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Obama warns Putin that U.S. ready to impose sanctions on Russia

Russia's President Vladimir Putin (C), Defence Minister Sergei Shoigu (L) and head of the Russian army's main department of combat preparati
Russia's President Vladimir Putin (C), Defence Minister Sergei Shoigu (L) and head of the Russian army's main department of combat preparati

By Matt Spetalnick and Roberta Rampton

WASHINGTON (Reuters) - President Barack Obama told Russian President Vladimir Putin on Sunday the United States rejected the results of a secession referendum in Ukraine's Crimea region and warned that Washington was ready to impose sanctions on Moscow over the crisis.

With Washington and its European allies expected to slap "targeted" punitive measures on Russian officials as early as Monday, the White House said Obama made clear to Putin that the dispute could still be resolved diplomatically but that Russia first must halt military incursions into Ukrainian territory.

Confirming what was considered a foregone conclusion in Sunday's hastily called referendum in Crimea, a region with a Russian-speaking majority, regional authorities said that with over half the vote counted 95.5 percent had chosen the option of annexation of the strategic peninsula by Moscow.

The regional government in Crimea, now controlled by Russian forces, went ahead with the ballot despite fierce U.S. and European opposition, underscoring the West's limited leverage in the worst standoff of its kind since the end of the Cold War.

"He (Obama) emphasized that Russia's actions were in violation of Ukraine's sovereignty and territorial integrity and that, in coordination with our European partners, we are prepared to impose additional costs on Russia for its actions," the White House said in a summary of Obama's telephone call with Putin.

Obama suggested to Putin that the referendum was a sham carried out "under duress of Russian military intervention" and Washington and the international community would never accept the results, the White House said.

According to the Kremlin, Putin told Obama the referendum on union with Russia was legitimate the two leaders agreed on the need to cooperate to stabilize Ukraine. The readouts of the call from both capitals spoke of the need to deploy international monitors to Ukraine.

Amid accusations from Republican critics that Obama had not shown enough resolve against Putin, the U.S. administration appeared intent on proving it was not bluffing over its threat of consequences for the seizure of Crimea.

U.S. options to prevent Russian from formally absorbing the strategic region are few. But some officials in Washington are hopeful that instead of pressing ahead with such a provocative action, Putin may hold off for now, seeking to avoid further escalation of the crisis.

White House senior adviser Dan Pfeiffer said the administration would step up pressure on Russia. "You can expect sanctions designations in the coming days," Pfeiffer told NBC's "Meet the Press," as the administration prepared to identify Russians whom the United States will seek to punish with visa bans and asset freezes the president authorized earlier this month.

COORDINATED SANCTIONS

A U.S. sanctions announcement is expected on Monday, and foreign ministers from the European Union, which has major trade ties with Russia, will decide on possible similar action in Brussels on the same day, Western sources said.

While Washington and its allies have ruled out military action, U.S. and European Union officials worked over the weekend to coordinate lists of those to be targeted initially.

Sanctions are not expected to be imposed on Putin himself at this point, and a congressional source said the first round could also spare Russian oligarchs close to him. Though news reports have cited some senior Putin aides as possible targets, Western governments could decide to start mostly with lower- or mid-level officials seen as complicit in the takeover of Crimea.

"Otherwise you leave yourself with no room to escalate" the allied response, the congressional source said. The measures would include bans on travel to the United States and Europe and a freeze on bank accounts and other assets held in those places.

Another congressional aide said he believed the administration was looking at "targeted sanctions" to be imposed on some Russian officials based on their holding positions of authority over the Crimea intervention rather than direct evidence of involvement. But the aide stressed that he was not privy to the administration's specific plans.

It was also unclear whether those sanctions might be announced on Monday or held in abeyance if deemed necessary.

Not expected to be named in the latest round of sanctions, however, are the heads of Russian oil company Rosneft or gas company Gazprom, with such figures possibly held in reserve if further punitive measures are needed.

COMPLICATIONS

At the same time, the Obama administration is mindful that Russia could retaliate with steps of its own. Any efforts to punish Moscow are complicated by the need for cooperation on Iran nuclear diplomacy, removal of Syrian chemical weapons and use of Russian territory for U.S. withdrawal from Afghanistan.

Obama's aides have discussed the potential for "blowback" in other areas of U.S.-Russia relations and believe that Moscow will not take dramatic steps on issues unrelated to Ukraine.

Pfeiffer sidestepped the question of whether Washington would provide military aid to Ukraine's interim government, which has accused Russia of violating its sovereignty. "We're looking at all ways of assistance," he said.

Pfeiffer said Putin has a choice. "Is he going to continue to further isolate himself, further hurt his economy, further diminish Russian influence in the world, or is he going to do the right thing?" he said.

Republican Senator John McCain of Arizona, just back from a visit to Ukraine, urged the administration to provide military assistance to Ukraine, resume development of a U.S. missile defense system for Eastern Europe and take steps toward NATO membership for Georgia and Moldova.

"The United States of America has to first of all have a fundamental reassessment of our relationship with Vladimir Putin. No more 'reset' button," McCain told CNN, referring to Obama's outreach to Russia early in his first term.

In a phone conversation with Russian Foreign Minister Sergei Lavrov, U.S. Secretary of State John Kerry said Russian forces must return to their bases and objected to Moscow's military activities in Ukraine's Kherson oblast area and continuing "provocations" in Eastern Ukraine, a senior State Department official said.

Lavrov and Kerry, according to a Russian statement, "agreed to continue work to find a resolution on Ukraine through a speedy launch of constitutional reform."

(Additional reporting by Warren Strobel, Toni Clarke, Bill Trott, Arshad Mohammed, Lesley Wroughton, Roberta Rampton and Andy Sullivan in Washington, Joshua Schneyer in New York; editing by Rosalind Russell, Matthew Lewis and Mohammad Zargham)

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