He said if the law allowed those sanctions New Zealand would have imposed them. He blamed Labour for that, saying it would not agree to change the law to allow sanctions other than those mandated by the UN. Attempts to get that mandate from the Security Council had been stymied by Russia's veto power.
Key said there was little that could be done about Putin and the warships, which risked overshadowing the EU.
"He will have his own motivations for doing that. You've got the 20 biggest leaders in the world here for G20, ultimately there are a lot of different positions. Some of those things are bubbling away and having quite a big impact."
He did not believe the standoff would derail the G20. "Really, people's attention will be focused on the leaders and the outcomes of the G20 and less about whether there's a few Russian ships floating around off the coast of Australia."
He said the trouble over Ukraine was having an impact on economic growth in Europe.
Also yesterday Key announced New Zealand has completed a free trade deal with South Korea.
"It's been a long hard agreement to reach," he told reporters. "It's a good deal."
He said South Korea is a big market for New Zealand, with two-way trade between the two countries worth $4 billion a year.