[Senate Hearing 116-204]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 116-204

               FIVE YEARS AFTER THE REVOLUTION OF DIGNITY: 
             UKRAINE'S PROGRESS/RUSSIA'S MALIGN ACTIVITIES

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

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON EUROPE AND
                     REGIONAL SECURITY COOPERATION

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 18, 2019

                               __________



       Printed for the use of the Committee on Foreign Relations


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                   Available via the World Wide Web: 
                         http://www.govinfo.gov

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40-550 PDF                  WASHINGTON : 2020                     
          
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                 COMMITTEE ON FOREIGN RELATIONS        

                JAMES E. RISCH, Idaho, Chairman        
MARCO RUBIO, Florida                 ROBERT MENENDEZ, New Jersey
RON JOHNSON, Wisconsin               BENJAMIN L. CARDIN, Maryland
CORY GARDNER, Colorado               JEANNE SHAHEEN, New Hampshire
MITT ROMNEY, Utah                    CHRISTOPHER A. COONS, Delaware
LINDSEY GRAHAM, South Carolina       TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia              CHRISTOPHER MURPHY, Connecticut
JOHN BARRASSO, Wyoming               TIM KAINE, Virginia
ROB PORTMAN, Ohio                    EDWARD J. MARKEY, Massachusetts
RAND PAUL, Kentucky                  JEFF MERKLEY, Oregon
TODD, YOUNG, Indiana                 CORY A. BOOKER, New Jersey
TED CRUZ, Texas
              Christopher M. Socha, Staff Director        
            Jessica Lewis, Democratic Staff Director        
                    John Dutton, Chief Clerk        




                   SUBCOMMITTEE ON EUROPE AND        
                 REGIONAL SECURITY COOPERATION        

                RON JOHNSON, Wisconsin, Chairman        
JOHN BARRASSO, Wyoming               JEANNE SHAHEEN, New Hampshire
ROB PORTMAN, Ohio                    CHRISTOPHER MURPHY, Connecticut
RAND PAUL, Kentucky                  BENJAMIN L. CARDIN, Maryland
MITT ROMNEY, Utah                    CHRISTOPHER A. COONS, Delaware

                              (ii)        

  
                            C O N T E N T S

                                                                   Page

Johnson, Hon. Ron, U.S. Senator From Wisconsin...................     1
    Prepared statement...........................................     1


Shaheen, Hon. Jeanne, U.S. Senator From New Hampshire............     2
    Prepared statement...........................................     2


Prepared Statement of Hon. Robert Menendez, U.S. Senator From New 
  Jersey.........................................................    42


Volker, Hon. Kurt, Special Representative for Ukraine 
  Negotiations, U.S. Department of State, Washington, DC.........     3
    Prepared statement...........................................     7


Herbst, Hon. John E., Director, Eurasia Center, Atlantic Council, 
  Washington, DC.................................................     9
    Prepared statement...........................................    11


Polyakova, Dr. Alina, Director, Project on Global Democracy and 
  Emerging Technology, Brookings Institution, Washington, DC.....    16
    Prepared statement...........................................    19


Carafano, Dr. James Jay, Vice President, Kathryn and Shelby 
  Cullom Davis Institute for National Security and Foreign 
  Policy, The Heritage Foundation, Washington, DC................    25
    Prepared statement...........................................    27

                             (iii)        

 
FIVE YEARS AFTER THE REVOLUTION OF DIGNITY: UKRAINE'S PROGRESS/RUSSIA'S 
                           MALIGN ACTIVITIES

                              ----------                              


                         TUESDAY, JUNE 18, 2019

                               U.S. Senate,
                         Subcommittee on Europe and
                     Regional Security Cooperation,
                             Committee on Foreign Relations
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:40 p.m. in 
room SD-419, Dirksen Senate Office Building, Hon. Ron Johnson, 
chairman of the subcommittee, presiding.
    Present: Senators Johnson, Barrasso, Portman, Shaheen, 
Menendez, and Murphy.

            OPENING STATEMENT OF HON. RON JOHNSON, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Johnson. Good afternoon. This hearing will come to 
order.
    I want to first thank our expert witness panel. Your 
testimony was excellent, very informative. We look forward to 
your oral testimony and answering of our questions.
    I want to apologize to everybody for the late start to the 
hearing. We had a number of votes. As a result, I am just going 
to ask that my opening statement be entered into the record, 
and we will have a very full conversation. So I will be able to 
make my points during questions and answers.
    With that, I will quickly turn it over to Senator Shaheen.
    [The prepared statement of Senator Johnson follows:]

               Prepared Statement of Senator Ron Johnson

    Good afternoon and welcome.
    The Senate Foreign Relations Subcommittee on Europe and Regional 
Security Cooperation is meeting today to discuss developments in 
Ukraine, 5 years after the Revolution of Dignity. Russia's subsequent 
invasion, occupation, and attempted annexation of Crimea and invasion 
of the Donbas are blatant violations of its international commitments 
and one of the most serious threats to peace in Europe since the end of 
the Cold War. With Ukraine having just completed its first presidential 
election since 2014, it is an opportune moment to examine the country's 
progress and to refresh the record on Russia's continuing assaults on 
Ukraine's territorial integrity.
    Much is at stake for the United States in Ukraine. Over the last 70 
plus years, the U.S. has invested tremendous resources building an 
international system predicated on democratic governance, the rejection 
of force as a means of altering borders, the peaceful settlement of 
disputes wherever possible, free trade, human rights, and robust 
alliances. These efforts have been successful and this is especially 
the case in Europe. Despite the high tensions of the Cold War, the 
conflicts that ravaged Europe for centuries have been largely avoided 
since the end of World War II. It is a historic tragedy that Vladimir 
Putin has spurned the outstretched hand of the West and chose instead 
to menace his neighbors. In 2008, Russia invaded Georgia and continues 
to occupy Abkhazia and South Ossetia. In 2014, Russia invaded and 
occupied Crimea, instigated an ongoing conflict in eastern Ukraine that 
has killed over 13,000 people, and launched a comprehensive campaign of 
cyberattacks, disinformation, propaganda, economic sanctions, and 
subversion aimed at destabilizing the Ukrainian state. And these are 
only the most overt examples of Russian belligerence. This continuing 
aggression strikes at the core of the international system the U.S. and 
our allies have worked so long and hard to build and maintain.
    America and Europe continue to respond to Russia's actions, though 
not always as robustly as necessary. The United States has imposed 
sanctions on over 700 different entities for actions related to 
Russia's aggression in Ukraine and provided hundreds of millions of 
dollars of defensive assistance to Ukraine including lethal defensive 
aid and military training. The EU has also imposed heavy sanctions on 
Russia. To date, however, Russia's behavior remains unchanged, and part 
of our task today will be examining the West's response in order to 
pinpoint areas where we can be more effective.
    Ukraine's success will depend primarily on the efforts of the 
Ukrainian government to champion the reforms necessary to unleash the 
economic potential of its people and to build popular trust in the 
integrity of its public institutions and the rule of law. Ukraine's 
record of reform over the last 5 years is by no means perfect, but it 
has made meaningful strides in vital sectors that are laying the 
foundation for long-term success. It is important to grasp the 
magnitude of the challenge confronting Ukraine. Casting off a legacy of 
70 years of communist rule is a generational task made all the more 
challenging by Russia's efforts to retain its influence and destabilize 
the country. It will take time, and we must remain patient and resolute 
in our support as Ukraine strives to fulfill the promise of freedom 
sparked 5 years ago by those courageous Ukrainians on the Maidan.

               STATEMENT OF HON. JEANNE SHAHEEN, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Well, thank you, Mr. Chairman. I am also 
happy to submit my opening comments for the record and look 
forward to the testimony of both our panels.
    [The prepared statement of Senator Shaheen follows:]

              Prepared Statement of Senator Jeanne Shaheen

   Thank you, Chairman, for calling this important hearing. I look 
        forward to working with you this Congress.

   The Ukrainian people made a strong statement for democracy in their 
        presidential elections completed on April 21.

   First, Ukraine held peaceful, credible elections while a war with 
        Russian-backed forces continues in its eastern regions. That 
        shows the resiliency of Ukrainian democracy.

   Second, the Ukrainian people voted overwhelmingly for a candidate 
        who ran on a platform of change but expressed that will for new 
        leadership in Kyiv through an election, not protests.

   This shows us that the Ukrainian people believe in their democracy.

   The reason there were not protests in the streets or on the Maidan 
        (mai-DAHN) were not because an authoritarian leader prevented 
        them by force. They simply weren't needed.

   Finally, Ukraine's new president, Volodymyr Zelensky (voh-loh-DIH-
        mir zeh-LIHN-skee) took office with a message of hope for the 
        Ukrainian people and inclusion.

   But also with a clear vision of the challenges that Ukraine still 
        faces, and a sense of responsibility to overcome them, by 
        Ukraine's leadership and its people.

   I believe our distinguished panels will help us better understand 
        what this political shift means for Ukraine's future and U.S. 
        policy.

   I think we can be hopeful at the moment that we have seen the most 
        fundamental block of a strong democracy: a credible election 
        and a peaceful transition of power.

   I would also like today's hearing to explore some of Ukraine's 
        challenges: the state of its reform agenda and anti-corruption 
        efforts and especially how Ukraine can better address 
        interference from Russia--the on-going war but also Russian 
        intrusions in its media, cyberspace and elections.

   In the 5 years since anti-government protests started in the Maidan 
        (mai-DAHN), we have learned a lot about the problem of Kremlin 
        interference, not just in Ukraine but throughout Europe and the 
        United States.

   There is NO question that Russia interfered in our 2016 
        presidential elections. And, the United States must examine the 
        experiences of countries like Ukraine to be prepared for what 
        will certainly come in 2020.

   We can also learn from the Ukrainian experience a certain irony. As 
        Russia worked so aggressively to divide Ukraine, Ukraine's 
        sense of unity endured and its commitment to a European future 
        only grew stronger, as President Zelensky made clear.

   Ukraine has built an enthusiasm for joining Europe and its 
        institutions at a time when Europe has increasingly doubted 
        itself.

   Five years ago President Poroshenko and a new parliament had the 
        mandate to reform the government, improve the economy and, 
        above all, translate the enthusiasm of the revolution into 
        reality.

   The challenge before President Zelensky is to continue those 
        reforms and use the enthusiasm behind his own candidacy for 
        positive change.

   I hope this hearing will give us better clarity on how to assist 
        our important ally Ukraine continue to develop the strong 
        institutions it needs for a European future.

   And I hope that we can better understand what we must do to protect 
        ourselves from foreign interference.

   I look forward to the testimony of our distinguished witnesses and 
        to hearing their perspectives on this important topic.

    Senator Johnson. Well, thank you.
    Ambassador Volker has agreed to give his opening testimony 
and then slide over and let the other panelists, other 
witnesses give their testimony. Then we will open it up to 
questions.
    So we will start with our first witness. Ambassador Kurt 
Volker is the U.S. Special Representative for Ukraine 
Negotiations and Executive Director of the McCain Institute for 
International Leadership.
    Ambassador Volker was a career member of the U.S. Senior 
Foreign Service, with over 23 years of experience working on 
European policy under five U.S. administrations. His postings 
include Ambassador to NATO and Principal Deputy Assistant 
Secretary of State for European and Eurasian Affairs. 
Ambassador Volker has previously served as Acting Senior 
Director for European and Eurasian Affairs at the National 
Security Council, as Deputy Director of the Private Office of 
then-NATO Secretary General Lord Robertson.
    Ambassador Volker.

   STATEMENT OF HON. KURT VOLKER, SPECIAL REPRESENTATIVE FOR 
 UKRAINE NEGOTIATIONS, U.S. DEPARTMENT OF STATE, WASHINGTON, DC

    Ambassador Volker. Well, thank you, Mr. Chairman, and thank 
you, Senators, for the opportunity to testify today.
    I also have a statement that I would like entered for the 
record, if I may, and I will just try to speak a little bit 
candidly with you about the situation in Ukraine.
    First off, it is an honor for me to be here, and again, I 
appreciate that.
    Second, I want to thank all of you Senators from both sides 
of the aisle for your commitment and dedication to Ukraine. It 
is critically important. And if I may, let me just say a few 
words about why that matters, where Ukraine is today, and a few 
suggestions looking forward.
    Concerning why Ukraine matters, I think most importantly we 
start with the people. Ukrainians are people who seek and 
deserve freedom, democracy, market economy, rule of law, and 
security just like other people in Europe. The United States 
has led the development of NATO and a strong NATO for decades. 
The European Union has also helped build a strong, prosperous, 
free, secure Europe. And there is no reason why Ukraine or 
others in the region who are not part of that now should not be 
part of that. They have very much the same values and very much 
the same aspirations. So the first thing is the people.
    The second is that they are a country that is fighting a 
war of self-defense. They have been attacked. Their territory 
has been seized. The fighting continues to go on, and they are 
in need of support. And it is important that we support them on 
the merits of that alone and also because we want to make sure 
that we are not allowing a Europe to be taken apart through the 
use of military force. If we go back to the Helsinki principles 
of 1975, which the Soviet Union supported at the time, we are 
talking about no changing of borders by force, no threat or use 
of force, no coercion, countries have the right to choose their 
own security orientations and so forth, those are principles 
that we need to continue to uphold. If we do not do so in 
Ukraine, we run the risks that we will be seeing them 
challenged across Europe, and that would be dangerous for all 
of us. If we do not invest in security today, we will pay for 
the lack of security tomorrow.
    Now, where we are today. Ukraine is really in the balance. 
As you know, they have just had a presidential election. 
President Zelensky was elected with 73 percent of the popular 
vote, and he came out of nowhere coming into this. So he has 
zero seats in the parliament. And so Ukraine has gone to early 
parliamentary elections. And his major task, the number one 
thing he has before him right now, is to take that 73 percent 
public support and convert it into actual votes for his program 
in the Rada. So that is his political challenge at the moment.
    In the course of his campaign, he promised substantial 
massive reform of everything from corruption to the economy, 
political systems, and judiciary. And that is what the 
Ukrainian people voted for. So with 73 percent of the public 
voting for him, he also generated very high expectations of 
what policies he would pursue as president.
    Let me take a minute and say that I believe that President 
Poroshenko also did an excellent job in promoting reforms in 
Ukraine over the past 4 years, probably more accomplished in 
the last 4 years than the preceding 20. But what we saw in this 
election was that the Ukrainian people wanted even more. They 
wanted to go faster, further, more aggressively, and that is 
what President Zelensky has promised.
    I believe it is important that we support those policies 
and those principles, and as long as he as willing to continue 
to advance that agenda, he deserves as much of our support as 
we can give him.
    I believe that he has a few other important challenges 
ahead of him. One of them is amassing the political capital to 
carry out real reform. Another is that a lot of the power 
structures in Ukraine are behind the scenes in the form of 
oligarchs who control a lot of the economic assets, control the 
media, and it is going to be very difficult for him to take on 
that system. But ultimately taking on that system is what is 
exactly essential for Ukraine to break free of its past and 
take advantage of the natural resources, the great human 
capital, and its position as a country of potential phenomenal 
growth within Europe. It has to do that.
    I would also say that since he has become president, of 
course, everyone is putting their oar in the water to try to 
influence the outcome in Ukraine, whether that is the Russians, 
whether that is the oligarchs, whether that is reformers. We 
have seen an increase in Russian media propaganda and presence 
in the Ukrainian media over the past few weeks. These are all 
areas of concern and another reason why it is important that we 
support Zelensky as much as we can.
    Concerning U.S. policy, we have over the past few years 
engaged in a significant strengthening of U.S. policy. I would 
argue that we have gone from a period in which time appeared to 
be on Russia's side to a time in which time now appears to be 
on Ukraine's side as they are more unified, more of a strong 
national identity, more pro-Western, more pro-European, more 
pro-NATO, more Russia-skeptic than ever before as a country. 
And that is giving Ukraine a resilience as they go through this 
period that I think will serve them well for the long term.
    And in addition, we have worked very hard to keep Western 
policy unified and strong. We and the EU have both maintained 
sanctions and increased sanctions. The U.S. has lifted the ban 
on lethal arms sales to Ukraine, and that has gone through with 
the acceptance of our European allies as well. We have 
strengthened their armed forces. Just today, we are announcing 
how we are dealing with an additional $125 million in support 
for Ukraine's military that the Congress approved. So we are 
grateful for that. So we have maintained a much stronger 
position. I believe we have a sustainable position. If what 
Russia wants is a Ukraine that is once again part of a Russian 
sphere of influence, a greater Russian empire, I believe that 
opportunity is lost because the Ukrainian people will never go 
back there.
    What we also have done is make sure that we have a hand 
outreached to work together with Russia to end this conflict if 
Russia wishes to do that. Thus far, we have not seen any 
indication from Russia that they do want to do that. And in 
fact, they remain in denial about their responsibility. They 
actually lead the military forces in the Donbas. They pay for 
the contract soldiers that are there. They hand-pick the civil 
administrations. They pay for those civil administrations. They 
provide the intelligence services. So this is 100 percent 
Russian-controlled, and yet, Russia denies their involvement 
and instead says that this is an internal Ukrainian matter, 
which we know not to be the case.
    We have continued to insist that Russia release the sailors 
that it seized in November in international waters. We have 
urged them to pursue a longer-term ceasefire. I have reached 
out recently to my Russian counterpart to ask whether they 
believe it is time to get together and see whether we can make 
any progress. Certainly in my consultations with you and 
Ukraine, with the French and Germans, we believe there is an 
opportunity to move ahead again or at least it is worth a try, 
but we need to know whether Russia wants to take this seriously 
and seize such an opportunity as well or not. Thus far, we do 
not see any indication of that.
    In terms of outreach to President Zelensky, I have stressed 
that this is critically important. I think that the future of 
Ukraine over the next 5 years is going to be shaped in the next 
3 months. How this election comes out, how President Zelensky 
assembles a government, and whether he is able to operate 
independently and in charge as President of Ukraine without 
undue influence of any individuals or oligarchs in Ukraine, 
will be absolutely critical. And it is important that he know 
that he has the full support of the United States and Europe in 
doing so.
    We have reached out significantly. Secretary Pompeo called 
the candidate Zelensky and also then-President Poroshenko on 
the eve of the elections. President Trump called to 
congratulate President Zelensky on the night of the election. 
As you know, Senator, you took part in a presidential 
delegation, along with Secretary Perry and myself and our EU 
Ambassador Gordon Sondland, to be there for the inauguration. 
We had a lengthy meeting with President Zelensky then.
    Since then, President Trump has written to President 
Zelensky, has indicated that he is welcoming him for a visit to 
the White House at a time yet to be agreed. We hope that is 
soon. And we have remained engaged in a number of ways. Our EU 
Ambassador hosted President Zelensky for a dinner in Brussels. 
And he has also made the rounds in Europe and is, in fact, in 
Berlin today and was in Paris yesterday. So we are reaching out 
in a variety of ways, and I hope that we are able to assemble 
another trip to Ukraine in advance of his White House visit in 
the next several weeks.
    Finally, I do want to put one point out there. It is very 
important that we not forget about the people of the Donbas. 
They are living through a war on their territory. Of a pre-war 
population of about 4 million, it is down to about 1.5 million 
to 2 million. They are dealing with all kinds of privations, 
whether it is threats to water supply, a collapsed economy, 
environmental degradation, pressure on the health care system, 
lack of freedom of movement, and difficulty in crossing 
boundary crossings between the occupied area and the rest of 
Ukraine, outages of electricity, outages of cell phone service, 
which is a vital means of communication. So it is a grinding, 
awful situation for the people in the Donbas. They need as much 
support as the Ukrainian Government can give them and as we can 
give them. And ultimately that is why we need to keep the 
spotlight on this issue, as you are doing with this hearing, 
because we cannot forget about those people even though we see 
a very difficult situation in terms of resolving this conflict 
going ahead.
    Ultimately what we seek--and this has been U.S. policy for 
as long as I have been involved--is the restoration of 
Ukraine's sovereignty and territorial integrity and the safety 
and security of all Ukrainian citizens regardless of ethnicity, 
nationality or religion.
    And with that, Senator, I will end my remarks. I look 
forward to the question and answer. Thank you.
    [The prepared statement of Ambassador Volker follows:]

