As the crisis in Ukraine continues to escalate, the United States and European Union have attempted to increase the pressure on Russia to defuse the situation. The G7 countries all have pulled out of preparatory talks for the G8 summit in Sochi, Russia this summer and the Pentagon called off all joint military exercises with Moscow. One response that has been floated constantly this week is economic sanctions. In fact, President Barack Obama signed an executive order on Thursday that allows the U.S. to impose sanctions against certain Ukrainian and Russian individuals who have undermined Ukrainian sovereignty, particularly in Crimea. The E.U. met in an emegency meeting today and cut off talks with Russia on a wide-ranging economic pact. They are also threatneing further sanctions if Russia does not back down. But what does that actually mean? How do economic sanctions work and how could they hurt Russia?

Let’s break it down:

What did Obama’s EO actually do today? Who is hurt by it?

The EO imposed a visa ban against certain Russian and Ukrainian officials, which prevents them from entering the United States. The administration does not release a list of names of those sanctioned so we don’t know who they are. In fact, they won’t even know they face a visa ban until they try to enter the U.S. or unless are already here and have their visa revoked. The order also authorizes the Treasury Department to impose additional economic sanctions against “individuals and entities.” Those sanctions could come in the form of freezing the assets or stopping Americans from doing any business with them. These individual sanctions require more advanced planning, because the charges must hold up in court. For that reason, Obama has only given Treasury the authority to take such moves.

Did we sanction Russian President Vladimir Putin?