US blacklists Putin's bankers, as EU leaders meet

The latest US designations include: Yuri Kovalchuk, the main shareholder in Bank Rossyia; the bank itself; businessmen and Putin judo partners Arkady and Boris Rotenberg; and Gennady Timchenko, head of Russian commodity trading firm Gunvor.

The US treasury described Kovalchuk as “the personal banker for senior officials of the Russian Federation including Putin.”

It said the Rotenberg brothers made inflated profits on Sochi Olympics contracts. It noted that Putin “has investments in Gunvor and may have access to Gunvor funds.”

The new US list also targets some of Putin’s oldest confidantes: Russian railway chief Vladimir Yakunin and anti-drugs tsar Viktor Ivanov.

The rest of the names are high-level Kremlin officials - Igor Sergun, Sergei Ivanov, Alexei Gromov, Andrei Fursenko, and Vladimir Kozhin - and MPs.

"Russia must know that further escalation will only isolate it further from the international community," US President Barack Obama said on TV while announcing the measures.

He spoke as EU leaders met in Brussels to consider their own list.

EU ambassadors on Wednesday agreed a draft register of 12 Russian names to add to a previous EU list of 13.

Diplomatic sources say the new EU list includes deputy PM Dmitry Rogozin, two Kremlin aides - Sergey Glazyev and Vladislav Surkov - and Kremlin propagandist Dmitry Kiselyov.

If adopted, it would see the EU playing catch-up with the US, whose lists are much more severe.

The Union is also going to cancel its next Russia summit.

Poland and the UK had wanted to go further, by imposing economic sanctions on parts of Russian industry. But Germany, for one, wants to leave the so-called “third phase” of EU measures in reserve in case the situation gets even worse.

Swedish PM Fredrik Reinfeldt told press in Brussels “there is a worry that provocations in Ukraine will continue and also expand to other parts of Europe.”

He said he does not expect Thursday’s EU decision to change Putin’s mind.

But he said the Western stigma will harm the Russian economy and undermine his popularity at home in the long term.

French President Francois Hollande noted: “We have to prepare economic sanctions, even if we don't decide on them today, because the threat of economic sanctions is a means of pressure."

Earlier in the day, France said it might not deliver $1.2 billion worth of naval vessels to Russia in October depending on developments.

Cypriot leader Nikos Anastasiades added on his way into the EU summit: “There are many things to consider. First, the principles. Second, the impact on our economies.”

Russia has already lost billions on stock exchange and currency markets over the crisis, while US ratings agency S&P on Thursday changed its Russia outlook from “stable” to “negative.”

But Putin has mocked the West’s response, while threatening blacklists of his own and proceeding with Crimea annexation formalities.

The sanctions battle has also dragged in a Belgian MEP.

Russian broadcaster NTV on Thursday showed CCTV footage and bugged audio of Guy Verhofstadt, a fomer Belgian PM and the leader of the Liberal group in the European Parliament, meeting in a Moscow hotel with Russian anti-corruption activist Alexei Navalny last year.

A voice alleged to be Navalny’s says: "You are interested not just in the future of Russian politics ... We need a kind of practical help in the investigation.”

NTV claimed the two men discussed sums of money to be paid out by Verhofstadt.

The broadcast caused mirth in the EU parliament in Brussels. But it could augur serious problems for Navalny, who is already under house arrest pending trial on a laundry list petty crimes.