              Prepared Statement of Ambassador Kurt Volker

    Thank you Chairman Johnson, Ranking Member Shaheen, and members of 
the Committee for calling today's hearing. I am happy to have the 
opportunity to talk about the state of negotiations with Russia to end 
the fighting in eastern Ukraine and take an important step toward 
restoring Ukraine's territorial integrity. I had the honor of being in 
Ukraine last month as part of a U.S. presidential delegation led by the 
Secretary of Energy Rick Perry, and including the United States 
Ambassador to the European Union, Gordon Sondland, for the inauguration 
of President Zelensky. Senator Ron Johnson joined us in Kyiv for the 
inauguration, reflecting his staunch support for Ukraine.
    The United States' support for Ukraine's sovereignty and 
territorial integrity is unwavering. Russia's aggression and efforts to 
undermine Ukraine continue, but Ukraine is stronger, more united, more 
cohesive, and more resilient than ever before, and with our support, 
those trends will continue.
    We are deeply concerned about the ongoing 5-year old conflict in 
eastern Ukraine. Unfortunately, the fighting continues unabated, and 
Ukrainian soldiers are still being killed nearly every week. The 
conflict is a humanitarian tragedy for the residents of the Donbas, 
with around 13,000 people killed, 40,000 injured, millions displaced, 
and untold damage to civilian infrastructure. The arbitrary separation 
created by Russia's invasion and installation of their artificial 
political proxies has caused needless suffering, divided families and 
communities, and damaged vital health and social infrastructure, 
businesses, and supply lines. In short, Russia has created one of the 
worst humanitarian crises in Europe since the wars in the Balkans in 
the 1990s. This suffering is a direct result of Russia's aggression and 
will end only when Russia withdraws its military and security forces 
from Ukraine, and implements the Minsk agreements--which remain the 
best vehicle for achieving peace through the reintegration of the 
currently Russia-controlled areas in the east.
    Russia, however, remains the primary obstacle to implementing the 
Minsk agreements. Ukraine has done what it can to implement the 
agreements. Ukraine passed legislation that would provide amnesty for 
people who committed crimes as part of the conflict. It has passed 
legislation that would provide for so-called ``special status.'' In 
December 2014, Ukraine attempted to hold local elections in the Donbas 
consistent with Ukrainian election laws, as called for by the Minsk 
agreements, only to be blocked by Russia. It has held elections 
throughout the rest of Ukraine and would do so in the Donbas as well if 
the Government of Ukraine were able to access these Russia-controlled 
areas.
    Unfortunately, Russia appears to have made a deliberate choice to 
maintain the status quo. Russia continues to prop up its puppet 
regimes, the so-called ``People's Republics'' of Donetsk and Luhansk 
that have no place under the Minsk agreements or Ukraine's 
constitutional order. Russia continues to lead and support the 
fighting, and has yet to implement a ceasefire or withdraw its forces 
from eastern Ukraine. Russia's highly provocative recent decision to 
provide expedited Russian citizenship to Ukrainians in the Donbas 
created another serious obstacle to the implementation of the Minsk 
agreements and the reintegration of the Russia-controlled territories 
in the east. There is a lot that Russia has to do to stop its ongoing 
aggression against Ukraine so that we can get on with the other aspects 
of full implementation of Minsk. It's very much what we want to do, but 
Russia remains intransigent.
    In the meantime, the people living on both sides of the frontlines 
but especially in the Russia-controlled areas of the Donbas need as 
much support and assistance as can be delivered by the Ukrainian 
government and by the international community. Many things need to be 
done--including assisting with mine clearance in areas where the 
Ukrainian government actually has control, improving the safety of 
boundary crossings between the Russia-controlled areas and the rest of 
Ukraine, facilitating the delivery of pensions to those needing 
assistance, making sure that vital services such as gas, water, and 
electricity are connected and continuing. These are all areas where, 
with the support of international humanitarian organizations, I believe 
more can be done. We continue our close cooperation with the Ukrainian 
government, our European Allies, and international organizations to 
address the humanitarian suffering.
    The United States has provided and will continue to provide support 
to protect and assist conflict-affected Ukrainians in the Donbas. This 
includes mental health and psychosocial support, legal aid, and 
critical infrastructure repair. These activities have also demonstrated 
the tangible reform progress that Ukraine has made since the Revolution 
of Dignity and helped build relationships between citizens and the 
state impacted by the on-going conflict. In providing communities of 
the Donbas with modern administrative services and opportunities to 
young entrepreneurs, Ukraine is supporting economic revitalization and 
good governance in the region and illustrating the way a united Ukraine 
can provide a better life for its citizens.
    Of course, the best step that could be taken to end this artificial 
conflict would be for Russia to get out of eastern Ukraine. In addition 
to our own bilateral efforts, we support the French and German efforts 
in the Normandy Quartet and the work of the Organization for Security 
and Cooperation in Europe (OSCE) in the Trilateral Contact Group, and 
we coordinate closely to ensure our bilateral efforts and negotiations 
complement these efforts. Unfortunately, Russia has been stalling and 
uninterested in progress for the past 18 months.
    The election of President Zelensky creates a good opportunity to 
re-energize efforts to end the 5-year old conflict in the Donbas. 
President Zelensky has repeatedly reiterated his commitment to peace 
and to the Minsk agreements, to seek to ease the suffering of the 
people in the Donbas, and has expressed an openness to creative 
approaches to break the deadlock. During this critical period, it is 
vital that the United States continue to support Ukraine and work 
closely with the new president on his diplomatic initiatives.
    We have encouraged the Russians through a variety of channels to 
take advantage of this opportunity. I would like to meet with my 
Russian counterparts in the near future, but I do not know what form 
that will take at the moment. I am willing to meet with them to discuss 
a way forward, if Russia is serious about making progress. I told the 
Russians that a good first step would be for Russia to release the 
Ukrainian sailors and vessels it seized during its unjustified attack 
near the Kerch Strait, which would be in keeping with the recent 
provisional order of the International Tribunal for the Law of the Sea.
    While we are open to supporting initial confidence-building steps, 
we are also focused on the central elements of Minsk implementation, 
starting with the ceasefire, withdrawal of foreign forces, the 
disarming of the illegal armed groups, and creating a situation of 
security in the Donbas so that additional political steps that are also 
part of Minsk can be taken. These include amnesty for people who've 
committed crimes as part of the conflict, implementing a so-called 
special status for the region under Ukraine's constitution, and holding 
local elections, resulting in the peaceful reintegration of this 
territory with the rest of Ukraine.
    We hope that Russia will finally choose peace and work with us to 
end the fighting. In the meantime, it is important to continue to 
strengthen Ukraine and increase its resilience to better withstand 
Russian aggression and to support ongoing reforms to integrate Ukraine 
more closely with the West. We will continue to support the work of the 
OSCE Special Monitoring Mission, which serves as the world's ``eyes and 
ears'' for the conflict in eastern Ukraine and now includes 
approximately 800 monitors and 420 local staff operating under 
extremely challenging political and security conditions. We are working 
with Ukraine on its reform agenda and creating an open, competitive 
economy that creates opportunity for its people. A democratic, free, 
and prosperous Ukraine creates a stark contrast with those living in a 
second-rate police state in the Russia-controlled Donbas.

    Senator Johnson. Thank you, Ambassador Volker, for first of 
all your past service and your future service as it relates to 
Ukraine.
    We will call up the other witnesses right now. While that 
is happening, just a couple comments.
    I really do believe that Ukraine is just ground zero in 
this geopolitical conflict between Russia and the United 
States. And we are really here in support of the Ukrainian 
people. This has been, I think, a real demonstration of 
bipartisan support. I keep pointing out to our European 
partners the extraordinary nature of the fact that on a 
unanimous basis we approved lethal defensive weaponry. I mean, 
that is a really big deal and just demonstrates that support.
    And a final comment before we go to additional opening 
statements is I did meet with a delegation from their foreign 
affairs committee, and I did express to them my concern that if 
there is conflict between the legislative branch and the new 
president, that is just not good from the standpoint of 
maintaining strong, unanimous support here in Congress. They 
have it now. They can maintain it as long as they work together 
as patriots for the benefit of Ukraine. And so that is what I 
think we all need to encourage. That is kind of the support 
that we need to give.
    Again, I want to welcome our next witnesses. Our first 
witness we will go to is Ambassador John Herbst. Ambassador 
Herbst is the Director of the Atlantic Council's Eurasia 
Center. Ambassador Herbst served for 31 years as a Foreign 
Service officer in the Department of State, retiring with the 
rank of career minister. He was Ambassador to Ukraine from 2003 
to 2006 and Ambassador to Uzbekistan from 2000 to 2003. He is a 
recipient of the Presidential Distinguished Service Award, the 
Secretary of State's Career Achievement Award, and the State 
Department's Distinguished Honor Award.
    Ambassador Herbst.

  STATEMENT OF HON. JOHN E. HERBST, DIRECTOR, EURASIA CENTER, 
                ATLANTIC COUNCIL, WASHINGTON, DC

    Ambassador Herbst. Thank you, Senator Johnson and Senator 
Shaheen. It is an honor to be here today.
    I know you want to save time. I am tempted to say every 
word Kurt said, I agree.
    But we are here to talk about one of the most critical 
issues on the international agenda today: the Kremlin's war 
against Ukraine and Ukraine's efforts to reform and actually 
transform itself into a rule of law society, closely aligned 
with Europe and the broader democratic world.
    We are in a period of great power conflict that pits the 
democratic world against revisionist authoritarians. 
Unfortunately, President Putin is challenging the world order. 
He claims a right to a sphere of influence in Russia's 
neighborhood. He seeks to weaken NATO, the EU, and the U.S., 
and he has launched two wars against Georgia in 2008 and 
against Ukraine since 2014.
    The U.S. has a vital interest in stopping Kremlin 
revisionism, and the place to do it is in Ukraine. Within the 
limits of Moscow's operations in Donbas, Kyiv has fought the 
world's second most powerful military to a standstill. I came 
back Saturday from 5 days in Ukraine with General David 
Petraeus. He was impressed by what he saw. We met most of the 
new leadership, including the army chief of staff Khomchak, 
visited Ukrainian commanders at the front and the troops at 
Abdiaka along the line of contact with the Russians.
    There are 2,500 Russian military officers leading the 
Kremlin war in Donbas, and they have at their disposal over 450 
tanks and 700 pieces of artillery. That is very serious 
hardware.
    Despite the two Minsk ceasefires, there has not been a day 
of peace since Moscow's aggression began in the spring of 2014. 
Less than 18 hours after we left the front, Russian artillery 
hit a residential building in Marinka, wounding four civilians.
    Over 13,000 Ukrainians have died in this war. Moscow hopes 
that its constant pressure on Ukraine will force the government 
to stop building a democratic and open society oriented to the 
West. So far the Kremlin is not succeeding.
    An important reason for Moscow's failure is it has two 
vulnerabilities: a weak economy based on hydrocarbon exports 
and also the Russian people have clearly stated that they do 
not want Russian forces fighting in Ukraine.
    The first means that Moscow is susceptible to economic 
pressure. The second means that Putin must hide his casualties 
and keep them to a minimum because the Russian people do not 
want Russian soldiers fighting in Ukraine.
    This makes it possible for the West to help Ukraine and at 
low cost, especially compared to, say, the cost of defending or 
even deterring Russian aggression against our Baltic allies. 
Western sanctions impose a real cost on Russia's economy. One 
to 1.5 percent of GDP growth a year is lost because of the 
sanctions. And Western military support, especially advanced 
weapons like the Javelins, nullify Moscow's tank advantage.
    I salute President Trump for his courage in sending the 
Javelins to Ukraine. The U.S. should consider sending more 
Javelins to Ukraine, also sending more counter-battery radar 
for missiles. These radar reduce Ukrainian casualties. The U.S. 
should also provide shore radar, Mark V speed boats, and anti-
ship Harpoon missiles, which will help Ukraine to deter Kremlin 
provocations at sea, which we have seen increasingly over the 
past 18 months.
    Western support for Ukraine has been substantial and 
essential but has not been as agile and effective as it could 
be. Part of that is due to the reluctance on part of some 
members of the EU. Chancellor Merkel deserves credit for 
maintaining EU sanctions on Russia.
    But Moscow is constantly seeking ways to increase the 
pressure on Ukraine and it has found a new mechanism. Starting 
in the spring of 2018, it began an inspection regime of ships 
heading to Ukraine's ports in the Sea of Azov. As a result of 
this inspection regime, shipping from Donbas, Ukraine has 
dropped by anywhere from 33 to 50 percent by imposing major 
economic costs, new economic costs on Ukraine. In November last 
year, Russian ships attacked and seized three Ukrainian ships. 
They have imprisoned the 24 sailors. No sanctions were imposed 
for the inspection system on Ukrainian ships, and U.S. 
sanctions for the incident in the Straits of Kerch came late 
and were weak.
    Congress has played a major role in sanctions policy. It 
should consider sanctioning a major Russian bank such as 
Gazprom Bank or VnesheconomBank.
    The Senate has introduced legislation, the Defending 
America's Security from Kremlin Aggression Act of 2019. This 
could be a vehicle for strengthening our sanctions policy.
    The U.S. should also be able to persuade Germany and the EU 
to drop the Nord Stream 2 project, a pipeline that will allow 
the Kremlin to bypass Ukraine and exert geopolitical leverage 
over the nations of Eastern Europe. Chancellor Merkel has asked 
for the Kremlin to guarantee substantial flow of gas through 
the Ukrainian pipeline even as Nord Stream 2 is built. But 
numerous statements by Russian officials as high as Prime 
Minister Medvedev have cast this problem into doubt.
    With this in mind, Congress and the U.S. should consider 
sanctions on companies providing the high tech necessary to 
complete the project. This needs to be managed very carefully 
since U.S.-German cooperation has been vital for overall 
sanctions policy. But it is hard to imagine Nord Stream 2 
proceeding if it permits Moscow to shut out Ukraine as a gas 
transporter.
    Moscow has also active trying to influence political 
developments in Ukraine, including in the recent Ukrainian 
presidential election. The Atlantic Council, in partnership 
with the Pinchuk Foundation and the Transatlantic Commission on 
Election Integrity, set up a Ukraine election task force to 
monitor Kremlin disinformation, cyber, and military operations. 
Our task force found substantial Russian disinformation and 
cyber-attacks, but there was little success. Moscow was pleased 
that Poroshenko lost the election, but they have been skeptical 
about new President Zelensky whose deaf response to Putin's 
passport provocation put Putin on a rare public defensive. 
Moscow is now busy trying to undermine Ukraine's upcoming 
parliamentary elections.
    President Zelensky has two great battles to win against 
Kremlin aggression and against domestic interests impeding 
fundamental reform. With assistance from the United States and 
the EU, he can win both battles. Congress should continue to do 
its part in providing that assistance.
    Thank you.
    [The prepared statement of Ambassador Herbst follows:]

