West seeks to inflict more economic pain on Russia

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West seeks to inflict more economic pain on Russia
People buy imported fruit at a supermarket in downtown Moscow on Thursday, Aug. 7, 2014. The Russian government has banned all imports of meat, fish, milk and milk products and fruit and vegetables from the United States, the European Union, Australia, Canada and Norway, Prime Minister Dmitry Medvedev announced Thursday. The move was taken on orders from President Vladimir Putin in response to sanctions imposed on Russia by the West over the crisis in Ukraine. The ban has been introduced for one year. (AP Photo/Ivan Sekretarev)
SAINT PETERSBURG - SEPTEMBER 04: In this handout image provided by Ria Novosti, Dean of the Department of Liberal Arts and Sciences, Saint Petersburg State University Alexei Kudrin attends the briefing 'The issues of development of global and Russian economy on the G20 agenda.' ahead of the G20 summit on September 4, 2013 in St. Petersburg, Russia. The G20 summit is scheduled to run between September 5th and 6th. (Photo by Roman Yandolin/RIA Novosti via Getty Images)
Russia's former finance minister Alexei Kudrin, left, speaks during a news conference in Moscow, Russia, Thursday, April 5, 2012. Russia's former finance minister says he has set up an independent committee to shape policies alternative to those of the government. Kudrin resigned last year over a disagreement with then President Dmitry Medvedev, and threw his support behind the emerging opposition movement. (AP Photo/Ivan Sekretarev)
Russian President Vladimir Putin listens to the Audit Chamber chairwoman Tatyana Golikova, foreground, at the Novo-Ogaryovo residence, outside Moscow, Russia, Tuesday, Sept. 16, 2014. (AP Photo/RIA Novosti Kremlin, Mikhail Klimentyev, Presidential Press Service)
Women choose Dutch tomatoes at a supermarket in downtown Moscow, on Thursday, Aug. 7, 2014. The Russian government has banned all imports of meat, fish, milk and milk products and fruit and vegetables from the United States, the European Union, Australia, Canada and Norway, Prime Minister Dmitry Medvedev announced Thursday. The move was taken on orders from President Vladimir Putin in response to sanctions imposed on Russia by the West over the crisis in Ukraine. The ban has been introduced for one year. (AP Photo/Ivan Sekretarev)
President Barack Obama speaks on the South Lawn of the White House in Washington, Tuesday, July 29, 2014, as he announces new economic sanctions against key sectors of the Russian economy in the latest move by the U.S. to force Russian President Vladimir Putin to end his support for Ukrainian rebels.
People hold on August 30, 2014 leaflets, reading 'Stop Putin' and 'Ukraine: 22 years without the war. Russia: 1.1992-Transnistria. 2.1994-1996-Chechnya. 3. 1999-2009-Chechnya. 4 2008-South Ossetia and Abkhazia. 5.2014-Ukraine' during a rally against Russian President Vladimir Putin as the European Union readied a fresh wave of sanctions against Russia at a summit in Brussels, with warnings that the escalating conflict in Ukraine was putting all of Europe at risk. AFP PHOTO/ ALEXEY KRAVTSOV (Photo credit should read ALEXEY KRAVTSOV/AFP/Getty Images)
President Barack Obama speaks on the South Lawn of the White House in Washington, Tuesday, July 29, 2014, as he announces new economic sanctions against key sectors of the Russian economy in the latest move to force Russian President Vladimir Putin to end his support for Ukrainian rebels. (AP Photo/Manuel Balce Ceneta)
President Barack Obama walks on the South Lawn of the White House in Washington, Tuesday, July 29, 2014, to announce new economic sanctions against key sectors of the Russian economy in the latest move to force Russian President Vladimir Putin to end his support for Ukrainian rebels. (AP Photo/J. David Ake)
President Barack Obama speaks on the South Lawn of the White House in Washington, Tuesday, July 29, 2014, as he announces new economic sanctions against key sectors of the Russian economy in the latest move to force Russian President Vladimir Putin to end his support for Ukrainian rebels. (AP Photo/Manuel Balce Ceneta)
President Barack Obama speaks on the South Lawn of the White House in Washington, Tuesday, July 29, 2014, as he announces new economic sanctions against key sectors of the Russian economy in the latest move to force Russian President Vladimir Putin to end his support for Ukrainian rebels. (AP Photo/J. David Ake)
