Lew Defends Gradual U.S. Approach to Sanctions Against Russia

Treasury Secretary Jacob J. Lew defended the Obama administration’s “step-by-step” approach to sanctions against Russia after the U.S. took measures against seven officials and 17 companies linked to President Vladimir Putin’s inner circle.

“Our goal is to move in a systematic way, in a careful way, in a way that also gives them a chance to change their policy and take a different course,” Lew told NBC News/MSNBC in an interview today. “Our goal here is obviously not to hurt the Russian people. It’s to get them to change their policy.”

The targets of U.S. sanctions imposed today include Igor Sechin, who is chief executive officer of state-run oil company OAO Rosneft and was Putin’s colleague at the St. Petersburg mayor’s office, and financial institutions InvestCapitalBank and SMP Bank.

The travel bans and asset freezes announced by the White House were levied in coordination with the European Union, which said today it’s adding 15 more names to the list of 55 individuals previously sanctioned.

“We’ve made clear that we’re prepared to take more steps should we need to,” Lew said. “But the idea is to go step by step and to show a determination to keep doing more. And frankly, even the anticipation of sanctions hurt them.”

Lew said he has spoken with “quite a few” U.S. CEOs in the past couple of weeks and “while they do express concerns -- on some occasions -- in terms of what it means for their business, they also express a deep understanding of the geopolitical importance of what we’re doing and unity with us.”

The iShares MSCI Emerging Markets Index (EEM) rebounded from the lowest level in a month on speculation that the sanctions against Russia won’t hurt the economy.

The exchange-traded fund rose 0.5 percent to $41.02 at 4 p.m. in New York. The MSCI Emerging Markets Index fell less than 0.1 percent to 993.12. The Micex Index climbed 1.5 percent in Moscow while the ruble rallied for the first time in three days.

To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net

To contact the editors responsible for this story: Chris Wellisz at cwellisz@bloomberg.net Brendan Murray, Gail DeGeorge

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