         Prepared Statement of Ambassador (Ret.) John E. Herbst

    Chairman Johnson, Ranking Member Shaheen, Members of the 
Subcommittee, thank you for the invitation to speak this afternoon. It 
is an honor.
    Ukraine emerged as a new independent state following the fall of 
the Soviet Union and into a new security order in Europe and Eurasia. 
This order, based on the principles of the Helsinki Final Act and the 
Paris Charter, ushered in an unprecedented period of peace and 
prosperity.
    The foundations of this security system include: the territorial 
integrity of nations; the sovereign right of nations to choose their 
own political and economic systems and rulers; the right of nations to 
choose their own external partners and allies; and the commitment of 
nations to resolve differences by diplomacy and international law.
    Sadly, Ukraine has not been able to exercise these internationally 
agreed rights in peace. For well over a decade, the Kremlin has been 
pursuing an openly revisionist policy, one explicitly designed to 
overturn the rules established in the Helsinki and Paris documents.
    In 2013, Moscow sparked the current crisis when it insisted that 
Ukraine not sign the Deep and Comprehensive Free Trade Agreement with 
the European Union. Then-President Yanukovych decided to abandon the 
agreement. A violent crackdown against Ukrainian demonstrators resulted 
in a successful revolution, forcing Yanukovych to flee to Russia. In 
the wake of these events, Moscow began military operations against 
Ukraine. It first seized the Crimean Peninsula by force, and then 
launched its not-so-covert, hybrid war in Donbas.
    This war is of critical importance to the United States for one 
simple reason: Moscow's revisionist ambitions go well beyond Ukraine. 
The Kremlin's aims include weakening the European Union, NATO, and the 
Transatlantic relationship. Its efforts to achieve these objectives 
have led it to interfere in elections in France, Germany, the U.K., and 
the United States.
    Moscow has claimed the right, and even the duty, to intervene on 
behalf of ethnic Russians and even Russian speakers in other countries; 
it has proclaimed a right to a sphere of privileged influence on the 
territory of the former Soviet Union; and it has proclaimed that there 
will be new rules or no rules in the international system.
    More immediately, and perhaps more dangerously, Moscow has 
continued to put tremendous pressure on the three Baltic States for 
their alleged mistreatment of ethnic Russians, which comprise 
approximately 25 percent of the population in Estonia and Latvia. To 
reduce the risk of Russian provocations against NATO allies, it is in 
the vital interest of the United States to help Ukraine stop Kremlin 
aggression in Donbas. The cost of doing it there is much smaller than, 
for instance, doing it in Narva, Estonia.
    We--the United States, NATO, and the European Union--have a great 
advantage here. Russia is weak. While it has a very talented and 
educated people, and extraordinary natural resources, its economy is 
frail, lacking diversity and innovation. It relies heavily on the 
export of natural resources because its corrupt government and feeble, 
compliant legal system make it hard for entrepreneurs to benefit from 
their own ingenuity and hard work. The absence of the rule of law means 
the insecurity of wealth, which explains the outflow of tens of 
billions of dollars every year. For the Russian economy to prosper, its 
own money must be invested at home and it must attract foreign direct 
investment.
    While between its nuclear and conventional forces Russia has the 
second most powerful military in the world, its stuttering economy 
means that its military position vis-a-vis the United States and NATO, 
and China separately, will diminish with time. This means that prudent, 
strong policies by the United States, NATO, and the European Union will 
eventually persuade the Kremlin to cease its aggression in Ukraine, 
and, more broadly, move away from its current revisionist course.
                        moscow's war on ukraine
    Ukraine is ground zero of Kremlin revisionism. The government is 
currently fighting the Kremlin to a standstill in Donbas. Kyiv has 
established strong defensive lines and there has been little 
acquisition of territory on either side over the last 3 years. Despite 
the 4-year-old Minsk II ``ceasefire,'' the normal day in Donbas 
averages over 100 exchanges of fire with the majority originating in 
Russian-controlled territory. Moscow's current aim is to destabilize 
Ukraine by a low intensity war of attrition. It is not succeeding.
    Two factors restrain Moscow from sending a large conventional force 
into Ukraine. Such an operation might aim either to seize Mariupol, 
establish a land supply corridor to Crimea, or take control of the 
water canal north of Crimea to ease the difficult problem of supplying 
water to the peninsula.
    First, such an offensive would reveal the entire charade propagated 
by the Kremlin, and repeated by the timid in Europe, that Ukraine is 
experiencing a civil war. Despite its bravado, the Kremlin does not 
want more punishing sanctions. Russian economic officials have at times 
acknowledged that the sanctions cost Moscow's already sluggish economy 
1 to 1.5 percent of its growth per year. The major Russian offensive 
required to achieve any of these objectives would likely provoke major 
new sanctions.
    Second, this is a Kremlin war against Ukraine, not a Russian war. 
Polls by Moscow's Levada Center repeatedly show that a large majority 
of the Russian people do not want their soldiers fighting Ukrainians 
and dying in the process. Casualties are thus a political problem for 
Mr. Putin, meaning that he must do everything possible to conceal them. 
There are currently over 1,500 and maybe as many as 3,000 regular 
Russian officers leading the fighting in Donbas.
                    strangling the economy of donbas
    The Kremlin has been searching for low-cost ways to further 
pressure Ukraine while avoiding more serious sanctions and major 
Russian casualties. Unfortunately, Moscow seems to have found one. 
Starting last spring, the Kremlin began to harass Ukrainian and 
international shipping in the Sea of Azov. Russian naval vessels are 
stopping and inspecting ships stopping at Ukraine's ports of Mariupol 
and Berdyansk. Shipping delays and rising insurance costs have reduced 
commercial sea traffic from Donbas between 33 and 50 percent, at major 
new cost to Ukraine's economy. Despite a few denunciations, the United 
States and European Union have done nothing to respond to Moscow's 
aggression in the Sea of Azov. The same was true when the Russians 
illegally completed the bridge over the Straits of Kerch last summer, 
connecting Russia proper with its conquest in Crimea.
    In late November, Moscow's war in Ukraine took an ominous turn. 
When Ukrainian naval vessels tried to exercise their sovereign right to 
transit the Kerch Straits, Russian naval units attacked, detaining 24 
Ukrainian sailors and impounding their ships. Unlike in the Donbas land 
war, Moscow did not try to hide the use of its conventional military 
forces against Ukraine. This May, the International Tribunal for the 
Law of the Sea ruled, with near unanimity, that Russia should 
``immediately'' release all 24 Ukrainian sailors and three vessels.
    Western reaction to this Kremlin escalation has been slow. In mid-
March, nearly 4 months after this provocation, the United States and 
European Union announced sanctions. Even worse, the sanctions were 
weak, targeting mid-level Russian officials involved in the Kerch 
military action and a few Russian firms involved in maritime 
production. This frail Western response makes the Kerch escalation look 
like a tactical victory for Putin.
    The Kremlin conducted interesting, and at times constructive, 
negotiations with the United States on ending the war in Donbas. U.S. 
Special Envoy Kurt Volker had two meetings with Vladislav Surkov in 
September 2017 and January 2018. But after that Moscow stopped 
negotiating seriously. Putin decided to wait for the outcome of the 
Ukrainian 2019 presidential and then Rada elections. His hope was that 
the new president and Rada would be more pliable.
    The presidential elections did not turn out the way the Kremlin had 
hoped. While glad to see the defeat of former President Petro 
Poroshenko, Putin is not sure what to make of the new president. 
Although a political neophyte, Volodomyr Zelensky has expressed 
national security views similar to that of his predecessor Poroshenko; 
and his first trip abroad was to Brussels, where he reiterated 
Ukraine's interest in much closer alignment with the EU and NATO.
    Mr. Putin expressed his dissatisfaction with the new president by 
failing to congratulate him on his election victory. Moreover, the 
Kremlin strongman tested Mr. Zelensky before he took the oath of office 
by offering Russian passports and citizenship to Ukrainian citizens in 
Moscow-controlled Donbas, a violation of international law and a long-
practiced Kremlin tactic used to exert influence and justify aggression 
abroad. President Zelensky's response, dismissing a Russian passport as 
a ticket to a life without human rights and the right to choose your 
own leaders, put Mr. Putin on the rhetorical defensive.
    President Putin is now hoping that the Rada elections, which are 
expected to take place on July 21, will lead to the creation of a 
strong political bloc in the parliament that will try to steer Kyiv 
away from a pro-Western foreign policy. Although we do not know how the 
Rada election will turn out, it is unlikely that a party or bloc of 
parties with such views would gain even 20 percent of the Rada seats. 
In other words, the new Rada, like the new president, is unlikely to 
reverse Kyiv's westward course.
    Once Putin realizes this, he faces an important choice. Does he 
resume real negotiations designed to allow him to save face and end his 
aggression in Eastern Ukraine, or does he escalate? We know that the 
technocrats and commercial elites understand the need to end Kremlin 
aggression in Donbas. This may also be true of some of Putin's allies 
within the military, security services, and the police. If Putin 
clearly understands that a Kremlin escalation will lead quickly to 
strong Western sanctions, the odds of his choosing negotiations go up 
substantially.
       the need for a stronger policy in washington and brussels
    That is why it is critical for the United States and the European 
Union to impose additional, serious sanctions on Moscow for its 
aggression at Kerch. Serious Western measures would turn Putin's 
current tactical victory into a strategic defeat. My first 
recommendation would be for sanctioning a major Russian bank, either 
Gazprom Bank, VnesheconomBank, Promsvyazbank, or a combination of 
these.
    It also makes sense to add a new twist to our personal sanctions 
policy, placing sanctions on the family members of those high Kremlin 
officials and Putin cronies. Some may argue that placing sanctions on 
family members unfairly tars them with the misdeeds of their parent or 
spouse. But it is well known that sanctioned individuals often 
``transfer'' their assets to their relatives. Moreover, there is a need 
to tie these family sanctions to Kremlin repression of individual 
Ukrainians. For instance, the Kremlin has unjustly imprisoned 24 
Ukrainian sailors during the Kerch aggression and Ukrainian filmmaker 
Oleg Sentsov. Sanctions should be levied against the family members of 
25 Kremlin officials and cronies and last until these Ukrainians are 
released.
    The United States should also consider allocating additional 
military aid to Ukraine that would reduce Moscow's naval advantage in 
the Sea of Azov. We should supply anti-ship missiles like Harpoons, 
which we have in surplus, coupled with a radar system that would enable 
Ukraine to chart the presence of Russian ships and direct fire. We 
should also provide Mark V patrol boats to Ukraine. These would provide 
Kyiv with an asymmetric capacity against the scores of Russian naval 
vessels in the Sea of Azov. Finally, an excellent training program has 
been established for the Ukrainian army and special forces, and this 
program should be expanded to increase the overall capability of 
Ukraine's armed forces.
    Finally, NATO should increase its presence in the Black Sea. 
British and U.S. ships have visited the Black Sea nearly 10 times since 
the Kremlin's November 25 attack on Ukraine's ships. This is in 
addition to April's Romanian-led naval exercise, Sea Shield 2019, that 
included more than 20 ships from Romania, Bulgaria, Canada, Greece, the 
Netherlands, and Turkey, along with five ships from the NATO maritime 
group. We should keep up this pace of naval visits, but NATO ships 
should also cruise regularly in the eastern Black Sea. The idea is to 
complicate the planning of the Russian General staff and demonstrate 
that Kremlin aggression in Ukraine has not enhanced Russian security.
    Congress took the lead on sanctions policy in 2017 when it passed 
the Countering America's Adversaries through Sanctions Act--CAATSA. 
This led to sharp sectoral and individual sanctions with serious 
repercussions. The Senate has introduced new legislation, the Defending 
American Security from Kremlin Aggression Act of 2019, which would 
impose major sanctions on Moscow for its aggression in Ukraine and 
provocations elsewhere, including in the United States. Passing this 
act with, for instance, its prohibition on American participation in 
any new issuance of Russian debt, or adding to the draft bill some of 
the measures that I offered above, would be a major blow to Kremlin 
aggression and give Putin reason to opt for negotiations designed to 
end his war on Ukraine.
    The administration and Congress should also consider action to stop 
Moscow's Nord Stream 2 project, which is designed, like Moscow's 
shipping inspection regime, to deliver a blow to Ukraine's economy. Not 
only would building Nord Stream 2 deprive Ukraine of $2 billion a year 
in transit revenues, but it would enable Moscow to supply Europe with 
gas while suspending shipments to Ukraine.
    This project is geopolitical, not commercial. Even Russia's 
Sberbank produced a report noting that the project was not in the 
country's economic interests--it was an expensive way to deliver the 
Russian gas currently flowing through the Ukrainian pipeline--but it 
was in the interest of President Putin's intimates, who were building 
the pipeline.
    Chancellor Merkel, unfortunately, has doubled down in her support 
for the project in recent months, even though there are serious qualms 
about it in her party. Recognizing the damage that this project could 
do to the Ukrainian economy, the Chancellor has said that Moscow should 
continue to send a significant amount of gas through the Ukrainian 
pipeline. But several statements by Russian Prime Minister Dmitry 
Medvedev and Energy Minister Alexander Novak impose intolerable 
conditions on Ukraine for doing just that. And Moscow has told gas 
consuming countries in Europe that it will cease sending gas to them 
through Ukraine's pipeline at the end of 2019.
    In light of all these factors, American sanctions against the firms 
providing the high-tech elements for the pipeline are warranted. It is 
not easy to make this recommendation. Chancellor Merkel has been the 
key European leader on sanctions; and U.S.-EU cooperation on sanctions 
has been a key factor in imposing costs on Moscow for its aggression in 
Ukraine. We want to continue to work with the Chancellor on sanctions.
    But a large number of EU countries also oppose Nord Stream 2, which 
they see as a German imposition. And Germany has not reacted to the 
Kremlin's provocations against Chancellor Merkel's own suggested 
safeguards for gas transit through Ukraine. Deft diplomacy that 
utilizes these factors should enable us to maintain cooperation on 
sanctions as we use sanctions to stop Nord Stream 2. Better yet, the 
threat of sanctions, Kremlin provocations, and deft American diplomacy 
persuade the EU or Germany to drop Nord Stream 2.
    If Germany truly sought to mitigate the strategic risks of Nord 
Steam 2 and perhaps attenuate the pressure for sanctions, it might 
consider putting even more of its weight behind EU efforts to diversify 
gas sources. Germany could back more LNG terminals, including in Poland 
and the Baltics as well as Germany; support thickening the web of gas 
pipelines to undercut the Russian near-monopoly of gas; press for 
rigorous, rapid implementation of the anti-gas monopoly provisions of 
the EU's Third Energy Package; bring Ukraine into an emerging European 
gas network outside of Moscow's control; and guarantee Ukraine the 
revenues from a substantial minimum of Russian natural gas flows 
through its pipeline system.
    The Three Seas Initiative which brings together Poland, Croatia, 
Romania and other countries of Central Europe; the EU, U.S., Germany 
and other stake holders; and private business, could prove a useful 
political umbrella to get past the current political acrimony and work 
out the details of a common approach. As I learned in my diplomatic 
career, when faced with a stand-off, enlarge your ambitions.
    My remarks thus far have focused on Moscow's military aggression 
against Ukraine and the dangers of our weak response to the Kerch 
provocation. But it is important to understand that the Kremlin is 
pursuing a full spectrum aggression that includes disinformation and 
cyber operations, economic sanctions and blockade, subversion, and 
assassinations. One particular object of Kremlin attention has been 
Ukraine's 2019 presidential and parliamentary elections.
    Failing to achieve a favorable result during Ukraine's presidential 
election, Putin has ceased serious negotiations. He now waits for the 
outcome of the upcoming Rada elections, trying to create the conditions 
for a more malleable leadership in Kyiv. Recognizing the Kremlin's 
well-established capacity to interfere in foreign elections, and its 
intention to do so in Ukraine, the Atlantic Council has partnered with 
the Victor Pinchuk Foundation in Ukraine and the Transatlantic 
Commission on Election Integrity to establish an Elections Task Force 
under the direction of David Kramer, a former Assistant Secretary of 
State and former Director of Freedom House. The task force has been 
operating since early December. Kremlin activities designed to shape 
the election's outcome include massive disinformation mischaracterizing 
the major candidates and seeking to call into question the legitimacy 
of the election process, cyber operations particularly against the 
Central Election Commission, and the raising and lowering of military 
operations in Donbas to encourage Ukrainians to seek peace on Moscow's 
terms.
                      some observations on reform
    While this statement has been devoted to Ukraine's security 
challenges, it would be a mistake to close without briefly addressing 
the other great issue facing Ukraine: socioeconomic reform and 
transformation. There is much debate on this topic, both in Ukraine and 
abroad.
    The first point is the most important. There has been substantial 
progress in transforming Ukraine over the past 5 years. These 
achievements include: stabilizing the economy after Ukraine lost 17 
percent of its GDP in 2014-15 because of Russian military aggression 
and severe trade sanctions; reducing the budget deficit from over 10 
percent of GDP to 2.5 percent of GDP; and reducing public debt. 
Inflation has been slashed from 61 percent to 9 percent. Economic 
growth has returned but stays low at 3 percent. Major changes have also 
taken place in the banking sector; more than 80 insolvent banks have 
been shut down and the nation's largest private bank, Privat, 
nationalized.
    In the course of these economic reforms, the government has 
eliminated major sources of corruption. Most important has been the 
equalization of gas prices, which has eliminated government subsidies 
as much as 6 percent of GDP per year. Another major reform has been the 
introduction of the electronic state procurement system ProZorro, which 
has eliminated 1 percent of GDP per year in excessive public 
expenditures.
    The second point, however, is that one area has seen little reform. 
That is the judicial sector: the prosecutors' offices and the courts. 
Yes, the anti-corruption bureau (NABU) was established, but its good 
work has been hindered by rivalry with the Prosecutor General's Office. 
The corruption in this area was one of the reasons for the surprise 
victory of President Zelensky.
    Candidate Zelensky ran as the anti-corruption candidate. We will 
now see if he takes on this huge challenge. Certainly, he has been 
saying the right things. While slow in handing out positions, several 
of his picks have been reformers, and only one selection raises 
questions.
    Senior U.S. and European officials have had the chance to talk with 
the new president. He has assured all interlocutors of his reform 
intentions. The reformers on his team are also optimistic.
    The Ukrainian leadership and people have done a commendable job 
defending their country against aggression by the world's second 
leading military power and introducing serious reforms. Western and 
especially American help has been essential to address both challenges. 
Greater assistance, in the form of additional sanctions on the Kremlin, 
more arms and military assistance to Ukraine, and more economic aid 
with tight conditionality, is called for. Such increased aid by the 
United States would protect our interests by hastening an end to 
Kremlin aggression and revitalizing the process of reform in Ukraine. 
This would greatly enhance stability in Europe and add to both its and 
our prosperity.

