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Rebels Down Ukraine Planes as EU Poised for Sanction Plan

July 24 (Bloomberg) -- Separatists shot down two Ukrainian jets in the same region where a Malaysian Air plane was destroyed, the government said, as the European Commission prepared proposals for stepped-up sanctions against Russia.

The pro-Russian rebels downed the Su-25 ground-attack aircraft yesterday over the Donetsk region, a Defense Ministry spokesman, Oleksiy Dmytrashkovsky, said by phone. Another ministry spokesman, Andriy Lysenko, told reporters in Kiev the planes were at 5,200 meters (17,000 feet) when they were brought down by a “powerful” anti-aircraft missile. Lysenko said the attack may have been from Russian territory, an allegation Ukraine’s government has made before when a plane was targeted.

“This shows the rebels have a pretty sophisticated anti-aircraft capacity,” Karl-Heinz Kamp, academic director at the German government’s Federal Academy for Security Policy in Berlin, said by phone. “You need more than a bazooka to take down a fighter. And it’s one more piece of evidence on the MH17 shoot-down.”

Flight MH17

The incident came almost a week after Malaysian Air Flight 17 was hit by a missile the U.S. says was probably fired from a Russian-supplied launcher. Russia denies involvement. With the U.S. pushing Europe to toughen its stance toward Russian President Vladimir Putin, European Union governments are due to hear initial plans today from the commission, the bloc’s executive arm, for an expansion of punitive measures.

The commission will put forward its proposals to a committee of the 28 EU member governments in Brussels. The bloc’s foreign ministers called two days ago for plans for measures that could hit “access to capital markets, defense, dual-use goods, and sensitive technologies, including in the energy sector” as they demanded that Russia use its influence over the separatists to ensure full cooperation with a probe into the downing of the Malaysian plane.

The U.S. is debating a new round of sanctions on Russia and pressing the EU to follow up with penalties of its own, U.S. Deputy National Security Adviser Ben Rhodes said. Putin’s government is increasingly isolated because of his support for the separatists in Ukraine, Rhodes told reporters yesterday at the White House.

Backfired ‘Badly’

“It has badly backfired on them because it’s earning him complete international isolation and condemnation,” he said, while giving no timetable for U.S. action.

Yesterday’s attack brings the number of Ukrainian aircraft destroyed by rebels to at least 16 during the conflict, according to the government. If verified, it raises the question of whether Putin’s military is still giving the rebels access to sophisticated anti-aircraft weapons.

Aircraft operating at 17,000 feet are generally beyond the range of shoulder-fired weapons, which can typically engage targets flying up to about 10,000 feet, according to Doug Richardson, missiles and rockets editor at IHS Jane’s.

The Micex Index of Russian stocks erased gains yesterday after news the fighters were shot down, falling 0.6 percent in Moscow.

Meanwhile, two planes carrying bodies from Flight MH17 arrived in the Netherlands from eastern Ukraine yesterday for identification, even as questions were raised over whether all the victims’ remains had been recovered. The Netherlands, which lost 193 of the 298 people who died in the July 17 downing of the Boeing Co. 777 flying from Amsterdam to Kuala Lumpur, held a day of mourning.

Different Counts

Forty bodies were flown from Kharkiv, Ukraine’s second-biggest city, to Eindhoven in the Netherlands in two military planes -- one Dutch and one Australian. The coffins were met at Eindhoven airport by King Willem Alexander, Queen Maxima and Prime Minister Mark Rutte and loaded into hearses by servicemen. Fifty-one more bodies will be flown to the Netherlands today, the Ukrainian government said.

While the rebels said more than 260 bodies were taken by train to Kharkiv from the crash site, according to the Organization for Security and Cooperation in Europe, Dutch experts said they’d only inspected 200 bodies.

“Securing the crash site to allow access to international investigators is the next priority,” Australian Foreign Minister Julie Bishop said in a statement today. “At this stage the site remains under the control of Russian-backed separatists –- access negotiations are under way. We stand ready to provide whatever support or resources are needed.”

Flight Recorders

The Netherlands, Australia and Ukraine are working on a United Nations resolution calling for a UN mission to police the crash site, the Dutch ANP newswire reported.

Ukrainian President Petro Poroshenko said Australian Prime Minister Tony Abbott offered to send guards to the site, according to a statement on the president’s website, while Putin and Rutte discussed how to start an international probe into the downing of the airline, the Kremlin said in an e-mailed statement.

Data from the cockpit voice recorder from the Malaysian plane have been downloaded by the U.K.’s Air Accident Investigation Branch and must now be analyzed, the Dutch Safety Board said in a statement. “No evidence or indications of manipulation of the cockpit voice recorder was found,” it said. Examination of the flight data recorder will start today.

International Experts

A total of 240 international specialists are in Ukraine to investigate the MH17 incident, the Interfax news service cited Ukraine’s Foreign Ministry as saying in a statement.

U.S. intelligence officials said two days ago satellite images and other evidence indicate the rebels attacked the jet with a surface-to-air missile from their territory.

The U.S. has ruled out involvement by Ukraine’s military -- a scenario suggested by Russia -- because its missiles weren’t within range of the plane, according to intelligence officials who briefed reporters on the condition of anonymity.

To contact the reporters on this story: Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net; Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Leon Mangasarian in Berlin at lmangasarian@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Eddie Buckle

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