WASHINGTON (Reuters) - President Barack
Obama escalated U.S. economic sanctions against Russia on Tuesday for
its aggression against Ukraine but dismissed suggestions the growing
chill in U.S.-Russian relations marked the start of a new Cold War.
The United States and the European Union, in a carefully
coordinated action, announced targeted new sanctions against Russian
banks, energy and defense firms.
It was the West's most serious response yet to what it calls Russian
instigation of and continuing support for the separatist uprising in
the east and the shootdown of a Malaysian passenger jet on July 17
over eastern Ukraine.
Obama, speaking at the White House, said the sanctions would have a
"greater impact on the Russian economy than we've seen so far" in a
drive to force Moscow to stop backing the separatists.
Until now, Europe had stopped short of tougher steps against Russia
for fear of retaliation. Obama said the new sanctions were a sign of
"the waning patience Europe has with nice words from President
(Vladimir) Putin that are not matched by actions."
Senior U.S. officials voiced growing alarm about a Russian troop
buildup on the border with eastern Ukraine and a continued supply of
heavy weaponry to the separatists.
These are signs that, so far at least, the sanctions are not forcing
Putin to back down despite the damage the sanctions are doing to the
Russian economy.
"It's not a new Cold War," Obama told reporters. "What it is, is a
very specific issue related to Russia's unwillingness to recognize
that Ukraine can chart its own path."
Still, Obama did not seem inclined to provide lethal military aid to
Ukraine, saying the Ukraine military was "better armed than the
separatists" and the issue at hand was "how to prevent bloodshed in
eastern Ukraine."
But Republican Senator Marco Rubio, while applauding the new
sanctions, voiced hope that Obama, along with European allies, "will
also significantly increase our assistance, including military
support, to the Ukrainian government."
"Russia’s continued aggression against Ukraine cannot go unanswered,
and we need to do much more to make clear that we and the rest of
the free world stand with the people of Ukraine at this important
moment,” Rubio said in a statement.
FIVE BANKS NOW UNDER U.S. SANCTIONS
The new targets for sanctions included VTB, the Bank of Moscow, the
Russian Agriculture Bank and the United Shipbuilding Corp., the
Treasury Department said.
The sanctions on the three banks prohibit U.S. citizens or companies
from dealing with debt carrying maturities longer than 90 days, or
with new equity.
Five of the six largest state-owned banks in Russia are now under
U.S. sanctions.
Also targeted was United Shipbuilding Corp, a shipbuilding company
based on St. Petersburg, in a move that freezes any assets it may
hold in the United States and prohibits all U.S. transactions with
it.
The Commerce Department classified United Shipbuilding Corp as a
defense technology company.
The new sanctions block the exports of
specific goods and technologies to the Russian energy sector. The
Commerce Department said it will deny any export, re-export or
foreign transfer of items for use in Russia's energy sector that may
be used for exploration or production of deepwater, Arctic offshore
or shale projects that have the potential to produce oil.
Obama also formally suspended credit that encourages exports to
Russia and financing for economic development projects in Russia. He
warned there would be additional costs to Russia should Moscow not
back down.
"Obviously, we can't, in the end, make President Putin see more
clearly," Obama said. "Ultimately, that's something President Putin
has to do on his own."
The Ukraine crisis has set back U.S. relations with Russia to
near-Cold War levels. Ties were further strained this week by U.S.
charges that Russia had violated the 1988 Cold War-era
Intermediate-Range Nuclear Forces Treaty designed to eliminate
ground-launched cruise missiles.
White House officials refused to divulge details of the allegations
but demanded immediate talks with Moscow, whose response thus far
has been "wholly unsatisfactory," said White House spokesman Josh
Earnest.
The new U.S. sanctions were announced during a visit to Washington
by Ukraine Foreign Minister Pavlo Klimkin, who discussed prospects
for resolving the conflict with Secretary of State John Kerry.
Both Kerry and Klimkin told reporters further pressure on Russia was
essential to halt the flow of men, money and weapons into eastern
Ukraine, but said the United States and Ukraine were examining
possible political steps that could be taken inside Ukraine to
address Russian concerns.
(Additional reporting by Eric Beech, Will Dunham, David Storey and
Patricia Zengerle; Editing by Sandra Maler, Tom Brown and Andrew
Hay)
