Russia's President Vladimir Putin chairs a session of the State Council Presidium in Voronezh, August 5, 2014.
President Vladimir Putin has ordered government agencies to restrict imports of food and agricultural products from the countries that have imposed sanctions against Russia over the conflict in Ukraine.
The text of Putin's decree released by the Kremlin on Wednesday says that such imports will be "banned or limited" for one year. The decree doesn't name any specific countries or products, but contains an order to government agencies to spell them out.
The move follows the latest round of sanctions against Russia imposed by the European Union last week, which for the first time targeted entire sectors of the Russian economy.
The U.S. and the EU have accused Russia, which annexed Ukraine's Crimean Peninsula in March, of fomenting tensions in eastern Ukraine by supplying arms and expertise to a pro-Moscow insurgency, and have imposed asset freezes and loan bans on a score of individuals and companies.
Russia depends heavily on imported foodstuffs — most of it from the West — particularly in the largest and most prosperous cities such as Moscow. Agricultural imports from the United States alone have amounted to about $1 billion annually in recent years and in 2013 the EU's agricultural exports to Russia totaled 11.8 billion euros.
The order says the limits are being imposed "with the goal of guaranteeing the security of the Russian Federation" and calls for undertaking measures to guard against quick price hikes. Both those clauses appeared to indicate that the scope of the measures wouldn't be wide.
Putin's order appears to show that Russia, although increasingly suffering the effects of Western sanctions, is disinclined to back down on Ukraine. Russia denies allegations that it is supporting the Ukrainian rebels or supplying them with equipment and has rejected claims that its artillery has been firing from across the border.
As tensions over Ukraine rise, a respected newspaper this week cited unnamed sources as saying Russia is considering closing its airspace to European carriers flying to Asia. The report sent the stocks of some airlines sharply lower.
Foreign Minister Sergey Lavrov on Wednesday said he wouldn't comment on "rumors" of airspace being closed, but said "our Western partners should think about their companies and their citizens," the Interfax news agency reported.
Russia last week banned the import of apples and some other fruits from Poland, saying this was because of sanitary concerns, but raising speculation that the move was in retaliation for Poland's support of the Ukrainian authorities.
Reuters: 06. August 2014
MOSCOW — Russia will ban all imports of U.S. food products as well as fruit and vegetables from the European Union after President Vladimir Putin ordered retaliation for Western sanctions against Moscow, a state news agency reported on Wednesday.
With Russia a major buyer of food from the United States and Europe, the ban marks a deep escalation of an economic tit-for-tat set off by the crisis in Ukraine, which has brought East-West relations to their lowest since the Cold War.
Putin signed a decree on Wednesday halting or limiting imports of agricultural products from countries which have imposed sanctions on Russia, ordering his government to come up with a list of imports to be banned for a year.
"(All food products) that are being produced in the U.S. and being supplied to Russia will be banned," Ria Novosti quoted Alexei Alekseenko, spokesman for the VPSS food standards agency, as saying. "Fruit and vegetables from EU will be covered by the total ban," he added.
No one was available for comment at the VPSS (Phytosanitary Surveillance Service) but earlier Alekseenko told Reuters that retaliatory action would be "quite substantial", and include U.S. poultry.
A spokesman for the European Commission in Brussels said he had no immediate comment.
Russians are by far the biggest buyers of EU fruit and vegetables, having bought 21.5 percent of EU vegetable exports and 28 percent of the bloc's fruit exports in 2011.
They also have a strong appetite for U.S. chicken, buying 276,100 tonnes of it last year, or 8 percent of U.S. exports. This made it the second largest buyer behind Mexico, according to the U.S. Department of Agriculture.
After Putin issued his decree, the VPSS said it would discuss an option to increase food imports from Ecuador, Brazil, Chile and Argentina with the countries' ambassadors on Thursday.
Brazilian producers could send an additional 150,000 tonnes of chicken per year to Russia to make up the shortfall, Francisco Turra, President of the country's animal protein association ABPA, said in Sao Paulo.
Washington and the EU first imposed sanctions after Russia annexed Crimea from Ukraine in March and tightened them after a Malaysian airliner was shot down last month over territory in eastern Ukraine held by pro-Moscow rebels. Moscow rejects Western allegations that the rebels used a missile it supplied to bring down the airliner, killing all 298 people on board.
