7 russian banks see credit card payments blocked !
Visa, Mastercard block US-sanctioned Russian banks
International payment system Mastercard has stopped serving clients of seven Russian lenders, after the US issued sanctions against it regarding Russia’s position over the Ukrainian turmoil.
Rossiya Bank was blocked by both - Master Card and Visa, and with the latter also cutting ties with Sobinbank, SMP Bank and Investcapitalbank.
Seven Russian banks are involved in the suspension, according to Timur Batyrev, the head of the national payment system department at the Central Bank of Russia.
The blockade came without warning, Rossiya bank said.
"The management of Rossiya understands the difficulties of clients in the current situation and will do all it can to solve them," the bank said in a statement.
The bank added that its own services relating to Visa and Mastercard cards, like withdrawing cash from the bank’s ATMs works fine.
Apart from the payment blockade, Rossiya is operating “in stable regime” and is fulfilling all its obligations, the bank said.
Visa and Mastercard did not immediately comment on the news.
Washington’s move is meant to put pressure on people they see as members of President Vladimir Putin’s “inner circle”. The bank’s owner, Yury Kovalchuk, is on the list as well, as an individual.
Visa and Mastercard have a record of bowing to political decisions from Washington, most notably in blocking donations to the WikiLeaks whistleblower website.
Garegin Tosunyan, the president of the Association of Russian Banks (ARB), said the action of the card payment companies was unacceptable.
“..the international payment system should correspond to the standards of the international payment system. That means it should not switch the tumblers on and off, depending on their own will, especially as it undermines their own foundations," he said.
The head of ARB said he wishes his "colleagues from the international payment systems and all those who stands behind them, would show enough wisdom to stop these actions".
Putin playing games......
Russian lawmakers ask President Obama to impose sanctions on them all
The State Duma has passed a motion suggesting that the US and EU extend the freshly introduced sanctions to all Russian MPs rather than a limited group of officials, defying western pressure just hours before Russia and Crimea signed a federation treaty.
The motion was supported by a unanimous vote on Tuesday morning. It was prepared the day before by all four parliamentary parties after representatives of the United States and the European Union said they were slapping sanctions, such as visa bans and asset freezes, on a number of Russian officials who are seen as “key ideologists and architects” of the policy towards Ukraine.
The State Duma motion reads that the US President’s decree was limiting the rights of Russian citizens and that similar discriminatory measures were approved by foreign ministers of the EU nations.
In a speech MP Mikhail Markelov (Fair Russia) called the move by the US State Department, President Obama and the European Union “an absurd attempt”, and suggested that the US punished all lower house members. “As long as they stress that MP Lyudmila Mizulina is on the blacklist, they should also impose sanctions on all 436 MPs who voted for the law that protects our children from gay propaganda,” Markelov noted.
A day earlier, after first reports about the new sanctions the head of the lower house committee for family issues Lyudmila Mizulina said that she was perplexed by her addition to the list. “The decision is puzzling – although we’ve expected sanctions – because I don’t have any accounts or real estate abroad, nor do my family members live abroad…Why was particularly I included?” the lawmaker said in press comments.
Deputy Markelov also said in his Duma speech that Russian politicians cannot be intimidated by Western sanctions as previous examples of their application demonstrate that such measures are hardly effective. “They tried it before in Serbia, Belarus, Syria. But these nations have not lost their dignity, have not lost their identity, they remain united and independent countries,” the deputy said.
“Our position is extremely clear and honest. We never betray our own. We will never betray the Russian-speaking citizens and simply the citizens who live on the territory of Crimea, who have made a decision to be with Russia forever,” Markelov told the parliamentarians.
“As for the sanctions, today any sanctions will only unite our political elite, because our businessmen and the common people have always united before external threats, regardless of their political views,” the MP added.
Commenting on the parliamentary motion an Russian presidential aide Yuri Ushakov said that everyone in Russia was tired of sanctions adding that the western measures only caused irony or even sarcasm. He refused to answer the question if Russia planned any reciprocal steps.
Hours after the State Duma passed the motion President Vladimir Putin, Crimea’s Prime Minister Sergey Aksenov, Chairman of the Crimea nlegislature Vladimir Konstantinov and Sevastopol Mayor Aleksey Chaly signed the federation treaty between the Crimean Republic and Russia. Putin asked the Russian parliament to ratify the treaty making both Crimea and the city of Sevastopol new federation subjects.
and....
http://in.reuters.com/article/2014/03/21/putins-spokesman-says-russia-will-respon-idINL6N0MI2CW20140321
PUTIN'S SPOKESMAN SAYS RUSSIA WILL RESPOND IN KIND TO THE U.S. SANCTIONS ANNOUNCED ON THURSDAY
Putin Signs Crimean "Absorption" Law, Asks To Have His Salary Transferred Into Sanctioned Bank Rossiya
Moments ago the "absorption" of Crimea into the Russian Federation was completed after Putin signed the final previously passed by parliament. And with that, in less than a month, the Crimean "question" has been answered. The only question is whether Putin will stop here or will the ease with which he just expanded the Russian political map leave him hungry for more.
In other news, as part of the Western escalations against Russia, Bank Rossiya, the one bank exclusively identified in the sanctions list, announced that Visa and MasterCard have stopped, without notification, providing services for payment transactions for clients. Another bank that saw the drop of merchant credit card services was SMP bank, co-owned by brothers Boris and Arkady Rotenberg, who were also on the latest U.S. sanctions list.
SMP bank said in a statement that it considered the credit card giants' move unlawful, because the U.S. sanctions targeted shareholders and not the bank itself, Reuters reported Friday.
Earlier in the day, Bank Rossiya said it was working in a "stable regime" and was taking all the necessary legal measures to defend its rights and its clients' rights and legal interests.
"In connection with the information about U.S. sanctions being imposed on Rossiya we can report that the bank is working in a stable regime. The bank is meeting and will, without a doubt, fully meet all its obligations to its clients and partners," the bank said in a statement.
"The management of Rossiya understands the difficulties of clients in the current situation and will do all it can to solve them," the bank said in a statement.
These moves in turn promptly led to Putin announcing that he wants to open an account with the Bank Rossiya. FromMoscow Times:
“I don't have an account there, but I will certainly open one there on Monday,” Putin said Friday, while speaking at a Security Council meeting, Interfax reported.
Putin later asked for his salary to be transferred to Bank Rossiya and ordered Russia's Central Bank to take the sanction-hit lender's clients under protection and provide all possible assistance to them, The Associated Press reported.
U.S. President Barack Obama on Thursday announced that Washington was levying a new round of sanctions affecting 20 Russian officials and businessmen, but also Bank Rossiya, which is chaired and part owned by businessman Yuri Kovalchuk, who is one of the 20.
