WASHINGTON May 6 The Obama administration is
working on new sanctions that would be imposed on Russia if it
dramatically ramped up aggression against Ukraine, such as
preventing elections from taking place in much of the country or
recognizing another separatist referendum, U.S. officials said
"What we're doing this week ... is trying to develop this
strong sectoral package on both sides of the Atlantic so that
the Russians can see it, understand it, and understand its
impact if they take further action to prevent these elections
from happening," Assistant Secretary of State Victoria Nuland
told a Senate Foreign Relations Committee hearing.
But both Obama's fellow Democrats and Republican lawmakers
pushed the administration to do more, unilaterally and with
Europe to discourage Russian aggression in Ukraine, rather than
waiting to respond after more action.
Democratic New Jersey Senator Robert Menendez, the panel's
chairman, said Russians are "doing everything they can" to
disrupt Ukraine's May 25 elections. "It seems to me there needs
to be a consequence for that up front so that that disruption
doesn't continue to take place," he said.
More than 20 Republican senators - including committee
members - co-sponsored legislation seeking to impose tougher
sanctions on Russia, including sanctions on major banks and
energy companies. Although that measure is expected
to go nowhere in the Democratic-controlled Senate, its backers
still hope for Democratic support.
'PRACTICE SOUNDING TOUGH'
The hearing turned angry, as lawmakers accused the
administration officials of dodging their questions. Some
scoffed at contentions that sanctions imposed so far are hurting
Russia's economy. Others said the administration should provide
more military aid to Ukraine's army.
"Sometimes I think the only strategy the administration has
is getting people who talk about Ukraine to look in the mirror
to make sure they practice sounding tough," said Tennessee
Senator Bob Corker, the committee's top Republican.
Evelyn Farkas, the Deputy Assistant Secretary of Defense for
Ukraine, said Washington is sending $18 million of non-lethal
military aid, including packaged meals and uniforms. Ukraine has
asked for more, but the Pentagon had not decided how much
additional Ukraine funding it would seek, she said.
Washington also wants to punish Moscow by refusing to
negotiate over a tax agreement that, if not approved by July 1,
could mean steep penalties for Russian banks. Talks were
suspended last month over an agreement to help Russian financial
institutions comply with 2010's U.S. Foreign Account Tax
Compliance Act (FATCA).
Assistant Treasury Secretary Daniel Glaser assured lawmakers
there were no plans now to resume those negotiations.
Glaser was also asked if Washington would consider enacting
sanctions to bar two U.S. companies that control much of
Russia's credit card market - Visa Inc and Mastercard Inc
- from doing business there.
"We have a number of tricks up our sleeve," he responded.
"The credit card idea that you're articulating is certainly one
of the levers that we have with respect to Russia," he said.
(Reporting by Patricia Zengerle; Editing by Bernard Orr)