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Ukraine Organizes Own Aid as Russian Convoy Said Near Border

Aug. 14 (Bloomberg) -- Ukraine sent its own aid to the country’s war-torn east as a Russian convoy with emergency supplies neared the border in defiance of conditions set by the government in Kiev.

President Vladimir Putin, visiting the Crimea peninsula he annexed from Ukraine in March, said Russia shouldn’t isolate itself and pledged to work to halt the conflict that’s flared for months between pro-Russian separatists and government forces, killing more than 1,500 people, according to United Nations estimates. The U.S and the European Union have slapped sanctions on Russian businesses and individuals, and Ukraine’s parliament passed a bill today allowing similar measures.

“We will do all we can so this conflict comes to an end as soon as possible and the bloodshed in Ukraine comes to an end,” Putin said in a meeting with political leaders in the city of Yalta at which he also pledged to strengthen Russian forces in Crimea. “The situation is becoming more dramatic by the day. The country has immersed itself in bloody chaos, a fratricidal conflict.”

Ukraine’s government said yesterday it would allow in the aid carried by hundreds of trucks from Russia if officials can inspect it and the Red Cross distributes it. Three convoys left Ukrainian government-controlled areas today for the Luhansk region, one of two where the army is encircling the rebels and where the fighting has cut water and power supplies.

Heading West

The Russian convoy turned west toward Ukraine at Kamensk- Shakhtinsky, about 40 kilometers (25 miles) by road from the border, the Associated Press reported. The trucks parked in a field, according to a BBC reporter following them.

Convoys of Ukrainian trucks left Kiev, Kharkiv and Dnipropetrovsk for the border regions engulfed by fighting, television pictures showed. They will all head to Starobelsk, in the north of the Luhansk region, with the aid being passed to the Red Cross to distribute, according to the government press service.

Russia’s Micex share index climbed 0.2 percent at 2:59 p.m. in Moscow, gaining for a fifth day. Russian government bonds rose for a fourth day. The Ukrainian hryvnia strengthened 0.8 percent to 13.05 per dollar.

The dispute over the convoy that left Moscow two days ago has prompted the U.S. and the EU to warn the government in Moscow against using the delivery as a pretext for military intervention. The Red Cross announced talks with both governments.

‘Strictly Humanitarian’

Laurent Corbaz, the International Committee of the Red Cross’s head of operations for Europe, will travel to Kiev and Moscow “soon,” with the Russian convoy on the agenda for discussions, the Geneva-based organization said by-e-mail today. “He will hold meetings with senior officials to reinforce the ICRC’s strictly humanitarian role and stress that the delivery of aid into eastern Ukraine should not be politicized.”

Two buildings in Donetsk containing shopping malls were damaged by shelling early this afternoon, a city council spokeswoman, Yuliya Babenko, said by phone. Emergency workers were on the scene and public transport was halted in city center. Shelling also damaged buildings in the Kuybyshev district, killing at least two civilians, she said.

The military has urged people to leave Donetsk and Luhansk as it seeks to complete the encirclement that would shut routes to the Russian border and sever separatist supply lines. About half of the cities’ 1.5 million residents have fled, while most shops are closed.

‘Cynical Aggressor’

Ukrainian Interior Minister Arsen Avakov said yesterday on his Facebook page that the Russian convoy wouldn’t be allowed to enter the country, calling it a provocation by a “cynical aggressor.” The government in Kiev blames the insurgency on Putin, who denies the allegation.

Russia said yesterday the aid supplies were agreed to by its neighbor and that there’s no ulterior motive for the shipments.

“There continue to be absurd claims that the humanitarian- aid convoy for the civilian population in southeast Ukraine could be used as a pretext for a Russian ‘armed invasion’ into a neighboring state,” the Foreign Ministry said on its website.

Valeriy Bolotov, the head of the self-proclaimed Luhansk People’s Republic in eastern Ukraine, told reporters he’s leaving the post temporarily because of injury, Interfax reported.

Sanctions Bill

In Kiev, Ukraine’s parliament gave final approval to a bill allowing the imposition of sanctions on Russian companies and individuals. Possible measures foreseen in the legislation may include a complete or partial ban on shipments of gas or oil through Ukraine to Europe.

Finnish President Sauli Niinistoe, who’s traveling to the southern Russian resort of Sochi to meet Putin tomorrow, told reporters in Helsinki that it “feels like we’re on the brink of a cold war.” He’ll aim “to get an open dialogue going,” he said.

In another development, the U.S. Treasury broadened the scope of sanctions against Russia by revising a rule on the ownership of entities by targeted individuals.

Yesterday’s change means that a firm can be sanctioned if any combination of sanctioned individuals collectively owns at least 50 percent of it. That would appear to ensnare OAO Sogaz Insurance Group, which is more than 50 percent owned by the combination of OAO Bank Rossiya and Volga Group.

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