East-West relations soured yet further on Wednesday as NATO said Russia might use the pretext of a humanitarian mission to invade eastern Ukraine.
The prospect of tit-for-tat economic restrictions has raised concern among smaller EU nations that have close trading ties to Russia. Finland, which shares a long border with Russia, said it feared a repeat of the turmoil suffered by most Western economies in 2008-09.
"This has the potential - and I stress potential - to become Economic Crisis 2.0," Prime Minister Alexander Stubb told reporters in the Finnish city of Espoo.
Neutral Finland traded heavily with its huge neighbour even during the Cold War, and suffered badly when the Soviet Union collapsed almost a quarter of a century ago. Today, Russia is Finland's third largest export market, while Russian tourists spend roughly 2 billion euros ($2.7 billion) a year in Finland.
Stubb said he expected Moscow to retaliate but defended the sanctions, imposed after Russia annexed Crimea from Ukraine in March and tightened after a Malaysian airliner was shot down over territory in eastern Ukraine held by pro-Moscow rebels.
However, he made clear the burden of retaliation had to be shared among EU members: "If sanctions hit Finland disproportionately, we will seek aid from our EU partners."
SET UP WELL
Until now, smaller or poorer countries have featured prominently among those targeted by the Russian response. Moscow has already suspended beef and cattle imports from Romania, citing an outbreak of mad cow disease, as well as banning Ukrainian juice and dairy produce, Polish vegetables and Australian beef.
The central bank warned that such bans on importing cheap products could make it harder to control inflation, which fell to an annual 7.5 percent in July, but remains well above the 6.5 percent increase seen in 2013.
The sanctions have effectively frozen Russian banks out of EU financial markets, and yet one Western bank active in Russia said it expected to keep making solid profits there despite losing some business.
Bank Austria, the central and eastern European arm of Italian bank UniCredit, said its pretax profit in Russia rose 3 percent to 247 million euros in the first half of this year.
That was more than a quarter of its total pretax profit, making Russia its most profitable market.
Bank Austria said it would be able to keep raising money locally.
"Given what we know now about sanctions, we assume that in Russia we will continue to have a very significant profit contributor. We feel we are set up well," Chief Executive Willibald Cernko said.
Federico Ghizzoni, UniCredit's chief executive, also expressed confidence. "The bank seems strong enough to go through this storm," he said in Milan. "This is not to say that we are not looking at the situation with concern, but there is no systemic problem," he said, adding the bank estimated a hit of up to 10-15 million euros in lost revenues.
In a sign of the economic slowdown, soft drinks giant Coca-Cola Co said it had taken advertisements off four television channels in Russia as a fall in second-quarter sales prompted a rethink of its marketing plans.
The Russian business daily Kommersant said two of the channels where Coke's advertising would be cut were owned by St Petersburg-based Bank Rossiya, which is owned in turn by Yuri Kovalchuk, a close ally of Putin.
Kovalchuk was hit by U.S. sanctions in March and blacklisted by the EU last month. However, a Coca-Cola spokeswoman said by email that "there is no political motive in this decision".
Reuters: 06. August 2014
Russia bans all U.S. food, EU fruit and veg in sanctions response
MOSCOW — Russia will ban all imports of U.S. food products as well as fruit and vegetables from the European Union after President Vladimir Putin ordered retaliation for Western sanctions against Moscow, a state news agency reported on Wednesday.
With Russia a major buyer of food from the United States and Europe, the ban marks a deep escalation of an economic tit-for-tat set off by the crisis in Ukraine, which has brought East-West relations to their lowest since the Cold War.
Putin signed a decree on Wednesday halting or limiting imports of agricultural products from countries which have imposed sanctions on Russia, ordering his government to come up with a list of imports to be banned for a year.
"(All food products) that are being produced in the U.S. and being supplied to Russia will be banned," Ria Novosti quoted Alexei Alekseenko, spokesman for the VPSS food standards agency, as saying. "Fruit and vegetables from EU will be covered by the total ban," he added.
No one was available for comment at the VPSS (Phytosanitary Surveillance Service) but earlier Alekseenko told Reuters that retaliatory action would be "quite substantial", and include U.S. poultry.
