Ukraine Latest: US Vows ‘Sweeping Sanctions’ on Russia’s Economy

(Bloomberg) — The US plans to announce “sweeping sanctions against key sectors that generate revenue” for Russia, including the country’s banking, defense, and technology industry on Friday, White House Press Secretary Karine Jean-Pierre told reporters. In addition, officials said a new package of about $2 billion in US security assistance will be announced.

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European Union members failed to sign off on a new package of sanctions, with diplomats set to reconvene Friday morning in an effort to get the measures over the line, according to people familiar with the matter.

With the one-year mark of Vladimir Putin’s invasion a day away, NATO Secretary General Jens Stoltenberg said Thursday that the alliance will closely monitor what Russia does with its nuclear weapons after the Kremlin suspended the country’s participation in the New START treaty.

Russia’s War in Ukraine: Key Events and How It’s Unfolding

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

Listen back to the latest in our series of special Twitter Space conversations about one year of war in Ukraine. Today’s focused on the impact on global energy supplies and markets, and on the environment and renewable energy policies. You can access it via this link. You can also listen back to our conversation on the war itself and military lessons learned:

How Does Ukraine Continue to Beat Back Russia? (Podcast)

Key Developments

  • One Year On: Russia’s War Casts Long Shadow

  • Ukraine Plans to Avoid Gas Imports This Year, Naftogaz CEO SaysJoe Biden

  • Ukrainians are Crowdfunding Their Defense From Drones to Mortar

  • Russians’ Support for Putin’s War Hardens as His Crackdown Grows

  • Biden Doesn’t See Putin Using Nukes Despite Halting Arms Treaty

On the Ground

Russia continues to shell settlements in the Kharkiv region, with one person injured by a missile attack on an administrative building near Kupyansk, according to the local governor. In the past day, Russian troops launched several rocket and air strikes, as well as conducting mortar and artillery fire, the Ukrainian General Staff said on Facebook. Civilian facilities in the Kharkiv, Chernihiv, Sumy, and Kherson regions were damaged.

(All times CET)

New $2 Billion Package of US Security Assistance Is Coming (9:13 p.m.)

The U.S. plans to announce a new assistance package of about $2 billion for Ukraine, according to people familiar with the matter.

The package, to be issued under the Ukraine Security Assistance Initiative, will build on previous efforts to aid Ukrainian defenses against Russia, according to the people, who asked not to be identified in advance of an announcement.

The initiative is aimed at funding contracts with delivery dates months or even years away to bolster the nation’s long-term security needs, not for immediate battlefield use.

Ukraine Envoy Cites Need to Rebuild Her Country After the War (9:10 p.m.)

Ukraine will need international assistance to rebuild after the war, but first needs more of the weapons needed to defend itself, Oksana Markarova, the nation’s ambassador to the US, said on Bloomberg Television.

“We don’t have a shortage of the will to fight and Ukrainians who are willing to defend the country,” Markarova said, while calling for as much ammunition as possible, as quickly as it can be supplied. “The priorities are still the same: air defense, artillery, longer-range” systems, she said.

US Pledges Sanctions to Target Russia, Its Enablers (7:53 p.m.)

In addition to targeting Russia’s banking, defense and technology industries, US sanctions to be announced Friday will hit actors in other countries that are attempting to help Russia backfill or evade sanctions, the White House said.

The US and allies also plan to announce a new economic and security assistance package for Ukraine intended to aid defense efforts and provide basic government services such as electricity and heat, according to Jean-Pierre, the White House press secretary.

President Joe Biden is scheduled to meet virtually with other Group of Seven leaders – and Ukrainian President Volodymyr Zelenskiy – on Friday.

US Tank Deliveries Are Months Away, US Army Chief Says (7:31 p.m.)

Delivery of 31 M1A2 tanks that the US promised to the Ukraine military is many months away, Army Secretary Christine Wormuth told a breakfast meeting of the Defense Writers Group in Washington.

“We’re looking at options” to present Defense Secretary Lloyd Austin, Wormuth said, that are “less than two years, less than a year and a half” away.

