While the US President, Barack Obama, is due to announce a new range of sanctions against Russia later today, the situation in Ukraine is rapidly getting worse. Russian-backed fighters still hold seven OSCE monitors and three SBU officers hostage, in addition to others including the Ukrainian journalist Irma Krat. Furthermore, the violence has spread further today: separatists have seized buildings in Kostiantynivka; a gun attack has wounded three in Kiev; Kharkiv Mayor Gennady Kernes has been shot and seriously wounded, and a third tortured body has been found in Slavyansk.
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An interactive map of the situation:
View Ukraine: April, 2014 in a larger map
For links to individual updates click on the timestamps.
Below we will be making regular updates. Be sure to check back often and hit refresh.
This ITV news report (video of which can be seen here) is frightening. James Mates begins the report from Donetsk by walking alongside a wall of riot police who were deployed to protect a large pro-Ukraine rally from a nearby pro-Russian rally. Mates suggests that the pro-Ukraine crowd may be so large because they knew that they would be protected by the riot police if they were attacked.
That confidence was misplaces. ITV cameras clearly show the riot police fleeing as the pro-Russian protesters, many armed with clubs, attack the defenseless crowds.
Not all the police fled, however. This video does show police officers interceding to help unarmed protesters who were under attack.
Russia’s economy has taken a beating lately. On Friday, the Russian economy was just filled with bad news. In what some analysts described as a “bloodbath,” Russia’s credit ratings were downgraded, its stocks tumbled, and the ruble continued to lose value. Euromoney reports:
On Friday, Russia’s credit rating was cut to BBB- from BBB by Standard & Poor’s, citing a weaker growth profile and capital outflows that “heighten the risk of a marked deterioration in external financing, either through a significant shift in foreign direct investments (FDI) or portfolio equity investments”. It maintained its negative outlook on the sovereign, raising the risk of a cut to junk, in what would be an astonishing move given the sovereign’s oft-cited war chest of FX reserves that stand at $473 billion and a low general debt-to-GDP at around 12% to 13%. Also on Friday, the Central Bank of Russia (CBR) unexpectedly hiked rates from 7% to 7.5%, citing inflation risk. Analysts don’t buy the CBR’s rationale and fear the move indicates expectations that the conflict will intensify.
Today, however, Russia’s stocks had a modest rebound. The Micex Index was up 1.63% (which does not even come close to erasing the losses it has suffered over the last month) and the ruble ticked up another .32% against the dollar. Leading the charge are several Russian energy giants which were spared in this latest round of sanctions.
Sberbank gained 4.2% and Gazprom advanced 2.2%. LukOil (LUKOY) was unaffected as well, sending the shares up 2.1%.
Together, these three stocks constitute about 25% of the Market Vectors Russia ETF (RSX). This ETF rallied 2.4% after the sanctions.
While no energy giants were directly targeted, Rosneft’s Chief Executive Igor Sechin was hit with sanctions (see what we had to say about Sechin here). The result — Rosneft’s stock took a hit. Reuters reports:
Shares in Russian oil company Rosneft and its major shareholder British BP fell on Monday after the United States announced sanctions against Rosneft’s Chief Executive Igor Sechin over the Ukraine crisis.
Shares in Rosneft, the world’s largest listed oil producer, were down 1.9 percent at 1435 GMT. They underperformed Moscow’s broad MICEX index, which rose on relief that the new U.S. sanctions did not affect any other publicly traded Russian company.
The sanctions against Rosneft only applied to Sechin, a close ally of Russian President Vladimir Putin, but analysts said the measure might hinder some of the company’s business activities.
“Because of the likelihood that the imposed sanctions will complicate the implementation of some of Rosneft’s foreign projects and its cooperation with foreign companies, shares obviously declined,” Grigory Birg, an analyst at Investcafe market research firm, said in a note.
Shares of BP, which holds almost a 20-percent stake in Rosneft, fell 1.6 percent in London and dollar bonds issued by Rosneft hit a record low.
