U.S. Tightens Russia Sanctions After Putin Blocks MH17 Court

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The U.S. tightened sanctions against Russia, adding the son of a billionaire ally of President Vladimir Putin and a sovereign wealth fund in what it said was a fight against efforts to circumvent the restrictions.

The decision came a day after Russia vetoed a United Nations Security Council resolution creating an international tribunal to try those suspected of downing a Malaysian passenger aircraft over eastern Ukraine last year. The U.S. and its allies say pro-Moscow rebels armed with a Russian-supplied missile shot down the plane, killing all 298 people on board.

The U.S. Treasury’s expanded sanctions list is “designed to counter attempts to circumvent our sanctions, to further align U.S. measures with those of our international partners, and to provide additional information to assist the private sector with sanctions compliance,” the U.S. Office of Foreign Assets Control said in a website statement Thursday.

Russia’s relations with the U.S. and the European Union plummeted to their lowest since the Cold War following Putin’s annexation of Crimea after Kremlin-backed Ukrainian President Viktor Yanukovych was ousted from office last year. The U.S. and the EU have limited some Russian companies’ access to borrowing and barred technology transfers to energy producers in response to Russia’s support for a separatist insurgency in eastern Ukraine.

Long-Term Sanctions

The U.S. move “lowers the chance that EU sanctions will be eased, which had been expected by some participants and confirms the long-term nature of the sanctions environment for Russia,” Dmitry Dolgin, an Alfa Bank analyst in Moscow, wrote in e-mailed comments Friday.

Despite a February cease-fire brokered by Germany and France, the 15-month conflict between the Ukrainian government and rebels in the east of the country is still festering and an agreement to implement autonomy for the area is stalled.

Putin’s spokesman, Dmitry Peskov, branded the U.S. sanctions as illegal and said Russia doesn’t rule out an asymmetric response on a conference call with reporters on Friday.

The announcement prohibits transactions with Russian billionaire Boris Rotenberg’s son Roman, who has Russian and Finnish citizenship, and Oleksandr Yanukovych, a son of Yanukovych, among others.

Roman Rotenberg, whose father was blacklisted last year, was included “for engaging in actions to circumvent sanctions,” Will Stevens, a U.S. embassy spokesman in Moscow, said on his Twitter account.

The U.S. also targeted companies owned or formerly owned by sanctioned individuals and units of sanctioned companies, including the Russian Direct Investment Fund and units of oil producer OAO Rosneft.

The Russian state fund, known as RDIF, announced earlier this month that it had agreed to set up a $10 billion partnership with Saudi Arabia to invest in Russia this year.

RDIF downplayed the U.S. measure, saying it was “essentially a technical repetition” of the sanctions introduced last year targeting state bank Vnesheconombank and its subsidiaries, which includes RDIF. The fund “has never attracted funds in the U.S.,” it said in an emailed statement.

The latest sanctions also concern Crimea, with the U.S. accusing entities in the region of falsifying documentation to evade a ban on Crimean business transactions with the U.S.. The expanded list now includes the peninsula’s major ports.

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