Russia-Ukraine war: US, G7, EU to strip Russia of 'most favored nation' status - source

Stripping Russia of its favored nation status paves the way for the United States and its allies to impose tariffs on a wide range of Russian goods.

 RUSSIAN PRESIDENT Vladimir Putin attends a meeting in Moscow on Tuesday. (photo credit: Sputnik/Kremlin/Reuters)
RUSSIAN PRESIDENT Vladimir Putin attends a meeting in Moscow on Tuesday.
(photo credit: Sputnik/Kremlin/Reuters)

The United States on Friday imposed sanctions on Russian billionaire Viktor Vekselberg, three family members of President Vladimir Putin's spokesperson and lawmakers in the latest punishment for Russia's invasion of Ukraine.

Russia has faced a slew of measures since launching its Feb. 24 invasion, the biggest attack on a European state since World War Two. Those hit by Friday's sanctions include 10 people on the board of VTB Bank, the second-largest lender in Russia, and 12 members of the Duma, Russia's lower house of parliament, the US Treasury Department said in a statement.

"Treasury continues to hold Russian officials to account for enabling Putin's unjustified and unprovoked war," Treasury Secretary Janet Yellen said.

Putin's spokesperson Dmitry Peskov was targeted on March 3. Friday's measures extend to his wife and two adult children. They lead "luxurious lifestyles that are incongruous with Peskov's civil servant salary," the Treasury said in a news release.

The Kremlin did not immediately reply to a Reuters request for comment.

 Russian Rouble coins are seen in front of displayed descending stock graph in this illustration taken, February 24, 2022. (credit: REUTERS/DADO RUVIC/ILLUSTRATION) Russian Rouble coins are seen in front of displayed descending stock graph in this illustration taken, February 24, 2022. (credit: REUTERS/DADO RUVIC/ILLUSTRATION)

Four Novikombank board members, including chair Elena Georgieva, and ABR Management and four of its board members, including Bank Rossiya chair Dmitri Lebedev and Vice Governor of St. Petersburg Vladimir Knyaginin, were also targeted with sanctions, the State Department said.

In mid-February, Russia's lower house of parliament voted to ask Putin to recognize two Russian-backed breakaway regions in eastern Ukraine as independent.

Eleven members and speaker Vyacheslav Volodin were added to the sanctions list on Friday.

"Today's designations further hold to account those actors who were directly responsible for Russia's illegitimate and unlawful recognition ... and facilitating the sham pretext used by Putin to justify the ... unprovoked war against Ukraine," the Treasury said.

Justifying the move at the time, Volodin said: "Kyiv is not observing the Minsk agreements. Our citizens and compatriots who live in Donbass need our help and support." The Minsk agreements are a pair of accords signed in 2014 and 2015 in the hope of ending violence between pro-Russian separatists in eastern Ukraine and the Kyiv government.

Russia calls its actions in Ukraine a "special operation" that it says is not designed to occupy territory but to destroy its southern neighbor's military capabilities and capture what it regards as dangerous nationalists.

Also on Friday, the US, together with the Group of Seven nations and the European Union said that it will move to revoke Russia's "most favored nation" status, multiple people familiar with the situation told Reuters.

The White House said Biden would announce "actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine," but gave no details.

Stripping Russia of its favored nation status paves the way for the United States and its allies to impose tariffs on a wide range of Russian goods, which would further ratchet up pressure on an economy that is already heading into a "deep recession."

Biden also announced a US ban on imports of Russian seafood, alcohol and diamonds, and sanctioned more oligarchs and elites, including board members of Russian banks, in addition to a dozen lawmakers.

In the US, removing Russia's "Permanent Normal Trade Relations" (PNTR) status will require an act of Congress, but lawmakers in both houses - and on both sides of the political aisle - have already signaled their support, two officials said.

"President Biden and the administration appreciate the bipartisan leadership of Congress and its calls for the revocation of PNTR," one of the officials said, adding that the White House would work with lawmakers on legislation to revoke Russia's status.

The sweeping sanctions along with export controls on a raft of technologies, have already caused the Russian economy to crater, and the International Monetary Fund is now predicting that it will plunge into a "deep recession" this year.

In 2019, Russia was the 26th largest goods trading partner of the United States, with some $28 billion exchanged between the two countries, according to the US Trade Representative's office.