    Senator Johnson. Thank you, Ambassador Herbst.
    Our next witness is Dr. Alina Polyakova. Dr. Polyakova is 
Director of the Project on Global Democracy and Emerging 
Technology at the Brookings Institution and an adjunct 
professor of European studies at Johns Hopkins University 
School of Advanced International Studies.
    Dr. Polyakova specializes in Russian foreign policy, 
European populism and U.S.-Russian-Europe relations and is a 
frequent contributor to many media outlets.
    Previously she was the Director of Research and Senior 
Fellow for Europe and Eurasia at the Atlantic Council.
    Dr. Polyakova.

 STATEMENT OF DR. ALINA POLYAKOVA, DIRECTOR, PROJECT ON GLOBAL 
   DEMOCRACY AND EMERGING TECHNOLOGY, BROOKINGS INSTITUTION, 
                         WASHINGTON, DC

    Dr. Polyakova. Thank you, Chairman Johnson and Ranking 
Member Shaheen, and distinguished members of the subcommittee. 
It is an honor and privilege to address you today on this 
important issue. Thank you for inviting me to speak.
    I could also just shorten my comments and say that I agree 
with everything that Ambassador Volker and Ambassador Herbst 
have just said, but in the interest of laying out a broader 
picture, I will not do that.
    Ukraine remains a key arena of contestation between Russia 
and the West. An unstable Ukraine means a Europe that is less 
secure and less able to defend itself from future threats. For 
these reasons, the United States must continue to support 
Ukraine's democratic path, its Euro-Atlantic future, and its 
ability to defend itself. Deterrence of an increasingly 
aggressive Russia must start in Ukraine.
    The Kremlin seeks to keep Ukraine in a so-called permanent 
``gray zone.'' To do so, Russia continues to destabilize 
Ukraine through conventional and non-conventional means. Today 
I am going to focus my oral comments on Russia's non-
conventional warfare against Ukraine, Ukraine's progress and 
challenges and reforms, and what the U.S. should do to ensure 
Ukraine's continued progress.
    But one comment on the conventional threat. Russia 
continues to occupy and militarize Ukraine's Crimean Peninsula. 
It is important to note that over the last 18 months, we have 
seen a steady and significant buildup in Russian military 
capabilities in Crimea and the surrounding waters. Beginning in 
January 2017, Russia began deploying S-400 surface-to-air 
missile systems to Crimea. Since then, there have been at least 
five known S-400 armed battalions positioned in Crimea. This 
means that with the S-400 presence, in addition to other 
capabilities on land and surrounding water, Russia de facto has 
military dominance over the Azov Sea and the entire Black Sea 
region. And this is something we must pay attention to from our 
national security interests.
    Ukraine has long been a test lab for Russia's growing 
arsenal of political warfare. This includes information 
warfare, cyber-attacks, and the use of energy supplies to exert 
political pressure. And while Russian interference in Western 
elections may have surprised many, Russia has a very long track 
record of intervening in Ukraine's elections since the Orange 
Revolution in 2004. Ukraine's experience is thus a bellwether 
for assessing the Russian tactics that may be deployed here in 
the United States or against our allies.
    For example, ahead of Ukraine's most recent presidential 
elections, the Russian media spread disinformation claiming 
that Ukraine's candidates were U.S. puppets and that the 
election systems were controlled by Ukraine's intelligence 
agencies, among other colorful disinformation campaigns.
    In a new and worrying tactic, a Russian operator confessed 
to being tasked with identifying Ukrainians who would be 
willing to, quote/unquote, rent out their Facebook accounts for 
the spread of disinformation.
    Russian information warfare does not stop when the ballot 
box closes. While Ukraine remains Russia's top target, Russian 
disinformation, especially in the digital domain, is an ongoing 
threat to democracies, including the democracy of the United 
States.
    On the cyber front, there have been at least 15 known 
Russian-attributed cyber-attacks on Ukraine since 2014. A 2015 
cyber-attack caused a blackout affecting over 230,000 
Ukrainians. The malware used in that attack has been identified 
by the FBI and the Department of Homeland Security as present 
in the electrical utilities in the United States. What happens 
in Ukraine does not stay in Ukraine.
    Further, Russia has continued to aggressively use natural 
gas as a tool of political warfare. The current gas transit 
contract between Ukraine and Russia expires at the end of this 
calendar year. This raises a concern, with the negotiations 
stalled, of a potential gas crisis this coming January that 
could also affect supplies to Europe.
    Nord Stream 2 is part of Russia's political warfare against 
Ukraine. When completed, the pipeline will allow Russia to 
circumvent Ukraine as a transit route for Europe-bound natural 
gas. However, it is important to note, in addition to what 
Ambassador Herbst has laid out, Nord Stream 2 has a military 
and security objective. Currently the line of contact in the 
Donbas tracks almost perfectly with the gas transit pipelines 
in Ukraine. This means that Ukraine's gas pipelines are de 
facto acting as a deterrent on further Russian military 
aggression. Without Russian gas flowing through those 
pipelines, that deterrent will also disappear.
    Despite Russia's continued aggression against Ukraine, Kyiv 
has made significant strides on reforms. Most significantly, 
Ukraine has reformed its energy sector, set up anti-corruption 
infrastructure, and cleaned up the banking sector. Taken 
together, it is estimated that these reforms should return up 
to $6 billion in annual revenue to Ukraine.
    Still, it is important to note that Ukraine's new president 
inherits an embattled anti-corruption institution structure. 
For example, the National Anti-Corruption Bureau, the so-called 
NABU, is meant to investigate high-level corruption, but 
convictions remain elusive because Ukraine has failed to reform 
its judicial sector. This must be the priority for this new 
administration and the incoming parliament. Until the Ukrainian 
Government makes a serious effort to tackle corruption, it will 
remain a vulnerability the Kremlin will continue to exploit. 
And while with their votes Ukrainians have closed the door to 
the East, they must still work to keep the door to the West 
open.
    The United States has led the international effort to help 
Ukraine defend itself. This legislative body has consistently 
authorized hundreds of millions in military aid to Ukraine. 
These funds and related programs have gone a long way to secure 
Ukraine's sovereignty.
    On sanctions, since 2014, the U.S. Government has 
sanctioned at least 762 individuals and entities under the 
combined authorities afforded to the administration. This is a 
significant number. Sanctions against Russian entities and 
individuals should continue to be a core tool of U.S. strategy 
to deter further Russian aggression. But it is critical that 
future sanctions, especially those against Russian energy 
companies, be coordinated with our European allies. And 
sanctions should only be one part of a broader U.S. strategy.
    In addition, the United States should continue to put 
pressure on Kyiv to institute judicial and anti-corruption 
reforms, remain steadfast on the conditionality of our 
assistance, together with the EU and international partners, 
should continue high-level bilateral engagement with the 
Ukrainian Government. I would hope to see a visit from 
President Zelensky in Washington in the near future.
    We should increase U.S. investment in countering Russian 
influence in Ukraine and Eastern Europe and support independent 
media and civil society already doing so.
    Russia's invasion of Ukraine has assured Ukraine's Western 
orientation. The Kremlin has lost the Ukrainian people. But as 
Ukraine's new government forms, Kyiv will need continued 
international support led by the United States, and it will 
also need a commitment to its territorial integrity and a 
resolve to impose additional costs on Russia for its escalatory 
behavior. Ukraine cannot be permanently relegated to the gray 
zone. Moscow sees a successful democratic Ukraine as a threat 
to President Vladimir Putin's authoritarian regime. It is in 
Ukraine's interest to see Ukraine's democratic and economic 
reforms fail, and therefore, it should be our mission to ensure 
that they do not.
    Thank you.
    [The prepared statement of Dr. Polyakova follows:]

               Prepared Statement of Dr. Alina Polyakova



















    Senator Johnson. Thank you, Dr. Polyakova.
    Our final witness is Dr. James Carafano. Dr. Carafano is 
Vice President of the Kathryn and Shelby Cullom Davis Institute 
for International Studies at The Heritage Foundation. A 25-year 
Army veteran, Dr. Carafano served in Europe and South Korea, 
retiring with the rank of Lieutenant Colonel. He is also an 
adjunct professor at Georgetown University and visiting 
professor at the National Defense University.
    Dr. Carafano's recent research is focused on developing the 
national security required to secure the long-term interest of 
the United States, protecting the public, providing for 
economic growth, and preserving civil liberties.
    Dr. Carafano.

 STATEMENT OF DR. JAMES JAY CARAFANO, VICE PRESIDENT, KATHRYN 
  AND SHELBY CULLOM DAVIS INSTITUTE FOR NATIONAL SECURITY AND 
    FOREIGN POLICY, THE HERITAGE FOUNDATION, WASHINGTON, DC

    Dr. Carafano. Thank you, Senator. So this is a little 
unusual. I have two thank yous. First of all, I want to thank 
the subcommittee for holding an incredibly important hearing on 
an issue that is very important to the United States, but I 
think we should all thank Kurt Volker for his service. It has 
been extraordinary and his continued service for the country in 
this matter. It really is.
    Senator Johnson. I agree.
    Dr. Carafano. So I made five points in my statement for the 
record, which I will not read.
    One is to talk about the importance of the bilateral 
relationship and why we should care about the Ukraine.
    The second was to stress, which I do not think we can do 
this emphatically enough, that the problem is Putin that his 
policies are the chief destabilizing threat in the region, and 
we should never lose focus on that.
    The third is to emphasize what everyone on the panel has 
already mentioned, which is the importance of early and really 
active engagement with the new presidency, also though to focus 
on the broader regional engagement of the United States on how 
many of the things going on outside Ukraine are really 
important to the success of Ukraine.
    And finally, to mention something that I think is really 
important, which is not just to keep the door for NATO 
membership open for the Ukraine, but that the United States 
should lead through that door.
    If I could just briefly emphasize two of those points: why 
the U.S.-Ukraine relationship is so important and on the 
importance of regional engagement and NATO.
    The United States is a global power with global interests 
and global responsibilities. To exercise that, we have got to 
connect to the rest of the world. And the three most important 
pieces of the world that do that are Europe, the Middle East, 
and the Indo-Pacific. So it is in our vital interest that those 
parts of the world are at peace and prosperous. And our 
alliances, our relationships are the key to doing that.
    I think often overlooked in that and particularly in regard 
to Western Europe is the role of small states, not that Ukraine 
is small but small in comparison in population and power to 
some of the other bigger states in Europe. But small states are 
critical for three reasons.
    One is often it is not how big they are, but where they 
are. And their geopolitical position is crucial. I think that 
is definitely true for the Ukraine, which is part of this, I 
think, vital backbone between Europe and Russia that has to be 
stable and coherent both politically, economically, but also 
geographically.
    The second is our alliances in Western Europe are built on 
the principle of collective defense, and collective defense is 
the choice of countries to decide their future and who they 
choose to partner with in their future to secure that. Keeping 
the door open for countries that want to join that alliance I 
think is incredibly important and certainly in the case of 
Ukraine.
    And the third is at the end of the day, small nations can 
actually be net contributors to collective defense. We have 
that case in a number of countries within NATO, and there is no 
doubt in my mind that a successful and peaceful and prosperous 
Ukraine is going to be a positive net contributor to collective 
security in the West.
    The second point is the larger regional engagement of the 
United States in Europe and how important that is to the future 
of the Ukraine. We have mentioned the concerns about Nord 
Stream 2, which I fully share. There are others issues in which 
the U.S. is engaged, which are important to the future of 
Ukraine. The Three Seas Initiative is one. It is an important 
series of energy projects, the fruition of which will improve 
the entire region, not just in energy but in terms of regional 
economic integration and economic growth. It is important for 
the United States to strongly support that.
    I mentioned in my testimony the importance of better 
Ukrainian-Hungarian relationships and how the United States 
plays an important role there.
    Also implied is the broader issue of Black Sea security. 
That is a regional challenge, and having that successful also 
has an impact on the Ukraine.
    And finally, I just want to mention briefly the importance 
of not just keeping the door open for Ukrainian membership to 
NATO, but that the United States leads toward that door. I 
think now that North Macedonia is essentially off the table, it 
is time for a discussion about the next round of NATO 
enlargement. And I think North Macedonia not only kind of 
cleared the table, it also taught us a really important lesson, 
that countries can figure out really complex, difficult 
problems and, for their own collective security, figure out a 
path forward. And I think that should make us optimistic about 
the future of NATO enlargement.
    I also think in the case of Georgia, we have a case study 
in how you can move forward on NATO membership despite the fact 
that a portion of your country is occupied by another country. 
My colleague Luke Coffey has written on this extensively on how 
within the existing charter, membership for Georgia is 
certainly realistic. And I think that sets a precedent for 
Ukraine. And I think the most important point is Vladimir Putin 
cannot have a veto on who gets to join NATO by simply occupying 
a piece of somebody else's country.
    I look forward to your questions. Thank you again.
    [The prepared statement of Dr. Carafano follows:]

              Prepared Statement of Dr. James Jay Carafano

    Mr. Chairman and other distinguished Members, I am honored to 
testify before you today on this vital subject. My name is Dr. James 
Jay Carafano. I am the Vice President for Foreign Policy and Defense 
Studies, the Director of the Kathryn and Shelby Cullom Davis Institute 
for National Security and Foreign Policy, and the E.W. Richardson 
Fellow at The Heritage Foundation, a non-partisan research institution. 
The views I express in this testimony are my own, and should not be 
construed as representing any official position of The Heritage 
Foundation.\1\
    In my testimony, I would like to: (1) stress the importance of 
Ukraine to the U.S. strategy for a secure and flourishing transatlantic 
community; (2) underscore that the principle threat to peace and 
stability remains the recalcitrant, malicious, destabilizing, and 
dangerous policies and actions of Russian President Vladimir Putin; (3) 
emphasize the imperative of immediate, strong and active engagement 
with the new Ukrainian government; (4) discuss regional developments 
that are crucial for the future peace and security of Ukraine and U.S.-
Ukraine bilateral relations; and, finally, (5) emphatically make the 
case that it is vital that the U.S. lead in preparing Ukraine for 
membership in NATO.
    My responsibilities at The Heritage Foundation comprise supervising 
all of the foundation's research on public policy concerning foreign 
policy, defense, and national security. Heritage has assembled a 
robust, talented, and dedicated research team. I have the honor and 
privilege of leading that team.
    Heritage analysts have studied and written authoritatively on 
virtually every aspect of the challenges of foreign policy and national 
security that affect the transatlantic community and U.S.-Ukraine 
relations. The results of all our research are publicly available on 
the Heritage website at www.heritage.org. Of particular note, and 
relevance here are, the Heritage Index of U.S. Military Strength, which 
includes a comprehensive review of contemporary European security 
issues and the Heritage Index of Economic Freedom, which grades every 
nation in the world on its level of economic freedom (the trends in 
Ukraine and neighboring states are especially instructive).
    We collaborate frequently with the research community, including 
such institutions as the American Foreign Policy Center, the Hudson 
Institute, the Foundation for Defense of Democracy, the Jamestown 
Foundation, the Center for European Policy Analysis, the Center for 
International Private Enterprise, the International Republican 
Institute, and the U.S. Institute of Peace, all of which have done 
substantive and important work on Ukraine, the Russian threat, and 
regional issues.
    I, and our research team, have also widely traveled in Ukraine and 
the region, and have participated in the regional and international 
conferences on the spectrum of vital issues from security and economic 
development to health care and the challenges of public corruption.
    In addition to our regional work, we have substantial expertise on 
defense issues. I served 25 years in the U.S. Army, including two tours 
with NATO forces. Our team also includes senior retired officers from 
each of the armed services with well over a century of operational and 
combat experience, a good deal of it in the European theater.
    I am particularly proud of The Heritage Foundation's long and 
substantive record of research on Ukraine. Our effort reflects the 
foundation's commitment to advancing public policies that keep America 
free, safe, and prosperous. We believe that U.S.-Ukrainian bilateral 
relations have important implications for meeting this aspiration.
                       why ukraine still matters
    The U.S. is a global power with global interests and 
responsibilities. American interests can only be protected if the U.S. 
is forward present to safeguard, or can get where it needs to be, to 
exercise power in support of those interests. There are three vital 
regions that link the U.S. to the world--Europe, the Middle East, and 
the Indo-Pacific. Regional peace and stability in each is a vital U.S. 
interest. These requirements are strongly reflected in the U.S. 
National Security Strategy, and sustaining and strengthening that 
commitment is crucial.\2\ In this respect, the stability of the 
transatlantic community is foundational to U.S. security, and the 
future of Ukraine has strong implications for that stability and 
security.
    In U.S. efforts to ensure regional stability in an age of great 
power competition, what is, in fact, more important than ever, is the 
role of ``small powers.'' \3\ There are three reasons why small states 
matter to the United States, particularly in the context of the 
transatlantic community and Western Europe.
    First, geography matters. In geopolitics--as in real estate--a 
critical consideration is ``location, location, location.'' To a major 
power, another country's greatest asset might be its map coordinates 
rather than the size of its arsenal or bank account. Part of the reason 
why the U.S. must insist that NATO continue to keep its membership door 
open is because there are nations still not included, whose accession 
would enhance collective security due to their geographical location.
    Second, freedom matters. Like-minded nations make better partners. 
One of the reasons why NATO works is because the Alliance is a 
partnership of free nation-states. The foundational rationale of the 
transatlantic Alliance is that free states have the right to associate 
for the purpose of collective security. To close NATO's door to new 
members would undermine what NATO stands for: the right of free peoples 
to choose their future.
    Third, contribution matters. Small nations can be net contributors 
to peace, security, and economic development. A free, secure, and 
prosperous Ukraine can provide all three of these benefits. Conversely, 
failing to support Ukraine adds to the prospects for diminishing and 
weakening the transatlantic community, and losing a pivotal state in 
the U.S. effort to help sustain peace and stability in Europe. A 
successful Ukraine is an important U.S. interest, and the U.S. should 
invest its time, influence, and treasure consistent with that interest.
         russia is the greatest destabilizing threat to peace 
                     and security in western europe
    Ukraine and the transatlantic community share a common cause: 
resisting, mitigating, and abating the malicious and dangerous actions 
of Russian President Vladimir Putin. Russia has been occupying 
Ukraine's Crimean peninsula illegally since 2014, and continues to 
stoke a deadly war in the east that has resulted in thousands of 
deaths, tens of thousands of wounded, and almost 2 million people 
internally displaced. In addition, Russia meddles in Ukrainian internal 
affairs, seeding political and economic disruption and fueling 
corruption. Of particular note is how Russia uses religion and 
religious narratives, through tactics of misinformation, to further sow 
divisions.\4\
    Of greatest significance is Russia's armed intervention in Ukraine. 
In addition to illegally occupying Crimea, Moscow stoked sectarian 
divisions in eastern Ukraine. Backed, armed, and trained by Russia, 
separatist leaders declared the so-called Lugansk People's Republic and 
the Donetsk People's Republic. Russia continues to support separatist 
factions in the Donbas region of eastern Ukraine with advanced weapons, 
technical and financial assistance, as well as Russian conventional and 
special operations forces. Two cease-fire agreements--one in September 
2014 and another in February 2015, known as Minsk I and Minsk II, 
respectively--have come and gone. As events in eastern Ukraine since 
the signing of Minsk II have shown, the agreement is a cease-fire in 
name only.
    Of recent note, on November 25, 2018, Russian Federal Security 
Service border-patrol boats opened fire on three Ukrainian navy vessels 
near the Kerch Strait, a narrow body of water connecting the Black Sea 
and the Sea of Azov. Twenty-four Ukrainian sailors are still being 
illegally detained.
    In addition, the 24 sailors being illegally detained, it is 
estimated Russia also illegally holds about 70 other Ukrainian 
citizens.\5\
    There is no demonstrable evidence that Russia will cease its 
destabilizing activities any time soon. Thus, without question, without 
the support of the U.S. and the international community, stability and 
security in Ukraine will be at grave risk. As a result, the U.S. 
should:

   Sustain commitment. Five years later, we can't show ``Ukraine 
        fatigue'' in the face of Russia's naked aggression.

