bne IntelliNews -

New European Union sanctions against Russia under consideration could target Russian corporate and sovereign access to international capital markets, EU officials said on January 28, according to newswires.

According to an EU official quoted by Reuters, one option would be to make it near impossible for Western financial institutions to buy Russian sovereign debt on issue. Such a measures would be easy to introduce, said officials. The EU could also restrict maximum maturity at which Russian companies could raise funds.

Until now, the EU and US have restricted capital market access only for selected strategic state companies such as oil major Rosneft and state-owned banks, although they have still avoided targeting Russia's largest state company Gazprom, which is important for Europe's energy security.

Restricting heavily leveraged Rosneft's financial market access is believed to have put significant pressure on the ruble in December 2014, as the company had to source funds to pay down foreign debt on the domestic market.

According to Reuters sources, there are no plans to disconnect Russia from the international Swift wire payment system. Additional sanctions could include further limitations for the transfer of oil and gas extraction technology.

EU foreign ministers are set to ask the European Commission on January 29 to extend existing sanctions and prepare the new round of sanctions in the run-up to an EU summit on February 12.

The European Union could prolong existing sanctions against Russia by another nine months, Reuters also reported, citing the draft document of the project.  The first sanction package against Russia that included entry bans and asset freezes for a list of individuals is due on March 15 2015. Sectoral sanctions limiting access to debt and capital markets and technology exports bans are currently set to expire by end-July 2015, and sanctions against the annexed Crimea until end-June 2015.

The most recent military escalation in Eastern Ukraine, especially the fighting at Donetsk airport and the bombardment of the Azov port of Mariupol, has intensified the debate on further sanctions against Russia. Previously in the fall, escalation in Donetsk and Mariupol was unofficially cited as one of the “red lines” for the current sanction regime against Russia.