Ukraine update: US to sanction ‘political figures,’ oligarchs

With the war about to enter its second month, Ukrainian President Volodymyr Zelenskiy called on French companies to exit Russia in a speech to France’s National Assembly.
Image: Olaf Scholz

German Chancellor Olaf Scholz held a call with Russian President Vladimir Putin as NATO leaders prepare to meet in Brussels to discuss the war in Ukraine.

US President Joe Biden, who is due to attend the summit on Thursday alongside meetings of G-7 and European Union leaders, said that he thought Russia might use chemical weapons in Ukraine. NATO chief Jens Stoltenberg warned Moscow against “nuclear saber-rattling.” His national security adviser said the US will announce new sanctions against Russian political figures and oligarchs.

With the war about to enter its second month, Ukrainian President Volodymyr Zelenskiy called on French companies to exit Russia in a speech to France’s National Assembly. He will also address the NATO meeting. The highest-level Russian official so far quit his job and left the country in protest against the war.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • Russia Central Banker Wanted Out Over Ukraine, But Putin Said No
  • How Russia Has Revived Fears of Nuclear War in Europe
  • EU Looks to Tighten Russia Sanctions Without Touching Energy
  • Wall Street’s Retreat From Moscow Is Fastest, Harshest Ever
  • Ukraine Is Changing the World Order, Just Not How Putin Hoped
  • Scholz Wants German Reliance on Russian Energy to End Quickly

US to Impose New Sanctions on Political Figures, Oligarchs (6:51 p.m.)

Jake Sullivan, Biden’s national security advisor, told reporters traveling with the president that the US is poised to announce added sanctions against Russian figures after Biden arrives in Brussels for a summit with allies.

“The United States will announce a package of sanctions designation tomorrow that relate both to political figures, oligarchs, so individual designations as well as entities, and that’ll be released tomorrow,” he said.

He also said there will be more to say on Friday about reducing “the dependence of Europe on Russian gas –full stop — and the practical roadmap for how to do that.”  He said “you can expect that the US will look for ways to increase LNG supplies, surge LNG supplies to Europe, not just over the course of years, but over the course of months as well.”

Zelenskiy Said to Have Urged Against Abramovich Sanctions (6:14 p.m.)

The US Treasury was preparing sanctions against Russian oligarch Roman Abramovich, but Ukraine’s President Zelenskiy urged President Biden to hold off and action was delayed, according to the Wall Street Journal.

Zelenskiy told Biden in a phone call to wait because Abramovich could become a go-between in efforts to negotiate peace, the Journal said, citing people familiar with the plans that it didn’t identify.

“We are not going to read out private conversations” between Biden and Zelenskiy, Emily Horne, a spokesperson for the US National Security Council told the Journal.

Sweden Sends Anti-Tank Weapons to Ukraine (5:45 p.m.)

Sweden is sending a second batch of 5,000 anti-tank weapons to Ukraine, Defense Minister Peter Hultqvist told the TT news agency. I

n the days after Russia’s Feb. 24 invasion, Sweden announced that it would donate field rations, body armor, helmets and shoulder-fired, unguided anti-tank weapons to Ukraine. The second shipment also includes equipment for mine removal.

NATO Estimates Russian Combat Deaths Top 7,000 (5:15 pm)

At least 7,000 Russian soldiers have likely been killed so far during the Kremlin-ordered invasion of Ukraine, and the total number could be as high as 15,000, NATO officials said. They said the estimate is based on a combination of Ukrainian estimates, Russian disclosures, Western intelligence and open-source information.

The number of wounded is likely much higher, the officials said, noting that for each soldier killed in combat, there are usually three more wounded. But information about the status of Russia’s forces in Ukraine has been sparse, which means the actual toll is unknown.

Italy Disinclined to Use Rubles for Russian Gas (4:39 p.m.)

“My view is is that we pay in euros because paying in rubles would be a way to avoid sanctions, so I think we keep paying in euros,” Francesco Giavazzi, Italian Prime Minister Mario Draghi’s economic adviser, said at the Bloomberg Capital Market Forum in Milan.

President Vladimir Putin said earlier that Russia will start demanding payment for its natural gas shipments to states that it deems “unfriendly” in rubles.

Russia Central Banker Wanted Out Over Ukraine (4.30 p.m.)

Russia’s highly regarded central bank Governor Elvira Nabiullina sought to resign after Vladimir Putin ordered an invasion of Ukraine, only to be told by the president to stay, according to four people with knowledge of the discussions.

Read our exclusive here.

Zelenskiy Tells French Firms to Ditch Russia (3:55 p.m.)

Zelenskiy called out French companies for operating in Russia in an address to France’s parliament, appealing to the country’s love for “liberty, equality, fraternity” as he asked for more help to combat the Kremlin’s aggression.

“Renault, Auchan, Leroy Merlin and others should stop sponsoring Russia’s war machine,” the Ukrainian president said via video link on Wednesday, calling on them to exit the Russian market.

