Obama announces sanctions on Russian officials

By NEDRA PICKLER1 hour ago

WASHINGTON (AP) — President Barack Obama on Monday froze the U.S. assets of seven Russian officials, including top advisers to President Vladimir Putin, for their support of Crimea's vote to secede from Ukraine. The sanctions are the most comprehensive since the end of the Cold War.

Obama said he was moving to "increase the cost" to Russia, and he warned that more people could face financial punishment.

"If Russia continues to interfere in Ukraine, we stand ready to impose further sanctions," Obama said. He added in a brief statement from the White House that he still believes there could be a diplomatic resolution to the crisis and that the sanctions can be calibrated based on whether Russia escalates or pulls back in its involvement.

The Treasury Department also is imposing sanctions on four Ukrainians — including former President Viktor Yanukovych and others who have supported Crimea's separation — under existing authority under a previous Obama order. Senior administration officials also said they are developing evidence against individuals in the arms industry and those they described as "Russian government cronies" to target their assets.

The administration officials said Putin wasn't sanctioned despite his support of the Crimean referendum because the U.S. doesn't usually begin with heads of state. But the officials, speaking to reporters on a conference call on the condition they not be quoted by name, say those sanctioned are very close to Putin and that the sanctions are "designed to hit close to home."

The U.S. announcement came shortly after the European Union announced travel bans and asset freezes on 21 people they have linked to the unrest in Crimea. Obama administration officials say there is some overlap between the U.S. and European list, which wasn't immediately made public.

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Pro-Russian people celebrate in the central square in Sevastopol, Ukraine, late Sunday, March 16, 20 …

The sanctions were expected after residents in Crimea voted overwhelmingly Sunday in favor of the split. Crimea's parliament on Monday declared the region an independent state. The administration officials say there is some concrete evidence that some ballots for the referendum arrived pre-marked in many cities and "there are massive anomalies in the vote." The officials did not say what that evidence was.

The United States, European Union and others say the action violates the Ukrainian constitution and international law and took place in the strategic peninsula under duress of Russian military intervention. Putin maintained that the vote was legal and consistent with the right of self-determination, according to the Kremlin.

The administration officials said they will be looking at additional sanctions if Russia moves to annex Crimea or takes other action. Those targeted will have all U.S. assets frozen and no one in the United States can do business with them under Obama's order.

"Today's actions send a strong message to the Russian government that there are consequences for their actions that violate the sovereignty and territorial integrity of Ukraine, including their actions supporting the illegal referendum for Crimean separation," the White House said in a statement.

"Today's actions also serve as notice to Russia that unless it abides by its international obligations and returns its military forces to their original bases and respects Ukraine's sovereignty and territorial integrity, the United States is prepared to take additional steps to impose further political and economic costs," the statement said.

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President Barack Obama pauses while speaking about Ukraine, Monday, March 17, 2014, in the James Bra …

Administration officials say those Obama targeted also are key political players in Russia also responsible for the country's tightening of human rights and civil liberties in the country. Obama's order targets were:

— Vladislav Surkov, a Putin aide

— Sergey Glazyev, a Putin adviser

— Leonid Slutsky, a state Duma deputy

— Andrei Klishas, member of the Council of Federation of the Federal Assembly of the Russian Federation

Raw: Crimea Votes on Whether to SecedePlay video

— Valentina Matviyenko, head of the Federation Council

— Dmitry Rogozin, deputy prime minister of the Russian Federation.

— Yelena Mizulina, a state Duma deputy

The four newly targeted by the Treasury Department are:

— Yanukovych, who fled Ukraine for Russia and has supported the dispatch of Russian troops into Ukraine

Raw: Pro-Russia Demonstrators Clash With PolicePlay video

— Viktor Medvedchuk, the leader of Crimea separatist group Ukrainian Choice and a close friend of Putin

— Sergey Aksyonov, prime minister of Crimea's regional government

— Vladimir Konstantinov, speaker of the Crimean parliament

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TEHRAN, Iran (AP) — A senior Iranian official said Monday that an alleged attempt to sabotage one of Tehran's nuclear facilities involved foreign intelligence agencies who tampered with imported pumps.

