Russia vows 'boomerang' retaliation as US widens sanctions

By HENRY MEYER | Bloomberg News | Published: September 2, 2015

MOSCOW — Russia said it will retaliate after the United States widened sanctions by targeting more companies, including subsidiaries of state oil producer Rosneft and entities controlled by an ally of President Vladimir Putin.

"In this case, we are operating on a principle of reciprocity," Putin's spokesman, Dmitry Peskov, said on a conference call with reporters on Wednesday. The Russian Foreign Ministry earlier said the U.S. is contradicting its stated intention of cooperating on major international crises such as Syria.

Russia's relations with the U.S. and the European Union plummeted to their lowest since the Cold War following Putin's annexation of Crimea after Kremlin-backed Ukrainian President Viktor Yanukovych was ousted from office last year. The U.S. and the EU have limited some Russian companies' access to borrowing and barred technology transfers to energy producers in response to Putin's support for a separatist insurgency in eastern Ukraine.

"Such a reckless course is provoking increasing concerns, even among allies of the U.S.," the Foreign Ministry said in a website statement, adding that Russia will respond in an asymmetrical way. "This risks serious damage to international stability and will hit U.S. interests like a boomerang."

The U.S. in its latest measure targeted 29 entities in Crimea, Cyprus, Finland, Romania, Russia, Switzerland, Ukraine and the British Virgin Islands. They include companies controlled by billionaire Putin ally Gennady Timchenko, Rosneft, units of sanctioned Russian defense groups and corporations active in Crimea.

Russia didn't retaliate in July, the last time the U.S. tightened sanctions, by adding the son of another billionaire ally of Putin and a sovereign wealth fund in what it said was a fight against efforts to circumvent the restrictions.

Separately, the 28-member EU reached an accord on a six- month extension of asset freezes and travel bans on Russians and Ukrainians accused of backing the separatist movement in Ukraine, an EU official said.

As of March, 150 people including six associates of Putin were subject to the sanctions, as were 37 organizations. The curbs had been set to lapse on Sept. 15. Other sanctions against Russia targeting trade and financing run until the end of January.