The bottom line — the United States and Europe continue to resist taking direct aim at Russia’s energy sectors, and each time that they fail to sanction them, Russia’s markets breathe a sigh of relief. However, long-term indicators are bleak, and Russia’s economy is beginning to expose structural defects.
But is it enough to trigger a coup? In our latest entry in our Windows On Eurasia column we highlight a report reportedly written by a former FSB officer who suggests that Russia’s economic elite may not support Putin’s aggressive expansion, and may be angry enough to overthrow him.
As we reported earlier, Russian-backed gunmen stormed the city council building in Konstantinovka, taking it over and erecting barricades outside. Though the Ukrainian authorities denied that the city council building and a police station were captured, earlier we posted pictures that showed armed gunmen in control of the entrance to the city council building.
Besides the rifles and equipment which have become a familiar sight to those who have been watching these gunmen capture various buildings across eastern Ukraine, note this man who is carrying what appears to be an RPG-22:
As several thousand protesters held a pro-Ukraine rally in Donetsk, the protests were disrupted, apparently by pro-Russian thugs, who attacked the crowds. RFE/RL reports:
Several people have been reported wounded after pro-Russian separatists attacked a rally in support of Ukrainian unity in Donetsk today.
Media reports said dozens of men dressed in military fatigues and wielding baseball bats and iron bars attacked the rally of some 2,000 people.
Blasts were heard. At least five people were injured, most of them with head injuries.
Some reports said the assailants were shouting “Russia, Russia!” as they attacked the rally.
Washington Post has collected a series of tweets from journalists who were present which tell the story, a few of which we’ve excerpted below.
Ukrainska Pravda reports on the SBU announcement of the discovery of evidence of direct financial links between Moscow and the separatist militia in Slavyansk, via the self-styled deputy mayor of Slavyansk, Igor Perepechayenko:
The SBU has established proof that the Russian Federation is financing the subversive activities of the ‘Strelok’ group.
This was announced by Marina Ostapenko, an SBU representative, on Monday.
According to her, the data were obtained as part of the prevention of the illegal activities of the self-declared deputy mayor of Slavyansk, Igor Perepechayenko.
“It is known that Perepechayenko established contacts with members of a Russian GRU reconnaissance and sabotage group, led by Russian citizen Girkin (Strelok), and provided assistance in the organisation of terrorist acts in the Donetsk region, amongst them, one which led to the death of an SBU employee,” she said.
“On April 22, in support of ‘Strelok’s’ objectives, Perepechayenko was brought to Moscow on a chartered flight, where he spoke with journalists from Channel One, and also received essential guidance and instructions from his foreign handler regarding the escalation of the situation in the eastern regions of Ukraine,” added Ostapenko.
“His handler also gave him 19,000 dollars for ‘Strelok’ and equipment for encrypting phone calls,” she said.
According to Ostapenko, Perepechayenko was arrested at Donetsk airport when he returned from Moscow.
She says that investigations are currently ongoing, a fragment of which has been shown to journalists at the press-centre.
In addition, according to Ukrainska Pravda’s sources, Perepechayenko also carried Yarosh’s business card to Moscow, which was already become a famous Ukrainian internet meme.
[Photo: SBU press-centre for Ukrainska Pravda]
The U.S. State Department released the following statement today:
Today, in response to Russia’s continued actions in southern and eastern Ukraine, the United States is implementing additional restrictive measures on defense exports to Russia. Accordingly, the Department of State is expanding its export restrictions on technologies and services regulated under the U.S. Munitions List (USML).
Effective immediately, the Department’s Directorate of Defense Trade Controls (DDTC) will deny pending applications for export or re-export of any high technology defense articles or services regulated under the U.S. Munitions List to Russia or occupied Crimea that contribute to Russia’s military capabilities. In addition, the Department is taking actions to revoke any existing export licenses which meet these conditions. All other pending applications and existing licenses will receive a case-by-case evaluation to determine their contribution to Russia’s military capabilities.
