* EU leaders expands travel-ban and asset-freeze list to 33 people
* Addition of 12 names brings EU closer in line with U.S. targets
* Preparations being made on "third phase" of financial sanctions
* EU brings forward association agreements with Georgia, Moldova (Releads with agreement on new names for sanctions list)
By Luke Baker and Adrian Croft
BRUSSELS, March 20 European leaders added 12 people to a list of those subject to travel bans and asset freezes for their part in Russia's seizure of Crimea on Thursday and begin preparations for economic sanctions if Russia expands its footprint in Ukraine.
French President Francois Hollande declined to give details of the names added to the list, which was agreed among the EU's 28 leaders after six hours of talks, but said it included Russians and Crimeans and raised the total number of people subject to EU sanctions to 33.
German Chancellor Angela Merkel said preparations would also be made for possible trade and economic measures against Russia if it moves beyond Crimea into southern and eastern Ukraine, and confirmed that the EU was calling off an EU-Russia summit scheduled for June, severing political ties.
"We are ready to start stage three if there is further escalation with a view to Ukraine, those are economic sanctions and we asked the European Commission today to do preparatory work for possible economic sanctions," she said.
The steps were in line with what was expected from the EU but fell short of the United States, which added 20 people and businesses to its sanctions list on Thursday, including a bank and oligarchs close to Putin.
One of the major difficulties the EU faces in matching the U.S. response is maintaining unity, since EU sanctions must be agreed unanimously among all member states.
With several countries depending on Russia for oil and gas or having close trade, investment and business links to Moscow, there was a reluctance to push too hard, too quickly. Instead, the EU is looking to steadily ratchet up the pressure.
At the same time, the EU plans to sign an "association agreement" with Ukraine on Friday, promising closer political and trade ties that will help draw Ukraine more closely into the heart of Europe and boost its economic growth.
European Commission President Jose Manuel Barroso said the EU would also bring forward plans to finalise similar agreements with Moldova and Georgia, signing them by June at the latest rather than by the end of the year.
That will send a signal to Russia that the EU is committed to drawing former Soviet states more closely into its orbit and away from Moscow's influence. Russia in 2008 invaded portions of northern Georgia and has close ties with Moldova and the disputed Transnistria region on its eastern edge. (Additional reporting by Noah Barkin in Berlin and Barbara Lewis, Jan Strupczewski, Justyna Pawlak and Robin Emmott in Brussels; Editing by Giles Elgood, Anna Willard and Philippa Fletcher)