President Barack Obama speaks on the South Lawn of the White House in Washington, Tuesday, July 29, 2014, as he announces new economic sanctions against key sectors of the Russian economy in the latest move to force Russian President Vladimir Putin to end his support for Ukrainian rebels. (AP Photo/Manuel Balce Ceneta)
Russian President Vladimir Putin speaks during a plenary session of the St. Petersburg International Investment Forum Friday, May 23, 2014. Putin said Friday at an investment forum that Russia will "respect the choice of the Ukrainian people." He said that Russia wants peace and order to be restored in Ukraine. (AP Photo/RIA Novosti Kremlin, Mikhail Klimentyev, Presidential Press Service)
Russian President Vladimir Putin listens during the St.Petersburg International Investment Forum in St Petersburg, Russia, Friday, May 23, 2014. Speaking at the investment forum, Putin blamed the West for encouraging a “coup” in Ukraine, when the nation’s pro-Russian president was chased from power after months of protests. He said that Ukraine is now facing “chaos and a full-scale civil war.” (AP Photo/RIA Novosti Kremlin, Mikhail Klimentyev, Presidential Press Service)
Russia's President Vladimir Putin attends an economic forum in Saint Petersburg, on May 23, 2014. Putin said today that the crisis in Ukraine had evolved into a full-scale civil war, blaming Washington for backing the overthrow of former president Viktor Yanukovych. AFP PHOTO/ RIA-NOVOSTI/ POOL / MIKHAIL KLIMENTYEV (Photo credit should read MIKHAIL KLIMENTYEV/AFP/Getty Images)
Russia's President Vladimir Putin attends an economic forum in Saint Petersburg, on May 23, 2014. Putin said today that the crisis in Ukraine had evolved into a full-scale civil war, blaming Washington for backing the overthrow of former president Viktor Yanukovych. AFP PHOTO/ RIA-NOVOSTI/ POOL / MIKHAIL KLIMENTYEV (Photo credit should read MIKHAIL KLIMENTYEV/AFP/Getty Images)
Vladimir Putin, Russia's president, pauses during a global business leaders summit at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, on Friday, May 23, 2014. SPIEF is an annual international conference dedicated to economic and business issues which takes place at the Lenexpo exhibition center May 22-24. Photographer: Andrey Rudakov/Bloomberg via Getty Images
Russian President Vladimir Putin attends a media meeting organized by the Russian People's Front in St. Petersburg, Russia, Thursday, April 24, 2014. Russia’s President Vladimir Putin has mocked the Internet as a CIA project and pledged to protect Russia’s interest in the online industry. (AP Photo/RIA-Novosti, Mikhail Klimentyev, Presidential Press Service)
Russian President Vladimir Putin takes part in a meeting of Russia's People's Front in St.Petersburg, Russia, Thursday, April 24, 2014. Ukrainian government troops moved against pro-Russia forces in the east of the country on Thursday and killed at least two of them in clashes at checkpoints manned by the insurgents, the government and insurgents said. Russian President Vladimir Putin decried what he described as a "punitive operation." (AP Photo/RIA Novosti Kremlin, Mikhail Klimentyev, Presidential Press Service)
Russian President Vladimir Putin meets with Royal Dutch Shell's CEO Ben Van Beurden in the Novo-Ogaryovo residence outside Moscow, Russia, Friday, April 18, 2014. (AP Photo/Maxim Shipenkov, Pool)
Russian President Vladimir Putin chairs a Security Council meeting in the Novo-Ogaryovo residence outside Moscow, Russia, Friday, April 18, 2014. (AP Photo/RIA-Novosti, Alexei Druzhinin, Presidential Press Service)
CAPTION CORRECTS THE EVENT Russian President Vladimir Putin enters a hall for a video call with the Prirazlomnaya arctic oil platform marking the launch of production in the Novo-Ogaryovo residence outside Moscow, Russia, Friday, April 18, 2014. (AP Photo/Maxim Shipenkov, Pool)
Russian President Vladimir Putin, flanked by Defense Minister Sergei Shoigu, left, and Federal Security Service Chief Alexander Bortnikov, right, arrives on a boat after inspecting battleships during a navy parade marking the Victory Day in Sevastopol, Crimea, Friday, May 9, 2014. Putin extolled the return of Crimea to Russia before tens of thousands Friday during his first trip to Black Sea peninsula since its annexation. The triumphant visit was quickly condemned by Ukraine and NATO. (AP Photo/Ivan Sekretarev)
