Obama sanctions Putin allies

 

President Obama on Monday announced that the U.S. is imposing a new round of sanctions against top Russian officials in an attempt to spur Russian President Vladimir Putin to "walk the walk, not just talk to talk," on deescalating the crisis in Ukraine.

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"The sanctions build on the ones that were already in place. We're moving forward with expanded list of individuals," Obama told reporters at a press conference in the Philippines. He described the move as “the next stage in a calibrated effort to change Russia’s behavior.”

The penalties will hit seven Russian government officials, including two members of Putin's "inner circle," according to White House press secretary Jay Carney. The Treasury Department will also freeze the assets of 17 companies linked to Putin.

All 17 companies are owned or controlled by Putin allies, a senior administration official said Monday. At least eight of the companies have ties to Gennady Timchenko, a Russian billionaire living in Switzerland with ties to Putin who had been previously targeted by sanctions efforts.

The Department of Commerce will also impose new restrictions on 13 of the companies in a bid to prevent the export of U.S. manufacturing to them. And the State Department is joining with Commerce to deny the export of "license applications for any high-technology items that could contribute to Russia’s military capabilities," Carney said.

“The goal here is not to go after Mr. Putin personally," Obama said. "The goal is to change his calculus with respect to how the current actions that he's engaging in could have an adverse impact on the Russian economy over the long haul."

The officials sanctioned include Igor Sechin, the head of government-owned oil company Rosneft, Vyacheslav Volodin, Putin's deputy chief of staff, and Sergey Chemezov, chief executive of high-tech Russian company Rostec.

Deputy Prime Minister Dmitry Kozak and Alexey Pushov, the head of the foreign affairs committee of Russia's lower house of parliament, will also face penalties.

Companies that also see assets frozen include Transoil, one of Russia's largest railway operators, financial services firm Volga Group, which funds infrastructure projects inside Russia, and aviation firm Avia Solutions Group.

Export controls will take particular aim at "microelectronics," according to a senior administration official. 

"Today’s targeted actions, taken in close coordination with the EU, will increase the impact we have already begun to see on Russia’s own economy as a result of Russia's actions in Ukraine and from U.S. and international sanctions," said Treasury Secretary Jack Lew in a statement. "Russian economic growth forecasts have dropped sharply, capital flight has accelerated and higher borrowing costs reflect declining confidence in the market outlook."

The U.S. decided last week that it would move ahead with additional penalties against Russia, White House officials said, after seeing few tangible results from a diplomatic agreement signed in Geneva earlier this month. Armed pro-Russian separatists remain occupying government buildings in eastern regions of Ukraine, and the Kremlin made no public calls for the militants to disarm.

But the White House waited to impose the additional penalties until they could be coordinated with officials with the European Union, which is also expected to move forward with new sanctions on Monday. The Europeans have been more reluctant to impose new financial penalties, wary of disrupting the flow of natural gas to their countries or upsetting the Russian oligarchs who live in European banking capitals.

Republican lawmakers expressed concern that the limited sanctions would not do enough to deter the Kremlin, with Sen. Dan Coats (R-Ind.) saying he was concerned the "actions are too little, too late."

“To date, the lack of a forceful, effective response by the administration and Western leaders has given this bully on the playground little reason to expect that further aggression will be punished," Coats said in a statement. "The president must use today’s announcement to pave the way for additional sanctions."

European diplomats were expected to meet in Brussels on Monday to decide which Russian officials would be subject to the penalties. 

Obama told reporters in Manila that he didn’t know if the steps would be enough to stop the aggression from the Kremlin.

"We don't yet know whether it's going to work," he said.

"We don’t expect, again, there to be an immediate change in Russian policy," a senior administration official echoed.

Obama warned that the next step could be broader sectoral sanctions against Russia. So far, officials in both Washington and Europe have been reluctant to move forward with such an aggressive measure, noting it would affect consumers, companies and energy prices in their countries.

Carney said that "further Russian military intervention in Ukraine" could result in penalties hitting the financial services, energy, metals and mining, engineering and defense industries in Russia. 

A U.S. official said that the administration was "confident the Europeans are with us" in imposing sectoral sanctions, should, for example, "we see Russian troops cross that border."

The president also looked to push back against criticism of his handling of Ukraine and other foreign policy entanglements, accusing opponents of being too eager to resort to military force.

“Do people actually think that somehow us sending some additional arms into Ukraine could potentially deter the Russian army?” Obama asked. “Or are we more likely to deter them by applying the sort of international pressure, diplomatic pressure and economic pressure that we’re applying?”

— This story was last updated at 11:31 a.m.