Russia Vetoes UN Resolution as China Abstains: Ukraine Update

(Bloomberg) -- Ukraine’s government said it was discussing with Russia the timing and location of potential peace talks. The diplomatic to and fro comes as fighting continues on the ground with Russian forces moving toward the capital. 

Any talks would likely struggle to find common ground on the question of “neutrality” for Ukraine, which has sought to join NATO and draw closer to Europe. 

Separately, the EU, U.K. and U.S. all announced sanctions on Russian President Vladimir Putin and Foreign Minister Sergei Lavrov. While the move is largely symbolic, it puts the Russian president in a category of infamous leaders including Syrian President Bashar al-Assad and former Libyan strongman Moammar Al Qaddafi. At the UN, Russia vetoed a resolution condemning its invasion of its neighbor, as its ally China abstained.

All times CET

Key Developments

• Russian Billionaire Jets, Superyachts Roam Free as Attack Rages
• Ukraine’s TV Comedian President Finds His Role as Wartime Leader
• Putin Unbowed as Russia Presses Ahead With Invasion Toward Kyiv
• Details of the U.S., EU and U.K. Sanctions Against Russia
• Wall Street Counsels Washington Against Kicking Russia Off SWIFT
• Russia Invaded Ukraine and Europe Bought More Gas. Here’s Why

U.S. Planning Sanctions on Russian Wealth Fund (11:55 p.m.)

The U.S. plans to implement sanctions on Russian’s sovereign wealth fund as it continues to ratchet up penalties over the invasion of Ukraine, the White House said Friday.

The Treasury Department will impose full blocking sanctions on the Russian Direct Investment Fund, which is intended “to attract capital into the Russian economy in high-growth sectors,” White House press secretary Jen Psaki said in a tweet on Friday.

The sovereign wealth fund played a role in marketing Russia’s Sputnik coronavirus vaccines. It had previously been sanctioned by the Obama administration over its ties to the bank Vnesheconombank in a tranche of punishments linked to the 2014 annexation of Crimea. The fund has turned away from Western investment so the impact of the new sanctions is expected to be minimal.

Russia Vetoes UN Resolution, China Abstains (11:49 p.m.)

A United Nations Security Council resolution condemning Russia’s invasion of Ukraine and calling for the immediate withdrawal of its forces was vetoed by Russia’s ambassador to the UN.

The resolution sponsored by the U.S. and Albania won support from 11 nations while China -- which often aligns itself with Russia on issues at the world body -- was joined by UAE and India in abstaining. As a permanent member of the council, Russia has veto power. Its decision was harshly criticized by U.S. Ambassador Linda Thomas-Greenfield. 

“You can veto this resolution, but you cannot veto our voices,”  Thomas-Greenfield said. U.K. Ambassador Barbara Woodward added, “Make no mistake, Russia is isolated.” 

In a show of support for Ukraine and the resolution, dozens of ambassadors from countries which aren’t members of the Security Council attended the debate over the proposal. 

Russia, Ukraine Sovereign Credit Ratings Under Review (11:17 p.m.)

Both Russia and Ukraine had their sovereign credit ratings placed on review for downgrade by Moody’s Investors Service amid the escalating conflict between the two nations, and Fitch Ratings slashed Ukraine’s score.

Russia is rated Baa3 by Moody’s, one notch above junk, while Ukraine is scored at B3, six steps below investment grade. Fitch took Ukraine’s level down to CCC from B.

The recent invasion of Ukraine by Russia represents “a significant further elevation of the geopolitical risks that Moody’s had previously highlighted, which is being accompanied by additional and more severe sanctions on Russia, potentially including those that could impact sovereign debt repayment,” the firm said in a Friday statement. 

Pentagon Vows to Defend ‘Every Inch’ of NATO Territory (10:50 p.m.)

Saying it’s not clear whether Putin has designs on territory beyond Ukraine, Pentagon spokesman John Kirby told reporters Friday, “We are going to defend every inch of NATO territory.”

He said U.S. military units already placed on alert will mobilize as needed by NATO after the alliance’s rapid-response force was activated on Friday, The Defense Department has put about 10,000 to 12,000 troops on prepare-to-deploy orders, Kirby said.

He also said there are “clear indications” that Ukraine’s forces have had some successes in resisting Russia’s invasion along with setbacks.