Top imports from Russia included mineral fuels, precious metal and stone, iron and steel, fertilizers and inorganic chemicals, all goods that could face higher tariffs once Congress acts to revoke Russia's favored nation trade status.

Biden on Tuesday imposed an immediate ban on Russian oil and energy imports.

Some US governors have already ordered government-run liquor stores to stop selling Russian-made vodka and distilled spirits in solidarity with the Ukrainian people.

The United States on Friday also sanctioned several board members at Novikombank and ABR Management, including Vice Governor of St. Petersburg Vladimir Nikolaevich Knyaginin, Secretary of State Antony Blinken said.

Although dozens of large companies announced they were stopping their operations in Russia, some have been slow to do so. Many Nike stores throughout were open on Friday afternoon, according to checks made by Reuters, more than a week after it was temporarily closing down all its shops in the country.

UK sanctions Russian lawmakers

Britain announced asset freezes and travel bans on 386 members of the Russian Duma who voted for the independence of two breakaway regions in eastern Ukraine.

"Foreign Secretary Liz Truss has today sanctioned 386 members of the Duma, the lower house of the Russian parliament, for their support for the Ukrainian breakaway regions of Luhansk and Donetsk," the foreign ministry said in a statement.

"The new sanctions will ban those listed from traveling to the UK, accessing assets held within the UK and doing business here."

Nuclear power

Ukrainian state nuclear power firm Energoatom will no longer buy Russian nuclear fuel, the company said on Friday.

Ukraine operates Soviet-era nuclear reactors, importing its fuel from Russia and the United States.

Belarus-Russia meeting

Belarusian President Alexander Lukashenko has left for Moscow to meet with Russian President Vladimir Putin, Sputnik Belarus reported.

The talks are set to be about bilateral cooperation and economic work in the face of sanctions, which both countries have received due to the invasion of Ukraine.

EU gas

The European Union will not impose sanctions on Russian gas or oil, Hungarian Prime Minister Viktor Orban said in a video posted on his Facebook page on Friday, amid a summit of EU leaders in France.

"The most important issue for us has been settled in a favorable way: there won't be sanctions that would apply to gas or oil, so Hungary's energy supply is secure in the upcoming period," Orban added.

British uncertainty

Britain's economy faces significant uncertainty due to Russia's invasion of Ukraine, British Finance Minister Rishi Sunak said on Friday after the release of stronger-than-expected growth data for January.

"We know that Russia's invasion of Ukraine is creating significant economic uncertainty and we will continue to monitor its impact on the UK, but it is vital that we stand with the people of Ukraine to uphold our shared values of freedom and democracy and ensure Putin fails," Sunak said.

Sunak is due to give a half-yearly update of economic growth and borrowing forecasts on March 23.

 

Kazakh airline pullout

Kazakhstan airline company Air Astana is suspending all flights to and from Russia, the company announced Friday.

The move comes following the withdrawal of insurance coverages for all flights to, from and over Russia in light of the ongoing invasion of Ukraine.

It is unclear if this move is only temporary, However, Air Astana is working with the Khazak government to resolve these issues and resume flights as soon as possible, according to Russian news agency TASS.

Food crisis

International food and feed prices could rise by between 8% and 20% as a result of the conflict in Ukraine, triggering a jump in the number of malnourished people around the world, the UN food agency said on Friday.

In a preliminary assessment on Russia's invasion of Ukraine, the Food and Agriculture Organization (FAO) said it was not clear if Ukraine would be able to harvest crops during a protracted conflict, with uncertainty also surrounding Russian food exports.

FAO said Russia was the world's largest exporter of wheat, while Ukraine was the fifth largest. Together, they provide 19% of the world's barley supply, 14% of wheat, and 4% of maize, making up more than one-third of global cereal exports.

Embassy street name change

The name of a part of a street in the Latvian capital of Riga home to the Russian embassy will now be changed to Ukraine Independence Street, Pravda reported citing Latvian media outlet Delfi.

A similar move was made earlier this week in the Lithuanian capital of Vilnius, where the street home to the Russian embassy will be renamed "Heroes of Ukraine Street."

An image of this was shared on social media by Vilnius Mayor Remigijus Šimašius.

On Monday, the Albanian capital of Tirana named the street home to its Russian embassy as "Free Ukraine Street" after a unanimous vote by the city council, as revealed by Tirana Mayor Erion Veliaj on Twitter.

The street is also home to the embassies of Ukraine, Serbia and Kosovo.