European Union leaders have agreed to expand sanctions against Russia to target companies that help to undermine Ukrainian sovereignty.
They also agreed to draw up a first list of companies and people to be targeted with asset freezes by the end of July.
The leaders, who met at a summit in Brussels, have decided to ask the European Investment Bank to suspend new lending for Russia.
The EU will also look into the possibility of targeting companies and people that support Russian decision-makers responsible for annexing Ukraine's Crimea region or destabilising eastern Ukraine.
German Chancellor Angela Merkel said Russia had failed to fulfil commitments to restore peace in the region.
Meanwhile, the US has imposed its most wide-ranging sanctions yet on Russia's economy.
US President Barack Obama said tonight that Russia has failed to take any steps to de-escalate the crisis in Ukraine.
Mr Obama said the new actions showed there were consequences to Russian President Vladimir Putin's aggression in the region.
Those targeted include Gazprombank and the Rosneft Oil Co, as well as other major banks and energy and defence companies.
The US has steadily escalated its financial sanctions on Russia over what it views as its interference in Ukraine.
The sanctions stopped short of targeting Gazprom, the world's largest natural gas producer and provider of much of Europe's energy supplies.
Russian President Vladimir Putin warned that the US sanctions will take relations with Russia to a "dead end".
Speaking to reporters on a visit to Brazil, Mr Putin said he needed to see the details of the sanctions to understand their full scope.