White House warns investors about new sanctions against Russia

Barack Obama's administration says it prepares additional sanctions against Russia.

The White House told representatives of investment companies about it, Bloomberg writes.

Officials from the Treasury Department and the National Security Council of the United States met last week in Washington with mutual-fund and hedge-fund managers. They said more sanctions would be imposed and that investors, if they were concerned about the impact, should manage that risk, RBC reports.

The meeting left managers grappling with the question of whether the government intended to follow through, or was trying to trigger asset sales through the threat of sanctions, a source says.

Former administration officials have said forcing Russia out of global financial markets is the strongest tool President Barack Obama has at his disposal in trying to defuse the ongoing crisis between Russia and Ukraine.

An official from Obama's administration warned that if the four-party talks in Geneva fail, the US is ready to take further steps, targeting people in Putin's inner circle and entities they oversee. Industry-specific sanctions are also an option, he added.

William Pomeranz, deputy director of the Kennan Institute that studies Russia and post-Soviet countries, said the US biggest weapon in terms of sanctions would be similar sanctions to what Washington did in Iran. The Unites States can try to exclude Russia from international financial markets. “The Russians fear that, and that is what the Russians want to avoid,” the expert said.

An official from the White House said there have been no specific requests made to investors not to invest in Russia. The Department of Commerce and the Treasury do have conversations with the business community to explain what they’re doing, such as briefing executives after a sanctions announcement. The official said the government maintains open lines of communication so businesses understand what policy makers are doing.

Representatives of Russia, Ukraine, the US and the EU adopted a joint document after a meeting in Geneva on April 17, 2014. The parties adopted a statement agreeing to take concrete steps to de-escalate the Ukrainian crisis. Russian foreign minister Sergei Lavrov says the disarmament of illegal armed groups, the release of seized buildings, streets and squares and amnesty of all protesters, except for those found guilty of capital crimes, are among the steps.

The main outcome of the four-party talks, according to Lavrov, was the agreement that the crisis in Ukraine “should be regulated by Ukrainians themselves”. The minister assured that Russia had no intentions to send troops to Ukraine.

“We have put in place additional consequences that we can impose on the Russians if we do not see actual improvement of the situation on the ground,” Obama said commenting on the meeting. He adds he has been in close consultation with European allies. “My hope is that we actually do see follow-through over the next several days,” he said.

Photo: AP