* Foreign ministers set to expand criteria for sanctions
* First companies to be added to EU sanctions list
* Ministers to discuss trigger for economic sanctions
(Repeats to fix formatting on screen)
By Adrian Croft and Justyna Pawlak
BRUSSELS, May 12 The European Union agreed to
impose sanctions on two Crimean companies and 13 more Russians
and Ukrainians on Monday, stepping up its response to Moscow's
annexation of the Ukrainian peninsula and its support for
It was the first time the EU's 28 governments had taken aim
at corporations rather than individuals, but the measures still
fall far short of Washington's sanctions against 17 companies.
The EU was due to publish the names of the new sanctions
targets later on Monday, as the decision entered into force.
The EU's reticence in imposing sanctions against Russia over
its support for pro-Russian groups in Ukraine reflects concerns
among many of its member states about trade and industrial ties
and heavy reliance on Russian energy.
Diplomatic sources said France planned to press ahead with a
1.2 billion euro ($1.66 billion) contract to sell Mistral
helicopter carriers to Russia because scrapping it would do more
damage to France than to Russia.
The ministers meeting in Brussels did, however, discuss
possible triggers for tougher sanctions, with big EU powers
Germany, France and Britain all suggesting that Russia must be
punished if it undermined Ukraine's presidential election on May
A joint statement after the meeting said the EU would "pay
particular attention to all parties' attitude and behaviour
towards the holding of free and fair presidential elections when
deciding about possible future measures".
The ministers also met Didier Burkhalter, head of the
Organisation for Security and Cooperation in Europe, who has
drawn up a peace plan for Ukraine.
"We have decided to adopt a new list of people subject to
sanctions as well as entities that have benefited from the
illegal annexation of Crimea," French European Affairs Minister
Harlem Desir said on the sidelines of the meeting.
"This decision has confirmed the EU's great determination to
make sure the territorial integrity and sovereignty of Ukraine
As they arrived for the talks, several ministers denounced
as illegal Sunday's separatist referendums organised by
pro-Russian rebels in eastern Ukraine.
"These attempts at referendums have zero credibility in the
eyes of the world, they are illegal by anybody's standards,"
British Foreign Secretary William Hague told reporters.
The EU ministers were also expected to endorse a broadening
of the legal rules for sanctions on Russia, making it easier to
freeze the assets of companies involved in the Ukraine crisis.
For now, the scope of new sanctions remains limited to firms
or other organisations linked to Russia's annexation of Crimea,
and the EU will not target high-profile firms such as the
Russian energy giant Gazprom.
The EU has previously imposed asset freezes and visa bans on
48 Russians and Ukrainians over the annexation of Crimea.
Chancellor Angela Merkel and President Francois Hollande
said on Saturday that Germany and France were ready to agree
more extensive sanctions against Russia if it obstructed the May
Hague took a similar line on Monday, saying Britain wanted
the EU to intensify preparations for sanctions "if the
circumstances require it, particularly determined by the Russian
attitude to the elections on May 25".
German Foreign Minister Frank-Walter Steinmeier said he
would travel to Kiev on Tuesday and possibly to eastern and
southern Ukraine to try to convince people there that building
bridges between different sides was the only solution.
"We have to be prepared for what to do if someone prevents
the elections on May 25. It that is going to happen ... then we
have to think about further sanctions," he said.
But Austria's Sebastian Kurz opposed tougher sanctions.
"We should not yearn for economic sanctions as they would
not only hit Russia but also definitely hit us ... If we went a
step further with our sanctions with every provocation, we would
already have war," he said.
Some EU governments fear that trade sanctions against Russia
could undermine their own economies, just recovering from the
financial crisis, and provoke Russian retaliation. Among those
most reluctant to intensify sanctions are Italy, Greece, Cyprus,
Bulgaria, Luxembourg and Spain.
(Editing by Kevin Liffey)