Ukraine Says It’s Discussing Timing, Location of Talks With Russia (10:44 p.m.)

Ukraine was and is ready to talk about cease-fire and peace, Serhiy Nykyforov, the spokesman for President Volodymyr Zelenskiy, said on Facebook, hours after Kyiv and Moscow appeared to be in a standoff about negotiations. 

“We agreed to the proposal from the Russian Federation’s president,” Nykyforov said. “At these hours, the sides are holding consultations on the place and time for negotiations process”

A Putin aide had earlier suggest Belarus for talks, despite the country serving as a staging ground for the invasion. 

Russian Foreign Minister Added to Sanctions List (9:42 p.m.)

White House Press Secretary Jen Psaki confirmed that Russian Foreign Minister Sergei Lavrov will join President Vladimir Putin on the U.S. sanctions list, aligning Washington with a decision made in European capitals earlier in the day. 

“In alignment with the decision by our European allies, the United States will join them in sanctioning President Putin and Foreign Minister Lavrov and members of the Russian national security team,” she said. 

U.S. Joins Sanctions Against Putin (8:39 p.m.)

The U.S. will place sanctions on Russian President Vladimir Putin, according to an official familiar with the plan. 

It’s a largely symbolic step given the broad uncertainties about the extent of the Russian leader’s wealth or where he keeps it. He officially owns few assets. His annual income is about 10 million rubles ($120,050), and he owns three cars and an apartment, according to his latest financial disclosure. 

NATO Sending Thousands of Troops to Eastern Members (8:14 p.m.)

NATO is deploying thousands of land, air and sea troops from its rapid-response force for the first time in defense of alliance members amid Russia’s assault on Ukraine.

Some of the 40,000-strong force, which has previously only been used for humanitarian missions, will be sent to NATO’s eastern members “to protect all allies and every inch of NATO territory,” NATO Secretary General Jens Stoltenberg told reporters Friday.

Stoltenberg also said the alliance would provide more military support, including for air defense systems, to Ukraine, but that “it’s hard to predict what are our possibilities in the future.”

China Backs Talks, Respect for Ukraine Sovereignty (9:56 p.m.)

China’s Foreign Ministry posted a statement in which it urged diplomatic talks to begin between Russia and Ukraine, while saying Ukraine’s sovereignty and territorial integrity should be respected and guaranteed. 

China also said the UN Security Council should play a constructive role in de-escalating the crisis. The statement came hours before a Security Council meeting at which Russia -- a permanent member of the council -- is expected to veto a resolution condemning its actions. UN observers will be watching to see if China, another permanent member, supports the Russian position or abstains from voting. 

Facebook Pushes Back on Russian Restrictions (9:45 p.m.)

Facebook parent company Meta Platforms Inc. said it will seek to continue allowing Russian citizens “express themselves and organize for action” following anti-war protests in Russia that drew the ire of authorities. 

Zelenskiy, Biden Hold 40-Minute Call (9:40 p.m.)

Ukraine President Volodymyr Zelenskiy and U.S. President Joe Biden spoke for 40 minutes, according to brief statements from both leaders. In a Twitter post, Zelenskiy said the two leaders discussed strengthening sanctions and “concrete defense assistance.” 

White House officials didn’t immediately provide a detailed readout of the call. 

U.K. To Imminently Sanction Putin, Lavrov, Following EU (7:20 p.m.)

The U.K. will impose sanctions on Russian President Vladimir Putin and Foreign Minister Sergei Lavrov, following a similar move by the EU earlier Friday, the prime minister’s office said.

Britain is to introduce the sanctions after Premier Boris Johnson also urged world leaders to isolate Russia from the SWIFT payment system, according to a statement from 10 Downing Street following a meeting of NATO leaders. It wasn’t immediately clear when the sanctions would take effect. 

Eurovision Kicks Russia Out of Contest (6:55 p.m.)

The Eurovision Song Contest ruled that Russia will be barred from entering an act in this year’s event because of its actions in Ukraine, the latest repercussion for Moscow’s actions in the world of culture and sport.

“The decision reflects concern that, in light of the unprecedented crisis in Ukraine, the inclusion of a Russian entry in this year’s Contest would bring the competition into disrepute,” Eurovision said in a statement.