   Maintain and strengthen the economic sanctions.

   Continue to provide support and lethal aid to Ukraine.

   Never consider making concessions in U.S. support to Ukraine as a 
        trade for Russian cooperation on other issues.

   Work to sustain the international coalition condemning and 
        punishing Russia for its illegal and malicious activity. 
        Continue to demand that the starting point for future 
        negotiations is Russia's full compliance with the Minsk 
        agreements.
                 engagement with ukraine is the answer
    There is no question of whether the U.S. should continue its level 
of engagement and support to the people of Ukraine. The only issue that 
should be up for discussion is how to make the U.S. effort the best it 
can be.
    The election of Volodymyr Zelensky (official English-spelling 
released by his administration in late May) as president of Ukraine 
raises many hotly debated questions about which key policies he will 
adopt and who will most influence the administration.\6\ Right now, I 
think it is fair to say: We just don't know for sure.
    The direction of the government may be clearer after parliamentary 
elections on July 21, 2019, (unless Ukraine's highest court stops the 
vote, which is highly doubtful). But, even that assessment is 
debatable. Zelensky has created a new party--Servant of the People--and 
his governing style will definitely be guided by how successful his 
party is in the July election. The more compromises that have to be 
made to form a majority coalition, the more difficult it is to 
speculate about future policies. When the cabinet is filled later this 
summer, the picture might be clearer.
                          the u.s. can't wait
    The time to ramp up engagement is right now. The U.S. must send 
strong, clear, and consistent messages of its expectations. What will 
best serve to strengthen the U.S.-Ukraine bilateral relationship is a 
stronger Ukraine. That requires advances in the three crucial areas: 
(1) security, (2) economic development, and (3) advances in good 
governance.
    1. Security. Security assistance and cooperation remain a high 
priority, particularly accelerating lethal defense aid and maritime-
security capabilities.\7\ Military reforms are lagging. That said, 
Ukraine's military has made remarkable progress and looks more and more 
like a competent, professional modern military. Naval power, however, 
is particularly problematic. Two of the six U.S. Island class patrol 
boats are getting ready to be sent, after long delay, but as of today 
Ukraine still has no navy--just five gunboats and one dock-bound former 
Soviet cruiser in Odessa. Ukraine has no naval ability to defend 
Odessa. Among the actions the U.S. could take are:

   Supply more ships to Ukraine. A strong Ukrainian navy is in 
        America's interests. Transferring two Island-class former Coast 
        Guard ships to Ukraine is a good first step in rebuilding 
        Ukrainian maritime capability after it lost many ships to 
        Russia in 2014, but more should be done. The U.S. should move 
        ahead with providing surplus Oliver Hazard Perry (FFG-7)-class 
        frigates as part of the Pentagon's program to dispose of excess 
        defense property.\8\

   Help Ukraine rapidly improve its anti-ship missile capability. The 
        right to self-defense does not stop at a country's shoreline. 
        The U.S. can help fund and speed up getting Ukraine's 
        domestically produced Neptune anti-ship missile in operation 
        faster. In addition, the U.S. should consider appropriate off-
        the-shelf options for anti-ship missile platforms for Ukraine.

   Assist Ukraine in improving its maritime domain awareness 
        capability. Most of the non-lethal support provided by the U.S. 
        to Ukraine since 2014 has focused on the land war in the east 
        of the country. The U.S. should expand this help to improve 
        Ukraine's maritime security by providing improved radar and 
        appropriate surveillance capabilities, such as unmanned aerial 
        vehicles.

   Lift geographical restrictions on U.S. troops in Ukraine. 
        Currently, the 300 U.S. troops in Ukraine as part of a training 
        mission are restricted to the western half of the country, more 
        than 800 miles from the front lines. On a limited basis, the 
        U.S. should allow U.S. trainers and observers to the front 
        lines to gain a better understanding of the situation on the 
        ground and of training requirements for the Ukrainian military.

   Evaluate NATO's trust funds for Ukraine. NATO should evaluate the 
        effectiveness of the six trust funds established at the 2014 
        Wales Summit. For example, there is no trust fund focused on 
        improving Ukraine's maritime capability.

    2. The Economy. Economic reforms are also lagging. According to the 
Index of Economic Freedom:
    Ukraine's economic freedom score is 52.3 [out of 100], making its 
economy the 147th freest in the 2019 Index. Its overall score has 
increased by 0.4 point, with improvements in fiscal health, business 
freedom, and property rights outpacing declines in labor freedom and 
trade freedom. Ukraine is ranked 44th among 44 countries in the Europe 
region, and its overall score is below the regional and world 
averages.\9\
    Progress on the economic front is vital.
    As Ukraine's oligarch-dominated economy improved in 2018, partly 
because of greater inflows of remittances, Western institutions found 
that they had less leverage to press for further reforms.
    On the other hand, the results of the national elections clearly 
demonstrate that the people of Ukraine are impatient for change. If the 
government cannot deliver, it will not remain popular for long. 
According analysis at The Heritage Foundation, what is need most are:

   Contentious but much-needed structural reforms, such as cutting 
        subsidies and raising energy tariffs, fiscal consolidation, and 
        the fight against corruption.

   Developing Ukraine's capital markets, privatizing state-owned 
        enterprises, and improving both its legal framework and the 
        rule of law.

    3. Governance. Advances in good governance are also important. The 
ability of Ukraine to hold free and fair elections is notable, 
particularly given the number of obstacles thrown in its path. The U.S. 
should be proud of its contributions in this area, and that in of 
itself should encourage America to do more. For example, in Ukraine, 
the International Republican Institute (IRI) has been on the ground 
since the country first gained its independence nearly 28 years ago. 
Since that time, the IRI has worked side-by-side with tens of thousands 
of elected officials, party representatives, and citizens to set up and 
strengthen the country's nascent democratic institutions, and has 
monitored every single election since independence, including the 
recent successful presidential election. There is so much to be done.

   Good government starts at the top with professional, dedicated, and 
        competent senior level appointments in the Ukrainian cabinet, 
        the president's staff and the military staff. The U.S. has to 
        make that point at every opportunity.

   President Trump should meet with the new President in Washington 
        and continue to demonstrate the continuation of our policy of 
        support for Ukraine during this transitional period. Apparently 
        a visit is tentatively scheduled after the parliamentary 
        elections in mid-July. At their meeting, the president should 
        both support and encourage Ukraine's president to follow 
        through on anti-corruption commitments and offer additional 
        military assistance to deter further Russian aggression. The 
        U.S. government could also exert more influence on Ukrainian 
        governance issues by ``being there.'' President Trump or Vice 
        President Pence and Cabinet-level officials across the U.S. 
        government should visit Ukraine. Their visits should be 
        followed up with regular calls by senior officials from all 
        areas of the U.S. government.

   U.S. policymakers should not play into Russian propaganda about 
        Ukraine as a failed state by focusing only on the negative. The 
        U.S. should hold Ukraine to account where it is failing, and 
        praise Ukraine for the strides it has made in tackling 
        entrenched challenges.

   Congress has an important role to play. Congress should continue 
        its strong support for U.S.-Ukraine bi-lateral relations and 
        interaction with Ukrainian ministers and parliamentarians. In 
        particularly, Congress could helpfully underscore at every 
        opportunity U.S. support for an independent Ukraine with the 
        bedrock of our policy being continued U.S. commitment to 
        Ukraine's territorial integrity.

   The U.S. should not forget human rights. Ukraine and the U.S. 
        should set the example. The two countries should work together 
        to highlight and bring attention to the plight of the Crimean 
        Tatars, who are being persecuted and oppressed by the Russian 
        government. The Trump administration should be praised for 
        raising the profile of this important issues.
                            regional issues
    Many of the issues that will help to strengthen U.S.-Ukrainian 
bilateral cooperation are not confined to the borders of Ukraine. 
Addressing these challenges would help as well.
    Of particular note is the disagreement between Hungary and Ukraine 
that dates to 2017 when Ukraine's government began to consider a 
``language law'' that makes mandatory the use of the Ukrainian language 
in secondary schools, which in Ukraine start in sixth grade. After much 
debate, Ukraine's parliament, the Verkhovna Rada passed the law on 
April 25. This resulted in a disagreement not of Ukraine's doing, but 
rather the result of Hungary's unique view of what constitutes the 
nation-state. The dispute has had important consequences, as Hungary 
has reacted by blocking ministerial-level meetings of the NATO-Ukraine 
Commission--the venue for cooperation between Ukraine and the Western 
Alliance. It bears repeating that it is Ukraine's sovereign right to 
take this step, just as it is in ours to ensure that our schoolchildren 
are taught in our national language, English. Every nation has the 
right to ensure that its youth grow up to be literate and productive 
members of a cohesive society. U.S. officials are to be lauded for past 
efforts to ameliorate the dispute.
    The U.S. must sustain a highly activist regional policy.

   In particular, the U.S. must continue to press for more 
        constructive Ukrainian-Hungarian relations and end the 
        obstructionism that negatively affects Ukrainian-NATO 
        cooperation.\10\

   The U.S. should continue to demonstrate strong support for the 
        Three Seas Initiative and remain firm in its opposition to the 
        Russian pipeline Nord Stream II.\11\

   The U.S. should work with the European Union and regional partners 
        who share our interest in the future of a free and prosperous 
        Ukraine.
                     commitment to nato enlargement
    Finally, the U.S. must continue not just to keep the door for NATO 
membership open, but must also craft a plan and advocate hard for 
getting Ukraine through the door. The ascension of North Macedonia not 
only paves the way for other countries, it demonstrates that thorny 
geopolitical obstacles can be overcome. The U.S., and its friends and 
allies, are already working on the reforms and capacity-building that 
will 1 day make Ukraine a successful candidate. There is also, already, 
a course of action for how to press for Ukrainian membership, despite 
the continued illegal Russian occupation of Ukrainian territory. My 
colleague Luke Coffey mapped out a solution with regards to a similar 
challenge faced by Georgia.\12\
    In conclusion, thank you for the opportunity to testify today. I 
look forward to your comments and questions.
    The Heritage Foundation is the most broadly supported think tank in 
the United States. During 2018, it had hundreds of thousands of 
individual, foundation, and corporate supporters representing every 
state in the U.S. Its 2018 operating income came from the following 
sources:

     Individuals: 67 percent

     Foundations: 13 percent

     Corporations: 2 percent

     Program revenue and other income: 18 percent

    The top five corporate givers provided The Heritage Foundation with 
1 percent of its 2018 income. The Heritage Foundation's books are 
audited annually by the national accounting firm of RSM U.S., LLP.

----------------
Notes

    \1\ The Heritage Foundation is a public policy, research, and 
educational organization recognized as exempt under section 501(c)(3) 
of the Internal Revenue Code. It is privately supported and receives no 
funds from any government at any level, nor does it perform any 
government or other contract work.
    \2\ James Jay Carafano, et al., ``Preparing the U.S. National 
Security Strategy for 2020 and Beyond,'' Heritage Foundation Special 
Report No. 214, May 23, 2019.
    \3\ James Jay Carafano, ``Why Small States Matter to Big Powers,'' 
The National Interest,'' August 10, 2018.
    \4\ This section of this testimony is adapted from Luke Coffey and 
Daniel Kochis, ``The Trump administration and the 115th Congress Should 
Support Ukraine,'' Heritage Foundation Backgrounder No. 3200, April 11, 
2017, and Luke Coffey and Alexis Mrachek, ``Improving Ukraine's 
Maritime Capability: Next Steps for the U.S.,'' Heritage Foundation 
Issue Brief No. 4926, November 28, 2018.
    \5\ Halya Coynash, ``Russia is holding over 70 Ukrainian Political 
Prisoners of War,'' June 6, 2018.
    \6\ There are causes for concerns over senior appointments. See, 
Vladimir Socor `` Ukraine's New Presidential Administration Filled With 
Show Business Friends,'' Eurasia Daily Monitor (16/75).
    \7\ The recommendations in this section are adapted from Coffey and 
Mrachek, ``Improving Ukraine's Maritime Capability: Next Steps for the 
U.S.''
    \8\ The Defense Surplus Equipment Disposal, Including Law 
Enforcement 1033 Program.
    \9\ (Washington, DC: The Heritage Foundation, 2019).
    \10\ See, for example, James Jay Carafano and Daniel Kochis, ``The 
Growing Spat Between Hungary and Ukraine Helps Putin,'' Heritage 
Foundation Commentary, October 25, 2018.
    \11\ See, for example, Edwin J. Feulner, ``Three Seas, One Aim: 
Preserving Liberty,'' Heritage Foundation Commentary, January 24, 2018.
    \12\ Luke Coffey, ``NATO Membership for Georgia: In U.S. and 
European Interest,'' Heritage Foundation Special Report No. 199, 
January 29, 2018, and Luke Coffey, ``Creativity and Bold Leadership 
Needed for Georgia's NATO Membership,'' Heritage Foundation Issue Brief 
No. 4969, June 12, 2019.

