West announces first Russia sanctions as Putin 'bent on full invasion of Ukraine'

Western powers respond after Vladimir Putin orders troops into eastern Ukraine

Ukrainian servicemembers take part in drills at a training ground in Ukraine. Reuters

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The US, Canada and Europe have announced the first tranche of sanctions against Russia in response to its military intervention in eastern Ukraine, with sweeping measures aimed at cutting the Kremlin off from western financial markets as Germany suspends the opening of the Nord Stream 2 gas pipeline.

US President Joe Biden said the “beginning” of the Russian invasion demanded a firm international response to impose tough initial costs that can be ramped up as Moscow pushes further into Ukraine.

“Who in the Lord's name does [Russian President Vladimir] Putin think gives him the right to declare new so-called 'countries' on territory that belongs to his neighbours?” Mr Biden said at the White House.

“We still believe that Russia is poised to go much further in launching a massive military attack against Ukraine … We will continue to escalate sanctions if Russia escalates.”

The sanctions are focused on Russian banks and sovereign debt, among others, the US leader said.

He also announced measures against Russian officials, joining the 27 EU member nations who unanimously agreed on Tuesday to levy their own set of sanctions against such figures.

The measures follow an executive order signed on Monday evening that takes punitive measures against the breakaway republics in Ukraine’s Donbas region. The order bars “new investment, trade and financing by US persons to, from, or in” the so-called Donetsk People's Republic and Luhansk People's Republic, White House Press Secretary Jen Psaki said.

Meanwhile, Canada's leader Justin Trudeau announced “a ban from all financial dealings with the so-called independent states of Luhansk and Donetsk".

“We will sanction members of the Russian parliament who voted for the illegal decision to recognise these so-called republics,” Mr Trudeau said.

In Britain, Prime Minister Boris Johnson said a “first barrage” of UK sanctions would hit five Russian banks and three wealthy oligarchs to punish Moscow for ordering troops to the Donetsk and Luhansk regions.

Amid criticism from MPs who say the sanctions don't go far enough, Mr Johnson said more could follow if Britain's fears that Mr Putin is “bent on a full-scale invasion” prove correct. But even the planned deployment to Ukraine “amounts to a renewed invasion of that country”, Mr Johnson said.

The three businessmen hit by Britain's sanctions — Gennady Timchenko, Boris Rotenberg and Igor Rotenberg — will have their assets in the UK frozen and will be banned from entering the country.

All three made fortunes in the oil and gas sector, are regarded as close to Mr Putin — with Boris Rotenberg thought to have sparred at judo with the president — and have previously been sanctioned by the US government.

Mr Johnson said Britain's sanctions would aim at Russia itself as well as the breakaway regions and would “target Russian economic interests as hard as we can".

Despite frantic diplomatic efforts, western powers “have to face the possibility that none of our messages has been heeded and Putin is implacably determined to go further in subjugating and tormenting Ukraine”, he said.

It came amid global condemnation of Mr Putin's move to recognise separatist governments in the two regions and send troops there under the guise of a peacekeeping mission.

It was not clear whether the promised Russian forces had yet arrived and the Kremlin would not confirm this on Tuesday.

EU foreign ministers were to meet on Tuesday afternoon to approve a package of sanctions put forward by Josep Borrell, the bloc's foreign policy chief.

The European Commission said these sanctions would go after banks financing Russian military operations as well as “those involved in the illegal decision”, although Mr Borrell would not say whether this meant Mr Putin himself.

Before the EU meeting, German Chancellor Olaf Scholz announced that the Nord Stream 2 gas pipeline from Russia would not open for the time being while officials assess what he called a changed security environment.

Bowing to pressure from the US and others who fear Russia could use the pipeline as a geopolitical weapon, Mr Scholz said the regulatory rethink was a “necessary administrative step so that the pipeline cannot be certified at this time”.

Ten north European countries are to undertake naval exercises in the Baltic Sea in response to increased tension with Russia, it was announced on Tuesday,

The alliance of the Joint Expeditionary Force, which includes Nato countries as well as Finland and Sweden, said they would “shortly conduct an exercise demonstrating JEF nations' freedom of movement”.

The manoeuvres would “remain preventive and proportionate”, the defence ministers said following a meeting in central England.

“In acting together, we shall demonstrate the JEF's solidarity, capability and resolve to stand together for security and stability in our region,” the statement added.

European stock markets hit a seven-month low in early trading as traders responded to the escalation. Natural gas prices jumped, as pressure grows for countries to reduce their reliance on Russian fuel — a step which Mr Johnson said Europe had failed to take after the annexation of Crimea in 2014.

“We have got to recognise that we were not tough enough and in the end we didn’t do enough, as Europeans, to wean ourselves off Russian hydrocarbons, off Russian oil and gas,” he said.

Ukraine's President Volodymyr Zelenskyy said the country was not afraid of anyone but said Kiev expected “clear support steps” from its allies after weeks of warnings to Russia. Defence Minister Oleksii Reznikov said the Kremlin had “taken another step towards the revival of the Soviet Union”.

Russia moved on Tuesday to cement its ties with the breakaway regions, with legislation put before its parliament that would rubber-stamp the deployment of troops. Mr Putin formally recognised them after an hour-long address scattered with references to the former USSR in which he questioned Ukraine's legitimacy as an independent state.

The escalation came despite weeks of attempts to calm the tension, including visits to Moscow by French President Emmanuel Macron and Mr Scholz. Russia said Foreign Minister Sergey Lavrov was still due to meet his US counterpart Antony Blinken on Thursday.

Moscow’s moves on Monday prompted an emergency session of the UN Security Council, where Russia received no backing and even its ally China called for diplomacy and a peaceful solution.

UK ambassador Dame Barbara Woodward told the council that Russia has “brought us to the brink” and that its actions “will have severe and far-reaching consequences”.

She said a full invasion would unleash “the forces of war, death and destruction” on the people of Ukraine and that “the humanitarian impact will be terrible on civilians fleeing the fighting. We know that women and children will suffer most".

Some officials in Europe have called for Belarus to face additional sanctions after allowing the Russian military to stay on its territory indefinitely, increasing the troop contingent on Ukraine's borders.

Russian troops have been taking part in joint military drills in Belarus for the past few weeks. On Sunday the Belarusian Defence Ministry announced that 30,000 Russian troops would remain in the country.

Asked about Mr Putin’s order to send troops into eastern Ukraine, UK Health Secretary Sajid Javid said Russia’s military presence on Ukrainian soil meant Europe was “waking up to a very dark day".

Agencies contributed to this report.