[Joint House and Senate Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


 
                        UKRAINE: CONFRONTING INTERNAL CHALLENGES 
                                   AND EXTERNAL

=======================================================================

                                HEARING

                               BEFORE THE

                       COMMISSION ON SECURITY AND
                         COOPERATION IN EUROPE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 9, 2014

                               __________

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            COMMISSION ON SECURITY AND COOPERATION IN EUROPE

                    LEGISLATIVE BRANCH COMMISSIONERS

               SENATE

                                                    HOUSE
BENJAMIN CARDIN, Maryland,
  Chairman
SHELDON WHITEHOUSE, Rhode Island
TOM UDALL, New Mexico
JEANNE SHAHEEN, New Hampshire
RICHARD BLUMENTHAL, Connecticut
ROGER WICKER, Mississippi
SAXBY CHAMBLISS, Georgia
JOHN BOOZMAN, Arkansas

                                     CHRISTOPHER SMITH, New Jersey,
                                       Co-Chairman 
                                     JOSEPH PITTS, Pennsylvania
                                     ROBERT ADERHOLT, Alabama
                                     PHIL GINGREY, Georgia
                                     MICHAEL BURGESS, Texas
                                     ALCEE HASTINGS, Florida
                                     LOUISE McINTOSH SLAUGHTER,
                                       New York
                                     MIKE McINTYRE, North Carolina
                                     STEVE COHEN, Tennessee
         UKRAINE: CONFRONTING INTERNAL CHALLENGES AND EXTERNAL

                              ----------                              

                             APRIL 9, 2014
                             COMMISSIONERS

                                                                   Page
Hon. Benjamin Cardin, Chairman, Commission on Security and 
  Cooperation in Europe..........................................     1
Hon. Michael Burgess, Commissioner, Commission on Security and 
  Cooperation in Europe..........................................     3
Hon. Steve Cohen, Commissioner, Commission on Security and 
  Cooperation in Europe..........................................     4
Hon. Sheldon Whitehouse, Commissioner, Commission on Security and 
  Cooperation in Europe..........................................     5
Hon. John Boozman, Commissioner, Commission on Security and 
  Cooperation in Europe..........................................    15

                                WITNESS

Victoria Nuland, Assistant Secretary for European and Eurasian 
  Affairs, U.S. Department of State..............................     6

                               APPENDICES

Prepared Statement of Hon. Benjamin Cardin.......................    27
Prepared Statement of Hon. Christopher Smith.....................    29
Prepared Statement of Victoria Nuland............................    30
Prepared Statement of Oleksandr Motsyk...........................    32


         UKRAINE: CONFRONTING INTERNAL CHALLENGES AND EXTERNAL

                              ----------                              


                             APRIL 9, 2014

          Commission on Security and Cooperation in Europe,
                                                    Washington, DC.
    The hearing was held from 10:09 a.m. to 11:30 p.m. in Room 
215 Dirksen Senate Office Building, Washington, D.C., Senator 
Benjamin Cardin, Chairman of the Commission on Security and 
Cooperation in Europe, presiding.
    Commissioners present: Hon. Benjamin Cardin, Chairman, 
Commission on Security and Cooperation in Europe; Hon. Sheldon 
Whitehouse, Commissioner, Commission on Security and 
Cooperation in Europe; Hon. John Boozman, Commissioner, 
Commission on Security and Cooperation in Europe; Hon. Michael 
Burgess, Commissioner, Commission on Security and Cooperation 
in Europe; and Hon. Steve Cohen, Commissioner, Commission on 
Security and Cooperation in Europe.
    Witnesses present: Victoria Nuland, Assistant Secretary for 
European and Eurasian Affairs, U.S. Department of State.

                HON. BENJAMIN CARDIN, CHAIRMAN, 
        COMMISSION ON SECURITY AND COOPERATION IN EUROPE

    Mr. Cardin. Good morning, everyone, and welcome to this 
hearing of the Helsinki Commission. I particularly want to 
thank Secretary Nuland for her presence here today and for her 
extraordinary service to our country during an extremely 
challenging time. We've had the opportunity to talk on several 
occasions, but I particularly appreciate this opportunity 
within the forum of the Helsinki Commission to be able to have 
this discussion about the circumstances in Ukraine.
    I also want to acknowledge Ambassador Motsyk, the 
ambassador from Ukraine, who is here. We appreciate very much 
his presence. I also want to acknowledge Spencer Oliver, who is 
the secretary general of the OSCE Parliamentary Assembly, who 
is with us today also. We have a distinguished group of people 
that are in the audience, along with Congressmen Burgess and 
Cohen. It's a pleasure to welcome you all here today. I look 
forward to examining the current situation in Ukraine and 
discussing how the United States, together with the 
international community, including EU and the OSCE, can best 
assist Ukraine and deter further Russian aggression.
    Since last November, Ukraine has been in turmoil with a 
deteriorating economy, public unrest by millions of protesters 
fed up with the human rights and democracy rollback and the 
massive corruption characterized by the four-year rule of 
Viktor Yanukovych. The largely peaceful protests culminated in 
a violent crackdown resulting in the killing of more than 80 
people in a span of three days.
    This in turn led to Yanukovych's removal by a sizable 
majority in parliament on February 22nd. Since then an interim 
government has been working at a rapid pace to address the 
numerous internal challenges moving forward on badly needed 
economic and political reforms and preparing for the critical 
May 25th presidential elections. I might say that I know that 
the OSCE Parliamentary Assembly and ODIHR will be participating 
in election monitoring. We will have a delegation from the 
commission, which will also be in Ukraine for the May 25th 
elections.
    As if these internal challenges weren't enough, a few days 
into the interim government's tenure Russia seized Crimea by 
force. Russia held an illegal referendum and annexed the 
peninsula. Russia's illegal actions violated numerous 
international obligations, including the core principles of the 
Helsinki Final Act. The land grab, cloaked in the cloth of 
self-determination, brings to mind darker times in Europe's 
history, undermines the international order, and sets a 
dangerous precedent. We saw Russia take similar action in 
Georgia and now in Crimea, in Ukraine.
    If this goes unchecked, and if we do not speak with a 
unified voice, it encourages more irresponsible action by 
Russia and other countries around the world that might be so 
inclined. Meanwhile Russia continues to threaten Ukraine's 
sovereignty and territorial integrity with formal military 
intervention and attempts to undermine the legitimacy of the 
new government, including through a propaganda campaign where 
truth is a casualty.
    In the last few days, Russian agents have fomented protests 
in several eastern cities in an attempt to destabilize Ukraine 
and make it more amenable to Russia's influence, yet these 
efforts do not appear to be finding fertile ground. Secretary 
Nuland, as I'm sure you're aware, Secretary Kerry testified 
before the Senate Foreign Relations Committee yesterday and was 
pretty candid about the efforts that Russia has been doing, 
particularly in the eastern part of Ukraine, to try to provoke 
action and unrest, and this obviously needs to be brought 
forward.
    It is clear that Ukrainians want to live in a united 
Ukraine. Even among the ethnic Russians there have been no 
cries of discrimination. It is clear that the people of Ukraine 
long for the rule of law, transparency, democracy and respect 
for human rights. They want to be afforded the dignity and 
respect that all human beings desire and deserve. The May 25th 
elections will be vital to understanding the aspirations of the 
people of Ukraine and the course they want to chart for their 
future. A free and democratic electoral process is a powerful 
response to Russia's perceptions and Russia's aggression.
    Given what is at stake, it is so important for the 
administration, the Congress and the international community to 
respond, and I believe it's absolutely essential that we speak 
with a strong, united voice and standing with the people of 
Ukraine. I particularly want to note the vital work of the OSCE 
and its various institutions which have been actively engaged 
in sending monitoring missions and representatives to help 
foster security and respect for human rights. The OSCE has 
deployed a large special monitoring mission in Ukraine. I hope 
that Russia will not prohibit this mission as well as other 
smaller OSCE missions from entering Crimea.
    I'm especially grateful that the Senate and the House, on 
an overwhelming bipartisan basis, were able to send to the 
president, for his signature, legislation underscoring our 
country's solidarity with the Ukrainian people, with tangible 
economic democracy and security assistance. The legislation 
also sanctions Ukrainians and Russians responsible for 
undermining Ukrainian sovereignty and massive corruption. Let 
me just point out that the sanctions that were employed by the 
administration patterned very much the sanctions that were made 
available that resulted in the Magnitksy Act, which was Russia-
specific in regards to the human rights violations in Russia.
    It is very comparable to that type of sanctions. As we 
originally suggested, and as legislation has now been authored 
by Senator McCain and myself, we want to make that legislation 
available globally so that we don't have to respond to Congress 
every time there's a human rights violation, and working with 
the administration trying to see whether we can't get the 
authorizing language that will allow the administration to be 
able to move more promptly if circumstances require.
    It basically underscores the three principles of the 
Helsinki Final Act, and that is that if we're going to have a 
stable partner, if we're going to have a country that is going 
to be able to proceed on an economic and security front, it 
must respect the rule of law, good governance and human rights. 
We must continue to stand with the people of Ukraine as they 
defend their democracy, integrity and independence. We must, 
ourselves, defend the Helsinki principles and other 
international principles which Russia so blatantly violated.
    I also noticed that we've been joined by Senator 
Whitehouse, and acknowledge his presence. I would yield to any 
of my colleagues who would like to make brief opening comments. 
Congressman Burgess.

              HON. MICHAEL BURGESS, COMMISSIONER, 
        COMMISSION ON SECURITY AND COOPERATION IN EUROPE

    Mr. Burgess. Thank you, Mr. Chairman. I do want to thank 
you for holding the hearing. I'll keep my comments brief 
because we are anxious to hear from the assistant secretary. 
And thank you, Madam Secretary, for being with us this morning. 
And thank you, Chairman, for your willingness to travel to 
Ukraine during the time that the voting occurs. I am anxious to 
be present when that happens and look forward to that day for 
the people of a free Ukraine.
    It's been an incredible couple of months, and some 
extraordinary events have occurred in Ukraine and the Crimea. 
February 21st, pro-European protesters legally marched in the 
streets of Kiev to demand reform from their government. The 
protesters won, and Yanukovych, who was president at the time, 
left the country. We all know what happens next. Russia 
immediately condemned the new Ukrainian government as 
illegitimate. Then, under the guise of liberating the Russian-
speaking peoples of the Crimea, Russia invaded and annexed a 
piece of a sovereign nation.
    The Russian activity must not be unchallenged. Yesterday 
armed protesters swarmed a city 300 miles to the north of 
Crimea. Ukraine and U.S. officials alleged that the protesters 
were in fact organized by Russia. The protesters themselves 
then called upon President Putin to send in troops for their 
aid. In fact, this cannot stand. Doing its part, the United 
States Congress has acted. We passed a billion-dollar loan 
guarantee to the Ukraine. Further, Congress has passed separate 
legislation that requires President Obama to ban visas and 
seize assets from the people responsible for undermining the 
peace and stability of the Ukraine.
    There is today, over in another committee of which I'm a 
member on the House side, a provision to allow the expedited 
handling of export licenses for liquefied natural gas. These 
are licenses that inexplicably have been held up for some time, 
and it is clear that natural gas exports to a country like 
Ukraine could be a significant weapon in the--in the fight 
against Russian aggression.
    Four years ago, Secretary of State Clinton said we must hit 
the reset button on our relationship with President Putin. That 
sent a confused message to the rest of the world. It implied 
that the United States, which has always stood firm for freedom 
and democracy, is willing to work diplomatically with President 
Putin. In fact, we all know he is not to be trusted. He is 
still fighting the Cold War, even if we are not. He's denying 
basic freedoms to the people of Russia.
    I thank the chairman and I look forward to hearing the 
comments by the witness as to the current situation in the 
Ukraine and what we can do to further deter Russian hostility 
and aggression. I yield back.
    Mr. Cardin. Thank you. Congressman Cohen.

