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Senator Levin suggests US should go after Russian banks and financial institutions because of actions in Ukraine

Economic sanctions against Russia hitting their stock market hard over the last couple of days…Is this an act of war? 

On May 1, 2014 Senator Carl Levin of Michigan asked for and was granted permission to address the United States Senate regarding the situation in Ukraine.

Here is some of what he had to say:

“In Ukraine, I met with Acting President Turchinov, Prime Minister Yatsenyuk, Defense Minister Koval, National Security and Defense Council Head Parubiy, and numerous other government officials, activists, and participants in the political process. Ukrainians faced down the heavily-armed security forces of a corrupt, repressive regime on the Maidan–their Independence Square–while they themselves armed with little more than rocks, tires, and sandbags. Now they face an even greater challenge in the form of tens of thousands of Russian troops massed on their borders. Already, the Russians have annexed Crimea and Russian Special Operations forces have organized sympathizers to occupy buildings in a number of Eastern Ukrainian cities and towns in an effort to disrupt and destabilize the government, make an election on May 25 difficult to organize, and establish a basis for Russian occupation or a Russian-oriented breakaway State.

In the face of these challenges, the Ukrainians I met expressed gratitude for the solidarity and support our country has shown through the dark days of the Yanukovich regime and into the challenges they face today. They expressed their support for our values and their strong desire to be a part of the democratic West, rather than the authoritarian sphere of Putin’s Russia and its allies. And they asked for our support in their effort to stabilize their country, fend off the Russian challenge, and hold free and fair elections as scheduled. The Ukrainian people earned our support when they put their lives on the line at the Maidan and turned to face the Russian threat with both toughness and restraint. We should stand with the Ukrainian government and the Ukrainian people because they share our democratic values, and because Russia’s effort to dismember their country through the threat of force, if allowed to succeed, could undermine decades of stability and a peaceful, democratic, and united Europe.

Ukrainians understand there will not be American “boots on the ground” in their country. But there are a number of important steps we can take to support the Ukrainians in their struggle.

First, we must expedite the aid we have already promised them–including both financial assistance and nonlethal military equipment–to make sure it arrives as quickly as possible.

Second, we should provide additional support, including body armor and fuel, that the Ukrainians need to protect themselves. We should provide the Ukrainians with firearms and ammunition if they need them–but it appears that at this point they do not.

Third, we should make more robust use of the powers established in Executive order 13661, which authorizes sanctions against the Russian financial, energy, metals, mining, engineering, and defense sectors, to ensure that the Putin regime pays a heavy price for its illegal actions. President Obama’s action to sanction more wealthy individuals in Putin’s circle, as well as businesses they own, is a wise one, but we can do more.

Fourth, we should ensure that Russian banks are subject to the significant tax penalties imposed on noncompliant banks by the Foreign Account Tax Compliance Act, or FATCA, the antitax evasion law set to take effect in July. Russian banks and financial institutions that fail to register with the Internal Revenue Service and obtain the required identification number by July 1 of this year will be noncompliant with FATCA and become subject to a 30-percent withholding tax on any U.S. investment earnings. We should not negotiate with either Russia or certain Russian banks on measures to provide relief from FATCA’s sanctions until Russia honors its diplomatic commitments and takes steps to diffuse tensions in Crimea and eastern Ukraine, including by withdrawing Russian troops from the border region.

Finally, we should use the existing authorities to take on Russia’s manipulation of energy prices and supplies which it has used to coerce not only Ukraine but also many of its neighbors. To be most effective, these actions should be taken in close coordination with our friends and allies in Europe, many of whom are directly affected by Russia’s abuses and threatened by its actions. We must take concrete steps toward substituting energy from other sources for the countries that would be impacted by a reduction of Russian energy. We must actively become involved in energy development, diversification, and conservation, even if it means paying higher prices for fuel, to break Russia’s iron grip on this market, and to prevent future acts of attempted political extortion by Russia from being effective.

The people of Ukraine are proud of their fight for freedom at the Maidan, as are the people of Afghanistan of the courage they showed, when they voted in record numbers to reject the Taliban in their April 5 election. Both countries are struggling for values that we, as a Nation, have always shared. They both deserve our support, and we should continue to give it to them”, said Levin (source: Congressional Record http://thomas.loc.gov/).

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