The move comes after a slew of sports organizations moved to cut ties with Russia or cancel planned events. UEFA, the European football governing body, said the May 28 final of its Champions League tournament will be relocated from Saint Petersburg to Paris “following the grave escalation of the security situation in Europe.”

The International Olympic Committee on Friday urged all sports organizations to move or cancel events in Russia and Belarus. Formula 1 canceled the Russian Grand Prix, which was scheduled for Sept. 23. And in tennis, the ATP Challenger tournament planned for Moscow on Feb. 28 was canceled. 

EU Adopts New Sanctions, Including on Putin (5:58 p.m.)

Latvian Foreign Minister Edgars Rinkevics wrote on Twitter that the foreign affairs council meeting in Brussels on Thursday had adopted the latest EU sanctions package, including asset freezes on President Vladimir Putin and Foreign Minister Sergei Lavrov.

U.S. Says Russia Lacks Air Dominance So Far (5:45 p.m.)

Russia has used about 1/3 of the 150,000 or so personnel it arranged against Ukraine so far, according to a U.S. defense official who said it appears the Kremlin is facing greater resistance than it anticipated. The official added Ukraine’s command-and-control infrastructure remains in place.

Ukraine’s Defense Ministry claimed Thursday as many as 15 T-72 Russian battle tanks were destroyed using U.S.-supplied Javelin anti-armor missiles, and said Friday that 80 tanks overall had been destroyed. Those figures couldn’t be independently verified.

An amphibious assault by Russia is underway from the Sea of Azov toward Mariupol, the U.S. official said. They said Russia was splitting those forces off to also go toward the Donbas region further east.

Russia to Limit Access to Facebook over Media Limits (5:23 p.m.)

Russia will limit access to Meta’s Facebook after the social network refused to lift restrictions on the accounts of four Kremlin-friendly media companies, including two state-run outlets.

Russia’s Internet regulator said Facebook ignored a demand to restore the accounts and was thus formally found by the Prosecutor General to have “violated the basic human rights” of users. Facebook couldn’t immediately be reached for comment.

Russia has cracked down on foreign Internet companies in recent years and last year limited access to Twitter for a time. Alphabet’s Google and Meta face record fines for failing to take down content banned in Russia.

Ukraine Says Targeted By Phishing Campaigns (5:18 p.m.)

Kyiv said military personnel and “related individuals” are being targeted by state-sponsored phishing efforts aimed at compromising private email accounts.

Ukraine’s Computer Emergency Response Team alleged Belarus was behind efforts to trick users into handing over login credentials. The previous campaign by the Minsk-based group “UNC1151,” known as “Ghostwriter,” targeted users in Eastern Europe and promoted narratives critical of NATO, according to cybersecurity firm Mandiant.

The Belarusian embassy in Washington did not immediately comment.

Amnesty Says Civilians Hit in Russian Attacks (5:15 p.m.)

The invasion has been marked by indiscriminate attacks on civilian areas and strikes on protected objects such as hospitals, Amnesty International said in a statement. It said it documented three incidents it believes to have killed at least six civilians and wounded at least 12 more. Russia said its troops were attacking only military targets.

Kremlin Says No Further Word From Kyiv (4:47 p.m.)

Russia had sent notice to Ukraine that it’s willing to begin talks in response to the suggestion of neutrality raised by President Volodymyr Zelenskiy, Kremlin spokesman Dmitry Peskov told reporters on a conference call. Putin had spoken to Belarusian President Alexander Lukashenko, who’d agreed to host talks and ensure the security of participants, he said.

With Ukrainian forces defending Kyiv against attack by the Russian military on the second day of the invasion ordered by Putin, the Kremlin spokesman accused “nationalist elements” in Ukraine of deploying multiple-launch rocket systems in major cities.

U.S. Keeps Hands Off Russian Crude in Sanctions (4:34 p.m.)

The Biden administration won’t target Russian oil with sanctions because it would drive up prices and hurt consumers without harming Putin, a U.S. State Department official said.

“If we target the oil and gas sector for Putin, and in this case the Russian energy establishment, then prices would spike. Perhaps he would sell only half of his product, but for double the price,” Amos Hochstein, the State Department’s senior energy security adviser, told Bloomberg Television.

