U.S. says has fresh Russia sanctions 'ready to go'

WASHINGTON (Reuters) - The United States said on Wednesday it has fresh sanctions ready to impose on Russia if Moscow does not take steps to de-escalate tensions with Ukraine, including halting the flow of fighters and arms to Ukrainian separatists. A senior U.S. official said on Friday Washington and the European Union had intensified talks about "scalpel" sanctions on Russia's financial, defense and high-tech industries as more Russian military material has flowed into Ukraine. The U.S. State Department declined to provide details on what kinds of sanctions might be imposed. However, a Western diplomat on Wednesday said they could include steps to limit Western purchases of debt from Russian state enterprises, to restrict technology transfers in the energy sector and to crack down on the sale of so-called dual-use items with civilian and military applications to Russia. The moves would respond to what American officials have said was Russia's recent increase in support to Ukrainian separatists, including the provision of Russian tanks and the preparation of more tanks to cross into eastern Ukraine. Separatist rebellions erupted in eastern Ukraine in early April after street protests in Kiev toppled Moscow-backed leader Viktor Yanukovich, and Russia in turn annexed the Crimean peninsula. Eastern rebels have called for union with Russia. "We need to see Russia secure its border, stop the flow of fighters and weapons into Ukraine and call on separatists to lay down their arms and release the OSCE hostages," U.S. State Department spokeswoman Marie Harf said on Wednesday. Harf was referring to monitors of the Organization for Security and Cooperation in Europe, a rights watchdog that lost contact with two monitoring teams in late May amid intense fighting between the Ukrainian army and pro-Russian separatists. Last week, the OSCE said it had re-established contact with the two four-person teams and demanded their immediate release. "Those are the important actions we are looking for," Harf added. "We have additional sanctions ready to go." The spokeswoman did not provide detailed information about the sanctions. However, last week the senior U.S. official said they were designed "to deny Russia the kinds of investment and next-generation technology that it needs to continue to grow." The Western diplomat, who spoke on condition of anonymity, said he thought it was unlikely that the 28-member group was now ready to undertake so-called "tier three" sanctions that would hit at entire sectors of the Russian economy. "I think there is almost no possibility of tier three sanctions at the European Council," said the diplomat, referring to a gathering of EU leaders in Brussels on Friday. The diplomat said Russian President Vladimir Putin may be doing just enough to stall momentum for new sanctions. "Putin is saying all the right things at the moment," he said. The upper house of Russia's parliament on Wednesday fulfilled a request from Putin to rescind the right to invade Ukraine in defense of its Russian speakers that it had granted him in March. The State Department described this as "a good step" but stressed that it could easily be reversed and that Moscow needed to do more to ease tensions with Ukraine. (Reporting by Arshad Mohammed; Editing by Jonathan Oatis, Bernard Orr)

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