Archive for January 6th, 2014


Ukraine – The sanction question(s) – Yes there’s more than one!

January 6, 2014

With the on-going obvious and yet distanced (to a degree) campaign of pressure by the current leadership toward євромайдан, its supporters, those deemed influential within and on its periphery continuing, there is a mounting cry from opposition MPs and some parts of civil society for the EU to implement sanctions against “the regime” – or to be more specific – those notable individuals of particular influence over such a campaign of pressure and intimidation.

Every other tweet from Arseniy Yatseniuk currently seems to make such a call.  Mr Klitschko has recently joined the call too, though not with anything like such frequency.

In response thus far, come broad statements from various EU and EU Member State politicians that they will do what they can within their spheres of influence (FATF?) – but no resolute statements of implementation to be sure – and to be quite blunt that is all that can be expected, as all the EU could realistically do is coordinate the actions of its Member States anyway – for it is Member States who decide who they deem persona non grata or are prepared to implement sanctions against.  It is not an “EU decision” per se (as if all EU Member States adhere to EU decisions without deviation anyway).

Ergo, the strength or weakness of any arguement for – or against – sanctions is very much dependent upon the receptiveness and willingness of the nation in question to implement them.

Under The Rome Statute, to which Ukraine is a signatory, but not a ratified signatory due to a Constitutional Court ruling on 12th July 2001 – yes I have written about Ukraine and The Rome Statute before unsurprisingly – it may be possible to make an arguement that the current leadership are, due to certain recent events, in breach of parts of that still to be ratified agreement.

As an aside, it should also be noted, that Article 8 of the (unsigned) EU Association Agreement required Ukraine to ratify The Rome Statute – despite Article 124 of the Constitution of Ukraine preventing that, per the 2001 Constitutional Court ruling.  An issue I pointed out at the time when the contents of the EU AA became known.

However, sanctions are a prickly diplomatic, political and economic issue which may be better framed a different way – one that perhaps may be strictly interpreted as impersonal and as beneficial to the nation and its recently declared domestic policies.

I recently read an article stating Iranian-esque sanctions would be a stupid tactic to take – as if it was a serious possibility.  It is of course a stupid tactic and would never be considered so disproportionate and ill-fitting is that approach for the Ukrainian issues.

Thus there is the Belorussian option – and that to which Messrs Yatseniuk and Klitschko undoubtedly refer – of personal sanctions.

Which raises the question of whom to sanction?  If we are to believe the political opposition and civil society, those most responsible and therefore should be sanctioned are:


Thus, no president, no president’s family, no prime minister or family etc.  The effect on “the family” at the very top if sanctions are limited to these four men? – Are we to believe that the very top are not instigating this and that it has lost control over those above (except President Obama of course to whom the appeal was made)?  Perhaps opposition and civil society recognise there are insufficient grounds to sanction those at the very top?  Perhaps this would be enough to carry the message anyway?

(For those wondering, the two on the left are Governor and Mayor of Kharkiv, the two on the right, Interior Minister and Deputy Prime Minister.)

Will sanctioning them drive them further into the Viktor Medvedchuk Russia orientated camp, and therefore be counterproductive in the longer term?

Will the USA act in concert or discord with the EU and its Member States?  Will the EU act as one?  Different nations have different bilateral interests and therefore different timescales.  How long before consensus can be reached?  What of those Member States who may disagree with sanctions either due to Ukrainian interests or to be belligerent in an effort to win concessions over internal EU affairs?  What carrots or sticks are others prepared to use to gain their approval and thus a consensus?  Any missing link will be exploited.

Despite the desire “to be seen to do something”, is this the right thing to do now – or in the future – how effective will they actually be?

Is there a need to expand the circle of those directly affected by using money laundering laws as the instrument?

If so, the next problem is defining what is truly personal when it comes to actual effects – and what is corporate and has direct casual effects on those whom may currently be supportive of the EU and yet suffer as a result.  The question of collateral damage.

For example, to target the recent purchase of a chain of 200 petrol stations in Germany by a young influential person from Kharkiv – when it comes to unfortunate causal effects to those employed by his other business interests in Ukraine – seems fairly risk free for the average Ukrainian when it comes to keeping their jobs.  To target Ukrainian operations that depend upon (in part) EU consumers may not have the same risk-free desirable result.

To target the purchases of exclusive real estate in Vienna, where a certain politician’s family live, has little effect on his numerous interests in central Ukraine where hundreds of Ukrainians work.  If Viennese assets can be seized or frozen during money laundering investigations and his family returned to Ukraine persona non grata – PoR Deputy and son of one of the highest ranking PoR politicians or not – few in Ukraine would lose their livelihood.

I could go on and on, but the point is if sanctions are pursued undoubtedly great care would need to be taken to insure that and outcomes did not disenfranchise any currently pro-EU workers employed by those targeted wherever possible.  Lest we forget support for the EU AA signing is still very much short of a robust majority without disenfranchising yet more.

The question, if following such a strictly targeted policy, is just how much pain would such sanctions cause those individuals identified – either through retrospective action over existing EU assets, additional money laundering hurdles being placed upon on-going acquisitions with regard the origin of money, or future purchases once the gauntlet has been thrown down? – How high is the pain barrier before it actually becomes painful rather than simply being written-off as the cost of doing business?  A mere irritation for the incredibly wealthy?

A unified response seems highly unlikely from the 28 EU Member States when it comes to the height and robustness of such barriers and hurdles.

As an aside, do continued calls from Messrs Yatseniuk and Klitschko for sanctions, accompanied by continued inaction in response from the “EU” (to whom they appeal presumably as the collective) and the USA undermine the credibility of the EU and USA to some supporters who may expect such pleas to be heard and actioned?

Perhaps they have built up diplomatic momentum amongst the USA and EU Member States via the embassies that have given assurances of delivery that are yet to become public?

Alternatively, do they further undermine the opposition leaders as actors of insignificant weight on the EU stage when it comes to influence and delivery, if no sanctions are forthcoming?  Perhaps domestically, looking forward, that will prove to be a more critical issue than it may currently appear.  Perceptions of the Ukrainian voting constituency and all that!

The issue of sanctions is always difficult, and the results when they come, perhaps not timely either.  Whether or not they will come is very difficult to say.  That demands have been made by certain leaders in the public realm may also fail to provide the desired results in more ways than one.

A lot of questions to answer before answering the sanctions question.

All rather messy at the moment to be frank!

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