                HON. STEVE COHEN, COMMISSIONER, 
        COMMISSION ON SECURITY AND COOPERATION IN EUROPE

    Mr. Cohen. Thank you, Mr. Chairman.
    I'm looking forward to your testimony. This, I think, is a 
most critical issue to the world and to America. I'd hope in 
your testimony--and I haven't had a chance to read it--that you 
will comment on some of the criticisms that some have launched 
about our $100 billion aid, about some of that aid possibly 
going to benefit debts that are owed to Russia and if there's 
any reality to it or anything can be done about that aid to see 
that it does help the economy directly rather than simply by 
paying off debts owed to maybe the Russian energy company, or 
if that's inevitable; comments about--that have been made that 
the individuals who have taken power in the Ukraine are, quote, 
unquote, ``neo-Nazis'' and fascists, et cetera--if there's any 
extremist elements that we know about or if this is simply 
propaganda on folks that don't want us to get involved.
    I'm curious about what's going on in the Caucasus. If I was 
a terrorist in the Caucasus right now in Dagestan or Chechnya, 
I'd be doing something because I would think that Russia's 
attention is turned toward Ukraine. Are there any indications 
we have any action taking place there, where it seems like an 
ideal opportunity to disrupt the Russian efforts? I yield back 
the balance of my time. I look forward to your testimony.
    Mr. Cardin. Senator Whitehouse.

            HON. SHELDON WHITEHOUSE, COMMISSIONER, 
        COMMISSION ON SECURITY AND COOPERATION IN EUROPE

    Mr. Whitehouse. Thank you very much, Chairman, for holding 
this. And I thank our witness for being here, and I appreciate 
the energetic nature of her diplomacy in this area. I think 
it's been helpful to our country.
    I don't want to ask the questions now--we can take it up 
later--but I wanted to flag two issues that I think bear on the 
situation in the Ukraine. The first is that when we were there 
recently we heard considerable concern from our Ukrainian 
interlocutors about the threat of corruption in Ukraine and 
about the extent to which confidence in any new government 
could be eroded if it weren't clear to the people of the 
Ukraine that a serious effort at undoing the corruption--
primary supporting theoligarchs but more generally the previous 
Ukrainian government is not dealt with.
    I'm not familiar with what the Department of Justice is 
doing by way of providing support, mentorship, guidance, 
resources and so forth to the prosecutors and to the judiciary 
in the Ukraine. There is skepticism, I think, that prosecutors 
will have the freedom to do what they should be doing, that 
investigators will be free to pursue this, that judges will be 
able to render legitimate decisions--that we have been active 
in other countries, helping them to, for want of a better word, 
reboot the justice system insofar as it pertains to corruption. 
I'd love to know what the role is and how DOJ is participating 
in our combined government efforts to try to support a new 
government in the Ukraine in that regard.
    The second is following on Congressman Burgess' observation 
that much of the power of Russia in this area has to do with 
its status as a petro state and has to do with the political 
threat that the denial of fuel or the aggressive and strategic 
pricing of fuel provides the Russians. There has been 
considerable discussion about the role of American natural gas 
exports to help with that problem. I would submit that there 
probably is also ground to be gained in that regard by helping 
support a Ukrainian transition to a stronger renewable 
footprint, and that it could well be seen that every patriotic 
Ukrainian should have a solar panel or, if they have enough 
land the grid for it, a wind turbine. Yet I'm unaware of any 
connection between our Department of Energy and the Ukraine. I 
don't know whether there's any effort being made to facilitate 
the renewable side in addition to considering natural gas 
exports. I think those are two important concerns. If we can't 
get after the corruption, if we can't reduce the Russian 
political weight associated with its petro-state status, a lot 
of these other goals that we want to achieve will be made more 
difficult.
    I'll pursue that during the Q-and-A period, but I do salute 
our witness for the energetic effort she has brought to this 
and appreciate her service.
    Mr. Cardin. Secretary Nuland, thank you for being here. 
Secretary Nuland assumed her position as assistant secretary of 
state for European and Eurasian Affairs on September 18th, 
2013. As assistant secretary, she is responsible for the 
diplomatic relations with 50 countries in Europe and Eurasia, 
as well as NATO, the European Union and the Organization for 
Security and Cooperation in Europe--quite a portfolio that you 
have.
    Secretary Nuland is a career diplomat. She was the 18th 
U.S. permanent representative to NATO from 2005 to 2008. As 
NATO ambassador, she focused heavily on strengthening the 
allied support for the ISAF mission in Afghanistan and on NATO-
Russia issues. She is an expert. She plays a central role in 
forging and implementing U.S. policy regarding Ukraine, Russia 
and the region during these extraordinary, challenging times.
    I want to note, on a personal basis, her extraordinary 
leadership is well-known. As we talk to more of our colleagues 
around the region, they respect greatly the strength that 
Secretary Nuland has brought to this position. It's a pleasure 
to have you here. As you see, our colleagues have a lot of 
questions. You may proceed as you wish. Your full statement 
will be incorporated in our record. And we look forward to your 
testimony.

