UPDATE 1-EU should heed European firms in Russia before imposing further sanctions -Putin aide

Sat May 24, 2014 8:15am EDT

(Adds background, quotes)

By Darya Korsunskaya

ST PETERSBURG, Russia May 24 (Reuters) - The European Union should consider the interests of European companies working in Russia when deciding on whether to impose sanctions on Moscow over its involvement in Ukraine, President Vladimir Putin's top economic aide said on Saturday.

The United States and European Union have already hit dozens of officials, lawmakers and companies close to Putin with sanctions and EU leaders are due to discuss next week further steps they could take against Russia if there are disruptions to Ukraine's presidential election on Sunday.

"I hope very much that when making these decisions ... the dependence and interests of European companies that are working in Russia (will be considered)," Andrei Belousov told reporters on the sidelines of the St Petersburg International Economic Forum.

"These are European companies, which are working here, working for European markets for the most part, and which are taking suitcases full of cash to Europe."

The measures, including restrictions ranging from luxury good imports to an oil and gas ban, envisage three scenarios - low-intensity, medium-intensity and high-intensity sanctions.

Belousov said that if any new measures were to restrict Russia's foreign trade, Russia may take legal action by appealing to the Dispute Settlement Body (DSB) of the World Trade Organisation.

"If the (DSB) authority decides in favour of Russia, our colleagues from the U.S. and the EU will find themselves, in - how to say it - an interesting position," Belousov said.

If the DSB were to decide in favour of the U.S. and Europe, Belousov said, it would be "even more interesting".

"This would mean that sanctions (have) become a WTO practice," he said. (Writing by Lidia Kelly; Editing by Jason Bush and Raissa Kasolowsky)

FILED UNDER: