Russia and China have just signed what is being called “the gas deal of the century”, and the two countries are discussing moving away from the U.S. dollar and using their own currencies to trade with one another. This has huge implications for the future of the U.S. economy, but the mainstream media in the United States is being strangely quiet about all of this. For example, I searched CNN’s website to see if I could find something about this gas deal between Russia and China and I did not find anything. But I did find links to “top stories” entitled “Celebs who went faux red” and “Adorable kid tugs on Obama’s ear“. Is it any wonder why the mainstream media is dying? If a particular story does not fit their agenda, they will simply ignore it. But the truth is that this new agreement between Russia and China is huge. It could end up fundamentally changing the global financial system, and not in a way that would be beneficial for the United States.
Russia and China had been negotiating this natural gas deal for ten years, and now it is finally done. Russia is the largest exporter of natural gas on the entire planet, and China is poised to become the world’s largest economy in just a few years. This new $400 billion agreement means that these two superpowers could potentially enjoy a mutually beneficial relationship for the next 30 years…
Russia reached a $400 billion deal to supply natural gas to China through a new pipeline over 30 years, a milestone in relations between the world’s largest energy producer and the biggest consumer.
President Vladimir Putin is turning to China to bolster Russia’s economy as relations sour with the U.S. and European Union because of the crisis in Ukraine. Today’s accord, signed after more than a decade of talks, will allow state-run gas producer OAO Gazprom (GAZP) to invest $55 billion developing giant gas fields in eastern Siberia and building the pipeline, Putin said.
It’s an “epochal event,” Putin said in Shanghai after the contract was signed. Both countries are satisfied with the price, he said.
Of course countries sell oil and natural gas to each other all the time. But what makes this deal such a potential problem for the U.S. is the fact that Russia and China are working on cutting the U.S. dollar out of the entire equation. Just check out the following excerpt from a recent article in a Russian news source…
Russia and China are planning to increase the volume of direct payments in mutual trade in their national currencies, according to a joint statement on a new stage of comprehensive partnership and strategic cooperation signed during high-level talks in Shanghai on Tuesday.
“The sides intend to take new steps to increase the level and expansion of spheres of Russian-Chinese practical cooperation, in particular to establish close cooperation in the financial sphere, including an increase in direct payments in the Russian and Chinese national currencies in trade, investments and loan services,” the statement said.
In my recent article entitled “De-Dollarization: Russia Is On The Verge Of Dealing A Massive Blow To The Petrodollar“, I warned about what could happen if the petrodollar monopoly ends. In the United States, our current standard of living is extremely dependent on the rest of the world continuing to use our currency to trade with one another. If Russia starts selling natural gas to China without the U.S. dollar being involved, that would be a monumental blow to the petrodollar. And if other nations started following the lead of Russia and China, that could result in an avalanche from which the petrodollar may never recover.
And it isn’t just the national governments of Russia and China that are discussing moving away from the U.S. dollar. For example, the second largest bank in Russia just signed a deal with the Bank of China “to pay each other in domestic currencies”…
President Obama’s wrongheaded view of the world has weakened America’s military and turned foreign policy into a “mess” — and Republicans bear some of the responsibility, the chairman of the House Armed Services Committee said yesterday.
“It is no accident that the expansion of Russia and China has come at the exact moment when we are dismantling our military and retreating from the world,” Rep. Buck McKeon (R- Calif.) said in a speech at The Heritage Foundation aimed at drawing attention to defense and national security issues.
“With Russia invading Ukraine, China provoking our Pacific allies, al-Qaeda regrouping, North Korea banging the drum, and ongoing turmoil in the Middle East, I think the president has lost sight of his purpose here,” McKeon said.
McKeon’s appearance at Heritage was part of “Protect America Month” events organized by the think tank.
Americans, McKeon argued, ought to be asking what the nation’s central foreign policy goal is, and what role the U.S. military has in advancing it. He said:
“Put plainly, our foreign policy is a mess. We have no coherent strategy. I’m not sure if we’re supposed to be pivoting to Asia, pivoting to the Middle East, or pivoting back to Europe.”
The California Republican, who announced four months ago that he will retire next January after 22 years in Congress, argued that most Americans want to live “in peace and security,” free to prosper and make their own decisions without worrying about what’s going on in “faraway lands.”