Asghar Zarean, in charge of nuclear security for Iran's Atomic Energy Organization, was commenting on claims regarding the heavy water nuclear reactor at Arak in the center of the country. Iran first made the charges Saturday.

Tehran has accused the Israel, the U.S. and their allies of undermining Iran's nuclear program through covert operations. It says its adversaries regularly engineer sales of faulty equipment and attacks by computer viruses.

Zarean said in comments posted on state TV's website that the contractor who sold the pumps did not know they were faulty. He did not identify the contractor.

"Foreigners were behind it and contractors had no specific role. The (intelligence agencies) exploited the contractors' lack of knowledge," he said.

The Arak reactor can produce plutonium, a potential route to building a nuclear warhead. The West suspects Iran of trying to develop a capability to make nuclear weapons. Iran denies the claim and says its nuclear program is for peaceful purposes.

Zarean said the incident at Arak reactor site was neither the first nor the last act of sabotage to undermine Iran's nuclear program.

"This is the policy of foreign intelligence agencies: to slow down our peaceful nuclear activities. Disrupting (our activities) is one of their methods. They will continue to target not only the nuclear industry but the country's entire infrastructure," he said.

In the past, computer viruses have attacked Iranian nuclear facilities. In 2010, the so-called Stuxnet virus temporarily disrupted operation of thousands of centrifuges, key components in nuclear fuel production, at Iran's Natanz uranium enrichment facility.

Israel has never commented on the allegations but is widely believed to have been involved in the Stuxnet attack.

Some Iranian officials have also suggested in the past that specific European companies may have sold faulty equipment to Iran with the knowledge of American intelligence agencies and their own governments, since the equipment would have harmed, rather than helped, the country's nuclear program.

Since then, Iran has also said that it discovered tiny timed explosives planted on centrifuges but disabled them before they could go off. Authorities now claim the Islamic Republic is immune to cyberattacks.

A vital part of the Arak nuclear power plant was tampered with, contends Iran's nuclear security chief.
How he says it happened

Now that Crimea has “voted,” the Obama administration has unveiled sanctions against Russian and Crimean leaders who are linked to what the West is calling Russia’s invasion and subversion in Crimea. But with a fragile ceasefire set to expire by Friday, the sanctions are unlikely to work in time to head off a conflict.

There are signs that the short-term measures, which includeasset freezes and visa bans for Russian government officials and business leaders, will not be biting enough to really put pressure on Putin and his friends.

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According to one independent analysis being studied by the Kremlin and reviewed by The Daily Beast, such measures could be a drag on the Russian economy over time and an embarrassment for the Russian government, but would only be an “inconvenience” for the Russian economy in the near term. More drastic measures would include going after Russia’s ability to interact in global financial markets, which the analysis calls “disruptive,” and restrictions on Russian energy exports or trade sanctions, which the analysis says would be “catastrophic.”

The analysis by Macro-Advisory, an investment firm operating in Russia, predicts that the West, especially European countries, will not move to impose “disruptive” or “catastrophic” sanctions on Russia until Putin crosses another red line, such as the outright invasion of Ukraine.

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“The key risk [for Russia] is Stage 3, i.e. a ban or restrictions on Russia’s interaction in global financial markets and/or any selected restrictions on trade or investment with Russia,” the report stated. “Investors assume that Stage 4 [catastrophic] sanctions are not yet on the agenda simply because these would also have a negative contagion to several EU countries, and many high-profile companies, as well as indirectly on the global economy.”

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President Barack Obama pauses while speaking about Ukraine, Monday, March 17, 2014, in the James Bra …

Meanwhile, the crisis in Crimea continued to unfold Sunday, when a reported 95.5 percent of voters opted in a near-choiceless referendum to leave Ukraine and join Russia. President Obama called Vladimir Putin shortly after the results were announced to reiterate that vote would never be recognized by the United States and the international community. It was a violation of the Ukrainian constitution, Obama added, made under duress of military intervention.