    Senator Johnson. Thank you all for your testimony.
    As we work our way through this, one thing I would like to 
have as a conclusion of this hearing is a list of priorities 
and literally prioritize. I mean, this is the first thing we 
need to focus on, second, third, fourth, and fifth.
    I just want to quick start the questioning. I was heartened 
by--I should probably get up on my news report--Merkel will 
only lift the Russian sanctions if Ukraine's sovereignty is 
restored. I mentioned Crimea in that statement as well. I 
thought that was a pretty good sign.
    In one of your testimonies, you talked about how Nord 
Stream 2 literally was not economic. It was all about 
geopolitics. Can you, first of all, explain? Because it does 
not make sense what Germany is doing there, why you would give 
that kind of economic power, geopolitical power to Russia. Can 
somebody just kind of walk through what the rationale is from 
the Germans' perspective, what we possibly can do, you know, 
the harm it will create to Ukraine?
    Ambassador Herbst. The argument by those in Germany who 
want Nord Stream 2, because it is not everybody, is that they 
want to build pipeline capacity because more pipeline capacity 
means more energy security.
    The argument against Nord Stream 2 is that, first of all, 
it is economically expensive. You are building a whole new 
capacity when the Nord Stream 1 pipeline is not fully used, and 
you have this large Ukrainian pipeline system.
    A Russian bank, VnesheconomBank had a report on its website 
for a week or so which argued that Nord Stream 2 was not in the 
economic interest of Russia for the reasons I have just 
described. It did say it was in the economic interest of 
Putin's cronies who were building Nord Stream 2 and getting 
Russian contracts.
    But more importantly from our point of view, Nord Stream 2 
gives Moscow the ability to deliver all the gas it has to 
Europe bypassing not just Ukraine, but all the countries of 
Central and Eastern Europe, which means that they can play 
coercive gas diplomacy with Ukraine, with Belarus, with Poland 
as they have a number of times over the past 10 years.
    And Alina mentioned another very good point, which is that 
the current Ukrainian pipeline system, which ships Russian gas, 
is vulnerable to Russian military operations in east and 
central Ukraine. So this is another deterrence on Kremlin 
military activity.
    Senator Johnson. So again, I think you mentioned, 
Ambassador Herbst, how crucial Germany is to keep this 
coalition together and make sure sanctions are maintained. How 
do we deal with this? Why is Germany doing this, and what can 
we do to stop them? I know you have some suggestions on 
effective sanctions.
    Ambassador Herbst. For starters, the Social Democrats in 
Germany traditionally have been rather soft in their approach 
to Moscow, and they are 100 percent in favor of this project. 
Of course, there are the peculiar circumstances of the former 
chancellor of Germany working for Mr. Putin on precisely this 
project and other gas matters. So that is point one.
    Point two, there are German businessmen who will benefit 
from this project. But it is all so true--and this is something 
which does not come up in the conversation that much--that 
there is serious opposition to Nord Stream 2 first in the Green 
Party in Germany and also in Chancellor Merkel's own party.
    There is also serious opposition to this within the EU. The 
EU Commission, by and large, is not favorably disposed towards 
this project. At least 13 EU nations have written against this 
project, and they believe that Nord Stream 2 working through 
the EU has been imposed by Germany, completely inconsistent 
with the third energy package of the EU and inconsistent with 
the concept of consensus within the EU.
    I in my testimony focused on the specific, I would say, 
kind of condition that Chancellor Merkel herself has advocated, 
that the Kremlin, as part of the Nord Stream 2 deal, should 
guarantee that a large flow of gas will continue through 
Ukraine's pipelines. But senior Kremlin officials, led by 
Medvedev himself, the Prime Minister, have cast doubt on it. 
And numerous times over the past several months, Russian 
officials and Russian gas--people in the gas industry have 
warned Central and Western European powers that gas flow 
through Ukraine will cease on December 31st of this year. So 
they are, in fact, sticking their fingers in Chancellor 
Merkel's eyes, but we have not seen a response yet from the 
German leadership.
    Senator Johnson. So, Ambassador Volker is the point person 
in terms of trying to negotiate with Russia and our European 
partners. There is a bill here that would impose sanctions on 
those companies that are building the pipeline. What do you 
believe we should do?
    Ambassador Volker. Thank you very much.
    I have been advised that we do not comment on pending 
legislation in the Senate, so I will avoid from commenting on 
the specific legislation.
    However, let me join you and Ambassador Herbst and Alina in 
saying that the clear motivation behind the Nord Stream project 
is to increase Russia's influence over Europe and division of 
Europe. And there are many countries in Europe that are as 
concerned about this as we are. So you can look in Central and 
Eastern Europe. You can look at some West European countries. 
This is not a uniformly welcomed development.
    For the past decade or so, maybe even a little more, Europe 
has been on a trajectory of increasing its independence, 
decreasing its reliance on Russian gas as part of the mix in 
Europe. This project actually reverses that trend.
    So the motivation behind the legislation that is pending is 
clearly to try to stop that development, stop the re-increase 
of dependence on Russian gas from both the source and the hard 
means of supply, and I think we agree with the thrust of that 
legislation.
    Senator Johnson. Again, let me ask it this way. If 
sanctions were imposed on those companies building the 
pipeline, would that complicate your job?
    Ambassador Volker. Not at all. In that respect, I think 
everyone knows that there are many issues out here, but the 
fundamental issue is one of Russia knowing exactly what it is 
doing in fighting in eastern Ukraine and trying to use that to 
gain political leverage over Kyiv. The Germans know that. The 
French know that. We talk about this very openly. We have 
differences of view over Nord Stream, but we fundamentally 
agree on where the issues lie with Russia.
    Senator Johnson. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    And thank you all very much for being here today and for 
your testimony.
    As has been pointed out, one of the main tools that the 
United States and the EU have used against Russia has been 
sanctions. So can you comment on how effective those sanctions 
have been in addressing Russians' behavior, and have they done 
anything to resolve the Ukraine conflict or to restrain Russian 
aggression?
    Dr. Polyakova. I can start perhaps, Senator.
    So as all of us mentioned in our testimonies I believe, it 
is estimated that the U.S. sanctions, with the combination of 
European sanctions, have cost the Russian economy between 1 and 
1.5 percent annually. However, the Russians have adapted to 
this new reality.
    In my view the greatest message sent by the sanctions 
regime is one of transatlantic unity and resolve against an 
increasingly aggressive Russia. It is for that reason that I 
strongly believe the sanctions should be coordinated with our 
European allies and also with our other allies, Canada, 
Australia, most notably because that sends the message to the 
Kremlin that there will be consequences for increased 
escalation.
    There is an argument to be made, however, which I believe 
many of my colleagues would disagree with, that in terms of 
changing behavior on the ground, sanctions have not achieved 
that. Yet, targeted sanctions against specific Russian 
individuals, which has been the tack the U.S. has pursued in 
the most recent sanctions rounds, I think have been very, very 
effective in sending a clear message that there will be 
consequences for increasing escalatory behavior.
    I will stop there.
    Ambassador Herbst. I agree that the sanctions have not 
persuaded Moscow to cease its aggression in Ukraine, but they 
have been a reason for Moscow not escalating. And that is very 
important.
    But there is a second, to my mind, very important reason 
for the sanctions. The economic cost is real. Over time, this 
will have a major impact on Russian economic production. They 
cannot sustain a world-class military with a third world 
economy. And we are contributing to their economic problems. 
And if they are going to pursue a revisionist foreign policy, 
it is in our interests that their economy not be able to 
sustain a world-class military indefinitely.
    Senator Shaheen. Well, I certainly agree that. That is why 
I am sponsoring the DASKA sanctions.
    But do we have any estimates about how long they can 
continue to operate with this kind of a hit to the economy?
    Dr. Carafano. Well, I think the answer is forever because 
that is the nature of authoritarian regimes is they have the 
capacity to redirect resources as they see fit.
    Senator Shaheen. Let me rephrase that. How long they can 
continue with this kind of a hit to support the military and 
the buildup in the way that they have been.
    Dr. Carafano. I think the answer is the same.
    Senator Shaheen. Is still indefinitely?
    Dr. Carafano. But I think the point, which my co-panelist 
made, is, one, understand the purpose of sanctions. It is very 
unlikely under an authoritarian regime that sanctions are going 
to change behavior. The purpose of the sanctions is to punish 
behavior, and I think that has been extraordinarily effective. 
But a sanction is a tool just like a tank is a tool. So a tank 
is not a strategy. A tank is effective in driving across Europe 
in World War II because it is done in the context of a whole 
bunch of things. And so when we look at sanctions, we should 
never have just a discussion like are the sanctions achieving 
our strategic end state, but are the sanctions contributing to 
the overall strategy. And our overall strategy--the goal is to 
end Russia's destabilizing influence in Western Europe.
    And I do think that the combination of the sanctions which 
punish and bring together solidarity and the military 
deterrence of a strong NATO presence and working on energy 
security for Western Europe and others, together I think it 
makes perfect sense. And taking the sanctions away would be 
like having a table and taking one of the legs away and 
expecting it to still not fall over.
    Senator Shaheen. So this may be a question for you, 
Ambassador Volker. As we look at where we are in the crisis 
with Ukraine, are the Minsk agreements still a way forward? Do 
you think they have any credibility at this point, or should we 
abandon those and look for another way forward?
    Ambassador Volker. Well, thank you very much for that 
question.
    Let me add on the sanctions point. I agree with what James 
just said, that sanctions do not work until the day they do. So 
you keep them in place for that reason.
    And in addition to that, you have--I am sorry. I lost my 
train of thought there with the phone ringing.
    Let us turn to Minsk. On Minsk, I think it is very 
important that the Minsk agreements stay in place because they 
are the most important means by which Russia formally 
recognizes the territorial integrity of Ukraine, even if in 
reality they do not. It is the basis on which the European 
Union keeps sanctions in place.
    In addition, it is the framework that has everything in the 
bag, everything on the table, if you will: ceasefire, 
withdrawal of heavy weapons, humanitarian access, all of the 
things that are necessary for a solution. What is lacking in 
Minsk is the political will of Russia to actually implement it. 
As I said, they are denying that they have a responsibility in 
this.
    So I do not think it has outlasted its purpose. I think it 
serves a very important purpose. But what we have to do--and 
this comes back to the point I wanted to make--we have to get 
to the point where Russia makes a different decision. Sanctions 
is a part of a strategy. It is one piece among many that can 
add up to a decision in Russia that says, you know, it is not 
worth it. It is not working. And that is what I think we are 
really striving for through the combination of sanctions, 
through support for Ukraine reform, anti-corruption, support 
for the military. All of these things add up to making it more 
and more clear to Russia that their effort to re-subordinate 
Ukraine to its sphere of influence is not going to work.
    Senator Shaheen. So one of the things that we have done 
since 2017 is we have put in place legislation called the 
Women, Peace, and Security Act that defines a strategy to 
include women at the table as we are looking at conflict 
negotiations. As we look ahead to a time when we hope there 
will be negotiations to end this conflict in Ukraine, how 
important is it to have women at the table in those 
negotiations? Ambassador Volker, do you want to go first?
    Ambassador Volker. I would like to say something on that, 
though, because when you visit the conflict area in Eastern 
Ukraine, you meet almost uniquely with women. The young men 
have all gone away because they do not want to be drafted into 
the military forces of the Russians. Young women have gone away 
because it is not safe. And the people that are there are 
elderly and mostly women, and they are holding down the 
property so that they try to maintain some semblance of 
continuity for life in the future. I do not think there is a 
way to talk about peace and the restoration of normal life 
without women.
    Dr. Polyakova. I will make one quick comment.
    In the context of Ukraine, there was a women's militia 
group on the Maidan. It was primarily women who organized the 
delivery of food and other supplies to the front in the very 
early days when the Ukrainian military was not able to organize 
those kinds of logistics themselves. And they continued to be 
incredibly helpful in resettling the IDPs. There are 1.5 
million internally displaced people in Ukraine right now. Women 
play a very strong role in the communities where those 
individuals end up.
    Lastly, on a broader scope about women in conflict 
resolution, there are many studies that show that when there 
are more women at the table, you end up with a better 
negotiated solution at the end. So absolutely, I think it is 
critical to have women at the negotiating table.
    Dr. Carafano. Can I just say I was really pleased to see 
the administration come up with a strategy to actually 
implement the act?
    Senator Shaheen. Me too.
    Dr. Carafano. And when you look at that, where can this 
actually work and be effective, you have to have a modicum of 
security. You have to have a modicum of civil society, and you 
have to have some capacity for economic growth to actually 
implement those kinds of program and make them happen. I think 
Ukraine is literally the poster child for where this kind of 
strategy ought to work.
    Senator Shaheen. Thank you. So you are all in agreement.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Portman.
    Senator Portman. Thank you, Mr. Chairman, and thanks for 
holding this hearing.
    I was just thinking, as I was hearing you talk about the 
women in Ukraine, I was there last month and met with two of 
the strong women from the previous administration. And one is 
the minister of health, whom many of you know, Ulyana Suprun, 
and the other was the minister of finance, Oksana Markarova. 
And boy, two strong women who have taken on some heroic 
reforms. I will leave it there.
    But you are absolutely right, Senator Shaheen. Women play a 
key role in this, including at the Maidan and since.
    And, Mr. Chairman, thank you for holding this hearing. This 
is really timely, and it is wonderful to hear from a panel of 
experts, all of whom basically agree on the need for us to keep 
the pressure on and to help this fledgling country that is 
trying to do the right thing.
    Thanks to some of my constituents back home--some of you 
know we have a big Ukrainian community in Ohio--I got involved 
in these issues early on and right after the Maidan, within a 
few months, I was over there. I could still see the scorch 
marks. In fact, you could still smell the burning rubber, and 
the encampment was still there. I have been back several times 
since, including meeting with President Zelensky last month, 
which was for me very refreshing actually. I worked well with 
President Poroshenko, but President Zelensky said something--
and I have repeated this since in the media. I do not talk 
about our specific conversation, but--that I thought was 
telling. I congratulated him, of course, for winning 74 percent 
of the vote. I said that does not normally happen in the United 
States of America. Maybe I am wrong. Maybe some of my 
colleagues have had votes like that, but probably not. And his 
response was not, yes, I ran a great campaign or we had all the 
right things going on. He said, you know, what? It is not about 
me. It is about a hunger for reform. And that is really 
important right now.
    So as we talk about the importance of pushing back on the 
Russian aggression, we also have to talk about the importance 
of reform and transparency and fighting corruption. And I think 
there is no question in my mind that he is personally committed 
to that and that he needs our help to be able to accomplish 
what he would like to do in terms of truly making this 
transition, looking to the West and a democratic country that 
is prosperous that practices free enterprise and pushes back on 
the corruption. So I am encouraged.
    I was encouraged today when the Department of Defense 
announced plans to provide Ukraine with an additional $250 
million in security assistance. That is consistent with what we 
appropriated here, of course, and authorized. That is $1.5 
billion since 2014, which I raised with the President. I also 
raised that with General Khomchak who some of you met with 
recently I know. And they appreciate it. They get it. I mean, 
these are my taxpayers, taxpayers represented in this panel and 
around the Senate, who have been willing to say, you know, we 
are going to stand up beside this country that wants to move 
toward a more optimistic future and toward the West. And it is 
in many respects the example of what we all talk about in terms 
of the competition between us and Russia, and two different 
visions for the future.
    So I am pleased to say that the aid that we authorized 
first in 2015 through legislation--did not actually happen till 
2017--for lethal defensive aid is now there and more is coming. 
You will see in the NDAA--this is the authorization bill we are 
about to vote on here in Congress--that there will be 
additional ideas expressed there. I will not talk about them in 
specifics because I know the chairman is still working through 
those, but I think all of us in this panel have probably 
involved in helping to ensure we get the right aid there. 
Ambassador Volker, you have been involved in ensuring that we 
know what they want and what they need. So my hope is that we 
will have some good news here shortly.
    I was on the contact line last year at a time when the 
snipers were pretty active. One of the things that I think most 
of my constituents do not realize is the degree to which it is 
still a hot war. So when I placed the wreath at the memorial 
recently for the Ukrainians who have lost their lives there, it 
includes about 3,000 troops who continue to face the artillery 
and the snipers.
    Ambassador Herbst, your testimony was in many respects the 
most powerful for me because you were talking about what is 
really happening on that contact line, the number of Russian 
officers who are involved and the number of tanks and 
artillery. I mean, it is overwhelming. It is amazing that the 
Ukrainians have been able to push back as they have. We got to 
help them not because we want war but because we want peace.
    The one question I would have for you all that you did not 
really talk about was the Kerch Straits and what happened in 
November and these 24 sailors and what are we going to do about 
it. You know, do you recommend additional sanctions? I think, 
Ambassador Herbst, you talked about maybe an additional company 
to be sanctioned. I would tell you President Zelensky 
emphasized that a lot, and I know that he is focused like a 
laser on that issue.
    It was a flagrantly illegal attack. There is no question 
about it. They were near Russian territorial waters. I think 
the United Nations has not been nearly as aggressive as it 
should be in pushing back. I think we move too slowly. I think 
NATO moves much too slowly.
    What should the U.S., NATO--this U.N. Law of the Sea 
tribunal came out just before I was there last month and was 
very clear that this is an illegal act and the sailors must be 
returned. What more can we do? How can we actually make this 
happen? And should, Ambassador Volker, this not be a 
precondition to negotiations with Russia on any kind of a 
peaceful settlement of the Donbas?
    Ambassador Volker. Well, if I may, Senator. Thank you very 
much for your comments and for that question as well.
    And to address a few of the things you said, first off I 
agree with you. I think the provision of security assistance to 
Ukraine is vitally important. I think it has had an impact both 
psychologically as well as militarily on the 
professionalization and the capacity of the Ukrainian forces.
    I think it is also important that Ukraine reciprocate with 
foreign military purchases from us as well, and I know that 
they intend to do so.
    In terms of priorities, I think the anti-sniper systems 
that were provided through foreign military financing were very 
important, the anti-tank Javelin missiles also very important. 
And as we look ahead, we need to look at air defense, at 
coastal defense, that maritime picture, coastal capabilities, 
all of them very important.
    The second thing that I want to call attention to, NATO's 
decision at the ministerial meeting that took place here in 
Washington on the Black Sea strategy because I think that was 
also a U.S. initiative to talk about this. Other countries 
picked it up. And it is very important that NATO be present in 
the Black Sea, that it support freedom of navigation, that it 
provide a fabric of port calls and engagement with Ukraine and 
other states in the region. If you look around, you have got 
NATO allies, three of them, Romania, Bulgaria, and Turkey. You 
have got two partner countries, Georgia and Ukraine that are 
all Black Sea littoral states. So it is not by any means a 
Russian lake. And I think it is important that NATO stand up to 
make clear that all of us have an interest in the freedom of 
navigation, the open access, the economic development of the 
region, and the security of the region.
    In terms of the Kerch Straits, we have raised at every 
juncture the importance of Ukraine releasing these sailors. In 
the letter I sent to my Russian counterpart last week or 2 
weeks ago, I mentioned it again. It is critical that Russia do 
that. As you said, it was an illegal seizure of the vessels and 
the sailors, and there is no justification for continuing to 
hold them.
    As far as engaging the Russians, I think that we have a 
balance sheet right now where there is nothing going well. If 
you look at Syria, if you look at Venezuela, if you look at 
North Korea, if you look at Iran, if you look at nuclear 
issues, you look at Ukraine, you look at Georgia, and there is 
really nothing on the positive side of the ledger. And I think 
that is a dangerous situation to have generally and even more 
dangerous if we are not going to be talking with Russia at all.
    So I think it is important that we do both. We keep the 
pressure up, calling attention to the Ukrainian sailors and 
demanding their immediate release, and that we also be willing 
to talk with Russia if there is an opportunity because of the 
seriousness of all the problems we have.
    Senator Johnson. Senator Murphy.
    Senator Portman. Thank you, Chairman.
    Senator Murphy. Thank you very much, Mr. Chairman.
    Good to see you all. Thank you very much for being here.
    I was one of the long-time skeptics of providing additional 
lethal aid to Ukraine in part because from the beginning, this 
appeared to me ultimately to be as much or more a political 
problem than it was a military problem. I think it is 
important, when we have these meetings, to find what the 
Russian objectives are so that we can tailor a solution to try 
to counter those objectives.
    And so, Ambassador Volker, I will just ask that simple 
question. My impression is that Russia has never and does not 
to this day want to militarily own all of Ukraine. They want to 
destabilize the country to a point that ultimately they can 
reinstall a client government or a friendly government in Kyiv 
to be back into their umbrella, as was the case prior to the 
Maidan. That does not mean that military assistance is not 
vital. It means, though, that if their ultimate goal is the 
political conquest of Ukraine, rather than the military 
conquest of Ukraine, it should probably inform the way in which 
we are spending money.
    Is my assumption about Russian aims wrong?
    Ambassador Volker. Well, Senator, that is an excellent 
question.
    And, no, your assumption is not wrong about Russian 
objectives, but I do have a different perspective on how we go 
about addressing Russia's policies here.
    I agree with you that Russia has a political objective of 
dominance over the entire country of Ukraine. It is using 
military force as a means of putting pressure on Ukraine toward 
that objective. I, therefore, think it is very important that 
we provide military assistance to Ukraine to help make sure 
that Russian strategy does not work, that they are not able to 
increase their military pressure in any effective way. This 
gives Ukraine time, space, confidence, and resilience so that 
they can withstand that pressure from Russia and not succumb to 
the political objectives that Russia has.
    So I think there is a political component. There is an 
economic component. There is an anti-corruption component to 
our strategy, but I do believe that military assistance for the 
resilience of Ukraine is a vital component as well.
    Senator Murphy. I do not deny that. I think my query is 
whether we have the allocation between the military spending, 
which is not simply only in the NDAA, it is also the $4 billion 
per year that we are spending on a broader European defense 
initiative that arises out of this, versus other forms of 
support for the Ukrainian regime.
    And I guess I will give sort of a different version of the 
question to Dr. Polyakova because you have thought a lot about 
these other means by which Ukraine has to develop capacities to 
fight back against political interference, whether it be cyber-
attacks, disinformation, or the ways in which American aid can 
help ease the transition to economic reform. I mean, it is not 
outside of the realm of possibility that we could talk about 
using our financial largesse to try to incentivize economic 
reforms instead of focusing only primarily on military aid.
    So are we doing enough in those other sectors right now, 
and what more can we be doing?
    Dr. Polyakova. Thank you for that question, Senator.
    I fully believe that our military support for Ukraine 
should be one part of a much broader, full-spectrum strategy to 
ensure Ukraine's sovereignty, to ensure Ukraine's continued 
democratic progress.
    I will note one thing, though. If we look back at Georgia, 
as an example, what we see today is that there is no steady, 
quote/unquote, border between the occupied territories and the 
Georgian Government-controlled territories. What we see is a 
slow creep, almost on a daily basis of that contact line.
    And in fact, that is likely what we would see in Ukraine if 
we pulled back some of our support. In some ways the Russian 
activities in the Sea of Azov that focus on basically 
economically strangling the Ukrainian ports there, Mariupol and 
Berdyansk, is a desire to achieve what the Russians are not 
able to achieve militarily by land, which was to take over the 
southeastern Ukraine line and to have a land pass directly to 
Crimea. They failed at that primarily because Ukrainians stood 
their line with U.S. military support.
    On the political side, I mentioned in my testimony that we 
should continue to impose conditionality on any further 
assistance programs, and we should think through in a much more 
focused way what that actually means. The reason why Ukraine 
has been able to achieve what it has been able to achieve in 
the last 5 years in terms of economic reforms, anti-corruption 
reforms, energy reforms is because of the so-called sandwich 
model where you have pressure from the top, including from the 
United States and other international institutions, and 
pressure from the bottom from civil society.
    So it should be our intention to make sure those civil 
society actors remain to put the pressure on the new Ukrainian 
Government to do the right thing and that we continue to impose 
conditionality on top and loans for reforms. This is basically 
the model that I think we should follow, and I do think it is 
critical to continue to invest in a U.S. presence through the 
European Deterrence Initiative to send a signal to Moscow that 
they cannot continue on this creep.
    Senator Murphy. I guess my question is whether loans for 
reform is an effective enough tool moving forward, and if we 
admit that we are going spend billions of dollars in the region 
on military aid, why are we not having a conversation about 
spending some of that money other than through loans, through 
direct grants for other mechanisms as well.
    I want to squeeze in one additional question, and that is 
back to you, Ambassador Volker.
    I thought Chairman Johnson raised an important point about 
the need for patriotism, especially at a moment today where 
there is a difficult transition of power. Obviously, we do not 
require regular agreement in this body as a measure of the 
health of our democracy. We fight in democracies, and that is 
okay. But there are some pretty powerful members of the 
opposition in Ukraine today and a very new, inexperienced 
president.
    What are our expectations of the opposition? What are the 
ways in which we expect them to cooperate, and what are the 
ways in which we expect that they would exercise legitimate 
opposition? What are the ways in which they might cross that 
boundary that we should be watchful for?
    Ambassador Volker. Well, thank you.
    And I think that is a great framing question because 
democracy, as you know as an elected official, is a competitive 
process rather than a consensus-based process. People are 
competing to see the realization of their ideas.
    And I think what we expect from the opposition is to stand 
for principles and policies that will advance the interests of 
all of Ukraine, the Ukrainian people, and to hold the 
government to account, hold the president to account if he is 
not doing that, to be competitive in a way that lifts up the 
country.
    That has not always been the case in Ukraine. We have seen 
people in the Rada acting on behalf of private interests and a 
great deal of corruption in the country and not really changing 
the country sufficiently to advance the interests of the 
people.
    There is a fresh opportunity with this Rada election that 
we are going through right now. It will produce a very 
different Rada, very different members of the parliament than 
has been the case up to this point. And I do hope that they 
play a different kind of role than what we have seen 
historically, of one holding the government to account.
    If I may add two additional points. One of them is on U.S. 
assistance and the broader package there.
    We do provide a great deal of other assistance as well. It 
is not purely military, including through AID, including in 
anti-corruption reform, including economic reform. But the real 
big ticket of the economic assistance is coming from the IMF 
and to some degree also from the European Union in helping 
Ukraine with a fundamentally difficult budgetary problem. And 
this, therefore, gives leverage as well. It is important that 
we work with the IMF and the European Union to establish the 
parameters by which that assistance is given so that Ukraine is 
doing what it needs to do to advance the right kinds of 
reforms.
    And my second point in that area, if I can take the 
opportunity to bring it up, is we often talk about corruption 
in Ukraine as the problem, and to be sure, it is a problem. But 
I also believe that corruption is really a symptom of a bigger 
problem, which is the oligarchic system itself, where a handful 
of people have disproportionate control over so many levers of 
power in the country. And I think that there is an opportunity 
with the new president and with the new parliament to pursue an 
aggressive effort to implement antitrust legislation, to break 
up holdings, and in doing so, create competition. And this 
might be something that is done in coordination with the U.S., 
the EU, and the IMF and might be something in which we make the 
resources and that kind of assistance contingent upon even more 
far-reaching reform in this area than has been the case to 
date.
    Senator Murphy. And that connects back to your first point 
about the legitimate role of the opposition to protect the 
interests of the country rather than the interests----
    Ambassador Volker. Absolutely. Exactly right, Senator. 
Thank you.
    Senator Johnson. Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman. Can I ask that a 
statement that I have be included in the record at this time?
    Senator Johnson. Without objection.
    [The prepared statement of Senator Menendez follows:]

