent, whose interests and voices must be taken into account in world politics.”

The project is the largest single foreign investment in Zimbabwe since it gained independence in 1980.

Mugabe, 90, met Russian Foreign Minister Sergei Lavrov at his rural home in Kutama Village, 130 kilometers north of the capital Harare.

Mugabe said international sanctions have to be approved by the UN.

Former BP chief warns against Russia sanctions

US and EU sanctions against Moscow are in danger of turning round and biting the west by constraining global oil supply and pushing up prices in coming years, the former chief executive of BP has warned.

Tony Hayward said that cutting off capital markets from Russia’s energy groups, which would eventually lead to less investment in Russian oil production, was likely to damage long-term supply. He said the US shale boom had obscured the growing risks to the world’s supply picture, but its effect would wear off, leaving the global economy dangerously exposed to potential disruptions in the flow of oil.

His comments came as the US and Europe expanded sanctions against Russia on Friday with the US adding Gazprom, Europe’s leading energy provider, and Lukoil, the privately owned oil group, to the list of companies deprived of US goods, technology and services for deepwater, Arctic offshore and shale projects. EU and US sanctions have also imposed restrictions on financing for some state-owned Russian energy companies.

“The world has been lulled into a false sense of security because of what’s going on in the US,” Mr Hayward said in an interview with the Financial Times, referring to the shale boom that has driven a 60 per cent increase in US crude output since 2008. But he asked: “When US supply peaks, where will the new supply come from?”

As output from mature basins such as the North Sea and Alaska’s North Slope declines, the world had been banking on new barrels from places such as Canada, Iraq and Russia. But the latter’s future production from untapped resources in the Arctic and the vast shale reserves of Siberia are under threat because of sanctions, Mr Hayward said.

“Because of financial sanctions, the big gorillas are going to start cutting their activities,” he said.

Mr Hayward, who runs oil explorer Genel Energy and is chairman of commodities group Glencore, also expressed doubt about projections for a big increase in oil production from Iraq. He said current circumstances meant the country would struggle to reach targets to double production by 2020.

The advance of Isis militants in northern Iraq has coincided with political instability in other big oil-producing countries such as Libya. But the barrels lost through post-Arab Spring unrest have been matched by new supply from North America. Without that additional supply, the world would be facing an oil price of $150 a barrel, according to Mr Hayward.

Brent crude has fallen from about $108 per barrel at the start of the year to about $97 today.

Source: FT

German eurosceptics surge in two state elections

The eurosceptic ‘Alternative for Germany’ party got more than ten percent of the vote in the country’s regional elections on Sunday, making the right-wing a growing threat for Chancellor Angela Merkel’s conservatives.

According to Beatrix von Storch, a Euro MP for Germany’s AFD, her country’s answer to Ukraine crisis should be setting up a free trade agreement with Russia to guarantee German business interests.

The AFD party won 10.1 percent of the vote in Thuringia and 11.9 percent in Brandenburg, according to projections on Germany’s ARD TV announced after voting ended at 6 pm Sunday (1600 GMT).

Two weeks ago, the party already won 9.7 percent in an election in Saxony. With this weekend’s results, the AFD will now have seats in three state assemblies. According to predictions by political analysts, the party has a strong chance of entering Germany’s federal parliament after the 2017 general election.

Founded in early 2013 to oppose eurozone bailouts, it was branded as a group of “unelectable mavericks” by the German political elite. Yet, the AFD won over seven percent of the vote in the EU elections in May, entering the 28-nation bloc’s parliament.

The 52-year-old party leader Bernd Lucke said the recent results in two more eastern states add to the momentum of the party. “We’re delighted that voters have made the choice for a political renewal,” he told German TV.

Originally calling for a return to the Deutsche Mark instead of the eurozone’s unified currency, the party’s message has broadened to include education, security and other issues in its campaign.

With previous allegations of the AFD being hijacked by extremists, the party leader was even happier with the recent results, saying: “We’re not going to sit still and let the other parties bad-mouth us.”

Chancellor Angela Merkel recently called the AFD is a “problem”.

Merkel’s Christian Democratic Union (CDU) won 34.4 percent in Thuringia, but it’s not clear yet whether it will stay in power in the region, depending on whether their junior coalition partners, the center-left Social Democrats (SPD), which won 12.3 percent, switch to support the Left Party (27.7 percent votes), in a coalition with the Greens and their 5.6 percent.

Merkel’s pro-European CDU has ruled out any coalition with the AFD.

Europe saw a remarkable shift towards right-wing and eurosceptic political parties after the EU parliamentary elections in May.

