EU to Mull Russian Sanctions as Black Box Analysis Starts

European leaders will consider proposals for new sanctions against Russia as officials began downloading data from the voice recorders of the Malaysian Air jet that crashed last week in Ukraine.

Governments are discussing options ranging from restricting Russia’s capital-market access to an arms embargo, with the European Commission circulating proposals to national capitals this morning. As the Netherlands awaits a third plane carrying bodies from Ukraine, examination of Flight MH17’s cockpit voice recorder will start today in the U.K.

The U.S. is pushing Europe to toughen its stance toward President Vladimir Putin a week after the Malaysian jet was hit by a missile American officials say was probably fired from a Russian-supplied launcher. Russia denies involvement. Analysis of the plane’s black box data may help determine exactly what happened to the Boeing Co. 777, which was flying over Ukraine’s eastern Donetsk region, a hot spot for separatist fighting.

“The reality is, in order to be effective, we have to have the Europeans,” U.S. Senator Angus King, a Maine independent, said yesterday on Bloomberg Television’s “In the Loop” program. “We’ve got to be reacting in a solid way so that Mr. Putin knows” that “he doesn’t have a free pass.”

Defense, Energy

The commission, the European Union’s executive arm, will put forward its proposals to a committee of the 28 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 Russia use its influence over the separatists to ensure full cooperation with a probe into the downing of the Malaysian jet.

Sweeping measures may include a proposal to ban Europeans from buying new debt or stock issued by Russia’s biggest banks, the Financial Times reported, citing a proposal it’s seen.

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

“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.

Dutch Mourning

The Micex Index of Russian stocks, which is down 7.1 percent in 2014, rose 0.1 percent as of 11:37 a.m. in Moscow. The ruble, this year’s third-worst performer against the dollar among 24 emerging-market currencies tracked by Bloomberg, was 0.4 percent weaker.

Data from the Malaysian jet’s voice recorder 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.

Meanwhile, two planes carrying bodies from Flight MH17 arrived in the Netherlands 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 flight from Amsterdam to Kuala Lumpur, held a day of mourning.

Crash Site

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.”

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.

Warplanes Downed

Ukrainian President Petro Poroshenko said in a statement on his website that Australian Premier Tony Abbott offered to send guards to the site. Putin and Rutte discussed how to start an international probe into the downing of the airline, according to an e-mailed statement from the Kremlin.

Meanwhile, separatists yesterday shot down two Ukrainian jets in the same region where the Malaysian jet was destroyed.

The rebels downed the Su-25 ground-attack aircraft yesterday over the Donetsk region, Oleksiy Dmytrashkovsky, a Defense Ministry spokesman, 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.”

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