Ukraine imposes retaliatory sanctions against Russia

Ukraine’s parliament voted for the bill allowing the Cabinet of Ministers to impose tit-for-tat sanctions against Russia. The amendment to the law of Ukraine on International Business Activity authorizes economic penalties against Russia in response to discriminatory actions of the aggressor state. 291 MPs, that is more than necessary number of lawmakers (226) voted in favor of the bill. The law will come into effect starting from January 1, 2016. Ukraine’s Economy Ministry has already suggested banning import of several Russian products from January 10, 2016. The list includes restrictions on baked goods, flour confectionery, chocolates, meat, fish, coffee, black tea, baby food, filtered cigarettes, beer, vodka and other goods. Ukraine’s Prime Minister Arseniy Yatsenyuk said that Ukraine would consider avoiding the sanctions if Moscow cancels product embargo on Ukraine and implements agreement with Ukraine on the Free Trade Zone.

The Ukraine’s decision followed Russian move to impose economic sanctions on Kiev due to its joining of anti-Russia sanctions by the European Union and the U.S. The decree signed by the Russian Prime Minister Dmitry Medvedev considers sanctions against Kiev from January 1, 2016 instead of free trade zone agreement in the framework of CIS. The existing framework implies duty free import of all Ukrainian goods to the Russian Federation, excluding sugar. Ukraine estimates $600 million in economic losses as a result of the sanctions.

Ukraine and the European Union signed an agreement on free trade that comes into effect starting from January 2016. Last-ditch negotiations in Brussels that aimed to address Russia’s concerns, failed without producing any tangible results. Moscow says the trade accord will allow cheap EU products into Ukraine that can eventually make their way into the Russian market, Ukraine cannot take part in two free-trade zones according to Medvedev. These developments took place along the extended EU and U.S. sanctions on Russia. On 21 December, 2015 the European Council prolonged EU economic sanctions against Russia for six more months due to Russia’s failure to comply with the Minsk Agreement. With the same reason, the U.S. tightened economic pressure on Russia by further sanctions on dozens of individuals and companies linked to Russian activities in Ukraine.

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