WASHINGTON — President Barack Obama and European leaders on Tuesday slapped their toughest sanctions yet on Russia’s energy, arms and finance sectors to protest Russian involvement in Ukraine. But the measures stopped short of steps that might inflict damage on Western economies.
Among the entities targeted are the Bank of Moscow and two other state-owned banks, as well as defense companies, including United Shipbuilding Corp. The European Union plan would prohibit new arms imports and exports and would halt the export of sensitive technology to Russian military users. But the plan would allow France to go ahead with a $1.7 billion sale of two amphibious assault ships.
Mr. Obama welcomed the European moves and said he hoped that the latest round of measures will persuade Russian President Vladimir Putin to reconsider his country’s arming of separatists in eastern Ukraine and persuade the pro-Russia forces there to stop interfering with the investigation into the downing of a Malaysian Airlines passenger jet over rebel-held territory.
“Russia is once again isolating itself from the international community, setting back decades of genuine progress,” Mr. Obama said in announcing the latest round of sanctions from the White House lawn. “It does not have to be this way. This is a choice that Russia — and President Putin, in particular — has made.”
European countries that rely on imported Russian oil and natural gas for their energy needs had been reluctant to impose more than symbolic sanctions against Russia. But widespread outrage over the downing of Flight 17 moved them to impose what Mr. Obama called the “most significant and wide-ranging sanctions” to date.
The European sanctions are “surprisingly tough,” said Anders Aslund, a Russia expert for the Peterson Institute for International Economics, a free-market think tank. He said the European sanctions go further than the U.S. sanctions with regard to state banks and oil and gas exploration technology.
Neither the United States nor Europe has targeted Russia’s ability to sell its oil and natural gas, he noted, adding that there is still room for additional sanctions.
On the energy front, the sanctions skirt existing joint ventures between Russian oil giants and international companies such as ExxonMobil and BP. Hitting these could have triggered oil price increases globally. A ban on oil and natural gas field technology was limited to sophisticated equipment needed to extract hydrocarbons from shale-rock deposits, beneath deep ocean waters or from inside the Arctic Circle. The idea, said a senior White House official who briefed reporters under a White House-imposed condition of anonymity, was to make it harder for Russia to conduct future-generation oil exploration and production.
The American Petroleum Institute, the trade association for the U.S. oil and gas industry, said the goal of sanctions could be reached through a different channel: flooding the market with U.S. oil and gas, reducing the demand for Russia’s most important export. An ExxonMobil spokesman said the company was assessing the sanctions.
German Chancellor Angela Merkel, whose government had been seen as waffling on tougher restrictions, was pointed Tuesday as she declared the new sanctions “unavoidable.” The Russian government, she said, needs to decide “whether they want to embark on a path of de-escalation and cooperation.”
The sanctions, agreed upon by representatives of the 28 member states of the European Union, still must be accepted by the countries’ national governments, but they are not expected to balk at the agreement. EU officials debated the sanctions list for seven hours Tuesday.United States - North America - United States military - United States government - Russia - Eastern Europe - Europe - Barack Obama - District of Columbia - Chuck Hagel - U.S. Department of Defense - Jacob Lew - Ukraine - Vladimir Putin - European Union - BP Plc - Moscow - Russia government - Angela Merkel - Exxon Mobil Corporation - Jeb Hensarling