U.S. Sanctions Russia for 'Beginning' Invasion of Ukraine

U.S. President Joe Biden on Tuesday announced tough new sanctions against Russia for "beginning" an invasion of Ukraine but said there was still time to avoid war, even as Vladimir Putin signaled plans to send troops beyond Russia's borders.

Japan and Australia followed suit early Wednesday with their own stringent penalties for Moscow and individuals connected with the aggression against Ukraine, with Australian Prime Minister Scott Morrison targeting members of Russia's Security Council for "behaving like thugs and bullies."

Russia's upper house, the Federation Council, gave Putin unanimous approval to deploy "peacekeepers" to two breakaway Ukrainian regions now recognized by Moscow as independent, and potentially into other parts of Ukraine.

Biden announced what he called the "first tranche" of sanctions, including steps to starve Russia of financing and target financial institutions and the country's "elites."

But he left the door open to a final effort at diplomacy to avert a full-scale Russian invasion.

"There's no question that Russia is the aggressor, so we're clear eyed about the challenges we're facing," the president said.

"Nonetheless, there is still time to avert the worst case scenario that will bring untold suffering to millions of people."

Biden's address followed a wave of sanctions announced by Britain and the European Union, after Putin recognized the self-declared Donetsk and Lugansk rebel republics.

Germany also announced it was halting certification of the Nord Stream 2 gas pipeline from Russia.

But Moscow said the sanctions regime would backfire.

The U.S.-led sanctions will "hurt the global financial and energy markets," Anatoly Antonov, Russia's ambassador to the United States, said in a Facebook post, adding that ordinary Americans will "feel the full consequences of rising prices."

'Rejection of diplomacy'

Putin's plans remained unclear, but Western officials have been warning for weeks he has been preparing an all-out invasion of Ukraine, a move that could spark a catastrophic war in Europe. 

The Biden administration signaled it no longer believes Russia is serious about avoiding conflict, as Secretary of State Antony Blinken said he had canceled a meeting with Russian Foreign Minister Sergei Lavrov scheduled for Thursday.

"Now that we see the invasion is beginning and Russia has made clear its wholesale rejection of diplomacy, it does not make sense to go forward with that meeting," Blinken said.

Speaking to journalists, Putin said the Minsk peace agreements on Ukraine's conflict no longer existed and he recognized claims by the separatists to more territory than they currently control.

But he added that the deployment of Russian troops would "depend on the specific situation... on the ground" and appeared to offer Ukraine a way out by giving up on its hopes to join the US-led NATO military alliance.

"The best solution... would be if the current Kyiv authorities themselves refused to join NATO and maintained neutrality," Putin said.

NATO chief Jens Stoltenberg said the alliance had "every indication" that Moscow "continues to plan for a full-scale attack on Ukraine."

Kyiv showed no sign of backing down, with Ukrainian Foreign Minister Dmytro Kuleba meeting Biden to appeal for more military aid.

Russia's recognition move prompted an emphatic condemnation from United Nations chief Antonio Guterres, who called it "a death blow to the Minsk Agreements endorsed by the (UN) Security Council."

'Further military aggression'

Biden said Washington would continue to supply "defensive" weapons to Ukraine and deploy more U.S. troops to reinforce NATO allies in Eastern Europe.

Kyiv recalled its top diplomat from Moscow as President Volodymyr Zelenskiy warned that Putin's recognition of the breakaway regions heralded "further military aggression" against Ukraine.

French Foreign Minister Jean-Yves Le Drian said EU foreign ministers "unanimously agreed on an initial sanctions package," as he also canceled a meeting with his Russian counterpart.

Britain slapped sanctions on five Russian banks and three billionaires, and Canada followed suit with similar measures. 

In some capitals, there has been debate over whether Moscow sending troops into an area that was already controlled by Russian-backed rebels amounts to the kind of all-out invasion that would justify imposing the harshest sanctions.

But Putin's rhetoric was sure to raise concerns.

Russia said it had established diplomatic relations "at the level of embassies" with the separatist-controlled regions, which broke away from Kyiv in 2014 in a conflict that cost 14,000 lives.

'We weren't expecting this'

A Ukrainian soldier died Tuesday and six suffered injuries in clashes with Moscow-backed rebels in the east, the army said.

In the frontline town of Shchastya, shellfire rang out around an electric power station as fearful residents awaited the Russian deployment.

A shell hit the roof of 59-year-old Valentyna Shmatkova's apartment block overnight, shattering all the windows in her two-room apartment.

"We spent the war in the basement," she said, referring to the 2014 fighting. 

"But we weren't expecting this. We never thought Ukraine and Russia wouldn't end up agreeing."