The United States will continue to adjust its export licensing policies toward Russia, as warranted by Russia’s actions in Ukraine. We urge Russia to honor the commitments it made in Geneva on April 17 to deescalate the situation in Ukraine.
According to one Ukrainian news outlet, however, the police are denying the report.
Of course, if true, this raises two interesting questions — why aren’t Ukrainian authorities better defending their regional administration buildings, and how do Russian government-paid television crews know exactly where to be when these “local” protesters stormed the building?
Sergei Chemezov was also named in the newest round of U.S. sanctions. The Treasury Department press release describes him as a key ally of the Putin administration:
Sergei Chemezov was appointed by a presidential decree on November 26, 2007 as the Director General of the State Corporation for Promoting Development, Manufacturing and Export of Russian Technologies High-Tech Industrial Products, also known as Rostec. Rostec is a Russian state-owned holding company and has not been sanctioned. Chemezov is a trusted ally of President Putin, whom he has known since the 1980s when they lived in the same apartment complex in East Germany. Sergei Chemezov was one of the Russian Government’s nominees for the Board of Directors of Rosneft, a Russian state-owned oil company. He was selected for the Rosneft Board on June 20, 2013.
But this bio only begins to explain who Chemezov is and why he is important to Putin. Just as Sechin (previous update) is a key player who links Russia’s energy sector of the FSB, Chemezov does the same for Russia’s arms export sector. Chemezov was a key architect in Russia’s arms deals that continue to supply the Syrian government with key weapons, including helicopters and aircraft. Chemezov has also lead the efforts to make Russia Egypt’s chief arms dealer in the wake of the fallout between Washington and Cairo over events that have transpired since the collapse of Mohamed Morsi’s administration.
Chemezov has also had a role in several controversial weapons deliveries, including plans that would have sent the advanced S-300 antiaircraft missile system to Iran and Syria.
Under Sergei Chemezov’s leadership, Russian arms exports have greatly expanded. These arms sales are helping to finance the growth of Russia’s military and its modernization programs. But a key part of Putin’s foreign policy is to try to drive wedges between various countries, like Egypt and Venezuela, and the United States, allowing Russia to fill the role that Western countries typically play. Chemezov is part of that system.
Here is the complete list of people named in Washington’s newest round of sanctions. Let’s start by noting one of the most important people on the list, Igor Sechin, described by the U.S. Treasury Department in their official press release:
Igor Sechin is the President and Chairman of the Management Board for Rosneft, Russia’s leading petroleum company, and one of the world’s largest publicly-traded oil companies. Rosneft is a state-owned company and has not been sanctioned. Sechin was formerly the Deputy Prime Minister of the Russian Federation from 2008 until 2012. Additionally, from 2004 until 2008, Sechin was the Deputy Chief of Staff for President Putin. Sechin has shown utter loyalty to Vladimir Putin – a key component to his current standing.
Sechin has well known connections with the FSB, Russia’s Federal Security Service and the successor of the KGB. He is arguably Putin’s primary weapon in controlling Russia’s energy sector, and his company stands to benefit hugely with the expansion into Crimea and the additional control of the Black Sea. For all of the economic dangers that are represented in Russia’s aggressive expansionism, Sechin, his company, and (so the Kremlin’s thinking goes) Russia’s energy sector will be the key beneficiaries in the long run.
The US Office of Foreign Assets Control has released a list of new names to be added the their sanctions list in response to Russia’s actions in Ukraine.
The seven individuals added are:
Oleg Belavenchev, Russian Presidential Envoy to the Crimean District and a member of the Russian Security Council
Sergei Chemezov, CEO of Rostec Corporation and a member of United Russia’s Supreme Council. Rostec is a state-owned conglomeration of technology and manufacturing companies with extensive holdings in both military and civil projects.
Dmitry Kozak, Deputy Prime Minister of Russia
Evgeniy Murov, Director of the Federal Protection Service (akin to the US Secret Service)
Aleksei Pushkov, Chairman of the State Duma Committee on International Affairs
Igor Sechin, Executive Chairman of Rosneft. Considered one of Putin’s closest allies, and highly influential amongst the chekist silovki faction of former security service personnel in the Russian governement.