             Prepared Statement of Senator Robert Menendez

    Thank you, Chairman Johnson and Ranking Member Shaheen for holding 
this hearing. With Ukraine's recent peaceful transition of power and 
Russia's decision to respond by illegally giving Ukrainian citizens 
Russian passports, now is a good time to examine Ukraine's progress 
over the past 5 years and Russia's constant attempts to undermine 
Ukraine's sovereignty and subvert the will of its people.
    In February 2014, the people of Ukraine made history. When 
President Yanukovic chose to listen to Moscow over his citizens, 
Ukrainians stood up for their country in the face of brutal repression 
and Russian interference, driving him out with the Revolution of 
Dignity. The courage Ukraine's people showed in their calls for 
democracy, for independence, and for sovereignty reflect the strong 
Ukrainian spirit and serve as an inspiration to us all.
    Unfortunately, Vladimir Putin continues to assault Ukraine's 
sovereignty and its people. From the illegal invasion of Crimea days 
after the Revolution of Dignity, to the ongoing war in the Donbass that 
has claimed over 13,000 lives to date, to last November's unprovoked 
attack on Ukrainian ships in the Kerch Strait, the Kremlin has 
repeatedly breached international law and harmed Ukraine with its 
malign activities. Twenty-four Ukrainian sailors remain in a Russian 
jail today, nearly 8 months after their illegal capture. Russia must 
release these men immediately and end any actions that threaten freedom 
of navigation in the Kerch Strait and the Sea of Azov.
    I also want to register my continued frustration with the Trump 
administration's inexcusably weak response to the 24 sailors' 
detention. The sanctions announced on March 15 were late, weak, and 
insufficient to make any difference. President Trump had previously 
said he would not meet with President Putin until the sailors are 
released, but now he plans on meeting Putin at next week's G20 summit. 
The President must advocate for the sailors' release, demand that Putin 
stop violating Ukraine's sovereignty and restart the peace process. 
Implementing Minsk II's provisions must be a top foreign policy 
priority for the U.S. I look forward to hearing from Ambassador Volker 
about the prospects for Minsk II and the peace process, as well as what 
plans the U.S. has for supporting Ukraine in the face of Moscow's 
continued malign activities. I also look forward to hearing his ideas 
on how the U.S. can be more active in the peace process.
    It is clear that Russian aggression against sovereign states like 
Ukraine will continue until the rest of the world strongly pushes back. 
That is why Senator Graham and I introduced the Defending American 
Security from Kremlin Aggression Act of 2019. DASKA would increase 
economic, political, and diplomatic pressure on the Russian government 
in response to its malign activities in Ukraine and around the world. 
DASKA's provisions include sanctions on 24 FSB sailors deemed complicit 
in the Kerch Strait attack and sanctions on Russia's shipbuilding 
sector if Russia violates freedom of navigation in the Kerch Strait or 
anywhere else in the world. This is what a strong response to Russia 
looks like. Passing DASKA will send a strong signal to Moscow that the 
U.S. will not take their illegal actions lying down. It will also show 
those bearing the brunt of Russian aggression, like Ukraine, that we 
stand with them in their fight for sovereignty and democracy.
    One particular area where I believe the United States can stand 
with the Government of Ukraine is with care for veterans and injured 
soldiers. Ukraine is in the process of setting up its own Veterans 
Administration (VA) to care for the many veterans of the ongoing war 
with Russia. Ukraine would benefit from American insights on 
establishing and running a VA, and I urge the administration to provide 
advice and support to Ukraine as it develops this critical institution. 
I further understand that the Armed Forces of Ukraine are in need of 
Mobile Army Surgical Hospitals, more commonly known as MASH units, and 
that the U.S. Armed Forces have older MASH units that are not currently 
in use. The U.S. should transfer those unused MASH units to the 
Government of Ukraine for use by its Armed Forces. This simple action 
could save countless Ukrainian soldiers' lives.
    Ukraine's government and people are also working to build up their 
democracy and restore the rule of law. Since the Revolution of Dignity 
Ukraine has made a number of important reforms to tackle corruption and 
strength democratic institutions. This April saw a peaceful transition 
of power to Ukraine's new President Volodymyr Zelensky, who has spoken 
of his desire to implement strong anti-corruption measures. However, 
there is still a lot of work to be done. I am particularly concerned 
about the influence of oligarchs in Ukraine's political system. I would 
like today's witnesses to address the future of anti-corruption and 
rule of law efforts in Ukraine under President Zelensky and what the 
United States is doing in support of them.
    The Ukrainian people have been clear in their vision for their 
country: a fair, free and transparent democracy with opportunities for 
all its people and strong ties to Western allies who share those 
values. The Revolution of Dignity five years ago demonstrated their 
resolve to stand up for that vision in the face of incredible pressure. 
The United States must stand with the people of Ukraine in their fight 
for the sovereign, democratic country they want and deserve.

