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Congress rushing to put in place Russia sanctions

March 6th, 2014 8:24 am by BRADLEY KLAPPER, Associated Press

Congress rushing to put in place Russia sanctions

Two pro-Ukrainian protestors hand a folder to each other that contains a depiction of Russian President Vladimir Putin with a mustache during a demonstration outside of an EU summit in Brussels on Thursday, March 6, 2014. (AP Photo/Michel Euler)

WASHINGTON (AP) — Congress is rushing to put in place hard-hitting sanctions on Russia in response to its takeover of Ukraine's Crimean Peninsula, hoping Europe will follow the lead of the United States in upping the pressure on President Vladimir Putin's government.

The U.S. sanctions push represents a rare case of broad agreement among the Obama administration and Democrats and Republicans in both houses of Congress. But they're also united in their concern that American economic penalties will mean little without the participation of European countries with far deeper commercial relations with Russia.

The Senate is taking the lead with legislation that would combine loan guarantees to Ukraine's fledgling government and measures against Russian government officials, state-owned banks and companies. The goal of the sanctions is to force Putin to withdraw Russian troops from Crimea. The bill could be introduced as early as next week.

Meanwhile, House Republicans have circulated a bill paying for the loan guarantees, while the top Republican and Democrat on the House Foreign Affairs Committee introduced a resolution Wednesday condemning Russia's actions in Ukraine and calling on the Obama administration to impose "visa, financial, trade and other sanctions." The committee will address the resolution Thursday after hearing testimony from State Department and Treasury officials.

Since last weekend, Russian troops have taken control of much of the peninsula on the Black Sea, where ethnic Russians are the majority. Moscow doesn't recognize the Ukrainian leadership that came to power after protesters ousted the country's pro-Russian president last month. Putin and other officials have cited strategic interests as well as the protection of ethnic Russians in making the case for intervention.

Much of the West's focus so far has been on securing an aid package for deeply indebted Ukraine and finding a diplomatic solution to the standoff with Russia. But with the Kremlin showing little tractability, the focus is turning toward sanctions.

NATO's 28 nations decided Wednesday to suspend a joint mission with Russia, as well as planned civilian and military meetings. Washington has halted military and economic talks. The U.S. and the European members of the Group of Eight industrialized nations — Germany, Britain, Italy and France — all have halted preparations for a planned June summit in Russia's Black Sea resort of Sochi.

The Senate bill hopes to go further.

Sen. Chris Murphy, D-Conn., who heads a Senate subcommittee on the region, told reporters the package would blacklist Russian individuals, banks and petrochemical companies. But he said it was vital that the United States not act alone.

"Our sanctions are pretty toothless without Europe as part of that package," said Murphy, who is spearheading the bill along with Sens. Bob Menendez and Bob Corker, the Democratic chairman and top Republican on the Senate Foreign Relations Committee.

"Europe is not where they need to be right now," he said. "I think they are willing to give Putin a much longer leash than we are."

While EU foreign ministers have threatened Russia with "targeted measures," the rhetoric in Brussels is far more cautious than in Washington. That's because any action targeting influential Russian businessmen or major Russian companies would also harm Europe's economic interests. Russian investors hold assets worth billions in European banks, particularly in Britain and Cyprus.

Britain is protective of London's huge financial industry and is reluctant to undermine the sector as the country crawls out of recession. The British hesitance to act was seen on a government document caught on camera by a film crew when a British official carrying it was walking by the prime minister's office. The document, which was filmed, then enlarged, said Britain "should not support for now trade sanctions or close London's financial center to Russians."

Germany, which gets a third of its gas supplies from Russia, has similarly urged patience. Altogether, Russia is the European Union's third-largest trading partner, mainly because of oil and gas imports, but also due to significant Russian purchases of European machinery, cars and other exports.

EU countries sold $170 billion worth of goods to Russia in 2012; U.S. exports to Russia barely exceeded $11 billion last year.

Senate Majority Leader Harry Reid, D-Nev., has voiced support for sanctions against Moscow while stressing the need for coordination with European allies. In the House, Rep. Ed Royce, the Republican chairman of the House Foreign Affairs Committee, has made the same argument.

Economic and diplomatic measures are about the only form of pressure the U.S. is considering at the moment.

Testifying Wednesday before the Senate Armed Services Committee, Defense Secretary Chuck Hagel said the U.S. was stepping up joint aviation training with Polish forces and increasing American participation in NATO's air-policing mission in its Baltic countries. But neither he nor Joint Chiefs Chairman Gen. Martin Dempsey mentioned any military options.

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