A Beacon of Light, or just more Fog?


A Beacon of Light, or just more Fog?

The U.S., the EU, Ukraine and Russia met in Geneva on Thursday, April 17 and hammered out a deal to de-escalate tensions in eastern Ukraine.  While this development is welcome news, U.S. companies should not celebrate just yet.

The deal calls for pro-Russian militia groups in eastern Ukraine to disband, disarm and vacate all seized property.  In exchange, those groups will be given amnesty, except for those accused of capital crimes.  The Organization of Security and Cooperation in Europe would be tasked with monitoring and overseeing the steps necessary to implement the deal.  Secretary of State Kerry called on Russia to use its influence over the militias to comply.

However, those pro-Russian militias have so far refused to leave occupied buildings and comply with the accord.  Separatists in the city of Donetsk have said that the current Ukraine government is illegal and that they will not abide by the deal until that government steps down.

Both the U.S. and the EU have been preparing additional sanctions targeting Russia’s energy sector, among others, in the event Russia fails to live up to its end of the bargain.  Kerry went so far as to say the U.S. will have “no choice but to impose further costs on Russia” if it fails to abide by the deal.  The threat of new sanctions is now very real.

The determining factor will be whether Russia can convince the militias to step down.  Clashes today between the militias and Ukrainian forces, despite an Easter truce, have further strained tensions.  If Russia is unable or unwilling to coerce the militias in eastern Ukraine to disarm, U.S. companies should expect a new round of sanctions to be issued by the U.S. shortly.  Those sanctions will likely track the framework established by Obama’s last executive order, issued March 20.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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