Ninth Report - European Scrutiny Committee Contents


40 Ukraine and Russia: EU restrictive measures

Committee's assessment Politically important
Committee's decisionCleared from scrutiny
Document detailsRestrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (36235), (36236), (36241), (36242)
Legal baseArticle 29 TEU; unanimity and Article 215 TFEU; QMV
DepartmentForeign and Commonwealth Office

Summary and Committee's conclusions

40.1 These instruments enact the sixth and seventh "rounds" of EU restrictive measures in response to the Ukraine-Russia crisis, in response to further adverse developments in eastern Ukraine.

40.2 The first two, enacted on 11 July, designate an additional 11 individuals under the for actions that "undermine or threaten the territorial integrity, sovereignty and independence of Ukraine", thereby bringing the number of individuals subject to sanctions in connection with Ukraine's territorial integrity to 72. Two confiscated entities in Crimea and Sevastopol also remain subject to an asset freeze under these sanctions.

40.3 The Minister for Europe (Mr David Lidington) notes these listings flow from the European Council Conclusions of 27 June 2014 which stated that the Council would continue to "assess the situation" and "adopt necessary decisions" as required.[164]

40.4 On 18 July, the EU then agreed to expand the listing criteria, thus broadening the category of individuals and entities that can be listed under these restrictive measures. The Minister explains that:

—   the previous listing criteria were:

    "…natural persons responsible for, actively supporting or implementing, actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine, or which obstruct the work of international organisations in Ukraine, and natural or legal persons, entities or bodies associated with them, or legal persons, entities or bodies in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law, or legal persons, entities or bodies which have benefited from such a transfer…"; and

—  the new listing criteria are:

    "natural persons responsible for, actively supporting or implementing, actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine or which obstruct the work of international organisations in Ukraine, and natural or legal persons, entities or bodies associated with them;

    "legal persons, entities or bodies supporting, materially or financially, actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine; or

    "legal persons, entities or bodies in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law, or legal persons, entities or bodies which have benefitted from such a transfer."

40.5 The Minister also notes that these changes to the listing criteria were agreed in line with the 16 June 2014 European Council Conclusions, which instructed the EU to "expand the restrictive measures, with a view to targeting entities, including from the Russian Federation, that are materially or financially supporting actions undermining or threatening Ukraine's sovereignty, territorial integrity and independence".[165]

40.6 The European Council also tasked the Council with deciding by the end of July on a first list of entities and persons, including from the Russian Federation, to be listed under the enhanced criteria. At the time of writing (28 July), the Minister says that, though no additional designations under these criteria had been agreed, he anticipated further additions to Ukraine restrictive measures being agreed "over the coming weeks and months".

40.7 Since these measures were enacted, there has, of course, been the downing of Malaysian Airlines Flight MH17 in Donetsk and the tragic loss of 298 lives. On 22 July, the Foreign Affairs Council:

—   called on the separatist groups in the area to ensure full, immediate, safe and secure access to the site in order to proceed with victim identification as well as to recover remains of those deceased;

—  supported the call for a full, transparent and independent international investigation in accordance with the international civil aviation guidelines;

—  urged Russia to actively use its influence over the illegally armed groups;

—   agreed to accelerate the preparation of the sanctions agreed at the European Council of 16 July;

—  also agreed to expand restrictive measures with a view to targeting individuals supporting or benefitting from Russian decision-makers responsible for the destabilisation of Eastern Ukraine;

—  requested the Commission and the European External Action Service to finalise preparatory work on possible targeted measures and to present proposals for action, including on access to capital markets, defence, dual use goods and sensitive technologies, including in the energy sector.[166]

40.8 Also, on 25 July, the Council announced that it had adopted (by written procedure) reinforced EU sanctions in view of the situation in Ukraine, following up on the request by the European Council of 16 July and the Foreign Affairs Council of 22 July, and thereby giving legal value to an agreement reached at the Committee of Permanent Representatives on 24 July. The Council said that it had thus added 15 further persons and 18 entities responsible for action against Ukraine's territorial integrity to the list of those subject to an asset freeze and a visa ban; which brought the number of persons under EU sanctions in connection with the situation in Ukraine to 87, while the number of entities will rise to 20. The Council also announced that it had also widened the designation criteria in the legal basis for the restrictive measures, which it said "paves the way for imposing asset freezes and visa bans on persons and entities that actively support or are benefiting from Russian decision makers responsible for the annexation of Crimea or the destabilisation of Eastern Ukraine". [167] We deal with these further matters elsewhere in this Report.

40.9 In the meantime, we now clear these Council Decisions, the Council Regulation and the Council Implementing Regulation.

40.10 In the circumstances outlined by him, we do not object to the Minister having over-ridden scrutiny on these occasions.

Full details of the documents: Council Decision 2014/455/CFSP of 11 July 2014 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine: (36235) —; Council Implementing Regulation (EU) No. 753/2014 of 11 July 2014 implementing Regulation (EU) No. 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine: (36236) —; Council Decision 2014/475/CFSP of 18 July 2014 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine: (36241) —; Council Regulation (EU) No. 783/2014 of 18 July 2014 amending Regulation (EU) No. 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine: (36242) —.

