Ukraine crisis: New EU sanctions on Russia go into effect

Luhansk airport - now controlled by pro-Russian rebels - was devastated by fighting

New EU sanctions against Russia have gone into force, blocking loans for five big state banks and curbing EU business with oil and defence firms.

The aim is to keep pressure on Russia over its role in the Ukraine crisis. But the measures could be eased or lifted if a ceasefire in Ukraine holds.

Russian Foreign Minister Sergei Lavrov accused the EU of "taking a path towards undermining the peace process".

Nato says Russia still has about 1,000 heavily armed troops in east Ukraine.

The EU sanctions will block the export of services and deep-water technology for Russia's oil industry.

Three major Russian state oil firms are targeted: Rosneft, Transneft and Gazprom Neft, the oil unit of gas giant Gazprom.

Their access to financial markets will be restricted - a serious matter for Rosneft, which last month asked the Russian government for a $42bn (£25.2bn) loan.

Big Russian state-owned banks will be barred from getting loans with a maturity longer than one month, and from getting other financial services in the EU.

'No military solution'

Mr Lavrov said Russia "will react in a calm and appropriate way, first and foremost, proceeding from the need to defend our interests".

Earlier a Russian presidential aide, Andrei Belousov, said cars imported from the EU could be targeted in retaliation, especially second-hand cars.

As the sanctions took effect Ukraine's President Petro Poroshenko said "I never felt before this level of solidarity".

Speaking in English at an international conference in Kiev, he said "I feel myself a full member of the European family".

"There is not any military solution for this crisis, and we should keep Ukraine united. And for keeping united my country we should make some decentralisation of power," he said.

These Ukrainian paratroops are among new units training to tackle the rebels

Exemption for gas

Some big economic sectors are unaffected by the sanctions: Russian gas exports, the space industry and nuclear energy.

Many EU countries rely heavily on Russian deliveries of gas and nuclear technology.

The EU has also added another 24 names to a list of Russian officials and rebel leaders in Ukraine who are subject to visa bans and asset freezes.

Most of the new names are pro-Russian separatist leaders in Donetsk region and prominent Russian MPs.

Among the most influential are: Sergei Chemezov, an ex-KGB associate of President Vladimir Putin who now runs a big arms firm, Rostec; nationalist leader and MP Vladimir Zhirinovsky; 76th Airborne Division Gen Alexei Naumets; Donetsk separatist leader Alexander Zakharchenko; Luhansk separatist leader Gennady Tsypkalov.

US President Barack Obama said his country would join the EU in imposing tougher sanctions on Russia, targeting the defence, finance and energy sectors. He said he would provide details on Friday.

The EU and US accuse the Kremlin of directly helping pro-Russian separatists in Ukraine's Donetsk and Luhansk regions by sending regular soldiers across the border, along with sophisticated weapons including tanks. Moscow denies the allegations.

Nato says Russia is still keeping about 20,000 troops near the Ukrainian border, besides those it says are inside Ukraine.

The separatists have recently made big gains in eastern Ukraine. The fighting has killed at least 3,000 people since April.

Russian warning

A statement from the EU Council says the officials targeted are people "involved in actions against Ukraine's territorial integrity, including the new leadership in Donbass, the government of Crimea as well as Russian decision-makers and oligarchs".

"This brings the total of persons subject to sanctions to 119 while 23 [Russian] entities remain under asset freeze in the EU," it said.

Russia has warned it may ban European planes flying over Russian territory

Russia already has a wide-ranging embargo on food imports from the EU, banning fruit, vegetables, meat, dairy produce and other important foods.

That year-long ban also applies to food from the US, Canada, Australia and Norway, which have imposed sanctions similar to the EU's.

The rouble fell to a new low of 37.57 to the dollar on Thursday, after news about the EU sanctions broke. It also fell against the euro.

Dual-use goods targeted

The latest EU decision followed a conference call between European leaders, including UK Prime Minister David Cameron.

For nearly a week the EU member states had delayed imposing more sanctions, because last Friday a fragile truce was agreed between Ukrainian troops and pro-Russian rebels.

But Germany, the UK and some other countries pressed for the sanctions to put be into effect.

The measures also cover dual-use goods which can be used for military purposes.

Russian Prime Minister Dmitry Medvedev has warned that Russia might shut its airspace to European passenger planes, a move that "could drive many struggling airlines into bankruptcy".