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1 (January 23, 2015)

handle is hein.crs/crsuntaaeat0001 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.loc.aov, 7-2668) Derek E. Mix, Analyst in European Affairs (dixusal.v, 7-9116) 23, 2015 (IN10129) Political Context The United States and the 28-member European Union (EU) have pursued similar policies in response to the crisis in Ukraine. (For background, see CRS Report RL33460, Ukraine: Current Issues and U.S. Poicy). Both have provided additional financial aid to bolster Ukraine's political transition, condemned Russia's annexation of Crimea, called for Russia to end its support of separatists in eastern and southern Ukraine, and taken steps to isolate Russia diplomatically. Between March and early July 2014, the EU and the United States announced visa bans and asset freezes on several dozen Russians and Ukrainians. Initially, however, many European officials were more wary than their U.S. counterparts of imposing stronger sanctions because of significant EU-Russian trade and investment ties and the dependence of some EU countries on Russian oil and gas supplies (see CRS Report RL33407, Russian Political. E~mnmJL-nd-Si t i). that they would prefer Economic, and ecurity Issues and U.S. Interest). U.S. officials ins!sted-publlytathywudper to escalate sanctions on Russia in cooperation with the EU, but many, including some Members.of Congres, were frustrated with the reluctance of certain EU countries to agree to tougher sanctions. Despite a lack of parallel EU action, President Obama announced U.S. sanctions on select Russian financial, energy, and defense companies on July 16 (see CRS Insight IN10048, L/S. Sanctions n Stronger EU Sanctions 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. U.S. intelligence 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, however, generated greater EU will to impose more stringent sanctions. On July 22. 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 Russian President Vladimir Putin's inner circle. On July 29, the EU reached political agreement on sanctions targeting Russia's financial, defense, and energy sectors. Even tighter EU sanctions entered into foce on September 12 amid growing evidence of direct Russian engagement in the fighting in eastern and southern Ukraine. Experts note that the EU sectoral sanctions have been carefullycrafted, 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 measures were perhaps most controversial for the United Kingdom, whose financial industry has attracted considerable Russian investment, as well as for Cyprus and some Central European countries with exposure to Russian banks. These same capital market access restrictions apply to three major Russian energy companies (including Rosneft) and three key defense firms. European subsidiaries of the targeted entities are exempted. * Ban future EU exports and imports of arms and related materiel. France sought to

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