Obama turns up the heat on Putin

Expands sanctions against associates over Ukraine acts

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WASHINGTON -- President Barack Obama on Thursday expanded sanctions against top aides and reputed financial associates of Russian President Vladimir Putin as punishment for the annexation of Crimea, and laid the groundwork for far broader measures against "key sectors of the Russian economy" if Mr. Putin further escalates his actions in Ukraine.

The expanded measures potentially include Russia's financial services, energy, mining, engineering and defense sectors, according to language in what was Mr. Obama's third executive order in two weeks. If implemented, he acknowledged, they would not only significantly affect the Russian economy, but "they could also be disruptive to the global economy."

Nonetheless, "Russia must know that further escalation will only isolate it further from the international community," Mr. Obama said in a brief statement on the White House South Lawn.

For now, the measures target Mr. Putin's inner circle and stop well short of the kind of sanctions that have crippled Iran's economy. Those would be triggered only by a wider military incursion.

Russian troops remain massed on Ukraine's eastern and southern borders, and although Mr. Putin has said Moscow has no further territorial designs on Ukraine, he has proved indifferent to Western threats.

Russia promptly retaliated by banning nine U.S. lawmakers and officials from entering the country. The Russian Foreign Ministry said the list includes Senate Majority Leader Harry Reid, D-Nev., House Speaker John Boehner, R-Ohio, Sen. John McCain, R-Ariz., and three top Obama aides.

"Washington has been repeatedly assured that it is unacceptable and counterproductive to talk with our country in such a way," said a statement from the Russian Foreign Ministry. "However, the U.S. seems to continue believing blindly in the efficiency of such methods, taken from the arsenal of the past, and does not want to admit the obvious -- in complete accordance with international laws and the U.N. charter, Crimean residents voted democratically for rejoining Russia."

The Obama administration said it is reviewing a Ukrainian request for nonlethal military assistance to help deter a Russian incursion. But a senior official, one of several who briefed reporters in a conference call about the new measures, said "nobody wants the outcome here to be a full-bore military conflict between Russia and Ukraine," and repeated that the United States is not considering "the introduction of U.S. military forces." The officials spoke on condition of anonymity to focus attention on the president's public remarks.

The U.S. actions came as European leaders, beginning a two-day meeting in Brussels, struggled to agree on how far they are prepared to go with measures against Russia that are likely to spur Moscow retaliation far more economically damaging to their countries than to the United States. As the administration tries to coordinate with Europe, the timing of Thursday's announcement was designed in part to stiffen European spines.

On Friday, the European Union plans to sign an agreement with Ukraine's interim government aimed at gradually bringing it closer to membership. The Ukraine crisis began four months ago, when pro-Europe demonstrators began protesting their then-government's refusal to sign the accord.

Mr. Obama will travel next week to meet with the Europeans and other allies in several forums, including the European Union, NATO and the Group of Seven industrialized nations, which has been at least temporarily downsized to exclude Russia. In the current "political circumstances," German Chancellor Angela Merkel said Thursday, "there is no G-8."

The U.S. sanctions announced Thursday added 20 people to a handful of Russians whose U.S. and dollar assets the administration froze this week, along with what a senior administration official described as "a crony bank that handles the funds" for wealthy Russians within and outside the government.

Among those on the list are government and business leaders who have been close to Mr. Putin, some for many years. They include some of the richest men in Russia -- and one Russian, Gennady Timchenko, who is in the oil-trade business in Switzerland.

The sanctions list also includes key officials such as Sergei Naryshkin, speaker of the lower house of parliament, and Sergei Ivanov, head of the presidential administration, as well as influential Russians in the banking and business communities, including several from Mr. Putin's hometown, St. Petersburg. Among them is Yuri Kovalchuk, a longtime Putin friend who is known as "Putin's banker."

Russian Foreign Minister Sergei Lavrov and Secretary of State John Kerry spoke again by phone Thursday about Ukraine. Mr. Lavrov, a separate ministry statement said, accused the United States of "condoning" the activities of "ultranationalist and extremist forces" that he said were targeting businessmen, journalists, dissenters, Russian speakers and "our compatriots."

The Pentagon said Defense Secretary Chuck Hagel also spoke with his Russian counterpart, Sergei Shoigu, who told him that Russian troops along the Ukrainian border were there only to conduct exercises.

Defying U.S. and European warnings, Russia moved troops several weeks ago into Crimea, a part of Ukraine with an ethnic-Russian majority population. In short order, it organized a referendum in which Crimea voted to become part of Russia, and Mr. Putin announced this week that Russia would annex the region.

On Thursday, the lower house of the Russian parliament voted 443 to 1 to admit Crimea and the metropolitan region of Sevastopol into the Russian Federation, putting some of the final procedural touches on the takeover. The bill is scheduled to be taken up today by the upper house, the Federation Council, where its expected approval will make Crimea officially part of the country under Russian law.


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