Instead of just targeting individuals close to Russian President Vladimir Putin the new sanctions will hit whole sections of Russia's economy: technology, weapons and the country's largest banks.
"It didn't have to come to this. It does not have to be this way. This is choice that Russia and President Putin in particular has made," said President Obama.
The U.S. followed similar sanctions laid out by the European Union. Punishing Russia is tricky for them -- Germany gets a third of its oil from Russia, but Europeans too were fed up with Russian separatists interfering in the investigation of Malaysian Flight 17 and firing on Ukrainians.
"We want to make it absolutely clear that Russian's behavior in destabilizing another country, Ukraine, is unacceptable," said British Prime Minister David Cameron.
1100 people have died in Ukraine since April.
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