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US targets Putin's inner circle with sanctions in bid to end Crimea crisis

By Andrew Woodcock

Billionaire oligarchs at the heart of Vladimir Putin's inner circle have been targeted for the first time for US sanctions over Crimea.

The move came as EU leaders prepared to meet in Brussels to discuss their own response to Russia's annexation of the strategically important Black Sea peninsula.

Barack Obama's imposition of travel bans and asset freezes on super-wealthy businessmen such as Mr Putin's banker Yury Kovalchuk, as well as officials including the president's chief of staff Sergei Ivanov, was met with a Cold War-style tit-for-tat retaliation by Moscow, which announced its own blacklist of US politicians.

Mr Obama also signed an executive order authorising American sanctions targeting key sectors of the Russian economy if the situation in Ukraine deteriorates further.

The US president's action is likely to overshadow discussions in Brussels, where leaders of the 28 European Union nations are expected to agree little more than an extension of the existing list of 21 Russian and Crimean officials subjected to visa restrictions and asset freezes.

Action against the oligarchs who provide financial support for the Putin regime is not on the table.

But officials at the Brussels talks stressed that the EU is offering a "carrot" of strengthened economic links with heavily indebted Ukraine, as well as the "stick" of sanctions. Elements of an association agreement with Kiev are set to be signed today, four months after former president Viktor Yanukovych stepped away from the deal in a move which eventually led to his overthrow.

David Cameron and the other 27 EU leaders were discussing the Ukraine crisis over dinner on the first day of the regular two-day European Council summit.

As well as the extension of sanctions to more individuals deemed responsible for violations of Ukrainian sovereignty, the talks focused on preparations for the wider trade and economic measures threatened by the EU if Russia continues to escalate the situation.

One measure under discussion for possible immediate application was a requirement for imports from Crimea to carry a Ukrainian customs stamp, while other countries could agree their own suspension of arms export licences and military co-operation with Russia of the kind announced by Britain earlier this week.

Tensions remained high in Crimea itself, where pro-Russian forces seized three Ukrainian warships and Kiev said its troops were being threatened. The lower house of Russia's parliament, the Duma, endorsed the absorption of the peninsula into their country by a near-unanimous vote of 445-1.

Speaking after meeting Mr Putin in Moscow, UN secretary general Ban Ki-moon said he "emphasised that all parties refrain from any hasty or provocative actions that could further exacerbate an already very tense and very volatile situation".

Arriving in Brussels, Mr Cameron called on Europe to send a "clear and united" message to Russia, whose actions he described as "unacceptable".

"What that means is more asset freezes and travel bans, more action specifically in respect of what has happened in the Crimea," he said.

FACTFILE

The blacklist of 20 individuals unveiled by Barack Obama in Washington includes prominent businessman Gennady Timchenko and billionaire brothers Arkady and Boris Rotenberg, who were judo sparring partners of the Russian president, as well as Mr Putin's deputy chief of staff, Alexei Gromov, Duma Speaker Sergei Naryshkin and Russian Railways chairman Vladimir Yakunin. Rossiya bank was also hit by US sanctions.

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