Why was the bank singled out?
The United States Treasury Department stated that Bank Rossiya is used by senior Russian officials and that its shareholders include members of Putin's inner circle.
http://en.ria.ru/russia/20140320/188583038/France-Should-Return-Money-if-Warship-Deal-Cancelled--Rogozin.html
France Should Return Money if Warship Deal Cancelled – Rogozin
Topic: Russia's purchase of French Mistral-class warship
01:30 20/03/2014
Related News
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- 2nd Mistral Warship to Be Complete in 2014 – Vice Premier
Multimedia
- Russian Shipyard Completes Stern for First Mistral Warship
- France’s Mistral amphibious assault ship visits St. Petersburg
MOSCOW, March 20 (RIA Novosti) – France should either fulfill its contract obligations under a June 2011 contract to deliver two Mistral-class warships to the Russian navy or return the money, a Russian deputy premier said on Wednesday.
French Foreign Minister Laurent Fabius said on Monday that Paris will consider canceling the 1.2-billion-euro deal if Moscow provokes further escalation in Ukraine.
The remarks came after the US and EU imposed sanctions on senior Russian officials following a referendum in Ukraine's Crimea in which voters overwhelmingly supported secession and reunification with Russia.
“Either stick to your contract obligations and deliver the warships in time, or return the money and parts of these warships’ hulls, assembled at our Baltiysky Zavod [shipyard],” said Dmitry Rogozin, a deputy premier in charge of the defense industry.
A source in Russia’s United Shipbuilding Corporation told RIA Novosti on the condition of anonymity that France will also have to pay huge penalties if it chooses to unilaterally terminate the contract.
Under a June 2011 contract signed between Russia and France, the first French Mistral-class amphibious assault ship, named Vladivostok, will be delivered to Russia by the year-end, while the second warship, the Sevastopol, is due to arrive in 2015.
The ships are capable of carrying 16 helicopters, four landing craft, 70 armored vehicles, and 450 soldiers and are expected to be deployed with Russia’s Pacific Fleet.
http://rt.com/news/putin-president-sanctions-bank-305/
President Putin mocks US sanctions, vows not to retaliate
Vladimir Putin has mocked US sanctions imposed on Russia, saying he will open an account at US-sanctioned Rossiya Bank. During a meeting with the country's senior security officials he added that he won’t introduce a visa regime with Ukraine.
Putin treated with irony the recent sanctions imposed on certain Russian lawmakers, some of whom took part in the meeting, including Duma Speaker Sergey Naryshkin.
“Russia needs to avoid these citizens as they are ‘compromising the country’,” he said.
On Thursday the US expanded its sanctions list by adding 20 more names. US President Barack Obama announced a new executive order imposing further sanctions on top Russian officials and businessmen.
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 Russian Railways President Vladimir Yakunin and businessman Gennady Timchenko, head of the Volga Group.
The order also allows for measures against Russian energy, mining, defense, and engineering sectors.
Putin also commented on the latest sanction of the US authorities that concerned Russia’s Rossiya Bank, to which international payment systems Visa and MasterCard stopped serving clients on Friday.
The Russian president said he will get his salary via the sanctioned bank.
“I’ve already said that I was going to open an account in this bank, more than that I asked for my salary to be transferred to this account,” he said.
Putin added that Russian authorities should provide any possible support for the clients of the blocked Rossiya Bank, as this “finance establishment has nothing to do with Ukraine crisis.”
“The clients of the bank must be taken under our protection. We also should make sure that neither clients nor the bank will sustain any negative outcome from this situation,” he added.
Putin assured that Russia will refrain from retaliatory sanctions against the US and introducing a visa regime with Ukraine.
Putin believes that millions of innocent Ukrainian would suffer should Russia introduce a visa regime with Ukraine.
“These people are not rich. They work in Russia to provide for their families. We shouldn’t do this,” he added.
Putin also said Russia will continue leading a project to repair helicopters in Afghanistan, which is run by NATO and Russia.
“We should continue this cooperation despite our NATO partners vow to freeze our partnership,”he said.
The so-called helicopter project, financed by both Russia and Western countries, aims at helping Afghanistan repair helicopter equipment produced in Russia and training special personnel to operate this equipment.
Putin’s statement about the visa regime came after reports this week that Ukraine might introduce a visa regime for Russians, but Ukraine’s coup-appointed PM, Arseny Yatsenuk, said the authorities are in no hurry to impose it.
http://www.businessinsider.com/morning-markets-march-21-2014-3
RUSSIAN STOCKS PLUNGE
REUTERS
The Russian stock market is plunging today, as the MICEX is down 3.7% in early going. This comes after Obama introduced sanctions against a new round of Russian officials, as well as a key bank used by Putin's cronies (Bank Rossiya).
One thing that's making the sanctions sting is that Visa and Mastercard have announced that they're freezing the accounts of cardholders at that bank.
The ruble is also falling.
http://en.ria.ru/business/20140321/188628529/Visa-Mastercard-Freeze-Customer-Cards-at-Russian-Bank.html
Visa, Mastercard Freeze Customer Cards at Russian Bank
Topic: Sanctions Against Russia
Visa, Mastercard Freeze Customer Cards at Russian Bank
© Сollage by RIA Novosti
10:41 21/03/2014
MOSCOW, March 21 (RIA Novosti) – US-based Visa Inc. and Mastercard Inc. have stopped processing payments by cardholders of a Russian bank added to a list of targeted economic sanctions by the United States on Thursday, the bank said on its website.
The news was the first sign that a series of Western sanctions against Russia over the ongoing crisis in Crimea could impact ordinary Russians, as earlier moves had been restricted to targeting high-level officials.
“The management of Rossiya Bank understands the difficulties experienced by clients in this situation, and assures them that everything possible is being done to help,” the Rossiya Bank said in its statement.
The bank added that customers blocked from using their cards for point-of-sale transactions could still withdraw cash from the bank’s ATMs without difficulties, as well as those owned by partner banks.
Russian President Vladimir Putin warned earlier this month that sanctions against Russia threatened to cause mutual damage in the modern, integrated global economy.
The US and EU announced asset freezes and travel bans targeting a number of Russian officials close to Putin on Monday, following a referendum in Crimea that saw voters overwhelmingly support reunification with Russia after 60 years as part of Ukraine.
Those lists were expanded – including the addition of Rossiya Bank to the US list – following the ratification of the reunification treaty by Russia’s parliament Thursday.
Leaders in Crimea refused to recognize the legitimacy of the government in Kiev that came to power amid often violent protests last month and sought reunification with Russia.
