U.S., EU Slap New Sanctions on Russian, Ukrainian Figures as Moscow Vows 'Painful' Response

The United States and the European Union on Monday slapped fresh sanctions on Moscow over its role in Ukraine's crisis, as Russia vowed a “painful” response to the measures.

Washington imposed new sanctions on seven Russian officials and 17 firms linked to President Vladimir Putin's inner circle to punish the Kremlin for failing to ease tensions in Ukraine.

Deepening the worst East-West showdown since the end of the Cold War, the U.S. is also tightening licensing requirements for certain hi-tech exports to Russia that could have a military use, the White House announced in a statement issued in Manila, where President Barack Obama is on a state visit.

"The United States has taken further action today in response to Russia’s continued illegal intervention in Ukraine and provocative acts that undermine Ukraine’s democracy and threaten its peace, security, stability, sovereignty, and territorial integrity," said White House spokesman Jay Carney in a statement.

Carney said Russia had done nothing to meet the terms of a deal agreed in Geneva with Ukraine, the European Union and the United States and designed to rein in pro-Moscow separatists in eastern Ukraine.

"Russia's involvement in the recent violence in eastern Ukraine is indisputable," he said.

The sanctions follow up on previously announced measures targeting other members of Putin's political and inner circle and a Russian bank.

They do not however specifically target sectors of the Russian economy like energy and mining.

The White House said those measures would only be imposed by the United States and its European allies if Russia actually invades Ukraine.

A senior U.S. official said the sanctions would be rolled out in coordination with new European Union sanctions, and that existing measures were already having a "substantial impact" on the Russian economy.

U.S. Treasury Secretary Jacob Lew said Russia's "dangerous and inflammatory actions against Ukraine are illegal and illegitimate."

He said in a statement that Russia's economic growth forecasts had "dropped sharply, capital flight has accelerated and higher borrowing costs reflect declining confidence in the market outlook."

The companies sanctioned include Avia Group limited, the Severny Morsoy Bank, InvestCapital Bank, Transoil, Volga Resources Group, SMP Bank, Sobin Bank and Zest Leasing.

Individuals hit with visa bans and asset freezes include Oleg Belavantsev, who was named presidential envoy to Crimea by Putin in March.

Sergei Chemezov, director general of Rostec, the state development manufacturing and export programme for hi-tech exports, is also on the list. The U.S. Treasury said Chemezov is a trusted aide to Putin.

Deputy prime minister Dmitry Kozak is hit by sanctions, along with Evgeniy Murov, director of Russia’s Federal Protective Service.

State Duma Deputy Aleksei Pushkov is among those named along with Igor Sechin, president and chairman of the Management Board for Rosneft, Russia’s top petroleum company and one of the world’s largest publicly-traded oil companies.

"Sechin has shown utter loyalty to Vladimir Putin -- a key component to his current standing," the Treasury said.

Meanwhile, the European Union agreed Monday to impose sanctions on another 15 Russian and Ukrainian individuals for their role in the Ukraine crisis, diplomatic sources said.

The 15 will be subject to the same visa ban and asset freezes imposed on more than 50 others as Moscow shows no sign of reversing course in Ukraine, the sources said.

The new names will be listed in the EU's official journal, likely on Tuesday.

The decision was taken at a meeting of the 28 member states' ambassadors to the EU, who gathered to discuss the next step in responding to the Ukraine crisis.

The measures fall short of the full-scale economic sanctions proposed by Washington.

With far more extensive economic ties between many member states and Moscow, the EU has balked at moving to tougher 'Phase 3' sanctions that would target Russia's economy as a whole, although leaders have agreed to begin preparation of sanctions.

"If there is additional escalation then there is the possibility to pass to Phase 3. Currently, there is no de-escalation so we think additional (Phase 2 measures) are appropriate," the European Commission said earlier on Monday.

Later on Monday, Russia vowed to deliver a "painful" response to the fresh U.S. sanctions.

"We will, of course, respond," Russian Deputy Foreign Minister Sergei Ryabkov told the Interfax news agency.

"We are certain that this response will have a painful effect on Washington," he said.

He provided no further details but stressed that Russia had a "broad range" of options.

Ryabkov said Washington's measures would only escalate tensions around the culturally splintered ex-Soviet state.

"We are disgusted with the statement issued by the White House press secretary," said Ryabkov.

"Every word used by the White House press secretary in the statement confirms that the United States has completely lost touch with reality and is leading things toward an escalation of the crisis."