Sanctions hypocrisy in Ukraine

Media reports say that sanctions against Russia will not work until Ukraine itself acts first, since at present it does not join in the restrictive measures against Moscow.

(Note: This post is also in Russian on this site).

THE European Commission on September 5 announced that it would be significantly strengthening sanctions against Russia. In the EU it was being emphasised that the restrictive measures would affect Russia’s capital market, defense industries and sensitive technologies. This is the latest round of measures announced by the European Union to put pressure on Russia, which last month openly stepped up its incursion into Ukraine, writes the Donetsk-based http://www.KorrDon.info news blog, citing http://www.ukranews.com.

However, while this will actually be the third attempt to impose such sanctions on Russia, the measures already taken in the first rounds have not borne fruit – insofar as it is deemed necessary that sanctions squeeze the immediate circle linked to President Vladimir Putin. As written in European media after separatist rebels shot down Flight MN17, the Malaysian Air civilian plane with nearly 300 passengers on board, Russia should be punished by seizing the luxury yachts of Russian billionaires.

However, despite the billions of dollars it cost in economic losses, the Europeans did adhere to to principle of sanctions and even tightened them.  Not so in Ukraine, which ostensibly needs global partners willing to apply ever tougher sanctions against the Russian Federation. Here there is little sign of active support for such measures as “many Russian corporations with close ties to the Kremlin continue to operate freely on Ukraine’s partially occupied territory,” to quote http://www.ukranews.com.

Ukrainian News cited as an example the corporate giant EuroChem, owned and operated by Russian billionaire Andrey Melnichenko, which is still quietly operating on Ukrainian soil like other multi-billion dollar enterprises. The 42-year-old Melnichenko, in 2013 joined the very exclusive club of the ten richest people in Russia, according to Forbes Magaine which noted his coziness with the Kremlin and close freindship with Putin.

And yet AgrotsentrEvroHim-Ukraine – the daughter company of a multi-billion Russian corporation – continues to operate unrestricted in Ukraine. Ukrainian News found odd parallels, both past and present. Whe the ousted Viktor Yanukovych first came to power, the Russian EuroChem was cleared by the courts to import ammonium nitrate duty free into Ukraine. Since then the EurChem daughter has grown by 80 percent and its share of the ammonium nitrate import market in Ukraine exceeded 60 percent at the end of 2012.

“As long as Kiev will allow Russian oligarchs to make a profit in Ukraine, the government can not
    realistically expect to further sanctions against Russian business from friendly countries.”

Ukrainian News also notes that among the partners of AgrotsentrEvroHim-Ukraine are JSC Severodonetsk Group, Dmitry Firtash and Agroprodinvest LLC, which is part of Ukrprominvest and co-owned by President Petro Poroshenko. In addition, EuroChem is mainly financed by the Russian state’s Sherbank, which was put on the United States and EU sanctions lists. So Ukraine leaves EuroChem free to do business on its territory, completely undermining its appeals to the West for the introduction of wider sanctions.

However, according to ITAR-TASS, President Poroshenko is taking some tentative steps towrd introducing sanctions against Russia. It is expected that he will approve a Ukrainian parliament law that would allow him to impose sanctions on Russian companies by decree.

This law includes a list compiled by the Ukrainian tax department of around 1,000 cases with more than 50 percent Russian capital who could be consider for having sanctions imposed. ition of sanctions. Nevertheless, it is not clear whether this list cwill cover multibillion-dollar corporations like EuroChem.

Certainly the law is a positive first step, but if the Ukrainian government somehow exempts the largest Russian corporations from its sanctions regime, it would be nothing more than an empty gesture.

“As long as Kiev allows Russian oligarchs to make profits in Ukraine,” writes Ukrainian News, “the government cannot realistically expect friendly countries to make furth efforts to sanction Russian businesses.

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