- The Washington Times - Tuesday, July 29, 2014

President Obama announced a new round of U.S. sanctions against Russian banks and a shipbuilding company Tuesday, saying Russia must pay an increasingly high price for its military aggression in Ukraine and the downing of a passenger jet.

The penalties follow tougher sanctions in an agreement reached by European Union leaders earlier in the day.

“Today is a reminder that the United States means what it says,” Mr. Obama said on the South Lawn of the White House. “It didn’t have to come to this. There continues to be a better choice.”

Mr. Obama urged Russian President Vladimir Putin to agree to a diplomatic solution to the crisis, which began when Russia annexed the Crimea region from Ukraine in March.

According to the Treasury Department, the latest U.S. penalties target the Bank of Moscow, the Russian Agricultural Bank and VTB Bank. Also listed on the Treasury designation is the United Shipbuilding Corp., based in St. Petersburg, Russia.

Mr. Obama told reporters that the crisis is “not a new Cold War,” but said Russia’s actions “have made a weak Russian economy even weaker.”

“The issue is how do we prevent bloodshed in eastern Ukraine,” he said.

The round of sanctions, he said, was a sign of growing impatience over “nice words from President Putin that are not matched by actions.”

The European Union agreed Tuesday to place sanctions on broad sectors of the Russian economy, marking an escalation of the bloc’s response to Moscow’s role in provoking the conflict in eastern Ukraine.

Some EU members, notably Germany, had been reluctant to impose sanctions until the downing this month of a Malaysia Airlines jetliner that killed all 298 people aboard. The West blames a missile fired by Russian-backed separatists.

The EU action will target finance, dual-use equipment with possible military applications and oil production equipment. The penalties will curtail the ability of Russia’s state-owned banks from borrowing on European markets.

An embargo also will be imposed on Russia’s arms trade and restrictions on exports of militarily sensitive goods and technology.

Along with the sanctions, Secretary of State John F. Kerry demanded that Russia compel separatists in eastern Ukraine to accept a cease-fire. The West has accused Russia of massing thousands of troops on the Ukraine border and shipping heavy weapons to the rebels.

The EU and U.S. previously imposed asset freezes and travel bans on individual Russians and pro-Russia separatists in Ukraine.

Some national security analysts say the latest restrictions are not tight.

Overall, the sanctions appear to target technology that is not of crucial interest to Russia, said Steve Ganyard, president of Avascent International and former deputy assistant secretary of state for plans, programs and operations in the State Department’s Bureau of Political-Military Affairs.

“The sanctions that we’re seeing out of the Europeans are limited in the sense that they aren’t designed to push or hurt the Russians as much as they are to show them that they’re doing something without increasing the risk of blowback by the Russians,” he said.

Treasury Secretary Jack Lew, however, said in a statement that the sanctions were strong and were imposed in solidarity with European allies.

Mr. Ganyard said the United States is “walking a tightrope” and making a distinct effort not to push the fragile Russian economy to the point of catastrophe.

“We’re trying to slowly turn up the heat in a way that doesn’t result in a boilover,” he said.

Meanwhile, Pentagon officials confirmed that Ukraine also has been turning up the heat on Russia by launching short-range ballistic missiles at separatists during firefights in populated areas near the Malaysia Airlines crash site.

The heavy exchange of military fire and “significant escalation on both sides in the past several days” are indicative of a new challenge for Mr. Putin, said Heather Conley, a national security analyst at the Center for Strategic and International Studies. Ms. Conley, director of the center’s Europe Program, said Mr. Putin’s foothold in eastern Ukraine appears to be slipping. As a result, the Russians are spending more time and energy trying to fuel the firefight from afar.

“This is why you’ve seen, over the last several days, a great deal of Russian military hardware that’s crossing the borders, the more sophisticated weapons because the separatists are really taking quite significant military setbacks,” she said.

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