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EU widens Ukraine sanctions to raise pressure

Brussels - The European Union took a cautious step to expand sanctions against Russia on Monday, targeting two Crimean companies and 13 people in response to Moscow's annexation of the Ukrainian region and its support for Russian-speaking separatists.

It was the first time the EU's 28 governments had taken aim at corporations rather than individuals, but the measures still fall far short of Washington's sanctions.

"We have decided to adopt a new list of people subject to sanctions as well as entities that have benefited from the illegal annexation of Crimea," French European Affairs Minister Harlem Desir told reporters.

The EU was due to publish the names of the new sanctions targets later on Monday, as the decision entered into force.

Rustam Temirgaliyev, Crimea's Deputy Prime Minister who was put on the EU sanctions list days before Russia annexed Crimea in March, called the EU sanctions unjust and urged the bloc to rethink its approach.

"In a democratic way, without violence, we held a referendum and Russia took us in. Why are they imposing sanctions on us for this?," he said.

The EU's reticence to go further and impose tough economic sanctions on Russia over its support for pro-Russian groups in Ukraine reflects concerns among many of its member states about trade and industrial ties and heavy reliance on Russian energy.

Underlying such concerns, diplomatic sources said France planned to press ahead with a €1.2bn contract to sell Mistral helicopter carriers to Russia because scrapping it would do more damage to France than to Russia.

The ministers meeting in Brussels did, however, discuss possible triggers for tougher sanctions, with big EU powers Germany, France and Britain all suggesting that Russia must be punished if it undermined Ukraine's presidential election on May 25.

A joint statement after the meeting said the EU would "pay particular attention to all parties' attitude and behaviour towards the holding of free and fair presidential elections when deciding about possible future measures".

The ministers also met Didier Burkhalter, head of the Organisation for Security and Cooperation in Europe, who has drawn up a peace plan for Ukraine.

Burkhalter said it was important that a "round table" of Ukrainian politicians and civil groups to try to end the conflict started as soon as possible and he was conciliatory towards Russia.

"We have seen in Moscow that there is an openness for dialogue," he told reporters.

Referendums criticised

Several ministers denounced referendums organised by pro-Russian separatists in parts of eastern Ukraine on Sunday as illegal.

"These do not have credibility or international acceptance or recognition. I think the votes in the Eurovision song contest really were more credible," British Foreign Secretary William Hague told reporters.

Despite Hague's joke, the separatist region of Donetsk appealed to Moscow on Monday to consider its absorption into the Russian Federation.

The EU ministers said they backed "a swift convening" of another ministerial meeting between Ukraine, Russia, the United States and EU to ensure an April agreement aimed at defusing the Ukraine crisis was fully implemented.

The ministers also endorsed a broadening of the legal rules for sanctions on Russia, making it easier to freeze the assets of companies involved in the Ukraine crisis.

For now, the scope of new sanctions remains limited to firms or other organisations linked to Russia's annexation of Crimea, and the EU will not target high-profile firms such as the Russian energy giant Gazprom.

The EU has previously imposed asset freezes and visa bans on 48 Russians and Ukrainians over the annexation of Crimea.

Ministers also asked EU officials to draw up plans for a possible EU mission to advise Ukraine on rebuilding its police and legal system. Britain, Poland and Sweden have proposed sending hundreds of judicial and police advisers to Ukraine.

German Foreign Minister Frank-Walter Steinmeier said he would travel to Kiev on Tuesday and possibly to eastern and southern Ukraine to try to convince people there that building bridges between different sides was the only solution.

"We have to be prepared for what to do if someone prevents the elections on May 25. It that is going to happen ... then we have to think about further sanctions," he said.

But Austria's Sebastian Kurz opposed tougher sanctions.

"We should not yearn for economic sanctions as they would not only hit Russia but also definitely hit us ... If we went a step further with our sanctions with every provocation, we would already have war," he said.

Some EU governments fear that trade sanctions against Russia could undermine their own economies, just recovering from the financial crisis, and provoke Russian retaliation.

Among those most reluctant to intensify sanctions are Italy, Greece, Cyprus, Bulgaria, Luxembourg and Spain.

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