MOSCOW -- Russian President Vladimir Putin signed a decree Monday formally recognizing Crimea as a "sovereign and independent state," laying the groundwork for annexation and defying the United States and Europe just hours after they imposed their first financial sanctions against Moscow since the crisis in Ukraine began.
Mr. Putin issued his late-night decree after the region declared independence earlier in the day and asked Russia to annex it in keeping with results of a referendum conducted Sunday under the watch of Russian troops. The Kremlin announced that Mr. Putin would address both houses of the Russian Parliament today, when many expect him to endorse annexation.
The moves indicated that Moscow remained undaunted by Western pressure in a clash of wills that has created the most profound rift in East-West relations since the Cold War's end, and which threatens the redrawn borders created after the Soviet Union's 1991 breakup. Every time the United States and Europe have tried to draw a line in recent weeks, Mr. Putin has vaulted past it. The White House indicated that it had held back going after some in Mr. Putin's inner circle to have room for its next countermove.
The decree signed Monday effectively raised the ante on President Barack Obama after he froze assets and banned travel for 11 Russian and Ukrainian figures, including Vladislav Surkov, a longtime adviser to Mr. Putin; Dmitry Rogozin, a deputy prime minister of Russia; and Valentina Matviyenko, a Putin ally and chairwoman of the Federation Council, the upper house of Russia's Parliament.
The European Union followed with sanctions against 21 Russian and Ukrainian figures. The sweep of the sanctions was viewed as relatively modest, but Mr. Obama signaled that he may go further by signing an executive order authorizing future sanctions against Russia's arms industry and the wealthy business figures who support Mr. Putin's ruling clique.
"We're making it clear that there are consequences for their actions," Mr. Obama said as he announced the sanctions. "We'll continue to make clear to Russia that further provocations will achieve nothing except to further isolate Russia and diminish its place in the world."
In Simferopol, the Crimean capital, celebrations continued Monday, and officials declared it a day off from work, as officials announced that 97 percent of voters in Sunday's referendum supported rejoining Russia. Legislators moved to complete the break from Ukraine, adopting a resolution declaring that Ukraine's laws no longer applied to Crimea, and that state funds and property in Crimea had been transferred to their new entity.
Highlighting the tensions, the Ukrainian Parliament in Kiev approved a presidential decree authorizing the call-up of 20,000 reservists, and another 20,000 for a newly formed national guard. The interim government also increased the military budget with an emergency allotment of about $680 million.
Moscow moved to welcome back Crimea, which was part of Russia for much of the past few centuries, until the Kremlin transferred it to control of the Ukrainian Republic inside the Soviet Union in 1954; it remained under Ukraine when it became a separate country in 1991. Every faction in the Russian Duma submitted draft legislation Monday officially reversing that 60-year-old decision.
The consensus in Moscow was so strong that even the last Soviet leader, Mikhail Gorbachev, whose role in the Soviet Union's dissolution is deeply reviled in Russia, endorsed Crimea's move, telling Interfax that its independence "should be welcomed and not met with the announcement of sanctions." He added: "If until now Crimea had been joined to Ukraine because of Soviet laws that were taken without asking the people, then now the people have decided to rectify this error."
The U.S. sanctions targeted prominent Russian officials, but not those likely to have many overseas assets; the European list went after generally lower-level targets. As a result, the actions were met with derision and even mockery in Moscow. In one measure of the reaction, Russia's battered stock markets rose sharply at the end of the day.
"This is a big honor for me," said Mr. Surkov, once called the "gray cardinal" of the Kremlin and known as the architect of Putin's highly centralized political system. He told a Russian newspaper that he had no assets abroad: "In the U.S., I'm interested in Tupac Shakur, Allen Ginsberg and Jackson Pollock. I don't need a visa to access their work."
Mr. Rogozin, who oversees the defense industry, chided "Comrade Obama" in a Twitter message noting that those on the list did not have assets abroad. Andrey Klishas, a Federation Council member, told Interfax that the measures against him "were no tragedy for me." Yelena Mizulina, a member of the State Duma, the lower house of Parliament, said in an email statement that she considered the sanctions "a rude violation of my rights and freedoms as a citizen and a politician."
German Chancellor Angela Merkel said the sanctions were not imposed lightly. "We wanted talks and a diplomatic solution, but the clear violation of international law yesterday with the so-called referendum meant we had to take this step, and I am glad that Europe showed such unity," she said.
U.S. officials made clear that they will ratchet up pressure if Mr. Putin does not back down. They went immediately back to the Situation Room after the announcement to begin work on a next round of sanctions that could come as early as this week. Mr. Obama's new executive order expanded the scope of his authority to target three groups: Russian government officials, the Russian arms industry and Russians who work on behalf of government officials, the latter called "Russian government cronies" by a senior U.S. official.
Mr. Obama held out hope that diplomacy may yet succeed, but he sent Vice President Joe Biden to Eastern Europe to meet this week with nervous NATO allies such as Poland, Lithuania, Latvia and Estonia and reassure them of U.S. resolve.