“You can build the tanks from scratch” as General Dynamics Corp. is doing for Poland in a $1.14 billion order signed last year for 250 tanks of the newest model. There are also “countries we have sold tanks to previously,” she said, implying one option is to ask countries to donate some of their vehicles.

Blinken, Scholz Urge China to Refrain From Arming Russia (6:56 p.m.)

China’s government probably approved of Chinese firms giving Russia non-lethal, “dual-use” support for its war in Ukraine, Blinken said in Washington, in remarks that underscore growing US concern that Beijing may go further and help arm Putin’s forces in Ukraine.

“There has been some non-lethal, dual-use type support coming from quote-unquote Chinese companies, that almost certainly was approved by the state, because there’s really no difference, but not lethal military support,” Blinken said, without citing evidence. “But we also have picked up information over the last couple of months that China is now strongly considering doing that.”

Scholz said he made clear in recent talks with China’s top diplomat that Beijing must not provide such support to Russia. “In public remarks, China so far has declared that it doesn’t want to send weapons. So it’s important that we continue to take a close look at this,” Scholz told public broadcaster ZDF in a television interview.

Estonian Premier Says War Will End When Russia Knows It’s Lost (5:50 p.m.)

NATO states should overcome concern that giving Ukraine the support it needs to defeat Russia will escalate the conflict beyond Putin’s red lines, Estonian Prime Minister Kaja Kallas said.

Even a worst-case scenario — a potential nuclear retaliation — will happen in the conflict zone and not on the alliance’s soil, she said in an interivew on Thursday.

War in Ukraine Will End When Russia Knows It’s Lost, Kallas Says

EU Fails to Agree New Russia Sanctions, Set to Try Again Friday (5:29 p.m.)

Talks became stuck on the scope of restrictions to impose on Russian rubber imports, according to people familiar with the matter, with Poland leading the charge to toughen up those provisions.

The EU is coordinating some of the proposed sanctions with the Group of Seven as part of a coordinated action to coincide with the one year mark since Russia’s invasion of Ukraine. That means diplomats are confident the measures will be agreed on Friday, the people said.

The proposed package includes export controls on multiple technologies and electronic components used in equipment such as drones, missiles, helicopters and for other military purposes, as well as restrictions on heavy vehicle exports. It would also hit a number of Russian banks and Iranian entities, including those linked to Iran’s Revolutionary Guard, imposing trade restrictions on the latter over Tehran’s provision of drones to Russia.

Sweden May Announce Tanks for Ukraine This Week (5:29 p.m.)

Sweden is set to announce that it will transfer battle tanks to Ukraine, the TT news service said, citing people it didn’t identify. According to the report, the Swedish government’s eleventh package of military aid will be unveiled this week, and will include air defense systems as well as tanks.

Sweden has about 120 tanks based on the German Leopard 2. The country previously announced that it will send 50 armored combat vehicles to Ukraine.

Putin Gave Biden $12,000 Pen Set Months Before Invasion (5:03 p.m.)

The Russian leader gave US President Joe Biden a $12,000 pen and decorative writing set at their first presidential summit in Geneva in 2021 during a momentary thaw in relations that ended with the invasion of Ukraine eight months later.

The writing set was the most expensive gift Biden received from a foreign leader that year. It was described in an annual report from the State Department’s Office of the Chief of Protocol as a “Kholuy lacquer miniature workshop desk writing set and pen.”

Putin Gave Biden $12,000 Pen Set Months Before Ukraine Invasion

Poland to Send 14 Leopard 2 Tanks to Ukraine Within Days (4:42 p.m.)

Poland will deliver 14 of its Leopard 2 battle tanks to Ukraine “in a few days,” Jacek Siewiera, the head of the national security bureau, told the Financial Times.

“It’s possible” that the tanks will leave the border “at the end of the week,” he was cited as saying. Poland has been assembling a coalition of countries to send the older A4 version of the Leopard 2 to bolster Ukraine’s fight against Russia.

Poland Beefs Up Security Measures on Border With Russia, Belarus (3:50 p.m.)