He cited Abraham Lincoln’s formula thatgovernment’s legitimate aim is “to do for a community of people whatever they need to have done, but cannot do for themselves.”
“An individual can go out and find health care coverage without the government,” McKeon said. “They can save for retirement without the government. They can start a business without the government. But they cannot resist foreign aggression without a strong standing military.”
Fighting in Slavyansk on Monday, chaos in Odessa, and entrenchment on all elevates talk of open war
– Jon Queally, staff writer
Pro-Russia gunmen on armored personal carriers passing by barricades on a road leading into Slavyansk. (Photograph: Darko Vojinovic/AP)
Interim president Oleksandr Turchynov on Monday was the latest to indicate that the spiraling violence in an increasingly divided Ukraine looks more and more like civil war as efforts to contain uprisings in the east against Kiev’s authority have only elevated the violence in recent days.
“War is in effect being waged against us, and we must be ready to repel this aggression,” said Turchynov in a televised address from Kiev and referring to violence in the cities of Odessa, Slavyansk, and elsewhere over the weekend.
According to Agence France-Presse, the latest high-level warning from Kiev comes as Ukraine spirals “further into a chaos that many fear could result in open civil war.”
Turchynov has called up additional forces and reintroduced conscription for military-aged Ukrainians citing fear of a Russian invasion on the eastern border.
This AFP video report shows how some regular Ukrainians are preparing for “civil war”:
Ukraine is facing its worst crisis in decades as the polarised nation of 46 million tries to decide whether to look towards Europe, as its western regions want to do, or improve ties with Russia, which is favoured by the many Russian-speakers in the east.
In the last few weeks, anti-government forces have stormed and seized government buildings and police stations in a dozen eastern Ukrainian cities. Authorities in Kiev – who blame Russia for backing the insurgents – have up to now been largely powerless to react.
And since Russia has kept tens of thousands of troops along Ukraine’s eastern border – and annexed its key Black Sea peninsula of Crimea last month – Ukraine’s central government fears Russia could try to invade and grab more territory.
Since the government began trying to take back the buildings late last week, Slavyansk has been under a tight security cordon. Movement in and out of the city has ground almost to a halt, causing shortages in basic supplies. Lines have been seen at grocery stores.
The goals of the insurgency are ostensibly geared towards pushing for broader powers of autonomy for the region, but some insurgents favour separatism, and the annexation of Crimea looms over the entire political and military discussion.
Following Friday’s violence in Odessa and the growing number of revolts in the east, former U.S. ambassador to Moscow, Michael McFaul, spoke with Time magazine and made this warning: “The last 24 hours was a major escalation,” told TIME. “This is real. This is war.”
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NATO’s second-in-command says Russia is now an enemy, not a partner
Published time: May 01, 2014 17:08
Edited time: May 02, 2014 06:51
NATO Deputy Secretary General Alexander Vershbow (AFP Photo / Yuri Kadobnov)
NATO Deputy Secretary General Alexander Vershbow now says that the allied group has been compelled to treat Russia “as more of an enemy than a partner,” according to an Associated Press report published Thursday.
The 61-year-old former United States ambassador to Russia reportedly told journalists this week that Moscow’s role in the ongoing crisis in Ukraine has forced NATO to reconsider the alliance’s opinion on Russia, and that additional troops may soon be mobilized to the region as tensions worsen.
AP journalist Robert Burns wrote on Thursday that Vershbow said the Kremlin’s perceived part in the recent events in Ukraine “marks a turning point in decades of effort by NATO to draw Moscow closer.”
NATO’s second-in-command reportedly told journalists that the alliance is now considering new measures meant to counter any future acts of aggression on the part of Russia aimed at partner nations, and soon could deploy a larger number of combat forces to Eastern Europe.
Journalists reporting for Civil.Ge wrote on Thursday that Vershbow told the audience at a panel discussion in Washington, DC one day earlier that NATO should deploy “defensive assets to the region.”
“We need to step up our support for defense reforms and military modernization of Russia’s neighbors, and not just of Ukraine, but also Moldova, Georgia, Armenia, Azerbaijan,” Vershbow said, according to the Civil Georgia site.
