U.S., EU intensify talks on Russia sanctions

By Arshad Mohammed WASHINGTON (Reuters) - The United States blacklisted seven separatists in Ukraine on Friday and threatened "scalpel" sanctions on Russia's financial, defense and high-tech industries as more Russian military material has flowed into Ukraine. The U.S. moves respond to what American officials say is Russia's recent increase in support to Ukrainian separatists, including the provision of Russian tanks and the preparation of more to cross into eastern Ukraine. Separatist rebellions erupted in eastern Ukraine in early April after street protests in Kiev toppled the Moscow-backed leader Viktor Yanukovich and Russia in turn annexed the Crimean peninsula. Eastern rebels have called for union with Russia. The U.S. Treasury named seven people, including separatist leaders in Donetsk, Slovyansk, Luhansk and the Crimean city of Sevastopol, whose assets under U.S. jurisdiction will be frozen and with whom U.S. individuals and firms will be generally barred from dealing. The Treasury identified one of the seven as a Russian citizen but gave no information on the citizenship of the other six. A senior Obama administration official said the United States had information that Russia was preparing to send more tanks into Ukraine and that the tanks had "departed from a deployment site in southwest Russia yesterday." The official, who spoke on condition of anonymity, also said the United States had intensified its conversation with the European Union about imposing additional sectoral sanctions on Russia because of the flows of Russian materiel to Ukraine. "We have been in active conversations with our EU partners on what we call 'scalpel' sanctions, which would be targeted primarily in the financial, defense and high technology sectors," the official told reporters. "The idea here is to deny Russia the kinds of investment and next-generation technology that it needs to continue to grow," the official said. "This conversation has been on going for some time but it has intensified over the last week as we have seen Russian materiel move into Ukraine," the official said. Those conversations are continuing today and over the weekend and next week Secretary (of State) Kerry will be making calls. (Reporting by Arshad Mohammed; Editing by Eric Beech)