'Cronies' get deadline for UK asset freeze

Russian oligarchs close to President Vladimir Putin have two weeks to get their cash out of Britain to avoid sanctions over Moscow's interference in the Ukraine crisis.

EU officials have started to prepare the list of businessmen and officials who will be targeted.

Philip Hammond, Britain's foreign secretary, made clear the UK government's determination to take action against those close to the Russian president's regime.

"The word is 'cronies'," he said. "The cronies of Mr Putin and his clique in the Kremlin are the people who have to bear the pressure.

"If the financial interests of the group around the leadership are affected, the leadership will know about it."

However, British sources disclosed that all EU countries will not have compiled their lists of the Russians to be affected until the end of the month.

The length of time before any action against "Putin's cronies" will add to concerns that they can withdraw their money before sanctions are enforced. The measures are likely to be targeted at oligarchs or companies linked to Putin.

Sanctions are unlikely to be retrospective, meaning existing investments or contracts would not be touched.

"After all this time, the effect of sanctions is going to be weakened," said one European diplomat. "The EU's inability to respond quickly and with resolve could damage it forever on the world stage."

The news emerged as ambassadors from EU countries gathered in Brussels to consider which trading areas should be subject to sanctions. EU diplomats are looking at targeted measures, including access to capital markets, defence, dual-use goods and technology in the energy sector.

The EU is believed to have backed off sanctions covering oil and gas, which is worth 68% of Russia's export revenues. "The new sanctions will represent a step up, but it will leave the Russian economy's biggest sector untouched. That shows the limitations," a diplomat said.

France, Germany, Cyprus, Italy and others are still concerned that the impact of sanctions could be more severe on some countries than others.

Hopes were raised for urgent action after Angela Merkel, the German chancellor, urged the EU to impose rapid sanctions, including economic penalties, against Russia. Georg Streiter, the German spokesman, said Merkel believed Moscow had shown no interest in investigating the background to last week's downing of a Malaysia Air jet in rebel-held territory in Ukraine.

Berlin maintains that Moscow's agents are running the pro-Russian separatist groups in Ukraine.

"Russia has promised a great deal but failed to deliver," said Streiter.