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Thirty five Russian diplomats have been expelled from the United States as punishment for alleged interference into this year’s presidential election.

The US will also close two Russian compounds used for intelligence-gathering, in Maryland and New York, as part of a raft of retaliatory measures.

President Barack Obama had vowed action against Russia amid accusations it directed hacks against the DNC and Hillary Clinton’s campaign.

Russia has denied any involvement.

The 35 Russian diplomats from the Washington DC embassy and the consulate in San Francisco have been declared “persona non grata” by state department, giving them and their families 72 hours to leave the US.

The Russian government is expected to respond in turn by expelling US diplomats.

The state department move follows calls from senior senators to sanction Russian officials who are believed to have played a role in the hacking, which some lawmakers referred to as America’s “political Pearl Harbor”.

President-elect Donald Trump has dismissed the claims as “ridiculous” and said Americans should “get on with our lives” when asked about the possibility of sanctions before the announcement on December 28.

Sanctions have also been announced against nine entities and individuals including the GRU and FSB Russian intelligence agencies.

The US Department of Treasury said that the move targeted those responsible for “undermining election processes or institutions”.

Konstantin Kosachyov, chairman of the international affairs committee in the upper house of the Russian parliament, told the RIA news agency the expulsion represented “the death throes of political corpses”.

In a statement President Barack Obama said “all Americans should be alarmed by Russia’s actions”.

The outgoing president called the moves a “necessary and appropriate response to efforts to harm US interests”, adding it would not be “the sum total of our response to Russia’s aggressive activities”.

Barack Obama also announced the US would declassify technical information related to Russian cyber activity to “help network defenders in the United States and abroad identify, detect, and disrupt Russia’s global campaign of malicious cyber activities”.

House Speaker Paul Ryan, the top Republican in Congress, said in a statement that despite the measures being overdue “it is an appropriate way to end eight years of failed policy with Russia”.

Paul Ryan added that “it serves as a prime example of this administration’s ineffective foreign policy that has left America weaker in the eyes of the world”.

Maryland Democrat Senator Ben Cardin applauded sanctions against Russia but called them insufficient.

Ben Cardin called for Congress to take action separately from the White House, and plans to introduce legislation to establish a committee “to further examine the attack and Russian’s efforts to interfere in our election”.

In a joint statement by the Department of Homeland Security, the Office of the Director of National Security, and the FBI, officials appeal to companies to “look back within their network traffic” and report any signs of “malicious cyber activity” to law enforcement.

The Russian hacking, which the intelligence agencies describe as a “decade-long campaign” included methods such as “spearphishing, campaigns targeting government organizations, critical infrastructure, think tanks, universities, political organizations, and corporations; theft of information from these organizations; and the recent public release of some of this stolen information”.

Emails stolen from John Podesta and from the servers of the DNC were released during the 2016 presidential election by WikiLeaks.

Several US agencies, including the FBI and CIA have concluded that the hacked information was released to cause damage to Hillary Clinton and the Democrats in order to favor Donald Trump.

As of Sunday, October 25, Ukraine will stop direct flights to Russia, as new sanctions initiated by Kiev come into effect.

Moscow first called Kiev’s ban on Russian airlines “madness”, then announced that it would mirror the move.

Ukraine now says flights will end at midnight on October 24, after last-minute crisis talks failed.

Up to 70,000 passengers a month will be affected.

The sanctions are intended to punish Russia for annexing Crimea and supporting armed rebels in eastern Ukraine. The fact that they have been introduced now, when a ceasefire is finally holding on the ground, shows how bitter relations remain.

Photo Reuters

Photo Reuters

Russia has accused Ukraine of shooting itself in the foot with the move, pointing out that most passengers are Ukrainian travelling to work in Russia, visiting relatives or in transit.

Two-thirds of all passengers travel on Russian airlines.

Russia’s transport minister has estimated that the loss in ticket sales to both countries will run to around $110 million a year.

The ban is already angering passengers from both countries.

Last-minute talks to find a compromise are under way – so far to no avail – and the chances of success look slim in this climate.

As of October 25, passengers will be forced to take longer, more expensive routes via third countries, or to brace themselves for a 13-hour trip by train.

Russia has announced it is extending its list of countries subject to a food import ban in retaliation for Western sanctions over the Ukraine crisis.

Russian PM Dmitry Medvedev said the ban would now apply to Iceland, Liechtenstein, Albania and Montenegro.

Dmitry Medvedev said Ukraine would be added in 2016 if an economic agreement between Kiev and the EU came into force.

The bulldozing of tonnes of Western-produced cheese and other foodstuffs has angered anti-poverty campaigners.

Russia began destroying banned produce earlier this month, steamrollering fruit and burning boxes of bacon. Critics say it should be used to feed the poor and hungry.

The move comes after the EU and US introduced sanctions over Russia’s annexation of Crimea and actions in eastern Ukraine.