Poland is ramping up security measures on its border with Belarus and Russia’s Kaliningrad region, Defense Minister Mariusz Blaszczak said.

The country has started setting up concrete and steel obstacles at the crossings as “part of our defense and deterrence strategy,” he said on Twitter. Poland’s government has been among the most vocal in the European Union and NATO in calling for a tough response against Russia’s invasion of Ukraine.

US Senator Highlights Trade Routes in Call for Stronger Sanctions (3:42 pm.)

US Senator Ben Cardin, who’s leading a key Congressional delegation this week in Europe, said Russian sanctions could be stronger, particularly around Europe’s periphery, where the Kremlin is building new trade routes to skirt restrictions.

“In some cases we don’t have the direct ability to stop this trade,” the Democrat from Maryland said at a briefing in Vienna hosted by the Organization for Security and Cooperation in Europe. “We will look at ways to use our global influence. It is part of our strategy.”

Russia and Iran have been building a new transcontinental trade route stretching from the eastern edge of Europe to the Indian Ocean, a 3,000–kilometer (1,860–mile) passage to avoid the reach of foreign intervention.

Zelenskiy Says It’s ‘Preferable’ to Have Contacts with China (3:37 p.m.)

Ukraine is seeking to reach out to high-level Chinese officials because it corresponds to the interests of the country, President Volodymyr Zelenskiy said at a press-conference with Spain Prime Minister Pedro Sanchez.

“I believe that it would be desirable for Ukraine to meet with China,” Zelenskiy said. “We conveyed this signal to China on the diplomatic level.”

G-7 Finance Chiefs Condemn Russia’s War, Boost Aid to Ukraine (2:46 p.m.)

Group of Seven finance ministers increased their budget to $39 billion and reaffirmed their “unwavering support for Ukraine,” according to a statement issued Thursday.

“We re-emphasize our shared commitment to our coordinated economic measures in response to Russia’s war of aggression,” Shunichi Suzuki, finance minister of Japan and this year’s G-7 chair, said from Bengaluru, India. “Our sanctions have significantly undermined Russia’s capacity to wage its illegal war.”

Poland Warns Ukraine Collapse Could Encourage China on Taiwan (2:20 p.m.)

“If, God forbid, Russia were to conquer Ukraine, chaos could very quickly ensue, not only in our region but also in the Far East,” Polish Prime Minister Mateusz Morawiecki said at a news conference in Copenhagen, alongside Danish Premier Mette Frederiksen.

“China could attack Taiwan and there could be various disruptions of the international order,” he added. China considers Taiwan part of its territory and has repeatedly said it is willing to use force to prevent its formal independence.

Ukraine Seeks Four-Year IMF Program (1:35 p.m.)

Ukraine is working “very actively” with the IMF to discuss a four-year full-fledged program, Prime Minister Shmyhal said, adding that the government is working to finalize appointments to anti-corruption institutions.

The premier told reporters in Kyiv that Ukraine is in talks on fighter planes for a counter-offensive, while the country received promises on the delivery of long-range weapons during Biden’s surprise visit at the start of this week.

Ukraine’s Economic Security Bureau Website Was Hacked (12:57 p.m.)

The website of Ukraine’s Economic Security Bureau — an agency that investigates economic crimes — was hacked on Thursday morning and is currently not operating, according to an emailed statement. IT specialists are working to fix the site.

It’s not known so far who was behind the attack or which tools were used, the bureau’s press office told Bloomberg by phone.

Ukraine has been subject to thousands of cyberattacks over the past year, many of them linked to Russia.

Russian Attendees Stir OSCE Meeting in Vienna (12:50 p.m.)

A meeting of lawmakers from Organization for Security and Co-Operation in Europe member states kicked off in Vienna with seven Russian delegates attending. Envoys from several countries, including Ukraine, didn’t participate in discussions at which Russian peers were present.

Austria has come under scrutiny for granting visas to the Russian lawmakers, including some sanctioned individuals. It’s said it must allow them to attend based on its obligations as a host country for the OSCE, an organization founded to promote peace and east-west dialogue on the continent.

