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EU edges to economic sanctions on Russia

The European Union has reached an outline agreement to impose the first economic sanctions on Russia. However, the scope will exclude technology, which means Russia's crucial gas sector will not be affected.

MOSCOW: The European Union has reached an outline agreement to impose the first economic sanctions on Russia. However, the scope will exclude technology, which means Russia's crucial gas sector will not be affected.

The move comes after suspicion of Russian involvement in the downing of Malaysia Airlines flight MH17 in eastern Ukraine on July 17.

The EU Council in its statement also said it added 15 more people and 18 entities to the blacklist, launched back in March, applying visa restrictions and asset freezes to those it sees responsible for meddling in eastern Ukraine.

The sanctions released so far are targeting Russian high-ranking officials, as well state-owned banks and entities belonging to people believed to be part of Russian President Vladimir Putin's inner circle. That move brings the total number of sanctions-hit individuals to 87 and the number of affected entities to 20.

The director of the FSB security service, Alexander Bortnikov, and the head of the Russian Foreign Intelligence Service, Mikhail Fradkov are on the new list of 15 people and 18 entities targeted by an asset freeze and visa bans, the EU's Official Journal said. Also on the list is Chechen President Ramzan Kadyrov. 

However, other measures suggested by the EU Commission, including cutting access to European capital market for Russian companies, limits on arms sales and supplies of dual-use technologies to Moscow are to be decided on next week. It is also so far unclear whether the sanctions will extend to the energy sector and financial services.

Russian government officials earlier on attempted to play down the move saying sanctions would be "peanuts" for the Russian economy, while some opposition experts and politicians said it could cost the country several points of GDP growth in the coming years.

The decision on sanctions comes amid accusations voiced by the US leadership that Russia was firing artillery from its territory to hit Ukrainian military sites, and was boosting supplies of its weaponry to the pro-Russian separatists in eastern Ukraine. Moscow has just claimed a town of Primiusskiy in the region of Rostov in southern Russia was shelled by the Ukrainian side, as 45 mortars hit six resident buildings.

The EU's executive Commission is to draw up a legal text setting out economic sanctions in more detail which the EU Council is set to discuss and agree on later next week. 

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