Russia, EU trade talks fail, Kyiv set to face retaliation

“Under these circumstances, we need to protect our market and our producers and to prevent imports from other countries under the guise of Ukrainian goods”, said Russian Prime Minister Dmitri Medvedev, according to Russian media.

Ukraine’s president Petro Poroshenko said last week he regretted Russia’s decision to end preferential trade with Ukraine but was “ready to pay the price” for the European Union trade accord, which would be fully implemented on January 1.

“Since the Minsk agreements will not be fully implemented by 31 December 2015, the duration of the sanctions has been prolonged whilst the Council continues its assessment of progress in implementation”, the statement said.

Russian President Vladimir Putin ordered free trade with Ukraine to be suspended in a decree last week which cited “extraordinary circumstances affecting the interests and economic security” of Russia.

The EU and Ukraine repeatedly stated they would not postpone the introduction of the free trade zone, nor would they make any changes to the Association Agreement.

The Treasury statement also said it had identified a number of majority-owned subsidiaries of Russian state banks Sberbank and VTB as well as defense company Rostec, and that they would be subject to the sanctions already imposed on the parent companies. “It was an emotional discussion”.

Reflecting the discordant forces at work Monday, French Defence Minister Jean-Yves Le Drian flew into Moscow for talks on bolstering cooperation against Islamic State jihadists in Syria.

U.S. Treasury Department on Tuesday imposed sanctions on 34 individuals and entities in an effort to maintain pressure on Russian Federation over its action related to the crisis in Ukraine.

“The sanctions are very important in keeping Russia on track and narrowing their space of maneuver in eastern Ukraine“, Mr. Klimkin said before meeting with European Union and Russian officials.

It has also targeted those involved in Moscow’s annexation of Crimea in March 2014 with similar measures which expire in June.