EU Trade Chief Says Russia’s Fiscal Outlook ‘Deteriorating Rapidly’ (12:20 p.m.)

European Commission Vice President Valdis Dombrovskis said the bloc’s sanctions are taking a toll on Russia’s economy as the EU attempts to complete a 10th round of punitive measures targeting Moscow.

“We see strong impact on Russia’s industry — Russia’s fiscal position is deteriorating rapidly,” Dombrovskis told reporters in Sofia. He said measures including the bloc’s oil embargo and the Group of Seven oil price cap, which went into effect later, have yet to take hold.

Finland Donates Leopard 2 Mine-Clearance Tanks (11:49 a.m.)

Finland will donate three of its six mine-clearance tanks as part of its 13th military aid package to Ukraine, said Defense Minister Mikko Savola. The package of more than €160 million ($169 million) includes training in the use and maintenance of the vehicles.

Tanks donated by Finland and other countries “give Ukraine the capabilities it needs to take back its territory,” said Savola, who added that the size of Finland’s contribution was limited by its own long border with Russia. “We cannot compromise on our own security,” he said.

Allies Watching Russian Nuclear Activity, NATO Chief Says (11:45 a.m.)

NATO will closely monitor what Russia does with its nuclear weapons after President Putin suspended his country’s participation in the New START treaty, alliance chief Stoltenberg said as he warned of the risk of an arms build-up.

“This is a reckless decision because we need arms control and we need transparency,” Stoltenberg told Bloomberg TV in an interview. “A world without nuclear arms control agreements risks leading to more nuclear weapons.”

Read more: Allies Closely Watching Russian Nuclear Arms Activity, NATO Says

Poland Says Ukraine to Get Fighter Jets Sooner or Later (11:39 a.m.)

It’s only a matter of time before Western nations decide to send fighter jets to Ukraine, according to Tomasz Szatkowski, Poland’s permanent representative to NATO. “Sooner or later Western planes will also go to Ukraine,” Szatkowski told TVN24 television in an interview on Thursday. “Western, but also post-Soviet systems.”

German Defense Minister Boris Pistorius said his government would support allies who decided to supply fighter jets to Ukraine, but that Germany would not be in a position to send any itself.

Pistorius said that it would be “awkward” if Ukraine used the jets to attack Russian territory and not for “preventive defense” and that would be something allies would have to discuss with officials in Kyiv.

Russia Expands Powers to Conceal Economic Data (11:34 a.m.)

Russian authorities will be able to suspend publication of any official statistical information under a new draft law passed by parliament this week.

The government has stopped releasing a broad range of data, including on foreign trade and currency reserves, since the invasion of Ukraine last year triggered waves of sanctions from the US and its allies.

Sanctioned Russian Oil Is Being Switched at Sea (10:34 a.m.)

Millions of barrels of Russian crude and fuels have been switched between tankers just a few miles off the coast of Greece, one of a series of workarounds that traders have used to overcome European Union sanctions against Moscow.

At least 23 million barrels of crude and additional volumes of refined fuels have been transfered from one tanker to another in the Bay of Lakonikos since Jan. 1, according to tanker tracking by Bloomberg.

Read more: Sanctioned Russian Oil Is Being Switched at Sea Just Off Greece

German Firms Commit to Ukraine Reconstruction Effort (10:20 a.m.)

German companies are already working on projects to help rebuild Ukraine and are preparing to ramp up efforts to tackle what will be a “mammoth international task,” according to the head of the country’s BDI industry lobby.

BDI President Siegfried Russwurm also called on the German government to “promptly and permanently” lift defense spending to meet NATO’s 2% guideline. “Tolerating military aggression in the midst of Europe would irreparably damage the international rules-based system on which peace, security and prosperity are founded,” he said.

Russians’ Support for Putin’s War is Unwavering (10 a.m.)

Even as the invasion of Ukraine, has dragged on far longer than the few days that the Kremlin originally hoped when it launched a “Special Military Operation,” and as casualties have mounted, the majority of Russians say they are ready to keep fighting, according to independent polls.

