U.S. Sanctions Putin, Key Aides as Russian Forces Encircle Kyiv

(Bloomberg) -- Global condemnation of Vladimir Putin quickened Friday with the U.S. sanctioning the Russian leader and several key aides as his troops met opposition in Ukraine’s capital.

“President Putin and Minister Lavrov are directly responsible for Russia’s unprovoked and unlawful further invasion of Ukraine,” the Treasury Department said in a statement, referring to Foreign Minister Sergei Lavrov. “President Putin joins a very small group that includes despots such as Kim Jong Un, Alexander Lukashenko, and Bashar al-Assad,” the Treasury added, referring to the leaders of North Korea, Belarus and Syria.

Western nations have sought to keep ratcheting up pressure on Putin, though there was little expectation the penalties would stop Russian forces. Ukraine’s president warned that Friday night would be even tougher than the previous ones. Kyiv Mayor Vitali Klitschko said in a video address Russian forces are in areas of the capital, though the Defense Ministry said Ukrainian forces are still in control of the city.

Russia will use all available forces to “break resistance in a backstabbing, tough, mean way,” Ukrainian President Volodymyr Zelenskiy said late Friday in a video address. “This night they will storm. Many cities of our country are under attack. We cannot lose Kyiv.”

Read: Ukraine’s TV Comedian President Finds His Role as Wartime Leader

Officials warned residents that street fighting was underway in Kyiv against Russian forces, and urged people to seek shelter, the Associated Press reported. Russian troops stormed toward the capital early Saturday as explosions reverberated through the city. President Zelenskiy refused American help to evacuate, saying: “The fight is here,” the AP reported, citing a senior American intelligence official with direct knowledge of the conversation.

Read more: How War in Ukraine Threatens the World’s Economic Recovery

Ukraine’s government said it was discussing with Russia the timing and location of potential peace talks. Putin aide Dmitry Peskov conveyed the offer for a gathering in Belarus -- one of several staging points for Russian troops -- and was turned down.

The Russian president said earlier he’s ready to authorize negotiations with Ukraine about the country adopting a “neutral” status. It also remains to be seen what the premise of the discussions would be and how each side would define what neutrality means.

Politically Meaningful

While the sanctioning of Putin is largely symbolic because, on paper at least, he doesn’t have much to target, it’s politically meaningful given that the U.S. tends to only sanction leaders of countries with whom it’s severed diplomatic relations or considers pariahs. Secretary of State Antony Blinken said the U.S. may sanction more Russian officials. 

“The U.S. Treasury has already designated eleven members of the Russian Security Council, and we will look to designate more in the future if Russia does not stop its unprovoked campaign against Ukraine,” Blinken said in an emailed statement.

Putin said he invaded Ukraine to stop it from getting closer to NATO, the Western military alliance, and to force it to “demilitarize.”

Watch: Biden Says Putin Has ‘Larger Ambitions Than Ukraine’ 

At the United Nations in New York, Russia deployed its veto to block a resolution calling on Moscow to withdraw from Ukraine. China, its closest ally on the Security Council, abstained, as did India and the United Arab Emirates. But ambassadors from dozens of nations showed up at the debate to show their support for Ukraine. 

The latest penalties came after the U.S. and European Union increased pressure on the Kremlin with a coordinated set of sanctions the previous day intended to inflict a heavy toll on the Russian economy. The goal, said French Finance Minister Bruno Le Maire, is “to financially isolate Russia.” Zelenskiy said he and President Joe Biden discussed strengthening sanctions and “concrete defense assistance” in a call on Friday.

Market Turmoil

The ruble sank to a record low Thursday and Russia’s dollar bonds lost 45% this week, according to data compiled from a Bloomberg index. Standard & Poor’s cut Russia’s credit rating to junk and Moody’s Investors Service put the debt on review for downgrade from one notch above junk.

Russian market turmoil eased after Biden and EU leaders shied away from the most drastic action, stopping short of barring Russia from the SWIFT international banking network and allowing exemptions for energy exports. They were further buoyed by the suggestion of negotiations, even though it’s unclear whether any talks would materialize.

Chinese President Xi Jinping told Putin in a call earlier on Friday that he supported negotiations between Russia and Ukraine, according to China Central Television. 

Despite talk of negotiation, Putin still appears to be seeking a replacement of Ukraine’s leadership, which he and top aides have called a “junta.” On Friday, the Russian president asked Ukrainian troops to help him overthrow the government.

“Take power into your own hands,” he said, addressing Ukraine’s military in a video statement before a meeting of his security council in Moscow.

Offer of Talks

Lavrov said that Moscow would only talk if Ukraine’s army surrenders. “We’re ready for negotiations at any time, as soon as the Ukrainian armed forces respond to our president’s call, stop resistance and lay down their weapons,” he said. 

Read this next: How War in Ukraine Threatens the World’s Economic Recovery

Russian Foreign Ministry spokeswoman Maria Zakharova dismissed Zelenskiy and his government as “puppets.” Despite the offer of talks, the assault on Ukraine is ongoing to secure the “de-militarization” of the country, she said.

In Kyiv, the Defense Ministry said 18,000 rifles were handed out on Thursday and that “thousands” of volunteers were signing up to fight the invasion.

Zelenskiy said that his intelligence services had identified him as Russia’s top target, but that he is staying in Kyiv and his family will remain in the country. “They want to destroy Ukraine politically by destroying the head of state,” he said.

In a later address, he said that Ukraine was not afraid “to talk about neutral status,” but went on to demand security guarantees and say that the country’s fate depended on its army.

French President Emmanuel Macron said that he’d had a frank, direct - and rapid - conversation with Putin at Zelenskiy’s request. Macron said Zelenskiy, who hasn’t been able to reach the Russian leader, wanted him to ask Putin to stop the fighting and engage in diplomacy.

“It didn’t produce any effect so far as you can see, because the Russian president has chosen war,” Macron said. 

©2022 Bloomberg L.P.