Japan poised to impose sanctions on Russia over Ukraine


Russian President Vladimir Putin, left, and Japanese Prime Minister Shinzo Abe meet in the Bocharov Ruchei residence in Sochi, Russia, in February. (Mikhail Klimentyev/Associated Press)

When Vladimir Putin was preparing for another shot at the Russian presidency a little more than two years ago, he said he would give a command to Russian and Japanese officials: “hajime.”

After half a century of frosty relations with Moscow, the order to “start” — using a word employed in the Japanese martial art of judo, in which Putin is a black belt — was well received in Tokyo. Even more so when Shinzo Abe returned later in 2012 for his second term as Japan’s prime minister and ordered his own restart with Russia, driven by pragmatic and regional considerations.

But two years of steadily improving relations could now be coming to a halt, as Tokyo follows the lead of the United States and the European Union and moves toward imposing sanctions on Russia over its role in Ukraine.

Japan this week announced plans to freeze the assets of people and groups that supported Russia’s annexation of Ukraine’s Crimea region in March and to impose restrictions on imports from Crimea.

The proposed sanctions are largely symbolic — it is unlikely that those on the list will have Japanese bank accounts, and experts struggle to name any products Japan might buy from Crimea. But analysts say Japan’s decision to coordinate policy with the European Bank for Reconstruction and Development, which has put funding for all new projects in Russia on ice, could have a sizeable effect.

The cabinet is expected to endorse the sanctions in the coming days, perhaps as soon as Friday, and release details.

Russia did not mince words in responding to Japan’s moves, calling them “unfriendly and short-sighted.”

“Tokyo’s imposing new sanctions against Russia, no matter what reservations were arranged, will inevitably harm the entire complex of bilateral relations and will cause regression,” the Foreign Ministry said in a statement, according to Russia’s RIA Novosti news agency. “Japan needs to take this into consideration,” the ministry added, accusing Tokyo of following Washington’s orders.

The situation is tricky for Abe, whose country is a major U.S. ally but who has gone to great lengths to mend fences with Putin. Last year, he became the first Japanese leader in a decade to visit Moscow.

“So much of Abe’s foreign policy has been invested in improving ties with Russia,” said James Brown, an expert on Russian-
Japanese relations at Temple University’s campus in Tokyo, who recently published a report called “Hajime.” “But Russia is not going to climb down, so Japan is really stuck.”

Closer relations

For almost two years, relations between Japan and Russia have been on an upswing. The rapprochement began in 2011 under a previous government, but it has accelerated sharply since Abe assumed power.

The two nations have even managed to put aside an old, festering territorial dispute over a small chain of islands between the northern Japanese island of Hokkaido and Russia’s Kamchatka Peninsula.

President Obama announced new sanctions on Russia that will expand to the energy, arms and finance sectors. This comes after the EU announced they are also imposing sanctions on Russia for its support of separatists in Ukraine. (AP)

Although other world leaders, including President Obama, stayed away from the Sochi Winter Olympics in February, mainly over Putin’s human rights record, Abe was at his side.

Meanwhile, the Japanese leader, facing strained relations with China and South Korea, has been looking for new friends in the neighborhood.

Add to that Japan’s need for new energy supplies since the 2011 nuclear disaster and Russia’s desire to develop its far east, and it’s a recipe for political pragmatism. Bilateral trade hit a record high of $34.8 billion last year, according to the Japanese government. A significant chunk of that was because of fuel imports.

Since the meltdown at the Fukushima Daiichi nuclear facility led to all of Japan’s nuclear power plants being shut down, the country has had to rely on fossil fuels for energy. Japan now accounts for one-third of the liquefied natural gas market and gets about 10 percent of its supplies from Russia, according to Brown of Temple University.

“Abe’s greatest risk in sanctioning Russia may not be diplomatic but, rather, economic,” said Sheila Smith, a senior Japan fellow at the Council on Foreign Relations. “Japan’s growing dependency on Russian energy will suffer if sanctions continue to deepen.”

If Japan’s proposed sanctions — which Washington has welcomed — are going to cause problems with its relations with Russia, it should be apparent soon enough.

Putin is to visit Japan in the fall, and Moscow has made it clear that it is up to Tokyo to uninvite him. “Nothing has been decided” about whether the visit will go ahead, Yoshihide Suga, the chief cabinet secretary, said this week.

A cause for concern

For now, Tokyo’s proposed sanctions and the measures announced by the United States and the E.U. are causing consternation in Japan’s business sector. They could particularly imperil energy projects.

Japan’s biggest conglomerates have started internally reviewing which of their joint ventures could be affected, according to an official at one major corporation who spoke on the condition of anonymity to talk about company discussions.

“Even if we’re not affected by the Japanese sanctions, many Japanese corporations are paying close attention to the sanctions that the United States imposes because we have business in the United States, and because the United States-Japan relationship is important,” he said.

Obama this week announced a new round of U.S. measures that he said will affect “key sectors of the Russian economy,” expanding the list of U.S.-sanctioned banks and defense companies.

That could create headaches for Japanese banks financing ventures in Russia but also operating in the United States, effectively forcing them to choose which country they want to do business with.

“We will continue to watch the situation and decide comprehensively from now on,” said Masako Shiono, a spokeswoman for Mizuho Financial Group.

Another big bank said the moves could narrow its “pipeline” of business with Russian banks. “Also, we are concerned about the impact on payments for Russia-Japan trade,” a spokesman said.

Yuki Oda contributed to this report.

Anna Fifield is The Post’s bureau chief in Tokyo, focusing on Japan and the Koreas. She previously reported for the Financial Times from Washington DC, Seoul, Sydney, London and from across the Middle East.
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