The crisis over the fate of the Black Sea peninsula has sparked the greatest geopolitical showdown between Russia and the West since the end of the Cold War.
Russian return sanctions most likely to hurt European banks and industry , rather than US banks and industry ( but watch Citibank )
Mapping Europe's Mutually Assured Economic Destruction As EU Plans More Sanctions
With senior German officials expecting discussions among leaders at the EU Summit to solely focused on a second round of sanctions against Russia (and warnings that they "must avoid a spiral of sanctions"), we thought it worth drilling down on just how mutually-dependent the two regions are. As Acting-Man's Pater Tenebrarum notes, thefollowing infographics suggest tit-for-tat sanctions could be a really big problem for Europe and why the EU's leaders are probably quietly praying for the crisis to simply go away.
Trade between the EU and Russia (via RT)
Trade between Russia and Germany (via Der Spiegel) – Russia is Germany's 11th largest trading partner
A list of German companies with big exposure to Russia (also via Der Spiegel)
International exposure to Russian debt (via Reuters)
Here are details on selected bank exposures (via Reuters):
SOCIETE GENERALE:France's second-biggest bank had exposure of 22.4 billion euros to Russia at the end of June, according to the European Banking Authority's (EBA) data. That equated to 15.7 billion euros in risk-weighted assets.SG Russia, which includes Rosbank and other insurance and financial operations, made operating income of 239 million euros last year, almost double 2012 despite a 41 percent jump in losses from bad debts. The bank said it had 13.5 billion euros of outstanding loans in Russia and deposits of 8.5 billion in the country at the end of 2013.SocGen's equity in its Russian business accounted for 7.7 percent of its group total, Morgan Stanley analysts estimated.UNICREDIT:Italy's biggest bank by assets had exposure of 18.6 billion euros to Russia at the end of June, the EBA data showed.The bank said its revenues from Russia were 372 million euros in the fourth quarter, up 80 percent from a year earlier.UniCredit's equity in its Russian business accounted for 2.7 percent of its group total, Morgan Stanley estimated.RAIFFEISEN BANK INTERNATIONAL:The Austrian lender said it is Russia's 10th biggest bank, with a loan book of 10.2 billion euros, 2.5 million customers and 192 outlets. Its Russian assets represent 12 percent of the group total, and the Russian unit made 507 million euros in the first nine months of last year, most of the group's total.The EBA data showed Raiffeisen had a 13.2 billion euro exposure to Russia at the end of June.Raiffeisen's equity in its Russian business accounted for 15.6 percent of its group total, Morgan Stanley estimated.OTP BANK:The Hungarian bank's exposure to Russia was 4.4 billion euros at the end of June, the EBA data showed.BANK OF CYPRUS:Its exposure to Russia was 1.6 billion euros at the end of June, the EBA data showed.
But apart from that - should be fine?! And this on the heels of Ukraine appearing to fold on any further action suggests Western powers have put themselves in a red-line-crossing MAD box...
and Citibank....
http://www.thestreet.com/story/12479391/1/citigroup-leads-banks-lower-on-ukraine-concerns.html
****
Citigroup in its annual 10-K filing with the Securities and Exchange Commission on Monday said its aggregate exposure in Russia was $10.3 billion as of Dec. 31. This exposure includes $6.5 billion in wholesale loans, $1.7 billion in retail loans, $1.4 billion in securities and $0.7 billion in trading account assets.
That's the highest level of exposure among the "big six" U.S. banks, which isn't surprising, considering Citi is unique among big U.S. banks, in that most of its revenue and earnings come from outside the country.
During 2013, 71% of core unit Citicorp's 2013 net income was derived from outside the United States.
and...
http://rt.com/news/kiev-clashes-rioters-police-571/
Friday, March 21
03:55 GMT:
The EU promised to provide an additional one billion euros in “macro financial assistance” to Ukraine, said president of the European Commission José Manuel Barroso after the the first session of the European Council meeting in Brussels. This will bring the total of overall support to 1.6 billion euros. Barroso also stated: “the autonomous trade measures we proposed to open unilaterally our market to Ukrainian products.”
03:51 GMT:
The EU approved annulling 98 percent of all custom duties paid by Ukrainian exporters. The decision was announced following the summit in Brussels. The new initiative might come into force as soon as May and will last until November 1 or until any other law is introduced.
02:51 GMT:
The EU has agreed to expand its sanctions list over the Crimea referendum by 12 more people, bringing the total to 33, said European Council President Van Rompuy. The EU also canceled the upcoming EU-Russia summit, along with other bilateral summits. Read more here.
01:21 GMT:
The EU is asking the European Commission to draft a plan by June on how to become less energy dependent, in light of its heavy reliance on Russia for energy imports.
01:21 GMT:
Ukraine will be ready to sign the economic part of the EU agreement after the presidential elections, coup-imposed Prime Minister Arseny Yatsenyuk said, adding that some of the economic changes are already being implemented.
01:21 GMT:
Ukraine’s prosecutor general concluded that snipers involved in killings on Independence Square in Kiev were Ukrainian citizens, acting Prosecutor General Oleg Mahnitsky told local Channel 5. He said the individuals cannot be named.
01:21 GMT:
UN Secreatary General Ban Ki-moon is planning to meet Ukraine’s coup-imposed Prime Minister Arseny Yatsenyuk and acting President Aleksandr Turchinov on Friday during his visit to Kiev.
01:20 GMT:
The EU will not be introducing energy-related sanctions against Russia, diplomatic sources said during the EU summit in Brussels, according to RIA Novosti.
Thursday, March 20
23:53 GMT:
The US House of Representatives Foreign Affairs Committee will introduce a Ukraine aid bill on Friday, but it will not include reforms of the International Monetary Fund requested by the Obama administration, congressional sources told Reuters.
The bill has similar provisions to those in a bill passed by the Senate Foreign Relations Committee. Yet there are differences in addition to the lack of IMF reforms, a congressional aide told Reuters. This means that if the House bill passes, the Senate and House will have to reconcile their versions of the legislation.
23:30 GMT:
EU agrees to expand sanctions to 12 more Russians, bringing total to 33 people, the President of the European Council
Herman Van Rompuy says.
21:26 GMT:
Passports were handed out to new Russian citizens in Sevastopol, Crimea on Thursday. The treaty of Crimea's accession was signed on Tuesday, enabling all of those who appealed to the Federal Migration Service to recieve the newly issued passport.
20:34 GMT:
Ukraine will not stop supplying Crimea with water and electricity, but Russia will need to pay for it, said coup-imposed Prime Minister Arseny Yatsenyuk.
