Russian Economy Minister Alexei Ulyukayev said Russia might sue the US in World Trade Organization (WTO) court because of sanctions placed against St. Petersburg’s Bank Rossiya, which is President Vladimir Putin’s preferred bank.
“The WTO gives us some additional possibilities,” Ulyukayev was quoted by Interfax as saying on Wednesday. “We at the WTO council in Geneva talked about the possibility of filing lawsuits against the U.S. over the sanctions against Russian banks and we hope to use the mechanism of the WTO to keep our partners in check regarding this issue.”
Putin annexed Crimea from Ukraine on March 21, and immediately afterwards, President Obama finally passed sanctions against Putin’s inner circle and Bank Rossiya. The list of those targeted included the bank’s chairman and largest shareholder Yuri Kovalchuk. SMP Bank was affected as well because co-owner brothers Boris and Arkady Rotenberg were named on the list. Over $249 million was withdrawn from SMP accounts after the sanctions were imposed.
The WTO said it is monitoring the situation and will work with Russia to make sure no WTO agreements were broken.
Meanwhile the US is thinking of more sanctions if Russia does not stop aggression towards Ukraine. The European Union is considering more sanctions, but since the majority of the region relies on Russian energy, it might not happen. According to Reuters, the European Commission shared documents with EU leaders that show how sanctions against Russia will affect EU countries’ economies. The categories examined included energy, finance, and trade.
“The important thing is that the measures are balanced,” said one EU diplomat briefed on the process.
“We can’t have a situation where a set of sanctions ends up having a retaliatory impact on one member state or two or three member states. If there are going to be repercussions from this, they have to be shared out.”
Energy could be the biggest sticking point. Russia’s state-owned gas giant Gazprom has been making threats since Ukraine’s parliament ousted Russia-backed president Viktor Yanukovych on February 22. The company told Ukraine gas would be shut off if Kyiv did not pay back a $2.2 billion debt, which sparked fears of a shortage in Europe. Then Gazprom said it would raise the prices on the gas along with a demand for money to pay off the debt.
Putin sent a letter to the EU leaders and warned them their gas supplies could be in jeopardy if they do not help Ukraine pay back their debt to Gazprom and Russia. The EU called Putin’s bluff, since Moscow depends on the revenue from the gas. Putin quickly told Europe their gas supplies are not in trouble, but turned around and resumed discussions with China on a pipeline through Siberia. The EU does not know what Putin actually plans on doing, since Russia did cut off gas to Ukraine in 2006 and 2009.