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EU agrees on tougher Russia sanctions

- Measures to target state-owned banks & curb all new weapon sales to Moscow

London, July 29: The EU today approved a package of expanded sanctions against Russia over the conflict in eastern Ukraine, where Moscow has been widely accused of supporting separatist rebels.

The new sanctions target Russia’s state-owned banks, and will restrict sales of arms, some kinds of technology and some equipment used by the oil industry. European diplomats also drew up a list of people who will face individual sanctions, including at least three close associates of President Vladimir V. Putin of Russia.

The sanctions could take effect as soon as August 1, after remaining legal formalities are completed. They include an embargo on all new weapons sales to Russia, though existing deals, including a French contract to supply warships, would not be affected, according to diplomats who spoke on the condition of anonymity today because the agreement had not yet been formally announced.

The sanctions also would affect sales of what are known as dual-use goods, those with both military and civilian applications — but the restrictions would apply only to military buyers, the diplomats said.

The President of Lithuania, Dalia Grybauskaite, welcomed the decision “on a wide range of sanctions on Russia” using her Twitter account. But she expressed unease that France would be able to maintain its naval deal with Moscow.

“Unfortunately, nothing to stop the deal of Mistral yet,” she wrote, referring to the class of assault ships involved. Lithuania is one of five EU states that directly border on Russian territory.

On the financial side, the sanctions would bar individuals or companies in Europe from buying or selling bonds and other securities issued by Russian state-owned and development banks.

Those measures could be felt significantly in London, where those securities are extensively traded.

Sales of technology for oil production and exploration in deep water, in shale deposits and in the Arctic would be restricted, but not technology for natural gas. Several European nations depend heavily on gas supplies from Russia.

European governments were moving in lock step with the US on the new round of sanctions, despite concerns that they would pay an economic price for confronting the Kremlin more aggressively.

Obama administration officials said today that they expected to announce their own package of new sanctions later.

Secretary of state John Kerry said at a news conference in Washington today that the West would continue to impose sanctions “if that is what we must do”, though he called once again for the separatists in Ukraine to agree to a cease-fire “now, not in the future” and reach a peace agreement that would make sanctions unnecessary.

A diplomat in Brussels said that four individuals were singled out for sanctions by the EU: three Russian “oligarchs” who are close to Putin and one figure from Donetsk, a provincial capital in eastern Ukraine that has been a center of rebel activity.

The new sanctions seemed likely to escalate a diplomatic confrontation with Russia that is seen as the most serious of the post-Cold War era, and posed a test the EU’s ability to act decisively in a foreign policy crisis. Leaders of the union’s four largest economies — Germany, Britain, France and Italy — agreed during a video conference yesterday with President Obama that additional action was necessary after Russia built up its forces along the border with Ukraine.

 
 
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