20:26 GMT:
Ukraine is continuing to work on introducing a visa regime for Russia, acting Foreign Minister Andrey Deschitsa told Itar-Tass. The first step would be requiring people to use their international passports when crossing the border. Russians could previously enter Ukraine using only their domestic ID.
20:25 GMT:
Russian Defense Minister Sergey Shoigu assured his US counterpart Chuck Hagel that there are no plans for Russian troops to enter Ukraine from the eastern border, Pentagon spokesman Rear Admiral John Kirby said.
Shoigu also urged Hagel to objectively look at Russian military activity in regions adjacent to Ukrainian borders and not to escalate the situation, according to the Russian Defense Ministry.
19:41 GMT:
The president of the European Parliament, Martin Schulz, has warned Europe against “sleep-walking” into an ever-escalating conflict, saying that the “Crimea crisis is unacceptable and must never be repeated anywhere.”
“The European Parliament urges you to think about the conflict from the point of view of its outcome and to keep all channels of communication with Russia open,” he added.
Schulz stressed that the European Parliament would do everything to ensure that Ukraine gets €3 billion from the EU budget as soon as possible.
“We must help Ukraine get back on its feet economically, to overcome divisions in its society, and to guard against rifts and radicalization,” he said.
19:28 GMT:
Seventy-two military units and institutions of the Armed Forces of Ukraine, which have been deployed to Crimea, have raised the Russian flag over their bases there.
“Commanders and officials of 72 military units and institutions and ships of the Ukrainian Defense Ministry have decided to voluntarily join the armed forces of Russia for further military service,”officials in Crimea said, as quoted by Itar-Tass news agency.
19:27 GMT:
Standard & Poor's Ratings Services has lowered its outlook on Russia's ratings to negative from stable, citing “heightened geopolitical risk and the prospect of US and EU economic sanctions.” S&P affirmed “'BBB/A-2' foreign currency and 'BBB+/A-2' local currency long- and short-term sovereign credit ratings on Russia,” the company said in a statement. "The outlook revision reflects our view of the material and unanticipated economic and financial consequences that EU and US sanctions could have on Russia's creditworthiness following Russia's incorporation of Crimea, which the international community currently considers legally to be a part of Ukraine," S&P said.
18:00 GMT:
Russian Foreign Minister Sergey Lavrov has called on the US Secretary of State John Kerry to put an end to violence “by ultranationalist and extremist forces targeting businessmen and journalists, dissenters, the Russian-speaking population and our compatriots.”
"The minister and the secretary of state agreed to stay in touch over Ukraine, including discussing ways to de-escalate the situation and assisting the launch of constitutional reform in Ukraine, with full participation of all of the country's regions," the Russian Foreign Ministry said, as the two spoke on phone.
17:43 GMT:
Russia and Ukraine appear to be on the verge of a messy battle over assets.
“Ukraine’s justice minister has said that Russian assets in the country, including those belonging to Gazprom, may be appropriated to compensate for a so-called nationalization of Ukrainian property in Crimea. Any claims on Russian property, including those abroad, will be treated as a violation of international law and principles of national sovereignty,” says a statement from the Foreign Ministry.
“Russia reserves the right to take adequate and proportionate measures in return.”
17:07 GMT:
The Federation Council, the upper chamber of Russia’s legislative assembly, has called an extraordinary meeting in which return sanctions may be imposed upon US and EU officials.
“The text of the final statement is still being worked on, and will be agreed upon by the various relevant committees,” a source told Interfax news agency.
“It will also take into account the latest measures adopted by Barack Obama.”
Several prominent members of the Federation Council, including its speaker, Valentina Mativenko, have ended up on Western sanction lists.
Russia really worried about those sanctions today....... Really shaking in their boots
Masked Men Storm, Seize Two Ukraine Cruisers In Sevastopol
Earlier today, heavily-armed masked men in military attire, stormed two Ukraine corvettes, Lutsk and Khmelnitsky, in what is now Russian territory at the port of Sevastopol.
This is what AFP reported:
Pro-Russian crowds seized two Ukrainian warships Thursday and Ukraine said its troops were being threatened in Crimea as the European Union considered new sanctions against Russia for its annexation of the Black Sea peninsula. Tensions in the region remained high despite the release of a Ukrainian naval commander held by pro-Russian forces.Shots were fired but there were no casualties as the Ukrainian corvette Khmelnitsky was seized in Sevastopol, according to an AP photographer at the scene. Another ship, the Lutsk, was also surrounded by pro-Russian forces. The Defense Ministry had no immediate information on the incidents.
Perhaps considering Ukraine said it had pulled its troops from Crimea, they should also have pulled their ships, although it is unclear just where they would pull them to. Regardless, this is what the actual storming of the ships looked like.
h/t Drugoi
Putin and Crimea makes another move ...... Check to the EU and their sanctions !
EU expands sanctions list to 33 Russians, cancels EU-Russia summit
The EU has agreed to expand sanctions against 12 additional Russians, bringing the total to 33 people, according to European Council president Van Rompuy. The EU also canceled the upcoming EU-Russia summit, along with other bilateral summits.
The second round of sanctions includes asset freezes and travel bans.
The EU expanded the list of people affected by the sanctions following a summit in Brussels on Thursday and stated that more economic measures could be introduced if the situation in Ukraine escalates.
EU leaders asked the European Commission to look into the impact that broad economic sanctions could have on Russia, Van Rompuy told reporters.
The EU will also be organizing its own observer mission to Ukraine if the Organisation for Security and Cooperation in Europe (OSCE) does not send its own mission.
The canceled EU-Russia summit was scheduled for June 3 in Sochi, Russia.
Sanctions - US and Russia ..... EU looking !
Mapping Europe's Mutually Assured Economic Destruction As EU Plans More Sanctions
With senior German officials expecting discussions among leaders at the EU Summit to solely focused on a second round of sanctions against Russia (and warnings that they "must avoid a spiral of sanctions"), we thought it worth drilling down on just how mutually-dependent the two regions are. As Acting-Man's Pater Tenebrarum notes, thefollowing infographics suggest tit-for-tat sanctions could be a really big problem for Europe and why the EU's leaders are probably quietly praying for the crisis to simply go away.
