Only small parts of Donetsk and Luganks are occupied by separatist (Russia, depending who you ask). Per USA/NATO stance etc, as long as Russia sticks to those areas there will be no further sanctions. Declaring all Donbass would mean further incursion into Ukraine.
Thank you. I've just had a look. Those two Oblast are much bigger than the areas currently being fought over.
It's a shame they can't be allowed to just vote on it - accepted there would be issues over rigging. I was in Kiev when they were having the elections in 2014. Had a chat with a British guy who was travelling Ukraine as part of the international team overseeing the voting.