Background

40.11 On 5 March 2014, the EU adopted sanctions focused on the freezing and recovery of misappropriated Ukrainian state funds, targeting 18 persons identified as responsible for such misappropriation and freezing their assets within the European Union.

40.12 In the absence of de-escalatory steps by the Russian Federation, on 17 March the EU adopted the first set of restrictive measures against persons responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine as well as persons and entities associated with them. 21 persons were identified and targeted with a travel ban and a freeze of their assets within the EU.

40.13 On 21 March, the EU strengthened its sanctions in this regard with additional measures against a further 12 individuals. The EU also strongly condemned the holding of an illegal "referendum" in Crimea on joining the Russian Federation, and declared that it did not recognise the "referendum" or its outcome.

40.14 Following the 14 April Foreign Affairs Council, the EU called on Russia to repudiate lawless acts in eastern Ukraine and pull back its troops from the Ukrainian border, and decided to expand the list of those subject to assets freeze and visa bans. EU High Representative/Vice President (HR VP) Baroness Ashton underlined that free and fair Presidential elections on 25 May, and the process of constitutional reform, were the best way to express the will of the citizens, and that the EU would continue to support the efforts to stabilise the situation in Ukraine economically, financially and politically. She added that the EU would also continue diplomatic engagement to try to deescalate the crisis and stabilise the situation, and that it was crucial that Russia and Ukraine engaged in a meaningful dialogue to find a political solution.[168]

40.15 HR/VP Ashton participated in a meeting between the European Union, the United States, Ukraine and Russia in Geneva on 17 April to discuss the crisis in Ukraine. In a joint statement issued following the meeting, it was agreed, inter alia, that all sides must refrain from violence, intimidation or provocative actions; that all illegal armed groups must be disarmed and illegally occupied buildings and public places vacated with amnesty granted to those who did so; that the OSCE Special Monitoring Mission should play a leading role in implementation of these de-escalatory measures and that the constitutional process announced by the Ukrainian authorities would be inclusive, transparent and accountable.

40.16 G7 leaders on 26 April welcomed the positive steps taken by Ukraine to meet its commitments under the Geneva accord, including work towards constitutional reform and decentralisation, the proposal of an amnesty law for those leaving seized buildings and supporting the work of the OSCE, noting the restraint used in dealing with armed bands illegally occupying government buildings and forming illegal checkpoints. In contrast, Russia's lack of concrete actions in support of the Geneva accord was noted along with continued escalation of tensions through rhetoric and ongoing military manoeuvres on the Ukraine's border.[169]

40.17 In line with the G7 statement and as agreed at the 14 April Foreign Affairs Council, on 28 April the EU expanded the list of persons subject to targeted sanctions for actions undermining Ukraine's territorial integrity sovereignty and independence, with travel bans and asset freezes on a further 15 individuals.[170]

40.18 At the 12 May Foreign Affairs Council, EU Foreign Ministers agreed to list an additional 13 individuals under Ukraine restrictive measures, as well as two entities. The designation criteria were also expanded.[171] The Minister for Europe noted that in line with the Council Conclusions, the previous designation criteria were expanded to read thus (additional language in bold):

    "(1) In view of the gravity of the situation in Ukraine, the restrictions on admission and the freezing of funds and economic resources should apply to natural persons responsible for, actively supporting or implementing, actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine, or which obstruct the work of international organisations in Ukraine, and natural or legal persons, entities or bodies associated with them, or legal persons, entities or bodies in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law, or legal persons, entities or bodies which have benefited from such a transfer. The beneficiaries of the transfer of ownership are to be understood as legal persons, entities or bodies that have become the owners of assets transferred contrary to Ukrainian law following the annexation of Crimea and Sevastopol."

40.19 This expansion of the (the Minister said) meant that the EU could now list several new categories of individuals and entities, namely:

    "Individuals that support certain actions/policies (as detailed above);

    "Entities in Crimea or Sevastopol that have been unlawfully expropriated; and

    "Legal persons, entities or bodies that benefit from such expropriation."

40.20 The Minister also explained that the EU Regulation contained statements of reasons for each individual, explaining why they had been listed; all thirteen individuals were listed for "actively supporting or implementing, actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine". The first three individuals were different to the majority of the individuals on the list: two were Russian government officials whilst the third was Commander of the Russian Airborne Troops; the other ten individuals on the list were based in Crimea/Eastern Ukraine; the UK had chosen to support the EU Council's decision to list this group of individuals as it was felt it represented a balanced response to the ongoing crisis, targeting both Russian decision-makers and individuals responsible for ongoing unrest. Additionally, the two listed entities were energy companies that had been expropriated since the illegal annexation of Crimea; the UK chose to support this decision because Russia had taken no practical steps towards deescalating the crisis.