Trade between the EU and Russia (via RT)
Trade between Russia and Germany (via Der Spiegel) – Russia is Germany's 11th largest trading partner
A list of German companies with big exposure to Russia (also via Der Spiegel)
International exposure to Russian debt (via Reuters)
Here are details on selected bank exposures (via Reuters):
SOCIETE GENERALE:France's second-biggest bank had exposure of 22.4 billion euros to Russia at the end of June, according to the European Banking Authority's (EBA) data. That equated to 15.7 billion euros in risk-weighted assets.SG Russia, which includes Rosbank and other insurance and financial operations, made operating income of 239 million euros last year, almost double 2012 despite a 41 percent jump in losses from bad debts. The bank said it had 13.5 billion euros of outstanding loans in Russia and deposits of 8.5 billion in the country at the end of 2013.SocGen's equity in its Russian business accounted for 7.7 percent of its group total, Morgan Stanley analysts estimated.UNICREDIT:Italy's biggest bank by assets had exposure of 18.6 billion euros to Russia at the end of June, the EBA data showed.The bank said its revenues from Russia were 372 million euros in the fourth quarter, up 80 percent from a year earlier.UniCredit's equity in its Russian business accounted for 2.7 percent of its group total, Morgan Stanley estimated.RAIFFEISEN BANK INTERNATIONAL:The Austrian lender said it is Russia's 10th biggest bank, with a loan book of 10.2 billion euros, 2.5 million customers and 192 outlets. Its Russian assets represent 12 percent of the group total, and the Russian unit made 507 million euros in the first nine months of last year, most of the group's total.The EBA data showed Raiffeisen had a 13.2 billion euro exposure to Russia at the end of June.Raiffeisen's equity in its Russian business accounted for 15.6 percent of its group total, Morgan Stanley estimated.OTP BANK:The Hungarian bank's exposure to Russia was 4.4 billion euros at the end of June, the EBA data showed.BANK OF CYPRUS:Its exposure to Russia was 1.6 billion euros at the end of June, the EBA data showed.
But apart from that - should be fine ? ! And this on the heels of Ukraine appearing to fold on any further action suggests Western powers have put themselves in a red-line-crossing MAD box...
Another Putin Oligarch Dumps His Shares Ahead Of Sanctions
Last week we discovered that Gazprom's Chairman Viktor Zubkov sold his entire stake in the company days before the Crimean invasion (and subsequent sanctions and asset freezes). Today, on the heels of the latest round of US sanctions against Russia's so-called "Putin cronies";Cyprus-based oil trader Gunvor Group announced that co-founder Gennady Timchenko (estimated wealth $8.5 billion) - who was named on today's sanctions list - sold his entire 44% stake in the company yesterday. The question is - as we show below - did the US Treasury tip Timchenko off to what was coming?
Anticipating potential economic sanctions so to ensure with certainty the continued and uninterrupted operations of Gunvor Group Ltd’s activities, the shares of the company held by Mr. Gennady Timchenko were sold on March 19 from his personal holding vehicle to Mr. Torbjorn Törnqvist personally.As a result, Mr. Törnqvist has become the majority owner of Gunvor Group Ltd, with an 87 percent stake, and Mr. Timchenko has fully divested his entire holdings in the company. The remaining 13 percent of shares are held by senior employees of Gunvor. There are no outside shareholders.
One thing we suspect will happen next, the list of names from US Sanctions 3.0 will include Mr. Tornqvist's name. Or maybe not - it may be that doing trade with Gunvor is even more important than the pretense of sanctioning those "evil" Russians.
Some more color from Bloomberg:
The majority of Timchenko's net worth was derived from his 44 percent stake in Cyprus-based oil trader Gunvor Group, which he sold to partner Torbjorn Tornqvist on March 19, 2014, ahead of U.S. economic sanctions. Through Volga Group, his Luxembourg-based investment vehicle, he also holds 23 percent stake in publicly traded Novatek, Russia's second-largest natural gas producer; a 31.5 percent stake in petrochemical company Sibur; and 80 percent of rail company Transoil.He owns Sibur through the holding company Sibur Ltd. with billionaire partner Leonid Mikhelson. The pair acquired the company from Gazprombank, the lending affiliate of state-controlled energy company Gazprom, in 2010 and 2011. The investment cost is calculated using the value stated by Gazprombank in December 2010, when it sold the first 25 percent for $1.3 billion. He also has an 80 percent stake in Russian construction company Stroytransgaz, which is valued using the average price-to-sales and price-to-book value multiples of three publicly traded peers: Mostotrest, Budimex and Polimex-Mostostal.Through Volga, Timchenko holds stakes in publicly traded Rorvik Timber and Russian Sea Group, a fish farm and seafood processing company,as well as 8 percent of Bank Rossia, 12.5 percent of insurance company Sogaz, 49.1 percent of insurance company Sovag and 30 percent of coal mining company Kolmar. Gunvor holds another 30 percent of Kolmar.Through A-group, the billionaire controls 70 percent of Avia Group, which develops ground infrastructure for the business aviation center at Moscow's Sheremetyevo airport, Avia Group Nord, which provides business-aviation services for flights out of Saint Petersburg's Pulkovo international airport, and a 99 stake in private jet operator Airfix Aviation. He also controls Finland's Hartwall Areena along with billionaire partners Boris and Arkady Rotenberg.
many wonder whether Gunvor’s rapid expansion over the past five years – just as the Kremlin has moved in on private oil production – is due to more than just vision. The company has “one very good friend,” a former partner says. “He is at the very top level,” says another.Some have speculated whether there are ties that bind Gunvor’s other co-founder, Gennady Timchenko, and Vladimir Putin, Russia’s presidentfrom 2000 until last week. As the company emerges from obscurity, some details of the connections between the two are finally becoming clear. The company claims that it has not benefited from any political favours.The company’s rise provides a glimpse into a secretive clique of businessmen close to Mr Putin who have made immense fortunes under his presidency but have so far stayed far away from public scrutiny. Even as Mr Putin completes a stage-managed transfer to the role of prime minister, installing his hand-picked successor, Dmitry Medvedev, as president, they are finding it increasingly hard to escape the spotlight. This year, Mr Timchenko for the first time made it on to the Forbes rich list with an estimated fortune of $2.5bn.In a scanty paper trail, corporate records from St Petersburg show Mr Timchenko and a committee headed by Mr Putin participated in one business in the early 1990s. Bankers say the company, Golden Gates, was established to build an oil terminal at St Petersburg’s port but foundered in a clash with organised crime.Mr Timchenko’s trading company, meanwhile, was a beneficiary of a large export quota under a scandal-tainted oil-for-food scheme set up by Mr Putin when he worked as head of the city administration’s foreign economic relations committee in 1991, local parliament records show. The trader also built close ties with Surgutneftegaz, a Kremlin-loyal oil company, inviting speculation he may have built a significant stake there.
The big question is - how did he know? We suspect the US Treasury telegraphed it.