VICTORIA NULAND, ASSISTANT SECRETARY FOR EUROPEAN AND EURASIAN 
               AFFAIRS, U.S. DEPARTMENT OF STATE

    Ms. Nuland. Thank you very much, Mr. Chairman. Thank you, 
members of this commission. I'll proceed with the prepared 
statement, and then we can go to many of these very rich 
questions that you all have raised in the opening statements. 
Again, it is my honor to be invited to testify before you today 
on the situation in Ukraine. It's a particular honor to do so 
before the U.S. Helsinki Commission, an organization that I 
have long personally valued and had lots of exchanged with over 
the years.
    Let me also express my gratitude and the administration's 
gratitude for the leadership that Congress has shown with the 
overwhelming passage of H.R. 4151 and S. 2183 in support of 
Ukraine and the Ukrainian people. That unity sent a strong, 
bipartisan signal that the United States stands united for 
Ukraine at this critical moment in its history.
    For almost 40 years, the United States and this commission 
have worked with our trans-Atlantic allies and partners to 
uphold the principles of the Helsinki Final Act. Russia's 
actions in Ukraine are an affront to those fundamental 
principles. Its occupation of Crimea, rubber-stamped by an 
illegitimate referendum conducted at the barrel of a gun, have 
tarnished its credibility and diminished its international 
standing in the eyes of Ukrainians and in the eyes of the 
world.
    Reports of human rights abuses in Crimea since the Russian 
occupation have also shocked the conscience. Russia has also 
attempted to intimidate Ukrainians by amassing more than 40,000 
troops and quick-strike aircraft along its borders, and with 
trade blockades and gas price hikes, as mentioned by some of 
you. This week's violent occupation of government buildings in 
Kharkiv, in Donetsk and in Lugansk deepen our concern.
    Far from a spontaneous set of events, as Secretary Kerry 
said yesterday before the Senate Foreign Relations Committee, 
these incidents bear all the hallmarks of an orchestrated 
campaign of incitement, separatism and sabotage of the 
Ukrainian state, aided and abetted by the Russian security 
services. Today, Ukraine is a front-line state for the struggle 
for freedom and all the principles that this commission holds 
dear. The United States stands with Ukraine in its effort to 
forge its own path forward to a more free, peaceful and unified 
future.
    Our approach includes four pillars with which you're very 
familiar. First, our bilateral and multilateral support for 
Ukraine and its democratic future, second the costs we're 
imposing on Russia for its aggressive actions, third our 
efforts to de-escalate the crisis diplomatically if at all 
possible and, fourth, our unwavering commitment to the security 
of our NATO allies. I'll address each of these briefly. My 
longer statement includes more detail.
    First, we support the Ukrainian people and the transitional 
government in the courageous steps they are taking to restore 
economic health, democratic choice and internal stability and 
security to the country. The Rada has passed landmark anti-
corruption measures, deficit reduction measures and taken 
difficult steps to reform the energy sector. These reforms are 
going to require painful sacrifice from the Ukrainian people, 
but they will also open the way to an IMF package of up to $18 
billion in support.
    As you know, the United States stands ready to help as the 
country addresses its immense challenges. Again, we thank you 
for your support of the $1 billion loan guarantee, which we 
will provide in conjunction with IMF and EU assistance. This 
loan guarantee will primarily go to help cushion the impact of 
reforms for the poorest in the Ukrainian system and the most 
vulnerable in their society.
    We also have approximately $92 million in FY '13 State and 
USAID funding and 86 million dollars in FY '14 State and USAID 
funding for other kinds of assistance. This is primarily going 
to be directed in the areas of strengthening anti-corruption 
and enforcement efforts. To address some of the concerns that 
Senator Whitehouse raised: revising public procurement 
legislation, again, in an anti-corruption direction; 
introducing agricultural and energy sector reforms that are 
badly needed, also going to rooting out corruption; improving 
transparency; and helping the Ukrainian people prepare for 
free, fair elections on May 25th.
    Thank you for those of you who've already traveled to 
Ukraine and to those of you who will travel for the elections--
it's important to have senior ranking Americans from both the 
executive and the legislative branch in Ukraine throughout this 
period.
    We are also working with the international community to 
push back against Russian propaganda, Russian lies and efforts 
to destabilize Ukraine's regions. As you mentioned, Mr. 
Chairman, the OSCE has already fielded a special monitoring 
mission. There are 70 monitors now in place in some 10 
locations around Ukraine, including most of the at-risk cities 
that we've seen over the weekend.
    We expect this mission can grow to up to 500 over the 
coming weeks. The OSCE's Office for Democratic Institutions and 
Humanitarian Rights will also play an essential role. They'll 
send some thousand observers for the presidential elections--
one of the highest per-capita fieldings of an ODIHR mission in 
recent trans-Atlantic history.
    Second, as I said, Russia is already paying a high price 
for its actions, and that cost will go up if its pressure on 
Ukraine does not abate. Across the board, Russia has found 
itself isolated, disinvited and diminished in its interactions 
with all of us. The president has signed two executive orders 
authorizing sanctions against those responsible and finding 
that the actions and policies of the Russian government 
undermine democratic processes and institutions, threaten the 
peace and stability and security and sovereignty and 
territorial integrity of Ukraine, or in the misappropriation of 
Ukrainian assets.
    These sanctions have been carefully coordinated with the EU 
and with our global partners. Today we are considering further 
measures in response to Russia's continued pressure on Ukraine. 
These costs will only grow if Russia does not change course. At 
the same time, the president has insisted on leaving the door 
open for diplomacy. We wanted to try to de-escalate this crisis 
peacefully, if at all possible. As you know, Secretary Kerry 
has met three times with Russian Foreign Minister Lavrov in 
recent weeks, with the full support of the Ukrainian 
government, at a time when Russia was refusing to meet directly 
with Ukraine.
    Earlier this week, the Russians agreed that they would 
finally sit down over the next 10 days with Ukraine and the EU 
and the U.S. to discuss de-escalation, demobilization, support 
for the elections and constitutional reform. I have to say that 
we don't have high expectations for these talks, but we do 
believe it is very important to keep that diplomatic door open. 
We'll see what they bring.
    Even as we try to de-escalate, with Russian troops ringing 
Ukraine for weeks now on high alert, we cannot be complacent 
about the security of our NATO allies who live closest to 
Russia. Our message to Putin and to Russia is clear: NATO 
territory is inviolable. We, and our NATO allies, are providing 
visible reassurance on land, on sea and in the air to our 
Central and Eastern European members, who now also live on the 
front lines of this conflict.
    More broadly, the events in Ukraine are a wake-up call for 
all of us. Everything we have stood for, for over 40 years, as 
a community of free nations is at risk if we allow aggressive 
acts to go unchecked and unpunished. As a community, North 
Americans and Europeans, must continue to stand with the people 
of Ukraine as they say no, or nie in Ukrainian, to the tactics 
and brutality of the 19th century on display now and yes, or in 
Ukrainian, to a 21st century future that respects their 
sovereignty, their choice and their human dignity.
    Thank you for allowing me to be with you today.
    Mr. Cardin. Once again, thank you for your testimony. There 
is a scheduled vote on the floor of the Senate at 11:00. We'll 
probably do, if necessary, more than one round, but if we could 
try to keep the rounds to five minutes.
    Mr. Whitehouse. Mr. Chairman, if I may, I have to leave 
very shortly with a meeting with my EPW chairman.
    Mr. Cardin. I'll yield my time.
    Mr. Whitehouse. DOJ, DOE.
    Ms. Nuland. First of all, Senator, I should let those 
agencies speak for themselves. But I will, since we work very 
closely, say to you that the Department of Justice has had a 
field team in Ukraine for at least three weeks now. They are 
working on all the issues of interest to you. They have been 
assisting the Ukrainians, and particularly the Rata, with some 
of the efforts that they've been making to reboot the justice 
system, as you say, by cleaning out some of the corrupt members 
of the judiciary, by working on legislation that would provide 
more transparency and more accountability in the justice 
sector.
    As you probably know as part of the IMF conditionality, and 
I cited it quickly in my testimony, the Rata is working on a 
whole series of transparency and anti-corruption legislation in 
things like government procurement in the different sectors--
grain, energy, et cetera--to provide openness and reduce graft 
in contracting. DOJ's been advising on that. But equally 
importantly they've had a team that's been working on helping 
the Ukrainians exploit this treasury trove of Yanukovych-era 
documents that have come forward so that they can make judicial 
cases against corrupt officials, both in Ukrainian courts and 
in international courts.
    We're also advising the Ukrainians through the Department 
of Justice. Out there on some of the cases that they plan to 
take to international bodies--like the ICC, like the ICJ, and 
in the WTO--against some of the Russian pressures, the stealing 
of the assets of the Ukrainian Navy, et cetera. So watch this 
space.
    On the energy side, Carlos Pascual, the State Department's 
senior coordinator for energy, has been in Ukraine recently. 
The secretary had a meeting with the EU, Cathy Ashton and the 
Energy Commissioner Oettinger, last week to try to support the 
Ukrainians in defending themselves should there be a gas cut 
off, primarily by working on reverse flows of gas from 
Slovakia, from Hungary, from Poland, accelerating U.S. and EU 
support for the adjustments that need to be made there. Those 
efforts continue. We are encouraging Secretary Moniz and Dan 
Poneman, his deputy, to go out and work in Ukraine.
    As you may know, there is major U.S. energy investment in 
Ukraine, primarily in the shale gas exploration field. This has 
the potential to make Ukraine completely energy independent in 
the span of some eight to 12 years, depending upon how it goes. 
We are also encouraging them in the direction of energy 
conservation--that's a really very serious issue; if you've 
ever been to--Ukrainian public buildings with the windows open 
in the middle of the winter, you know what I'm talking about--
and also on renewables. But as you know, with renewables, it's 
expensive, it's a longer-term game, but there are lots of 
young, Ukrainian high-tech companies interested in getting into 
that sector.
    Mr. Whitehouse. Thank you, Chairman. Thank you, Ms. Nuland.
    Mr. Cardin. Thank you. Congressman Burgess.
    Mr. Burgess. Please go ahead, sir.
    Mr. Cardin. Thank you. Well, thank you. I want to bring up 
an issue that was present before Russia's invasion in Ukraine, 
and that is the legislation that was passed, known as the 
Magnitsky law, required the administration to evaluate who in 
Russia was responsible for these gross violations of human 
rights and to take action, including visa bans and sanctions on 
our banking system. The list that came out before the Ukrainian 
crisis erupted, before the Olympics was--by many of us--we 
thought incomplete. We have, under the laws, notified the 
administration that we thought additional reviews should be 
made, particularly of certain individuals. Can you just give me 
the status of that review?
    Ms. Nuland. Chairman, thank you. As you mentioned, we put 
forward our annual report in December, but did not at that time 
add more names. We are in receipt of your request for more 
review, which sets in motion a 120 day clock, which I believe 
comes forward to us end of April, middle of May. We do expect 
to be able to respond within the timeframe that the legislation 
sets and we are reviewing now the question of adding more 
names.
    Mr. Cardin. Thank you, and we'll look forward to that 
response.
    I'm going to talk a little bit about the OSCE and its 
importance. It is the largest regional organization. It is an 
organization that includes both the United States and Russia, 
which gives it particular importance. Now that the G-8 is G-7, 
at least temporarily, the OSCE provides us one of the only 
regional forums that we can have direct contact with Russia. It 
is difficult right now, because Russia is in violation of so 
many of its responsibilities under the OSCE. We now have 
missions from the OSCE in Ukraine. Can you just tell us what we 
can do to help ensure that the missions are able to get the 
type of access and support that they need in order for us to 
have independent observers and help, we hope, to develop the 
type of democratic tools necessary to resist open violence in 
that area?
    Ms. Nuland. Well, Chairman, in all my years of working with 
the OSCE, and it's been decades, as it has for you, I have 
never seen a more active period at the headquarters in Vienna 
than we have now, because the need is so great and because the 
OSCE has so many of the tools that are required. That said, it 
was quite a struggle to get agreement on the Special Monitoring 
Mission. We would have liked it about a month earlier than it 
came forward. But we do now have agreement to a mission that 
can grow to up to 500 people. We have about 70 in the field 
now, including in the key cities. We've had considerable 
reporting coming forward, including reporting that very much 
validates our understanding of the situation in Kharkov and 
Donetsk and Lugansk--which was that it was relatively peaceful 
with some relatively small, but peaceful, pro-Russian protests 
on Saturday, on Sunday--until this very surgical and 
orchestrated campaign of building takeovers that happened, over 
the last couple of days. Since then, monitors coming forward 
with reporting that the rest of the cities are relatively calm, 
that citizens in these cities are distancing themselves from 
the position of these extremists and these aggressive actors 
and are expressing their desire to vote in free, fair elections 
on May 25th.
    I think we need, to accelerate the pace of getting the 
monitors out there, filling out this mission. Obviously, it 
