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[1] (March 13, 2015)

handle is hein.crs/crsmthmaojp0001 and id is 1 raw text is: CRS Insights U.S.-EU Cooperation on Ukraine and Russia Kristin Archick, Specialist in European Affairs (karchick crs.locaov, 7-2668) Derek E. Mix, Analyst in European Affairs (dmixgcrs.Iocgov, 7-9116) S 2015 (IN10129) Background The United States and the 28-member European Union (EU) have pursued similar policies in response to the conflict in Ukraine. (For background, see CRS Report RL33460, Ukraine: Current I S. Plicy.) Both have provided financial aid to bolster Ukraine's political transition and economy, condemned Russia's annexation of Crimea, and called for Russia to end its support of separatists in eastern Ukraine. They have also urged the full implementation of the September 2014 and February 2015 ceasefire agreements. Following the annexation of Crimea in March 2014, the EU and the United States adopted a series of visa bans and asset freezes on several dozen Russian and Ukrainian individuals and entities. Despite the subsequent conflict in eastern Ukraine, however, many European officials were wary initially of imposing stronger sanctions that they feared might isolate and provoke Russia and jeopardize trade and investment relations; some EU countries highly dependent on Russian oil and gas supplies also worried about endangering energy sector ties. US. officials insisted publicly that they would prefer to escalate sanctions on Russia in cooperation with the EU, but many, including some Members of Congrss, were frustrated with the reluctance of certain EU countries to agree to tougher sanctions. In the absence of parallel EU action, President Obama announced U.S. sanctions on select Russian financial, energy, and defense companies on July 16, 2014 (see CRS Report IN 10048, S. _Sanctions on Russia in Resonse to Events in Ukraine). Expanding EU Sanctions The July 17, 2014, downing of Malaysian Airlines Flight MH17 over eastern Ukraine that killed 298 people (mostly EU citizens) changed the political calculus in Europe. US. intelligece asserted that MH17 was shot down by separatists with a missile supplied by Russia. U.S. and EU leaders alike called for a full investigation and reiterated that Russia must stop the flow of weapons and other assistance to the separatists. Continued Russian intransigence generated greater EU will to impose more stringent sanctions. On July2tE tk s to add more individuals and companies to the list of those subject to EU travel bans and asset-freezing measures, including for the first time some of Russian President Vladimir Putin's inner circle. On July 29. the EU reached poitical agreement on sanctions targeting Russia's financial, defense, and energy sectors. Even tighter EU sanctions entered into force on September 12 amid growing evidence of direct Russian engagement in the fighting in eastern Ukraine. Experts note that the EU sectoral sanctions have been carefully crafted, both to protect specific EU interests and to share the economic burden throughout all 28 EU members. Together, the EU sanctions imposed in July and September: Restrict Russia's access to EU capital markets. Buying or selling debt, equity, or other financial instruments issued by five Russian state-owned banks with a maturity of over 30 days is prohibited. Related services, such as brokering, are also banned, as are most loans. These same capital market access restrictions apply to three major Russian energy companies (including Rosneft) and three key defense firms. European subsidiaries of sanctioned entities are exempted. In general, measures targeting financial services were perhaps most controversial for the United Kingdom and Cyprus, whose banks and financial industries have attracted a considerable number of wealthy Russian clients over the years.

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