Congressional Actions with Regard to Ukraine (with Turza Comment)

With the approach of a planned referendum on the future of Crimea on March 16, the United States Congress has moved to increase pressure on Russia and its supporters in Ukraine through a combination of threatened sanctions and promised support for Ukraine's new government.

First, on March 6, the House passed a bill providing $1 billion in loan guarantees to aid the new government of Ukraine and support the country's financial stability (see linked H.R. 4152). Next, in a resolution passed with a strong bipartisan majority on March 11, the House condemned the violation of Ukrainian sovereignty by Russian military forces and called on the United States and its European allies to support Ukraine (see linked H. Res. 499). Significantly, House Resolution 499 urges President Obama and European allies to impose visa, trade and other sanctions on unnamed senior Russian Federation officials, and on Russian and Ukrainian individuals "complicit in Russia's Ukrainian intervention and interference in Ukraine." The resolution also calls for sanctions against "majority state-owned banks and commercial organizations, and other state agencies, as appropriate." Additionally, the resolution calls for the suspension of military cooperation with Russia and for the President and other leaders to consider expelling Russia from the G-8.

Following the passage of the House resolution, the Senate Committee on Foreign Relations announced a bill on March 12 calling for sanctions - including asset freezes and travel bans - against the Ukrainians and Russians responsible for "undermining the peace, security, stability, sovereignty, or territorial integrity of Ukraine" (full text of bill not yet available). The bill provides for additional sanctions on Russian officials who were complicit in the "significant corruption in Ukraine." Under an amendment introduced by Senator John McCain, the President also would be authorized to impose visa bans and asset freezes on Russian officials complicit in significant corruption within Russia itself. The bill includes a $1 billion loan guarantee for the new Ukrainian government, similar to last week's House bill, as well as assistance in the recovery of assets stolen under the previous regime, support for Ukrainian civil society, security assistance and approval of certain IMF reforms allowing the organization to shift assets from its crisis fund to its general accounts. The bill next goes to the full Senate for a vote, and will require House approval before becoming law. It is unclear whether final passage will occur before this weekend's referendum in Crimea and in advance of a congressional recess next week.

The Senate Foreign Relations Committee's action came on the same day on which President Obama hosted Arseniy Yatsenyuk, Ukraine's interim prime minister, at the White House for meetings in Washington. Although hosting the visit was a show of U.S. support for the new Ukrainian government, the Obama administration has yet to exercise the authorities contained in Executive Order 13660, signed on March 6, 2010. As discussed here, the Order allows the United States to impose economic sanctions against persons (individuals and entities) who are determined to be responsible for, or are complicit in, activities that undermine the democratic process in the Ukraine or threaten the peace, security, stability, sovereignty or territorial integrity of the country, including those who have provided material or financial assistance to such persons. The Order also targets those who are determined to have misappropriated the assets of the Ukraine or any other "economically significant entity" in the country.

To date, no specific Ukrainian or Russian individuals or entities have been designated under the March 6 Executive Order.

Turza Comment: Speculation continues about the identity of those who might be designated under the Order, as well as what other actions the Administration might take such as the issuance of additional Executive Orders that might hold sanctions-related Congressional action at bay.Please contact Dale Turza at 202-862-2261 or [email protected] should you have any questions. James Treanor, an associate in Cadwalader's Washington Office, covered today's Congressional action.

See: (i) Bill to Provide Loan Guarantees for Ukraine and (ii) Bill Condemning the Violation of European Sovereignty.For a copy of the March 6 Executive Order, actions on the same day by the European Union and the UK and commentary thereon, see the Cabinet's posting on March 11.