Biden to impose trade financing restrictions on two Ukraine territories recognized by Putin

President Biden will sign an executive order restricting trade, investment and financing by U.S. individuals with two territories in Ukraine controlled by Moscow-backed separatists, the White House said Monday.

The move comes shortly after Russian President Vladimir Putin escalated tensions with the West by announcing that Russia would recognize the two territories’ independence.

The Russian-controlled separatists’ territories, which are located in Ukraine’s Donbas region, are the self-proclaimed People’s Republics of Donetsk and Lugansk.

In a statement, White House press secretary Jen Psaki said the administration anticipated Mr. Putin’s move and responded immediately.

Under the executive order, U.S. companies and individuals will be prohibited investing in, trading with or financing activity in the separatist regions.

“This [order] will also provide authority to impose sanctions on any person determined to operate in those areas of Ukraine,” Ms. Psaki said, adding that the State and Treasury departments will announce further details later.

Ms. Psaki said the White House will soon announce additional sanctions related to “today’s blatant violation of Russia’s international commitments.”

“To be clear: these measures are separate from and would be in addition to the swift and severe economic measures we have been prepared in coordination with allies and partners should Russia further invade Ukraine,” she said.

Mr. Biden‘s decision to impose sanctions against the separatist territories in Ukraine suggests that the U.S. is recognizing the window for diplomacy is closing. The White House over the past week has stepped up its warnings about the likelihood of a Russian attack on Ukraine, while simultaneously trying to resolve the crisis through diplomatic talks. 

Last week, Mr. Biden said he believes Mr. Putin has made up his mind to invade Ukraine. On Sunday, the White House announced that Mr. Putin had agreed “in principle” to a meeting with Mr. Biden. But the Kremlin has dismissed that announcement as “premature.”

The U.S. announcement of sanctions comes after the European Union announced it would “react with sanctions against those involved in this illegal act” of recognizing the Ukrainian regions’ independence.

European Union Commission President Ursula von der Leyen wrote in a tweet that the recognition of the two separatist territories in Ukraine is a blatant violation of international law. She vowed that the EU and its partners would react “with unity, firmness and determination in solidarity.” 

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