By Damian Paletta and William Mauldin
WASHINGTON--The Obama administration is prepared to expand a new
set of economic sanctions against Russia if the country doesn't
take steps to end Ukraine's conflict with pro-Russia separatist
fighters, a senior administration official said.
U.S. officials, who are looking to raise pressure on President
Vladimir Putin, on Wednesday imposed a new type of sanctions which
limit the financing activities of some of Russia's biggest
companies, including state-controlled oil giant OAO Rosneft. Since
then, the downing of Malaysia Airlines flight 17 has broadened
support in the U.S. and Europe for using economic levers against
Russia, even if the measures also affect Western companies.
Under the new sanctions program, the Treasury Department could
expand the number of institutions affected and expand the
limitations placed on the Russian firms, the senior administration
official said. The current rules prevent people or firms with ties
to the U.S. from providing medium- and long-term credit to Rosneft,
Russia's second-biggest natural-gas producer and two major
financial institutions. The Treasury also bars equity financing for
some of the firms.
The official didn't elaborate on what a broader array of
limitations might look like. The current sanctions don't prevent
U.S. entities from doing business with the Russian firms or freeze
their assets.
The current set of sanctions was designed so it could be
gradually intensified over time if Russia doesn't work to seal the
border and prevent the flow of weapons to the separatist fighters.
White House officials have aimed to avoid any economic spillover in
the U.S. from the punitive measures, the official said.
But Obama administration officials are prepared to take more
extreme steps if necessary that could have a broader economic
impact to force Russian cooperation, the official said.
On Tuesday, European Union ministers expanded their sanctions
program against Russia, and the names of the new people and
entities targeted are expected to be released later this week.
Officials in Brussels are also developing a set of broader economic
sanctions that could target the defense, energy By And or financial
sectors.
Write to Damian Paletta at damian.paletta@wsj.com and William
Mauldin at william.mauldin@wsj.com