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U.S. bans licenses for military exports to Russia

WASHINGTON (Reuters) - The United States said on Thursday it imposed a ban this week on the issuance of licenses for the export of defense items and defense services to Russia in response to Russia's annexation of Crimea.

A spokeswoman for the U.S. State Department said the move followed a U.S. Commerce Department ban on the export to Russia of "dual use" items that could have military applications.

"The State Department has also placed a hold on the issuance of licenses that would authorize the export of defense articles and defense services to Russia," Marie Harf told a regular news briefing.

Harf said the ban, which she believed took effect on Monday, would remain in place until further notice.

A Commerce Department statement said the U.S. Bureau of Industry and Security had placed a hold on the issuance of licenses that would authorize the export or re-export of items to Russia from March 1.

"BIS will continue this practice until further notice," it said.

Earlier on Thursday, a group of U.S. senators called on President Barack Obama to impose sanctions on Russia's defense sector following its forcible annexation of Crimea. It urged him specifically to cut U.S. ties with Moscow's state arms exporter.

"We call on you to cancel all existing (Pentagon) contracts with Rosoboronexport, as well as any plans for future deals, and impose sanctions to ban contracts with any company that cooperates with Rosoboronexport on military programs," Sen. John Cornyn of Texas and Sen. Dan Coats of Indiana wrote Obama.

Both lawmakers are Republican. At least seven other senators were expected to sign the letter, a congressional aide said. The Pentagon has paid Rosoboronexport over $1 billion for Russian-made Mi-17 helicopters, which the United States is providing to Afghan security forces.

Obama has imposed financial sanctions on members of Russian President Vladimir Putin's inner circle, and held out the prospect of sectoral sanctions - including in the defense sector - if Russia makes further military moves against Ukraine.

"Rosoboronexport is an arm of the Russian government and a powerful instrument of Vladimir Putin's increasingly belligerent foreign policy, and it handles more than 80% of Russia's weapons exports," the senators wrote.

Coats had previously offered an amendment to a Ukraine aid bill that would have cut off all U.S. business with Rosoboronexport; the amendment has not been acted upon.

The White House had no immediate comment.

Harf said the sanctions should give pause for thought for any firms considering doing business with Russia.

"If individual companies are looking to do business in Russia, they have to take a very serious look right now.

"They have to look at the sanctions we have in place, at the sanctions that might be coming, and they need to know that Russia's economy is not particularly good right now," she said.

"The path forward is stepping back from the brink and having direct dialogue between Russia and Ukraine about how to move forward here," Harf said.

In response to sustained criticism in Washington of the helicopter deals, Rosoboronexport's general director, Anatoly Isaykin, told Reuters in November that the contracts are "completely transparent" and "most acceptable from the perspective of price-to-value for the Defense Department."

(Reporting by David Brunnstrom, Will Dunham an Warren Strobel; Editing by Diane Craft)

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