Putin: US Sanctions Are Leading to 'Dead End'

Wednesday, 16 Jul 2014 11:11 PM

 

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Russian President Vladimir Putin said the U.S. will only hurt its own interests with its “aggressive” approach to new sanctions over the four-month conflict between Ukrainian forces and pro-Moscow separatists.

“As a rule, a sanctions regime has a boomerang effect, and without doubt, in this case, leads Russian-American relations to a dead end,” Putin told reporters in Brasilia after taking part in a summit of emerging market powers. “They will hurt the national, long-term strategic interests of the American state and the American people.”

The U.S. sanctions imposed yesterday are designed to pinch Russia’s economy by targeting financial institutions and the defense sector. The European Union yesterday announced its broadest sanctions yet against Russia, punishing Putin for flouting an ultimatum to end the rebellion in Ukraine.

“It’s a pity our partners are going that route, but our doors are not closed to using the negotiating process to exit this situation,” Putin said.

Russia, locked in the biggest confrontation with the U.S. and Europe since the Cold War, is accused by the Barack Obama’s administration of sending heavy weapons, including tanks and rockets, as well as other means of support to separatists in eastern Ukraine. The Kremlin insists that it is trying to pursue peace.

For the last 10 to 15 years, the U.S. has had a “rather aggressive foreign policy” that causes problems wherever it goes, Putin said. “Just look, there are problems in Afghanistan, Iraq is going to pieces, Libya is going to pieces.”

“They touched Ukraine, and there are problems there now.”

Updated U.S. sanctions against Russia include restrictions on energy firms OAO Rosneft and OAO Novatek; financial institutions OAO Gazprombank and Vnesheconombank; and eight Russian arms firms, according to the U.S. Treasury website.

Rosneft isn’t linked to the Ukraine crisis and the sanctions against the company are “unreasonable, subjective and illegal,” CEO Igor Sechin told reporters in Brasilia after Putin spoke. The penalties won’t affect current projects with Exxon Mobil Corp., Sechin said.

Putin, who is wrapping up six-day tour of Latin America with a summit of leaders of BRICS nations — Brazil, Russia, India, China and South Africa — urged the group to seek a bigger global role, accusing the U.S. and its allies of abusing their dominance of international institutions.

“It is time to raise BRICS’ role to a new level and to make our group an unalienable part of the global order to ensure sustainable development,” Putin said in an interview with Itar- Tass released July 15.

The group at a two-day summit in Brazil agreed on the structure of a $50 billion development bank and formalized the creation of a $100 billion currency exchange reserve, to provide an alternative to financing from the IMF and World Bank, where BRICS countries have been seeking more say.

The latest EU sanctions build on travel bans and asset freezes on 72 people accused of destabilizing Ukraine and engineering Crimea’s annexation that the EU has imposed since March. It has also already blacklisted two companies.

There’s an urgent need to “agree on a genuine and sustainable cease-fire by all parties,” EU leaders said in a joint statement.

While Ukrainian forces have made advances against the separatists in eastern Ukraine, the risks of a broader conflict were highlighted by the downing this week of an An-26 military transport plane in which the Kiev government says Russia was involved.

Clashes between Ukraine’s government forces and pro-Russia rebels in the east of the country have been intensifying since President Petro Poroshenko called off a cease-fire July 1.

© Copyright 2014 Bloomberg News. All rights reserved.

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