Ukraine Considers Sanctions That Would Block the Flow of Gas from Russia
Prime Minister Arseniy Yatsenyuk of Ukraine announced today that the nation is considering a new round of sanctions against Russia, including transit sanctions, which would affect both air travel and gas supplies to Europe. Earlier this week, Russia sanctioned produce, pork, beef from a variety of nations and air travel from Ukraine, in retaliation for U.S. and E.U. sanctions against them.
This new round of Ukrainian sanctions also includes a list of 172 Russian citizens and 65 companies. They would be sanctioned specifically for "sponsoring terrorism, supporting the annexation of Crimea, and violating the territorial integrity of Ukraine." For the applicable parties, these sanctions would freeze assets, ban enterprises, ban privatized state property, and halt license issuing. The Prime Minister told RT, "We simply have no other choice."
The gas transit ban is of particular importance here. The Ukrainian government has been working to "put a stop" to their reliance on Russia for gas. Yatsenyuk stressed to reporters that Ukraine is now willing to take more extreme measures to become independent of Russia for their energy needs. Considering Ukraine imports over half of their natural gas from Russia, this move would require precise execution, and of course, a solid supply of cash to purchase gas elsewhere. Ukraine is planning to use funds from the IMF, which totalled $17 billion, and may go to the World Bank for additional moneys as needed.
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Surrounding nations would also be hit by a gas transit ban, as Hungary, Slovakia and Czech Republic rely on Ukrainian transit lines for natural gas. However, Gazprom does have additional lines which completely bypass Ukraine, so they could be used more heavily in the event of a ban.
These sanctions could be imposed very quickly if approved. On Tuesday, Ukraine's parliament will vote on the additional sanctions, after they first consult with Ukraine's Central Bank. This newest round of sanctions puts $7 billion on the line, as Russia is Ukraine's second largest trading partner. (The first is the E.U.)
This article was originally published at http://www.thewire.com/business/2014/08/ukraine-considers-gas-transit-sanctions-against-russia/375786/
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