The EU formally adopted broad economic sanctions against Russia on Thursday, hoping the move will force Moscow to reverse course on the Ukraine crisis.
The sanctions were published in the EU’s Official Journal late in the day, meaning that they were to take effect yesterday.
The measures, finally agreed upon earlier this week after months of hesitation, target Russia’s banking, defense and energy sectors in view of what the EU called “actions destabilizing the situation in eastern Ukraine,” a statement said.
A first step limits access by Russian state-owned banks to Europe’s financial markets, chief among them London, which is to increase their cost of doing business. Five banks were named: Sberbank, VTB, Gazprombank, VEB and Rosselkhozbank.
EU nationals and companies are no longer to be allowed to buy or sell new bonds, stocks or other debt instruments with a maturity of more than 90 days issued by such banks, the statement said.
Sales of arms and dual-use technology are banned, along with sensitive technologies in the oil sector, but Europe has balked at applying sanctions to Russia’s gas industry, which supplies about a third of the EU’s needs.
Analysts say the oil sector ban could cause problems for Russia, which relies on advanced Western drilling technology.
“The measures will apply to new contracts,” the statement said, meaning current deals and activities are not covered.
Ratings agency Moody’s said the sanctions would not cause an immediate liquidity crisis, as Russian companies and banks have sizeable cash and financial buffers.
However, it said the measures can be expected to worsen a “gradual downward trend in the country’s growth potential.”
“The sanctions add to factors already weighing on Russia’s economy and financial system that have been exacerbated by the conflict in Ukraine,” Moody’s said.
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