The Kremlin said Kiev’s military move against the insurgents “destroyed” the two-week-old Geneva agreement on cooling Ukraine’s crisis. President Barack Obama said it was obvious to everyone now that the pro-Russia militants were not peaceful protesters and the U.N. Security Council held an emergency session in Ukraine at Russia’s request.
Fighting broke out around dawn near Slovyansk, a city 160 kilometers (100 miles) from the Russian border that has become the focus of the armed insurgency. Two helicopter crew members were killed in the crashes, both sides said, and the insurgents reported one member killed.
Acting President Oleksandr Turchynov later said two Ukrainian soldiers were killed and seven wounded in Friday’s clashes and the insurgents suffered significant losses, including many killed or injured. It was not clear if the two referred to the helicopter crew.
“Our security forces are fighting mercenaries of foreign states, terrorists and criminals,” he said in a statement
By early evening, Turchynov said the army controlled all of the checkpoints around Slovyansk, a city of 125,000 people.
In this image taken from Rossia 24 television channel TV, an injured Ukrainian military helicopter p …
One of the helicopters was hit by a surface-to-air missile, the Ukrainian Security Service said, calling it a sophisticated weapon that undercut Russia’s claims the city was simply under the control of armed locals. The agency said its forces were fighting “highly skilled foreign military men” in Slovyansk.
The Russian state television channel Rossia 24 showed one man they said was a wounded helicopter pilot reportedly being helped by pro-Russia forces.
Central Slovyansk still remained in the hands of pro-Russia gunmen, according to AP journalists in the city. Several foreign news crews trying to cover the fighting were detained for several hours Friday before being released.
A clash also broke out late Friday between pro-Russians and government supporters in Odessa, a Black Sea coast port some 550 kilometers (330 miles) from the turmoil in the east. Police said one person died from gunshot fire and other was wounded. Until now, Odessa had remained largely untroubled since the February toppling of pro-Russia President Viktor Yanukovych, which ignited tensions in the east.
Turchynov admitted earlier this week that the central government had lost control of the east, and said some government troops and police there were “either helping or cooperating with terrorist organizations.” He said Ukrainian forces were working to prevent the unrest from spreading to central areas like Odessa.
In this image taken from Rossia 24 television channel, an injured Ukrainian military helicopter pilot …
In Moscow, Russian President Vladimir Putin’s spokesman said the Ukrainian offensive “effectively destroyed the last hope for the implementation of the Geneva agreements” that aimed to defuse the crisis. But Dmitry Peskov said Russia “continues to undertake consistent efforts on de-escalation.”
Putin had warned Ukraine not to move against the insurgents and said it should withdraw its military from the volatile eastern and southern regions.
Putin wants troops out of Ukraine’s east, acting president renews military draft
Pro-Russian activists clash with police in front of the regional administration building in Donetsk, Ukraine, Thursday, May 1, 2014. Anti-government demonstrators in Donetsk have stormed the local prosecutor’s office. The clash came after a march by several hundred people carrying flags of the Donetsk People’s Republic, a movement that seeks either greater autonomy from the central government, or independence and possible annexation by Russia. (AP Photo/Evgeniy Maloletka)
Associated Press May 1, 2014 SHARE
By PETER LEONARD, Associated Press
DONETSK, Ukraine (AP) — Russian President Vladimir Putin said Thursday that Ukraine should withdraw its military from the eastern and southern regions of the country, a statement that could bolster anti-government insurgents who are seizing buildings.
Hours later, Ukraine’s acting president ordered that the military draft be renewed, citing “threats of encroachment on the nation’s territorial integrity” and interference by Russia in its internal affairs.
Moscow has consistently denounced Ukrainian security forces’ largely ineffectual operation against the eastern insurgents and warned they should not commit violence against civilians.
In a telephone conversation with German Chancellor Angela Merkel, Putin said the removal of military units was the “main thing,” but it was unclear if that could be construed as an outright demand.
Oleksandr Turchynov’s conscription order marked a turnaround for the country, which last year announced plans to end military conscription in favor of an all-volunteer force. His order did not specify where conscript-bolstered forces could be deployed. The renewal of military conscription affects only men 18 to 25 years old.
