Following Crimea Annexation, U.S. Pushes Economic Sanctions on Russia

The president signed a new executive order on Thursday that targets more Russian leaders and sectors of the economy.

A Russian soldier stands in front of a recruitment poster for the Ukrainian armed forces in an area surrounding the Ukrainian military unit in Perevalnoye, outside Simferopol, on March 20, 2014.
National Journal
Matt Vasilogambros and Brian Resnick
Matt Vasilogambros Brian Resnick
March 20, 2014, 7:23 a.m.

Pres­id­ent Obama took new steps Thursday to in­tensi­fy the eco­nom­ic isol­a­tion of Rus­sia fol­low­ing its “il­leg­al” an­nex­a­tion of Crimea, which could have a “sig­ni­fic­ant im­pact on the Rus­si­an eco­nomy,” the pres­id­ent said.

Speak­ing from the White House on Thursday, Obama said the U.S. will move “to im­pose sanc­tions not just on in­di­vidu­als but on key sec­tors of the Rus­si­an eco­nomy.” Seni­or White House of­fi­cials say the sanc­tions will ap­ply to 20 seni­or mem­bers of the Rus­si­an gov­ern­ment and oth­er “cronies.” They will also ap­ply to St. Peters­burg-based Rossiya Bank, which will be “frozen out of the dol­lar,” mak­ing it dif­fi­cult for the in­sti­tu­tion to op­er­ate in­ter­na­tion­ally.

The sanc­tions will tar­get Rus­sia’s fin­an­cial ser­vices, en­ergy, min­ing, and en­gin­eer­ing sec­tors, of­fi­cials said Thursday.

“This is not our pre­ferred op­tion,” Obama said, be­cause the ef­fects of such sanc­tions could trickle in­to the glob­al eco­nomy. European na­tions de­pend heav­ily on Rus­si­an crude oil and nat­ur­al gas ex­ports. 

{{ BIZOBJ (video: 4828) }}

Still, Obama said, “dip­lomacy between the United States and Rus­sia con­tin­ues,” des­pite these latest moves. Sec­ret­ary of State John Kerry met Monday with his Rus­si­an coun­ter­part, For­eign Min­is­ter Sergei Lav­rov in Lon­don, al­though the lead­ers re­por­ted no pro­gress.

Earli­er Thursday, the Rus­si­an Duma voted to ap­prove Putin’s an­nex­a­tion treaty. Only one le­gis­lat­or op­posed the meas­ure. On Fri­day, it will move to the up­per house of the Rus­si­an par­lia­ment, where it is ex­pec­ted to pass. Kiev con­tin­ues to protest the an­nex­a­tion, “Crimea was, is, and will be part of Ukraine,” the Ukrain­i­an par­lia­ment de­clared in a pub­lic state­ment.

While Obama re­it­er­ated his view that Rus­sia’s an­nex­a­tion of Crimea is il­leg­al, his re­marks sug­gest there’s not much the West can do about restor­ing the re­gion to Ukraine. And Ukraine agrees: the Kiev lead­er­ship said Wed­nes­day that it would pull its troops from Crimea, ef­fect­ively giv­ing up the re­gion and its mil­it­ary struc­tures to Rus­si­an forces.

Putin main­tains he has no in­ten­tions of in­vad­ing an­oth­er coun­try with large eth­nic Rus­si­an pop­u­la­tions. Parts of Ukraine and Po­land, as well as Balt­ic na­tions such as Latvia, Lithuania, and Es­to­nia, re­main con­cerned, however.

“The world is watch­ing with grave con­cern as Rus­sia has po­si­tioned its mil­it­ary in a way that could lead to fur­ther in­cur­sions in­to south­ern and east­ern Ukraine,” Obama said Thursday. Vice Pres­id­ent Joe Biden is cur­rently on on a whirl­wind tour of the re­gion, re­as­sur­ing those coun­tries of Amer­ica’s com­mit­ment to col­lect­ive de­fense un­der the North At­lantic Treaty Or­gan­iz­a­tion.

The Obama ad­min­is­tra­tion’s op­tions to con­front Putin have so far been lim­ited. The U.S. has already can­celed pre­par­a­tions for a sum­mer­time G-8 sum­mit in So­chi that would have in­cluded Rus­sia, hal­ted all mil­it­ary-to-mil­it­ary en­gage­ments with the coun­try, and im­posed travel re­stric­tions on sev­er­al Rus­si­an of­fi­cials. Obama has in­vited mem­bers of the G-8, minus Rus­sia, to meet in Europe next week to dis­cuss fur­ther re­sponse to Rus­sia’s in­volve­ment in Ukraine, and to re­con­sider Mo­scow’s mem­ber­ship in the or­gan­iz­a­tion. Whatever’s com­ing next for Rus­sia, it in­volves more isol­a­tion from the rest of the world.

Marina Koren contributed to this article.
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