Photo RIA Novosti

Photo RIA Novosti

Certain products from EU countries as well as Australia, Canada, Norway and the US were banned in August last year.

Speaking at a cabinet of ministers on August 13, Dmitry Medvedev said Iceland, Liechtenstein, Albania and Montenegro would also now be affected because they had joined EU sanctions against Russia.

“Joining the sanctions is a conscious choice which means readiness for retaliatory measures from our part, which have been adopted,” the prime minister said in comments broadcast on state-owned channel Rossiya 24.

The ban includes meat, fish, dairy products, fruit and vegetables.

Dmitry Medvedev previously said that the counter-sanctions had given domestic agriculture a significant boost and had not caused shortages, according to Rossiya 24.

Russian authorities have also started burning Dutch flowers, saying they pose a safety risk because they may be infected with pests.

However, critics say Russia wants to take revenge on the Netherlands over its handling of the investigation into the downing of Malaysia Airlines flight MH17 over rebel-held eastern Ukraine last year.

In a rare move against President Vladimir Putin, Russia’s Communist Party announced on August 13 it had submitted a bill to parliament calling for smuggled Western food to be given to the needy instead of being destroyed.

The Kremlin says food cannot be given away because it could be unsafe.

Russian energy giant Gazprom has been charged by the European Commission with abusing its dominant market position in Central and Eastern European gas markets.

The EC said its preliminary view was that Gazprom was breaking EU anti-trust rules.

It added the company may have limited its customers’ ability to resell gas, potentially allowing it to charge unfair prices in some EU member states.

Gazprom rejected the EC’s objections, calling them “unfounded”.

“Gazprom strictly adheres to all the norms of international law and national legislation in the countries where the Gazprom Group conducts business,” the company said in a statement.

The company now has 12 weeks to respond to the Commission’s allegations.

Photo Reuters

Photo Reuters

The move could further sour relations with Moscow, which are already strained over the Ukraine crisis.

Brussels began investigating Russian state-controlled Gazprom in 2012, but Moscow says the Commission’s allegations are politically motivated.

The EU’s new anti-monopoly chief, Margrethe Vestager, said the Commission had found that Gazprom “may have built artificial barriers preventing gas from flowing from certain Central European countries to others, hindering cross-border competition.

“Keeping national gas markets separate also allowed Gazprom to charge prices that we, at this stage, consider to be unfair.

“If our concerns were confirmed, Gazprom would have to face the legal consequences of its behavior.”

Brussels’ competition authority has the power to impose fines of up to 10% of Gazprom’s global turnover.

The EC questioned the formulae Gazprom used to come up with the different prices at which it sold gas to individual countries.

“Gazprom’s specific price formulae, which link the price of gas to the price of oil products, seem to have largely favored Gazprom over its customers,” it said.

The Commission said that, in its preliminary view, Gazprom was hindering competition in the gas markets in eight Central and Eastern European member states – Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

Russia supplies about a third of the EU’s gas requirements, with half that amount going through pipelines that cross Ukraine.


President Barack Obama will sign a bill imposing new Russian sanctions despite reservations, the White House has announced.

The bill – which primarily sanctions Russia’s defense industries – passed with overwhelming support in Congress.

White House spokesman Josh Earnest said the bill sent “a confusing message to our allies” but President Barack Obama will sign it because it “preserves flexibility”.

The Russian ruble has lost half its value this year amid lower oil prices and Western sanctions.Barack Obama Russia sanctions bill

The currency went into free-fall in trading on December 16.

The bill would also give Barack Obama the authority to provide lethal and non-lethal military assistance to Ukraine, but not require him to do so.

The US and European powers have sanctioned Russia previously over the country’s annexation of Crimea and its support for separatists in eastern Ukraine.

Secretary of State John Kerry, who met Russia’s foreign minister in Rome, said: “These sanctions could be lifted in a matter of weeks or days, depending on the choices that President Putin takes.”

However, John Kerry said Russia had made “constructive” moves in recent days.

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Rolls-Royce Holdings has warned of falling revenues as trade sanctions against Russia begin to bite.

Customers of Rolls-Royce’s nuclear, energy and power systems businesses have delayed or cancelled orders, the company said in a trading update.

As a result, group underlying revenue for 2014 would be 3.5%-to-4% lower than expected, it said.

However, Rolls-Royce expected underlying profit to remain flat as cost savings counterbalanced the falling revenue.

“Since our interim results, the economic outlook for 2015 has become more challenging,” the company said, with many of its customers experiencing “worsening market conditions” affecting their investment decisions.

Rolls-Royce Holdings has warned of falling revenues as trade sanctions against Russia begin to bite

Rolls-Royce Holdings has warned of falling revenues as trade sanctions against Russia begin to bite

Guidance on revenues for its civil aerospace, defense aerospace, marine and power systems divisions, remained unchanged, the company said.

