Obama orders new sanctions targeting Russia, Putin’s bank

President Obama announced new sanctions against Russia on Thursday and warned that more were on the way if Moscow escalated the crisis in Ukraine.

The new sanctions target senior Russian officials, influential businessmen in the country and a bank that provides “material support” to allies of Russian president Vladimir Putin. [Read the updated list of sanction targets.]

{mosads}Obama also said he had signed a new executive order that would allow him to impose sanctions on “key sectors of the Russian economy.”

He warned that this step, if taken, would have repercussions to the global economy.

The president did not detail those possible penalties, but his comments suggested the new executive order could also hurt U.S. businesses, which have been wary of tougher action against Russia.

Obama said the new steps were necessary given Russia’s annexation of the breakaway Ukrainian peninsula of Crimea earlier this week.

“Russia must know that further escalation will only isolate it further from the international community,” Obama told reporters in comments on the White House’s South Lawn.

Those sanctioned on Thursday include a longtime Putin aide who has worked for the Russian leader since 1993, the chairman of the state-owned Russian Railways, and the founder of a large commodity trading company. According to senior administration officials, the 20 targets’ assets will be frozen and they will be barred from doing business with American companies or financial institutions.

The sanctions will also affect Bank Rossiya, which the administration said was Russia’s 17th largest bank and Putin’s personal financial institution. 

One administration official said that despite “bluster” from Russian officials who had dismissed the U.S. steps earlier this week, sanctioned individuals and institutions were going to find it “difficult to transact in the dollar.” 

Under the new executive order, further aggression by Moscow could be met by sanctions against the financial services, energy, metals and mining, defense, and engineering sectors in Russia. 

Most foreign policy experts say there is little chance that Crimea, which has a majority Russian-ethnic population, will revert back to Ukrainian control, but Russian troop movements near Eastern Ukraine have raised worry that the Kremlin could also make a play for additional territory.

The president has come under fire from critics on Capitol Hill, who have charged that his initial round of sanctions against Russian and Ukrainian officials has done nothing to deter Russia.

Obama insisted that “diplomacy between the U.S. and Russia continues” and he urged Putin to re-engage with the global community.

“Russia still has a different path available — one that de-escalates the situation,” Obama said.

The president reiterated his call for Congress to pass an aid package that would help stabilize the interim government in Kiev.

“Do it right away,” Obama said. “Expressions of support are not enough. We need action.”

German Chancellor Angela Merkel indicated Thursday that Europe would be expanding its response to the Kremlin’s actions, adding around a dozen names to the 21 Russian and Crimean officials already targeted by the EU for travel and financial penalties.

“We are ready at any time to introduce phase-three measures if there is a worsening of the situation,” Merkel told the German parliament, according to Reuters.

Administration officials also said that they were providing nonlethal support to the Ukrainian government and military, and would “consider on an ongoing basis” requests for assistance from the Ukrainian military.

At the same time, officials cautioned that “nobody wants the outcome here to be a full-bore military conflict” and downplayed the likelihood of military aid.

“As a general matter, it’s our view that the best course here is to lay down strong costs through the sanctions,” one official said.

In local television interviews on Thursday, Obama said the U.S. would not engage militarily in Ukraine.

“We are not going to be getting into a military excursion in Ukraine,” Obama said.

Officials also said they were unconcerned by Moscow’s threats to respond to the sanctions. 

Russian Deputy Foreign Minister Sergey Ryabkov told Interfax that it may “raise the stakes” in response to additional moves by the U.S. and Europe, hinting they could pull out of agreements over Syria’s chemical weapons cache or Iran’s nuclear weapons program.

The Obama officials said Russia benefited from involvement in those processes and would only be hurting itself.

“Any reduction in cooperation would only further isolate Russia,” one official said.

Updated at 11:54 a.m.