The European Union froze the assets of Russian oligarchs Arkady Rotenberg and Yury Kovalchuk as part of its effort to end President Vladimir Putin’s support for rebels in eastern Ukraine.
Rotenberg, who helps control SMP Bank and InvestCapitalBank OAO, and Kovalchuk, the biggest shareholder in OAO Bank Rossiya, are among eight people that the EU added today to its blacklist of individuals and organizations being punished for the Ukrainian unrest. Three entities -- Russian National Commercial Bank, weapons maker Almaz-Antey and airline Dobrolet -- were also added, according to the list in the EU’s Official Journal.
The move marks the bloc’s first strike against business allies of Putin and aligns European policy more with that of the U.S. The EU is hardening its stance against Russia after a Malaysia Airlines jet was shot down in an area of eastern Ukraine controlled by pro-Russian rebels on July 17 killing all 298 people aboard.
The widening of blacklist targets reflects “the gravity of the situation in Ukraine,” the 28-nation EU said.
Previously, the European list had 87 people and 20 entities deemed responsible for Russia’s annexation of Crimea in March and subsequent infiltration of eastern Ukraine.
Sanctions already announced have intensified a sell-off in the ruble and capital flight from Russia amid its worst standoff with the U.S. and its allies since the Cold War, pushing the economy to the brink of recession.
Waging Financial War
In addition to broadening the scope of blacklisted people and organizations, the EU is seeking to undermine strategic parts of Russia’s economy to protest Putin’s policy toward Ukraine. On July 29, the bloc decided to prohibit state-owned Russian banks from selling shares or bonds in Europe, curbed the export of equipment to modernize the oil industry and banned sales of arms and civilian goods with military uses.
People on the EU blacklist face asset freezes and travel bans. The asset freezes on companies will prevent them from doing business in the EU.
Rotenberg, 62, is a boyhood friend and former judo partner of Putin and made his fortune by selling pipes and building pipelines for state-run OAO Gazprom, the world’s largest natural-gas producer. He and his brother Boris are business partners and each is worth about $3 billion, according to data compiled by Bloomberg.
Kovalchuk, 63, owns the National Media Group, which encompasses TV channels, newspapers and websites friendly to the national leader. The EU said the media mogul’s TV stations “actively support the Russian government’s policies of destabilization of Ukraine.”
Among the other additions to the EU blacklist are 64-year-old Nikolay Shamalov, who is described by the EU as the second-largest shareholder of Bank Rossiya, and 54-year-old Alexei Gromov, a former Putin spokesman who is now first deputy Kremlin chief of staff in charge of media policy.
The EU decided July 28 to add these people, whom European officials had dubbed “cronies,” and four others to the blacklist without disclosing them at the time. The remaining four are Konstantin Malofeev, the 40-year-old founder of Marshall Capital in Moscow whose network stretches into the heart of Ukraine’s pro-Russian insurgency, and three pro-separatist officials in eastern Ukraine.
In a separate decision taken on July 28 and published today in the Official Journal, the EU imposed trade and investment restrictions regarding Crimea. These include a ban on new infrastructure investments in transport, telecommunications and energy.
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