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“He emphasized that Russia’s actions were in violation of Ukraine’s sovereignty and territorial integrity and that, in coordination with our European partners, we are prepared to impose additional costs on Russia for its actions,” a White House read-out of the call said.

The Obama administration's plan to impose those additional costs was set last week. Secretary of State John Kerry revealed, perhaps accidentally, that the U.S. had no intention of waiting for the results of the Crimean referendum and was planning a “very series of serious steps on Monday” against Russia.

READ MORE 97% of Crimea Votes to Join Russia

Also on Sunday, the Ukrainian government announced that it had struck a truce with the Crimean government and the Russian foreign ministry (which still doesn’t acknowledge that Russian troops have taken over Crimea) that will avoid attacks on Ukrainian bases inside Crimea until March 21. A leaked document reported to spell out the Russian position on Ukraine sets terms the West is not likely to accept as an offer to stave off war.

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Pro-Russian people celebrate in the central square in Sevastopol, Ukraine, late Sunday, March 16, 20 …

A senior State Department official said this weekend that the administration is not predicting that the coming sanctions will be enough to change Putin’s calculus on Crimea and reverse course there.

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“I would simply say that there have already been significant costs. Just take a look at what’s happening to the Russian stock market. Look at what’s happening to the Russian ruble,” the official said. “So as both – as the United States, Canada, the European Union, others exact further costs, we’ll just have to see what cost-benefit analysis President Putin makes.”

The administration is also bracing for Russian retaliation to the limited sanctions being rolled out Monday. Michael McFaul, who served until last month as U.S. ambassador to Russia, said he expected the Obama administration to announce sanctions against Russian officials in the coming days and that the Kremlin would respond--as they have done in the past--with a sanctions and travel ban list of their own. "They will have their own list and their own people they will sanction in terms of travel and assets in Russia," the former ambassador said "I fear someone like me could be on that list."

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McFaul as ambassador was demonized by Russian controlled media and harassed by the country's intelligence service. His private schedule as ambassador in the past would be shared with Russian media, who would ambush him at public events. In more ominous moves, anonymous videos appeared on the internet accusing McFaul of being a child molester. Because of his work on civil society, Russian hardliners have portrayed him as an agent of influence seeking regime change in Moscow.

Last year, in response to the U.S. creation of the Magnistky list, a list of Russian human rights violators subject to sanctions, Russia created its own list of Americans banned from traveling to Russia. The list included Bush administration officials including John Yoo, a former US Justice Department official, David Addington, the chief of staff for former vice-president Dick Cheney, and two former commanders of Guantanamo Bay.

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Toby Gati, the White House senior director for Russia during the Bush administration, said that broad attacks on the Russian economy are not practical but well crafted, targeted sanctions against Russian elites can have the effecting of placing pressure on Putin if implemented smartly.

“Remember this, unless we are coordinated with the Europeans, the Russians are going to get missed signals,” she said. “The question is how do we want to hurt them. You want to isolate them, you want to make it more difficult for the people who have been getting a free ride on the Western economic system.”

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As a fragile cease-fire agreement is set to expire Friday, experts analyze whether sanctions will deter Russia.
'Disruptive'

KIEV, Ukraine (AP) — Ignoring the toughest sanctions against Moscow since the end of the Cold War, Russian President Vladimir Putin recognized Ukraine's Crimean Peninsula as an "independent and sovereign country" on Monday, a bold challenge to Washington that escalates one of Europe's worst security crises in years.

The brief decree posted on the Kremlin's website came just hours after the United States and the European Union announced asset freezes and other sanctions against Russian and Ukrainian officials involved in the Crimean crisis. President Barack Obama warned that more would come if Russia didn't stop interfering in Ukraine, and Putin's move clearly forces his hand.