40.21 Apparently picking up on points made in our Report of 2 April concerning an exchange between the Prime Minister and the Leader of the Opposition on 26 March, following the 20-21 March European Council, the Minister also commented on the differences between the EU's measures and those taken by the US.[172]

The Minister's Explanatory Memoranda of 29 July 2014

40.22 The Minister's first Explanatory Memorandum of 29 July[173] includes the full list of the individuals designated, including the reason for this designation, as follows:

"Aleksandr Yurevich BORODAI — So called 'Prime Minister of People's Republic of Donetsk'. Responsible for the separatist 'governmental' activities of the so called 'government of the Donetsk' People's Republic (e.g. on 8 July stated 'our military is conducting a special operation against the Ukrainian "fascists"'). Signatory of the Memorandum of Understanding on 'Novorossiya union'.

"Alexander KHODAKOVSKY — So called 'Minister of Security of People's Republic of Donetsk'. Responsible for the separatist security activities of the so called 'government of the Donetsk'.

"Alexandr Aleksandrovich KALYUSSKY — So called 'de facto Deputy Prime Minister for Social Affairs of DPR'. Responsible for the separatist 'governmental' activities of the so called 'government of the Donetsk People's Republic'.

"Alexander KHRYAKOV — So called 'Information and Mass Communications Minister of DPR'. Responsible for the pro-separatist propaganda activities of the so called 'government of the Donetsk People's Republic'.

"Marat BASHIROV — So called 'Prime Minister of the Council of Ministers of the People's Republic of Luhansk, confirmed on 8 Jul'. Responsible for the separatist 'governmental' activities of the so called 'government of the People's Republic of Luhansk'.

"Vasyl NIKITIN — So called 'Vice Prime Minister of the Council of Ministers of the People's Republic of Luhansk', (used to be the so called 'Prime Minister of the People's Republic of Luhansk', and former spokesman of the 'Army of the Southeast'). Responsible for the separatist 'governmental' activities of the so called 'government of the People's Republic of Luhansk'. Responsible for the statement of the Army of the Southeast that the Ukrainian presidential elections in the People's Republic of Luhansk' cannot take place due to the 'new' status of the region.

"Aleksey KARYAKIN — So called 'Supreme Council Chair of the People's Republic of Luhansk'. Responsible for the separatist 'governmental' activities of the 'Supreme Council', responsible for asking the Russian Federation to recognize the independence of 'People's Republic of Luhansk'. Signatory of the Memorandum of Understanding on the 'Novorossiya union'.

"Yurij IVAKIN — So called 'Minister of Internal Affairs of the People's Republic of Luhansk'. Responsible for the separatist 'governmental' activities of the so called 'government of the People's Republic of Luhansk'.

"Igor PLOTNITSKY — So called 'Defence Minister of the People's Republic of Luhansk'. Responsible for the separatist 'governmental' activities of the so called 'government of the People's Republic of Luhansk'.

"Nikolay KOZITSYN — Commander of Cossack forces. Responsible for commanding separatists in Eastern Ukraine fighting against the Ukrainian government forces.

"Oleksiy MOZGOVY — One of the leaders of armed groups in Eastern Ukraine. Responsible for training separatists to fight against the Ukrainian government forces."

40.23 In an earlier letter of 18 July, the Minister noted that each person has two months in which to challenge his listing in the European Court, and may apply to the EU Council for exceptions to the asset freeze (licences) and for reconsideration of the decision to include them.

40.24 The Minister also expresses his regret that "due to the fast-moving pace of events on the ground in Ukraine and the need to agree further sanctions at short notice", he found himself having to agree to the adoption of these Council Decisions and Regulations before the Committee had an opportunity to scrutinise the documents.

Previous Committee Report(s)

None, but see (36028) —, (36029) — and (36030) —: First Report HC 219-i (2014-15), chapter 28 (4 June 2014); also see (35905) — and (35906) — : Forty-seventh Report HC 83-xlii (2013-14), chapter 23 (30 April 2014) and Forty-fifth Report HC 83-xl (2013-14), chapter 5 (2 April 2014); also see (35880) — and (35881) —: Forty-fourth Report HC 83-xxxix (2013-14), chapter 3 (26 March 2014) and (35848) — and (35849) —: Fortieth Report HC 83-xxxvii (2013-14), chapter 1 (12 March 2014).


164   The Council Conclusions are available at http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/143478.pdf. Back

165   The Council Conclusions are available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/143992.pdf  Back

166   The Council Conclusions are available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/144090.pdf. Back

167   See http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/144144.pdf for the text of the statement. Back

168   See http://eeas.europa.eu/statements/docs/2014/140414_02_en.pdf. Back

169   See https://www.gov.uk/government/news/g7-leaders-statement-on-ukraine-april-2014.  Back

170   For full information on EU-Ukraine relations, see the EEAS 16 July 2014 Fact Sheet at http://www.eeas.europa.eu/statements/docs/2014/140514_02_en.pdf.  Back

171   See http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/142563.pdf, pp 6-10 for the full Council Conclusions. Back

172   For the full background, see (36028), -, (36029), - and (36030), -: First Report HC 219-i (2014-15), chapter 28 (4 June 2014) Back

173   The Minister's other Explanatory Memorandum of 29 July deals with the Council Decision and Council Regulation of 18 July concerning the further amendments to the EU "listing" criteria: see the Summary section of this chapter of our Report for details. Back


 
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Prepared 19 September 2014