Russian President Vladimir Putin speaks during a Victory Day Parade, which commemorates the 1945 defeat of Nazi Germany, in Red Square, with St. Basil Cathedral in the background, in Moscow, Russia, Friday, May 9, 2014. Putin made no reference to the situation in Ukraine when he opened Friday's parade, focusing on the historic importance of the victory over Nazi Germany. (AP Photo/Pavel Golovkin)
Russian President Vladimir Putin, right, and Prime Minister Dmitry Medvedev, wearing ribbons symbolizing the Soviet victory in WWII, arrive to attend the Victory Day Parade, which commemorates the 1945 defeat of Nazi Germany, in Moscow, Russia, Friday, May 9, 2014. Russia marks the Victory Day on May 9 holding a military parade in Red Square in Moscow. (AP Photo/Pavel Golovkin)
Russian President Vladimir Putin heads to speak at a parade marking the Victory Day in Sevastopol, Crimea, Friday, May 9, 2014. Putin extolled the return of Crimea to Russia before tens of thousands Friday during his first trip to Black Sea peninsula since its annexation. The triumphant visit was quickly condemned by Ukraine and NATO. (AP Photo/Ivan Sekretarev)
Russian President Vladimir Putin speaks at a navy parade marking the Victory Day in Sevastopol, Crimea, Friday, May 9, 2014. Putin extolled the return of Crimea to Russia before tens of thousands Friday during his first trip to Black Sea peninsula since its annexation. The triumphant visit was quickly condemned by Ukraine and NATO. (AP Photo/Ivan Sekretarev)
Russian President Vladimir Putin heads to speak at a navy parade marking the Victory Day in Sevastopol, Crimea, Friday, May 9, 2014. Putin extolled the return of Crimea to Russia before tens of thousands Friday during his first trip to Black Sea peninsula since its annexation. The triumphant visit was quickly condemned by Ukraine and NATO. (AP Photo/Ivan Sekretarev)
Russian President Vladimir Putin arrives on a boat after inspecting battleships during a navy parade marking the Victory Day in Sevastopol, Crimea, Friday, May 9, 2014. Russian President Vladimir Putin extolled the return of Crimea to Russia before tens of thousands Friday during his first trip to Black Sea peninsula since its annexation. The triumphant visit was quickly condemned by Ukraine and NATO. (AP Photo/Ivan Sekretarev)
Russian President Vladimir Putin speaks at a navy parade marking the Victory Day in Sevastopol, Crimea, Friday, May 9, 2014. Crimea, which hosts a major Russian Black Sea Fleet base, is set to hold a massive navy parade in the port of Sevastopol. Putin extolled the return of Crimea to Russia before tens of thousands Friday during his first trip to Black Sea peninsula since its annexation. The triumphant visit was quickly condemned by Ukraine and NATO. (AP Photo / Ivan Sekretarev)
Russian President Vladimir Putin, right, and Prime Minister Dmitry Medvedev, wearing ribbons symbolizing the Soviet victory in WWII, arrive to attend the Victory Day Parade, which commemorates the 1945 defeat of Nazi Germany in Moscow, Russia, Friday, May 9, 2014. Thousands of Russian troops march on Red Square in the annual Victory Day parade in a proud display of the nation's military might amid escalating tensions over Ukraine. (AP Photo/Pavel Golovkin)
Russian President Vladimir Putin, right, and Prime Minister Dmitry Medvedev arrive to attend a Victory Day parade, which commemorates the 1945 defeat of Nazi Germany, in Moscow, Russia, Friday, May 9, 2014. Russia marked the Victory Day on May 9 holding a military parade at Red Square in Moscow. (AP Photo/RIA-Novosti, Alexei Nikolsky, Presidential Press Service)
Russian President Vladimir Putin, left, and Prime Minister Dmitry Medvedev attend a Victory Day parade, which commemorates the 1945 defeat of Nazi Germany, at Red Square in Moscow, Russia, Friday, May 9, 2014. Russia marked the Victory Day on May 9 holding a military parade at Red Square. (AP Photo/RIA-Novosti, Mikhail Klimentyev, Presidential Press Service)
Russian President Vladimir Putin, back, speaks at a meeting of the leaders of the member states of the Collective Security Treaty Organization (CSTO) in the Kremlin in Moscow, Russia, Thursday, May 8, 2014. At right is Tajik President Emomali Rakhmon. (AP Photo/Sergei Karpukhin, Pool)