Addressing lawmakers including presidential hopefuls Marine Le Pen and Jean-Luc Melenchon, Zelenskiy also asked France to supply combat aircraft. Leroy Merlin and Auchan declined to comment following his speech. Renault couldn’t immediately be reached for comment.

EU Looks to Tighten Sanctions Minus Energy (3:41 p.m.)

The EU is considering tightening or expanding existing sanctions against Russia in coordination with the US, while refraining from major new steps to cut off oil and gas purchases.

EU leaders won’t forge new penalties against Russia at their summit, officials in French President Emmanuel Macron’s office told reporters Wednesday. Any new measures countries can agree on would be limited in scope and possibly focused on closing loopholes, according to an EU diplomat.

Amid the threat of a deepening divide over how to limit Moscow’s biggest source of revenue, another EU official said the 27-nation bloc and the US. could announce further asset freezes and travel bans against individuals and entities.

NATO Warns Russia Against Nuclear Threats (2:52 p.m.)

NATO Secretary General Jens Stoltenberg warned Russia against making threats that could escalate the war in Ukraine.

“Russia must stop its nuclear saber-rattling,” Stoltenberg told reporters in Brussels on Wednesday, a day before NATO leaders meet there for a summit.

“This is dangerous and it is irresponsible,” he said. “NATO is there to protect and defend all allies and we convey a very clear message to Russia that a nuclear war cannot be won and should never be fought.”

Putin Demands Ruble Payments for Gas (2:37 p.m.)

Russia will start demanding payment for its natural gas shipments to states that it deems “unfriendly” in rubles, President Vladimir Putin said Wednesday at a meeting with his government.

Putin ordered the central bank to develop a mechanism to make ruble payments within a week, according to the transcript. Russia earlier named the US, UK and members of the European Union unfriendly nations. European benchmark gas prices extended gains, jumping as much as 21% on the ICE Endex in Amsterdam.

Biden Sees Risk of Chemical Weapons (2:10 p.m.)

Biden sees a “real risk” that Putin will deploy chemical weapons in Ukraine, in comments made while he was leaving the White House for Europe.

Biden will join back-to-back summits Thursday with NATO, the Group of Seven and the European Union in Brussels, in an attempt to rally allies and partners behind his administration’s tough approach to Russia and to signal a united front to China.

France Sees No New Sanctions on Russia This Week (1:55 p.m.)

France doesn’t see new sanctions against Russia being adopted at this week’s EU summit, officials in President Emmanuel Macron’s office said. France wants OPEC to increase oil production to relieve market constraints, they added, and would like the European Commission to handle negotiations for joint purchases of oil and gas in the future.

Asked about China, they said the country was not “indifferent” to the conflict and “doesn’t necessarily support” the Russian invasion, and that France would like Beijing to clearly state its opposition to Moscow’s operations.

EU Agrees Support for Hosting Ukrainian Refugees (1:37 p.m.)

The EU earmarked more cash and other support for countries hosting Ukrainian refugees after 3.5 million people, mainly women and children, crossed the bloc’s borders since Russia launched its assault.

Member states can tap as much as a combined 10 billion euros ($11 billion) this year from the React-EU program. Other measures include special dispensations to protect children, provide Ukrainian-language teaching, and offer health care, including vaccines and mental health counseling. Programs are also being developed to match refugees with jobs and provide housing to the millions of those displaced by the war.

Germany’s Top War Risk Is Firms Cutting Russia Ties (1:34 p.m.)

The war in Ukraine will hurt Germany most as Western companies break off business ties with Russia, according to a survey of financial-market experts by ZEW. Other measures — such as excluding Russian lenders from SWIFT and freezing central bank-reserves and oligarchs’ assets — will have a much more muted impact, the poll suggested.

US, EU in Talks on LNG, Hydrogen Supply (1:33 p.m.)

The European Union and the US are working on an agreement that would aim to ensure a supply of American liquefied natural gas and hydrogen to EU member states as the bloc works toward ending its reliance on Russian energy.

Joe Biden and European Commission President Ursula von der Leyen could announce an agreement this week while the US president is in Brussels meeting with NATO, Group of Seven and EU allies, according to a diplomatic correspondence seen by Bloomberg.

Russian Stock Trading to Resume After Record Market Shutdown (12:50 p.m.)

Russia will restart trading in some local equities, ending the nation’s record long shutdown that was meant to shield domestic investors from the impact of sanctions.The Moscow Exchange will resume trading in 33 Russian equities, including Gazprom PJSC and Sberbank PJSC, on March 24 between 9:50 a.m. and 2 p.m. local time, the Bank of Russia said in a statement.

A ban on short selling will apply, it said. Local stock trading has been halted from Feb. 28, marking the longest closure in the country’s modern history. Even with the ban on short selling, local traders and strategists are bracing for a selloff.

Putin Adviser Quits Over War, Leaves Russia (12:47 p.m.)

Russian climate envoy Anatoly Chubais resigned and left the country, citing his opposition to President Vladimir Putin’s war in Ukraine, according to two people familiar with the situation.