The West has struggled to find leverage to force Moscow to back off in the Ukraine turmoil, of which Crimea is only a part, and analysts saw Monday's sanctions as mostly ineffectual.

Moscow showed no signs of flinching in the dispute that has roiled Ukraine since Russian troops took effective control of the strategic Black Sea peninsula last month and supported the Sunday referendum that overwhelmingly called for annexation by Russia. Recognizing Crimea as independent would be an interim step in absorbing the region.

Crimea had been part of Russia since the 18th century, until Soviet leader Nikita Khrushchev transferred it to Ukraine in 1954 and both Russians and Crimea's majority ethnic Russian population see annexation as correcting a historic insult.

Ukraine's turmoil — which began in November with a wave of protests against President Viktor Yanukovych and accelerated after he fled to Russia in late February — has become Europe's most severe security crisis in years.

Obama: Sanctions Show Costs to Russia on CrimeaPlay video

Russia, like Yanukovych himself, characterizes his ouster as a coup, and alleges the new authorities are fascist-minded and likely to crack down on Ukraine's ethnic Russian population. Pro-Russia demonstrations have broken out in several cities in eastern Ukraine near the Russian border, where the Kremlin has been massing troops.

Fearing that Russia is prepared to risk violence to make a land-grab, the West has consistently spoken out against Russia's actions but has run into a wall of resistance from Moscow.

Reacting to Monday's sanctions, Russian Deputy Foreign Minister Sergei Ryabkov declared that they were "a reflection of a pathological unwillingness to acknowledge reality and a desire to impose on everyone one-sided and unbalanced approaches that absolutely ignore reality."

"I think the decree of the president of the United States was written by some joker," Russian Deputy Prime Minister Dmitry Rogozin, one of the individuals hit by the sanctions, said on his Twitter account.

The White House imposed asset freezes on seven Russian officials, including Putin's close ally Valentina Matvienko, who is speaker of the upper house of parliament, and Vladislav Surkov, one of Putin's top ideological aides. The Treasury Department also targeted Yanukovych, Crimean leader Sergei Aksyonov and two other top figures.

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A local teenager waves with Russian flag in a street in Simferopol, Ukraine, on Monday, March 17, 20 …

The EU's foreign ministers slapped travel bans and asset freezes against 21 officials from Russia and Ukraine.

"We need to show solidarity with Ukraine, and therefore Russia leaves us no choice," Polish Foreign Minister Radoslaw Sikorski told reporters in Brussels.

Despite Obama's vow of tougher measures, stock markets in Russia and Europe rose sharply, reflecting relief that trade and business ties were spared.

"I guess the market view is that Russia forced their case in Crimea, pushed through the referendum, and the Western reaction was muted, so that this opens the way for future Russian intervention in Ukraine," said Tim Ash, an analyst who follows Ukraine at Standard Bank PLC.

In the Crimean capital of Simferopol, ethnic Russians applauded Sunday's referendum that overwhelmingly called for secession and for joining Russia. Masked men in body armor blocked access for most journalists to the parliament session that declared independence, but the city otherwise appeared to go about its business normally.

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A Ukrainian soldier stands atop an armored vehicle at a military camp near the village of Michurino, …

"We came back home to Mother Russia. We came back home, Russia is our home," said Nikolay Drozdenko, a resident of Sevastopol, the key Crimean port where Russia leases a naval base from Ukraine.

A delegation of Crimean officials was to fly to Moscow on Monday and Putin was to address both houses of parliament Tuesday on the Crimean situation, both indications that Russia could move quickly to annex.

In Kiev, acting President Oleksandr Turchynov vowed that Ukraine will not give up Crimea.

"We are ready for negotiations, but we will never resign ourselves to the annexation of our land," a somber Turchynov said in a televised address to the nation. "We will do everything in order to avoid war and the loss of human lives. We will be doing everything to solve the conflict through diplomatic means. But the military threat to our state is real."

The Crimean parliament declared that all Ukrainian state property on the peninsula will be nationalized and become the property of the Crimean Republic. It gave no further details. Lawmakers also asked the United Nations and other nations to recognize it and began work on setting up a central bank with $30 million in support from Russia.

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Crimea's Russia-backed leader Sergei Aksyonov gestures as people celebrate in Lenin Square, in d …

Moscow, meanwhile, called on Ukraine to become a federal state as a way of resolving the polarization between Ukraine's western regions — which favor closer ties with the 28-nation EU — and its eastern areas, which have long ties to Russia.

In a statement Monday, Russia's Foreign Ministry urged Ukraine's parliament to call a constitutional assembly that could draft a new constitution to make the country federal, handing more power to its regions. It also said the country should adopt a "neutral political and military status," a demand reflecting Moscow's concern that Ukraine might join NATO and establish closer political and economic ties with the EU.

Russia is also pushing for Russian to become one of Ukraine's state languages, in addition to Ukrainian.

In Kiev, Ukraine's new government dismissed Russia's proposal as unacceptable, saying it "looks like an ultimatum."

Ukrainian Foreign Minister Andriy Deshchytsya visited NATO headquarters in Brussels to request technical equipment to deal with the secession of Crimea and the Russian incursion there.

NATO said in a statement that the alliance was determined to boost its cooperation with Ukraine, including "increased ties with Ukraine's political and military leadership."

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Associated Press writers Maria Danilova in Kiev, John-Thor Dahlburg in Simferopol, Lynn Berry in Moscow, Nedra Pickler in Washington, Pan Pylas in London and Mike Corder and Raf Casert in Brussels contributed to this report.

MOSCOW (AP) — Russia's President Vladimir Putin on Tuesday approved a draft bill for the annexation of Crimea, one of a flurry of steps to formally take over the Black Sea peninsula.

Crimea on Sunday voted overwhelmingly to secede from Ukraine and seek to join Russia. The West and Ukraine described the referendum which was announced two weeks ago as illegitimate.

The United States and the European Union on Monday announced asset freezes and other sanctions against Russian and Ukrainian officials involved in the Crimean crisis. President Barack Obama warned that more would come if Russia didn't stop interfering in Ukraine.

Former Soviet President Mikhail Gorbachev, however, hailed Crimea's vote to join Russia as a "happy event."

Russian troops have been occupying the region for more than two weeks.

The decree signed by Putin and posted on the official government website Tuesday morning is one of the steps which would formalize the annexation of Crimea. Russia, however, still has room to back off. The treaty to annex Crimea has to be signed by leaders of Russia and Crimea, approved by the Constitutional Court and then be ratified by the parliament.

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Self-Defense activists perform military exercises at a military training ground outside Kiev, Ukrain …

Putin is set to address both houses of the parliament at 3 p.m. Moscow time (1100 GMT) in a nationally televised speech where he is widely expected to stake Russia's claim on Crimea.

Gorbachev, in remarks carried Tuesday by online newspaper Slon.ru, said Crimea's vote offered residents the freedom of choice and justly reflected their will. The referendum showed that "people really wanted to return to Russia" and was a "happy event," he said.

Gorbachev added that the Crimean referendum set an example for people in Russian-speaking in eastern Ukraine, who also should decide their fate.

The State Duma, the lower chamber of parliament, on Tuesday unanimously passed a resolution condemning sanctions which targeted Russian officials including members of the chamber. The chamber urged President Barack Obama to extend the sanctions to all the 353 deputies who had voted for the resolution. Eighty-eight deputies left the house before the vote.

Crimea had been part of Russia since the 18th century until Soviet leader Nikita Khrushchev transferred it to Ukraine in 1954. Both Russians and Crimea's majority ethnic Russian population see annexation as correcting a historic insult.

Ukraine's turmoil, which began in November with a wave of protests against President Viktor Yanukovych and accelerated after he fled to Russia in late February, has become Europe's most severe security crisis in years.

Russia's president moves forward with a bid to formally take over the disputed Ukrainian region. West announces sanctions