EU and US agree new economic sanctions against Russia

The European Union and the US have agreed new economic sanctions against Russia, in the wake of the Malaysia Airlines MH17 crash, which has been blamed on Moscow-backed rebels in Ukraine.

Reports quoted EU sources as saying the new measures will include an arms embargo, a ban on the sale of dual use and sensitive technologies, and a ban on the sale of bonds and equities by state-owned Russian banks in European capital markets.

Eight more officials - including four members of president Vladimir Putin’s inner circle - are also expected to be subjected to asset bans and travel freezes.

President Barack Obama also said the United States had expanded sanctions against Russia.

Speaking at the White House, Mr Obama said the new sanctions targeted “key sectors of the Russian economy” - energy, arms and finance.

He said the new US sanctions block the exports of specific goods and technologies to the Russian energy sector, expand sanctions to include more Russian banks and defense companies, and formally suspend credit that encourages exports to Russia and financing for economic development projects in Russia.

“If Russia continues on this current path, the costs on Russia will continue to grow,” he said.

The United States slapped sanctions on VTB, the Bank of Moscow, the Russian Agriculture Bank and the United Shipbuilding Corp over Moscow's support for separatists in eastern Ukraine, the Treasury Department said.

Meanwhile, US Secretary of State John Kerry said that pro-Russian separatists in eastern Ukraine were showing “an appalling disrespect for human decency” in carrying on fighting close to the site where MH17 crashed after apparently being shot out of the sky by a surface-to-air missile.

The fact that not all the remains of the 298 victims of the disaster had yet been recovered had placed "an unsupportable burden on families", who "clearly deserve a thorough, international investigation," Mr Kerry said in a Washington DC press conference.

Earlier, intense fighting between Ukrainian troops and pro-Russian rebels in eastern Ukraine killed dozens of civilians, soldiers and rebels, as Kiev pressed on with an offensive today including near the wreckage of Malaysian flight MH 17.

Ukrainian forces have been pushing rebel units back towards their two main urban strongholds of Donetsk and Luhansk and have sought to encircle them in several places. The government says its forces have retaken several villages in the rolling countryside near where the airliner crashed on July 17.

Officials said up to 17 people, including children, were killed in fighting yesterday evening in the town of Horlivka, a rebel stronghold north of Donetsk that saw fierce battles between the rival forces in the last few days.

In the city of Luhansk, officials said five civilians were killed when shelling hit a retirement home.

“The enemy is throwing everything it has into the battle to complete encirclement of the DNR,” Igor Strelkov, a Muscovite rebel commander, told journalists in Donetsk yesterday evening, referring to the self-proclaimed “Donetsk People’s Republic”.

A rebel source in Donetsk said reinforcements including military equipment and fighters had arrived across the nearby border from Russia into Ukraine. Reuters was not able to confirm that independently.

Agencies