WASHINGTON — The United States is escalating its sanctions against Russia over the Ukrainian crisis, targeting some of Russia's largest banks, energy companies and armsmakers and individuals tied to Russian President Vladimir Putin.
President Obama said Wednesday the sanctions were "significant but also targeted" and designed to minimize "spillover effects" on U.S. businesses.
"I have repeatedly made it clear that Russia must halt the flow of weapons and fighters into Ukraine," he said. "We have to see concrete actions and not just words that Russia is committed to trying to end this conflict along the Russia- Ukraine border."
European Union leaders quickly followed suit. Meeting in Brussels Wednesday, they agreed to expand the list of sanctions and asked the European development banks to halt new investments in Russia.
The companies targeted include Gazprombank, Russia's third-largest bank; Vnesheconombank, a bank tied closely to Putin; Novatek, its largest natural gas supplier; and oil giant Rosneft. U.S. companies are forbidden from issuing new, long-term financing for these companies, but their assets are not completely frozen.
Also listed are five individuals, eight Russian arms manufacturers, three Ukrainian separatist groups and a Crimean port effectively nationalized by the Russian government.
The Russian defense industries include Kalashnikov Concern, the maker of the iconic AK-47 assault rifle, and UralVagonZavod, a major tankmaker.
The added sanctions come as Ukrainian security forces prepare to launch military offensives against strongholds of pro-Russian separatists in the eastern cities of Donetsk and Luhansk. Russia continues to provide assistance to the rebels, allowing fighters and heavy military equipment across the border and massing thousands of tanks nearby, said Geoffrey Pyatt, the U.S. ambassador to Ukraine.
"We have seen no evidence that Russian support for the separatists has ceased," Pyatt said in an interview Tuesday. "Heavy equipment is crossing the border. There are equipment offices in Moscow for these separatist groups. You have Russians leading the fighters. You have Russian fighters crossing the border into Ukraine. … We know Moscow has recently transferred tanks and artillery to the separatists."
The Treasury action follows a round of phone calls by Obama to European leaders — including British Prime Minister David Cameron and German Chancellor Angela Merkel — to ensure their support. In a call with Merkel on Tuesday, the two leaders agreed to "take immediate steps to de-escalate the situation in eastern Ukraine amid the ongoing violence there," the White House said.
Hours before the announcement, White House spokesman Josh Earnest warned that Russia's one-step-forward, two-steps-back response to the crisis puts Russia "at risk of greater isolation and greater economic consequences."