After meeting late into the night, the EU said it was asking the European Investment Bank to sign no new financing agreements with Moscow. The EU also agreed to suspend financing of new European Bank for Reconstruction and Development operations in Russia.
"There has been no progress in the attitude of Russia to solve this situation, the Ukraine crisis," said French President Francois Hollande in explaining the decision he and other EU leaders took.
European leaders also signaled for the first time their willingness to go after Russian companies "that are materially or financially supporting actions undermining or threatening Ukraine's sovereignty, territorial integrity and independence." They ordered their foreign ministers to draw up a list of such people or entities by the end of the month.
Lithuanian President Dalia Grybauskaite, whose nation borders Russia, said the EU had to get tougher with Moscow "because if Putin's aggressive policy isn't stopped, he will go further."
The targets of the U.S. sanctions include two major Russian energy firms: Novatek, the country's largest independent natural gas producer, and Rosneft, Russia's largest petroleum company and third largest gas producer. The penalties bar both from getting long-term loans from U.S. entities.
Also targeted were leading Russian financial institutions, the Russian development bank VEB and Gazprombank, banking arm of Russia's state energy behemoth Gazprom. The sanctions restrict their ability to access U.S. capital markets.
Steven Pifer, the former U.S. ambassador to Ukraine, said the American sanctions will add uncertainty to a Russian economy that has already been showing signs of weakness.
"These are serious sanctions. They target major Russian energy companies and financial institutions," said Pifer, who currently works as an analyst at the Brookings Institution in Washington.
The sanctions were welcomed with muted praise from some Republicans on Capitol Hill, who have contended that Obama's warnings of tougher action have been little more than empty threats.
"While the delay in imposing real costs on Russia has been damaging to U.S. credibility, today's announcement by the administration is definitely a step in the right direction," said Tennessee Sen. Bob Corker, the top Republican on the Senate Foreign Relations Committee.
Also included on Wednesday's sanctions list were four individuals: Putin adviser Igor Shchegolev, Russian State Duma Deputy Speaker Sergei Neverov, Ukrainian separatist leader Aleksandr Borodai and Sergey Beseda, an official with Russia's Federal Security Service, the intelligence agency that replaced the KGB after the collapse of the Soviet Union.
Associated Press writers Nedra Pickler and Deb Riechmann in Washington and Laura Mills in Moscow contributed to this report.
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