Russian shares tumble as US widens sanctions

Mar 22 2014, 10:47 IST
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The EU also extended its personal sanctions to another 12 middle-ranking Russian and Crimean officials. The EU also extended its personal sanctions to another 12 middle-ranking Russian and Crimean officials.
SummaryRussian shares fell sharply on Friday

Russian shares fell sharply on Friday as investors took fright at tougher-than-expected US sanctions against President Vladimir Putin’s inner circle over Moscow’s seizure of Crimea from Ukraine.

The US added 20 names to its sanctions blacklist, including Kremlin banker Yuri Kovalchuk and his Bank Rossiya, oil and commodities trader Gennady Timchenko and the brothers Arkady and Boris Rotenberg, who are linked to big contracts on gas pipelines and the Sochi Olympics, as well as Putin’s chief of staff and his deputy, the head of military intelligence and a railways chief.

In one immediate consequence, US card companies Visa and MasterCard stopped providing services for payment transactions with Russia’s SMP bank, owned by the Rotenberg brothers, the bank said.

US President Barack Obama said Washington was also considering sanctions against key economic sectors including financial services, oil and gas, metals and mining and the defence industry, if Russia made military moves into eastern and southern Ukraine.

Diplomats said the mere mention of such a possibility would chill investment in Russia, charging an immediate price for Moscow’s action in Crimea and serving as a potential deterrent to going further.

The EU also extended its personal sanctions to another 12 middle-ranking Russian and Crimean officials.

Though the MICEX share index lurched about 3% lower when trade opened, Putin mocked Obama’s announcement of the visa bans and asset freezes on the money men and security officials who accompanied his rise from the mayor’s office in Saint Petersburg in the 1990s. But he said Moscow should refrain from further retaliation against the US for now.

Russia’s parliament rushed to complete ratification of the annexation of the Black Sea region while EU leaders met in Brussels to discuss steps to reduce their long-term dependence on Russian energy. The Federation Council upper house approved a treaty on Friday incorporating Crimea into Russia after the State Duma lower house did so a day earlier.

The 28 EU leaders underlined their support for Ukraine’s new leadership, rejected as illegitimate by Moscow, by signing a political agreement with interim Prime Minister Arseniy Yatseniuk and promising financial aid as soon as Kiev reaches a deal with the IMF.

The signing “recognises the aspirations of the people of Ukraine to live in a country governed by values, by democracy and the rule of law, where all citizens have a stake in national prosperity”, European Council president Van Rompuy said. The accord contained no offer of EU membership.

The EU leaders said Europe

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