Congress Passes Tougher Russia Sanctions But Gives Obama Leeway

Congress Passes Tougher Russia Sanctions But Gives Obama Leeway

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The bill requires that any sanctions imposed remain in place until the president can certify that Russia has ceased trying to destabilize Ukraine. The original draft would have kept those provisions in place until Russia also abandoned interfering in Georgia and Moldova, conflicts that have dragged on for years.

The U.S. Congress has voted for tougher sanctions to punish Russia for its intervention in Ukraine, moving beyond steps the White House and European Union have been willing to take while giving President Barack Obama leeway in applying most of the provisions.

The Ukraine Freedom Support Act of 2014, which passed the Senate and House unanimously, authorizes -- but doesn’t require -- providing lethal assistance to Ukraine’s military as well as sweeping sanctions on Russia’s energy sector. The measure mandates sanctions against Rosoboronexport, the state agency that promotes Russia’s defense exports and arms trade. It also would require sanctions on OAO Gazprom (GAZP), the world’s largest extractor of natural gas, if the state-controlled company withholds supplies to other European nations.

The resolution was softened from its original text, which would have required sanctions on the Russian energy industry and made Ukraine, Moldova and Georgia “major non-NATO allies,” facilitating arms transfers and greater military cooperation with the former Soviet republics. The measure awaits a final procedural vote in the Senate as early as today before it reaches the president’s desk.

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European Leverage

The Obama administration and the business community opposed the original language on the grounds that the measures would have harmed U.S. and European energy companies. The White House was most concerned about undermining its united front with the European Union, arguing that to keep sanctions against Russia effective, the U.S. must move in tandem with European allies, whose trade with and economic leverage over Russia far outstrips the U.S.’s.

“The notion that we can simply ratchet up sanctions further and further and further, and then ultimately, Putin changes his mind I think is a miscalculation,” Obama told chief executive officers yesterday at a meeting of his export council. “What will ultimately lead to Russia making a strategic decision is if they recognize that Europe is standing with us and will be in it for the long haul and we are, in fact, patient. And if they see that there aren’t any cracks in the coalition, then over time, you could see them saying that the costs to their economy outweigh whatever strategic benefits that they get.”

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Strong Message\

Several congressional aides involved in drafting the legislation described it today as sending a strong message to the administration that Congress wants the White House to take additional steps to support Ukraine and press the EU harder to deter further Russian interference.

The most recent U.S. sanctions on Russia were imposed Sept. 12. The administration so far has resisted providing lethal assistance to Ukraine, arguing that doing so could escalate the conflict.

The measure would provide $510 million in assistance to the Ukrainian government, including $160 million for military aid. The rest would go to promoting energy efficiency, civil society and broadcasting to counter Russian propaganda.

The bill requires that any sanctions imposed remain in place until the president can certify that Russia has ceased trying to destabilize Ukraine. The original draft would have kept those provisions in place until Russia also abandoned interfering in Georgia and Moldova, conflicts that have dragged on for years.

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EU Mood

A European diplomat involved in sanctions policy said the current mood in the EU is against imposing more sanctions unless Russia escalates its military interference in Ukraine. The EU wants to avoid any divisions with the U.S. but is unlikely to mirror the congressional measure’s provisions now, according to the diplomat, who spoke on condition of anonymity to discuss private consultations.


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http://www.bloomberg.com/news/2014-12-12/congress-passes-tougher-russia-sanctions-but-gives-obama-leeway.html