Following Crimea Annexation, U.S. Pushes Economic Sanctions on Russia

The president signed a new executive order on Thursday that targets more Russian leaders and sectors of the economy.

A Russian soldier stands in front of a recruitment poster for the Ukrainian armed forces in an area surrounding the Ukrainian military unit in Perevalnoye, outside Simferopol, on March 20, 2014. (National Journal)

President Obama took new steps Thursday to intensify the economic isolation of Russia following its "illegal" annexation of Crimea, which could have a "significant impact on the Russian economy," the president said.

Speaking from the White House on Thursday, Obama said the U.S. will move "to impose sanctions not just on individuals but on key sectors of the Russian economy." Senior White House officials say the sanctions will apply to 20 senior members of the Russian government and other "cronies." They will also apply to St. Petersburg-based Rossiya Bank, which will be "frozen out of the dollar," making it difficult for the institution to operate internationally.

The sanctions will target Russia's financial services, energy, mining, and engineering sectors, officials said Thursday.

"This is not our preferred option," Obama said, because the effects of such sanctions could trickle into the global economy. European nations depend heavily on Russian crude oil and natural gas exports.

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Still, Obama said, "diplomacy between the United States and Russia continues," despite these latest moves. Secretary of State John Kerry met Monday with his Russian counterpart, Foreign Minister Sergei Lavrov in London, although the leaders reported no progress.

Earlier Thursday, the Russian Duma voted to approve Putin's annexation treaty. Only one legislator opposed the measure. On Friday, it will move to the upper house of the Russian parliament, where it is expected to pass. Kiev continues to protest the annexation, "Crimea was, is, and will be part of Ukraine," the Ukrainian parliament declared in a public statement.

While Obama reiterated his view that Russia's annexation of Crimea is illegal, his remarks suggest there's not much the West can do about restoring the region to Ukraine. And Ukraine agrees: the Kiev leadership said Wednesday that it would pull its troops from Crimea, effectively giving up the region and its military structures to Russian forces.

Putin maintains he has no intentions of invading another country with large ethnic Russian populations. Parts of Ukraine and Poland, as well as Baltic nations such as Latvia, Lithuania, and Estonia, remain concerned, however.

"The world is watching with grave concern as Russia has positioned its military in a way that could lead to further incursions into southern and eastern Ukraine," Obama said Thursday. Vice President Joe Biden is currently on on a whirlwind tour of the region, reassuring those countries of America's commitment to collective defense under the North Atlantic Treaty Organization.

The Obama administration's options to confront Putin have so far been limited. The U.S. has already canceled preparations for a summertime G-8 summit in Sochi that would have included Russia, halted all military-to-military engagements with the country, and imposed travel restrictions on several Russian officials. Obama has invited members of the G-8, minus Russia, to meet in Europe next week to discuss further response to Russia's involvement in Ukraine, and to reconsider Moscow's membership in the organization. Whatever's coming next for Russia, it involves more isolation from the rest of the world.

Marina Koren contributed to this article