Vyacheslav Volodin, First Deputy Chief of Staff of the Presidential Executive Office
Seventeen commercial entities have also been added to the list. We’ll go over these and look into what they represent shortly.
UNIAN reports on the Ukrainian Security Service’s announcement that they have established the true identity of Igor Strelkov, a figure they believe to be a GRU officer leading operations in Slavyansk. SBU press-centre official, Marina Ostapenko, said that:
“This is a citizen of the Russian Federation, Colonel Igor Vsevolodovich Girkin. Born on December 17, 1970, passport number 4506460961. This individual is registered at an address in Moscow: Shenkursky passage, house 8-6, apartment 136.”
She also noted that Girkin had repeatedly visited Ukraine with a Russian passport, and that the last time he had legally crossed the Ukrainian border was February 26 this year, arriving on a flight from Moscow to Simferopol. By the night of February 27, the Verkhovna Rada of the Autonomous Republic of Crimea had been seized, which was the beginning of the annexation of the Crimean peninsula.
Ostapenko also said that the SBU has established the involvement of ‘Strelkov’s’ group in the abduction of the OSCE representatives in the Donetsk region. “Their detention took place on the direct orders of the spy, Igor Bezler (callsign – Bes [daemon]). This is confirmed by recordings of telephone conversations between Bezler and his subordinates”, added the head of the press-centre.
Ukrainska Pravda reports on the discovery of a body with signs of torture found in Slavyansk:
The body was found at the site of the discovery of the bodies of the opposition deputy from Horlivka, Volodymyr Rybak, and the Kiev Polytechnic Institute student, Yuri Popravko, with similar signs of a violent death.
The identity of the deceased is not known.
As previously reported, on April 22, the body of the Horlivka city council deputy, Volodymyr Rybak, was found in Slavyansk. His corpse surfaced near the banks of the Seversky Donets river.
On April 23, the SBU reported that the murder of the Horlivka city council deputy, Volodymyr Rybak, involved two Russian citizens – Colonel Igor Bezler (callsign – Bes [daemon], who served in the GRU with the General Staff of the Russian Armed Forces, and has been assigned to Ukraine, and Igor Strelkov (callsign – Strelok [shooter]).
On April 24, the Ministry of Internal Affairs confirmed the identity of the second man, who was found murdered along with Rybak. He turned out to be a student from the Sociology and Law Department of the Kiev Polytechnic Institute, Yuri Popravko.
The Ukrainian Interior Ministry (MVD) has released a statement on a shooting near Kiev this morning. According the the MVD, local police received reports of a shooting in the village of Mykhailivska Rubezhivka at 7:40 (4:40 GMT). Unknown gunmen had opened fire on a minibus. The MVD reports that:
An investigative team, forensics and a canine team have arrived on the scene. Law enforcement officers have ascertained that the unknown people, who arrived in three cars without number plates at the last stop of the bus route, fired shots with an unidentified weapon, and then fled in an unknown direction.
Three people were injured in the attack and a trauma centre. Their wounds are not reported to be life-threatening.
Gennady Kernes, the mayor of Kharkiv, has been shot and seriously wounded by unknown assailants this morning.
A statement on the website of the Kharkiv city administration states that the assassination attempt was made at around 12:00 (9:00 GMT) today.
The mayor of Kharkiv has received a gunshot wound in his back. He is now in hospital, receiving emergency treatment in the operating theatre. Doctors are fighting to save his life.
The assassination attempted in the area of the Belgorod Highway. The mayor was jogging at the time.
At 11:07 (8:07 GMT) however, the press office of the Donetsk Police force announced that the police station in Konstantinovka was “operating normally”.
Ukrainska Pravda reports that, while 30 unidentified gunmen had arrived and entered the building at 6:00 local time, the police press office had said that no one had been hurt and that no shots had been fired. According to the police, several of the intruders remain in the building negotiating with the local police chief while the rest are now outside.