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US levels Crimea sanctions as Ukraine battles separatism

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(Globalpost/GlobalPost)

The United States slapped sanctions Friday on seven architects of Crimea's split from Ukraine as the ex-Soviet country struggled to stamp out another insurgency by pro-Russian separatists.

The new Treasury sanctions escalated the tit-for-tat row between Russia and the West over Ukraine after Moscow threatened to cut off gas supplies to its neighbour unless it settled its unpaid bills -- a move that could wreak economic havoc on European countries that source gas from Ukraine.

Washington's latest sanctions hit back at that threat while also sending a warning to Kalashnikov-armed militants barricaded inside state buildings in two key cities in eastern Ukraine that following in Crimea's footsteps would have consequences.

"Crimea is occupied territory. We will continue to impose costs on those involved in ongoing violations of Ukraine's sovereignty and territorial integrity," said Treasury Under Secretary for Terrorism and Financial Intelligence David Cohen as he announced the measures.

The sanctions freeze the US-based assets of key Crimean breakaway leaders and gas company Chernomorneftegaz, whose funds were seized by the Crimean parliament and are now managed by Moscow.

The move came after embattled Ukrainian Prime Minister Arseniy Yatsenyuk vowed during a visit to the Donetsk coal mining zone to grant more power to the country's regions in a bid to soothe separatist tensions.

Separatists have been occupying the local government building in Donetsk for five days, demanding a referendum on joining Russia.

A similar occupation of the state security office of the hardscrabble eastern city of Lugansk has confronted Ukraine's untested leaders with their biggest challenge since their February ouster of Kremlin-backed president Viktor Yanukovych.

But Russian President Vladimir Putin -- his troops already massed along Ukraine's eastern border following their seizure of Crimea -- only upped the stakes by threatening to cut off Ukraine's gas over unpaid bills.

The decision could limit the supplies of at least 18 European nations for the third time since 2006. Each of the previous interruptions also coincided with attempts by Ukraine to pull itself out of the Kremlin's historic sphere of influence.

The Kremlin's emphatic response to its possible loss of control over the nation of 46 million people has plunged its relations with the West to post-Cold War lows and forced NATO to step up the defence of former Soviet satellite states.

The sabre rattling has set an ominous tone to the first round of four-way talks on the crisis, which will bring together the United States, European Union, Ukraine and Russia in Geneva on April 17, the US and EU confirmed.

"I have to say that we don't have high expectations for these talks, but we do believe it is very important to keep that diplomatic door open and will see what they bring," said US Assistant Secretary of State Victoria Nuland.

- Crimean leaders targeted -

The US sanctions targeted Aleksei Chaliy, the de facto mayor of Sevastopol, who signed the deal on March 16 to unite Crimea with Russia.

He was joined by Crimea's deputy prime minister Rustam Temirgaliev, and Yuriy Zherebtsov, said to be among the main organisers of the peninsula's March 16 secession referendum.

Electoral officials Mikhail Malyshev and Valery Medvedev were targeted for administering the vote, which has been denounced as illegal by the US and its European allies.

The former head of the Ukrainian security services, Pyotr Zima, who was dismissed after swearing an oath of loyalty to the new Crimean authorities, was also placed on the list.

They also targeted the former vice speaker of Ukraine's parliament, Sergei Tsekov, who helped pave the way towards the March referendum in Crimea on separating from Ukraine.

US officials had been warning for days that more sanctions against individuals and companies were in the works, as it called on Moscow to deescalate tensions and withdraw Russian troops from Ukraine's eastern border.

A first wave of sanctions unveiled in March notably blacklisted officials and businesspeople close to Putin to protest Moscow's takeover of Crimea.

- 'No need to panic' -

Yatsenyuk's main preoccupation at the moment is trying to end the separatist sieges that have exposed Kiev's limited sway over the heavily industrialised east.

He flew to Donetsk to enlist the help of its mayor and Rinat Akhmetov -- Ukraine's richest man and one of its most legendary powerbrokers -- in finding a bloodless solution to the militants' occupation of the local government seat.

Yatsenyuk immediately addressed one of the protesters' most pressing concerns by promising never to limit the use of the Russian language in the region.

He also admitted that he "must respond to people's desire to have more regional authority."

Kiev has previously said it was ready to grant more powers to the regions while stopping well short of creating the federation sought by Russia.

Yatsenyuk said the devolution of power would be detailed in a new draft constitution to be made public by the time Ukraine holds snap presidential polls on May 25.

Ukraine meanwhile appeared to be making more headway on an agreement with Europe that could help cover an immediate debt to Moscow of $2.2 billion.

European Energy Commissioner Guenther Oettinger said EU officials were in "close contact" with Kiev and trying to "ensure that Ukraine remains solvent," while also helping it secure new gas supplies.

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http://www.globalpost.com/dispatch/news/afp/140412/us-levels-crimea-sanctions-ukraine-battles-separatism