Russian President Vladimir Putin oversees a military exercise involving Russian nuclear forces in Defense Ministry's situation room outside Moscow, Thursday, May 8, 2014. President Vladimir Putin on Thursday oversaw a military exercise involving Russia's nuclear forces amid escalating tensions over Ukraine. Putin said that the maneuvers involved the military across the entire Russian territory, including the nation's nuclear forces. (AP Photo/RIA-Novosti, Alexei Nikolsky, Presidential Press Service)
Russian President Vladimir Putin speaks to Valery Gerasimov, chief of Russian military's General Staff, right, as he attends a military exercise involving Russia’s nuclear forces, at an undisclosed location outside Moscow, Russia, on Thursday, May 8, 2014. Putin, speaking from the Defense Ministry’s headquarters where he oversaw the exercise along with leaders of several ex-Soviet nations which are members of the Collective Security Treaty Organization, said that the maneuvers involved the military across the entire Russian territory, including the nation’s nuclear forces. (AP Photo/RIA Novosti, Alexei Nikolsky, Presidential Press Service)
Russian President Vladimir Putin, centre, attends a meeting of the leaders of the member states of the Collective Security Treaty Organization (CSTO) in the Kremlin in Moscow, Russia, Thursday, May 8, 2014. At right is Tajik President Emomali Rakhmon. (AP Photo/Sergei Karpukhin, Pool)
Russian President Vladimir Putin, right, and Belarusian President Alexander Lukashenko enter a hall for bilateral talks after a meeting of the leaders of the member states of the Collective Security Treaty Organization (CSTO) in the Kremlin in Moscow, Russia, Thursday, May 8, 2014. (AP Photo/Sergei Karpukhin, Pool)
Russian President Vladimir Putin speaks during his visit to the Crimean port of Sevastopol on May 9, 2014. Putin's visit to Crimea, which was annexed by Moscow in March, is a 'flagrant violation' of Ukraine's sovereignty, authorities in Kiev said today.AFP PHOTO/ YURI KADOBNOV (Photo credit should read YURI KADOBNOV/AFP/Getty Images)
Russian President Vladimir Putin speaks during his visit to the Crimean port of Sevastopol on May 9, 2014. Putin's visit to Crimea, which was annexed by Moscow in March, is a 'flagrant violation' of Ukraine's sovereignty, authorities in Kiev said today.AFP PHOTO/ YURI KADOBNOV (Photo credit should read YURI KADOBNOV/AFP/Getty Images)
Ukrainian security forces guard a checkpoint outside the southern city of Mykolayiv on May 9, 2014. Russian President Vladimir Putin took a victory lap in his first visit to Crimea since its annexation by Russia, as fighting in eastern Ukraine left 21 dead just days ahead of a separatist vote. AFP PHOTO/ ALEXEY KRAVTSOV (Photo credit should read ALEXEY KRAVTSOV/AFP/Getty Images)
Ukrainian security forces guard a checkpoint outside the southern city of Mykolayiv on May 9, 2014. Russian President Vladimir Putin took a victory lap in his first visit to Crimea since its annexation by Russia, as fighting in eastern Ukraine left 21 dead just days ahead of a separatist vote. AFP PHOTO/ ALEXEY KRAVTSOV (Photo credit should read ALEXEY KRAVTSOV/AFP/Getty Images)
Ukrainian security forces guard a checkpoint outside the southern city of Mykolayiv on May 9, 2014. Russian President Vladimir Putin took a victory lap in his first visit to Crimea since its annexation by Russia, as fighting in eastern Ukraine left 21 dead just days ahead of a separatist vote. AFP PHOTO/ ALEXEY KRAVTSOV (Photo credit should read ALEXEY KRAVTSOV/AFP/Getty Images)
Armed pro-Russia militiants take part in a rally marking Victory Day in eastern Ukrainian city of Donetsk on May 9, 2014. Russian President Vladimir Putin took a victory lap in his first visit to Crimea since its annexation by Russia, as fighting in eastern Ukraine left 21 dead just days ahead of a separatist vote. AFP PHOTO/ ALEXANDER KHUDOTEPLY (Photo credit should read Alexander KHUDOTEPLY/AFP/Getty Images)
Armed pro-Russia militiants take part in a rally marking Victory Day in eastern Ukrainian city of Donetsk on May 9, 2014. Russian President Vladimir Putin took a victory lap in his first visit to Crimea since its annexation by Russia, as fighting in eastern Ukraine left 21 dead just days ahead of a separatist vote. AFP PHOTO/ ALEXANDER KHUDOTEPLY (Photo credit should read Alexander KHUDOTEPLY/AFP/Getty Images)
