The European Union has imposed targeted sanctions on close associates of Vladimir Putin in response to Russian policies that the West says have undermined Ukrainian sovereignty and left the country teetering on the edge of civil war.
Reacting to the crisis in eastern Ukraine that shows no sign of abating, Brussels introduced visa bans and asset freezes on 15 senior Russian officials and pro-Russian leaders in Ukraine.
The list includes Dmitry Kozak, Russia’s deputy prime minister, General Valery Gerasimov, chief of general staff, and General Igor Sergun, head of Russian military intelligence.
At the same time, the United States also brought in sanctions targeting seven individuals and 17 companies owing to what the US state department described as Russia’s “indisputable” role in sowing the havoc that has gripped parts of eastern Ukraine as pro-Moscow separatists battle Kiev’s central authority.
In the latest bout of violence yesterday, separatists armed with iron bars stormed and seized a local government building in the city of Luhansk. They then pulled down the Ukrainian flag flying from the roof and replaced it with a Russian one, and opened the main entrance to the large crowd outside.
Later, crowds of pro-Russia activists overran the building housing the prosecutor’s office before storming the headquarters of the interior ministry’s police force.
Rebels now control about a dozen towns and cities in the east of the country.
Catherine Ashton, the EU’s foreign policy chief, said the Kremlin was failing to support the Geneva agreement signed earlier this month and aimed at defusing the crisis.
“I call on Russia to take now concrete action in support of the Geneva accord,” she said.
US president Barack Obama said the goal of the sanctions was not to attack Vladimir Putin, but to show how his actions over Ukraine “could have an adverse impact on the Russian economy over the long haul”.
The imposition of the new sanctions produced a terse response from the Kremlin.
Sergei Lavrov, the Russian foreign minister, said: “We reject sanctions in any form, in particular those sanctions adopted by the United States and the European Union against all common sense regarding the events in Ukraine.
“We stand for the speedy settlement of this crisis … a national dialogue that takes into account the views of all regions of the country is the only way forward.”
His deputy, Sergei Ryabkov, said that US sanctions targeting hi-tech firms were reminiscent of the Cold War, and added that by appearing to follow America’s lead, the EU was clearly “under Washington’s thumb”.
Although the sanctions will affect some of Mr Putin’s closest and most influential allies, the EU in particular shied away from hitting Russian companies. However, the US did add Bank Rossiya to its list, placing restrictions on American trade with the bank.
Since Moscow’s annexation of Crimea, the EU has had to battle internal divisions over how best to target Moscow and fears that a strong approach could have consequences for Western energy supplies from Russia.
But sanctions already appear to be harming the Russian economy. Ratings agency Standard & Poor’s yesterday downgraded the country’s credit rating, noting that since the start of this year investors had moved the equivalent of £30.3 billion out of the country against £37.4bn moved in the whole of last year.
In an attempt to find a political solution to the crisis, the Ukrainian parliament discussed the possibility of holding a national referendum on granting greater autonomy to its regions and move towards federalism.
Many protesters in eastern Ukraine fear the government plans to suppress their cultural rights, and this has helped fuel the chaos gripping the region, although support for maintaining the constitutional status quo remains strong.
The Ukraine crisis began in November when protests broke out after president Viktor Yanukovich’s government rejected a far-reaching accord with the European Union in favour of stronger ties with Russia.
The move outraged many who have aspirations for integration with Europe, with the prospect of greater rights and a better standard of living.
Mr Yanukovich fled office after scores were killed in clashes, but the new pro-Western regime has faced a crisis over pro-Russian regions wishing to join the Russian Federation.