Nuclear and energy revenue guidance would fall from 0%-to-5%, down from 5%-to-10%.

However, Rolls-Royce expected underlying profit in its civil aerospace division to be higher than previously thought.

“While the short term is clearly challenging, reflecting the economic environment, the prospects for the group remain strong, driven by the growing global requirement for cleaner, better power,” said chief executive John Rishton.

Rolls-Royce’s share price fell 7.5% in early morning trading as the market reacted negatively to the revenue warning.

Russia has been given by the European Union one week to reverse course in Ukraine or face new sanctions.

European Council President Herman Van Rompuy said the EU was working urgently on further restrictive measures.

Earlier, Ukrainian President Petro Poroshenko said his country was “close to a point of no return – full scale-war” with Russia.

Russia denies Western accusations that its forces have illegally crossed into Ukraine to support separatists there.

Pro-Russian rebels have made gains against Ukrainian troops in recent days in the eastern Donetsk and Luhansk regions.

Some 2,600 people have died in fighting.

The conflict in the east erupted in April following Russia’s annexation of Ukraine’s southern Crimea peninsula a month before.

Western leaders say there is clear evidence of regular Russian military units operating inside Ukraine with heavy weapons.

Speaking after a summit in Brussels, Herman Van Rompuy said the EU “stands ready to take further significant steps in light of the evolution of the situation on the ground.

“Everybody is fully aware that we have to act quickly.”

Herman Van Rompuy did not specify the nature of further sanctions, but said the proposals would be ready within a week.

The US applauded the EU’s move.

Speaking in Brussels, President Petro Poroshenko said Ukraine was a victim of military aggression and terror

Speaking in Brussels, President Petro Poroshenko said Ukraine was a victim of military aggression and terror (photo AFP)

“We welcome the European Council’s consensus today to show strong support for Ukraine’s sovereignty and territorial integrity and to prepare further sanctions for consideration in coming days,” White House National Security spokeswoman Caitlin Hayden said.

The EU and US have already imposed asset freezes and travel bans on many senior Russian officials and separatist leaders in eastern Ukraine.

Western sanctions also restrict loans for Russian state banks, block defense-related technology exports and certain oil industry exports to Russia.

Russia denies that its forces are backing the rebels, instead accusing Ukrainian forces of aggression and deliberately firing at civilians.

Speaking in Brussels, President Petro Poroshenko said Ukraine was a victim of “military aggression and terror”.

“Any offensive action which would be undertaken [by Russia]… would be a point of no return. And that’s why we undertake enormous efforts to stop that.”

Petro Poroshenko also said that he would discuss the possibility of a ceasefire at a meeting in Belarus on Monday of the Contact Group, which includes Ukraine, Russia, Belarus and the Organization for Security and Cooperation in Europe (OSCE).

Federica Mogherini, named on August 31 as Catherine Ashton’s successor, said there could be no military solution to the crisis and that while sanctions were being worked on, the diplomatic process would need to continue.

Ukraine’s government forces have lost ground in recent fighting.

A Ukrainian military spokesman said on August 30 that Russian tanks had attacked the town of Novosvitlivka near Luhansk and “destroyed virtually every house”.

Spokesman Andriy Lysenko said troops had been ordered to retreat from Novosvitlivk.

Ukrainian soldiers have also been trying to evacuate Ilovaisk in the Donetsk region, which has been surrounded by the rebels. Reports say a number of soldiers have been killed in shelling by the separatists.

Rebel leader Alexander Zakharchenko told the Russian News Service radio station a new offensive was being planned to create a corridor between Donetsk and Luhansk.

In south-eastern Ukraine, people have been leaving the port city of Mariupol, after advancing rebels captured Novoazovsk to the east.

Western and Ukrainian officials say this offensive has been substantially helped by Russian regular troops, opening a new front. Russia denies the accusation.

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The G7 powers have agreed to impose fresh sanctions on Russia over its actions in Ukraine.

A G7 statement gave no detail of the sanctions, but US officials said they could announce measures by Monday.

The West accuses Russia of leading a secession rebellion in Ukraine’s east, months after it annexed Crimea. Moscow denies the allegations.

Meanwhile, negotiators are trying to secure the release of international observers seized by pro-Russia gunmen.

Forces in the city of Sloviansk are still holding the eight European military observers and several Ukrainian army personnel who they seized on Friday and accuse of espionage.

The observers were taking part in a mission linked to the Organization for Security and Co-operation in Europe (OSCE).

Forces in Sloviansk are holding eight European military observers and several Ukrainian army personnel

Forces in Sloviansk are holding eight European military observers and several Ukrainian army personnel (photo AFP)

Rebel militia continue to occupy official buildings in a dozen eastern cities, defying the government in Kiev.

