EU agrees to extend Russia economic sanctions by six months

By Adrian Croft and Gabriela Baczynska BRUSSELS/MOSCOW (Reuters) - European Union governments agreed on Wednesday to extend economic sanctions on Russia over its actions in Ukraine until Jan. 31, diplomats said, and Moscow said it would respond. The six-month extension was agreed by ambassadors from the 28 EU nations meeting in Brussels. Ratification of the decision by EU foreign ministers meeting in Luxembourg on Monday is expected to be a formality. The procedure means there will be no formal motion on Russia at an EU leaders' summit in Brussels at the end of next week. Kremlin spokesman Dmitry Peskov said Russia's reaction would be based on the "principle of reciprocity", suggesting that it would extend counter-sanctions that include a ban on Western food imports. But Peskov said Moscow would wait for an official EU announcement before making any move, RIA news agency reported. The sanctions on Russia's energy, defense and financial sectors, originally imposed in July 2014 for one year, were the EU's toughest response to Moscow's annexation of Ukraine's Crimea region and what the EU said was Russia's support for separatists in eastern Ukraine. Russia's Finance Minister Anton Siluanov said Moscow had already factored in the expected extending of EU sanctions in its economic planning. The EU ambassadors also agreed to extend by a year a ban on imports from Crimea, due to expire on June 23, an European diplomat said. The diplomats asked EU officials to start legal and technical work required to extend asset freezes or travel bans on Ukrainian and Russian individuals and companies accused of undermining Ukraine's sovereignty, territorial integrity and independence. No decision has been taken yet to actually extend the sanctions on 150 people and 37 organizations, currently due to expire on Sept. 15. Igor Sechin, head of Russia's top oil producer Rosneft, said on the sidelines of an economic forum in St Petersburg the EU decision to renew sanctions was harmful to both Russia and the bloc. "It'll affect everyone. First of all, manufacturers of technology that we buy in Europe. So I think this is not the right decision," Sechin, a close ally of Russian President Vladimir Putin, told reporters. "I still hope that this situation won't last very long because it violates the interests of all market participants who have no relation whatsoever to these conflicts, crises and so on," he said. The extension of EU measures comes amid renewed fighting between pro-Russian separatists and Ukrainian troops in eastern Ukraine, in violation of February's Minsk ceasefire agreement. It maintains Western unity on sanctions despite the reservations that some EU members openly express. (Additional reporting by Alastair Macdonald, Barbara Lewis and Jan Strupczewski; editing by Andrew Roche)