takes money. I am scraping my budget now to fund as many 
American monitors as we can. We're also talking to the OSCE 
about insuring--currently their reporting is confidential 
within the organization. The first reporting we've had has been 
very rich. We're asking them to do what they can to publicize 
more of it, either by sanitizing reporting and putting it up on 
their website on a regular schedule, or by giving regular press 
conferences, and I think hearing from you all on that would be 
helpful.
    Final issue on the special monitoring mission: It has a 
mandate not simply to passively monitor, but also to offer good 
offices to facilitate de-escalation of crisis situation. Over 
the last couple of days, we've been raising the question in 
Vienna whether the monitors in Donetsk, the monitors in Lugansk 
can offer a more active role and good offices in trying to get 
these last two buildings that are being held cleared, 
particularly the one on Lugansk, where there are hostages still 
at risk. We'd like to see the mandate used to the maximum.
    We also talked about the absolutely vital role that ODIHR 
will play in monitoring the elections. This is absolutely key 
for undercutting this narrative that somehow the Ukrainian 
people will not have a broad choice. As you know, there are 
more than 20 candidates in the race, representing every single 
color of Ukraine. We expect the media environment for this to 
be as free as it's ever been. But it'll be important to 
document that and important to have monitors in every single 
part of the country.
    Finally, the human rights monitors from the OSCE were some 
of the only people--and the monitors for journalistic freedom--
were some of the only people to get into Crimea, both during 
the occupation and afterwards, and the witness that they have 
borne to the increasingly tense human rights situation in 
Crimea has been important. But we're frustrated that more of 
this information is not getting into the public domain.
    Mr. Cardin. The Yanukovych administration left Ukraine in a 
pretty bad situation. The economy was in desperate situation. 
The political institutions were severely damaged, and the 
parliament acted with some division. They are clearly united in 
regards to the independence of Ukraine and the actions of 
Russia, but it's not a predictable circumstance. The May 25th 
elections are critically important, and they're only weeks 
away. How well-prepared will the Ukrainians be for a open, free 
and fair election on May 25th?
    Ms. Nuland. Chairman, this is an issue that we are watching 
intently. This is why we are gratified to have such a large 
ODIHR presence. We also expect that we will have a large IRI 
and NDI contingent out there and also from the commission.
    In terms of the fundamentals of free, fair conditions, a 
broad slate of candidates, open media environment, electoral 
roles that are up-to-date--my understanding is that the 
conditions are all in relatively good shape along those lines. 
I think our number one concern is the concern that you also 
have: That there will be efforts to--further efforts to 
destabilize the security situation, that that is part of the 
playbook here: to make it difficult to have elections, or to 
claim that the environment is too unstable for elections.
    This is why we are gratified to see the very restrained and 
careful efforts that the Ukrainian security services have been 
making to deal with the occupation of the buildings in these 
eastern cities. They've now, through a combination of 
negotiation and very surgical police action, cleared the two 
buildings in Kharkov. They've cleared one of the buildings in 
Donetsk, and they're working on the last two. This, again, 
gives confidence to the Ukrainian people in those cities that 
their public institutions serve them and serve them with 
professionalism and credibility.
    Mr. Cardin. Let me also point out: ODIHR works very closely 
with the Parliamentary Assembly. I think we have resolved some 
of our earlier conflicts we expect a large number of 
parliamentarians--maybe a record number of parliamentarians--
that will be participating in the observation of the elections.
    We now have frozen conflicts in Georgia, in Azerbaijan, 
Moldova--will Ukraine outlook be one in which it's going to be 
a long-term area of disagreement before we can get this 
resolved, or is there any hope that this will not become 
another frozen conflict?
    Ms. Nuland. Chairman, first and foremost, we are focused 
intently on supporting the Ukrainian people and the Ukrainian 
transitional government, and we will support the elected 
authorities after the elections in ensuring that the rest of 
Ukraine is as successful as possible in improving the economy, 
the political environment, security, and stability.
    With regard to Crimea, I think we all have to be honest 
with ourselves that this is going to be a medium-term effort, 
and here again, the more successful Ukraine is, the more 
Ukraine begins to resemble Poland, rather than resembling 
Russia over time, the more the people of Crimea will have to 
ask themselves whether they made the right bet, either with 
their vote, or otherwise.
    I think that the best antidote to this kind of separatism 
is to bring these countries--whether it is Ukraine, whether it 
is Moldova, whether it is Georgia--closer to their successful 
neighbors in Europe. The EU has offered to sign association 
agreements with Moldova and Georgia. They've extended a lot of 
the benefits of the Association Agreement in the Deep and 
Comprehensive Free Trade agreement to Ukraine already. In 
Georgia and Moldova, this offers the opportunity, conceivably 
as early as June, July, for citizens carrying Moldovan 
passports to travel visa-free to Europe, to have business 
exchanges with the lowest-possible, or no tariffs to Europe. 
That's going to be true not just for those living in Chinau--
it's going to be true for those living in Tiraspol.
    This opportunity, as a Moldovan, to integrate with Europe, 
and to be freer and more prosperous through that opportunity, 
we think is the greatest antidote to separatism, whether it's 
there or whether it's in Apozee or ultimately in Crimea. But 
it's going to be a medium-term game.
    Mr. Cardin. One last follow-up question in regards to 
Moldova. There have been released reports that there is some 
nervousness that Russia might in fact pull its troops into 
Moldova under, again, the guise of protecting the Russian 
ethnic community. Can you just give us a quick update as to our 
concerns as to Moldova and Russia's actions on that border?
    Ms. Nuland. Chairman, as you know, I was in Moldova a week 
ago Sunday, reassuring that--Moldovan government and people of 
U.S. support for their sovereignty, territorial integrity, and 
for their chosen path of deeper association with Europe. There 
was considerable concern that in a scenario where Russia chose 
to bring its troops that are now ringing the Ukrainian border 
into Ukraine proper, that they would also use their bases in 
Transnistria to come into Ukraine on the western side and make 
a connection between Transnistria and Odessa. That puts a 
premium on trying to deter that kind of decision by Russia and 
to continue to make the case to the people of Transnistria that 
there are good things coming for Moldova in the coming weeks 
and months as a result of its association with Europe, which 
will pay economic benefits and free-choice benefits for their 
people too, and that they should resist these efforts to use 
them as a pawn in this game.
    Mr. Cardin. Thank you. We've been joined also by Senator 
Boozman--it's nice to have you here. Congressman Burgess.
    Mr. Burgess. Thanks, Mr. Chairman. Again, Madam Secretary, 
I want to thank you for spending time with us this morning and 
sharing your considerable knowledge and expertise in this area 
with the commission. I want to ask a question about just prior 
to the annexation, or the takeover, of Crimea. There was a 
story that broke in the newspapers about a hospital where the 
hospital administrator had been instructed that the hospital 
was now being managed by, presumably, the Russians. That got my 
attention, because why would Russia be taking over a hospital 
if they were not expecting multiple or maybe a mass casualty 
situation? After the event occurred, then there was a follow-up 
story where the hospital administrator had now been detained by 
the Russians. I'm a physician by background--there's plenty of 
times I want to see a hospital administrator detained--but can 
you shed any light on that as to what happened to that hospital 
administrator?
    Ms. Nuland. I'm not familiar with this incident. We will 
look into it for you. But certainly the story that you recount 
is consistent with human rights violations and intimidation and 
other tactics that have been widely reported, including by OSCE 
human right monitors and by others and by the Crimeans 
themselves since the Russian pressure began, but particularly 
since the occupation--human rights abuses against Tatars, 
against journalists, against Ukrainian Navy personnel who 
resisted. We're talking about arrests, we're talking about 
reports of secret torture facilities, and we're talking about 
appropriation of property, intimidation of families. It is 
significant. It is pervasive.
    Secretary Kerry, in his meetings with Foreign Minister 
Lavrov, has expressed our concerns about this at every stage 
and, in the most recent meeting, handed over a list of cases of 
concern that was coordinated with the government of Ukraine.
    Mr. Burgess. Well, if you could follow up with us on that, 
I would be grateful.
    Ms. Nuland. We will.
    Mr. Burgess. I was happy to hear your affirmation of the 
NATO commitment. Can you tell us, as far as the Budapest 
memorandum was concerned, is there any like requirement that 
any of the people who were involved in the crafting of that 
memoranda provide any assistance or lack of aggression toward 
Ukraine?
    Ms. Nuland. In terms of the individuals who were 
negotiators of the agreement?
    Mr. Burgess. Right. We asked them to disarm. I remember 
Secretary Rice when she was national security adviser, actually 
coming to Congress and talking about if a country wanted to 
disarm, we know what it looks like.
    Ms. Nuland. Right.
    Mr. Burgess. We know what Ukraine did.
    Ms. Nuland. Yes.
    Mr. Burgess. Does that carry any weight, the fact that 
Ukraine was so cooperative?
    Ms. Nuland. I was on the negotiating team in the Clinton 
administration that--led by Strobe Talbott, that worked on the 
denuclearization of Ukraine, Kazakhstan, Belarus at the time, 
and worked on this security assurance document, the 1994 
Budapest agreement. The idea here was that for a Ukraine that 
had voluntarily surrendered its nuclear weapons, it required 
political assurances from its neighbor, Russia, and from two 
other large NATO powers, the U.K. and the U.S., that it would 
not be subject to attack as a result.
    That was a political reassurance; it was not a sovereign 
treaty obligation of the level of what we have with our NATO 
allies, what we have with Japan, Korea. But it was primarily 
designed to give Ukraine reassurance vis-a-vis Russia. We 
consider that that commitment has been more than violated by 
Russia. We supported the Ukrainian call for consultations under 
Budapest. We endeavored to have those consultations within days 
of the Crimean crisis, and the Russians declined to 
participate.
    It is regrettable that this political commitment proved not 
to be worth much more than the paper that it was written on. I 
think it does speak to whether broader international assurances 
should be given to other such states in the future.
    Mr. Burgess. May I ask a follow-up question, then, as far 
as, for example, the missile defense in Poland, the interceptor 
program in Poland, in Czechoslovakia, that was brought back to 
some degree. Perhaps we should rethink the activities 
surrounding that.
    Ms. Nuland. These systems were never designed with Russia 
as a target. These are systems that are designed to deal with 
ballistic missile and nuclear threats and WMD threats coming 
from the south of Europe. They are not constituted for that 
mission.
    Mr. Burgess. Correct.
    Ms. Nuland. There is a question of Russian nuclear 
aggression is deterred by the NATO nuclear posture, which 
remains in place.
    Mr. Burgess. But while these were designed for protection 
from a country such as Iran, there was considerable concern on 
the part of Vladimir Putin that we had participated in the 
missile defense of Poland, if we know it is something that has 
concerned the Russian hierarchy before, maybe it's worthwhile 
re-exploring that.
    Let me add one other thing, and this is on the question of 
energy, and Senator Whitehouse did bring that up. Again, we're 
marking up a bill right now in the Energy and Commerce 
Subcommittee on Energy that would expedite the export licenses. 
It still takes a long time, even for those companies that have 
already done their environmental studies, that are awaiting the 
approval of these licenses. It's still a year and a half before 
gas can be shipped. It does take a long time. Are you 
encouraging the Department of Energy to really be active in 
looking at these licenses, these export licenses?
    Ms. Nuland. I don't want to get into a brother/sister 
agency's business too deeply. That obviously is their business 
and their relationship with you.
    The Europeans have been clear that they appreciate the 
licensing that has already been done, that they are hopeful 
that in the context of the Transatlantic Trade and Investment 
Partnership negotiations, the TTIP negotiations for a broad 
trade agreement between the U.S. and the EU, that this could be 
included, which would put them in a preferential category for 
licensing. What we are doing is very aggressively encouraging 
the building of LNG terminals, the building of pipelines and 
interconnectors, the reverse flow of gas, as we've talked 
about, to invigorate the energy market within Europe, which 
will bring prices down and create more options for these 
countries, not just outside of NATO space, but those allies who 
are at risk from total monopoly from one source of energy. So 
we are very active. We have been releasing the Department of 
Energy has, considerable amounts more of LNG. The president 
spoke about this when he was in Europe. I understand the 
department is in dialogue with all of you about what makes 
sense going forward.
    Mr. Burgess. Sure. Well, as a Texan, we don't ever want to 
see our Ukrainian friends want for natural gas.
    Thank you, Mr. Chairman. I'll yield back.
    Mr. Cardin. I want to thank Congressman Cohen. He's yielded 
to allow Senator Boozman an opportunity to ask questions since 
there will be a pending vote. During that vote, I will leave 
and let Congressman Cohen have the gavel and question, and I 
will be back shortly. So Senator Boozman.

