The crucial question that you'd need to answer in order to determine whether the example the phrase "were being prepared" should be altered or left alone is this: At the time that Obama made his remarks, were sanctions actually in the process of being prepared, or were the Western nations simply in agreement that they would prepare such sanctions if future events warranted doing so?
In the first scenario, the problem isn't with "were being prepared," in my opinion, but with the wording that follows. Here is how I would try to bring it into a consistent sequence of tenses:
Earlier, on his arrival in Warsaw, the president had met with U.S. and Polish air personnel from a detachment of F-16 fighter jets. [In his subsequent remarks,] Obama stressed that more sanctions against Russia were being prepared and that they would be imposed if the West decided that Russia was continuing to engage in activities destabilising to Ukraine.
In the second scenario, preparation of the sanctions hasn't actually begun, so "were being prepared" isn't factually accurate. In that case I would rework the two sentences in the extract as follows:
Earlier, on his arrival in Warsaw, the president had met U.S. and Polish air personnel from a detachment of F-16 fighter jets. [In his subsequent remarks,] Obama stressed that more sanctions would be prepared and imposed against Russia if the West decided that Russia was continuing to engage in activities destabilising to Ukraine.
Whether "were being prepared" or "would be prepared" is the better wording depends on the underlying facts. In contrast, the wording "if the West decided it [Russia] engaged..." near the back end of the sentence strikes me as requiring revision regardless of what the author is trying to say.
If we start (again as a matter of factual accuracy) with the proposition that Russia had, prior to Obama's remarks, already engaged "in activities destabilising to Ukraine," then either imposition of the new sanctions is inevitable (because the condition for imposing them has already been fulfilled) or the word "engaged" needs to be modified to something prospective (such as my alternative, "was continuing to engage").
The other major flaw that I see in the original wording is its omission of the action "imposed" as a separate step from the action "prepared," in connection with the sanctions. Both of my revised versions of the extract acknowledge "imposed" as a distinct and meaningful separate step in the Western handling of sanctions against Russia.