    Senator Menendez. Mr. Chairman, I appreciate you holding 
this hearing.
    Ahead of last December's G20 meeting, President Trump said 
he would not meet with President Putin until Russia released 
the Ukrainian ships and sailors that it illegally detained in 
the Kerch Strait. Russia still holds those 24 sailors and the 
ships. Yet, President Trump said last week that he will meet 
with Putin at the upcoming G20 summit.
    Now, that is not necessarily a bad thing in and of itself 
if--if--the President is clear and unequivocal about the 
remarks he makes to Putin on this, as well as other things, 
including our elections.
    Ambassador Herbst, what should President Trump--I am not 
going to ask Ambassador Volker because that would put him in a 
difficult position, not that I am averse to that. But in any 
event, what should President Trump be saying to President Putin 
about not only the sailors but the ongoing occupation of 
Crimea, the conflict in the Donbas? What is the statement that 
he should be making to him both privately as well as publicly?
    Ambassador Herbst. I think that the policies of the 
administration vis-a-vis Russia and vis-a-vis Ukraine have been 
sound policies, meaning on the sanctions on the Kremlin for its 
aggression, the important decision on supplying Javelins to 
Ukraine. It would be wonderful if, when the President saw 
Putin, he were to say to him things that reflected completely 
the policy of the administration. The fact that that has not 
happened in the past has raised confusion and other feelings as 
well, which I think you are well aware of.
    So, again, from my standpoint, if when he sees Putin, he 
were to say unequivocally, as he has said at certain points, 
you know, Mr. Putin, I cannot improve relations with you until 
you stop your aggression in Ukraine that would be a good thing 
for him to say, in fact, to say not just privately but also 
publicly.
    Senator Menendez. Now, the sanctions on Russia--and I have 
been the architect of a fair number of those. But the ones 
following the Kerch attack were very late. They were weak, and 
they were clearly ineffective. The fact of the matter is the 
sailors are still in detention.
    It is abundantly clear that President Putin will keep 
interfering with the affairs of sovereign states such as 
Ukraine unless the rest of the world firmly and strongly pushes 
back.
    I appreciate, Ambassador Herbst, that in your statement you 
talked about the legislation that Senator Graham and I have 
introduce, the Defending American Security from Kremlin 
Aggression Act. DASKA, as we call it, would increase economic, 
political, and diplomatic pressure on the Russian Government in 
response to its malign activities in Ukraine and around the 
world; the provisions, including sanctions on the 24 FSB 
sailors deemed complicit in the Kerch Strait attack; sanctions 
on Russia's shipbuilding sector, if Russia violates freedom of 
navigation in the Kerch Strait or anywhere else in the world. 
That is a hard-hitting sanction.
    And I came in at the tail end of Mr. Carafano, I guess in 
response to some question, talking about sanctions. My view is 
that we only have a handful of peaceful diplomacy tools at our 
disposal. The use of our aid and trade to induce countries and 
leaders to act in a certain way, international opinion to the 
extent that a country and/or leader is actually subjected to 
that, and then the denial of aid, trade, and access to our 
financial institutions as a consequence to move them in a 
different direction. Other than that, after 27 years of foreign 
policy work, I have not figured out what other foreign peaceful 
diplomacy tools we have.
    Now, Russia uses its military in pursuit of its foreign 
policy objectives. That is something we do not do.
    So in light of that, should we not be passing something 
like DASKA to ultimately force back, keeping all the elements 
of the stool together--I am all for that, the energy side, the 
diplomacy side, and all of that. But I think Putin only 
understands strength at the end of the day, and at the end of 
the day, having real consequences in the sanctions, 
particularly in some sectors of the Russian economy, I think 
would be very significant. What are your views on that?
    Ambassador Herbst. I think Congress has played an essential 
positive role overall in our policy towards Russia and Ukraine, 
but particularly in the sanctions area. What you folks did in 
the summer of 2017 was absolutely critical, and I salute you 
for it.
    I spoke positively of the legislation you and Senator 
Graham introduced, and I think it would have a positive impact 
now. I think that, for whatever reasons, congressional 
encouragement is necessary both to move Washington and, for 
that matter, in a less direct way but still a real way, 
Brussels in the right direction.
    Senator Menendez. Ambassador Volker, why are we not we 
doing this, whether it be by legislative action--I do not hold 
you responsible for that, but certainly some of these things 
could be pursued by the administration separately of 
legislative action.
    Ambassador Volker. Yes, and that is exactly what I was 
going to say too, Senator. So thank you.
    I think the administration has increased sanctions 
periodically over time throughout the course of the 
administration. We are in a stronger position now with more 
pieces of the puzzle referenced than before. We have Crimea. We 
have Minsk. We have the Kerch Strait now. We have the 
elections. We have the Skripals. There has been a growth of 
sanctions against Russia.
    Speaking just from my experience, I have always seen a 
difference of view between various administrations, not only 
this one, and the Congress as to who should be in the driver's 
seat on sanctions. It is always a question as to how much 
leeway the administration has in implementation versus how much 
the Congress----
    Senator Menendez. But should we not be doing more? You just 
listed all of the reasons that Russia deserves a firmer 
response. And the simple question is, should we not be doing 
more?
    Ambassador Volker. We have been doing more, and I believe 
we will continue to do more.
    Senator Menendez. Well, let me ask you this. When I was the 
chairman of this committee, I offered the Ukraine Freedom 
Support Act, and I advocated then with President Obama to 
robustly help the Ukrainians. And now in response to Russia's 
illegal actions in the Kerch Strait, I called on this 
administration to increase security assistance to Ukraine, 
including providing lethal maritime assistance and weapons, and 
to assist Ukraine's efforts to improve its maritime domain 
awareness.
    Have we, the United States, taken any steps to increase its 
support for Ukraine's security?
    Ambassador Volker. We have, and we appreciate the 
appropriation that has been made by Congress, $250 million FMF 
for this year. The Pentagon is moving forward with that. There 
was just an announcement today of how we are going to deal with 
$125 million of that. And the priorities that you listed, 
maritime domain awareness, coastal defense, air defense, those 
are very much the priorities that are under discussion between 
us and the Ukrainians right now.
    Senator Menendez. One quick question. I understand the 
armed forces of Ukraine are in need of mobile army surgical 
hospitals, or MASH units, and that the U.S. armed forces have 
older MASH units that are not currently in use.
    Have we considered transferring some of those unused MASH 
units to the Government of Ukraine?
    Ambassador Volker. I do not know the specific answer to 
that. I would be happy to track it down. There is no reason why 
we would not.
    Senator Menendez. Get back to me because if we want people 
to fight for their own country, one of the things we have to do 
is they have to be taken care of at the end of the day.
    Ambassador Volker. Absolutely.
    Senator Menendez. Mr. Chairman, if I may have one more 
moment.
    Senator Johnson. Absolutely.
    Senator Menendez. Thank you.
    Last question. I heard your answer about President 
Zelensky. I hope that is where we are headed. I know he came 
into office on a strong anti-corruption platform. But there are 
concerns about his connections to certain Ukrainian oligarchs. 
You talked about the whole challenge of oligarchs in the 
Ukraine as an undermining element and particularly Igor 
Kolomoisky who is under suspicion of stealing money from a bank 
he co-owned. President Zelensky has denied that Kolomoisky, who 
owned the TV that aired his comedy show, or any other oligarch 
controls him.
    Is that the view of the State Department?
    Ambassador Volker. I think the view is that President 
Zelensky has said all of the right things. He does not have the 
power in his hands right now to do what he has said he will do. 
He has zero votes in the Rada right now. We believe that he 
deserves the benefit of the doubt, and we want to stand by the 
principles and the policies of reform and fighting the 
domination of the Ukrainian political system by oligarchs such 
as Kolomoisky. We hope that he is able to amass the 
independence and to execute what he says he will do. And it is 
our intention to be both helpful and to hold him to account if 
he does not.
    Senator Menendez. I will be looking at the accountability 
aspect.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Barrasso.
    Senator Barrasso. Thank you, Mr. Chairman.
    Ambassador Volker, good to see you again.
    I wanted to talk about illicit coal exports for a second. 
Ukraine's minister for temporarily occupied territories and 
internally displaced persons recent stated, quote, Ukraine is 
aware of Russia's scheme for smuggling coal illegally mined 
from a part of the occupied Donbas to the ports of different 
countries. The coal is reportedly being transported from 
eastern Ukraine across the border to Russia where it is 
repackaged and relabeled and then sent to Europe.
    I am concerned by the reports detailing the illegal sale of 
millions of dollars of sanctioned coal from the Ukrainian 
breakaway regions often using Russian businessmen as proxies 
and as intermediaries.
    So can you just share? Is the administration currently 
investigating this trade in coal, the mechanisms used to 
introduce it into the international market, and the individuals 
involved in this illicit trade?
    Ambassador Volker. Senator Barrasso, if I may, I would like 
to offer to get back to you with any specifics on that. But I 
can say that I share the assessment that this is what is 
happening. Russia has occupied the areas and then a number of 
people with connections are getting access to resources, 
repackaging, relabeling, and trying to make a profit out of 
this.
    Russia is not investing in the Donbas. So they are not 
building new things. They are not fixing mines. A lot of things 
have gone into disrepair. But to the extent that they are able 
to extract from there, yes, indeed, it is our perception they 
are doing so.
    Senator Barrasso. And then also for Ambassador Volker, as 
well as Ambassador Herbst, if I could please. I want to talk 
about Germany's efforts with regard to Ukraine and specifically 
Nord Stream 2, which I believe is Putin's pipeline. It is a 
German trap I believe.
    A year ago, when meeting with Ukrainian President 
Poroshenko, Chancellor Merkel said I made very clear that a 
Nord Stream 2 project is not possible without clarity on the 
future transit role of Ukraine.
    So what guarantees is Germany seeking? What actions has 
Germany taken to ensure that Gazprom continues to export gas 
through Ukraine? Could you just kind of talk about that topic 
and your thoughts on it?
    Ambassador Herbst. You are right, Senator, that Chancellor 
Merkel has said that Russia should guarantee a substantial flow 
of gas through Ukraine even as Nord Stream 2 goes into 
operation.
    But Moscow has basically been flouting this requirement to 
the Chancellor in a very public way for the last several 
months. Both Prime Minister Medvedev, the Russian prime 
minister, and the energy minister Novak have said that, yes, 
they are happy to do this to send gas through Ukraine, first, 
if the economic conditions are viable--and that is a reasonable 
condition--but also if Gazprom in Russia and Naftogaz in 
Ukraine have no more issues on their bilateral agenda. That is 
a completely unacceptable condition because what they want, 
they want the Ukrainian firm Naftogaz to give up the court 
settlements it has won, which will cost Gazprom billions of 
dollars. And they have also insisted--this is Medvedev's 
words--that, quote ``Ukraine must be stable for this to 
happen.'' And we know that the Kremlin characterizes unfairly 
Ukraine as unstable. So Moscow has shown it has no interest in 
meeting the Chancellor's condition.
    One more point. Multiple times over the past several 
months, Russian officials have told Western and Central 
European governments that the gas flow through Ukraine's 
pipeline from Russia will end on December 31st this year.
    So the point is zero progress and, in fact, I would say 
regression on this issue. And so far, we have seen no reaction 
from Germany.
    Senator Barrasso. Ambassador Volker, anything you would 
like to add to that?
    Ambassador Volker. Well, I agree with John's assessment on 
that. I think that Germany has recognized in some ways that its 
pursuit of Nord Stream 2 puts Ukraine in a difficult position. 
It has, therefore, tried a few things such as negotiating with 
Russia a guaranteed amount of gas transit. Russia has no 
interest in this, and Germany is kind of in a quandary. They 
want to pursue the project for their own reasons, and at the 
same time, they know some of the consequences of it.
    I do believe also it is appropriate that we continue to put 
pressure on it because it is not just us but many countries in 
Europe are concerned about this development, especially those 
in Central and Eastern Europe that would be more vulnerable to 
Russian pressure if it goes forward.
    Senator Barrasso. One of the things a number of us are 
trying to do is put that pressure on through some legislation 
called the ESCAPE Act. President Trump and the administration 
do continue to raise concerns about Russia's Nord Stream 2.
    The ESCAPE Act does a number of things. It is something we 
have recently introduced. It directs the U.S. Permanent 
Representative to NATO to encourage NATO member states to work 
together to achieve energy security. It creates a transatlantic 
energy strategy focused on increasing the energy security of 
our NATO allies and partners and increasing American energy 
exports to those countries. It requires the Secretary of Energy 
to expedite approval of natural gas exports to NATO allies. It 
authorizes mandatory U.S. sanctions on the development of 
Russian energy pipeline projects such as Nord Stream 2. And I 
think, Ambassador Volker, you and I have talked about this in 
the past at the McCain Institute on this whole topic.
    Do you support efforts to enhance our allies' energy 
security and reduce the threat it poses to NATO countries? And 
I would ask that you would look at this legislation. If you 
have some additional thoughts on ways we can even strengthen 
it, we would appreciate your efforts.
    Ambassador Volker. Okay. I will be happy to take that on 
board. I cannot comment on the specifics of the legislation, 
but the principles behind what you are saying are exactly where 
the administration is. You may have seen President Trump's 
meeting with President Duda this past week in which he was very 
outspoken on this issue. He is very concerned about Europe 
increasing its dependence on Russian gas as opposed to 
decreasing it and looking for ways to work with Europe and 
incentivize Europe to open that up more, whether that is 
through U.S. LNG--and Secretary Perry was obviously the lead in 
our delegation going to Ukraine--or generally. It does not have 
not be American gas, but it is making sure that Europe 
maintains its own freedom of decision so that it is not 
creating a situation of political compromise with respect to 
Russia.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    Senator Johnson. Thank you, Senator Barrasso.
    One of the things I am concerned, dealing with so many 
Eastern and Central European countries that are not part of the 
EU, are not part of NATO, I think we have all seen the positive 
effect, positive influence of their attempting to join these 
organizations. They are able to enact reforms that they would 
not be able to enact otherwise. We just saw that with North 
Macedonia and the Prespa Agreement with Greece. If we do not 
have that capability--I think you all agree with the fact that 
Ukraine should move toward eventual NATO membership. Is that 
correct or incorrect?
    Ambassador Volker. Absolutely, and that is the policy of 
the administration.
    Senator Johnson. There are certainly some voices in 
America--I do not agree--that are concerned about that. You 
know, why would we want to obligate ourselves to come to the 
defense of some of these smaller countries? We were in Munich 
for the security conference, and we met with Secretary-General 
Jens Stoltenberg. One of the members raised that issue, that 
devil advocate position, and the Secretary-General said we want 
to enlarge NATO because a larger NATO is just good. It is a 
defensive alliance. It literally threatens no one.
    So, again, I just wanted to get on the record you all would 
agree that we should be moving forward and cooperate with these 
nations that want to join the European Union, want to join 
NATO. It is a good thing. It is a positive thing. It helps them 
provide reforms.
    Does anybody want to comment on that?
    Dr. Carafano. Yes.
    Dr. Polyakova. Yes.
    Ambassador Herbst. I agree.
    Ambassador Volker. I will be a little more expansive, if it 
is okay, Senator.
    Senator Johnson. Sure.
    Ambassador Volker. But the great thing about NATO is that 
it is an alliance of free countries that are banding together 
to provide collective defense and that deters attacks against 
them. And that creates a secure space in which people are able 
to govern themselves as democracies without threat from 
outside. There is no reason why that should apply only to some 
people in Europe and not other people in Europe. If everybody 
shares the same values and everybody faces security threats, 
why should it not be the case that all people have the same 
opportunity? That has been the basis of NATO's policy on 
enlargement since the time that it first became possible after 
the fall of the Berlin Wall.
    Now, NATO has always insisted and the U.S. has insisted 
that countries be ready. They have to meet the standards of 
doing so. And so we went through a long period of time, 10 
years, from the fall of the Berlin Wall to when Poland first 
acquired NATO membership 20 years ago. I think Ukraine still 
has work to do. Others still have work to do. But the direction 
on this and the principles behind it have to be crystal clear.
    Senator Johnson. So, again, NATO is a defensive alliance. I 
do believe you achieve peace through strength.
    I am highly concerned about our, what I would consider 
weak, response to the Kerch Strait aggression. I have led two 
resolutions. One we passed last Congress. This one we passed 
the Foreign Relations Committee trying to get it attached to 
the NDAA--I think we have over 60 Senate sponsors--calling for 
the United States to lead a strong multinational freedom of 
navigation operation, to preposition maritime assets in the 
Black Sea.
    I know a number of you mentioned this in your testimony. 
Some of you want to comment on what we really should do? I 
mean, how strong should our response be as not a kinetic 
military response but a military show of strength to keep the 
Black Sea and the Sea of Azov open to navigation? Because that 
is obviously what the Putin strategy is, is squeezing out those 
ports and really taking control of the Black Sea.
    Mr. Carafano.
    Dr. Carafano. First of all, I would say from a military 
perspective--and I listed some of these in my prepared 
remarks--that the number one objective, particularly in 
military assistance to help Ukraine, is building up their 
maritime capacity. I think that is clear.
    Senator Johnson. How many ships did they lose when Russia 
illegally annexed----
    Dr. Carafano. Three. I mean, they have virtually no 
capacity to either have awareness of their own maritime domain 
or to conduct any law enforcement or operations in that domain. 
I do not think that is a big stretcher. I mean, their capacity 
is near zero. Right? And so I think building up that capacity 
rapidly and kind of taking that open space that we have created 
for the Russians off the table and making it a more competitive 
space for the Ukrainians--we have seen the impact that has had 
in the land domain, and I think the sea domain is--as bad of a 
problem they have in air defense, that is a bigger problem. But 
in the maritime domain, there is a gap that can be closed 
relatively quickly.
    But in conjunction with that, it is not just important 
about capacity building for Ukraine, it is important about NATO 
and partner operations in the Black Sea area and having a 
sustained--it does not have to be a permanent but a sustained 
naval presence that the Russians have to take account for 
within the context of what can be done both in the NATO 
environment and what can be done bilaterally with our partners 
in the region.
    Senator Johnson. Senator Shaheen has a couple questions, 
and I will close it out. I actually have a bunch. I will keep 
you here for a little bit longer.
    Senator Shaheen. Well, I just wanted to follow up on 
Senator Johnson's question about what might have been a more 
aggressive response in the Black Sea or a more robust response 
in the Black Sea is probably a better way to put it in the 
Kerch Strait. And that is, what kind of a message does it send 
to other adversaries of the United States who are watching our 
response on an issue like this to, for example, what is 
happening with Iran in the Strait of Hormuz? And can you talk 
about whether there is a connection and how important it is to 
have some kind of a consistent policy in response to these 
kinds of incidents?
    Dr. Carafano. Can I just make one short comment? And then I 
will turn to my colleagues.
    I think the great sin was not the response. The great sin 
was we knew this was coming. We knew the Russians were prepping 
for this. We had months and months' notice, and yet we were a 
deer in the headlights when it actually happened. That was a 
sin.
    I would contrast with what just happened in the Gulf 
because the administration actually knew it was coming and they 
prepositioned assets and capabilities to deal with it before it 
happened. And I think in the Ukraine when we stop Putin in one 
place, he is just going to look for something else. The real 
challenge for Kurt and the administration is we need to be 
constantly having situational awareness so we recognize where 
the next Russian poke in the eye is coming from and we have a 
response in place to deal with that before we get poked.
    Dr. Polyakova. I think, fortunately, to follow up on my 
colleague's comments, the Russians do make it relatively easy 
for us to know from where the next poke is coming because the 
incident in November in the Kerch Strait was preceded by months 
of harassment of commercial vessels and detentions by the 
Russian FSB. And so we knew and we continue to know, and the 
Russians are basically testing the waters, in this case 
literally. When they see no response, they know they can move 
forward. That is exactly what happened in November. And the 
fact that we waited 3 months, until March 15, to impose any 
sort of U.S. and ally-coordinated sanctions, sent a very clear 
message, this is not a priority to the United States and it is 
not a priority to the Western alliance.
    And I think in terms of setting a precedent that is 
absolutely the right way to think about this, Senator. 
Certainly other authoritarian regimes, including China and 
Iran, who have grander aspirations for territory are observing 
very closely how the West responds to Russian aggression in 
Ukraine. Think of China's aspirations in the South China Sea 
and vis-a-vis Taiwan. There is no question in my mind that 
authoritarian regimes are learning from our inaction and our 
lack of resolve, and that sets a very dangerous precedent.
    Senator Shaheen. Ambassador Herbst.
    Ambassador Herbst. I just want to enlarge on that a little 
bit.
    Jim correctly pointed out that we were ready in the Gulf. 
But while Russia in my judgment under Putin is the greatest 
immediate danger to our national security, the longer-term 
danger is China. And in fact, so we were very weak with the 
Straits of Kerch incident. I think we have not been as strong 
as we could be regarding China's island building activity in 
the South China Sea. So I suspect looking at this as a Chinese 
policymaker might, they see reluctance in confronting Russia 
there in the Sea of Azov or rather the Straits of Kerch. Yes, 
they went after Iran, but Iran is a second or a third-rate 
power. They have also been a little bit weak in coming after 
us, the Chinese, in the South China Sea. So in that sense, it 
is very bad precedent.
    Senator Shaheen. So, Ambassador Volker, do you want to 
defend our lack of action?
    Ambassador Volker. Well, I agree with you, Senator, that it 
is very important that we have a tempo of activity. I did go to 
Ukraine in the end of February. I helped push forward. And then 
we had a visit of the USS Donald Ross, a guided missile 
destroyer, to Odessa, and I wanted to go and make sure this 
attracted some visibility. We have increased the tempo of U.S. 
presence in the Black Sea. And I think significantly we have 
also gone to NATO and urged NATO establish a strategy for a 
greater presence in the Black Sea.
    But I agree with you that more can and should be done. This 
should be a sense of the beginning which should, by no means, 
be the end of what we see as possible.
    Senator Shaheen. Well, thank you all very much for your 
very important testimony today and your continued action in 
Ukraine. We very much appreciate what you are doing.
    And, Mr. Chairman, thank you for holding this important 
hearing.
    Senator Johnson. Thank you, Senator Shaheen.
    I have just been handed a note I do not have time to ask 
you all these questions. I may submit some for the record.
    One of the things--and I think we will probably hold a 
hearing on this--is an evaluation of sanctions, what are the 
most effective, what are not effective, what maybe do more harm 
than good. I think that is something we really do need to 
evaluate.
    I would like to explore a little bit more in terms of the 
economy of Ukraine, the oligarch control, what Ukraine needs to 
do to move past there--the oligarchs. And by the way, I think 
President Zelensky might be in a perfect position to do that.
    But let me just kind of end the hearing on a more positive 
note. The improvement in terms of the Ukrainian military--I 
mean, that came through in your testimony. That is a pretty 
good thing that they have been able to hold off Russian 
aggression. It would have been nice if we could stop it and 
reverse it, but that is in the future.
    And then just Ukraine's economic potential. It is enormous 
if they can shed the corruption, if they can abide by the rule 
of law. I mean, Ukraine can just be the bread basket of Europe. 
It has such great potential. So it really is about America 
supporting the Ukrainian people. Their courage that they showed 
in the Maidan, with their votes for President Poroshenko and 
now with President Zelensky.
    Let me end on this note. During President Poroshenko's 
inauguration, the comment I made to him is you have the 
opportunity to be Ukraine's George Washington. His reaction was 
wow. He had not really thought of that. And I meant it from the 
standpoint of being the father of his country to enact those 
very important reforms. I think you can play it forward, the 
way he behaved in the transition of power. And that might have 
been the most important thing that George Washington did for 
this nation, but I think the most important thing that 
President Poroshenko did for his nation, a peaceful transition 
of power.
    Again, I will just reaffirm what I told those legislators 
from the Ukrainian parliament. It is so important that they act 
as patriots and they come together to really rid their country 
of the corruption, enact that rule of law so it can realize its 
full potential.
    So, again, I just want to thank all of you for your 
excellent testimony, both written and oral. And this will be 
continued because it is so important for America to support the 
Ukrainian people.
    With that, the hearing record will remain open for the 
submission of statements or questions until the close of 
business on Thursday, June 20th.
    This hearing is adjourned.
    [Whereupon, at 5:20 p.m., the hearing was adjourned.]

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