Cash Pulled in Poland, Czechs Stop Russia Visas (4:10 p.m.)

People in Poland queued to withdraw cash from banks amid concerns over the fallout from Russia’s invasion of neighboring Ukraine, triggering a statement from the central bank that the country has sufficient reserves despite some ATMs running out of zloty.

In the neighboring Czech Republic, Russia’s Sberbank, which was sanctioned by the U.S., closed its branches citing “security issues,” the CTK news wire reported. People queued at Sberbank ATMs to withdraw cash, according to eyewitnesses.

Czech Prime Minister Petr Fiala said his administration stopped issuing visas to Russian citizens, except in humanitarian cases.

Lagarde Pledges to Defend Price, Banking Stability  (4:01 p.m.)

The European Central Bank will do everything in its power to safeguard the stability of prices and the euro area’s financial system, President Christine Lagarde said.

While it’s too early to judge the overall economic impact of Russia’s invasion, it’s already clear that persistent uncertainty will likely drag on investment and consumption and impede growth, Lagarde told journalists after a meeting with euro-area finance ministers in Paris. Inflation is likely to be boosted further by rising energy costs.

Kyiv Says Russia Attacks Civilian Targets, Which Kremlin Denies (3:26 p.m.) 

Ukrainian authorities accused Russian troops of attacking civilian targets as the Moscow-led assault continued toward the capital, Kyiv. Russia’s Foreign Ministry said it is only attacking military assets. 

Foreign Minister Dmytro Kuleba said his office and Ukrainian prosecutors were collecting evidence following what he said was the shelling of a kindergarten and an orphanage. He said the Russians were guilty of war crimes and said the evidence would be sent to The Hague.

White House Says Russian Market Rally is ‘Dead Cat Bounce’ (3:17 p.m.)

A White House spokeswoman dismissed the ideas that sanctions on Moscow hadn’t gone far enough, and had set up Friday’s 20% rally in the benchmark MOEX Russian stock market index. The ruble also gained after sinking to a record low on Thursday. 

“They had their worst day on record the day before. There’s something called a dead cat bounce,” the spokeswoman said -- a reference to the market theory that any asset can stage a temporary rally if it falls from a great enough height.  

The MOEX was still down about 34% for 2022 to date. 

Pope Francis Visits Russian Embassy to the Holy See (3:03 p.m.) 

Pope Francis visited the Russian embassy of the Holy See, in Rome, on Friday to express his concern about the offensive taking place in Ukraine. 

During a 30-minute visit, the Pope called for a joint supplication for peace during a day of fasting on March 2. 

In an earlier statement, Cardinal Secretary of State Pietro Parolin said there is still room for negotiation to spare the world from the folly and horrors of war.

Kyiv Is on the Defensive, Mayor Says (2:45 p.m.)

“Right now, in some areas of the capital, shots and explosions can be heard,” Kyiv Mayor Vitali Klitschko said in an video address. “Ukraine’s military are neutralizing groups of Russian saboteurs. The enemy is already in Kyiv, we must hold the capital, which the enemy wants bring to its knees and destroy.”  

Ukrainian forces are still in control of Kyiv, the Defense Ministry said. The most dangerous fighting is coming from the direction of Hostomel, the site of a military airport northwest of the capital. 

Russia Says It Captured Airfield Near Kyiv (2:08 p.m.)

Even as Putin signaled a willingness to talk, Russian forces have taken the Hostomel airfield near Kyiv and blockaded the city from the west, Interfax reported, citing the Defense Ministry in Moscow.

The Hostomel airfield is able to accommodate large transport planes and the Russian military could use it to funnel equipment for its assault on Kyiv, about 30 km (18 miles) northwest of downtown.

Russia Ready to Talk With Ukraine, Interfax Reports (1:58 p.m.) 

The ruble and Russian stocks extended their day’s gains on the Interfax report. The ruble was 2.9% stronger and the MOEX stock index climbed 19%. The Stoxx Europe 600 index also added to today’s gains to trade 2.5% up, while futures on the S&P 500 and Nasdaq 100 turned higher.

Russia Lacks Options to Replace Foreign Chips (1:37 p.m.)

Technology sanctions will have a huge impact on Russia after the Kremlin’s push for import substitution failed to create a viable domestic microchip, said Karen Kazaryan, general director of the Internet Research Institute.

