US, EU preparing new round of economic sanctions against Russia

(L-R) French President Francois Hollande, Ukrainian President Petro Poroshenko, U.S. President Barack Obama, British Prime Minister David Cameron, German Chancellor Angela Merkel and Italian Prime Minister Matteo Renzi meet to discus Ukraine at the NATO summit at the Celtic Manor resort, near Newport, in Wales September 4, 2014 (Reuters / Alain Jocard)
The United States is planning a new round of sanctions aimed at the Russian Federation over the ongoing crisis in Ukraine, the White House said on Thursday, and the European Union is reportedly on the verge of doing the same.

Reuters reported on Thursday that the White House is working on a new wave of sanctions against Russia, which may be imposed in tandem with embargoes expected to be announced by European Union representatives later this week. The newswire made the announcement as the White House participated in a conference-call with reporters.

According to Reuters, Deputy White House national security adviser Ben Rhodes told reporters that the new penalties were being finalized, but neglected to give details concerning what specific sectors will be targeted.

"The key point is that Russia must continue to face costs for its own escalation," Rhodes said. "If Russia escalates we can escalate our pressure."

Previously, sanctions imposed by the US and EU have targeted some of the largest banks in Russia, as well as the country’s largest oil producer, Rosneft.

Moments before it was reported that the US is working on a new round of sanctions, the Telegraph reported from the UK that its journalists were shown a confidential three-page document suggesting “all state-controlled Russian oil and defense companies will be banned from raising funds in European capital market.”

"[To] prohibit debt financing (through bonds, equities and syndicated loans) to defense companies and to all companies whose main activity is the exploration, production and transportation of oil and oil products and in which the Russian state is the majority shareholder," the paper quoted from the EU document. "This extension would significantly increase the burden placed on the Russian state to finance its companies."

Bruno Waterfield of the Telegraph reported from Brussels that both the US and EU will agree to impose the sanctions tomorrow, Friday, “unless Russia withdraws its military.”

“Tomorrow at the European Council … we will announce sanctions and put them into action if there is no progress [on Ukraine], but everything will depend on the coming hours,” French President Francois Hollande was quoted as saying by Reuters.

Western powers allege that the Kremlin has a direct role in the escalating hostilities in eastern Ukraine, where the Kiev-based military has for weeks now been engaged in combat against separatists presumed to be supported by Russian forces. Moscow has adamantly denied this claim.

"It is an extension of the financial sanctions that are already in place," Neil Shearing, the chief emerging markets economist at Capital Economics, told The Moscow Times of the EU’s expected maneuver. "The previous sanctions have set a precedent."

US President Barack Obama is currently in Wales, where NATO alliance members are meeting throughout this week to weigh further options concerning the current situation in eastern Ukraine, as well as the international threat posed by Islamic State militants and other issues.