Earlier in the week, the acting president said police and security forces had been effectively “helpless” against insurgents in the Donetsk and Luhansk regions, the heart of the unrest, and that efforts should be focused on preventing the instability from spreading to other parts of the country.
DONETSK, Ukraine — Having lived through a month of pro-Russian separatists storming and seizing government buildings to raise the Russian flag, Donetsk residents will be asked May 11 to answer a single question in a hastily organized referendum.
That question, according to a government official who said he was present at a meeting Tuesday where the wording was agreed on: “Do you support the creation of the Donetsk People’s Republic?”
What would a “yes” vote actually mean? Officials admit they aren’t sure. In fact, one noted that more than a desire to join Russia, or be a separate nation, the vote is an attempt to persuade the central government in Kiev to listen to this populous, industrial region. Regional council member Nikolai Zagoruiko said that if the central government would agree to two long-standing demands, the vote might never have to happen.
“If they would agree to make Russian a second official language of Ukraine _ so that everyone can understand the state documents they must read and sign _ and agree to give Donetsk more local control over the taxes we collect to send to Kiev, so that we can make this a better place to live, we would probably be satisfied,” he said. “In fact, if they did those two things, I’m sure the referendum could be postponed, and eventually forgotten about.”
Analysts and experts on the region have repeatedly said that they think the idea of a referendum is more about having a bargaining chip with the Ukrainian government than a real desire to join Russia. The local legend is that regional business and political leaders helped create the separatist movement hoping it would lead to more local budget control.
“But after creating the monster, they lost control of the monster,” Volodymr Kipen, the head of the Donetsk Institute for Social Research and Policy Analysis, told McClatchy this week.
The notion of the region’s union with Russia _ a primary goal of pro-separatists _ won’t be mentioned on the yet-to-be printed ballots. The possibility of remaining a part of Ukraine after the vote _ a primary concern of pro-Ukrainians, who risk beatings during efforts to make their point _ also won’t be mentioned on the ballot.
Ukraine to restore conscription after admitting it has lost eastern front
Acting president announces move in response to occupation of power centres by pro-Russian gunmen Roland Oliphant in Donetsk
6:57PM BST 01 May 2014
Police officers huddle for safety under their riot shields after pro-Russian activists overran the prosecutor’s office in Donetsk (GETTY IMAGES)
Oleksandr Turchynov, the acting president, reintroduced compulsory military service in a decree signed on Thursday, a day after he admitted that security forces have effectively lost control of two eastern regions to a pro-Russian rebellion.
The decree cited “the rising force of armed pro-Russian units and the taking of public administration buildings… which threaten territorial integrity”.
Former President Viktor Yanukovych abolished conscription in 2013, as part of a reform aimed at switching to a professional military.
The announcement came after pro-Russian demonstrators in Donetsk seized control of the city’s prosecutor’s office, in the latest of nearly daily occupations of government buildings in the country’s east.
Rioters fought battles with police after a traditional May Day march in the city turned violent.
The interim government in Kiev has accused Russia of using its intelligence services to ferment the armed uprising that has taken effective control of parts of the Luhansk and Donetsk regions.
Earlier on Thursday Ukrainian authorities detained a Russian diplomat and ordered him to leave the country on suspicion of espionage.
After storming the office, Pro-Russian activists burn uniforms outside the prosecutor’s office in the separatist-held city of Donetsk, Ukraine, May 1, 2014.
April 30, 2014 6:22 AM
Ukraine’s acting president says that the Kyiv government has effectively lost control over the situation in the country’s eastern Luhansk and Donetsk regions where a number of government buildings have been taken over by pro-Russia separatists.
Oleksandr Turchynov says that Russia is now eyeing six more regions in the country’s east and south. A takeover by Russia of two such regions, if it were to take full control of Donetsk, would secure Russia’s land connection with Crimea, which it annexed last month.
The takeover of two more regions along the Black Sea coast would connect Russian mainland with Moldova’s Russian-speaking Transdniestria enclave.
Speaking Wednesday at a meeting of regional leaders in Kyiv, Turchynov operatives have received instructions from Moscow to destabilize, via “acts of sabotage,” the regions of Kharkiv, Dnipropetrovsk, Kherson, Zaporizhzha, Mykolayiv and Odesa.
