The Obama administration leveled new sanctions on Russia amid newly increased tensions along the Ukrainian border, the first sanctions handed down by the U.S. on Russia since late April.
The sanctions are targeted at a series of large banks and energy and defense firms, marking a significant escalation in the U.S.'s standoff with Russia. Up to this point, the sanctions had only been aimed at several Russian individuals and their businesses involved in the destabilization of the situation in Ukraine.
Among the targeted firms on the new sanctions list include Rosneft, the world's largest oil company; Gazprombank, Russia's largest private bank; Novatek, Russia's largest independent natural-gas producer; and Vnesheconombank, a development lender.
Other entities were included on the list, including the entirety of the self-proclaimed "Donetsk People's Republic" and "Luhansk People's Republic" in Ukraine. Several Russian government individuals were also sanctioned, including senior Russian Federal Security Service official Sergey Beseda.
The sanctions restrict Russian access to U.S. debt markets. Senior administration officials portrayed the entities sanctioned as now being cut off "from the U.S. financial system and the U.S. economy."
"This is a significant step. These are some of the largest financial institutions in Russia," a senior Obama administration official told reporters on a conference call Wednesday.
The sanctions stop short of completely cutting off entire sectors of the Russian economy, which officials have threatened in the past.
How far to go with the new sanctions had presented a dilemma for the administration, which had imposed sanctions to this point in concert with the E.U., whose leaders were meeting to discuss implementing new sanctions on Wednesday. U.S. officials said the Obama administration's sanctions were coordinated among Obama and European leaders, but the E.U.'s own sanctions weren't expected to go as far as the U.S.
Analysts have said this week a unilateral move by the U.S. would have been unwise. It would be a significant shift from the Obama administration's calculus thus far — a move that would signal a "weaker hand" going forward. It also would double down on a policy U.S. officials have admitted hasn't deterred Putin's actions in Ukraine.
"The Obama administration has consistently said that the U.S. was working to 'isolate' the Russians if they didn’t back down on Ukraine," Eurasia Group president Ian Bremmer told Business Insider in an email. "It's unclear to me how unilateral sanctions supports that strategy.
"Russia's already ignored joint U.S.-E.U. sanctions, pressing ahead with escalation in Ukraine. America losing the Europeans only shows a weaker hand. If the U.S. is going to back off of what’s been a failed policy, better to do it earlier (and with their allies) than down the road."
The Pentagon said Wednesday that Russia was again building up its troops along the border, and the U.S. has in recent days accused Russia of continuing to send tanks and other weapons to help struggling pro-Russian separatists. The State Department has also claimed Russian officials are permitting fighters from the self-proclaimed "Donetsk Peoples’ Republic" to establish a recruiting office in Moscow. Ukraine on Tuesday also accused Russia of having a role in two air strikes over the past two days.
A senior administration official said it was clear Russia's "support for the separatists has increased."
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