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20 Mar, 2014 15:11

US blacklists 20 Russian officials and businessmen, threatens to sanction economy

US President Barack Obama has announced a new executive order imposing further sanctions on top Russian officials and businessmen. The order also allows for measures against Russian energy, mining, defense, and engineering sectors.

"We're imposing sanctions on more senior officials of the Russian government. In addition, we are today sanctioning a number of other individuals with substantial resources and influence who provide material support to the Russian leadership, as well as a bank that provides material support to these individuals," Obama said.

The new list of sanctioned officials includes 20 names, according to the list published by the US Department of Treasury.

Aleksey Gromov, First Deputy Head of the Presidential Administration; Sergey Ivanov, Chief of Staff of the Presidential Executive Office; and Sergey Naryshkin, Speaker of the State Duma, the lower chamber of the Russian Parliament, are among those mentioned.

Prominent businessmen Arkady and Boris Rotenberg are also on the list - as well as the Russian Railways president, Vladimir Yakunin and businessman Gennady Timchenko, head of the Volga Group.

Yakunin reflected on the decision, saying he is surprised that “a country which calls itself democratic could punish for an honest position and sincere comments.”

Bank Rossiya identified by the Treasury Department as the sanctioned entity will be "frozen out of the dollar," Reuters reports quoting US officials. Bank Rossiya, headquartered in St. Petersburg, has some $10 billion in assets. Several senior government officials are known to use the bank, and Kovalchuk, who is its head, has also been sanctioned individually.

While the US president didn’t specify the ‘key sectors of Russian economy’ authorized by the order, a senior administration official mentioned those which could be hit shortly afterwards. ‘Broader’ sanctions could restrict Russian financial services, energy, mining, defense and engineering sectors.

From Left to Right: Aleksey Gromov, Sergey Ivanov, Sergey Naryshkin, Arkady and Boris Rotenberg, Vladimir Yakunin, Gennady Timchenko (RIA Novosti)

The measure was slammed by the Kremlin.

We are puzzled to see any names on the list but even if there were none, lists like that are totally unacceptable to us,” presidential press secretary Dmitry Peskov said. “In any case, it won’t take Russia long to react.

Peskov added that Ivanov took the US decision with humor, since he used to be banned from entering various Western countries throughout his political career. "There's nothing new for him (Ivanov) in that," he said.

Russian Foreign Minister Sergey Lavrov told his US counterpart Kerry that the decision to reunify Crimea and Russia must be respected and “is not subject to review,” according to Interfax. The US considers the reintegration of Crimea into the Russian Federation an illegal annexation on Russia's behalf.

Meanwhile, analysts are describing the US sanctions as nothing more than political posturing.

“There’s an executive order which Obama signed of future sanctions against sectors of Russia’s economy, meaning energy and finance, and I think that’s to deter Russia from going into Eastern Ukraine," Ivan Eland, Defense Analyst at the Independent Institute, told RT. "They are trying to make the threat of more sanctions.”

Eland believes Washington is attempting to "get at Putin’s inner circle, people that are closer to him, really turn the screws on some of the leadership in the Kremlin." However, the Washington-based defense analyst doubts the effectiveness of such actions in a global economy. "I’m skeptical about that because I think there are many ways to evade sanctions in a world economy – even banking sanctions. And they’ve only sanctioned one bank so far. So I’m a little skeptical that most of this will have anything beyond symbolic effect."

Washington's new penalties mark the second round of economic sanctions the US has levied on Russia this week. Obama noted that the measures were being taken in the full knowledge that the move could be “disruptive to the global economy”.

The US president made the announcement just under two hours after the Russian Duma ratified the Treaty for the Accession of Crimea and city of Sevastopol to the Russian Federation.

Last Sunday, Crimea voted to join Russia, with some 95.7 percent of voters saying 'yes' to the reunion of the republic with Russia as a constituent unit of the Russian Federation. The overall voter turnout in the referendum on the status of Crimea was over 80 percent, according to the head of the Crimean parliament’s commission on the referendum, Mikhail Malyshev.

On Monday, the US introduced similar visa bans and asset freezes on 11 Russians and Ukrainians. The same day, some 21 Russian and Ukrainian officials fell under the impact of travel bans and asset freezes from the EU.