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Undeterred, Russia wades into war of sanctions

MOSCOW -- Russia on Thursday banned most food imports from the West in retaliation for sanctions over Ukraine -- a sweeping move that will cost Western farmers billions of dollars but could also lead to empty shelves in Russian cities.

Meanwhile, the Russian lawyer for NSA leaker Edward Snowden said Thursday that the former spy agency IT specialist had been granted a three-year residency in Russia. If confirmed, it would represent another jab by Moscow at Washington amid worsening relations.

The NSA contractor's one-year temporary asylum in Russia expired just days ago, and the Obama administration has urged Moscow to hand him over to the U.S. Justice Department to face charges of exposing sensitive U.S. intelligence operations.

Flash Points: Do the new sanctions on Russia have any bite?

The decision to ban food imports showed that President Vladimir Putin has no intention of bowing to Western pressure over Ukraine and will instead try to strike back at the West. It also demonstrated that the Kremlin is ready to inflict damage on Russia while pursuing its course in Ukraine.

The U.S. and the EU have accused Russia, which annexed Ukraine's Crimean Peninsula in March, of fomenting tensions in eastern Ukraine by supplying arms and expertise to a pro-Moscow insurgency, and have imposed asset freezes and loan bans on a score of individuals and companies.

Officials in Washington and Europe believe it was the pro-Russian rebels who fired the surface-to-air missile on July 17 which brought down Malaysia Airlines Flight 17. Intelligence sources have told CBS News the separatists likely shot the plane out of the sky believing it was a Ukrainian military aircraft, and that they might have been given the advanced weapon used in the attack by Russia.

Moscow has flatly denied those accusations and suggested the missile could have been fired by Ukraine's own military.

Prime Minister Dmitry Medvedev said at a televised Cabinet meeting that Russia's retaliatory ban covers all imports of meat, fish, milk and milk products and fruit and vegetables from the United States, the European Union, Australia, Canada and Norway. It will last for one year.

Russia depends heavily on imported foodstuffs -- most of it from the West -- particularly in the largest and most prosperous cities such as Moscow. In 2013 the EU's agricultural exports to Russia totaled $15.8 billion, while the U.S. Department of Agriculture says food and agricultural imports from the U.S. amounted to $1.3 billion.

Experts said that local producers will find it hard to fill the gap left by the ban, as the nation's agricultural sector has continued to suffer from poor efficiency and shortage of funds.

The damage to consumers inflicted by the ban will be felt particularly hard in big cities like Moscow, where imported food fills an estimated 60-70 percent of the market.

Obama: Russia sanctions “are working as intended”

Speaking to reporters on Wednesday, President Obama said the sanctions against Russia were "working as intended."

"We are doing exactly what we should be doing and we are very pleased that our European allies and partners joined us in that process," he said.

Medvedev said Russia could go further and ban Western carriers from flying over Russia on flights to and from Asia -- a move that would significantly swell costs and increase flight time. He said there has been no decision on that yet, and wouldn't specify when and under what conditions the move could be taken.

Medvedev made it clear that Russia hopes that the sanctions will make the West revise its policy and stop trying to pressure Russia with sanctions.

"Until the last moment we hoped that our partners would understand that sanctions only lead to a deadlock, and no one needs them, but they didn't," he said. "We hope our partners will put a pragmatic economic approach above bad policy considerations, and they will start thinking instead of trying to scare us."

If the West doesn't revise its course, Russia may follow up by introducing restrictions regarding imports of planes, navy vessels and cars, Medvedev warned, but added that the government will realistically assess its own production potential.

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