Obama Expands Sanctions Against Russia Over Action In Ukraine

The president said the "sanctions are significant but they are also targeted" and are designed to send a message to Russian leaders.

Updated — July 17, 2:10 a.m.

Jul. 17, 2014, at 06:11 AM

Russian President Vladimir Putin said Thursday the sanctions "will push U.S.-Russian relations into a dead end, and cause very serious damage," Reuters reports. Putin also said American companies willing to work in Russia will lose their global competitiveness.

Andrei Kostin, the chief of Russia's second largest bank, further called the sanctions inappropriate. "I believe that if we do not take measures to stop such unilateral actions, we could see devastating consequences for the global financial system," he added.

The U.S. will pursue "targeted" sanctions against Russia, President Obama announced Wednesday afternoon from the White House.

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Obama said the "sanctions are significant but they are also targeted" and are designed to send a message to Russian leaders that their actions in Ukraine will not be tolerated. Obama also said that Russia has not halted the flow of weapons and fighters across the border into Ukraine, even though he and European leaders "have made it clear directly to Mr. Putin" that the country must stop.

"So far Russia has failed to take any of the steps I have mentioned," Obama said, adding that American and European leaders want a diplomatic solution. The sanctions are designed to show the Russian government that continued involvement in Ukraine means a weakened economy and further isolation. At the same time, Obama said, the U.S. is committed to helping Ukraine build its own economy and maintain the integrity of its borders.

The sanctions will impact a group of large energy and defense firms, as well as banks.

Dmitry Kostyukov/AFP/File

According to the New York Times, targeted firms include several state-run energy-oriented companies: Rosneft, the world's largest oil company; Gazprombank, the financial branch of a state-run natural gas company; Novatek, a natural gas company; and Vnesheconombank, an economic development bank.

The sanctions also target individuals, such as senior security official Sergey Beseda, and entities such as the self-proclaimed "Donetsk People's Republic" and "Luhansk People's Republic" in Ukraine.

The sanctions will prevent the Russian companies from borrowing money in the American market.

AP Photo/Alexander Zemlianichenko

The headquarters of Gazprom, one of the companies targeted by the sanctions.

Companies included in the sanctions will be shut out of the American debt market for 90 days, the New York Times reports. That should make it harder for them to do business long term.

The White House is coordinating its efforts with European leaders.

AP Photo/Charles Dharapak

European leaders also met Wednesday in Brussels and ordered new sanctions against Russia.

Officials at the meeting agreed to suspend the new European Bank for Reconstruction and Development's financing of operations in Russia, and to ban signing new financing agreements.

The leaders also appeared willing to go after Russian firms "that are materially or financially supporting actions undermining or threatening Ukraine's sovereignty, territorial integrity and independence."

The U.S. first imposed sanctions against Russia in March as the violence in Ukraine escalated.

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Those sanctions included visa bans for Russian officials. Obama also signed an executive order allowing additional sanctions against "individuals and entities responsible for activities undermining democratic processes or institutions in Ukraine."

Meanwhile, the violence in Ukraine continues.

Last week, as many as 30 Ukrainian soldiers were killed when rebels shelled a camp near the Russian border.

AP Photo/Pablo Martinez Monsivais