Ukraine: Daily Briefing – June 1, 2017, 5 PM Kyiv time

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Ukraine: Daily Briefing
June 1, 2017, 5 PM Kyiv time
 
Ukrainian staff officer presents her portion of mission analysis brief during classroom training in Yavoriv, Joint Multinational Training Group-Ukraine. Photo US Army Europe


1. Russian Invasion of Ukraine
The General Staff of Ukraine’s Armed Forces reported at 12:30 PM Kyiv time that in the last 24 hours, no Ukrainian soldiers were killed and two Ukrainian soldiers were wounded in action. Towards Donetsk, Russian-terrorist forces shelled Ukrainian positions near Avdiivka with mortars. Russian-terrorist forces fired on Ukrainian positions near Troitske, Zaytseve and Verkhnotoretske. Towards Mariupol, Russian-terrorist forces shelled Ukrainian positions near Krasnohorivka and Maryinka with mortars. At Chermalyk and Vodyane, Russian-terrorist forces fired on Ukrainian positions. Towards Luhansk, Russian-terrorist forces shelled Ukrainian positions near Novotoshkivsk with mortars. Russian-terrorist forces fired on Ukrainian positions near Stanytsia Luhanska and Popasne.
2. Ukraine wins important ruling over Russia in gas dispute
Anders Aslund, Senior Fellow at the Atlantic Council, stated, “On May 31, Ukraine’s Naftogaz won an extraordinary victory over Russia’s Gazprom in the international arbitration court in Stockholm. This was the possibly biggest international arbitration verdict ever. Gazprom had claimed $47.1 billion from Naftogaz, half of Ukraine’s GDP, and Naftogaz $30.3 billion from Gazprom.
Naftogaz won on all three counts the court considered. First, Ukraine does not have to pay for gas that it has not purchased, revoking the ‘take or pay’ requirement. Second, the court revised the price formula, tying it to market prices at European gas hubs. Finally, the court decided to completely abolish the ban on gas re-export. Whether Gazprom will have to pay damages will be decided later, and Ukraine’s claims to receive more pay for Gazprom’s transit through Ukraine also will be decided at a later date.
The case was based on the ten-year gas supply and transit agreement the two countries concluded on January 19, 2009. This was a shotgun agreement forged between then Prime Ministers Vladimir Putin and Yulia Tymoshenko after the Kremlin had cut all gas supplies for two weeks to Ukraine and sixteen European countries in the midst of a cold winter.
This agreement was flawed from the outset, demanding more from Ukraine than Russia. Naftogaz committed itself to buy far more gas than it needed. The unpublished price formula obliged Ukraine to pay higher gas prices than any other country. […]
Russia’s gas trade with Ukraine is no ordinary trade. It is an important part of Russia’s hybrid warfare against Ukraine and the European Energy Union. One of Yanukovych’s main supporters was the gas trader Dmytro Firtash, wanted by the US Department of Justice for gross corruption. […]
Since November 2015, Ukraine has not bought any gas from Gazprom. Last year, its total imports were 13 bcm, mostly imported from Slovakia, while the 2009 agreement obliged Naftogaz to purchase 41.6 bcm per year from Gazprom. […]
This case needs to be seen in a broader European context. Since February 2011, Ukraine has a member of the European Energy Community, which incorporates the principles of the EU Third Energy Package of 2009 and the European Energy Union of free trade in energy. European energy law applies. The principles of the European energy market and security are at play in Stockholm, and the arbitration tribunal appears to have recognized that.
The victors are Naftogaz’s young CEO Andriy Kobolyev and his first deputy Yuriy Vitrenko. They deserve a round of applause and then some.” The full report from the Atlantic Council is available at http://www.atlanticcouncil.org/blogs/ukrainealert/ukraine-beats-russia-in-epic-gas-battle
 
3. US Senators propose stronger sanctions against Russia
Bloomberg reported on May 31, “Bipartisan leaders of the Senate Banking Committee announced a plan Wednesday to strengthen sanctions against Russia over its actions in Ukraine and Syria, as well as internet intrusions in the U.S. The proposal is a signal that some in Congress intend to push back on the Trump administration’s moves to explore an improvement in relations with Moscow.
Panel Chairman Mike Crapo of Idaho and top Democrat Sherrod Brown of Ohio said their bill would authorize ‘broad’ new sanctions targeting sectors of Russia’s economy including mining, metals and railways.
It would codify and strengthen existing sanctions included in executive orders affecting Russian energy projects and debt financing in key economic sectors, the senators said in a press release.
‘Despite existing sanctions, Russia remains a hostile, recalcitrant power, deploying its military, cyber-enabled information espionage activities, and economic tactics to harm the United States and drive a wedge between it and its allies,’ the committee statement said. ‘There is significant congressional interest in ensuring sanctions on Russia are effective and proportionally enhanced, particularly in light of continuing Russian intransigence in these areas.’ […]
The question of Russian sanctions has been raised by a number of senators in both parties after the intelligence community announced in January its conclusion that Russia interfered in the 2016 election on behalf of President Donald Trump.
Among those seeking more sanctions is Republican Senator Lindsey Graham of South Carolina, who has said he would try to attach such a measure to bipartisan Iran sanctions legislation expected to be sent to the Senate floor.”
 

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