In a marked escalation of their sanctions campaign against Russia, the United States and the European Union hit the Kremlin on Friday with new penalties for its actions in Ukraine, targeting favored financial, energy and defense businesses.
The Western governments took steps to cut the flow of capital to these enterprises and to deprive the Russian energy sector, the foundation of the country's economy, of Western know-how and technology it needs to develop new energy fields. The measures will also sting for U.S. energy companies that have been dealing with Russian firms.
The West sharpened sanctions because of Russia's "direct military intervention and blatant efforts to destabilize Ukraine," Treasury Secretary Jack Lew said in a statement.
But officials said the U.S. and Europe could roll back those penalties if Russia observed all the points of a proposed peace plan and respects the week-old cease-fire in Ukraine's embattled eastern region.