Russia has tens of thousands of troops deployed along its side of the border with Ukraine and has said it would act if its interests were threatened.

The US accused Russian jets of violating Ukraine’s airspace on Friday in a further sign of escalation.

Pentagon spokesman Col. Steven Warren said Russian aircraft had entered Ukrainian airspace several times in the past 24 hours.

Meanwhile, the G7 praised Ukraine for acting with restraint in dealing with the “armed bands” that had occupied government buildings.

But the group, which includes the US, UK, Germany, Japan, France, Canada and Italy, condemned Russia’s “increasingly concerning rhetoric and ongoing threatening military maneuvers”.

“Given the urgency of securing the opportunity for a successful and peaceful democratic vote next month in Ukraine’s presidential elections, we have committed to act urgently to intensify targeted sanctions and measures to increase the costs of Russia’s actions,” said the statement.

The US and EU already has assets freezes and travel bans in place target a number of Russian individuals and firms accused of playing a part in the annexation of Crimea.

On Friday, Ukraine’s interior ministry said armed separatists had seized OSCE representatives, who were believed to be military observers from Germany, Denmark, Poland, Sweden and the Czech Republic.

Pro-Russian leaders in Sloviansk confirmed the bus had been stopped near the town of Sloviansk and said they were checking the identities of those on board.

The self-proclaimed mayor of Sloviansk, Vyacheslav Ponomaryov, said at least one passenger had been carrying maps showing separatist checkpoints in the area, which suggested “their involvement in espionage”.

Last weekend, Vyacheslav Ponomaryov broadcast an appeal to President Vladimir Putin asking for Russian troops to protect the city from “fascists” after three of his men died in a gunfight.

Russia’s OSCE envoy Andrei Kelin promised to take “all possible steps” to free the representatives, according to Russian media reports.

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Miley Cyrus and Justin Timberlake may be forced to cancel their sell-out shows in Finland as a result of US sanctions against Russia.

Helsinki’s Hartwall venue is owned by Gennady Timchenko and brothers Arkady and Boris Rotenberg.

All three appear on the US sanctions list as part of Russian President Vladimir Putin’s “inner circle”.

Helsinki’s Hartwall venue is due to host Justin Timberlake in May and Miley Cyrus in June.

Other acts due to appear this summer include Robbie Williams, Peter Gabriel, Aerosmith and Elton John.

Gennady Timchenko is a co-founder of Russian oil trader Gunvor and was estimated by Forbes magazine to be worth $15.3 billion before the sanctions came into force last month.

Arkady and Boris Rotenberg are the billionaire co-owners of SMP Bank and childhood friends of President Vladimir Putin.

Helsinki's Hartwall venue is due to host Miley Cyrus in June

Helsinki’s Hartwall venue is due to host Miley Cyrus in June

The three men are among a list of 27 individuals named by the US as being closely tied to President Vladimir Putin personally or politically.

Together, the three own events management company Arena Events Oy, which bought the Helsinki Hartwall Arena last year, as well as taking a minority stake in the local hockey club, Jokerit.

Arena Events Oy is managed by Boris Rotenberg’s son Roman.

Under the US sanctions no American citizen or business can provide Gennady Timchenko or the Rotenberg brothers with “economic resources”, effectively preventing business from being conducted with them.

But the concerts’ US ticket promoter, Live Nation, could apply to the US Office of Foreign Assets Control (OFAC), part of the Treasury Department, for a license to authorize the transaction.

Live Nation said it was currently reviewing its portfolio and would work to ensure the US sanctions were upheld.

Tom Stocker, partner at law firm Pinsent Mason, said much depended on whether any money was still to be paid to the venue.

If not, Tom Stocker, the concerts could go ahead as planned. But if money was still owed to the venue it was possible the concerts could be cancelled.

“OFAC will need to provide a license to authorize the transaction and will have to take into account that the show forms part of a pre-existing agreement,” he said.

“But it has quite a wide discretion to grant licenses. If this was Europe then a license would most likely not be granted.

“It is a real area of ambiguity. The company that owns the venue is not on the sanctions list, but Timchenko is.

“The question is whether you are giving Timchenko economic resources by allowing the concerts to go ahead.”

Tom Stocker added there was potential for the concerts not to go ahead, as US companies would be likely to take a “cautious approach” for fear of falling foul of the current sanctions.

He said British artists like Robbie Williams, Elton John and Peter Gabriel, who were all likely to have US management, might find they were unable to discuss details of their forthcoming concerts at the Finnish venue while they were on US soil.

“The individuals themselves can’t do anything in furtherance of the concerts while on US soil,” Tom Stocker said.

“They can’t send emails to their US management while on American soil, they can’t discuss arrangements for the concert.”

As yet there is no evidence that any concerts at the venue have been cancelled. The Hartwall venue’s website shows all the concerts going ahead as planned.