Factbox: EU paper details options for sanctions against Russia

BRUSSELS (Reuters) - European Union countries are considering tougher sanctions against Russia over its role in the conflict in eastern Ukraine and the downing of the Malaysian airliner that killed 298 people last week. Ambassadors of the 28-nation bloc met on Thursday to discuss options drafted by the executive European Commission, that could be turned into legal measures and approved as early as next week. [ID:nL6N0PZ510] European foreign ministers expressed readiness to introduce targeted measures against Moscow in areas of access to capital markets, defense, dual use goods, and sensitive technologies, including in the energy sector. Following are the key points of a Commission options paper that was the basis for the discussion: CAPITAL MARKETS * Russian banks with state ownership over 50 percent would not be able to raise capital through new share or debt issues on European Union's capital markets * The ban would apply to debt, equity and other financial instruments with maturity longer than 90 days issued by state-run financial institutions after the ban enters into force * The ban would include both primary and secondary markets * The sanctions are expected to boost Russia's borrowing costs, undermine public finances * Russian government debt would not be part of the ban in the initial stage. Syndicated loans would not to be covered by the ban. * A possible next step could be tied to other sanctions in the package, prohibiting the purchase of bonds and equities from companies operating in sectors that are subject to sanctions (energy, defense). * Newly issued Russian securities from the targeted entities would be prohibited from listing on EU stock exchanges. * In 2013, 47 percent of the bonds issued by Russian public financial institutions were issued in the EU's financial markets (7.5 billion euros out of a total of 15.8 billion euros). ARMS EMBARGO * The proposal envisages an embargo on trade in arms on the entire defense sector. * The embargo would be reversible. * It is still open how to deal with prior contracts (such as France's 2011 deal to build Mistral helicopter carriers). DUAL-USE GOODS * EU dual use goods exports to Russia amount to around 20 billion euros ($26.95 billion) per year. * The proposal is to impose an export embargo for all dual goods for military use, military end users or mixed end-users. * Examples of the targeted goods include special materials, some machine tools, high performance computers and electronics. * Russia needs hi-tech system/products to develop some of the most competitive and export-oriented sectors of its economy, including energy and steel production. RESTRICTIONS IN TECHNOLOGIES, GOODS TRADE * There would be a system of prior authorization for the sale, supply, transfer or export, directly or indirectly, of the European technologies to Russia. * Public authorities would deny export authorization of pre-identified technologies destined for projects in deep sea drilling, arctic exploration and shale oil. * Gas-related projects would not be affected. * The measure would negatively impact Russia by increasing the cost of accessing to those services in alternative markets. * EU exports of energy related technologies for non-conventional oil and gas projects amount to about 150 million euros per year. ($1 = 0.7422 Euros) (Reporting by Martin Santa; Editing by Paul Taylor)