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U.S. sanctions Putin’s friends and advisors to force ‘clear choice’ on Ukraine

April 28, 2014 at 6:18 PM EST
The Obama administration has announced additional sanctions on Russian officials and key companies with close ties to President Putin to persuade Moscow to diffuse tensions in Ukraine. Deputy National Security Advisor Tony Blinken joins Gwen Ifill to discuss the strategy behind these new sanctions, their potential to hurt U.S. companies and the prospect of further sanctions still in reserve.
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TRANSCRIPT

GWEN IFILL: Now, for more on the new sanctions, we turn to White House Deputy National Security Adviser Tony Blinken.

Welcome.

Is the goal here to isolate Russia economically, or politically, or both?

TONY BLINKEN, Deputy National Security Adviser: The goal is impose a clear choice on President Putin.

Either choose a diplomatic path to resolve this crisis in Ukraine or face increased pressure on the Russian economy. We have already seen significant impacts from the pressure that we have exerted to date, in coordination with our European markets, financial markets down 22 percent, the ruble at all-time lows, investment drying up, capital flight, downgraded credit ratings.

All of that is imposing a hard choice on President Putin. If he wants to continue to deliver growth for the people, which is essential to their support, he has to make that head choice.

GWEN IFILL: Let’s take this a piece at a time.

Part of what you’re proposing today is to sanction government officials. That’s different than what we have seen so far. What is the point of that?

TONY BLINKEN: So, we have a number of things, Gwen.

We have government officials. And we actually have designated government officials before. And, significantly, we have two individuals who are at the very heart of the Russian economy and of the support system for President Putin, Mr. Sechin and Mr. Chemezov.

Mr. Sechin controls the largest energy company in the world, Rosneft. That company wasn’t designated itself. He was in his individual capacity. But we have already seen an impact on the company itself. Its credit rating was dropped to near junk bond — junk status. And we have seen its stock price take a dive as well. So, this is having a clear impact and it’s forcing a clear choice.

GWEN IFILL: Well, why sanction individuals, and not the company, if what you are after is the company?

TONY BLINKEN: We’re looking to do this in a very deliberate way, to do it in coordination with our European partners, because, when we act together, the impact is greater and stronger.

And so the president has been extremely focused on making sure that we have the Europeans with us. While he was in Asia, he convened a conference call with the senior European partners on Friday when it became clear that, unfortunately, Russia was not living up to the commitments it made in Geneva to try to de-escalate the crisis in Ukraine.

And there was agreement reached, with the president’s leadership, to have the G7 pronounce itself on the need for additional pressure, and now today with us and the Europeans following through today.

GWEN IFILL: Well, let me ask you this way. If you were to sanction the companies themselves, would that have an immediate impact on, say, their U.S. partners? Like ExxonMobil, for instance, is in partnership with Rosneft.

TONY BLINKEN: What we have been focused on is making sure that we maximize the pressure we’re exerting on Russia and minimize the impact here in the United States or in Europe. That’s why we have done it in such a deliberate, careful fashion. That has been the result to date.

GWEN IFILL: Well, I couldn’t tell whether that was the answer to my question or not.

So, you are saying this step-by-step process is in part to insulate American companies?

TONY BLINKEN: Yes, the step-by-step process is to make sure that everything we do is focused on exerting pressure on Russia and minimizing any impact or consequences on American companies, on European companies.

But, look, the longer this goes on — and we have held various sanctions in reserve if this does continue — there will be spillover and there will be an effect, unfortunately, on companies here and in Europe. But the overriding and overwhelming impact is on Russia. We have no desire to do this. Unfortunately, we’re forced to do it by President Putin’s actions and Russia’s actions. And we hope that he will reconsider and choose a diplomatic resolution to this crisis.

GWEN IFILL: Among the individuals that you are sanctioning, will their assets — do they have assets in the U.S. that will be frozen as a result of this? And do we know what that adds up to?

TONY BLINKEN: Yes, some of them may well have assets in the United States. We’re looking at that.

They will also be prohibited from traveling to the United States. But most significantly of all, U.S. persons, U.S. companies will not able to do business with them in their individual capacities. That’s significant because not only does it mean that their ability to do business with and in the United States is cut off, but that tends to have a chilling impact on their ability to do business elsewhere around the world.

So, we think this will be very significant in terms of the individuals who have been designated.

GWEN IFILL: One of the things you have suggested, that if Russia decides to cross the border into Ukraine, that — the quote is, “Robust sectoral sanctions will follow.”

What does that mean? What is a sectoral sanction? And if it’s robust and it’s meant to deter bad behavior, then why not impose them now?

TONY BLINKEN: So, the president put in place a mechanism with various executive orders to be able to target large sectors of the Russian economy and companies within those sectors, like energy, like the financial sector, like mining.

But the very fact that we have established that mechanism, that the president put it in place, we believe, will have a deterrent effect. The president has been very clear that we need to hold options in reserve if unfortunately Russia persists in its actions and takes additional actions. So, that’s what we have.

And we believe that having those in place, with Russia knowing that we’re able to, if necessary, take those — take those actions, will hopefully have a deterrent effect on what they do and again focus them on what they agreed to do already, which is to find a diplomatic resolution, de-escalate the crisis, make good on the commitments they made in Geneva.

GWEN IFILL: So, is action against banks, like Gazprom Bank or VEB, are those being held in reserve for additional punishment?

TONY BLINKEN: Look, I’m not going to get into specific companies or individuals going forward, but, again, we have already seen the impact to date that we have had with the sanctions, working in coordination with the Europeans.

You can imagine that, going forward, if necessary, we will have an even greater impact.

GWEN IFILL: A senior administration official — it could have been you — said today, briefing reporters, referring to Slavyansk as the new Bermuda Triangle of Eastern Ukraine.

What does that mean?

TONY BLINKEN: Well, you have seen the images just now of what is going on now in Eastern Ukraine.

Unfortunately, these pro-Russian groups of separatists, who are actually quite small in number, have doing everything they can destabilize Eastern Ukraine, with Russia’s support. And we believe Russia is trying to delay or disrupt or ultimately delegitimize the elections that are scheduled for May 25.

But this is all about one simple proposition. The Ukrainian people should choose their own future, not us, not Russia, not Europe, the Ukrainian people. And that’s why elections are so important. That’s why we’re supporting the elections. We would expect Russia to do the same thing.

Unfortunately, Russia and the groups it supports are trying to do just the opposite.

GWEN IFILL: Deputy National Security Adviser Tony Blinken, thank you very much.

TONY BLINKEN: Thanks for having me.

GWEN IFILL: For a fuller picture of the history of tensions between Russia and Ukraine, our team at PBS NewsHour Weekend traced the centuries-long relationship. You can watch that full report online.