President Barack Obama on Thursday imposed sanctions on 20 Russian citizens as well as a bank linked to Moscow's move to annex Ukraine's Crimea peninsula and threatened broader penalties against key sectors of Russia's economy if Moscow moves further into Ukraine.
Among the 20, Obama targeted several individuals close to Russian President Vladimir Putin in retaliation for his military seizure of Ukraine's Crimea region. Any assets they have in the United States will be frozen and they will also be barred from U.S. travel.
Russia's Bank Rossiya, with $10 billion in assets, was singled out for U.S. sanctions. A Treasury Department statement said it is the personal bank for senior officials of the Russian government, including Putin's inner circle.
St. Petersburg-based Bank Rossiya is chaired and partly-owned by Yuri Kovalchuk, a close adviser to Putin. Kovalchuk, whose association with Putin dates back to the early 1990s, was among the 20 individuals targeted for sanctions.
The bank will be "frozen out of the dollar," a senior Obama administration official said.
BAD OMEN?Gennady Timchenko, one of the founders of Gunvor, which is one of the world's largest independent commodity trading companies involved in the oil and energy markets, was also singled out for penalties.
In a potentially ominous move, Obama said he had signed a new executive order that clears the way for U.S. sanctions against broad sections of the Russian economy should Putin's military make moves beyond Crimea and into southern and eastern Ukraine.
Senior administration officials said many parts of the Russian economy could be targeted, including the financial services sector and the key energy, defense and mining sectors.
Russia's oil and gas industry alone accounts for nearly half of the country's annual budget revenues.
Obama, speaking at the White House, said Russia's threats to southern and eastern Ukraine posed a serious risk of escalation of the crisis in the region.
"This is not our preferred outcome. These sanctions would not only have a significant impact on the Russian economy, but could also be disruptive to the global economy. However, Russia must know that further escalation will only isolate it further from the international community," Obama said.
One official said Washington was using the new authority to prepare additional sanctions that would sting Moscow while having the smallest impact possible on the United States and its allies.
"Sanctions build over time. They are very powerful. And people may think that they are a mere wrist slap. I can assure them that they are not," the official said.
Obama also said the United States is reacting to the "dangerous risks of escalation, including threats" to Ukraine.
"These are all choices that the Russian government has made, choices that have been rejected by the international community as well as the government of Ukraine. And because of these choices the United States is today moving, as we said we would, to impose additional costs on Russia," he said.
He also promised unwavering U.S. support to NATO allies, which include Russian neighbors Lithuania, Latvia and Estonia.