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Financial Times: Russia satisfied with toothless sanctions of West
4/29/2014 11:30:35 PM
The Financial Times reported on Obama's sanctions against Russia. The newspaper notes:
The new sanctions imposed on the eve by the US administration are unlikely to have a serious effect on the Russian leadership. It is known that under US sanctions have fallen 17 companies and seven citizens of Russia from Putin's inner circle.
When the US announced its latest wave of sanctions against Russia on Monday, there was an almost audible sigh of relief in Moscow.
Although the new sanctions are aimed at a broader list of companies – adding 17 new names – all those groups are tied to Gennady Timchenko, Arkady and Boris Rotenberg or Bank Rossiya, individuals or institutions whose names appeared in the second wave of sanctions in March.
The impact of the March action was very narrow because it focused on individuals' personal assets and on companies in which they held a stake of at least 50 per cent kept. Monday's sanctions are unlikely to change much because the companies targeted do most of their business inside Russia.
The three lenders added to the list are all relatively small players unlikely to have business ties to US or European institutions, bankers said, with the exception of Visa and MasterCard, which provide credit cards for clients at SMP Bank, one of the three.
SMP Bank, controlled by the Rotenberg brothers, is the largest of the three lenders targeted, but only the 35th biggest bank in Russia with $ 5.8bn in assets and $ 2.8bn worth of deposits.
David Nangle, head of equity research capital at Renaissance Capital, noted that most major western banks would already be likely to have cut or reduced their exposure to financial institutions associated with potentially sanctioned individuals.
Although limited, the earlier rounds of sanctions clearly damaged economic sentiment as investor fears speeded up capital flight and foreign lenders grew more cautious, driving up borrowing costs.
In the latest such fallout, Standard & Poor's cut the credit rating of state oil company Rosneft and state gas giant Gazprom to one notch above junk rating on Monday, following an earlier downgrade of Russia's sovereign rating.
Bankers and investors said the expanded sanctions were unlikely to influence the Kremlin's stance and strategy in Ukraine. The only concern in Moscow is that Washington's next step could hurt more.
In response to the US and EU sanctions Putin mockingly said that he sees no sense to answer the West, but in case of further adoption of restrictive measures Moscow, they say, "will think on the presence of the US and EU in strategic sectors of the Russian economy", threatened the Kremlin ringleader.
Department of Monitoring
Kavkaz Center
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