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US joins EU with Russia sanctions

The United States and European Union have hit Russia with a new round of economic sanctions.

The US is levying penalties on Russia's largest bank and expanding financing restrictions on major energy and defence companies.

The sanctions were imposed in coordination with the European Union, which unveiled its own package of penalties hours earlier. Officials said the parallel penalties are aimed at punishing Russia for deepening its provocations in Ukraine, including sending forces and weaponry across the border.

The penalties were levied despite a fragile ceasefire between Ukraine and pro-Russian separatists. However, officials said the sanctions could be rolled back if the separatists and Russia implement the agreement in good faith.

A prime target of the new sanctions is Sberbank of Russia, the country's largest financial institution. The bank accounts for approximately a quarter of Russian banking assets and a third of its banking capital, according to the US administration.

Sberbank, along with five other previously sanctioned Russian banks, will now face restrictions if it seeks debt financing of longer than 30 days. The European Union issued similar restrictions, effectively locking the Russian banks out of any long-term debt financing from the West.

The US is also prohibiting US entities from exporting goods services or technology to help Russian energy companies with the exploration of production of potentially lucrative oil projects.

The sanctioned Russian companies include Gazprom, the world's largest extractor of natural gas, and Rosneft, an oil company owned by the Russian government.

The penalties could impact major companies that have partnered with key players in Russia's energy industry.

Also targeted by the US sanctions are five Russian defence companies that produce weapons, ammunition and anti-aircraft systems.

The EU sanctions ban another 24 officials from travelling to the EU and freeze their assets there. Among the individuals are four deputy parliament speakers and leaders of the separatists in eastern Ukraine.

They also hit businessman Sergey Viktorovich Chemezov, who served in the Soviet intelligence service in Germany alongside President Vladimir Putin during the Cold War and is now known as one of his "close associates", according to the EU.

The sanctions curbing access to Europe's financial market also hit pipeline operator Transneft, arms firms and Russia's plane maker United Aircraft Corporation.

They forbid EU companies from engaging in new contracts in oil drilling, exploration and related services in Russia's Arctic, deep sea and shale oil projects. Russia's directly targeted oil major Rosneft is majority-owned by the state, but Britain's BP holds a 19.75% stake in it.

Conspicuously absent from the high-level targets chosen, however, were Russian gas companies - such as Gazprom - because Europe depends on Russian gas imports.

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