Timchenko Stake in Gunvor Less Than 50% Trigger, Treasury SaysGunvor Group Ltd. isn’t subject to automatic blocking from dealing with U.S. persons under Russian sanctions because co-founder Gennady Timchenko owns less than 50 percent of the company, a U.S. Treasury official said.Treasury: Under the 50 percent rule, only entities in which a designated individual or entity owns a 50 percent or greater interest are blocked by operation of lawTreasury’s understanding is that Timchenko’s ownership stake in Gunvor is less than the 50 percent required to trigger an automatic blockingTreasury urged U.S. persons to act with caution when considering a transaction with a non-blocked entity in which a blocked person has a significant ownership
Bottom line: since the US needs a means to trade Russian oil, the top Russian crude trading firm will be exempt no matter what.
and.....
Here Come The Official Russian Counter Sanctions: Boehner, Reid, McCain Barred From Entering Russia
Moments after Obama "escalated" against Russia with a second set of sanctions, here comes the prepared Russian statement, which bars the following US individuals from entering the Russian Federation "in relation to the US sanctions over Ukraine and Crimea."
The people sanctioned via the Russianforeign ministry:
- Caroline Atkinson
- Daniel Pfeiffer
- Benjamin Rhodes
- Harry Reed (sic)
- John Boehner
- Robert Menendez
- Mary Landrieu
- John McCain
- Daniel Coats
The original, with Harry Reid's name misspelled:
More detail from RIA:
In the sanctions list of the Ministry of Foreign Affairs of Russia against the United States, including Barack Obama's aides entered Pfeiffer and Rhodes House Speaker Beyner and Senator McCain."In response to the U.S. administration released March 17 sanction measures against a number of Russian officials and deputies of the Federal Assembly as a" punishment "for the support of the referendum in the Crimea, the Russian Foreign Ministry said the introduction of reciprocal sanctions against a similar number of U.S. officials and legislators," - Foreign Ministry said in a statement posted on the site office.In a statement, the Russian Foreign Ministry said that every hostile attack Russia will respond adequately."We have repeatedly warned that the use of sanctions instruments - double-edged thing, and boomerang hit by the U.S. However, the U.S. side, it seems, continues to blindly believe in the efficacy of these methods taken from the arsenal of the past, and do not want to admit the obvious: the inhabitants of Crimea democratically in full compliance with international law and the UN Charter voted for reunification with Russia, respect and accept this choice, "- said in a statement."Such a decision may like it or not, but it is a reality to be reckoned with. Should be no doubt: for every hostile attack, we will respond appropriately," - confirmed in a statement the Foreign Ministry.Who entered the United States expanded sanctions list.Previously, the official website of the U.S. Treasury Department issued advanced sanctions list, which included 20 other people - Russian officials, businessmen and parliamentarians.U.S. authorities have included in the list of co-owner of the bank "Russia" Yuri Kovalchuk, head Vladimir Yakunin, businessman Boris and Arkady Rotenberg and Gennady Timchenko. Earlier in the list of Russian citizens who are denied entry to the United States and whose assets in the United States will be frozen, included only policy.In addition, the sanctions now imposed on the bank "Russia".
And like that, the second Cold War promptly "escalates" into a namecalling farce.
and....
US Sanctions 2.0; "Additional Costs" Levied On Russian Banks & Billionaires - Full List
After warning of the potential for"dangerous risks of escalation" President Obama, absent his Congress, has signed an Executive Order authorizing further penalties on more Russian individuals and also a bank. "We’re imposing sanctions on more senior officials of the Russian government,” Obama said. “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.” The list includes Bank Rossiya (Russia's 5th largest bank), and 20 more individuals including Billionaire Gennady Timchenko, and Duma Deputy Speaker Evgeny Bushmin.
Via AP,
President Barack Obama says the United States is levying a new round of economic sanctions on individuals in Russia, both inside and outside the government, in retaliation for the Kremlin's actions in Ukraine.Obama says he has also signed a new executive order that would allow the U.S. to sanction key sectors of the Russian economy.The new penalties mark thesecond round of economic sanctions the U.S. has levied on Russia this week. The first round of penalties had little impact in stopping Moscow from annexing the strategically important Crimean Peninsula from Ukraine.
- *TREASURY ADDS 20 INDIVIDUALS, BANK ROSSIYA TO SANCTIONS LIST
- *OBAMA SIGNS DECREE ON POSSIBLE INTRODUCTION OF SANCTIONS ON KEY SECTORS OF RUSSIAN ECONOMY
- *U.S. SANCTIONS MAY TARGET METALS, MINING, DEFENSE: OFFICIALS
The following individuals have been added to OFAC's SDN List:
BUSHMIN, Evgeni Viktorovich (a.k.a. BUSHMIN, Evgeny; a.k.a. BUSHMIN, Yevgeny); DOB 10 Oct 1958; POB Lopatino, Sergachiisky Region, Russia; Deputy Speaker of the Federation Council of the Russian Federation; Chairman of the Council of the Federation Budget and Financial Markets Committee (individual) [UKRAINE2].
DZHABAROV, Vladimir Michailovich; DOB 29 Sep 1952; First Deputy Chairman of the International Affairs Committee of the Federation Council of the Russian Federation (individual) [UKRAINE2].
FURSENKO, Andrei Alexandrovich (a.k.a. FURSENKO, Andrei; a.k.a. FURSENKO, Andrey); DOB 17 Jul 1949; POB St. Petersburg, Russia; Aide to the President of the Russian Federation (individual) [UKRAINE2].
GROMOV, Alexei; DOB 1960; POB Zagorsk (Sergiev, Posad), Moscow Region, Russia; First Deputy Chief of Staff of the Presidential Executive Office; First Deputy Head of Presidential Administration; First Deputy Presidential Chief of Staff (individual) [UKRAINE2].
IVANOV, Sergei (a.k.a. IVANOV, Sergey); DOB 31 Jan 1953; POB St. Petersburg, Russia; Chief of Staff of the Presidential Executive Office (individual) [UKRAINE2].
IVANOV, Victor Petrovich (a.k.a. IVANOV, Viktor); DOB 12 May 1950; alt. DOB 1952; POB Novgorod, Russia (individual) [UKRAINE2].
KOHZIN, Vladimir Igorevich; DOB 28 Feb 1959; POB Troitsk, Chelyabinsk Oblast, Russia (individual) [UKRAINE2].
KOVALCHUK, Yuri Valentinovich (a.k.a. KOVALCHUK, Yury Valentinovich); DOB 25 Jul 1951; POB Saint Petersburg, Russia (individual) [UKRAINE2].
MIRONOV, Sergei Mikhailovich (a.k.a. MIRONOV, Sergei); DOB 14 Feb 1953; POB Pushkin, Saint Petersburg, Russia; Member of the Council of the State Duma; Leader of A Just Russia Party; Member of the State Duma Committee on Housing Policy and Housing and Communal Services (individual) [UKRAINE2].
