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U.S. Considering Moving Embassy Out of Ukraine: Ukraine Update

(Bloomberg) -- Russian President Vladimir Putin signed a decree officially recognizing two self-proclaimed separatist republics in eastern Ukraine, a move that likely torpedoes European-mediated peace talks and further escalates tensions with the West. Most Read from BloombergU.S. Considering Moving Embassy Out of Ukraine: Ukraine UpdateKremlin Cautious on Prospect of Biden-Putin Summit Amid TensionsStocks Retreat, Ruble Weakens on Ukraine Tension: Markets WrapPonzi Schemer Bernie Madoff's Siste Read More...

(Bloomberg) — Russian President Vladimir Putin signed a decree officially recognizing two self-proclaimed separatist republics in eastern Ukraine, a move that likely torpedoes European-mediated peace talks and further escalates tensions with the West.

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It drew immediate condemnation from the U.S. as well as the European Union, including states in the bloc’s far east. The U.S. is poised to move its Ukraine embassy temporarily out of the country to Poland, according to people familiar.

Putin made the announcement in a televised address against a backdrop of heightened concern over Russia’s troop buildup near Ukraine. He also ordered the Defense Ministry to send what he called “peacekeeping forces” to the separatist regions. Moscow continues to deny it plans to invade.

Key Developments

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  • Stocks Retreat on Ukraine Tension, Ruble Weakens: Markets Wrap

  • U.S. Warns That Russia May Target Multiple Cities in Ukraine

  • Explainer: Why Minsk Accords Are Murky Path for Ukraine Peace

All times CET:

U.S. Discussing Moving Embassy Out of Ukraine (11:05 p.m.)

The U.S. is considering moving its Ukraine embassy out of the country, according to two people familiar with the matter. The people, speaking on condition of anonymity, said Poland was the most likely temporary destination.

Spokespeople for the State Department and the National Security Council declined to comment. The embassy had previously relocated from Kyiv to the western city of Lviv. The Biden administration has also told non-essential embassy staff and U.S. citizens to leave Ukraine.

Putin Orders Russian Troops to East Ukraine Separatist Zones (11:04 p.m.)

Putin ordered Russian armed forces to carry out “peacekeeping” duties in the separatist regions of Ukraine, according to the text of the decrees he signed on Monday. While Russia will argue Putin’s recognition of the separatist regions gives a legal basis for the presence of its troops, the move will likely fuel U.S. and European concerns that Moscow is moving to take control of territory internationally recognized as part of Ukraine.

The orders potentially move Russian forces closer to direct confrontation with Ukrainian troops at the line of separation with the separatist regions. There was no immediate detail on how many troops might go in, or when.

Macron Calls Putin’s Move a Violation of Commitments (10:25 p.m.)

Macron rebuked Putin’s decree as an encroachment of Ukraine’s sovereignty, his office said in a statement. The French leader is calling for an emergency meeting of the UN Security Council and the adoption of targeted European sanctions.

Macron had engaged in an intense diplomatic marathon to try and solve the crisis, acting as an intermediary between Putin and Biden and seeking to develop a rapport with Putin.

U.K. Set to Impose Sanctions On Russia Tuesday (9:50 p.m.)

The move comes after new rules introduced in London last week that allow ministers to punish Russian businesses and individuals in a wide range of sectors including financial services, chemicals, construction, defense, electronics, energy, mining, transport and communications and digital. There will be further sanctions if an actual incursion into Ukraine happened, Foreign Secretary Liz Truss said.

Truss took to Twitter Monday night to condemn Putin’s recognition of the separatists. “It demonstrates Russia’s decision to choose a path of confrontation over dialog,” she wrote.

Biden Plans Order Barring U.S. Trade With Separatist Regions (9:34 p.m.)

The U.S. President will issue an executive order Monday prohibiting U.S. investment, trade, and financing to separatist regions of Ukraine after Putin’s move to officially recognize the breakaway territories.

The executive order will allow the U.S. to sanction individuals operating in the area, and the U.S. will also “soon” announce additional measures “related to today’s blatant violation of Russia’s international commitments,” White House press secretary Jen Psaki said. Trade and investment has already plummeted since Russian-backed separatists took control of the regions eight years ago.

Secretary of State Antony Blinken made no direct mention of sanctions, but said “appropriate steps” would be taken to “this unprovoked and unacceptable action by Russia.” Blinken said Biden’s actions will only prohibit new — rather than existing — U.S. investment, trade, and financing in the breakaway regions, and that the restrictions would not impact the Ukrainian people, government, or humanitarian organizations.

EU to React With New Sanctions Over Russian Decree (9:20 p.m.)

EU ambassadors will meet Tuesday to discuss a plan for sanctions in response to Putin’s decree, according to multiple diplomats familiar with the talks. Member states are expected to make a swift decision on a package in the following days, the officials said.

EU chiefs Ursula von der Leyen and Charles Michel said earlier in a joint statement that Putin’s move was “a blatant violation of international law as well as of the Minsk agreements,” referring to the agreement where Russia had recognized the two regions as part of Ukraine.

Any sanctions would have to be unanimously adopted and the bloc has yet to agree which specific measures to take in response. Polish Prime Minister Mateusz Morawiecki said the European Council should call an urgent meeting to impose “immediate sanctions” against Russia.

Germany, U.K., Romania Among Those Condemning Putin’s Order (8:58 p.m.)

Scholz condemned the move to recognize the territories, which is in stark contrast to the push by Germany and France to implement the Minsk peace accords aimed at ending a separatist conflict that’s smoldered since 2014. U.K. Prime Minister Boris Johnson called it an “ill omen” and “flagrant violation” of the sovereignty and integrity of Ukraine.