Armed pro-Russia militiants take part in a rally marking Victory Day in eastern Ukrainian city of Donetsk on May 9, 2014. Russian President Vladimir Putin took a victory lap in his first visit to Crimea since its annexation by Russia, as fighting in eastern Ukraine left 21 dead just days ahead of a separatist vote. AFP PHOTO/ ALEXANDER KHUDOTEPLY (Photo credit should read Alexander KHUDOTEPLY/AFP/Getty Images)
A man holds pictures of dead relatives during a Victory Day ceremony at the Unknown Sailor Memorial in the southern Ukrainian city of Odessa on May 9, 2014. Russian President Vladimir Putin took a victory lap in his first visit to Crimea since its annexation by Russia, as fighting in eastern Ukraine left at least 21 dead just days ahead of a separatist vote. AFP PHOTO/ ANATOLII STEPANOV (Photo credit should read ANATOLII STEPANOV/AFP/Getty Images)
Russian President Vladimir Putin leaves after a video call with the Prirazlomnaya arctic oil platform marking the launch of production in the Novo-Ogaryovo residence outside Moscow, Russia, Friday, April 18, 2014. (AP Photo/Maxim Shipenkov)
Russian President Vladimir Putin attends a video call with the Prirazlomnaya arctic oil platform marking the launch of production in the Novo-Ogaryovo residence outside Moscow, Russia, Friday, April 18, 2014. (AP Photo/RIA-Novosti, Alexei Druzhinin, Presidential Press Service)
Russian President Vladimir Putin speaks to the media after a nationally televised question-and-answer session in Moscow, Russia, Thursday, April 17, 2014. President Vladimir Putin on Thursday rejected claims that Russian special forces are fomenting unrest in eastern Ukraine, but recognized for the first time that the troops in unmarked uniforms who had overtaken Ukraine's Crimean Peninsula before its annexation by Moscow were Russian soldiers. (AP Photo/Pavel Golovkin)
Russian President Vladimir Putin speaks during a nationally televised question-and-answer session in Moscow on Thursday, April 17, 2014. President Vladimir Putin has urged an end to the blockade of Moldova’s separatist province of Trans-Dniester. Trans-Dniester, located in eastern part of Moldova on border with Ukraine, has run its own affairs without international recognition since a 1992 war. Russian troops are stationed there. (AP Photo/RIA Novosti, Alexei Nikolsky, Presidential Press Service)
Russian President Vladimir Putin, foreground, leaves after a nationally televised question-and-answer session in Moscow, Russia, Thursday, April 17, 2014. At left is Head of Russian Television Channel One Konstantin Ernst. President Vladimir Putin on Thursday rejected claims that Russian special forces are fomenting unrest in eastern Ukraine, but recognized for the first time that the troops in unmarked uniforms who had overtaken Ukraine's Crimean Peninsula before its annexation by Moscow were Russian soldiers. (AP Photo/Pavel Golovkin)
Russian President Vladimir Putin speaks at a nationally televised question-and-answer session in Moscow, Thursday, April 17, 2014. President Vladimir Putin on Thursday rejected claims that Russian special forces are fomenting unrest in eastern Ukraine, but recognized for the first time that the troops in unmarked uniforms who had overtaken Ukraine's Crimean Peninsula before its annexation by Moscow were Russian soldiers. (AP Photo/RIA-Novosti, Alexei Nikolsky, Presidential Press Service)
Russian President Vladimir Putin attends a meeting of a board of trustees of the Russian Geographical Society in a library of Moscow State University in Moscow, Russia, Tuesday, April 15, 2014. (AP Photo/RIA-Novosti, Alexei Druzhinin, Presidential Press Service)
Russian President Vladimir Putin meets with Supreme Court Chairman Vyacheslav Lebedev in the Novo-Ogaryovo residence outside Moscow, Russia, Thursday, April 3, 2014. (AP Photo/RIA-Novosti, Alexei Druzhinin, Presidential Press Service)
Russian President Vladimir Putin, right, shakes hands at the presentation ceremony of the top military brass in the Kremlin in Moscow, Russia, Friday, March 28, 2014. Russia's president says Ukraine could regain some arms and equipment of military units in Crimea that did not switch their loyalty to Russia. (AP Photo/RIA-Novosti, Alexei Druzhinin, Presidential Press Service)
Russian President Vladimir Putin meets with Federation Council members in the Novo-Ogaryovo residence outside Moscow, Thursday, March 27, 2014. (AP Photo/RIA-Novosti, Alexei Nikolsky, Presidential Press Service)
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By JULIE PACE and JOHN-THOR DAHLBURG


