EU moves towards sanctions on Russia

The EU agreed on a framework for its first sanctions on Russia since the Cold War.

The European Union agreed on a framework on Wednesday for its first sanctions on Russia since the Cold War.

JOHANNESBURG - The European Union agreed on a framework on Wednesday for its first sanctions on Russia since the Cold War, a stronger response to the Ukraine crisis than many expected and a mark of solidarity with Washington in the drive to make Moscow pay for seizing Crimea.

It's in response to Russian troops being deployed to the Crimea region following the ouster of Ukraine's president Viktor Yanukovych.

Crimea will hold a referendum on Sunday on whether it should become a part of Russia. But the United States and other Western powers have opposed the move, labelling it illegal.

US President Barack Obama warned Russia it faced costs from the West unless it changed course in Ukraine, and pledged to "stand with Ukraine" as he met with the country's new prime minister in Washington.

"We have been very clear that we consider the Russian incursion into Crimea, outside of its basis, to be a violation of international law and of international agreements of which Russia is a secretary."

"We will never surrender," Ukrainian Prime Minister Arseny Yatseniuk vowed as he and Obama met in a White House show of support for the embattled leader.

"Mr. Putin - tear down this wall - the wall of more intimidation and military aggression," Yatseniuk told reporters in remarks aimed at Russian President Vladimir Putin and a reference to then-President Ronald Reagan's challenge to the Soviet Union in a 1987 speech at the Berlin Wall.

But Obama and Yatseniuk outlined a potential diplomatic opening that could give Russians a greater voice in the disputed Crimean region, where a referendum is scheduled for Sunday on whether it should become part of Russia.

Yatseniuk told a forum in Washington after his White House meeting that his interim government was ready to have a dialogue and negotiations with Russia about Moscow's concerns for the rights of ethnic Russians in Crimea.

Russian troops have seized control of the Black Sea peninsula, where separatists have taken over the provincial government and are preparing for Sunday's referendum, which the West calls illegal.

The measures outlined by the EU are similar to steps already announced by Washington, but would have far greater impact because Europe buys most of Russia's oil and gas exports, while the United States is only a minor trade partner.

The EU's $465 billion of trade with Russia in 2012 was worth about 10 times that of the United States.

The travel bans and asset freezes could cut members of Russia's elite off from the European cities that provide their second homes and the European banks that hold their cash.

The fast pace of Russian moves to annex Crimea appears to have galvanised the leaders of a 28-member bloc whose consensus rules often slow down its decisions.

German Chancellor Angela Merkel said the measures would be imposed on Monday unless diplomatic progress was made.

Merkel herself had initially expressed reservations about sanctions but has been frustrated by Moscow's refusal to form a "contact group" to seek a diplomatic solution over Crimea.

"Almost a week ago, we said that if that wasn't successful within a few days, we'd have to consider a second stage of sanctions," Merkel said. "Six days have gone by since then, and we have to recognise, even though we will continue our efforts to form a contact group, that we haven't made any progress."

The US Senate Foreign Relations Committee approved legislation that would impose strict sanctions on Russians involved in the intervention in Ukraine and provide aid to the new government in Kiev. The bill now goes to the full Senate for a vote and must also be approved by the House of Representatives.

There has been a lot of diplomatic contact between Russia and the West but no breakthrough.

Putin spoke on Wednesday to French President Francois Hollande and Swiss Foreign Minister Didier Burkhalter, whose country chairs the Organisation for Security and Cooperation in Europe.

US Secretary of State John Kerry is due to meet with Russian Foreign Minister Sergei Lavrov in London on Friday.

Russia has pledged to retaliate for any sanctions, but EU leaders seem to be betting that Moscow has more to lose than they do. Merkel's finance minister, Wolfgang Schaeuble, said any potential impact on Germany's economy was likely to be limited.

While the EU has agreed to wording for its sanctions, it is still working on a target list. Talks took place in London this week between officials from Britain, the United States, Italy, France, Germany, Poland, Switzerland, Turkey and Japan.

European officials have indicated that Putin and Lavrov will not be on the list, in order to keep channels of communication open. The list is expected to focus on targets close to Putin in the security services and the military, as well as lawmakers.

In the past, US and EU sanctions against countries such as Syria, Libya and Iran have started with lists of only around 20 people and companies. But those lists quickly evolved into more powerful weapons as other people and firms were added.

The EU has said it is also prepared to take further steps, such as an arms embargo and other trade measures.