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EU Slaps New Sanctions on Russia
Sep 16, 2014

The European Union has decided to slap new economic sanctions on Russia over its actions in Ukraine. These sanctions will further curb access to European capital markets for Russian firms and banks, limit exports of certain high-technology goods and target several officials with travel bans and asset freezes. The sanctions will be reversible if the situation in eastern Ukraine improves.

A summit of EU leaders almost two weeks ago called for the new sanctions to be finalised, but they were then twice postponed to assess the impact of a cease-fire in eastern Ukraine. The United States previously said it was also considering new sanctions once the EU moves forward, and could now take that step.

The new sanctions are expected to deepen earlier penalties targeting Russia’s oil and arms sectors, including a further tightening of access to international capital markets. The new sanctions put Russia's top oil producers and pipeline operator, Rosneft, Transneft and Gazprom Neft, on a list of state-owned firms that face restrictions on raising capital on European markets. 

EU sanctions do not include the gas sector and in particular state-owned Gazprom, the world's biggest gas producer and the biggest gas supplier to Europe.  Under the EU penalties, firms in the bloc will be barred from providing drilling or well testing services for deep-water oil exploration, Arctic oil exploration or production and shale oil projects in Russia. 

Battle-tank maker Uralvagonzavod, aerospace company Oboronprom, maker of Mil military helicopters, and state-controlled United Aircraft Corp (UAC), which produces MiG and Sukhoi warplanes, are barred from issuing raising new capital in Europe via securities with a maturity of more than 30 days. 

Diplomats say the EU will offer Russia more time to adjust to a European free-trade pact with Ukraine that has been the trigger for the conflict and which Russia fears would hit its exports to Ukraine. Ukraine's President Petro Poroshenko said the fresh EU sanctions highlighted the support his country was receiving.


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