Russian President Vladimir Putin has signed into law the treaty formally making Crimea part of the Russian Federation, after it was approved by the parliament, on the same day Ukraine capped a landmark alliance with the European Union.
All 155 senators present in Moscow's upper house voted on Friday in favour of the treaty, which was signed on Tuesday by President Vladimir Putin and representatives of the secessionist Ukrainian region.
The treaty creates two new Russian administrative regions, Crimea and the port city of Sevastopol, where Russia's Black Sea fleet is based.
Despite threats of more sanctions from the EU and the US, Kremlin has declared that it considers Crimea part of Russia since the signing of the treaty.
On Thursday, Russia's lower house of parliament, the State Duma, also voted to ratify the treaty with just one MP voting against. Both the Duma and the upper house of parliament are seen as largely rubber-stamping bodies.
Meanwhile in Brussels, Ukraine's acting Prime Minister Arseniy Yatsenyuk and the EU leaders signed a landmark agreement in defiance of Russia's wishes. Ukraine is formerly part of the Soviet Union.
"Signing [the] political part EU-Ukraine Association Agreement symbolises importance of relations (and) will to take it further," EU president Hermann Van Rompuy said in a tweeted message.
The final deal, once signed, will cover issues as wide-ranging as economic integration, judicial reform and consumer rights to environmental protection.
Sanctions and counter-sanctions
As alliances were made, the EU and the US also announced new sanctions against prominent Russians, including close allies of President Vladimir Putin.
|Ukraine strengthens EU ties as crisis looms
The European bloc on Friday announced it was expanding its list of Russians targeted with sanctions by 12, hours after the US president, Barack Obama, said his administration had imposed sanctions on "senior officials" in the Kremlin.
President Barack Obama earlier announced the new round of punitive measures against 20 Russian lawmakers and senior government officials, in addition to 11 individuals already targeted.
Speaking at the White House, Obama said Russia's threats to southern and eastern areas of Ukraine - which like Crimea have large Russian-speaking populations - posed a serious risk of escalating the crisis in the region.
Also among those top businessmen targeted are Putin-allies such as billionaires Gennady Timchenko, Arkady Rotenberg and Boris Rotenberg plus a bank used by close associates.
EU leaders also slapped an asset freeze and travel ban on 12 more Russians and Ukrainians, bringing to 33 the number of figures targeted by the European bloc.
Moscow had announced its own sanctions against senior US politicians in retaliation against visa bans and asset freezes imposed by Washington on its citizens.
But on Friday, Putin said Russia will, for the time being, refrain from imposing sanctions on Americans in retaliation for punitive measures announced by the United States, Russian news agencies reported.
Meanwhile, Russia's Prime Minister Dmitri Medvedev said that Ukraine owes Russia $11bn, because the treaty under which Russia provides Ukraine with cheap gas in return for the Sevastopol naval base was "subject to denunciation".
In addition, he said that Ukraine owes Russia $3bn for a recent loan in the form of Russian purchase of Eurobonds, and that around $2bn is owed to Gazprom, Russia's state-controlled gas concern.