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EU Formally Adopts Russia Sanctions

Russia's largest banking house, Sberbank, is among those affected by the sanctions. (file photo)
Russia's largest banking house, Sberbank, is among those affected by the sanctions. (file photo)

The European Union formally adopted broad economic sanctions against Russia on July 31 in response to Moscow's actions in eastern Ukraine.

An EU statement said the new measures, agreed on July 29, target Russia's banking, defense and energy sectors in view of its "actions destabilizing the situation in eastern Ukraine."

The move limits access by Russian state-owned banks to Europe's financial markets, which will increase their cost of doing business and hinder their contribution to the economy.

Five banks were named, among them the largest in Russia -- Sberbank -- as well as VTB, Gazprombank, VEB, and Rosselkhozbank.

EU nationals and companies will no longer 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.

However, EU subsidiaries of the targeted banks are excluded from the ban, although prohibited from raising funds for their parent companies.

Sales of arms and dual-use technology -- that can be used for military or civilian purposes -- are banned, along with sensitive technologies in the oil sector but not gas, where Russia supplies about a third of the EU's needs.

The restriction on sales of defense equipment is limited to future orders, which allows France to go ahead with delivery of a naval helicopter carrier it has already sold to Russia.

EXPLAINER: New Western Sanctions Could Sting Russia

The EU sanctions will be subject to a three-month review to assess whether they are achieving their objective.

The sanctions announced on July 31 are only the latest in a series of measures the EU, the United States, and others have taken against Russia.

Previous sanctions have targeted Russian companies and individuals and also some officials in self-declared pro-Russian separatist governments in eastern Ukraine.

So far, Russia has retaliated to the Western sanctions with bans on imports of some food items, such as fruits and vegetables from Poland, Ukraine, and Moldova.

Moscow may restrict fruit imports from Greece -- which has the weakest economy in the eurozone. It may also suspend U.S. poultry imports.

With reporting by Reuters, AP, and ITAR-TASS
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