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U.S. Must Move Now
27 June 2014 06:18

David J. Kramer

Vladimir Putin made a small conciliatory gesture earlier this week on Ukraine, primarily aimed at stalling further EU sanctions against Russia. It appears to have worked: further European sanctions appear unlikely. President Obama, however, must not be fooled.

Published on June 26, 2014

President Obama and his European counterparts can help end Russia’s ongoing aggression against Ukraine by imposing new, tough sanctions against the regime of Vladimir Putin this week.

European heads of state meet Friday to decide whether to institute additional measures against Russia, but Obama should not wait another moment.  He should announce immediately that the U.S. is going ahead with its own sanctions. American leadership might bolster the wobbly Europeans to take similar steps Friday, but even if it doesn’t, it will send Putin a strong message that he can no longer get away with his efforts to destabilize Ukraine without significant consequences.

Putin this week launched a campaign to preempt decisions on sanctions by hinting at his readiness to end the Ukrainian crisis that he created. At his request, Russia’s upper house of parliament, the Federation Council, revoked the authorization of military action that Putin requested in March. Putin also unenthusiastically endorsed Ukrainian President Petro Poroshenko’s ceasefire offer and half-heartedly pressed the separatists he has supported in eastern Ukraine to accept it as well.

The move by the Federation Council is solely symbolic and can be undone at a moment’s notice.  As for the ceasefire, someone forgot to tell the Russian fighters in Ukraine, who shot down a Ukrainian helicopter on Tuesday, killing nine people.  Sporadic fighting has continued in other parts of eastern Ukraine, prompting Poroshenko to threaten to end the ceasefire.  Meanwhile, Putin visited Vienna where he pushed Austrian officials to agree to a new natural gas pipeline that would circumvent Ukraine, sowing further divisions in an already badly split Europe about how to handle Russia.

Putin’s efforts may be paying off, as an unnamed European Union official on Tuesday predicted that the 28 European Member States will not approve tougher measures on Friday.  The Russian stock market and the value of the Russian ruble have risen this week to pre-crisis levels.

Obama has said he wants to maintain a united U.S.-EU position and to avoid unilateral sanctions. There is no question that a unified position of hard-hitting sanctions would be the preferred option. Given how badly divided the EU remains, however, such unity simply may be unachievable.  Obama should not let the perfect – unity with the EU – be the enemy of the good.

Adding to Obama’s reluctance to act unilaterally has been pressure from the American business community.  “Unilateral sanctions by the United States end up with other countries and their industries filling the void,” argued Linda Dempsey, vice president at National Association of Manufacturers.

Yet such fears are overstated.  Because of the extraterritorial nature of U.S. sanctions, foreign companies and banks would have to choose between doing business with Russian entities blacklisted by the U.S. and staying in the good graces of the U.S. Treasury Department.  My bet is they will do the latter, given the recent case of PNB Paribas.  One of France’s largest banks, PNB Paribas this week tentatively agreed to a $9 billion settlement for violating U.S. economic sanctions by doing business in Sudan, Iran, and Cuba; many of the banks’s transactions in those sanctioned countries were routed through the U.S.

The sanctions already imposed against Russia by the U.S. have had impact, and given the fragile state of the Russian economy, a new round of measures could force Putin to back down in a serious way, not the phony way he has displayed in recent days.

Let’s remember that the current crisis is the responsibility of Putin.  Last fall, he pressured Ukraine’s then-President Viktor Yanukovych into abandoning deals with the European Union, setting off a wave of protests in Ukraine.  In February, Putin offered Yanukovych a $15 billion bailout but only if Yanukovych brutally suppressed the protestors; more than 100 people were killed in downtown Kyiv.  After Yanukovych fled Ukraine and forfeited power, Putin, terrified that such a scenario might be repeated in Russia, invaded Crimea and staged a rigged referendum that led to Russia’s annexation of the peninsula in March.

For months, Putin has been doing his best to destabilize Ukraine by sending in forces and arms, including tanks, and cutting off energy supplies. More than 400 people have been killed in the fighting for the cause of separatism that few Ukrainians actually support.  The so-called “separatist” leaders are in most cases Russian citizens; their frequent visits to Moscow for consultations underscore how easily the conflict could end should Putin decide – or be forced to decide – to do so.

This is no time to take Putin at his word. He remains a dangerous threat not only to Ukraine, but to all his neighbors and to European security and transatlantic stability.  Obama must show U.S. leadership in confronting this threat through meaningful sanctions against Russian banks, energy firms, and defense and technology companies.  Such leadership would advance U.S. national interests and might even prod the Europeans to follow suit and do the right thing, too.

David J. Kramer is President of Freedom House.
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