EU's Russia sanctions to take effect on Wednesday

A first, limited, round of European Union sanctions on Russia is set to take effect by 1400 GMT on Wednesday, a senior EU diplomat said, after foreign ministers agreed in principle on Tuesday to blacklist more politicians and target bond trading.

Russian President Vladimir Putin on Monday recognised the separatist enclaves in the Donbass region of eastern Ukraine that adjoin Russia, deepening Western fears of a major war in Europe.

EU foreign ministers chose not to sanction Putin himself but instead blacklist all members of the lower house of the Russian parliament who voted in favour of the recognition of the breakaway regions, freezing any assets they have in the EU and banning them from travelling to the bloc.

Banks involved in financing separatist activities in eastern Ukraine would also be targeted and the two regions could also be removed from a free-trade deal between the EU and Ukraine.

The impact of the new sanctions on banks and on bond trading is likely to be minimal. Western governments - for now - are preferring to keep the much larger sanctions packages that they have planned in reserve should the crisis escalate.

Technically, as per the EU's procedure rules, the 27 member states are expected to agree on these sanctions by 1000 GMT, and then there will be a so-called "written procedure" process until 1400 GMT at which time they will be formally adopted.