Kyiv says that many such operatives have received training and are being financed by Russia, a charge Moscow denies.
On full alert
Bracing for a possible invasion by Russian troops massed on the border, Turchynov says Ukraine’s military has been put “on full combat alert.”
Speaking at a ministerial meeting in Kyiv on Wednesday, he said there was a real threat of Russia starting a war against Ukraine’s mainland.
A Ukrainian soldier stands guard in front of armored personnel carriers at a check point near the village of Malynivka, southeast of Slovyansk, in eastern Ukraine, April 29, 2014
Moscow, meanwhile, has voiced concern over Turchynov’s statement, criticizing it as “militaristic.”
“We insist that Kyiv immediately cease its militaristic rhetoric aimed at intimidating its own population,” said a Foreign Ministry statement calling on Ukrainian authorities to start a dialogue toward national reconciliation instead.
The criticism comes as pro-Russian gunmen seized yet another administrative building in eastern Ukraine. Armed insurgents took control of the local council building in Horlivka early Wednesday, a town of more than 260,000 people. Police say the pro-Russian rebels have also overtaken the town’s regional police department.
Hundreds of pro-Russian separatists overran more Ukrainian government buildings near the Russian border earlier this week, taking control of several in the Donetsk and Luhansk regions.
The pro-Moscow rebels in Donetsk have set a referendum on secession for May 11. A similar vote last month led to Russia’s annexation of Ukraine’s Crimean peninsula.
Ukrainian Prime Minister Arseniy Yatsenyuk threatened his government on Wednesday with a reshuffle if it failed to meet the demands of the people, venting frustration with Kyiv’s failure to restore law and order in the country’s east.
Some critics say the central government has become all but paralyzed by infighting.
“The country demands action and results. If there is such action and results that means the government is doing its job,” Yatsenyuk told a government meeting.
“If in the near future such action and results fail to materialize, that means there will be personnel changes,” said Yatsenyuk.
He said ministers would also pass to parliament a law on conducting a nationwide poll on Ukrainian unity and territorial integrity, “those issues which concern Ukraine today,” on May 25 when Ukraine is due to hold a presidential election.
U.S. Strikes at Putin’s Inner Circle With Sanctions as Fight Over Ukraine Intensifies
By Roger Runningen and Jonathan AllenApr 28, 2014 12:35 PM CT
The Obama administration today imposed sanctions on seven Russian officials and 17 companies linked to President Vladimir Putin’s inner circle over the crisis in Ukraine.
The list includes Igor Sechin, OAO Rosneft (ROSN) chief executive officer, and Sergei Chemezov, director of State Corporation for Promoting Development, Manufacturing and Export of Russian Technologies High-Tech Industrial Products, also known as Rostec, and banks such as InvestCapitalBank and SMP Bank.
The travel bans and asset freezes announced by the White House were levied in coordination with the European Union, which said today it’s adding 15 more names to the list of 55 individuals previously sanctioned. The identities of those targeted by the EU weren’t immediately disclosed.
The U.S. and EU say Russia hasn’t lived up to an accord signed April 17 in Geneva intended to defuse the confrontation between the Ukrainian government and pro-Russian separatists. The U.S. warned it’s prepared to levy additional penalties to hit the broader Russian economy if Putin escalates by sending troops into Ukraine.
“The goal here is not to go after Mr. Putin, personally,” President Barack Obama said earlier today at a news conference in the Philippines. “The goal is to change his calculus with respect to how the current actions that he’s engaging in in Ukraine could have an adverse impact on the Russian economy over the long haul.”
The U.S. also expanded export restrictions on defense technologies and services and revoked previously approved export licenses.
The new sanctions list includes Oleg Belavantsev, Putin’s presidential envoy to Crimea; Dmitry Kozak, deputy prime minister of the Russian Federation, and Evgeniy Murov, director of Russia’s Federal Protective Service and an army general.
Most of the companies on today’s list are tied to Gennady Timchenko or brothers Arkady and Boris Rotenberg, who were placed on a sanctions list on March 20. They include the Volga Group, which is controlled by Timchenko, and InvestCapitalBank and SMP Bank, which are controlled by the Rotenbergs.
