Putin Orders Suspension of Some Imports from Countries Imposing Sanctions on Russia
August 7, 2014 • 2:28PM

Russian President Vladimir Putin signed an Executive Order yesterday on Special Economic Measures to Protect the Russian Federation's Security, which mandates a one-year " ban or restriction on ... the import to Russia of particular kinds of agricultural produce, raw materials and foodstuffs originating in countries that have decided to impose economic sanctions on Russian entities and/or individuals, or have joined such decisions." Prime Minister Dmitri Medvedev's spokesperson Natalya Timakova said that the Government would unveil the ban lists on Thursday, Aug. 7, adding that those publicized so far were merely "drafts." Earlier in the day, Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) spokesman Alexei Alexeyenko had told RIA Novosti, "Everything [agricultural] produced and imported to Russia from the United States will be banned. Fruits and vegetables from the European Union will also be under full ban."

Rosselkhoznadzor announced it would hold meetings with diplomats from Ecuador, Brazil, Chile and Argentina tomorrow, on boosting their food exports to Russia. Brazil has been a major beef exporter to Russia, and Rosselkhoznadzor today lifted temporary restrictions on Brazilian meat, after receiving guarantees from that country's Veterinary Service. Big beef producer Argentina has not been heavily in the Russian market recently, but Putin visited the country in July to discuss all areas of cooperation with President Cristina Fernandez. Ecuador is the world's top producer of bananas.

EU countries with substantial fruit and vegetable exports to Russia include Bulgaria, Cyprus, the Czech Republic, Denmark, the Netherlands, Spain, and Poland. Dairy products from several EU exporters, as well as Ukraine and Moldova, have already been banned by Rosselkhoznadzor on veterinary and phytosanitary grounds. Poland, for example, exports 677,000 tonnes of apples to Russia; every Pole would have to double his apple consumption to absorb the loss of the Russian market, according to the Financial Times. The Polish Ministry of Economics projects that sanctions against Russia could cut its GDP by 0.6%. Today the Prime Minister of Finland warned that his country stands to lose a billion euros of business with Russia, half of it in the dairy industry.

Russia remains the second-largest market for American poultry exports, the FT reported. Seven percent of U.S. poultry exports are sold to Russia, for $303 million annually, although that level is below Russia's 40% share of U.S. poultry exports during the early 1990s trade liberalization, when so-called "Bush legs," or chicken quarters, flooded the Russian market and destroyed the former Soviet poultry industry.

Putin said in televised remarks that Russia will proceed carefully, to prevent the measures from hitting its population with sudden food price hikes. Concerning one of the retaliatory moves rumored yesterday after the EU cancelled aircraft leasing to Russia's Dobrolyot Airline, namely the possibility of closing Russian air space to transit overflights by carriers from sanction-imposing countries, Foreign Minister Sergei Lavrov yesterday urged caution. Speaking after talks (on nuclear power cooperation, among other things) in Ust-Kamenogorsk, Kazakstan, Lavrov said he would not comment on rumors and did not favor bans that cause problems for ordinary travellers "who have nothing to do with what those who unleashed this war in Ukraine are doing." He quoted Putin on how responsible countries should think carefully about what the impact of any sanctions imposed will be on their own citizens.