West turns to Putin's inner circle

Sanctions focus on Russian tech, defense firms

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WASHINGTON -- The U.S. and European Union will impose new sanctions as early as today on Russian companies and individuals close to President Vladimir Putin over the escalating crisis in Ukraine, officials said.

"We will be looking to designate people who are in his inner circle, who have a significant impact on the Russian economy," said Tony Blinken, deputy White House national security adviser, on CBS's "Face the Nation" program Sunday. "We'll be looking to designate companies that they and other inner-circle people control. We'll be looking at taking steps as well with regard to high-technology exports to their defense industry. All of this together is going to have an impact."

The seizure of international inspectors by pro-Russian separatists last week added pressure to a confrontation made urgent by Russian military exercises on Ukraine's frontiers. NATO says 40,000 Russian troops are near the border. Ukraine's southern air-defense forces are in "operational readiness," the country's defense ministry said Sunday on its website.

Among those who may be hit by sanctions is Igor Sechin, the chief executive officer of OAO Rosneft, according to people familiar with developments. Mr. Sechin is a confidant of the Russian president.

Representatives of the 28 European Union nations will meet today to widen a list of people subject to asset freezes and travel bans, an official from the bloc said over the weekend. The sanctions will target 15 Russians in positions of power, another diplomat said. Both asked not to be identified because of the sensitivity of the matter.

"I have the impression" that the European Union will extend visa bans and asset freezes to "maybe another 15 people," Gernot Erler, Germany's deputy foreign minister, said in an interview on ZDF television.

Russia has stoked tensions in Ukraine with "threatening" military maneuvers and by "taking no concrete steps" to implement an April 17 accord meant to calm the crisis, the Group of Seven nations -- the U.S., Britain, France, Germany, Italy, Canada and Japan -- said in a Friday statement.

Executives at OAO Gazprombank, Russia's third-largest lender, are preparing for possible sanctions, two people with knowledge of the deliberations said last week, while development lender Vnesheconombank is taking precautions, according to a person familiar with talks at the lender.

U.S. Sen. Bob Corker of Tennessee, the top Republican on the Foreign Relations Committee, called on President Barack Obama's administration to impose sanctions on four of Russia's largest banks and OAO Gazprom, the country's gas-export monopoly.

"Hitting four of the largest banks there would send shock waves through the economy," Mr. Corker said Sunday on CBS. "I just think we need to hit him much more toughly," he said of Mr. Putin.

Some U.S. officials warn that broader sanctions, those that affect ordinary Russians and not just the business oligarchs in Mr. Putin's inner circle, may backfire to the Russian leader's benefit. Ordinary Russians probably would rally behind Mr. Putin and allow him to blame the U.S. and its allies for the country's economic woes.

Three officials, all of whom requested anonymity to discuss internal policy deliberations, said financial and other sanctions are unlikely to deter Mr. Putin. His goals are to destabilize Ukraine; ensure Russian domination of portions of it, as well as the Transnistria region of Moldova; and make the government in Kiev subservient to the one in Moscow.

"It's going to be more effective if everybody signs on and everybody's committed," Mr. Obama told a news conference Sunday in Putrajaya, Malaysia. "We're going to be in a stronger position to deter Mr. Putin when he sees that the world is unified and the United States and Europe is unified, rather than this is just a U.S.-Russia conflict."

The planned EU moves are not set to include broader trade, financial and economic measures against Russia, known as "stage three" sanctions.

The allied measures will be coordinated, though penalties from each country won't necessarily be identical, the U.S. official said.

"I think these targeted sanctions against individuals just are not affecting Putin's behavior enough," Mr. Corker said, in advocating broader measures that target whole sectors of the Russian economy.

In addition to sanctions, some Republican lawmakers, led by Arizona Sen. John McCain, are pushing the Obama administration to send weapons to Ukraine's military.

"We should supply them anti-tank, anti-missile weapons," Sen. John Barrasso of Wyoming, a Republican on the Foreign Relations Committee, said Sunday in a CNN interview.

Mr. Blinken, the White House adviser, dismissed that suggestion, saying the administration focus is on economic assistance.

The U.S. will focus on "professionalizing" Ukraine's military, while stopping short of providing lethal aid, he said.

Meanwhile, pro-Russian separatists freed one international observer from a group of 11 taken captive three days ago in the eastern Ukrainian city of Slovyansk. Negotiators for the Organization for Security and Cooperation in Europe left the city following the release of the observer, a Swedish officer who has diabetes, the Russian news agency RIA Novosti reported.

Pro-Russian militants in camouflage fatigues and black balaclavas paraded seven captive European military observers and their translator before the media Sunday, hours after three captured Ukrainian security guards were shown bloodied, blindfolded and stripped of their trousers and shoes, their arms bound with packing tape.

Also on Sunday, several hundred pro-Russia activists stormed the television broadcasting center in Donetsk, the regional capital of eastern Ukraine, to demand that Russian state channels be put back on the air. The Kiev government last month blocked broadcast of the Russian channels, which serve as propaganda tools for the Kremlin.

U.S. Secretary of State John Kerry telephoned Russian Foreign Minister Sergei Lavrov over the weekend to urge "support without preconditions" for moves to free the observers, the State Department said.

Russia is "undertaking measures" to resolve the situation, the Foreign Ministry in Moscow said in a statement that also said the Ukrainian government was responsible.

Associated Press contributed.


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