WASHINGTON (AP) - Citing Russia's stalled growth rate and a flow of foreign capital out of Moscow, U.S. and European officials hope a new round of sanctions targeting energy and defense entities, as well as major banks, will deepen Russia's economic pain even further and force President Vladimir Putin to end provocations in Ukraine.

Roughly 30 percent of Russia's banking sector assets are now constrained by U.S. sanctions, Obama administration officials said Tuesday, shortly after announcing new penalties. The sanctions target five of Russia's six largest state-owned banks and aim to curtail their access to U.S. debt markets.

The West is also halting future sales to lucrative Russian economic sectors, with the U.S. announcing plans to block future technology sales to the oil industry and Europe approving an arms embargo. The Europeans also backed sanctions Tuesday against state-owned banks and the energy sector, though the specific EU targets won't be made public until later in the week.

Western officials insist the new sanctions will damage an already struggling Russian economy. The International Monetary Fund has slashed Russia's growth forecast for this year to nearly zero, and the U.S. says more than $100 billion in capital is expected to flow out of the country.

"Russia's actions in Ukraine and the sanctions that we've already imposed have made a weak Russian economy even weaker," President Barack Obama said Tuesday.

Yet it remained uncertain whether the tougher penalties would have any impact on Russia's actions in Ukraine - nor was it clear what other actions the U.S. and Europe were willing to take if the situation remains unchanged. In the nearly two weeks since a Malaysia Airlines passenger plane was felled in eastern Ukraine, Russia appears to have only deepened its engagement in the conflict, with the U.S. and allies warning that Russia was building up troops and weaponry along its border with Ukraine.

Obama Says Russia Has 'Failed,' Imposes New Sanctions

The West blames pro-Russian separatists for firing a missile at the jetliner and Moscow for supplying the equipment and training needed to take down a plane. Nearly 300 people were killed in the attack, including more than 200 Europeans.

The shocking incident spurred Europe in particular to impose dramatically tougher economic sanctions. Europe has a far stronger economic relationship with Russia than the U.S., but until this week, European Union leaders had been reluctant to impose harsh penalties in part out of concern about a negative impact on their own economies.

EU President Herman Van Rompuy and the president of the European Commission, Jose Manuel Barroso, said the sanctions sent a "strong warning" that Russia's destabilization of Ukraine could not be tolerated.

"When the violence created spirals out of control and leads to the killing of almost 300 innocent civilians in their flight from the Netherlands to Malaysia, the situation requires urgent and determined response," the two top EU officials said in a statement.

The new EU sanctions put the 28-nation bloc on par with earlier sector sanctions announced by the U.S. and in some cases may even exceed the American penalties.

Obama said coordinating Tuesday's actions will ensure that the sanctions "will have an even bigger bite."

Despite the West's escalation of its actions against Russia, Obama said the U.S. and Europe were not entering into Soviet-style standoff with Russia.

"It's not a new cold war," he said in response to a reporter's question.

The new European penalties placed a ban on the unapproved sale to the Russians of technology that has dual military and civilian uses or is particularly sensitive, such as advanced equipment used in deep-sea and Arctic oil drilling. The EU also approved an arms embargo, though it would not restrict past agreements, allowing France to go forward with the delivery of two warships to Russia, a deal that has been sharply criticized by the U.S. and Britain.

To restrict Russia's access to Europe's money markets, EU citizens and banks will be barred from purchasing certain bonds or stocks issued by state-owned Russian banks, according to EU officials.

The U.S. sanctions target three major Russian banks: the Bank of Moscow, Russian Agricultural Bank and VTB Bank, Russia's second largest bank.

Analysts said the effort was aimed at cutting off access to resources that these banks would need to support their own lending operations, an action that could weaken economic activity in Russia.

"This limits the ability of these banks to do new business. That means the Russian economy will suffer because the banks will not be able to make as many loans," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University Channel Islands.

He said that barring financing from U.S. institutions to these banks likely would have a ripple effect. "It is likely that other Western banks and banks in Asia will be reluctant to do business with them," Sohn said.

The U.S. also targeted the St. Petersburg-based United Shipbuilding Corp., a defense technologies firm, and was blocking future technology sales to Russia's oil industry.

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