Obama targets Putin's allies

Russia's foreign ministry has responded saying the action would 'hit the US like a boomerang'.

US President Barack Obama. Picture: AFP.

WASHINGTON/MOSCOW - US President Barack Obama announced sanctions on Thursday against prominent Russians including close allies of President Vladimir Putin, as Moscow raced to complete its annexation of Crimea and build up its forces in the region.

Moscow responded by announcing its own sanctions against senior US politicians in retaliation against visa bans and asset freezes imposed by Washington on its citizens, with the foreign ministry saying US action would "hit the US like a boomerang".

With Obama also clearing the way for possible sanctions on vital sectors of the Russian economy, Putin told Russian company bosses to bring their assets home to help the nation survive the sanctions and an economic downturn.

Speaking at the White House, Obama said Russia's threats to southern and eastern areas of Ukraine, which like Crimea have large Russian-speaking populations, posed a serious risk of escalation of the crisis in the region.

"We're imposing sanctions on more senior officials of the Russian government. In addition, we are today sanctioning a number of other individuals with substantial resources and influence who provide material support to the Russian leadership, as well as a bank that provides material support to these individuals."

Washington announced a first round of sanctions against 11 Russians and Ukrainians it said were involved with the Crimean annexation on Monday.

The latest measures cover 20 people including Putin confidantes, the official said, adding that Bank Rossiya, which has $10 billion in assets, would be "frozen out of the dollar".

Those on the Russian list included former presidential candidate Senator John McCain, Senate majority leader Harry Reid and House of Representatives speaker John Boehner.

Obama said he had signed a new executive order expanding the US government's authority to take measures against economic sectors.

"Russia must know that further escalation will only isolate it further from the international community."

European Union leaders also gathered in Brussels to consider imposing their own further sanctions on Moscow.