ROBERT SIEGEL, HOST:
Today, the EU and Japan increased the number of Russians they're sanctioning for their roles in the Ukraine crisis. This follows the move yesterday by the U.S. to expand sanctions. Russia reacted angrily to all this, but markets in the country indicate the sanctions weren't as bad as expected.
NPR's Corey Flintoff has more from Moscow.
COREY FLINTOFF, BYLINE: The sanctions freeze the property and bank accounts of the targeted individuals and banned them from travelling in the U.S., Europe or Japan. Russia's deputy foreign minister denounced the moves as illegal and accused the United States of reviving Cold War tactics. But the reaction the Russian financial markets was mild.
The two main stock industries actually closed higher.
CHRIS WEAFER: There were rumors and there were fears that the U.S. actually might go further and perhaps put some institutions that are more important for the economy onto the list.
FLINTOFF: That's Chris Weafer from the financial consulting firm, Macro-Advisory. He says the rise in the markets was actually a small sigh of relief that the sanctions didn't go beyond targeting individuals and some smaller companies. But one individual who was targeted on the U.S. list raised eyebrows among analysts. He's Igor Sechin, a long time friend and former KGB colleague of President Putin.
Sechin is now the head of the world's largest oil company, the state-run Rosneft and the decision to sanction him is the closest the United States has come to targeting Russia's oil and gas business. Political analyst Mikhail Troitsky says the move will be taken seriously by Rosneft's partners in the West, which include BP, Exxon Mobil and Shell.
MIKHAIL TROITSKY: Rosneft was downgraded by the ratings agencies in the aftermath of sanctions against Mr. Sechin, but at this point, I think the move to sanction Mr. Sechin remains largely symbolic.
FLINTOFF: Troitsky says that for now, the sanctions don't keep the multinational energy companies from doing business with Rosneft and though Sechin has been banned from travelling to the United States, he's not on the sanctions list in Europe. Still, Chris Weafer says the decision to name Sechin amounts to a warning shot.
WEAFER: The very clear message is that if there are more sanctions, we will move into a different category and start to hurt institutions that are important for the economy and could start disrupting Russian trade and so I think Mr. Sechin's name is on the list to emphasize that point, that the next stage will be a lot more serious.
FLINTOFF: Weafer says the month of May will be critical for seeing how much effect the sanctions really have. He says he'll be watching the money flows in and out of Russia and especially capital flight, the amount of money that leaves Russia for investment havens in the West or in Asia. That's something that Russia's leaders will be watching, too.
President Putin has been trying to induce wealthy Russians to invest their money at home instead of tax shelters abroad and sanctions may force at least some of them to do that.
PRESIDENT VLADIMIR PUTIN: (Speaking foreign language)
FLINTOFF: As he told the media forum last week, people who keep their savings and even parts of their businesses in low tax areas should wonder whether it would be safer to conduct their business at home. Corey Flintoff, NPR News, Moscow.
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