               HON. JOHN BOOZMAN, COMMISSIONER, 
        COMMISSION ON SECURITY AND COOPERATION IN EUROPE

    Mr. Boozman. Thank you, Mr. Chairman. Thank you for 
yielding for a second. We appreciate you being here, appreciate 
your hard work.
    I'd really like for you to comment. Right now OECD, the 
ambassadorship is vacant. Can you talk a little bit about, as a 
former NATO ambassador and sometimes we don't realize the 
importance that that agency has in Europe and how important it 
is to have somebody around the table, as you talk about Ukraine 
and the other issues that are facing Europe right now and our 
allies. Can you talk a little bit about the importance, 
perhaps, of getting that position filled?
    Ms. Nuland. Thank you, Senator. We are as an administration 
eager to have every one of these ambassadorships filled. I've 
got some 10 still vacant in my area of responsibility. OECD is 
one of the few missions resident in Europe that I am not 
responsible for, but obviously can speak to the fact that it 
plays an absolutely vital role in providing those kinds of 
essential connections, economic connections, cultural and human 
rights connections, across its memberships. Having a strong 
leader there is absolutely essential.
    As you may know, Russia has sought a closer relationship. 
We had been trying to support that and help it, but now we've 
had to make very strong decisions, along with our European 
partners, that that closer integration is not in keeping with 
the behavior that we're seeing now. These are the kinds of 
political calls that we're now having to make out there, which 
speak to having strong leadership.
    Mr. Boozman. No, I agree totally. I think it is important 
that we have representation at the table that can, you know, 
speak with a strong voice.
    Tell me also about the NATO Parliament and things. As an 
old NATO ambassador--how important it is for the Americans to 
be represented there and to be a strong voice.
    Ms. Nuland. Thank you for that softball, Senator. I am a 
strong and enthusiastic supporter of the NATO Parliamentary 
Assembly, having worked very closely with them during my two 
tours at NATO, both as deputy and as ambassador. It's 
particularly a strong organization when the American contingent 
is bipartisan, is broadly geographically representative and is 
committed both at home and in Europe to a good conversation. I 
remember, for example, when I was out there and we were first 
working on missile defenses in Europe, and the fact that 
although Republicans and Democrats had some differences as to 
what the appropriate system would look like, the fact that both 
Republicans and Democrats thought we needed missile defenses in 
Europe had a profound impact on our ability to get that done in 
individual nations. The fact that they could talk to their 
counterparts in nations who were responsible for national 
budgeting, who were responsible for these kinds of policy 
decisions was absolutely key.
    Today I would say that speaks to two absolutely vital 
things. One is the importance of all allies participating in 
the reassurance mission on land, sea and air for our frontline 
allies in Eastern and Central Europe, and that this not just be 
an American or big allied effort. That requires 
parliamentarians to make budget decisions sometimes that are 
difficult, and more broadly to maintain strong budgets.
    Increasingly we see that if we want to be strong in defense 
of our values and in defense of our security, we've also got to 
continue to grow, and that means that everything is connected 
to everything in the European theater. The strong steps that 
individual parliamentarians take to support growth and jobs in 
their economies, to support banking union and other kinds of 
strengthening of the Eurozone is directly connected to whether 
they can raise defense budgets, provide reassurance; whether 
they can work together to withstand what we have to do to 
sanction Russia. All of these things are connected.
    Mr. Boozman. Right. No, I appreciate that. We've got really 
significant problems going on, but one of the basics for 
solving those problems is the dialogue the communication.
    Ms. Nuland. Yes.
    Mr. Boozman. I was very active on the House side in NATO 
and now trying to get Senate participation, which I think is 
really important, in the NATO parliament. You mentioned the 
bipartisanship. Probably that's one of the most nonpartisan 
things that I've ever been a part of in the sense that, when 
you get over there and you roll up the sleeves and start 
working together, it really--I can't remember a time in any of 
those meetings where there was a real rift as far as important 
policy.
    We appreciate your leadership, and I've got to go vote. 
Thank you.
    Ms. Nuland. Thank you. Thanks for coming and participating 
at NATO.
    Mr. Boozman. Thank you.
    Mr. Cohen. Thank you, Senator. And I will yield myself as 
much time as I shall consume. It's good to have the gavel.
    Thank you for your attendance here. One thing I'd like to 
ask is, in the Eastern Ukraine with the disturbances, do we 
have any proof--not suspicion but proof--that Russians have 
been involved in the takeover of the buildings and 
participating physically?
    Ms. Nuland. Congressman, let me say that the evidence is 
overwhelming that this was a very carefully orchestrated, well-
planned, well-targeted, well-coordinated effort to take over 
buildings in four cities on--within the same 24-hour period 
with identical tactics. There is considerable information out 
on social media, out in the public domain in Ukraine that 
points directly to involvement of folks who are not resident in 
those cities and are not resident, in fact, in Ukraine.
    As you may have seen, the Ukrainian government has also put 
out publicly its recent arrests and rollups of GRU and other 
intelligence officers in various Ukrainian cities, including 
these, over the last couple of weeks. There are also a number 
of absolutely wild stories, like in Kharkiv, where when the mob 
first started forming it showed up to take over the opera house 
rather than what its intended target turned out to be, which 
was the local administration building and the local interior 
building, indicating that these were not boys from Kharkiv and 
they were not quite as well planned and executed as they might 
have been, opera house not being a very significant threat.
    I don't think that we have any doubt that the preponderance 
of evidence indicates direct Russian involvement here, but in 
this setting I'm not prepared to go further.
    Mr. Cohen. I understand. I can read that. It seems like a 
cookie cutter from what they did in Crimea, but in Crimea was 
there not actual sightings of--even though they had their masks 
on and you can never know who the ``lone ranger'' might be, but 
that there were actually Russians there.
    Ms. Nuland. Crimea was host to Russian bases.
    Mr. Cohen. Navy.
    Ms. Nuland. There were significant numbers of troops, which 
had dual-use capability, as we saw during the occupation 
annexation. And then they were of course reinforced with 
Spetsnaz and other military assets directly from Russia at the 
time of the annexation.
    I think the concern that we have, in addition to what's 
going on currently in the cities, as Secretary Kerry said 
yesterday before the SFRC, is that this is the same playbook, 
and the effort here is to create the pretext or the excuse for 
a larger Russian reinforcement over the borders in defense of 
ethnic Russians or Russian citizens who are not getting their 
way by force.
    Mr. Cohen. We, as I understand it, reduced our joint 
relationship with Russia in the space program. We're still 
going to, as I understand it, participate in maintaining the 
space station, but we eliminated some of our activities. What 
activities did we eliminate, and what was the purpose of that? 
Does that strike them financially in that we give them X amount 
of money, or was it simply a blow to their pride?
    Ms. Nuland. Well, Congressman after Crimea, did a complete 
review of U.S. bilateral relations with Russia. We have 
suspended the vast majority of our programs that go to economic 
cooperation, that go to military-to-military cooperation, and 
that go to a lot of the technical cooperation that we had been 
doing.
    We have maintained the relationship in areas of high 
national interest to the United States--obviously the Iran 
talks, the work we're doing on Syria chemical weapons. Parts of 
the space program where that relationship is vital to the 
safety and security of the program continue, but my 
understanding is that most of the routine other things have 
been curtailed, as have other U.S. government programs with 
Russia. But I would refer you to NASA for more specifics on 
what they've curtailed.
    Mr. Cohen. In Syria, have the Russians been working with us 
in trying to locate and remove the weapons?
    Ms. Nuland. This has been a matter of intensive diplomatic 
effort, and Secretary Kerry's direct diplomacy with Foreign 
Minister Lavrov from the time of the negotiation of the U.N. 
Security Council resolution in September that provided for the 
removal of these weapons. The Russian role here has been to 
work with the Syrian government on their implementation. We 
consider that this has been too slow. There have been 
obstacles. The Russians do continue to work with us to try to 
speed those things up, but in this setting I can't speak any 
further about the details of that.
    Mr. Cohen. Thank you. The questions I thought about 
earlier--and these were criticisms that I didn't feel were 
warranted but they were still within my constituency, and one 
was about the $100 billion loan guarantee. Much of that money, 
if I remember correctly, my constituent complaint was that some 
of that would go to Russia, probably to the energy debt that 
Ukraine has. Are there any stipulations that that money will 
not be money that basically just goes right back to Russia?
    Ms. Nuland. In the context of the negotiations that Ukraine 
is having with the IMF, the IMF is looking at the totality of 
Ukrainian budget obligations, as we talked about earlier, 
trying to ensure that the corruption is squeezed out of the 
system, that energy prices are normalized, that--now that the 
hryvnia is floating, that they are being responsible in fiscal 
and monetary terms. But Ukraine does have some outstanding 
legitimate gas debt to Russia, in the context of working 
through all of that, the IMF is advising the Ukrainians on what 
does need to be paid out of budget and what is illegitimate, 
and working also with the Russians on that.
    With regard to our loan guarantee, as I said, we're 
currently in discussions with the Ukrainian government now that 
the legislation has been passed on exactly how it would/should/
could be used in support of that larger conversation the IMF is 
having. Our priority, and the Ukrainians' priority as I 
understand it, is to use our money to help implement these 
energy sector reforms that have been put in place to support 
the IMF, to help implement the anticorruption programming, but 
the bulk of the money will go to help cushion the most 
vulnerable Ukrainians from the increased gas and energy and oil 
prices that will be required in order to normalize the economy, 
so to strengthen a social safety net program. But those 
negotiations are ongoing now.
    Mr. Cohen. The issues that were raised by some 
constituents--and--they were about possible neo-Nazis being 
involved in the--in the group that took over. I know you can't 
assure me that everybody that's in power there is a George 
McGovern or a Chuck Percy, but do we have any assurances that 
those concerns are not valid?
    Ms. Nuland. Congressman, it's absolutely clear that during 
the period of the building takeovers in Kiev there were some 
extremist elements that got into some of these buildings. They 
were talked out of these buildings and disarmed by other Maidan 
participants, other members of the Ukrainian political 
structure, many of whom are either serving in the current 
transitional government now or are members of the Rada, which 
supported the government.
    What's most important here is that the transitional 
government was voted in by the vast majority of members of the 
parliament representing all of the regions and all of the 
political colors of Ukraine. All of this very difficult, very 
painful legislation that they're putting in place with regard 
to energy sector reform, anticorruption, et cetera, is also 