One of the most prominent individuals on the list is Sechin, 53, who was Putin’s colleague at the St. Petersburg mayor’s office before rising to become the head of state-run Rosneft. Over the past decade he has built it into the world’s largest publicly traded oil company by output and reserves.
Rosneft, in which British oil company BP Plc holds a 20 percent stake, isn’t being sanctioned. The Russian company also has exploration projects with other international oil producers, including a venture with Exxon Mobil Corp. (XOM) to drill a multibillion-barrel prospect in Russia’s Arctic Ocean.
U.S. Sanctions Target Putin Allies’ Companies, Rosneft’s Sechin
By Elena Mazneva and Torrey ClarkApr 28, 2014 1:45 PM CT
Photographer: Meridith Kohut/Bloomberg
The Obama administration imposed sanctions on OAO Rosneft Chief Executive Officer Igor… Read More
The U.S. imposed sanctions on seven Russian executives and officials and 17 companies controlled by four of President Vladimir Putin’s allies as the crisis in Ukraine escalates.
The following is a list of those targeted.
Sechin, 53, has worked with Putin for more than two decades, starting the St. Petersburg mayor’s office in the 1990s. He was appointed chief executive of OAO Rosneft (ROSN) in 2012, having served as board chairman since 2004. Sechin oversaw the company’s growth over the past 10 years into the world’s biggest publicly traded oil producer by output, largely through acquiring Yukos Oil Co.’s assets and TNK-BP.
Chemezov, 61, heads Rostec, the state corporation that owns arms exporter Rosoboronexport and holds stakes in more than 660 other civilian and military-industrial manufacturers. He is chairman at titanium producer OAO VSMPO-Avisma and OAO Uralkali, the world’s largest potash producer, and is on the boards of automaker OAO AvtoVAZ, controlled by Renault SA-Nissan, and OAO Kamaz, part-owned by Daimler AG.
Chemezov has known Putin since the 1980s, when the Russian leader served as a KGB officer in Dresden, then East Germany.
Kozak, 55, a deputy prime minister, was in charge of Russia’s preparations for the Sochi Winter Olympics and is now overseeing the development of Crimea, the Black Sea peninsula that Russia annexed from Ukraine.
Volodin, 50, has served as the first deputy chief of the presidential staff under both Putin and now Prime Minister Dmitry Medvedev, replacing Kremlin ideologue Vladislav Surkov in 2011.
Pushkov, 59, heads the foreign affairs committees of Russia’s lower house of parliament and supported the annexation of Crimea.
Russian Billions Scattered Abroad Show Trail to Putin Circle
By Henry Meyer and Irina ReznikApr 28, 2014 8:23 AM CT
Outside a Moscow stadium one night in 2006, deputy central bank chief Andrei Kozlov was walking to his car after playing soccer when two men opened fire, pumping bullets into his head and neck and killing his driver.
Days before the murders, the man leading Russia’s fight against money laundering had shut down a scheme used to funnel $1.6 billion of dirty funds abroad, including at least $112 million via Vienna-based Raiffeisen Zentralbank Oesterreich AG, according to Russian and Austrian investigators.
It was a trickle in a flood of illegal outflows that would reach $52 billion in 2012 alone, according to former central bank Chairman Sergey Ignatiev. Such flows are now in the cross hairs of President Barack Obama’s efforts to penalize Vladimir Putin for annexing Crimea and to halt his incursions into Ukraine. Obama signed a law on aid to Ukraine this month that includes a clause that allows the U.S. to go after assets of Russian officials and their allies who are deemed complicit in “significant corruption.”
“This is a declaration of war by the Obama administration on the current governing Russian elite,” Ariel Cohen, senior fellow at the Heritage Foundation, a Washington-based research group, said by phone from New York. “There will be a lot of people potentially targeted.”
One possible weapon in this new battle is Dmitry Firtash, 48, the billionaire Ukrainian and major Raiffeisen client who was arrested in Vienna last month on U.S. bribery charges, according to Mark Galeotti, a Russian organized crime expert at New York University who advises regulators on money laundering.
