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U.S.-EU Cooperation on Ukraine and Russia

Kr stin Archick, Spec    ist in European Affairs                         7 72668)
Derek  E. Mix, Ana  yst in European  Affairs (d                    9116)
Augu  7, 2014 (IN10129)
U.S.   and EU Reactions to the Crisis in Ukraine
The United States and the European Union (EU) have pursued similar policies in response to the crisis
in Ukraine. Both have provided additional financial aid to bolster Ukraine's political transition,
condemned  Russia's annexation of Crimea, and called for Russia to end its support of separatists in
eastern and southern Ukraine. The United States and the EU have taken steps to isolate Russia
diplomatically and imposed several rounds of sanctions in an effort to change Moscow's behavior and
bring an end to the conflict in eastern Ukraine. (For background, see CRS Report RL33460,
                            , by Steven Woehrel.)
At the same time, some U.S.-EU tensions have been evident as the two sides have grappled with how
best to respond to Russia's actions in Ukraine. Frictions have been perhaps most pronounced on the
issue of sanctions. Between March and early July 2014, the EU and the United States announced visa
bans and asset freezes on several dozen Russians and Ukrainians. In contrast to the United States,
however, the EU did not sanction members of Russian President Vladimir Putin's inner circle or key
firms or banks associated with them due to concerns about antagonizing Russia.
                           that they would prefer to escalate sanctions on Russia in cooperation
with the EU given the EU's substantial trade and investment ties with Russia (see CRS Insight
IN10119,                              , and CRS Report RL33407,
                                for a comparison). At the same time, many U.S. policy makers,
including some                    , were frustrated with the EU's reluctance. While some of the
EU's 28 members  (including Poland and the Baltic states) were strong advocates for wider-ranging
sanctions, others were hesitant, thus impeding the EU from reaching the required consensus.
Germany,  France, Italy, Finland, and Cyprus, among others, worried that tougher sanctions could:
harm  economic relations with Russia; jeopardize the Eurozone's recovery; endanger the delivery
of                        from Russia; and hinder a peaceful solution to the conflict in Ukraine.
Despite a lack of EU action, on July 16, President Obama announced new unilateral  on
select Russian financial, energy, and defense companies (see CRS Insight IN10048,


The MH17 Crash and New                  EU   Sanctions on Russia
The July 17 crash of Malaysian Airlines Flight MH17 over eastern Ukraine that killed 298 people
(mostly EU citizens) changed the political calculus in Europe toward sanctions on
Russia.                asserted that MH17 was shot down by separatists with a missile supplied by
Russia. U.S. and EU leaders alike called on President Putin to use his influence to permit a full,
independent investigation and reiterated that Russia must stop the flow of weapons and other
assistance to the separatists.
By late July, continued Russian intransigence and indications that Moscow was perhaps accelerating its
involvement in the Ukraine conflict prompted the EU to impose two rounds of more extensive
sanctions. Oni     , the EU took steps 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 President
Putin's closest associates. On ,   the EU reached political agreement on sanctions targeting
Russia's financial, defense, and energy sectors; experts note that they have been
both to protect specific EU interests, and to share the economic burden throughout all 28 EU member
states. Entering into force on August 1, the sanctions:

*   Restrict Russia's  access  to EU capital  markets.  Buying  or selling debt, equity, or
    other financial instruments issued by Russian state-owned  banks with a maturity of over
    90 days is prohibited, as are related services, such as brokering. This measure was

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