Chubais, known as the architect of Russia’s 1990s privatizations, is the highest-level official to break with the Kremlin over the invasion. Chubais also gave Putin his first Kremlin job in the mid-1990s and initially welcomed his rise to power at the end of that decade.

Nestle to Suspend Russian Production, Stick to Essentials (12:24 p.m.)

Nestle SA, the world’s largest food maker, said it’s suspending the vast majority of manufacturing in Russia amid growing pressure on multinationals to fully exit the country following the invasion. Nestle will focus on essential foods including baby food and medical nutrition. The Vevey, Switzerland-based company has faced increasing pressure from the Ukrainian government.

Germany to Deliver Anti-Aircraft Missiles to Ukraine, Bild Says (12:27 p.m.)

Germany will send almost all of the 2,700 Soviet-era Strela anti-aircraft missile systems approved at the start of March to Ukraine, the Bild newspaper reports, citing people familiar with the decision that it didn’t identify.

Grain Sowing Starts in Ukraine, Offering Signal to Markets (11:50 a.m.)

Ukraine’s government said farmers have begun the seasonal planting campaign in the southern Odesa region, potentially easing fears that the war will disrupt growing in one of the largest grain producers in the world.

Agriculture Minister Roman Leshchenko told Reuters Tuesday that Ukraine’s planting areas could be halved this year to 7 million hectares. So far, 30,000 hectares have been sown with spring barley, the ministry said on its website.

Poland Prepares to Expel 45 Russian Diplomats (11:45 a.m.)

Poland is preparing to expel 45 Russian diplomats after arresting a low-level civil servant on suspicion of spying, joining a counter-espionage crackdown that’s sweeping the European Union’s eastern wing.

The Foreign Ministry in Warsaw summoned the Russian ambassador on Wednesday, government spokesman Piotr Muller said. Polish intelligence has identified 45 diplomats as officers of the Russian special services and their associates, according to Stanislaw Zaryn, a spokesman for Poland’s security services.

Zelenskiy Urges Japan to Help With Invasion ‘Tsunami’ (11:20 a.m.)

Zelenskiy urged Japanese lawmakers to expand their already unprecedented sanctions regime against Russia, saying he needed more help to turn back the “tsunami of brutal invasion.”

In a speech Wednesday to the Japanese Diet, Zelenskiy reiterated his call for a trade embargo against Russia. The video address — like his other appeals to supportive parliaments — was peppered with references intended to strike a chord locally, such as an allusion to the 2011 tsunami that devastated northeast Japan and sparked a nuclear disaster.

Scholz Says Teetering Russian Economy Is ‘Only the Beginning’ (10 a.m.)

Germany’s Olaf Scholz said the barrage of sanctions is pushing the Russian economy to the edge, with the stock exchange shuttered, the ruble crashing and foreign companies leaving the country “in the hundreds” – and more measures are to come.

“This is only the beginning,” Scholz told Bundestag lawmakers in Berlin. “Most of the hardest effects will be seen in coming weeks – and we are continuously tightening the sanctions further.”

While Scholz’s government isn’t preparing a fresh set of sanctions at this week’s EU summit, it’s open for talks on further measures, government spokesman Steffen Hebestreit told reporters later – and reinforced Berlin’s position rejecting an EU-wide embargo on Russian oil and gas. Putin and Scholz discussed discussed Russia-Ukraine negotiations in a call, the Kremlin said.

Draghi Says EU Leaders to Support Ukraine’s EU Membership Process (9:40 a.m.)

Italian Prime Minister Mario Draghi said European leaders meeting this week will reaffirm their support for offering Ukraine a process to bring it closer to EU membership, even if the path to accession is a long one.

“The process will be long, and time will be needed to allow for a real and functioning integration,” Draghi told lawmakers in Rome. Italy’s position is to support and encourage Ukraine along a path that’s already begun, he said.

Germany and the Netherlands are among countries that have said the bloc should focus on practical help for Ukraine rather than a symbolic idea of membership that could take a decade or more to play out.

Baltics, Poland Ask EU to Block Russian Access to Ports (9:15 a.m.)

The transport ministers of Estonia, Latvia, Lithuania and Poland called on the EU to block its roads for Russian and Belarusian cargo trucks and to restrict entry to ports for their ships, the Lithuanian Transport Ministry said in a statement.

Russian vessels are already blocked from U.K. ports.

China Backs Russia as Member of the G-20 (9 a.m.)

China signaled it stands by Russia’s continued membership in the Group of 20, saying the bloc needs to work together on issues from global economic growth to the pandemic.

“Russia is an important member” of the grouping, Chinese Foreign Ministry spokesman Wang Wenbin said Wednesday at a regular press briefing in Beijing. “No member has the right to remove other countries.”

Beijing has struggled to convince the world it’s a neutral player in the war, as assurances to international audiences are undermined by messages at home affirming the China-Russia partnership.

© 2022 Bloomberg

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