While Chinese chip makers can cover some of the shortfall, Russian companies will begin feeling the effect of shortages within a year, Kazaryan said.  

Putin Tells Tycoons Banks First in Line for Aid (1:25 p.m.)

Banks are taking precedence as Russia devises a domestic response to sanctions rolled out by Western governments. 

Russian state aid will initially focus on assisting lenders hit with penalties, according to two people who attended a closed meeting with Putin to discuss the impact of the conflict on big business. 

The message to the gathered billionaires and corporate titans underscores the urgency facing Putin’s government at home while the showdown in Ukraine intensifies. Retaining depositor confidence is crucial in a country where bouts of economic turmoil have in the past wiped out savings and prompted bank runs.

Erdogan Says West Must Offer More Than ‘Advice’ (1:15 p.m.)

Turkey’s president urged NATO allies to take firmer action after Russia’s invasion of Ukraine, accusing the western alliance of doing too little in response to Putin’s attack.

“The West continues to just offer advice,” Recep Tayyip Erdogan told reporters in Istanbul. Leaders of NATO states should discuss what action to take at the virtual meeting later Friday, he said. 

Russia Says Surrender is Condition for Ukraine Talks (12:37 p.m.)

Russian Foreign Minister Sergei Lavrov said Moscow won’t talk to the government in Kyiv until Ukraine’s military 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,” Lavrov said in Moscow after meeting representatives of Ukrainian breakaway areas. 

Lavrov repeated Putin’s comments that the invasion seeks the “de-militarization and de-Nazification” of Ukraine and reinforced the Kremlin’s uncompromising stance toward the government in Kyiv. 

China’s Xi Urges Putin to Negotiate With Ukraine (12:26 p.m.)

Chinese President Xi Jinping spoke with Putin by phone and encouraged Russia and Ukraine to negotiate to “address problems,” China state TV said Friday.

“China supports Russia and Ukraine to resolve issues through negotiations,” Xi said during the call, according to China Central Television. He reiterated that China’s position has always been to respect every country’s sovereignty and territorial integrity. Putin told Xi he’s willing to hold high-level negotiations with Ukraine, the China report said.

Xi and Putin are close allies and met this month in Beijing around the Olympics. Beijing has declined to rebuke Russia for its invasion of Ukraine, while pledging normal trade and interactions also with Kyiv. An important energy supplier to China, Russia has strengthened trade ties with Beijing over the past decade.

Still, the repeated call for territorial integrity to be respected hints at a degree of discomfort in Beijing with the offensive. China has also been keen to portray itself as an international statesman and supporter of global rules-based institutions.  

China Leaves Russia’s War Off Front Pages 

Zelenskiy Says Europe is Too Slow to Help Ukraine (12:23 p.m.)

Ukrainian President Volodymyr Zelenskiy made a plea for more support and additional sanctions against the Kremlin as he said Russian tanks are “shooting at residential buildings.” 

“This is not just Russia’s invasion in Ukraine -- this is the beginning of a war against Europe, against the unity of Europe, against elementary human rights in Europe,” Zelenskiy said in a televised address from Kyiv. “Europe has sufficient force to stop this aggression.”

Baltic NATO States Pledge More Weapons for Ukraine (12:20 p.m.)

Estonia said it would send additional Javelin anti-armor missiles to Ukraine to bolster the country’s defenses, according to its Defense Ministry, which didn’t elaborate. 

Estonia and fellow Baltic NATO members Latvia and Lithuania had already given Ukraine a number of the U.S.-made anti-tank missiles this month. Lithuania also said it would be providing Ukraine with automatic rifles, helmets and armored vests.

Baltic States Join Poland in Banning Russian TV Networks (12:12 p.m.)

The Baltic states of Estonia, Latvia and Lithuania are taking measures they say are aimed at limiting the spread of war propaganda and disinformation by banning the broadcasting of several Russian and Belarus television news channels.

“This is necessary to fight false information and war propaganda of Russian channels and the narrative they are trying to build,” Estonian Prime Minister Kaja Kallas said at a press conference. Poland on Thursday announced it was prohibiting some Russian channels as well, including RT, a Kremlin-backed media outlet, and Rossija 24.

