Mar. 16, 2014 By AARON MEHTA – Defense News
WASHINGTON — As the situation in Ukraine continues to worsen, the US and its allies in Europe find themselves with a limited set of options at the same time the Pentagon is trying to plan for potential fallout.
The most likely path seems to be economic sanctions of some kind, hand in hand with moves to isolate Russia internationally. But even without direct conflict, experts warn Russia’s reaction could lead to fallout with the world’s militaries.
Economic sanctions are “the most viable national security tool we’ve got,” said David Asher, adjunct senior fellow at the Center for a New American Security.
“There is no doubt for me we have tremendous coercive leverage against Putin and his cronies’ finances by going after Russia’s ability to do banking relations in the United States,” Asher said, referring to Russian President Vladimir Putin. “That would be a huge wakeup call for them.”
Asher, a former State Department official, helped organize the use of the Patriot Act to target the Macao-based Banco Delta Asia over its ties to North Korea in 2005. He believes similar regulations could be effective against Russia. Such a move would require proof of illegal activity, but given the notorious nature of Russian money laundering, Asher is confident the US would have a wealth of evidence at its disposal.
“There would have to be an investigation by the Department of Treasury, but I don’t think it would be hard to find a smoking gun when it appears the room is on fire with illicit financing from Russia,” Asher said.
It’s not just Russian-based banks that could be targeted. An analyst who follows corruption in Europe identified Austria and Latvia as home to banks that frequently launder Russian funds.
“What we are looking at is a number of economic measures,” said Julianne Smith, senior vice president of Beacon Strategies. That starts with targeted sanctions but could grow to include visa restrictions and asset freezes for rich oligarchs, in the hope they will provide pressure on Putin.
Smith, who served as principal director for European and NATO policy at the Office of the Secretary of Defense before joining Vice President Joe Biden’s staff as deputy national security adviser, said the US may try to isolate Russia.
Smith expects to see pressure on France not to deliver two Mistral helicopter carriers purchased by Russia.
But bilateral relations between Paris and Washington seem to be close. When US Secretary of State John Kerry met Russian Foreign Minister Sergei Lavrov in Paris on March 5, Kerry paid tribute to France’s work in international crises, not just the Ukraine.
“We especially thank our friends here in France for their partnership as we work to address these challenges and many others,” Kerry told journalists after meeting Lavrov, French Foreign Minister Laurent Fabius and other foreign ministers.
“For instance, Iran’s nuclear program, violence in the Central African Republic — we’re working together — [and] pursuit of reconciliation in Mali.”
Asked about the Mistral issue, Marie Harf, State Department spokeswoman, said “We would hope that any country would exercise judgment and restraint when it comes to transferring military equipment that could exacerbate tensions in any conflict region.”
Harf deferred comment on whether the US is pressuring France on the issue, but as of now, a French diplomat said there has not been pressure on Paris. “There is dialogue, friendship and confidence,” the diplomat said. “The ministers [Laurent Fabius and John Kerry] are in constant contact.”
Another part of that isolation strategy involves severing of military-to-military relationships, and Russia has already been disinvited to military training exercises hosted by the US. But cutting military relationships could backfire, Smith said.
“In the medium and long term, when you turn the lights out on mil-to-mil relationships, you suffer, because, down the road, you hit a crisis, and people don’t know whom to call. They don’t know who is in charge,” Smith warned. “We will turn the lights out in an effort to penalize Russia, but there could be some costs to the US as well, because we won’t have that longstanding connective tissue.
“In Pakistan, we did the same thing and found that it ends up hurting both of us,” she said. “Sometimes the military channel is the only one that is functioning and working because people aware of the risks of ratcheting things up can talk to each other and say, ‘Let’s try to sort this out.’ ”
The question facing US and European officials is how Putin will react to global pressure. Does he give in to economic pressure or stand his ground and force the issue — potentially setting up further conflicts between Russia and the West?
“President Obama and Secretary Kerry are very aware of the enormous risks of having the ‘have to have’ bilateral relationship with Russia become frayed or, at worst, snap, with the imposing of sanctions,” one former State Department official said. “But Putin must take responsibility for his grab of the Crimea and must be made to understand the consequences.
“The US and Russia are fundamental to the international communities’ ability to work the diplomatic levers of many of the world’s day-to-day flare-ups, and it would be very dangerous for this relationship to become undependable or ‘out of service,’ ” added the former official.
Responses from Russia could take varied forms, including severing ties with US industry in the region. From a defense perspective, there are two simple ways for Russia to directly impact current Pentagon operations.
The first is to cut off supplies of the RD-180 engine, used by the United Launch Alliance (ULA) joint venture of Boeing and Lockheed Martin in its Atlas V rocket for both commercial and military satellite launch. Eric Fanning, Air Force undersecretary, raised that concern last week.
“The partnership we’ve had with Russia on that engine has been very important, I think to both of us,” Fanning said. “But there are a number of concerns the Air Force has and others have anytime we’re relying on such an important piece of equipment from vendors outside the United States.”
While noting that there have been no signals from Russia that the RD-180 supply could be endangered, Fanning said the service is “monitoring very closely the current bilateral situation to make sure we can protect that supply.”
If Russia did cut off supplies of the RD-180, it might be more symbolic than actually painful for the US, according to Marco Caceres, director of space studies with the Teal Group
“The Atlas V isn’t launching that much, so short-term impact would be minimal,” Caceres said. “The long-term impact would be that Atlas V would have to find another engine and that wouldn’t be easy.”
The biggest impact might come not to US military launch, but to the corporate firms that provide it. Right now, military launch is provided either by ULA’s Atlas V or Delta IV. For years, the US has wanted to maintain two families of launch vehicles in case one failed. However, SpaceX looks poised for certification this year. The combination of having a third launch option, along with the lack of RD-180 parts, might lead to the end of the Atlas V.
That may be all hypothetical, however, as Caceres doubts Russia would block sales of RD-180s, primarily because of the financial impact.
“It’s not to the benefit of the Russians to do this. These are engines that bring in hard currency to Russia, the same way Russian oil and gas does,” he said. “Russia doesn’t really export much else of any consequence. ”
Russia also could cut off access for US materiel traveling through its territory as the US exits Afghanistan, but that may provide more of a hiccup than a roadblock. Both Marine Gen. Joseph Dunford, the head of NATO forces in Afghanistan, and Air Force Gen. Paul Selva, the nominee to head US Transportation Command, expressed confidence last week that other options are available.
“If the Russians were to take action to constrain our access to the Russian segments of the Northern Distribution Network, we have other options to move that cargo in and out of Afghanistan,” Selva told senators at his nomination hearing.
A less direct avenue would be for Putin to expand military sales to countries such as Syria, which has already received significant military support from Russian industry. If Putin feels the pinch fiscally, he could open further sales to Syria or other nations.
Pierre Tran in Paris and Zachary Fryer-Biggs in Washington contributed to this report.