being voted through democratically after lots of debate with 
broad support in the Rada. The Rada also called for these 
elections. We have some 20 candidates representing everybody 
from the far right to the far left, and lots of moderate 
candidates in the middle.
    The Ukrainian people will have a choice, and it is quite 
interesting that public opinion polling in Ukraine now 
indicates that these extremist elements, whether they are the 
Communists or whether they are the private sector candidate, 
are polling well below 3 percent on both ends of the scale. 
That speaks well to the moderating influence of an increasingly 
democratic Ukrainian system.
    Mr. Burgess. Will the gentleman yield?
    Mr. Cohen. Yes.
    Mr. Burgess. Madam Secretary, I'm going to have to take off 
as well. I just wanted to thank you for being so generous with 
your time this morning. I appreciate your efforts and look 
forward to perhaps seeing you May 25th--in Kiev when the 
elections are ongoing. But thank you for your efforts in this, 
and the country is counting on you. Thank you.
    Ms. Nuland. Thank you, sir.
    Mr. Cohen. Couple of questions. The Tartars or the Tatars 
in Crimea, there was one killed, as I understand it, and the 
treatment may have not been so wonderful from the Russians. Is 
there concern there about the treatment of that minority group 
in Crimea?
    Ms. Nuland. We're very concerned about the situation for 
Crimean Tatars. They are concerned themselves. I think some 
members of Congress may have had a chance to see the Crimean 
Tatar leader when he was here over the past week.
    The incident you reference was the March 3rd abduction of 
Crimean Tatar activist Reshat Ametov. He was abducted in 
Simferopol. Two weeks later his body was found 28 miles away in 
a small village. According to local media, that body bore clear 
evidence of torture. In another notable case, massed pro-
Russian forces kidnapped Yuri Shevchenko from a train station 
in Simferopol. He was on his way to visit friends. He seems to 
have been mistaken for another activist.
    As I said at the beginning, we are concerned about the 
human rights situation inside Crimea. We have made these 
concerns known to the Russian government in the Kerry-Lavrov 
conversations and handed over significant case information and 
demanded a response.
    Mr. Cohen. Has Mr. Erdogan made his voice known on this 
issue at all?
    Ms. Nuland. Yes, the Turkish government has been quite 
active on this subject and they do participate with us in the 
small group that works on Ukraine.
    Mr. Cohen. Two last questions. One is, any indices that 
there's any activity in the Caucasus?
    Ms. Nuland. You're talking about the Russian Northern 
Caucasus.
    Mr. Cohen. Right.
    Ms. Nuland. As you know, the Northern Caucasus is never 
peaceful. There was a significant crackdown on separatist 
activity by Russian security forces in the run-up to the Sochi 
Olympics--pretty devastating clean-out there. They've been 
pretty----
    Mr. Cohen. I'll withdraw that question----
    Ms. Nuland. Yeah.
    Mr. Cohen [continuing]. Because if you knew the answer, you 
couldn't tell me or you had to kill me, and we don't want 
either one of those things to happen.
    Ms. Nuland. I don't want to kill you, Congressman.
    Mr. Cohen. I'm going to yield back, but I've just had this 
thought, the Russians and the Ukrainians had a boxing series, 
and it was a big deal, and the Russians won 4 to 1. Maybe this 
would be better for the ambassador, but I wondered if Vitali 
Klitschko hasn't offered the opportunity for Mr. Putin to have 
an exhibition match with him, and I'm sure he would take him up 
on it, and it'd be wonderful to watch.
    Ms. Nuland. The ambassador says they'd be glad to see it, 
yeah.
    Mr. Cohen. Yeah, I think I would too. I'd pay to see that 
fight, so to speak.
    I yield back the balance of my time.
    Mr. Cardin. Let me thank Congressman Cohen for substituting 
while we had a vote on the floor of the Senate.
    I want to just ask a few follow-up questions. I want to 
talk a little bit more about energy, Senator Whitehouse's 
point. I understand the longer-term strategies on dealing with 
the shale and dealing with energy efficiency, and I couldn't 
agree more. I think that's, an area of great interest.
    There are conflicting incentives here. Russia makes a lot 
of money off of Ukraine, and there are pipelines through 
Ukraine that affect other countries, in addition to just Russia 
and Ukraine. What is our strategy in the short term to try to 
provide more security to Ukraine and some of the other 
countries in that region as it relates to energy sources? There 
has been some discussion--in regards to liquefied natural gas. 
There's been other discussions about other sources that could 
be made available to Ukraine in the region other than Russia. 
Do we have a strategy to try to remove the potential leverage 
that Russia has over Ukraine on energy supply?
    Ms. Nuland. Thank you, Senator. We did talk a little bit 
about this while you were out. I think your Republican 
colleagues asked some questions about it.
    Mr. Cardin. Oh, good.
    Ms. Nuland. You'll see some of that in the record. We are 
working hard with the Ukrainians and with the Europeans to 
provide some cushion, some diversification in the short run, 
even as we work on some of these longer-term things.
    The most likely source of quick gas for Ukraine in the 
event of a shutoff comes in reverse flows from Slovakia, from 
Hungary, from Poland. This requires some upgrading of 
infrastructure, and it requires some investment; it requires 
some political decisions. As I may have mentioned, Secretary 
Kerry and High Representative Ashton and the EU's Commissioner 
for Energy Oettinger met last week to talk about this very 
subject and directed their teams over the next three weeks to 
accelerate talks between the Slovaks and the Ukrainians in 
particular, but also looking at EU funding support, U.S. 
funding support for this kind of reverse flow. That's the best 
thing we can do. We're also working in the Moldovan context, 
with Romania and with the EU on interconnector infrastructure, 
which would also allow reverse flow. That speaks more generally 
to strengthening and revitalizing the intra-European energy 
market.
    The other topic of conversation at the EU last week was how 
they can strengthen the interconnector system, the LNG terminal 
system, across the European space, across EU space, so that 
there are more flows, more options, which reduces prices, makes 
them more competitive when they negotiate with Gazprom. That's 
what's resulting already in lower gas prices within Central and 
Western Europe, that they are more competitive than Ukraine has 
been because they have more options.
    Mr. Cardin. That's an encouraging report. I take it we have 
certain plans in place in the event that Russia imposes 
additional pressure on Ukraine?
    Ms. Nuland. We do. The Ukrainians have been pretty 
strategic in ensuring that their storage tanks are well-
stocked, and as I said, some of these reverse flow things are 
the best option in the short run. That said, you'll remember 
that in 2010, when the Russians, for the second time, cut off 
the gas completely from Ukraine, it didn't last long because it 
cost them a fortune because Ukraine is a transit country to 
others and to some of their major markets in Central Europe.
    Mr. Cardin. Yeah. I think that's a double-edged sword.
    Ms. Nuland. It is.
    Mr. Cardin. We understand that.
    Ms. Nuland. It is.
    Mr. Cardin. But sometimes Russia's calculations are not 
easy for us to logically understand.
    Ms. Nuland. Blessedly, it's spring and summer now, so it 
gives us some time.
    Mr. Cardin. That's true. It helps us a good deal.
    Can we talk a little bit about the economic progress in 
Ukraine, which also deals with energy cost? One of the major 
areas of protest is when energy costs go up in Ukraine. The 
warmer seasons are coming, that will help. But can you just 
talk a little bit about how the reforms are taking place in 
Ukraine and whether the popular support will be adequate so 
that politically this can be accomplished?
    Ms. Nuland. Senatorin the context of the IMF agreement, the 
Ukrainians have been asked to make a huge amount of change 
quickly, not only in the energy sector, but also to squeeze out 
corruption throughout the public sector and in all of the 
different--in agriculture, in energy and in other places, as 
well as in public procurement. They have passed a huge number 
of new bills already, and they are working this week on further 
steps, both in support of the IMF program, but in support of 
cleaning up Ukraine.
    The Maidan was about many things, but it was very strongly 
about a sense that the leadership of Ukraine was kleptocratic, 
was that too much money was going into their private pockets, 
that not enough was going to the Ukrainian people, that it was 
disappearing. I think some of these documents that we've seen 
have certainly supported that. There is strong support across 
the country for anti-corruption measures. It is difficult to 
make some of these energy reforms. They will hit households.
    But this is why it is so important and such a strong signal 
of American support that in a bipartisan fashion, both houses 
of Congress supported the $1 billion loan guarantee, because 
one of the things we're going to do with the loan guarantee is 
support Ukrainian programs to cushion the poorest Ukrainians 
from the impact there.
    Mr. Cardin. Oh.
    Ms. Nuland. We do think the government of Ukraine has to do 
more outreach to the regions, has to explain these programs, as 
do those members of the Rada who have voted for them. We think 
this'll be a hot topic in the election campaign, but we are 
gratified that the legislative measures that have passed in the 
Ukrainian parliament have had broad popular support, that--have 
had broad political support across the parties, because there 
was an understanding across political elites that things have 
to change in Ukraine, or they just become more and more 
dependent.
    Mr. Cardin. I fully agree in regards to the popular desire 
to rid their country of corruption. I think that is clearly a 
commitment that the populace understands needs to be 
implemented by their government, and they strongly not only 
support it, but demand it, as they did during the Orange 
Revolution, as they did now. I've been in Ukraine. I was there 
shortly after the Orange Revolution. I've been back a couple 
times since. And you hear that frequently as one of the battle 
cries of a free Ukraine, free from corruption.
    But as you get to pricing of energy and a more accurate 
cost, that's a hard political sell.
    Ms. Nuland. It is.
    Mr. Cardin. It has to be done.
    Ms. Nuland. It is.
    Mr. Cardin. Hard political sell. I'm pleased to see that 
part of our assistance will go towards mitigating the harm to 
lower-income families. That's not only the right political 
message, but it's also the right policy message for the growth 
of the Ukrainian economy.
    These changes have to take place. But knowing that Russia 
will use propaganda to try and take advantage wherever they 
can, I think we need to understand that the explanations to the 
Ukrainian people will be mixed based upon what Russia will be 
doing.
    Ms. Nuland. Absolutely. We have consistently encouraged the 
Ukrainian government to send its representatives out to the 
east, to have town hall meetings, to bring regional 
representatives to Kiev to talk about these things. They have 
started doing a lot more of that, particularly in the context 
of the dicey security situation. I think in the conversations 
that we and Secretary Kerry have had with Prime Minister 
Yatsenyuk, he hopes to do much more of that in the coming weeks 
and days.
    Mr. Cardin. I thank you so much for your appearance here. I 
think this has been extremely helpful to our commission's work 
and to the work of the Congress, and we fully intend to keep 
the unity between the administration and Congress on this 
effort. We understand there are short-term, medium-term and 
long-term objectives that we need to accomplish, and we look 
forward to you keeping us informed so that we can do everything 
we can to support the people of Ukraine, as I said earlier.
    We appreciate you being here. We appreciate the ambassador 
being here. And with that, the commission's hearing will stand 
adjourned. Thank you.
    Ms. Nuland. Thank you, Chairman.
                            A P P E N D I X

