U.S., U.K., Germany target Russian banks, pipeline project over growing Ukraine crisis

U.S. President Joe Biden announced a first wave of new and tougher sanctions against Russia Tuesday, following measures imposed by Britain and Germany, one day after President Vladimir Putin formally recognized two breakaway regions in Eastern Ukraine, escalating a security crisis on the European continent.

"This is a flagrant violation of international law and demands a firm response from the international community," he said at the White House Tuesday afternoon.

The sanctions, among others things, target Russian banks and sovereign debt.

"That means we've cut off Russia's government from western financing," he said. "It can no longer raise money from the West and cannot trade in its new debt on our markets or European markets either."

Sanctions are being applied to VEB bank and Russia's military bank, Promsvyazbank, which does defence deals, Biden said. Starting on Wednesday U.S. sanctions will begin against Russian elites and their family members.

Tass news agency cited Promsvyazbank as saying the sanctions would not have a significant effect since it had taken precautionary measures ahead of time. It did not give details.

Putin did not watch Biden's speech and Russia will first look at what the United States has outlined before responding, according to Kremlin spokesperson Dmitry Peskov, cited by Russian news agencies.

Biden said he was also moving additional U.S. troops to the Baltic states on NATO's eastern flank bordering Russia. The prime minister of Estonia and presidents of Latvia and Lithuania on Friday had made a direct plea to U.S. Vice-President Kamala Harris for the U.S. to step up its presence in the Baltics.

Earlier, Prime Minister Boris Johnson said the U.K. government would begin imposing fresh sanctions on Russian banks and individuals following Putin's decision to recognize the separatist regions as independent. 

German Chancellor Olaf Scholz has suspended the certification process for the Nord Stream 2 natural gas pipeline in response to the Russian president's decree, which the West fears signals that a full-scale invasion of Ukraine is next.

The undersea pipeline directly links Russian gas to Europe via Germany and is complete but not yet operating. It has become a major target as Western governments try to exert leverage on Russia to deter further military moves against its neighbour.

France has also agreed to respond with sanctions, as has Canada. 

Johnson told the U.K. Parliament that Russia's actions amounted to "a renewed invasion" of Ukraine and said Putin was "establishing the pretext for a full-scale offensive."

In his speech, he announced sanctions against five Russian banks — Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank — as well as sanctions against three wealthy Russian businessmen, Gennady Timchenko, Boris Rotenberg and Igor Rotenberg, freezing their assets and banning them from travelling to or trading in the U.K.