U.S. Must Move Now on Russia Sanctions | Freedom House

U.S. Must Move Now on Russia Sanctions

The American Interest

by David J. Kramer
President, Freedom House

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.

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