The Cable

Europe Ready to Target Russian Companies With Sanctions

European Union leaders meeting in Brussels are preparing to go beyond the asset freezes and travel bans that have been levied against Russian and Ukrainian officials and instead begin targeting Russian companies, according to a leaked policy draft.

The decision would allow the European Union to go after "entities that are supporting materially or financially actions undermining or threatening Ukraine's sovereignty, territorial integrity and independence," according to the memo obtained by the Financial Times and Bloomberg News.

If the measures outlined in the memo are fully implemented, Europe could also reduce economic cooperation between the bloc and Russia. The EU may freeze aid and stop funding new development projects, though not ones that support civil society groups, according to the draft. In addition, the draft, which could change, warns international banks not to finance projects in Crimea because the Ukrainian territory has been under Russian control since March.

The move represents a potentially significant escalation of pressure on Moscow because European leaders appear to have decided that Russian President Vladimir Putin hasn't done enough to rein in pro-Russian fighters in eastern Ukraine. The tougher stance against Russia's support of Ukraine's separatists comes after nearly constant pressure from U.S. officials to get their European counterparts to be more aggressive. On Monday, July 14, the U.S. State Department released a list of evidence it says proves Moscow is still supplying Ukrainian militants with weapons, financing, and Russian fighters.

The strength of the expanded sanctions will depend on which companies the EU decides to target. It's unclear yet whether the new measures will even go as far as the measures the United States has already put in place, which have, among other things, frozen the assets of scores of businessmen close to Putin and a handful of their companies. The EU list has not yet been released; in the past, the EU's disclosures of its specific sanctions targets have lagged announcements of the broader shift in policy. The EU is not expected to target broad sectors of the Russian economy, which Washington has been threatening to do for months.

While the expansion of EU sanctions would be a win for Washington's diplomatic efforts, it could also serve to put more pressure on Barack Obama's administration to ratchet up its own response to Moscow. Top senators last week excoriated the administration for not acting on sanctions threats as evidence of Russia's support of Ukrainian militants mounts. Tennessee Republican Bob Corker said the White House was acting as a "paper tiger" on Ukraine and "doing incredible long-term damage to our nation."

Photo by DOMINIQUE FAGET/ AFP/ GETTY

The Cable

Powerful Lawmakers Issue New Iran Demands

The battle between Congress and the White House over a potential nuclear deal with Iran is heating up again.

With just one week before the July 20 deadline for Iran and six world powers to come to an agreement in Vienna on curbing Tehran's nuclear enrichment capabilities, a key pair of senators is issuing a new set of terms for a final deal that could further complicate the delicate talks.

In a letter obtained by Foreign Policy, Senators Bob Menendez (D-N.J.), the chairman of the Foreign Relations Committee, and Lindsey Graham (R-S.C.), a member of the Armed Services Committee, demand that any deal allow international inspectors to probe Iranian facilities for "at least 20 years." It also says the inspections "must be intrusive," with the International Atomic Energy Agency gaining "access to any and all facilities, persons or documentation" necessary to determine Iran's compliance with the deal.

In the letter, the senators write that Iran's long "history of deception compels the international community to be vigilant to ensure no path to a nuclear bomb is possible" and warn that they'll keep the existing economic sanctions against Iran in place unless Tehran agrees to 20 years of inspections.

Iran reportedly opposes any deal that creates an inspection regime that lasts longer than 10 to 15 years and has said any deal has to include the elimination of the sanctions, raising concerns that the demands by the senators may be unattainable.

"The talks could be thrown off course if senators try to grab the steering wheel away from U.S. and allied negotiators," said Daryl Kimball, executive director of the Arms Control Association, a nonproliferation organization.

The letter, which is addressed to the president, went out to members of the Senate Banking Committee, Foreign Relations Committee, and Armed Services Committee on Friday, July 11. It has the support of the American Israel Public Affairs Committee, the powerful pro-Israel lobbying group, an AIPAC official confirmed. The due date for senators to add their signature is Wednesday, which could time the release of the letter for the final days of intense negotiations between Iran and the P5+1 (the five permanent members of the U.N. Security Council plus Germany).

The status of those negotiations is fluid, but the most significant hurdle pertains to whether Iran should be allowed to keep large industrial-scale uranium enrichment capacity. The United States wants to limit Tehran to 10,000 centrifuges or fewer for the enrichment of uranium. Tehran says that it needs many times that capacity so that it can provide nuclear fuel for its Bushehr power station without importing any from other countries. Israel and many Western countries believe that Iran wants to use that uranium to build a nuclear weapon, a charge Tehran denies.

On Monday, Secretary of State John Kerry stayed in Vienna for an additional day to try to close the gaps in bilateral discussions with Iranian Foreign Minister Javad Zarif. The two men are believed to be deliberating the possibility of a two-phased agreement in which Iran faces tough initial restrictions on uranium enrichment for the next few years, but would be allowed to expand enrichment activities later on. That expansion would be contingent on Iran's demonstrated energy needs and compliance with nuclear inspectors.

A senior Obama administration official declined to say whether the White House is open to an inspection regime that is shorter than 20 years. "We are not going to discuss our negotiating positions in public," the official told Foreign Policy in a statement Monday.

Over the weekend, a senior U.S. official told reporters in Vienna said any final agreement would need to ensure that Iran's future enrichment activities would be "very limited" for a number of years that can be measured in "double digits."

"For some period of time, they are going to have a very limited, very constrained program that will have inspections, verification, monitoring, and a lot of limitations of what they can do," the official said.

The administration has been clashing with Capitol Hill for several months about the contours of a potential deal with Iran, but it's clear that the two sides will need to be on the same page eventually. While the administration is free to negotiate a deal of its choosing and can issue temporary waivers exempting Iran from certain sanctions, only Congress has the authority to lift the measures once and for all -- a point the senior administration official acknowledged. "Ultimately, comprehensive sanctions relief would clearly require a mix of executive and legislative action," said the official.

Kimball, of the Arms Control Association, said it's shortsighted to oppose a deal based on any one detail. "Any agreement that is struck between the P5+1 and Iran should not be evaluated on the basis of any single feature," he said. "Instead, it should be judged on its overall impact on reducing Iran's nuclear capacity and improving capabilities to detect any ongoing or future Iranian weapons program."

A spokesman for Menendez said the lawmakers were playing a constructive role in advocating for a strong deal. "To describe a letter being circulated for signatures outlining sensible parameters to any potential agreement as being disruptive lacks merit," said Adam Sharon. "The same voices who have long opposed congressional involvement are doing so again, but they ignore that congressional action got us to this place and that Congress is mandated to fulfill an oversight role, should a deal be reached, and how that agreement is monitored and verified."

You can read the full letter bellow:

Menendez Graham

Photo via Getty Images