US President Joe Biden on Monday signed an executive order imposing financial sanctions on two breakaway republics in eastern Ukraine freshly recognised by Russia as independent regions and said more were in the making if necessary.

In response to Russian President Vladimir Putin’s decision to recognise two pro-Moscow territories as independent, the US banned fresh investment, trade and financing by people from the US to, from, or in the so-called Donetsk People's Republic and Luhansk People's Republic located in the Donbas region of eastern Ukraine, White House press secretary Jen Psaki said in a statement.

On Monday, Putin signed decrees in a ceremony on the state television recognising the two self-proclaimed republics -- Donetsk People's Republic (DNR) and the Luhansk People's Republic (LNR).

Psaki said these sanctions were separate from the wider measures that the US and its allies were readying should Russia invade Ukraine.

Although the two regions have limited exchange with US citizens, the new sanctions could be seen as the most dangerous East-West confrontation since the collapse of the Soviet Union, AFP reported.

Calling all allies

After Putin's speech on Monday, the US President is said to have discussed matters with Ukrainian President Volodymyr Zelensky. He also spoke to French President Emmanuel Macron and German Chancellor Olaf Scholz, AFP reported.

When UK wakes up today

On Tuesday morning, UK Prime Minister Boris Johnson will chair a meeting of the UK’s emergency Cobra committee to agree on a package of immediate sanctions on Russia.

According to The Guardian, the package could target “those complicit in the violation of Ukraine’s territorial integrity” for now, although greater sanctions could follow in the aftermath of an invasion.

European Union

The members of the European Union have agreed to announce imposing a “limited package of sanctions" against those who were involved in the decision to recognise the two self-proclaimed republics in eastern Ukraine, Dutch Prime Minister Mark Rutte said.

Canada

Canada will impose sanctions in response to Putin’s recognition of the two regions, foreign minister Melanie Joly said on Monday. Canada will join its allies to “react firmly to this blatant disregard for international law" Joly said in a statement, Reuters reported.

Australia

Australia is working with the US, UK, EU and other governments “to ensure there are severe costs for Russia’s aggression”, the country’s foreign affairs minister Marise Payne said. Australia is prepared to impose “swift and severe sanctions” on key Russian individuals and entities, Payne said.

More action expected

The US and its European and other allies have designed a package of economic sanctions on Russia in case of an invasion of Ukraine. The level of Western sanctions would depend on the extent of the Russian offensive.

Daleep Singh, deputy US national security advisor for international economics, on Friday said the sanctions would cripple Russia, isolate it from the global financial markets and deprive it “of the most sophisticated technological inputs", AFP reported.

According to Singh, the Western sanctions would lead to intense capital outflows, higher pressure on the Russian currency, surging inflation, economic contraction and erosion of productive capacity.

Read Also | Explainer-What will Russian recognition of breakaway Ukraine regions mean?

(Edited by : Thomas Abraham)