European Union Prepares ‘Robust’ Russia Sanctions Amid Ukraine Crisis; Targets Banks, Officials

The European Union is close to agreeing sanctions on Russia that would put politicians and officials on blacklists, ban trading in Russian state bonds, and target imports and exports with separatist entities, senior EU officials said on Tuesday.

Responding to Russia`s formal recognition of two breakaway regions in eastern Ukraine, the EU said it was reacting “with robustness and speed to the illegal actions of Russia in close coordination with international partners”.

Russian President Vladimir Putin`s announcement on Monday, followed by his signing a decree on the deployment of Russian troops to Donetsk and Luhansk, is “illegal and unacceptable,” European Council President Charles Michel and European Commission President Ursula von der Leyen said in a statement.

The EU had repeatedly said it was ready to impose “massive consequences” on Russia`s economy if Moscow invaded Ukraine but has also cautioned that, given the EU`s close energy and trade ties to Russia, it wanted to increase sanctions in stages.

The package of sanctions, which EU foreign ministers will discuss in Paris from 1500 GMT and aim to finalise “without delay”, includes putting on an EU blacklist those who were involved in the decision to recognise the breakaway regions, the joint statement said.

That could involve all members of the lower house of the Russian parliament who voted in favour of the recognition, one EU official said.

The package of measures under discussion also aims “to target the ability of the Russian state and government to access the EU`s capital and financial markets and services, to limit the financing of escalatory and aggressive policies,” the statement said

Banks involved in financing separatist activities in eastern Ukraine could also be targeted.

The two regions could also be removed from a free trade deal between the EU and Ukraine, “to ensure that those responsible clearly feel the economic consequences of their illegal and aggressive actions,” the statement said.

Meanwhile, German Chancellor Olaf Scholz put certification of the Nord Stream 2 gas pipeline on ice, in one of the most far-reaching reactions to Moscow`s moves.

Not all of the bloc`s 27 member states have the same relation to Russia or dependency on its gas, which could eventually complicate the adoption of sanctions.

EU officials and diplomats said some EU countries, including Austria, Hungary and Italy, Russia`s closest allies in the bloc, would prefer more limited sanctions in response to Putin`s move on eastern Ukraine.

Others want to see a fuller, tougher range of measures discussed in recent weeks for the event of a Russian invasion of Ukraine to be rolled out now. Baltic, central and eastern European states say tough sanctions should be imposed immediately as Russia is already showing military aggression towards Ukraine.

Italian Prime Minister Mario Draghi, whose country relies on Russian for much of its gas, told a news conference in Rome that any sanctions should not include energy imports.

“How we react as European Union will define our character and indeed the future of Europe,” Lithuanian vice minister of foreign affairs Arnoldas Pranckevicius said at a meeting in Brussels.

The sanctions “should not be symbolic. If we want to deter further actions from president Putin, if we want to stop the war from happening, we need to move ahead with serious measures.”

Irish EU affairs minister Thomas Byrne said earlier on Tuesday: “We`ve got to ensure that whatever happens, Russia will feel the pain … to make sure Russia has absolutely no incentive to go further.”