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EU sanctions won’t have major impact on Crimea

By: | at 05:34 PM | Channel(s): International Trade  

European sanctions on Crimea-based companies and individuals over Russia’s annexation of the region from Ukraine will not have a major impact, the peninsula’s deputy prime minister said.

European Union foreign ministers agreed new sanctions over Russia’s support for pro-Moscow separatists in Ukraine on Monday, adding two Crimean companies and 13 people to the bloc’s sanctions list.

The EU had previously been reluctant to impose sanctions on Russian companies, reflecting concerns among member states over their trade ties with Moscow and reliance on Russian energy.

“The EU should rethink its approach on sanctions,” Crimean Deputy Prime Minister Rustam Temirgaliyev, against whom the United States and EU have imposed a visa ban and asset freeze, told Reuters in an interview in the region’s main city.

He accused European politicians of “double standards”.

“In a democratic way, without violence, we held a referendum and Russia took us in. Why are they imposing sanctions on us for this?” he said, referring to a March 16 vote in which local authorities say 97 percent voted to become citizens of Russia.

Russia annexed Crimea on March 21 but U.S. and EU officials view the Crimea referendum as illegitimate and have not recognized self-rule votes held by pro-Russian separatists in Ukraine’s Donetsk and Luhansk regions on Sunday.

Temirgaliyev said the new sanctions were meaningless, citing Crimea’s relatively minor trade links with the EU.

“Personally, I don’t feel any restrictions. I have traveled around lots of European countries and don’t plan to travel there in the near future. I don’t have any assets there either,” he said.

Temirgaliyev acknowledged, however, that annexation by Russia had brought some short-term economic problems, including a drop in tourist numbers and disruption to the banking sector.

But he said Crimea would benefit from becoming part of Russia in the long run and that local authorities were drawing up plans to develop strategic sectors of the local economy, including shipbuilding, agriculture and tourism.

“We want to create a special economic zone - a so-called ‘civilized offshore zone’ - which will have a special tax regime. We want to return a portion of Russian capital from offshore jurisdictions such as Cyprus,” he said.

Russian President Vladimir Putin has been pushing for the “deoffshorisation” of the Russian economy, whereby companies with offshore entities re-register them in Russia, but it is not clear how much Crimea would benefit from this.

In another effort to increase regional revenues, Temirgaliyev said Crimea also wanted to build a gambling zone. (Reuters)