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Politics
U.S. Pushes EU to Ready Russia Sanctions
on Energy and Banks
By Alberto Nardelli, Jennifer Jacobs, and John Follain
16. Dezember 2021, 19:41 MEZ
Updated on 16. Dezember 2021, 19:58 MEZ
U.S. wants allies to agree on list, timing remains unclear
Economic sanctions will be launched if Russia invades Ukraine
The Biden administration is pushing European Union allies to finalize a broad package
of sanctions against Russian banks and energy companies that could be imposed
jointly with the U.S. if the Kremlin attacked Ukraine, according to people familiar with
the discussions.
Adding to the urgency is the fact that Vladimir Putin has shown no sign of pulling back
the thousands of troops he’s amassed near his neighbor’s borders. The U.S. believes
agreeing on specific sanctions options would send a firm signal to the Russian
president.
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It’s been more than a week since he and Joe Biden discussed the crisis.
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These are the measures under consideration, according to people familiar with
discussions. They are based on multiple conversations that have taken place between
the U.S., U.K., Germany, France and Italy, as well as with the EU.
OPTION POTENTIAL IMPACT
More restrictions on Russia’s ability to Russian debt market disrupted
refinance its sovereign debt
Limits on interbank operations of major Bank operations, cross-border
Russian banks possibly including currency financing, trade impeded
conversion
More sanctions on companies in energy Transactions, possibly exports and
and defense sectors financing limited
Ban Russia from key international Global markets for oil, gas, other
transaction networks like SWIFT commodities, as well as Russian
markets, disrupted
The EU countries say that moving too hastily to outline the measures could undermine
efforts to resolve the crisis through diplomacy. The U.S. thinks the package needs to be
readied in order for efforts to deter Russia be credible, according to people familiar
with both points of view.
It’s not clear whether the economic measures would dissuade Putin from attacking
Ukraine if he continues to view NATO outreach to Kyiv to be an existential threat to
Russian security. The U.S., on the heels of the chaotic Afghanistan pullout, has little
appetite for military involvement overseas.
Seeking Balance
The U.S. and the big western European countries together are trying to strike a
balance between sounding like they will follow through on their threats while keeping
a diplomatic dialog going, said one of the people.
To reassure NATO allies in eastern Europe who worry they could be left out of key
discussions, the U.S. is pledging additional military deployments and security
assistance in the event of a Russian invasion. Efforts are in the works to shore up
defense plans for all other scenarios, as well.
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Read more: Biden Told Putin He’d Bolster Ukraine Military If Russia Attacks
Western officials say the Russian buildup could be complete early next year, making an
assault possible as soon as late January, though they say they don’t know whether
Putin has decided to attack.
The Kremlin denies it plans to invade. Specific timelines are still under discussion and
have not been agreed.
Read more: U.S. Intel Shows Russia Plans for Potential Ukraine Invasion
The final details of the sanctions proposals remain to be worked out and officials are
still assessing the potential economic and legal impact of the measures that would be
implemented in the event of an invasion. The difficulty lies in when to tell Putin what
the cost of his actions would be, the people say.
The European countries, which are much more dependent on Russia for energy and
other imports than the U.S., also worry about the impact some of the measures might
have on key goods and their economies given their reliance on imports of energy and
other products.
Swift, Nord Stream 2
Some potential steps on the list, such as cutting Russia off the from SWIFT payments
system, are considered extremely problematic, the people said, citing the potential
disruption of global markets for energy and other Russian exports.
Another concern is the prospect Putin might cut off gas exports -- Russia provides
about 40% of Europe’s supplies -- amid surging energy prices.
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The U.S. has also pushed Germany to agree to stop the Nord Stream 2 gas pipeline
from Russia in the event of an invasion. While the new government in Berlin hasn’t
given a public commitment on that, German regulators said approval for the link to
start operations won’t come before July 2022.
The EU wants to project a united front and leaders agreed to warn Russia of severe
consequences if it invades Ukraine at a summit in Brussels on Thursday an EU
diplomat said. The debate focused on whether to add a reference to restrictive
measures to be taken in coordination with partners, a line which was agreed to, the
diplomat said.
Why Russia-Ukraine Tensions Are So Hard to Defuse: QuickTake
But there are different sensitivities among the 27 nations, with Baltic countries and
Poland feeling particularly threatened given their proximity while those further West
are more sanguine.
Any sanctions package would need unanimity among member states to be adopted. A
commission spokesman declined to comment on the sanctions package.
Read more: Biden Infuriates Eastern NATO Allies With Outreach to Russia
One person, who has been briefed on the EU’s paper, said the list is strong and broadly
echoes the potential sanctions the U.S. is working on. It covers measures targeting:
Russian financial institutions, banks and access to payments systems, including
Swift
Defense companies
The energy sector, including coal, and technology exports
A new sanctions regime on hybrid attacks, adding more individuals to existing
sanctions lists and putting an end to visa-free travel for diplomatic passport
holders.
Another person said that the actions the EU ultimately goes for would depend on what
Russia does and developments on the ground.
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— With assistance by Jorge Valero, and Nick Wadhams
(Updates to reflect state of play at EU summit)
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