BRUSSELS, July 30 (RIA Novosti) – The new round of EU banking sanctions aims to stem capital flows into the Russian economy, according to an unnamed official at the European Commission in Brussels, Belgium.
“We aren’t talking about an embargo on [banking] operations. The objective is not to destroy banks. This measure only limits the range of opportunities for the Russian economy to draw funds from,” the source told journalists Wednesday.
He also said that restrictions will not prevent Russian banks and other financial institutions from carrying out transactions with EU-based subsidiaries. EU investors are however not allowed to purchase new issues of shares and bonds of the Russian state banks around the world on primary and secondary markets.
On Tuesday, the European Union agreed a new package of sectoral economic sanctions against Russia over the Ukrainian crisis. This time, restrictions will limit Russian state-owned financial institutions' access to EU capital markets, impose an embargo on arms trade, establish an export ban for dual-use goods for military end users and curtail Russian access to sensitive technologies, particularly in the oil sector.
The sanctions are to be published on July 31 and go into effect on August 1.
In a statement earlier today, the Russian Foreign Ministry stressed that Russian and EU economies are “communicating vessels,” and Brussels’ decision to move to third-phase penalties against Moscow will eventually backlash.