West looks to broaden sanctions on Russia

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By Neil Buckley in London, Christian Oliver in Brussels and Guy Chazan in Donetsk

The US and its leading European allies are preparing wider sanctions on Russia’ economy and are discussing a ban on the high-tech energy equipment if Moscow is seen to have disrupted Ukraine’s elections on May 25.

The west is still backing the presidential to relegitimise Kiev’s leadership, even as separatist leaders in Donetsk, eastern Ukraine, asked Russia to annex it, after what they claimed was a resounding victory in a self-rule on Sunday.

The US, UK, Germany and France are warning the Kremlin that attempts to undermine the presidential will bring about “phase three” of sanctions. This would take penalties beyond individuals and companies to sectors.

One option being discussed is a plan that would prevent western companies from exporting high-end energy technologies to Russian companies, officials said. This could hamper Russia’s attempts to move beyond traditional production and export markets.

In the US, this could take the form of new export licence requirements, similar to those recently imposed on military technology exports. Existing projects would be protected but any new programmes would either receive extended scrutiny or be blocked.

But the plans may face opposition from Italy, another G7 member, while foreign ministers meeting in Brussels remained divided over the trigger for moving to the third phase of sanctions. The 28 member states concluded only that they would “pay particular attention to all parties’ attitude and behaviour towards” Ukraine’s presidential poll when deciding on future sanctions.

EU ministers did agree to expand their travel bans and asset freezes on Russia to 13 more individuals and two companies in Crimea, which Moscow annexed in March.

In a sign of the difficulty of forging a united front, France is pressing ahead with the €1.2bn sale of two helicopter ships to Russia despite growing US pressure to stop the deal.

The international manoeuvring came as separatist leaders in Donetsk claimed that almost nine out of 10 voters had backed self-rule on Sunday, on a turnout of nearly 75 per cent. Neighbouring Lugansk said 94-95 per cent of participants had supported self-rule in a similar poll, on an 81 per cent turnout.

The referendums were widely denounced as illegal by the international community and took place without observers. Oleksandr Turchynov, Ukraine’s acting president, claimed ­turnout in the two polls was 32 per cent and 24 per cent respectively. (FT)