Sanctions Summary - Week of July 7 (with Turza Comment)
Ukraine
On July 9, 2014, Senator Robert Menendez (D-NJ) chaired a Senate Foreign Relations Committee hearing on developments in Ukraine and the potential for future sanctions against Russia. Witnesses at the hearing included Victoria Nuland (Assistant Secretary of State for European and Eurasian Affairs, U.S. Department of State); Daniel Glaser (Assistant Secretary for Terrorist Financing, U.S. Department of the Treasury); Derek Chollet (Assistant Secretary of Defense for International Security Affairs); Dr. Zbigniew Brzezinski (former U.S. National Security Advisor; now Counselor and Trustee, Center for Strategic and International Studies); and Stephen Hadley (former U.S. National Security Advisor; now Principal, RiceHadleyGates, LLC).
Senators Menendez, Bob Corker (R-TN) and Marco Rubio (R-FL) each expressed discontent with what they perceived to be the Administration's slow response to continued Russian aggression, with Senator Menendez raising the possibility of unilateral congressional action should the Obama Administration fail to adopt additional sanctions. Senator Rubio asserted that, at a minimum, the United States should specify precisely what measures it is prepared to adopt against Moscow if Russia does not change course. Assistant Secretary of State Nuland defended the Administration's actions to date in part by asserting that stronger and more effective sanctions against Russia can only be implemented successfully if enacted in concert with the European Union. Nuland went on to remark that "we are ready to impose more costs – including targeted sector-specific sanctions – very soon if Russia does not decisively change course and break its ties with separatists." On July 11, 2014, Canada announced sanctions against 14 individuals under its Ukraine sanctions program. The Council of the European Union followed suit on July 12, 2014, with the announcement of travel bans and asset freezes against 11 individuals in connection with their role in "undermining Ukraine's territorial integrity, sovereignty and independence." The EU list includes three of the same names as the Canadian list released the day before, and many of those identified are pro-Russian Ukrainian separatist leaders affiliated with self-declared "People's Republics" in Donetsk and Luhansk. An updated list of all individuals and entities sanctioned in connection with the situation in Ukraine is available here.
Other Sanctions Developments
On July 9, 2014, the U.S. Treasury Department ("Treasury") designated United Arab Emirates-based Pangates International Corporation Ltd. pursuant to E.O. 13582 (see Executive Order 13582) for "providing material support for, and goods and services to, the Government of Syria, including Sytrol, a Syrian state oil company sanctioned by the United States." (See Treasury Press Release – Syria). Additionally, the Treasury designated Expert Partners and Megatrade pursuant to E.O. 13382 for "acting for or on behalf of the U.S.-sanctioned entity Scientific Studies and Research Center (SSRC)." The European Union has also sanctioned Sytrol and SSRC.
Finally, on July 10, 2014, the Treasury designated individuals closely connected to Stars Group Holding, a key Hezbollah procurement network based in Beirut, Lebanon pursuant to E.O. 13224 (see Executive Order 13224). According to the Treasury's press release, "Kamel and Issam Mohamad Amhaz, Stars Group Holding, its subsidiaries, and certain managers and individuals who support their illicit activities" were added to the SDN list. (See Treasury Press Release – Hezbollah). The Treasury also designated Hanna Elias Khalifeh, a Hezbollah member and Lebanese businessman who allegedly has worked with Stars Group Holding network managers to facilitate Hezbollah's procurement activities.
Turza Comment: Congress is unlikely to be impressed by the EU's (or Canada's) action late last week to impose sanctions on a limited number of individuals responsible for unrest in eastern Ukraine. It is doubtful that the United States will adopt any significant measures against Russia in the near term. As Assistant Secretary Nuland suggested in her comments before the Senate Foreign Relations Committee, the U.S. likely will prefer to coordinate any major action against Russia with that of the European Union. Much will depend on whether Europe will reach consensus as to additional sanctions during its meeting scheduled for July 16. It remains to be seen whether the United States will be prepared to act unilaterally – including with respect to imposing sector-based sanctions against the Kremlin.
See: Executive Order 13582; Treasury Press Release - Syria; Executive Order 13224; Treasury Press Release - Hezbollah.Related news: Sanctions Update (with Turza Comment) (June 27, 2014); Canada Imposes Sanctions on Ukrainian and Russian Individuals (with Turza Comment) (June 23, 2014); Sanctions Update (with Turza Comment) (June 20, 2014).See also the Cabinet Sanctions Page (some materials are accessible to Cabinet subscribers only). For more information, please contact Dale Turza, James Treanor or Keith Gerver.