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EU to hit Russian banks over Ukraine

The European Union may go even further than the United States in hitting Russian banks with sanctions over the Ukraine crisis, curbing their ability to raise funds, reports said on Thursday (July 24).

BRUSSELS: The European Union may go even further than the United States in hitting Russian banks with sanctions over the Ukraine crisis, curbing their ability to raise funds, reports said on Thursday (July 24).

As member state ambassadors to the EU began a meeting to review the next step, the Financial Times said they would look at proposals to ban Russian banks from selling new shares on European markets. Citing an options memo, the Financial Times said the new measures would go even further than tougher US sanctions announced last week which targeted only two Russian banks -- Gazprombank and VEB -- since they would apply to all lenders with more than 50 per cent public ownership.

EU foreign ministers agreed on Tuesday to speed up sanctions against Russia and to examine tougher measures, including in the defence sector, after the downing of Malaysian Airlines flight MH17 in eastern Ukraine. They said this would involve adding to list of individuals hit with visa ban and asset freeze sanctions to include "entities and persons, including from the Russian Federation," for their role in stoking the crisis and aiding Russia's annexation of Crimea in March.

They also agreed to finalise work on tougher, sectoral measures and to "present proposals for taking action, including on access to capital markets, defence, dual-use goods and sensitive technologies, including in the energy sector."

The 28 EU ambassadors began their meeting on Thursday under tight security, an EU source said. The additional list of individuals sanctions targets would likely be announced Friday, the source said.

However, agreement on the wider measures envisaged by foreign ministers on Tuesday was unlikely. "I cannot imagine a decision today ... that will take a few days more," the source said, with another ambassadors meeting due next week.

EU officials explained that any decision on the wider package would require unanimity, making a leaders summit very likely. They declined to give any details of the proposals being discussed by the ambassadors.

So far Brussels has hit 72 Russian and Ukrainian figures with asset freezes or visa bans but has not agreed tougher measures given that some member states, such as Italy and Germany, have major economic ties with Russia they do not want to see harmed.

The shooting down of flight MH17 however has upped the pressure, with Britain, Sweden, the Baltic states and Poland all urging a much tougher line.

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