A longtime ally of Viktor Yanukovych, the ousted Ukrainian president who fled to Russia in February, Firtash made his fortune as a middleman in OAO Gazprom’s secretive gas trade with Ukraine, conduit for 15 percent of Europe’s supply and the most corrupt country on the continent, according to Transparency International. He’d be an invaluable asset to the U.S. if he agrees to cooperate because he knows how Russian officials have shifted billions of dollars into banks abroad, Galeotti said.
“Firtash knows the way the game is played, the way the money is moved,” Galeotti said in an interview in Moscow.
Ignatiev told lawmakers last June that money laundering in Russia, ranked the most corrupt major economy by Transparency International, was so pervasive that fighting it consumed more of his time than formulating monetary policy. In his last address to parliament before stepping down after a decade in the post, he highlighted one network in which 1,173 shell companies channeled $24 billion to foreign banks.
About half of all illegal capital flight, including bribes to bureaucrats and revenue from criminal syndicates, “appears to be controlled by one well-organized group of people,” Ignatiev told the Vedomosti newspaper in a rare interview in February 2013, without elaborating. Ignatiev, 66, is now an adviser to his successor, Elvira Nabiullina.
The wording of the new U.S. law is so broad it could apply to “almost anyone” close to Putin, 61, said Masha Lipman, an analyst at the Carnegie Moscow Center who’s co-written academic articles on Putin with former U.S. Ambassador Michael McFaul.
The U.S. today imposed sanctions on 17 Russian companies and seven individuals, including Igor Sechin, CEO of OAO Rosneft, the country’s largest oil producer. That adds to the more than two dozen officials and billionaires penalized last month for being what the Treasury Department called part of Putin’s inner circle.
An agreement to disarm pro-Russian rebels and anti-Russian groups in Ukraine that both countries signed with the U.S. and the European Union is on the brink of collapse. Secretary of State John Kerry said Russia was trying to impose its will on Ukraine by the “barrel of a gun and the force of a mob.”
Russia is already on the verge of recession, so the U.S. can inflict major damage with industry-wide sanctions, according to John Herbst, a former U.S. ambassador to Ukraine.
“Even without European support, U.S. sanctions against the Russian financial sector would deal a body blow to the nation’s economy,” Herbst said by e-mail.
U.S. Said to Sanction Seven Russians, 17 Companies
By Daria Marchak, Margaret Talev and Jonathan AllenApr 28, 2014 7:51 AM CT
The Obama administration will sanction seven Russians and 17 companies, including some involved in the financial, energy and infrastructure sectors, according to a congressional official briefed on the actions.
President Barack Obama said today in Manila that the U.S. is “moving forward with an expanded list of individuals and companies that will be affected by sanctions. They will remain targeted. It will also focus on some areas of high-tech defense exports to Russia.”
European Union representatives have discussed similar penalties, a European Commission spokeswoman said. The announcements of expanded measures came as Gennady Kernes, the mayor of Ukraine’s second-largest city Kharkiv, was shot in the back and rushed to hospital for surgery. It also followed the seizure of international military inspectors by pro-Russian separatists last week.
In the worst confrontation with the U.S. and its European allies since the Cold War, Russia has started military exercises on Ukraine’s border where the North Atlantic Treaty Organization says Putin is massing about 40,000 troops in a potential preparation for invasion. That conflicts with an April 17 agreement signed in Geneva aimed at solving the standoff, according to U.S. and EU officials.
“Later today, there will be an announcement made, and I can tell you that it builds on the sanctions that are already in place,” Obama told a news conference in the Philippine capital Manila today. “We are going to be moving forward with an expanded list of individuals and companies that will be affected by sanctions. They will remain targeted. It will also focus on some areas of high-tech defense exports to Russia.”
Representatives of the 28 EU states met to discuss extending a “stage two” black list, spokeswoman Pia Ahrenkilde Hansen said in Brussels today. German Deputy Foreign Minister Gernot Erler said in an interview on ZDF television yesterday he had “the impression” that the EU would extend visa bans and asset freezes to “maybe another 15 people.”
“We’ve already taken action, we’ve already introduced travel bans and asset freezes on certain individuals,” U.K. Chancellor of the Exchequer George Osborne said in Paris after meeting his German, French, Italian and Spanish counterparts. “European countries are discussing further such action today following the statement from the G-7.”
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