A spokesman for the European Commission in Brussels said he had no immediate comment.
Russians are by far the biggest buyers of EU fruit and vegetables, having bought 21.5 percent of EU vegetable exports and 28 percent of the bloc's fruit exports in 2011.
They also have a strong appetite for U.S. chicken, buying 276,100 tonnes of it last year, or 8 percent of U.S. exports. This made it the second largest buyer behind Mexico, according to the U.S. Department of Agriculture.
After Putin issued his decree, the VPSS said it would discuss an option to increase food imports from Ecuador, Brazil, Chile and Argentina with the countries' ambassadors on Thursday.
Brazilian producers could send an additional 150,000 tonnes of chicken per year to Russia to make up the shortfall, Francisco Turra, President of the country's animal protein association ABPA, said in Sao Paulo.
Washington and the EU first imposed sanctions after Russia annexed Crimea from Ukraine in March and tightened them after a Malaysian airliner was shot down last month over territory in eastern Ukraine held by pro-Moscow rebels. Moscow rejects Western allegations that the rebels used a missile it supplied to bring down the airliner, killing all 298 people on board.
East-West relations soured yet further on Wednesday as NATO said Russia might use the pretext of a humanitarian mission to invade eastern Ukraine.
The prospect of tit-for-tat economic restrictions has raised concern among smaller EU nations that have close trading ties to Russia. Finland, which shares a long border with Russia, said it feared a repeat of the turmoil suffered by most Western economies in 2008-09.
"This has the potential - and I stress potential - to become Economic Crisis 2.0," Prime Minister Alexander Stubb told reporters in the Finnish city of Espoo.
Neutral Finland traded heavily with its huge neighbour even during the Cold War, and suffered badly when the Soviet Union collapsed almost a quarter of a century ago. Today, Russia is Finland's third largest export market, while Russian tourists spend roughly 2 billion euros ($2.7 billion) a year in Finland.
Stubb said he expected Moscow to retaliate but defended the sanctions, imposed after Russia annexed Crimea from Ukraine in March and tightened after a Malaysian airliner was shot down over territory in eastern Ukraine held by pro-Moscow rebels.
However, he made clear the burden of retaliation had to be shared among EU members: "If sanctions hit Finland disproportionately, we will seek aid from our EU partners."
SET UP WELL
Until now, smaller or poorer countries have featured prominently among those targeted by the Russian response. Moscow has already suspended beef and cattle imports from Romania, citing an outbreak of mad cow disease, as well as banning Ukrainian juice and dairy produce, Polish vegetables and Australian beef.
The central bank warned that such bans on importing cheap products could make it harder to control inflation, which fell to an annual 7.5 percent in July, but remains well above the 6.5 percent increase seen in 2013.
The sanctions have effectively frozen Russian banks out of EU financial markets, and yet one Western bank active in Russia said it expected to keep making solid profits there despite losing some business.
Bank Austria, the central and eastern European arm of Italian bank UniCredit, said its pretax profit in Russia rose 3 percent to 247 million euros in the first half of this year.
That was more than a quarter of its total pretax profit, making Russia its most profitable market.
Bank Austria said it would be able to keep raising money locally.
"Given what we know now about sanctions, we assume that in Russia we will continue to have a very significant profit contributor. We feel we are set up well," Chief Executive Willibald Cernko said.
Federico Ghizzoni, UniCredit's chief executive, also expressed confidence. "The bank seems strong enough to go through this storm," he said in Milan. "This is not to say that we are not looking at the situation with concern, but there is no systemic problem," he said, adding the bank estimated a hit of up to 10-15 million euros in lost revenues.
In a sign of the economic slowdown, soft drinks giant Coca-Cola Co said it had taken advertisements off four television channels in Russia as a fall in second-quarter sales prompted a rethink of its marketing plans.
The Russian business daily Kommersant said two of the channels where Coke's advertising would be cut were owned by St Petersburg-based Bank Rossiya, which is owned in turn by Yuri Kovalchuk, a close ally of Putin.
Kovalchuk was hit by U.S. sanctions in March and blacklisted by the EU last month. However, a Coca-Cola spokeswoman said by email that "there is no political motive in this decision".
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