Ukraine crisis: U.S. threatens more sanctions against Russia

Ukraine crisis: U.S. threatens more sanctions against Russia
Michael Holmes/CNN
Friday, April 25, 2014 - 4:50am

The threat of tougher U.S. sanctions against Russia over its actions in Ukraine loomed Friday as the crisis showed no sign of easing.

In their sights: key Putin allies, high-profile Russian oligarchs and possibly Russian institutions and companies, senior U.S. officials told CNN.

According to the U.S. officials, the additional measures could come as early as Friday.

The new sanctions "will be an escalation," one official said.

It comes after top U.S. officials -- including President Barack Obama -- vowed more punitive international actions targeting Russia's economy if Moscow, in their view, continues to escalate the situation.

U.S. Secretary of State John Kerry called Russia's actions in Ukraine "a full-throated effort to actively sabotage the democratic process through gross external intimidation."

"If Russia continues in this direction," he added, "it will not just be a grave mistake, it will be an expensive mistake."

Russia also ramped up its rhetoric Thursday.

Russia's defense chief ordered new military drills near the border with eastern Ukraine, after Ukrainian forces said they killed five pro-Russian militants in an operation to clear roadblocks near the city of Slavyansk.

And Russian President Vladimir Putin told state media that "if the Kiev regime has started to use the army against the population inside the country, it, beyond any doubt, is a very serious crime."

This, he said, would have consequences for Ukraine's interim leaders and for relations between the two countries.

Competing claims

Only a week has passed since foreign ministers for Ukraine, Russia, the United States and the European Union agreed to a deal in Geneva, Switzerland, aimed at easing the crisis.

But that pact -- which called for all sides to refrain from violence and for illegal militia groups to disarm and quit occupied buildings -- appears to have faltered, if not failed.

Pro-Russian militants remain holed up in government buildings in around a dozen cities in eastern Ukraine.

And efforts by the Ukrainian security services to dislodge them, in what it has termed an anti-terrorist operation, risk provoking more violence or perhaps direct Russian intervention.

The United States has accused Russia of supporting, arming and coordinating the separatist militants -- a claim Moscow denies, saying they are simply local "self-defense" units.

Russia in turn accuses the United States of "running the show" in Ukraine and says it must do more to hold Kiev to its side of the Geneva deal, saying the interim government must disband right-wing, ultranationalist groups.

However, Kerry on Thursday praised what he called positive efforts by Ukraine's government to implement the Geneva deal while rapping Moscow for having "refused to take a single concrete step in the right direction."

He pointed to "peaceful protesters ... armed with grenade launchers and automatic weapons," self-defense group members wearing "brand new matching military uniforms and speaking in dialects that every local knows comes from thousands of miles away" and the reported arrests of Russian intelligence operatives in Ukraine.

Kerry: Window is closing

Kerry warned that the "window to change course is closing" for Russia -- and that its leaders face a choice.

"If Russia chooses the path of de-escalation, the international community -- all of us -- will welcome it. If Russia does not, the world will make sure that the cost for Russia will only grow," he said.

Obama, speaking Thursday in Tokyo, said that the United States was "teed up" to impose additional sanctions, with only technical details and international coordination to finalize.

Unless and until the additional U.S. sanctions are announced, it's hard to judge how much they will hurt Russia. Previous rounds targeted individual lawmakers and businessmen seen as close to President Vladimir Putin, as well as a bank, Rossiya, believed to serve the President and senior Russian officials. The European Union has also imposed its own asset freezes and visa bans.

But Russia's stock market and currency tumbled Thursday as investors and traders worried about the worsening situation in Ukraine. Russian Prime Minister Dmitry Medevdev acknowledged this week that the sanctions, coupled with other factors, were impacting Russia's economy.

Russia's benchmark Micex index has fallen by 13.5% since the start of the year as investors worry about the cost of a full-fledged military confrontation. The Russian ruble has declined by roughly 8% over the same period.

Journalist Victoria Butenko reported from Kiev and CNN's Laura Smith-Spark wrote and reported in London. CNN's Elise Labott and Alanna Petroff contributed to this report. 

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