Western nations have accused Moscow of spreading falsehoods about activities in Ukraine as a pretext for an invasion. The EU earlier this week sanctioned several Russian media figures, including Margarita Simonyan, the head of RT.  

Four Million Refugees Possible From Ukraine, U.N. Says (12:10 p.m.) 

United Nations agencies forecast as many as 4 million refugees will flee Ukraine to neighboring countries if the Russian invasion continues. 

At a briefing Friday in Geneva, U.N. officials said thousands of people displaced by the conflict are already crossing borders from Ukraine into Moldova, Romania, Hungary and Poland. 

EU Leaders Still Discussing Cutting Off Russia From SWIFT (11:30 a.m.) 

Leaders of the European Union discussed stronger options, including cutting Russia off the SWIFT international payments system, during their summit on Thursday night, according to an EU official. Several leaders urged their counterparts to adopt the measure as part of the second package of sanctions, the official said.

But several other governments, including those of Germany, France and Italy, have strongly opposed a Swift cut-off amid concerns about the impact of such a move on their financial operations and economies, including jeopardizing payments for gas from Russia.  

UEFA Moves Champions League Final to Paris (10:56 a.m.)

The European football governing body, UEFA, will move the final of its flagship Champions League tournament scheduled for May 28 from Saint Petersburg, Russia, to Paris’s Stade de France.  The decision was made at an Executive Committee meeting following the “grave escalation of the security situation in Europe,” UEFA said in a statement. 

Merkel Calls Invasion ‘Profound’ Turning Point (11 a.m.)

Former German Chancellor Angela Merkel called Russia’s invasion of Ukraine “a profound turning point in European history,” and said Vladimir Putin’s “war of aggression” must be stopped. 

During Merkel’s 16-year chancellorship that ended in late 2021, she was seen as a pillar of global stability and worked hard to promote the rules-based international democratic order. She played a central role in establishing the Minsk agreement seeking a peaceful resolution to the Russia-Ukraine conflict.  

“There is no justification whatsoever for this blatant breach of international law, and I condemn it in the strongest possible terms,” Merkel said, according to the news agency DPA, in some of her first public comments as a private citizen. “My thoughts and my solidarity are with the Ukrainian people and the government led by President Zelenskiy in these frightful hours and days.”

As War Rages, Europe Laps Up Russian Gas (10:48 a.m.)

Russian gas exports to Europe through Ukraine jumped almost 38% on Thursday and are expected to increase by another 24% on Friday as the EU finalizes a package of sanctions that largely spared Moscow’s energy industry. 

The higher flows are an awkward reminder of Europe’s dependency on Moscow for energy. Russia is the continent’s biggest gas supplier, providing more than a third of the region’s needs. About a third of those shipments typically transit via Ukraine.

EU Economy Chiefs Warn of Domestic Sanctions Impact (10:41 a.m.)  

The EU’s top economy officials warned that the effects of the new sanctions package targeting Russia will be felt domestically as well. “Clearly if we’re applying a massive sanctions package against Russia, it’s also going to have certain consequences on the European economy,” EU Executive Vice President Valdis Dombrovskis said on Friday before a meeting of the bloc’s finance ministers. 

“Of course we will pay a price economically for this war,” said Paolo Gentiloni, the EU’s economy commissioner. “It will have an impact,  but the costs of reacting to this invasion, to this violation of international law, are costs we must afford.” 

Russia Bans U.K. Planes From Its Airspace (9:45 a.m.)

Russia banned British planes from its airspace, effective immediately, the aviation watchdog said in a statement. The measure -- which includes transit flights -- was taken in response to similar step from the British side, it said.

Among other things, the airspace bans are an issue for long-haul flights between Europe and Asia, forcing carriers to take longer alternate flight paths.   

Zelenskiy Says He’s No. 1 Target But Staying in Kyiv (8:23 a.m.)

Ukrainian President Volodymyr Zelenskiy said his intelligence services have identified him as Russia’s top target, yet he’s staying in Kyiv with his ruling team and his family will also remain in the country. 

“According to our information, the enemy marked me as the number one target,” Zelenskiy said in an early-morning video address in which he assessed the first day of the Russian invasion. “My family is the number two target. They want to destroy Ukraine politically by destroying the head of state.”  

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