=======================================================================

                          Prepared Statements

                              ----------                              


         Prepared Statement of Hon. Benjamin Cardin, Chairman, 
            Commission on Security and Cooperation in Europe

    Let me welcome everyone here today and thank you, Assistant 
Secretary Nuland, for agreeing to participate in this important and 
timely hearing. I look forward to examining the current situation in 
Ukraine and discussing how the United States, together with the 
international community, including the EU and the OSCE, can best assist 
Ukraine and deter further Russian aggression.
    Since late November, Ukraine has been in turmoil, with a 
deteriorating economy and public unrest by millions of protestors fed 
up with the human rights and democracy rollback, and the massive 
corruption that characterized the four-year rule of Viktor Yanukovych. 
The largely peaceful protests culminated in a violent crackdown, 
resulting in the killing of more than 80 people in a span of 3 days. 
This, in turn, led to Yanukovych's removal by a sizeable majority in 
parliament on February 22. Since then, an interim government has been 
working at a rapid pace to address numerous internal challenges, moving 
forward on badly needed economic and political reforms and preparing 
for the crucial May 25th presidential elections.
    As if these internal challenges weren't enough, just a few days 
into the interim government's tenure, Russia seized Crimea by force. 
Russia held an illegal, farcical referendum and annexed the peninsula. 
Russia's illegal actions violate numerous international obligations, 
including the core principles of the Helsinki Final Act. The land grab, 
cloaked in the cloth of self-determination, brings to mind darker times 
in Europe's history, undermines the international order and sets a 
dangerous precedent. We saw Russia take similar action in Georgia, and 
now in Crimea in Ukraine. If this goes unchecked and if we do not speak 
with a unified voice, it just encourages more irresponsible action by 
Russia and other countries around the world that might be so inclined.
    Meanwhile, Russia continues to threaten Ukraine's sovereignty and 
territorial integrity with further military intervention, and attempts 
to undermine the legitimacy of the new government, including through a 
propaganda campaign where truth is a casualty. In the last few days, 
Russian agents have fomented protests in several eastern cities in an 
attempt to destabilize Ukraine and make it more amenable to Russia's 
influence. Yet these efforts do not appear to be finding fertile 
ground. It is clear that Ukrainians want to live in a united Ukraine. 
Even among ethnic Russians, there have been no great cries of 
discrimination. And it is clear that the people of Ukraine long for the 
rule of law, transparency, democracy and respect for human rights. They 
want to be afforded the dignity and respect that all human beings 
desire and deserve. The May 25 elections will be vital to understanding 
the aspirations of the people of Ukraine and the course they want to 
chart for their future. A free and democratic electoral process is a 
powerful response to Russian perceptions and Russian aggression.
    Given what's at stake, it is so important for the Administration, 
the Congress and the international community to respond, and I believe 
it is absolutely essential that we speak with a strong united voice in 
standing with the people of Ukraine. I particularly want to note the 
vital work of the OSCE and its various institutions, which have been 
actively engaged in sending monitoring missions and representatives to 
help foster security and respect for human rights. The OSCE has just 
deployed a large special Monitoring Mission in Ukraine. I hope that 
Russia will not prohibit this mission, as well as other smaller OSCE 
missions, from entering Crimea.
    I am especially gratified that last week, the Senate and House--on 
an overwhelming bipartisan basis--were able to send to the President, 
for his signature, legislation underscoring our country's solidarity 
with the Ukrainian people with tangible economic, democracy and 
security assistance. This legislation also sanctions Ukrainians and 
Russians responsible for undermining Ukrainian sovereignty and massive 
corruption. We must continue to stand with the people of Ukraine as 
they defend their democracy, integrity and independence. We must 
ourselves defend the Helsinki principles, and other international 
principles, which Russia has so blatantly violated.
    As Assistant Secretary of State for European and Eurasian Affairs, 
Secretary Nuland continues to play a central role in forging and 
implementing U.S. policy regarding Ukraine, Russia and the region 
during this extraordinarily challenging time. I look forward to your 
testimony.
      Prepared Statement of Hon. Christopher Smith, Co-Chairman, 
            Commission on Security and Cooperation in Europe

    Recently hundreds of pro-Russian protestors seized and damaged 
government buildings in several eastern Ukrainian cities. Meanwhile, 
tens of thousands of Russian troops remain on the borders of Ukraine, 
ready to invade at any time. Many people believe that some of the 
protestors are Russian operatives and that these events are part of a 
Russian government policy to destabilize Ukraine and so undermine its 
sovereignty and democracy.
    This comes on the heels of the Russian government's illegitimate 
annexation of Crimea--a gross violation of the core principles of the 
OSCE as well as several multilateral and bilateral agreements between 
Ukraine and Russia. The military occupation and annexation of Crimea by 
means of an illegal referendum is the most blatant assault on a 
European country's territorial integrity since the signing of the 1975 
Helsinki Final Act.
    The Russian government claims it is concerned about threats to 
ethnic Russians and other minorities by the new, pro-Western 
government. Yet recent surveys show an overwhelming majority of 
Ukrainians, including minorities, do not believe that Russian-speakers 
are facing increased pressure since the flight of Victor Yanukovych and 
installation of a new government. It is remarkable the extent to which 
Ukrainian citizens of every ethnicity and every faith--Orthodox, 
Catholic, Protestant, Jewish and Muslim--are united in their 
condemnation of Russian government aggression and their desire to live 
in a peaceful, united, independent, democratic Ukraine.
    In the past six months the Ukrainian people have shown tremendous 
courage, character, faith, responsibility, and maturity. They are going 
to have to continue doing so--as they implement deep economic and 
political reforms, conduct the political campaign running up to May 25 
presidential elections, and face down Russia, posing an existential 
threat to Ukrainian independence. Each of these tasks are daunting, to 
say the least.
    That is why our country is standing with the Ukrainian people as 
never before. The Ukraine Support Act, passed by overwhelming 
bipartisan majorities, is now public law, assisting Ukraine and 
sanctioning individuals responsible for undermining its sovereignty. 
And the international community has resolutely condemned Russia's 
aggression in Ukraine. Some diplomatic and economic sanctions have been 
instituted, but we need to do more should the need arise. The United 
States and international community simply cannot permit outright 
aggression that not only subverts Ukraine's independence, but peace and 
security in the regions and, indeed, throughout the world.
Prepared Statement of Victoria Nuland, Assistant Secretary for European 
             and Eurasian Affairs, U.S. Department of State

    Thank you, Chairman Cardin and Co-Chairman Smith, for inviting me 
to testify before you today on the situation in Ukraine. It is a 
particular honor for me to do so before the U.S. Helsinki Commission, 
whose purpose is to advance security through the promotion of human 
rights, democracy and economic, environmental and military cooperation 
in the Euro-Atlantic Area.
    Let me also express my gratitude for the leadership that Congress 
has shown with the overwhelming passage of the H.R. 4152 and S. 2183 in 
support of Ukraine. Not only did this legislation pass with strong 
bipartisan support in both the House and Senate, it was also backed by 
all 17 Commissioners of this body. That unity sent a strong signal that 
the United States stands united for Ukraine at this critical moment in 
its history.
    For almost 40 years, the United States and this Commission have 
worked with our TransAtlantic Allies and partners to uphold the 
principles of the Helsinki Final Act. These founding principles are 
universal, and they include ``respect for human rights and fundamental 
freedoms;'' ``the inviolability of frontiers;'' ``territorial integrity 
of states''; and ``the peaceful settlement of disputes.''
    Russia's actions in Ukraine are an affront to each of these 
fundamental principles. Its occupation of Crimea, rubberstamped by an 
illegitimate referendum conducted at the barrel of a gun, have 
tarnished its credibility and diminished its international standing in 
the eyes of Ukrainians and the world. Reports of human rights abuses in 
Crimea since the Russian occupation have shocked the conscience. Last 
month, a Crimean Tatar activist protesting the Russian occupation of 
the peninsula was abducted, tortured and killed by pro-Russian 
irregulars. Russia has also attempted to intimidate Ukrainians by 
amassing more than 40 thousand troops and quick strike aircraft along 
the border, and with trade blockades and gas price hikes of 80 percent.
    This week's violent occupation of government buildings in Kharkhiv, 
Donetsk, Luhansk and Mariupol deepen our concern. Far from a 
spontaneous set of events, these incidents bear all the hallmarks of an 
orchestrated campaign of incitement, separatism and sabotage of the 
Ukrainian state, aided and abetted by the Russian security services.
    So today Ukraine is a frontline state in the struggle for freedom 
and all the principles this commission holds dear. Ukraine is also 
replete with heroes in that struggle. It took guts for the Ukrainian 
people to stand up to a regime awash in unchecked cronyism, corruption 
and violence against its people. It took grit for tens of thousands of 
Ukrainians to spend weeks and months on the Maidan enduring subfreezing 
winter temperatures to demand dignity and a better future.
    I think of Tetiana Chornovol, the investigative journalist and 
activist dedicated to exposing Yanukovich-era graft. She was savagely 
beaten by anti-Maidan thugs on Christmas Day. Today she serves as chief 
of the Anti-Corruption Bureau in the new government.
    I think of Air Force Colonal Yuliy Mamchur, who led his troops to 
stand up to Russian forces when they came to take over Belbek airbase 
in Crimea. Together Mamchur and his forces sang the Ukrainian national 
hymn as Russian troops swarmed the base. The Russian military took him 
into custody for five days, trying to pressure him to defect. But his 
allegiance to Ukraine remained steadfast.
    Today, the United States stands with Ukraine in its efforts to 
forge its own path forward to a freer, peaceful, and unified future. 
Our approach includes four pillars: first, our bilateral and 
multilateral support for Ukraine; second, the costs we are imposing on 
Russia for its aggressive actions; third, our efforts to deescalate the 
crisis diplomatically; and fourth, our unwavering commitment to the 
security of our NATO Allies who also live on the frontlines of this 
crisis. Let me address each of these briefly.
    First, we support the Ukrainian people and the transitional 
government in the courageous steps they are taking to restore economic 
health, democratic choice and internal stability and security to the 
country. The Rada has passed landmark anti-corruption measures, deficit 
reduction measures and taken difficult steps to reform the energy 
sector. These necessary reforms will require painful sacrifices from 
all Ukrainians. But they also open the way to an IMF package of up to 
$18 billion in support.
    The United States stands ready to help as the country addresses its 
immense challenges. Our $1 billion loan guarantee, in conjunction with 
IMF and EU assistance, will help implement these reforms and will 
cushion some of impact on the most vulnerable in Ukrainian society.
    And we have approximately $92 million in FY 2013 State/USAID 
funding and an anticipated $86 million in FY 2014 State/USAID funding 
for assistance to Ukraine such as strengthening anti-corruption 
enforcement efforts, revising public procurement legislation, 
introducing agriculture and energy sector reforms, deepening 
privatization efforts, improving the transparency and quality of higher 
education and helping Ukraine prepare for free, fair elections on May 
25th.
    And we are working with the international community to push back 
against Russian propaganda, lies and efforts to destabilize Ukraine's 
regions. The OSCE has already deployed more than 70 monitors in ten 
locations throughout Ukraine as part of a special monitoring mission 
and the mandate allows the mission to grow to 500. The OSCE Office for 
Democratic Institutions and Human Rights will also play an essential 
role by sending 1000 observers for the Presidential election, one of 
its biggest missions ever.
    Second, Russia is already paying a high price for its actions, and 
that cost will go up if its pressure on Ukraine does not abate. Across 
the board, Russia has found itself isolated. The United States along 
with all other G-7 members declined to attend the Sochi G-8 Summit and 
suspended participation in G-8 activities. Instead, the G-7 will meet 
in Brussels. On March 27th, the United States and 99 other countries in 
the UN General Assembly reaffirmed the unity and territorial integrity 
of Ukraine within its internationally recognized borders. Only 11 voted 
against. Along with our Allies, we have suspended practical cooperation 
between NATO and Russia. We have suspended most bilateral economic and 
military cooperation of the U.S.-Russia Bilateral Presidential 
Commission. The President signed two Executive Orders authorizing 
sanctions against those responsible and finding that the actions and 
policies of the Russian government undermine democratic process and 
institutions in Ukraine; threaten its peace, security, stability, 
sovereignty, and territorial integrity; and contribute to the 
misappropriation of its assets. These sanctions have been carefully 
coordinated with the EU and other global partners. And today we are 
considering further measures in response to Russia's continued pressure 
on Ukraine.
    And the financial markets are reacting. The ruble has fallen. 
Capital flight from Russia is at a high not seen in years. And Russia 
has been downgraded by major credit rating agencies on account of its 
actions. These costs will only increase if Russia does not change 
course.
    At the same time, we want to try to de-escalate the crisis. 
Secretary Kerry has met three times with Russian Foreign Minister 
Lavrov in recent weeks, with the support of the Ukrainian government at 
a time when Russia would not meet directly with Ukraine. Earlier this 
week, Foreign Minister Lavrov finally agreed to sit down in the next 
ten days with Ukraine, the EU and Secretary Kerry to discuss de-
escalation, demobilization, support for elections and constitutional 
reform. Between now and then, we have made it clear that Russia needs 
to take concrete steps to disavow separatist actions in Eastern 
Ukraine, pull back its forces outside the country, and demonstrate that 
they are prepared to come to these discussions to do what is necessary 
to de-escalate. So Russia has a choice--to work with the international 
community to help build an independent Ukraine that can meet the hopes 
and aspirations of all Ukrainians, or they can face greater isolation 
and economic cost. We do not have high expectations of a rapid 
breakthrough, but it is critically important to keep trying.
    Even as we try to de-escalate, with Russian troops ringing Ukraine 
for weeks now, we cannot be complacent about the security of our allies 
who live closest to Russia. Our message to Putin and Russia is clear: 
NATO territory is inviolable. We will defend every piece of it. And we 
are mounting a visible deterrent to Russia testing that proposition. In 
that vein, we and our NATO Allies are providing visible reassurance on 
land, sea and in the air to our Central and Eastern European members. 
The United States has increased our contribution to NATO's Baltic Air 
Policing mission. We have bolstered the U.S.-Poland aviation detachment 
in Lask, Poland with 12 F-16s and 200 personnel. We extended the stay 
of one of our ships, the USS Truxtun in the Black Sea, and will send 
another ship there in the coming weeks. NATO is flying AWACS over 
Poland and Romania. And last week at NATO, Allies agreed to extend and 
expand these efforts.
    More broadly, the events in Ukraine are a wake-up call for all of 
us. That everything we have stood for over 40 years as a community of 
free nations is at risk if we allow aggressive acts to go unchecked and 
unpunished. As a community, North Americans and Europeans, we must 
continue to stand with the people of Ukraine as they say no--``ni'' in 
Ukrainian--to the tactics and brutality of the 19th century and yes--
``tak'' in Ukrainian--to a 21st century that respects their 
sovereignty, their choice and their human dignity.
    Thank you again for this invitation. I look forward to your 
questions.
 Prepared Statement of Oleksandr Motsyk, Ambassador of Ukraine to the 
                             United States

