Russia is ready to retaliate with counter sanctions against the EU and US if they go ahead with economic measures against Russia over tension in Crimea, the Russian Economic Ministry has said.

"We hope that there will only be targeted political sanctions, and not a broad package affecting economic trade,” Deputy Economic Development Minister Aleksey Likhachev said.

“Our sanctions will be, of course, similar,” he added.

One way Russia plans on shielding itself from pending sanctions is by boosting trade in other currencies, not the US dollar.

“We need to increase trade volume conducted in national currencies. Why, in relation to China, India, Turkey and other countries, should we be negotiating in dollars? Why should we do that? We should sign deals in national currencies- this applies to energy, oil, gas, and everything else,” Aleksey Ulyukaev, the Minister of Economic Development said in an interview with the Vesti 24 TV channel.

The Duma, Russia’s parliament, is drafting legislation to allow Moscow to freeze assets of Western companies and individuals in the event sanctions are imposed following the Crimea referendum vote on March 16.

The bill would give “the president and government opportunities to defend our sovereignty from threats,” according to its author, Andrey Klishas, as quoted by RIA Novosti on March 5.

The US Congress has already denounced Russia’s actions in Ukraine. On Tuesday, lawmakers passed a resolution that urges the US to “to work with our European allies and other countries to impose visa, financial, trade and other sanctions on senior Russian Federation officials, majority state-owned banks and commercial organizations, and other state agencies, as appropriate.”

Earlier this week the European Union threatened to impose further sanctions on Russia starting on March 17, after the referendum in Crimea takes place on Sunday. Speaking to the German parliament, Chancellor Angela Merkel hinted sanctions would be needed if Russia "continues its course of the past weeks" in Ukraine.

"It would not only change the European Union's relationship with Russia. No, this would also cause massive damage to Russia, economically and politically," Merkel said Thursday.

The decision on sanctions was made, “especially on the procedure of introducing sanctions,” Poland's Prime Minister Donald Tusk said. “The consequence of this will be the start of sanctions on Monday,” he added.

However, China’s ambassador to Germany Shi Mingde, warns of the global economic affect sanctions against Russia could hold. Mingde said the geo-political tiff between Russia and the West could “spiral” into chaos.

President Putin and the foreign ministry have both said sanctions against Russia could backfire, and spill over into the global economy.

Foreign Minister Sergey Lavrov denounced any Western-led sanctions as “hasty and ill-considered”, and President Putin said squeezing economically would cause “mutual damage”.

If extreme Iran-style sanctions are imposed on Russian exports, the EU would be much more exposed than the US.

Europe imports nearly one third of its gas from resource-rich Russia, and some countries are completely dependent on Russian gas.

While the US and Russia trade very little, Russia is Europe’s biggest customer, and the $13 trillion economy would suffer if trade with Russia was halted overnight.