WASHINGTON (AP) — The United States and its European
allies are finalizing a package of sanctions on Russia’s key economic
sectors that could be levied as early as this week, though the penalties
might be delayed because of positive signals from Russian President
Vladimir Putin, administration officials and others close to the
decision-making said Tuesday.
Penalizing large swaths of the
Russian economy, including its lucrative energy industry, would ratchet
up the West’s punishments against Moscow over its threatening moves in
Ukraine. The U.S. and Europe have already sanctioned Russian individuals
and entities, including some with close ties to Putin, but have so far
stayed away from the broader penalties, in part because of concern from
European countries that have close economic ties with Russia.
But
with the crisis in Ukraine stretching on, a senior U.S. official said
the U.S. and Europe are moving forward on "common sanctions options"
that would affect several areas of the Russian economy. A Western
diplomat said those options included Russia’s energy industry, as well
as Moscow’s access to world financial markets.
The U.S. and Europe
have been eyeing a European Council meeting in Brussels later this week
as an opportunity to announce the coordinated sanctions. However, the
enthusiasm for new sanctions, particularly among European leaders,
appears to have waned in recent days as countries evaluate whether Putin
plans to follow through on a series of promises that could ease the
crisis, officials said.
The Russian leader acted Tuesday to
rescind a parliamentary resolution authorizing him to use the Russian
military in Ukraine. He also urged the new Ukrainian government to
extend a weeklong cease-fire and called for talks between Ukraine and
pro-Russian rebels that are widely believed to be backed by the Kremlin.
Putin’s
moves came one day after he talked by phone with President Barack
Obama, their first known conversation in more than two weeks.
The
threat of sector sanctions may be driving Putin to try to avoid
penalties that could have a devastating impact on the already shaky
Russian economy. However, there were no guarantees that Moscow would
abide by the West’s requests to pull back its troops from the Ukrainian
border, stop arming separatists and negotiate seriously with Kiev.
Indeed,
there were signs Tuesday of just how fragile the situation on the
ground remains. Hours after Putin called for the cease-fire to be
extended, pro-Moscow separatists shot down a Ukrainian military
helicopter, killing nine servicemen.
Vice President Joe Biden
spoke to Ukraine’s new president, Petro Poroshenko, for the third time
in as many days and offered his condolences for the deaths. The White
House said Biden also underscored the importance of having monitors in
place in Ukraine to verify violations of the cease-fire, as well as the
need to stop the supply of weapons and militants from flowing across the
Russian border.
At the State Department, spokeswoman Marie Harf described the situation on the ground as "two steps
forward, one step back."
"We
do see some positive signs on the ground," she told reporters. "The
cease-fire, some separatists have accepted it, but the same day some
other separatists shot down a helicopter. That President Putin says
he’ll go to the Duma, that’s good, but then they continue the military
buildup."
At the White House, spokesman Josh Earnest said that if
Russia were to make positive changes, it would make additional sanctions
"less likely."
Even if the U.S. and European Union decide not to
levy sector sanctions this week, they could outline clearer intentions
to ultimately take that step. In Europe, the 28 nations that form the EU
may at least agree on the details of a package of sanctions so the
penalties could be levied quickly, according to the Western diplomat,
who like other officials insisted on anonymity because they were not
authorized to discuss the internal deliberations by name.
An
industry expert and legislative aides with knowledge of the sanctions
said the penalties being readied by the U.S. are expected to focus on
energy and aim to hurt the Russian economy without causing undue harm
for U.S. industry — a shared concern among administration officials,
business lobbies and members of Congress.
Obama and British Prime
Minister David Cameron discussed Ukraine on Tuesday, including the
possible implementation of "additional coordinated measures to impose
costs on Russia" should Russia fail to make positive changes, the White
House said.
Although American officials have examined the
possibility of unilateral action, they are still trying to do everything
in concert with European countries. Officials said implementing
restrictions on American companies exporting oil and gas exploration
technology to Russia, for example, without similar rules for European
competitors, risks harming major U.S. players in Russia’s burgeoning
energy sector such as ExxonMobil and Halliburton.
Several U.S.
businesses are worried about the prospect of imminent sector sanctions
on Russia and have held meetings with senior administration officials
over the past 10 days.
Given their reliance on Moscow for fuel
supplies and far deeper economic integration with Russia, European
countries are unlikely to go along with any far-reaching energy sector
action. So if the U.S. moves ahead on its own, the Obama administration
fears Russia would be able to escape punishment by shifting business
from U.S. firms to European energy giants such as BP, Total or Royal
Dutch Shell.