(QHA) -

The European Union may ban transactions with financial institutions in Crimea as part of its response to the annexation of the Ukrainian peninsula by Russia last month, Reuters reported.

EU leaders consider the takeover as illegal and have asked the EU executive arm, the European Commission, to propose economic, trade and financial restrictions on Crimea for rapid implementation.

"Solutions need to be found that at the same time support the territorial integrity of Ukraine, do not recognize the illegal annexation of Crimea, defend European interests in this region and do not penalize the Crimean people," the Commission said in a document prepared for EU governments to consider.

One way to discourage or penalize financial institutions in Crimea that cooperated with the annexation could be to restrict capital movements between the EU and those banks, it said, and bar EU citizens or businesses from carrying out transactions with them.

Out of Crimea's 1,000 bank branches, around 60 were owned by EU banks, the Commission said. Italy's Unicredit had 20, Austria's Raiffeisen had 32 and Hungarian OTP had six, the Commission said.