The UK Independence Party (UKIP) beat off competition from the country’s Lib Dems, Conservatives and Labour, garnering 27.5 percent of the vote. France’s National Front, known for its anti-immigration and anti-EU rhetoric, got 25 percent.

Along with the anti-Eurozone position, some new players on the EU political scene have expressed their concern regarding Brussels’ sanctions aimed at Russia.

After the earlier round of sanctions, Heinz-Christian Strache, Chairman of the right-wing Freedom Party of Austria, which has 20 percent of seats in the lower chamber of the national parliament and showed similarly strong results in this year’s European parliamentary election, criticized the EU.

“In just a few days after the [Russian] sanctions came into force they hurt out agriculture. The EU is thinking on how to mitigate it. Instead of putting Russia on its knees, they drag our farmers to ruin with their senseless sanctions policy,” Strache said.

Source: RT

West’s new sanctions subverts peace process in Ukraine

The West’s new package of sanctions against Russia looks “somewhat strange,” since this move actually subverts the peace process in Ukraine, Russian President Vladimir Putin said.

“As for sanctions that were imposed today, or yesterday, it all looks somewhat strange – even on this background of the use of (sanction) mechanisms,” Putin told journalists.

“Some time ago, I had a telephone conversation with Ukrainian President Petro Poroshenko and after it I proposed a plan how to solve this conflict peacefully and our positions coincided to a greater extent,” Putin said, adding that his plan had been used as a basis for peace agreements “committed to paper at a Contact Group meeting in Minsk.”

“And I would like to mention it with satisfaction that the process has moved off the starting block,” with combat operations stopped and the offensive by the East Ukraine’s militia suspended, he said. Apart from that, “you have to give the Ukrainian president his dues, the Ukrainian army has made corresponding steps under the agreements: they have withdrawn artillery and multiple launch rocket systems off populated areas to a distance that makes it impossible to fire on these settlement.”

“A peace process has begun, first contacts have been launched and I think this process has yielded a possibility to begin a political settlement, at least provisionally,” Putin said. “It has brought some positive air into the situation, which showed on Ukraine’s southeastern regions.”

Bearing this in mind, Putin said he did not see what had triggered further sanctions from the European Union. “I can’t understand what these next sanction steps are about,” he said.

“I’ve said it many a time that our Western partners first drove the situation into an anti-constitutional coup and then supported the punitive operation in the Southeast and now that the situation has switched over to the track of peace settlement someone is taking steps aimed at breaking the peace process up,” Putin said.

“What is this done for?” he asked.

The EU and US imposed a new batch of sanctions on Russia for Ukrainian developments from Friday despite the fact that the parties to the intra-Ukrainian conflict agreed on a ceasefire during OSCE-mediated talks on September 5, and that the truce took effect the same day.

The new sanctions the European Union and the United States decided against Russia, target the country’s largest banks, energy and defense companies, as well as individuals.

Building on earlier measures, the sanctions target Russian access to capital markets, ban the sale of dual use equipment to nearly a dozen Russian companies, and add dozens of people to the list of those facing travel and financial restrictions. The new initiative follows on a change of tactics made in July, switching from targeted sanctions against individuals and businesses to measures against entire sectors of the Russian economy.

The EU made their announcement first, stating Friday that sanctions targeting Russia’s finance, energy and defense sectors had come into force.

Sanctions against Russia would affect Exxon and BP

The U.S. and European Union are poised to halt billions of dollars in oil exploration in Russia by the world’s largest energy companies in sanctions that would cut deeper than previously disclosed.

The new sanctions over Ukraine would prohibit U.S. and European cooperation in searching Russia’s Arctic, deep seas or shale formations for crude, according to three U.S. officials who spoke on condition of anonymity because the measures haven’t been made public. If implemented, they would affect companies from Dallas to London, including Exxon Mobil Corp. and BP Plc.

EU ambassadors met today and will resume deliberations tomorrow in Brussels on whether to trigger added sanctions or wait longer to see if a cease-fire holds between Ukraine and pro-Russian separatists and if Russia backs moves toward a longer-term agreement.

Once the EU implemented the new ban on sharing energy technology and services, the U.S. would follow suit with a similar package, including barring the export of U.S. gear and expertise for the specialized exploration that the Russians are unequipped to pursue on their own, the U.S. officials said.

EU governments agreed on these oil-related sanctions on Sept. 8 as part of a wider package of measures intended to hobble Russia’s finance, defense and energy industries, pending evaluation of the cease-fire declared in Ukraine last week, according to two European officials who also spoke on condition that they not be named.

Source: Bloomberg