Only about a fifth of Russians want to bring a quick end to the war if that means admitting defeat, according to a Kremlin consultant.

Schools Turn to Distance Learning Amid Airstrikes Threat (10:07 a.m.)

Ukraine’s education ministry recommended schools switch to online classes amid the threat of Russian airstrikes around the invasion’s one-year mark.

“The Russian military disregards the norms of international humanitarian law and has no limits of weapon use,” said minister Serhiy Shkarlet. In the past year, Russian attacks have damaged 3,128 educational institutions, completely destroying 441, according to ministry data.

Putin Has Failed in ‘Energy War’ on Europe: Habeck (9:30 a.m.)

Putin has failed in his bid to “bring Europe to its knees” with his “energy war,” although the continent remains “in a sensitive situation,” said German Economy Minister Robert Habeck.

Asked in an interview with broadcaster RTL/ntv whether German money was still flowing to the Kremlin, Habeck said companies in Europe’s biggest economy were no longer buying Russian gas but conceded that some may still be arriving in Germany via LNG terminals in third countries. The crucial step is to bring down oil prices, which would probably “hit Russia the hardest,” he added.

Spanish Premier Visits Ukraine (9:15 a.m.)

Spanish Prime Minister Pedro Sanchez is the latest world leader to visit Ukraine, arriving in Kyiv early Thursday to show support as the nation prepares to mark the first year of Russia’s full-scale invasion.

Sanchez’s visit comes after US President Joe Biden made a surprise trip to Kyiv, his first since the invasion began, on Monday and Italian Prime Minister Giorgia Meloni visited on Tuesday.

Wagner Leader Says Mercenary Group Now Getting Ammo (7:41 a.m.)

The founder of mercenary group Wagner, Yevgeny Prigozhin, said his fighters in Ukraine are now receiving new ammunition supplies after a war of words with the Defense Ministry.

“Today at 6 a.m. they announced they’re starting to ship the ammunition,” Prigozhin said, according to his press service’s Telegram account. “I’d like to thank everyone who helped us. You saved the lives of hundreds, maybe thousands of guys who are defending their motherland.”

Prigozhin, a multimillionaire Putin ally who’s risen to greater prominence during the war in Ukraine, has forged a battlefield rivalry with Russia’s regular forces.

Read: Ukrainians Are Crowdfunding Their Defense From Drones to Mortar

India Balks at Calling Russia’s War a ‘War’ at G-20 (7:09 a.m.)

Indian officials hosting the Group of 20 finance chiefs this week are seeking to avoid using the word “war” in any joint statement when referring to Russia’s attack on Ukraine, a person familiar with the matter said.

That would mark a divergence from the consensus reached by leaders in Bali last November. The person said using words like “crisis” will be more acceptable.

Read more: India Doesn’t Want to Call Russia’s War a ‘War’ at G-20

Germany Sets Out ‘Path to Peace’ (6:30 a.m.)

German Foreign Minister Annalena Baerbock outlined “necessary, concrete steps” toward peace in Ukraine that will be part of a resolution to be presented by more than 50 countries at the United Nations General Assembly.

“What the world community is asking for could not be simpler: a halt to Russian attacks, protection of civilians, respect for Ukraine’s territorial integrity through Russian troop withdrawal, and accountability for crimes committed,” Baerbock said in an emailed statement.

“That is the path to peace, I will reiterate that in New York,” she added. “That’s what the world community will decide today, and that’s what the world has been expecting from Russia for a year.”

The Growing Cash Pile in Moscow Foreign Investors Can’t Touch (6 a.m.)

Stock dividends, interest payments on bonds and anything else that Western investors didn’t sell before the war are all part of a pile of money accumulating in Moscow that’s been trapped by sanctions.

The accounts are remnants of what’s left of Russia’s ties to the world of international finance, and another marker of its isolation as the country’s war on Ukraine begins a second year.

Read more: The Growing Cash Pile in Moscow Foreign Investors Can’t Touch

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