    Dear Members of Congress: Today's hearing comes at a time of great 
challenge and grave danger not only for Ukraine, but also for the 
European and global security as a whole.
    A cornerstone of international nonproliferation regime is the 
notion that you don't need to have weapons of mass destruction and can 
rely on international law and the power of international community for 
protection against unwarranted aggression.
    After the end of the bloodiest war in the history of humankind, the 
United Nations Organization was created ``to save succeeding 
generations from the scourge of war'' and ``to establish conditions 
under which justice and respect for the obligations arising from 
treaties and other sources of international law can be maintained,'' 
where the most fundamental of such conditions is that ``All Members 
shall refrain in their international relations from the threat or use 
of force against the territorial integrity or political independence of 
any state.''
    The same principles were embodied in the Budapest Memorandum on 
Security Assurances of 1994. In exchange for Ukraine's giving up the 
third largest nuclear arsenal in the world, the Russian Federation, the 
United Kingdom and the United States ``reaffirm[ed] their commitment to 
Ukraine, in accordance with the principles of the Final Act of the 
Conference on Security and Cooperation in Europe, to respect the 
independence and sovereignty and the existing borders of Ukraine; . . . 
to refrain from the threat or use of force against the territorial 
integrity or political independence of Ukraine, and that none of their 
weapons will ever be used against Ukraine except in self-defense or 
otherwise in accordance with the Charter of the United Nations.''
    All these principles have been grossly violated by the aggression 
of the Russian Federation--one of the guarantor states under the 
Budapest Memorandum--against Ukraine. All this was done under the false 
pretext of protecting Russian speaking population of Crimea and pulled 
through a fake ``referendum'' in violation of all norms of Ukrainian 
law. Only 32.4% of the Crimea residents took part in so called 
``referendum'' and it was boycotted completely by the indigenous people 
of Crimea--the Crimean Tatars.
    As the OSCE High Commissioner on National Minorities Astrid Thors 
stated during her recent visit to Crimea, she found no evidence of 
violations or threats to the rights of Russians and Russian-speaking 
citizens of Ukraine in the Autonomous Republic of Crimea. Thus, the 
pretext for invasion was completely trumped-up, the ``referendum'' was 
a sham, and its results were falsified in a blatant attempt to justify 
a land grab.
    Russia's aggression received overwhelming condemnation by the 
international community. Although Russia vetoed the decision by the UN 
Security Council, 100 countries voted for a UN General Assembly 
resolution in support of Ukraine's territorial integrity. There have 
been numerous statements in support of Ukraine and in condemnation of 
Russia's actions by various international actors, including the OSCE, 
the United States and other G-7 nations, the European Union, the 
Council of Europe, and NATO.
    At the same time, the fact remains that the security guarantees 
that had been given to Ukraine did not work. International legal 
mechanisms so far have failed to achieve their purpose and have been 
powerless to prevent aggression in Crimea.
    Moreover, Russia does not want to stop there. Instead, Russia 
concentrates its troops near Ukraine's border. Russian government is 
pushing hard for federalization of Ukraine. Russian security services 
continue to orchestrate provocations and instigate separatist movements 
in the East. Criminal terrorist groups, organized and controlled by 
Moscow, are carrying out seizures of administrative buildings and 
critical infrastructure facilities in the eastern regions of Ukraine, 
seeking their secession from our country and accessions into the 
Russian Federation, destabilizing the political and economic situation 
and attempting to disrupt the presidential elections scheduled on May 
25, 2014. As part of this scenario, separatist groups requested 
military assistance from the Russian Federation. All of this clearly 
confirms that Russia launched the second phase of the aggression plan 
against Ukraine in the East.
    By implementing this plan, Russia is attempting to tear away the 
territory of eastern Ukraine, turn it under the control of Russia into 
illegitimate quasi formations and sources of constant tension.
    We cannot and will not allow it to happen. However, we cannot stop 
it on our own. We need strong actions by the international community to 
restore the status quo of Crimea as Ukrainian land, and thereby to 
restore the credibility in international law and order. So far, the 
aggressor has not backed down, and the pressure on Russia should only 
increase until Crimea is returned and all attempts to violate Ukraine's 
sovereignty and territorial integrity are abandoned.
    Ukraine appreciates the resolute position of the United States, in 
particular the bipartisan support of the U.S. Congress which recently 
passed strong legislation that was signed by President Obama: the H.R. 
4152 and S. 2183, the ``Support for the Sovereignty, Integrity, 
Democracy, and Economic Stability of Ukraine Act of 2014,'' which 
provides for loan guarantees for Ukraine and directs the imposition of 
sanctions; and S. 2183, which authorizes funds to enhance U.S. news and 
information programming to the people of Ukraine and the neighboring 
regions.
    Nowadays, our joint efforts aimed at strengthening Ukraine's 
defense capabilities, modernizing Ukrainian Armed Forces and working 
together on maintaining peace and security are more important than 
ever.
    Ukrainian and American soldiers were together in Iraq, Afghanistan 
and in all peacekeeping missions under the aegis of NATO. Today, the 
threat to peace and security is looming over Ukraine, and the Ukraine-
U.S. defense is becoming more important than ever. On April 1, 2014, 
the Parliament of Ukraine passed the law allowing conducting eight 
multinational military exercises on the territory of Ukraine, including 
Ukraine-U.S. exercises ``Rapid Trident 2014'' and ``Sea Breeze 2014'' 
with the participation of NATO members and partners.
    We thank the United States for its valuable support at this 
critical time, both with upholding Ukraine's sovereignty and security, 
as well as with helping us tackle the most pressing economic 
challenges.
    Ukraine stays firmly on its path towards becoming a true European 
democracy and a prosperous market economy. We have signed the political 
part of the Association Agreement with the European Union, and the rest 
of the document is to be signed shortly.
    The Government announced an ambitious program of reforms. Despite 
very difficult measures that need to be taken, the result will be a 
sound economic and financial system that provides opportunities for 
growth and high living standards. As part of that program, the budget 
spending is being reduced, the government is to be downsized, the 
taxation streamlined. The new economic policy encompasses antitrust 
measures, deregulation of the economy and improvement for investments, 
as well as creation of a competitive energy market that would stimulate 
energy efficiency and lessen Ukraine's dependence on Russian gas.
    At the same time, the situation in the Ukrainian economy now 
remains quite strained and we need urgent financial assistance, 
particularly from the International Monetary Fund, the World Bank, the 
EBRD and other international financial institutions.
    After several weeks of difficult negotiations, the IMF announced 
that it had reached a preliminary compromise agreement with the 
Government of Ukraine on an economic reform program that can be 
supported by a two-year Stand-By Arrangement. The financial support 
from the broader international community that the program will unlock 
amounts to US$27 billion over the next two years. The assistance from 
the IMF will range between US$14-18 billion, with the precise amount to 
be determined once all bilateral and multilateral support is accounted 
for. We expect that this agreement will be approved by the IMF 
Management and the Executive Board in April this year.
    We are encouraged by the announcements made by other international 
financial organizations, including the World Bank and the EBRD, 
regarding additional financial assistance to Ukraine.
    Once again, now is a critical time, both for Ukraine and for the 
international community. Our country has always been and will remain a 
reliable partner of the United States, and we appreciate the U.S. 
support.
    There is too much at stake now, and our actions at this moment will 
have profound ramifications for international peace, security and 
economy for years to come. Thank you.