New EU sanctions could target Russia's access to capital markets

By bne IntelliNews January 29, 2015

bne IntelliNews -

 

New European Union sanctions against Russia under consideration could target Russian corporate and sovereign access to international capital markets, EU officials said on January 28, according to newswires.

According to an EU official quoted by Reuters, one option would be to make it near impossible for Western financial institutions to buy Russian sovereign debt on issue. Such a measures would be easy to introduce, said officials. The EU could also restrict maximum maturity at which Russian companies could raise funds.

Until now, the EU and US have restricted capital market access only for selected strategic state companies such as oil major Rosneft and state-owned banks, although they have still avoided targeting Russia's largest state company Gazprom, which is important for Europe's energy security.

Restricting heavily leveraged Rosneft's financial market access is believed to have put significant pressure on the ruble in December 2014, as the company had to source funds to pay down foreign debt on the domestic market.

According to Reuters sources, there are no plans to disconnect Russia from the international Swift wire payment system. Additional sanctions could include further limitations for the transfer of oil and gas extraction technology.

EU foreign ministers are set to ask the European Commission on January 29 to extend existing sanctions and prepare the new round of sanctions in the run-up to an EU summit on February 12.

The European Union could prolong existing sanctions against Russia by another nine months, Reuters also reported, citing the draft document of the project.  The first sanction package against Russia that included entry bans and asset freezes for a list of individuals is due on March 15 2015. Sectoral sanctions limiting access to debt and capital markets and technology exports bans are currently set to expire by end-July 2015, and sanctions against the annexed Crimea until end-June 2015.

The most recent military escalation in Eastern Ukraine, especially the fighting at Donetsk airport and the bombardment of the Azov port of Mariupol, has intensified the debate on further sanctions against Russia. Previously in the fall, escalation in Donetsk and Mariupol was unofficially cited as one of the “red lines” for the current sanction regime against Russia.

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss