E.U. levels new slate of sanctions on Russia

Sep 12, 2014, 6:37 AM EDT
People wait to board a bus to leave the city on September 11, 2014 in Donetsk, Ukraine.
AFP/Getty Images

New E.U. sanctions against Russia have gone into force, blocking loans for five big state banks and curbing EU business with oil and defence firms. The BBC reports:

The aim is to keep pressure on Russia over its role in the Ukraine crisis. But the measures could be eased or lifted if a ceasefire in Ukraine holds. Russia says it is preparing a response.

One top Russian official said cars imported from the EU could be targeted. Nato says Russia still has about 1,000 heavily armed troops in east Ukraine. The EU sanctions will block the export of services and deep-water technology for Russia's oil industry.

Three major Russian state oil firms are targeted: Rosneft, Transneft and Gazprom Neft, the oil unit of gas giant Gazprom. Their access to financial markets will be restricted - a serious matter for Rosneft, which last month asked the Russian government for a $42bn (£25.2bn) loan.

Big Russian state-owned banks will be barred from getting loans with a maturity longer than one month, and from getting other financial services in the EU. As the sanctions took effect Ukraine's President Petro Poroshenko said "I never felt before this level of solidarity".

Speaking at an international conference in Kiev, he said "I feel myself a full member of the European family".

The European Union halted an aid plan for fruit and vegetable growers hit by a Russian import ban after Polish farmers claimed far more compensation than EU officials reckon the entire bloc exports to Russia in a year. Reuters writes:

An EU official said none of the 125 million euros ($162 million) set aside for farmers taking produce off the market had been paid out and a revised scheme is likely to be ready next week.

The 125 million euros was equivalent to annual exports to Russia from the 28 EU states of the crops targeted for help. The official said the European Commission would not assume there was fraud in the claims that totaled some 170 million euros, nearly 90 percent of that from Poland.

There could have been confusion about the rules of the scheme and it was likely the amended measures would do more to target those in most need. "The scheme has to be closed due to a disproportionate surge in claims – for example where the figures submitted for some products are several times higher than the total EU average annual exports to Russia," the Commission said in a statement.

Poland's exports of apples to Russia have been a prominent victim of the Russian ban, imposed in retaliation for sanctions on Moscow by the EU over Russian actions in Ukraine. But many other types of fruit and vegetable have also been affected.

Citing one example where the Commission found claims for compensation to be excessive, the official said sweet pepper growers had sought payment for taking off the market 62 percent of their annual output even though only crops destroyed, recycled or given away in the last three weeks were eligible.