EU leaders criticized Russia's expulsion of diplomats from Sweden, Germany, and Poland on Friday (February 5).
They've been accused of taking part in illegal protests last month against the jailing of Kremlin critic Alexei Navalny.
It came on the same day Navalny was back in court for a slander trial.
He is accused of slandering a World War Two veteran who took part in a promotional video last year.
The video supported reforms that allowed Putin to run for two more terms after 2024 if he wanted to.
He called the people in the recording "corrupt lackeys" and "traitors without a conscience."
This audio from Friday's trial shows Navalny telling the court to "burn in hell," and also accused the prosecution and relatives of the veteran of using the 95-year-old "as a puppet."
Earlier this week, Navalny was jailed for three years for parole violations - accusations he said were "trumped up."
Western governments have condemned that trial, which spurred talks of sanctions.
The EU's top diplomat Josep Borrell was in Moscow on Friday for rare talks.
"My visit coincided with arrest and sentencing of Alexei Navalny and the arrest of thousands of demonstrators. As you can expect I have conveyed to Mr. Lavrov our deep concern and reiterated our appeal to his release and a launch of an impartial investigation over his poisoning."
Russian Foreign Minister Sergei Lavrov gave a harsh response to the possibility of EU sanctions.
"We are used to the European Union more and more often drawing on one-sided restrictions that have no legal base. We are building our life on the basis that the EU is an unreliable partner at least for the time being.
The slander charge is punishable by up to two years in jail.
Navalny's lawyer has argued he cannot be sentenced because the alleged crime was committed before the law was changed to make it a jailable offense.