US imposes tough sanctions on Russia

Targets entities in the financial services, energy and arms sectors

The US has slapped additional  sanctions on Russia's financial services and energy sectors for its failure to taken enough steps to address the volatile political situation in Ukraine.

The Department of the Treasury imposed a broad-based package of sanctions yesterday on entities in the financial services, energy and arms or related materiel sectors of Russia as well as on those undermining Ukraine's sovereignty or misappropriating Ukrainian property

"Russia has continued to destabilise Ukraine and provide support for the separatists, despite its statements to the contrary," Under Secretary of Treasury for Terrorism and Financial Intelligence David S Cohen said.

"Because Russia has failed to meet the basic standards of international conduct, we are acting today to open Russia's financial services and energy sectors to sanctions and limit the access of two key Russian banks and two key energy firms to US sources of financing and to impose blocking sanctions against eight arms firms and a set of senior Russian officials," he said.

Treasury imposed sanctions that prohibit US persons from providing new financing to two major Russian financial institutions (Gazprombank OAO and VEB) and two Russian energy firms (OAO Novatek and Rosneft), limiting their access to US capital markets.

It designated eight Russian arms firms, which are responsible for the production of a range of materiel that includes small arms, mortar shells and tanks.

"Luhansk People's Republic" and the "Donetsk People's Republic," which have asserted governmental authority over parts of Ukraine without the authorisation of the Government of Ukraine were also designated.

Aleksandr Borodai, the self-declared "prime minister" of the Donetsk People's Republic found a mention for threatening peace, security, stability, sovereignty and territorial integrity of Ukraine.

Treasury further designated Feodosiya Enterprises, a key shipping facility in the Crimean peninsula, as it is complicit in the misappropriation of state assets of Ukraine and slapped sanctions on four Russian government officials, including Sergey Beseda, a senior Russian Federal Security Service official.

"These actions do more than build upon previous steps to impose costs on separatists and the Russian government. By imposing sanctions on entities within the financial services and energy sectors, Treasury has increased the cost of economic isolation for key Russian firms that value their access to medium and long-term US sources of financing," the Treasury statement said.