US Congress readies new sanctions on Russia

Vladimir Putin
Mikhail Klimentyev | RIA Novosti | Kremlin | Reuters

U.S. lawmakers were expected on Friday to approve new sanctions on Russian weapons companies and investors in the country's high-tech oil projects, putting more U.S. pressure on President Vladimir Putin for interference in eastern Ukraine.

Late on Thursday, the Senate and House of Representatives unanimously passed the Ukraine Freedom Support Act. A House panel made a small change and sent the bill back to the Senate for a last vote expected as soon as late Friday.

President Barack Obama has said he opposes further sanctions on Russia unless Europe is on board.

The bill, which will be sent to Obama to sign, requires him to apply sanctions on Russian state-owned arms exporter Rosoboronexport and other defense companies Congress says contribute to instability in Ukraine, Georgia and Syria.

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It requires Obama to penalize global companies that make large investments in crude oil drilling projects in deep waters and the Arctic.

The penalties go beyond U.S. and EU sanctions imposed in September on the world's largest oil companies such as Exxon Mobil Corp and BP Plc.

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The legislation would also provide $350 million in military assistance to Ukraine from 2015 to 2017, and other aid for energy to the country, which has been threatened by cutoffs in natural gas supply from Russia.

Russia sanctions won't solve issues: VTB CEO
Russia sanctions won't solve issues: VTB CEO

Republicans, who control the House and will have a majority in the Senate from January, have criticized Obama's reaction to Russian interference in Ukraine as inadequate.

"The hesitant U.S. response to Russia's continued invasion of Ukraine threatens to escalate this conflict even further," said Senator Bob Corker, a Tennessee Republican, incoming chairman of the foreign relations committee.

The unanimous support for the bill showed a "firm commitment to Ukrainian sovereignty and to making sure Putin pays for his assault on freedom and security in Europe," said Corker, who co-authored the bill with Democratic Senator Robert Menendez, the current head of the panel.

The bill authorizes Obama to penalize the top Russian natural gas producer Gazprom if he determines it is withholding significant natural gas supplies from NATO members or from Ukraine, Georgia and Moldova. Lawmakers dropped a measure that would have designated Ukraine, Georgia and Moldova as non-NATO allies of Washington.

Read More Ukraine, Putin and the options that remain

Obama on Thursday said slapping fresh sanctions on Russia without a similar move by Europe would be counterproductive.

In Kiev on Friday, Ukraine's defense minister called for a doubling of the military budget to buy weapons abroad and better equip the army to fight Russian-backed separatists in the east.