NARYSHKIN, Sergey Yevgenyevich (a.k.a. NARYSHKIN, Sergei); DOB 27 Oct 1954; POB Saint Petersburg, Russia (individual) [UKRAINE2].
OZEROV, Viktor Alekseevich (a.k.a. OZEROV, Viktor Alexeyevich); DOB 05 Jan 1958; POB Abakan, Khakassia, Russia; Chairman of the Security and Defense Federation Council of the Russian Federation (individual) [UKRAINE2].
PANTELEEV, Oleg Evgenevich (a.k.a. PANTELEEV, Oleg); DOB 21 Jul 1952; POB Zhitnikovskoe, Kurgan Region, Russia; First Deputy Chairman of the Committee on Parliamentary Issues (individual) [UKRAINE2].
ROTENBERG, Arkady; DOB 15 Dec 1951; POB St. Petersburg, Russia (individual) [UKRAINE2].
ROTENBERG, Boris; DOB 03 Jan 1957; POB St. Petersburg, Russia (individual) [UKRAINE2].
RYZHKOV, Nikolai Ivanovich (a.k.a. RYZHKOV, Nikolai); DOB 28 Sep 1929; POB Duleevka, Donetsk Region, Ukraine; Senator in the Russian Upper House of Parliament; Member of the Committee for Federal Issues, Regional Politics and the North of the Federation Council of the Russian Federation (individual) [UKRAINE2].
SERGUN, Igor Dmitrievich; DOB 28 Mar 1957; Lieutenant General; Chief of the Main Directorate of the General Staff (GRU); Deputy Chief of the General Staff (individual) [UKRAINE2].
TIMCHENKO, Gennady (a.k.a. TIMCHENKO, Gennadiy Nikolayevich; a.k.a. TIMCHENKO, Gennady Nikolayevich; a.k.a. TIMTCHENKO, Guennadi), Geneva, Switzerland; DOB 09 Nov 1952; POB Leninakan, Armenia; alt. POB Gyumri, Armenia; nationality Finland; alt. nationality Russia; alt. nationality Armenia (individual) [UKRAINE2].
TOTOONOV, Aleksandr Borisovich (a.k.a. TOTOONOV, Alexander; a.k.a. TOTOONOV, Alexander B.); DOB 03 Mar 1957; POB Ordzhonikidze, North Ossetia, Russia; alt. POB Vladikavkaz, North Ossetia, Russia; Member of the Committee on Culture, Science, and Information, Federation Council of the Russian Federation (individual) [UKRAINE2].
YAKUNIN, Vladimir; DOB 30 Jun 1948; POB Vladimir Oblast, Russia (individual) [UKRAINE2].
ZHELEZNYAK, Sergei Vladimirovich(a.k.a. ZHELEZNYAK, Sergei; a.k.a. ZHELEZNYAK, Sergey); DOB 30 Jul 1970; POB Saint Petersburg, Russia; Deputy Speaker of the State Duma of the Russian Federation (individual) [UKRAINE2].
The following entity has been added to OFAC's SDN List:
BANK ROSSIYA (f.k.a. AKTSIONERNY BANK RUSSIAN FEDERATION), 2 Liter A Pl. Rastrelli, Saint Petersburg 191124, Russia; SWIFT/BIC ROSY RU 2P; Websitewww.abr.ru; Email Address bank@abr.ru[UKRAINE2].
Latest
12.04 Here's a fuller report from Reuters on this morning's UN human rights meeting in Geneva, where Ukraine's ambassador to the organisation has warned that Russia is planning further incursions into Moscow-leaning parts of the country:
Russia may be preparing a further military incursion to Ukrainian territory, Ukraine's ambassador to the United Nations in Geneva told UN diplomats on Thursday.
"There are indications that Russia is on its way to unleash a full blown military intervention in Ukraine's east and south," ambassador Yurii Klymenko said at a briefing on the human rights situation in Ukraine.
But a Russian diplomat in Geneva immediately dismissed Mr Klymenko's warning.
"Russia would never invade east and south Ukraine," the diplomat said, adding that President Vladimir Putin had said as much in a televised speech on Tuesday.
MR Klymenko described Russia's annexation as a farce, as well as unlawful and illegitmate and called for Russia to negotiate. His statement received wide support from diplomats from the United States, many European Union countries and Australia.
"Despite Russian claims to the contrary, this was never about protecting the rights of ethnic Russians and was always about one country's ambition to redraw its own borders," US acting ambassador Peter Mulrean said.
"It must be clear to Russia that further provocations will achieve nothing except to further isolate Russia and diminish its place in the world."
He described Russia's takeover of Crimea as aggression and an illegal land grab, and said human rights had seriously worsened on the peninsula since Russia took control.
A Russian diplomat read out a prepared statement, justifying Russia's actions so far as legal under Russian, Ukrainian and international law.
11.56 The BBC's Mark Lowen tweets that Ukrainian military at the Belbek base in Sevastopol are expecting an order from Kiev to withdraw within the next 48 hours:
11.30 In Germany, where Chancellor Angela Merkel has adopted a more cautious stance on sanctions against Russia than has Prime Minister David Cameron, opinion polls suggest much of the public agree with her.Tony Paterson reports from Berlin for the Telegraph:
Opinion polls have shown that 75 per cent of Germans fear that economic sanctions against Russia could have a negative impact on their economy and jobs. The Forsa polling organisation found that Germans “greatly feared” that sanctions would hit energy resources. Russia provides a third of Germany’s gas and oil supplies.
Forty four percent of Germans want their government to resolve the crisis by diplomatic means whereas 25 percent backed the idea of economic sanctions, according to Forsa.
The organisation also found that many Germans were not convinced that Crimea belonged to Ukraine rather than Russia. Seventy five percent of those polled thought that President Vladimir Putin was “power hungry, clever and strong”.
The Forschungsgruppe Wahlen public opinion research group found that many Germans thought that because the United States had in the past broken international law, Russia’s actions in the Crimea could not be so easily condemned. Sixty percent of those polled doubted that President Obama could solve the crisis.
11.24 The new authorities in Crimea have announced a weapons amnesty, Roland Oliphant reports from Simferopol:
Any resident of Crimea with an unregistered weapon should hand it in by March 30, Crimea's new prosecutor general. Natalia Poklonskaya has said.
It's not clear if this amnesty extends to the shiny new Kalashnikovs some "self defence" and Cossack units have been seen with in recent weeks. Or the shiny nickel-plated 9mm pistol one was wearing on his hip at the storming of the Ukrainian Navy Headquarters in Sevastopol yesterday.
