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EU prepares to freeze Putin and Lavrov assets over Ukraine invasion

The EU is preparing to freeze the assets of Russian President Vladimir Putin and his foreign minister Sergei Lavrov under a new sanctions package as member states seek to toughen their response to Russia’s invasion of Ukraine, according to four people familiar with the matter.

Foreign ministers hope to approve the sanctions package in a meeting on Friday, along with measures against Russian banks and industry, the people said.

Putin and Lavrov would not be subject to a ban on traveling, underlining the EU’s willingness to keep symbolic diplomatic avenues open.

The EU is preparing to sign off on its second package of restrictions on Russia in the space of three days following a late-night leaders’ summit in Brussels. The other new proposals would freeze some transactions with a wide range of Russian banks, bar a number of state-owned companies from launching listings on stock exchanges in the bloc and stop Russian nationals from making big deposits in EU banks.

The EU is under pressure to step up its pressure on Putin as he intensifies his assault on Ukraine. Volodymyr Zelensky, Ukraine’s president, on Friday criticized Europe for not imposing tough enough sanctions on Moscow, calling on Putin to negotiate in order to “stop the death”.

Directly sanctioning foreign leaders is rare for the EU. Among those targeted before are Syrian leader Bashar al-Assad and Belarusian president Alexander Lukashenko.

Arriving at the foreign ministers’ meeting in Brussels on Thursday, German foreign minister Annalena Baerbock said: “We will hit the Putin system where it needs to be hit, not only economically and financially, but at its core of power. And that’s why we have to list not only oligarchs, but also the many members of parliament who have prepared these steps, and we are also now listing the President of the Republic, Mr Putin and the foreign minister Sergei Lavrov. ”

The push for the Russian president and foreign minister to be directly targeted with sanctions gathered momentum at a summit of EU leaders ending in the early hours of Friday in Brussels, where EU leaders gave the political go-ahead for the second sanctions package. Ursula von der Leyen, the commission president, said she expected the measures, when finalized, to have “maximum impact on the Russian economy and on the political elite”.

Paolo Gentiloni, the EU economics commissioner, said the second package was “very important and very effective” but that it would not be the last Europe would impose.

The EU has also been discussing whether to sever the access of Russian banks to the Swift messaging network. French finance minister Bruno Le Maire said on Friday the EU wanted to cut Russia off from the world’s financial system and that depriving Russia of access to Swift was still an option.

Member states, including Germany and Italy, have been concerned that blocking Russia’s use of Swift would damage their own economies or financial systems. The move could, for instance, make transactions with Russian companies difficult for countries that buy the country’s oil and gas.

Baerbock said the experience of cutting Iran out of the Swift system showed how broad the impact could be.

“We have seen in Iran that we could no longer use it to fund humanitarian projects, for example. It would also mean that people in Russia, for example, a granddaughter who lives in Europe would not be able to transfer money to her grandmother. That may sound small. . . but those who are responsible for this bloodshed will have ways and means, of course, to carry out their financial payments anyway. ”

One senior European banker said cutting Moscow off from Swift could backfire on western countries given Russia has a fledgling system and could seek to increase its financial connections with China.

Video: Russian troops heading ‘at speed’ to Kyiv

The second package of sanctions to be agreed on Friday will extend the list of Russian banks blocked from EU financing to Alfa-Bank and Bank Otkritie, two private lenders, on top of five state-owned institutions, according to plans seen by the Financial Times .

Lending and the purchase of securities would be prohibited in several state-owned Russian enterprises, including companies in the aerospace and defense sector, shipping and shipbuilding. Russians would not be able to make any new deposits of more than € 100,000 in EU banks.

Additional reporting from Erika Solomon in Berlin, Javier Espinoza in Brussels and Demetri Sevastopulo in Washington

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