“I don’t know what is in his mind,” Johnson added at a Downing Street press conference. “There’s a chance he could row back from this.”

Czech Defense Minister Jana Cernochova said on Twitter that the world can’t tolerate Putin’s move as it’s “not just Ukraine on Putin’s chessboard, we’re there.’

Baltic States Sound Alarm Over Separatist Recognition (8:42 p.m.)

Leaders of three Baltic states that are NATO and EU members urged the 27-member bloc to come forward with a call for “strong sanctions” against Russia after it said it will recognize the self-proclaimed separatist republics it backs in eastern Ukraine.

Latvia’s Foreign Minister Edgars Rinkevics said on Twitter that Putin’s speech “was a demonstration of imperialism and chauvinism.” Baltic leaders have previously raised fears that if Putin is allowed to proceed with his plans, their nations could be his next target.

EU Warns on Russian Cyber Actions in Any Ukraine Attack (7:26 p.m.)

The European Union warned it is highly likely Russia would launch cyberattacks to interfere with electronic payments and online services systems if it launches a military attack against Ukraine.

The EU’s computer emergency response team warned the bloc’s institutions that cyberattacks could also be aimed at damaging critical infrastructure, as well as targeting and manipulating news sources. The aim of the operations would be to hamper financial transactions, impede access to key services and sow divisions among the population.

The internal document seen by Bloomberg said Russia is unlikely to attempt to take down Ukraine’s entire Internet. Moscow has denied it was behind recent cyberattacks on Ukraine.

EU Yet to Agree Potential Sanctions for Separatist Recognition (5:15 p.m.)

Several EU leaders had already called for sanctions should Putin opt to recognize the separatist territories in eastern Ukraine. Still, countries have yet to agree on what sanctions would be imposed in such circumstances, according to diplomats and officials who asked not to be identified discussing confidential matters.

“If there is an annexation, there will be sanctions,” EU foreign policy chief Josep Borrell told reporters after a meeting of foreign ministers in Brussels. “And if there is a recognition, I will put the sanctions on the table and the ministers will decide. I will certainly put on the table the sanctions package that has been prepared if such a thing happens.”

Russia Security Council Members Argue for Separatists (4:43 p.m.)

The televised meeting of the Security Council on Monday showed member after member arguing in favor of recognizing two self-proclaimed republics in eastern Ukraine’s Donbas region. Only a few suggested giving the West more time to address Russia’s security demands.

When Sergei Naryshkin, the head of Russia’s Foreign Intelligence Service, suggested annexing the territories, Putin corrected him and said that wasn’t on the agenda, a sign they could remain frozen conflicts similar to two largely unrecognized Russian protectorates that split from Georgia after a 2008 war.

“We see the threats and blackmail from our Western colleagues, we understand what such a step entails, but we also understand the situation that has developed,” Putin said at the start of the meeting.

The leaders of the so-called Donetsk People’s Republic and Luhansk People’s Republic earlier appealed to Putin to recognize their independence from Ukraine and conclude a treaty on defense.

Damage in Eastern Ukraine as Tensions Escalate (4:23 p.m.)

A local natural gas treatment plant in the Luhansk region was damaged as cease-fire violations along the line of contact with separatist forces surge. The facility, which is not connected to a major network transiting Russian gas to Europe, was shelled by mortar fire from separatist territory and a village cut off from its gas supply, according to state-run producer UkrGasVydobuvannya JSC.

Ukraine Denies Attack on Russian Forces (3:00 p.m.)

Foreign minister Dmytro Kuleba denied Russian allegations that Kyiv sent “saboteurs” and armed personal carriers into Russia’s Rostov region early Monday.

Russia Wants Details on Any Putin-Biden Summit (2:30 p.m.)

“President Putin explained very clearly that we’re not against summits or meetings, but before getting together, especially in such a tense atmosphere, it’s important to understand what these summits would result in,” Foreign Minister Sergei Lavrov told reporters in Moscow.

Earlier, Putin’s spokesman Dmitry Peskov, said there are no “concrete plans” yet for a summit between Putin and Biden. The French and Russian leaders agreed to pursue dialogue at the level of foreign ministers, he said on a conference call with reporters.

Russia Says It Killed 5 ‘Saboteurs’ From Ukraine (2:15 p.m.)

Russian forces killed five “saboteurs” and destroyed two Ukrainian armored personnel carriers that crossed into Russian territory in the Rostov region early Monday, state-run Tass news service reported, citing a statement from the Southern Military District.

The alleged strike comes as tensions have escalated between the Ukrainian army and separatists in the two breakaway republics in the east, with both sides accusing the other of increased shelling in recent days.

Unlike the firing along the contact line between Ukraine and the separatists, Russia alleged this incident took place over the international border.

Ukraine Says Russian-Backed Separatists Shelling Villages (12:48 p.m.)

Vrubivka and Shchastya, in Ukraine’s eastern Luhansk region, are being shelled by Russian-backed separatists, regional government head Serhiy Hayday said on Facebook. Vrubivka has seen electricity and gas supplies cut while Shchastya is without power or water, he said. Meanwhile officials in Kyiv said shelling on Monday by separatists killed two troops and one civilian, and wounded four soldiers.

Separatists in turn accused Ukrainian forces of what they said were massive attacks with artillery and other weapons. Both sides have traded accusations of violence amid a surge in violations along the contact line in Ukraine’s Donbas over the past week.

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