October 22, 2014
Obama hits closest Putin allies with further Russia sanctions over Crimea
US President Barack Obama raised the stakes in an East-West confrontation over Crimea by targeting some of Russian President Vladimir Putin's closest long-time political and business allies with personal sanctions.
The extension of visa bans and asset freezes into Putin's inner circle came as Moscow rushed to consolidate the annexation of the Black Sea peninsula, seized from Ukraine last month, and to boost its military presence in the region.
Russian troops took over three Ukrainian warships in Crimea today, using stun grenades in one incident, a Ukrainian spokesman said. Kiev also said it had begun withdrawing its border guards, surrounded and outnumbered by Russian forces, from Crimea to the mainland.
The 20 names added to the US blacklist included Kremlin banker Yuri Kovalchuk and his Bank Rossiya, major oil and commodities trader Gennady Timchenko and the brothers Arkady and Boris Rotenberg, linked to big contracts on gas pipelines and at the Sochi Olympics, as well as Putin's chief of staff and his deputy, the head of military intelligence and a railways chief.
Most grew rich after being associated with Putin since the former KGB officer began his ascent to power in the mayor's office of St Petersburg in the 1990s.
In a statement explaining the sanctions, the US Treasury said: "Gennady Timchenko is one of the founders of Gunvor, one of the world's largest independent commodity trading companies involved in the oil and energy markets.
"Timchenko's activities in the energy sector have been directly linked to Putin. Putin has investments in Gunvor and may have access to Gunvor funds."
Putin has denied any link with Gunvor in the past. The Swiss-based oil trading company said in a statement that Putin had no ownership of Gunvor and "any understanding otherwise is fundamentally misinformed and outrageous".
It also said Timchenko, who has Finnish as well as Russian citizenship, had sold his 43 percent stake in Gunvor to its chief executive, Torbjorn Tornqvist, on Wednesday as part of what the company called a "contingency plan".
Moscow reacted by announcing its own sanctions against senior US politicians in retaliation against visa bans and asset freezes imposed by Washington on its citizens, with the Foreign Ministry saying US action would "hit the United States like a boomerang".
European Union leaders were meeting in Brussels to step up their own measures against Russia. Officials said the EU would add up to a dozen names to its sanctions list and cancel a planned EU-Russia summit in Sochi, but it would not go as far as Washington in hitting Putin's money men.
"We will be a step behind the Americans," a senior European diplomat said.
However, EU sources said the leaders were discussing a radical plan to reduce their dependence on Russian energy by agreeing to negotiate gas purchases collectively with Moscow instead of country-by-country.
The EU would also accelerate work to upgrade cross-border energy networks to reduce individual member states' vulnerability to supply cuts, and speed up building new liquefied natural gas import terminals to diversify suppliers.
Leaders were expected to ask the executive European Commission to study further sanctions on trade, finance, arms and energy in case Russia went further into Ukraine or moved to destabilise other former Soviet states, the sources said.