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US hits Putin's allies with sanctions

Barack Obama raised the stakes in an East-West confrontation over Crimea.

Russia's President Vladimir Putin. Picture: AFP

REUTERS - US President Barack Obama raised the stakes in an East-West confrontation over Crimea on Thursday by targeting some of Russian President Vladimir Putin's closest long-time political and business allies with personal sanctions.

"We're imposing sanctions on more senior officials of the Russian government," he said. "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."

The extension of visa bans and asset freezes into Putin's inner circle came as Moscow rushed to consolidate the annexation of the Black Sea peninsula, seized from Ukraine last month, and to boost its military presence in the region.

Russian troops took over three Ukrainian warships in Crimea on Thursday, using stun grenades in one incident, a Ukrainian spokesman said. Kiev also said it had begun withdrawing its border guards, surrounded and outnumbered by Russian forces, from Crimea to the mainland.

The 20 names added to the US blacklist included Kremlin banker Yuri Kovalchuk and his Bank Rossiya, major oil and commodities trader Gennady Timchenko and the brothers Arkady and Boris Rotenberg, linked to big contracts on gas pipelines and at the Sochi Olympics, as well as Putin's chief of staff and his deputy, the head of military intelligence and a railways chief.

Most grew rich after being associated with Putin since the former KGB officer began his ascent to power in the mayor's office of St Petersburg during the 1990s.

Moscow retaliated by announcing its own sanctions against senior US politicians, with the Foreign Ministry saying US action would "hit the United States like a boomerang".

European Union leaders meeting in Brussels agreed to add 12 more Russian and Crimean officials to their sanctions list for visa bans and asset freezes and to cancel a planned EU-Russia summit in Sochi and forthcoming bilateral summits with Moscow.

Russian forces took control of Crimea in late February after Moscow-backed Ukrainian President Viktor Yanukovich was toppled by protests sparked by his decision to spurn a trade deal with the EU and seek closer ties with Moscow.

The seizure has been mostly bloodless.