11.11 As EU leaders prepare to expand sanctions against political and military figures close to President Putin, Alexei Navalny, the Russian opposition leader currently under house arrest, writes in the New York Times that most of the individuals targeted so far by the EU and US are small fry and that the West should be setting its sights on much bigger fish. He offers a few suggestions:
They [those sanctioned] do not have major assets outside Russia and are irrelevant to Mr. Putin; sanctioning them will not change Russia’s policy. After all the tough talk from Western politicians, this action is mocked in Russia and even seen as a tacit encouragement to Mr. Putin and his entourage, who seem to possess some magical immunity.
They [those sanctioned] do not have major assets outside Russia and are irrelevant to Mr. Putin; sanctioning them will not change Russia’s policy. After all the tough talk from Western politicians, this action is mocked in Russia and even seen as a tacit encouragement to Mr. Putin and his entourage, who seem to possess some magical immunity.
Instead, Western nations could deliver a serious blow to the luxurious lifestyles enjoyed by the Kremlin’s cronies who shuttle between Russia and the West. This means freezing the oligarchs’ financial assets and seizing their property.
Such sanctions should primarily target Mr. Putin’s inner circle, the Kremlin mafia who pillage the nation’s wealth, including Gennady N. Timchenko, head of the Volga Group; Arkady and Boris Rotenberg, influential businessmen and former judo sparring partners of Mr. Putin; Yuri V. Kovalchuk, a financier believed to be Mr. Putin’s banker; Vladimir I. Yakunin, president of Russian Railways; the oligarchs Roman A. Abramovich and Alisher B. Usmanov; and Igor I. Sechin and Aleksei B. Miller, the heads of Rosneft and Gazprom, respectively.
The sanctions must also hit the oligarchs whose media outlets parrot the regime lines, and target Mr. Putin’s entire “war cabinet”: the TV spin doctors, compliant Duma members and apparatchiks of Mr. Putin’s United Russia Party.
The Telegraph's Roland Oliphant in Simferopol says of Navalny's suggestions: These are major players and decision makers who are close to Mr Putin and his inner circle, and sanctioning them - especially figures like Mr Sechin - would be one notch down from naming Mr Putin himself. So far, however, Western governments have seemed reluctant to go to that level.
10.51 The administrative work of annexation continues. The Russian communications ministry has issued Crimea with new, Russian dialling codes, according to Sergei Aksyonov, the local prime minister.
The new codes are +7 (365) for the republic of Crimea and +7 (869) for Sevastopol, Aksyonov said on Twitter. It's not clear when the new codes start working.
10.26 Will Ukraine's eastern regions eventually fall to Russia too? Russian TV channel REN apparently thinks so, expanding its report on Russian weather to include the cities of Donetsk, Luhansk and Kharkiv.
10.16 Kiev will never recognise Russia's annexation of Crimea and will fight for the "liberation" of the strategic Black Sea peninsula, Ukraine's parliament has said in a resolution adopted this morning.
"Ukraine will never cease to fight for the liberation of Crimea as long and painful as this can be," said the resolution, an initiative of acting president Olexandr Turchynov.
10.15 Ukraine's ambassador to the UN in Geneva has said that Russia may be preparing a further military incursion to Ukrainian territory.
Yurii Klymenko told UN diplomats at a briefing on the human rights situation in Ukraine: "There are indications that Russia is on its way to unleash a full blown military intervention in Ukraine's east and south."
The Black Sea peninsula of Crimea is not the only Russian-leaning region in Ukraine's east. There have already been clashes in the eastern city of Donetsk and there are fears that it and other areas where anti-Kiev sentiment is high could follow Crimea in splitting from the rest of the country.
09.59 Russian journalist Natalia Antonova comments on Twitter that Yatsenyuk's decision to row back from visa restrictions is a smart one:
09.37 Barack Obama said last night that the United States would not take military action against Russia over their actions in Ukraine. But he also said Washington would ratchet up the pressure on Russia, taking additional steps following the sanctions already announced. Watch his remarks below:
09.33 German Chancellor Angela Merkel says the European Union will impose more sanctions on Russia following its decision to annex Ukraine's Crimean Peninsula and will suspend all G-8 meetings until the political situation changes.
Mrs Merkel told German MPs ahead of today's EU summit in Brussels that the bloc would expand a freeze of bank accounts and travel bans of people that have been linked to the crisis.
Earlier this week, the EU and the United States slapped sanctions on certain individuals that were involved in what they say was the unlawful referendum in Crimea over joining Russia.
But there are still likely to be disagreements at the summit as to when to introduce tougher sanctions. The EU previously agreed to impose punitive measures such as an arms embargo and energy and financial sanctions if Russia continued to destablise the situation. David Cameron believes that the annexation of Crimea is the trigger for those sanctions but Mrs Merkel wants to hold off for now.
"The EU summit today and tomorrow will make clear that we are ready at any time to introduce phase-3 measures if there is a worsening of the situation," she said.
Mrs Merkel also said that the G-8 will not meet until the situation changes, the group, which includes Russia, being effectively dead so long as the crisis continued. Russian President Vladimir Putin was due to host leaders from the top industrial countries in Sochi in June.
Angela Merkel addresses German MPs
Angela Merkel addresses German MPs
09.27 Ukraine's interim prime minister Arseniy Yatsenyuk now says he "won't hurry" to impose a visa regime on Russia. Our correspondentRoland Oliphant in Simferopol says this sounds like a U-turn. "It could be a bit like burning down the house," he notes of the visa threat.
09.15 Good morning and welcome to today's live coverage of developments in Ukraine.
First, a quick recap of yesterday's events. Russian and pro-Russian forces took over Ukrainian navy headquarters and another military base in Crimea, encountering little resistance but taking the naval commander hostage.
Tensions rose as Crimean authorities turned back a ministerial delegation sent from Kiev, Russia, the US and Europe engaged in verbal sparring and an American warship began military exercises in the Black Sea.
The government in Ukraine demanded the release of the naval commander and a number of pro-Ukraine activists previously detained in Crimea, warning of 'adequate' consequences if authorities did not comply. it said it would be holding military exercises with the US and UK - a move clearly aimed to scare Moscow off any further seizures of territory in Ukraine's restive east. Withdrawal from the Russian-led CIS union - an umbrella group of former Soviet states - and visa restrictions on Russians wanting to travel to Ukraine were also announced.
This morning, as EU leaders prepared to meet in Brussels to discuss the bloc's response to Russian actions in Crimea, the hostages were released by authorities in the Black Sea peninsula. Admiral Sergei Haiduk and the civilians reportedly left the Sevastopol naval base accompanied by Russian special forces, apparently on the orders of the Russian defence minister.
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