IMF funding issue delays U.S. Congress Ukraine bill

by Reuters
Wednesday, 12 March 2014 02:15 GMT

By Patricia Zengerle

WASHINGTON, March 11 (Reuters) - The chairman of the U.S. Senate Foreign Relations Committee said on Tuesday he would introduce a bill to address the crisis in Ukraine including $150 million in aid, sanctions against Ukrainians and Russians responsible for violence and human rights violations in Ukraine, and backing for a shift in funding for the International Monetary Fund.

"Ukrainian sovereignty cannot be violated for looking westward and embracing ideals rooted in freedom," Senator Robert Menendez, a New Jersey Democrat, wrote in a column in The Washington Post, in which he laid out details of the Ukraine bill he plans to introduce.

The bill echoes one passed by the U.S. House of Representatives last week in backing $1 billion in loan guarantees for Ukraine, he said. But it would also authorize $50 million for democracy, governance and civil society assistance, as well as $100 million for enhanced security cooperation for Ukraine and other states in Central and Eastern Europe, he said.

And it provides for sanctions, in addition to those announced by President Barack Obama via executive order last week against Ukrainians and Russians, and imposes sanctions on Russians "complicit in or responsible for" what Menendez termed "significant corruption" in Ukraine. The bill also directs President Barack Obama's administration to help Ukraine's government in identifying and recovering assets linked to corruption by ousted Ukrainian president Viktor Yanukovich.

The bill also includes reforms for the International Monetary Fund, something requested by the Obama administration but resisted by many Republican members of Congress. Tennessee Senator Bob Corker, the top Republican on the foreign relations committee, had said earlier on Tuesday that the committee was near agreement on its Ukraine bill, but was held up by disagreement over whether to include the IMF reforms.

The delay had raised concerns that the Senate might not pass a Ukraine bill before leaving Washington for next week's one-week recess. Separately, Senate leaders began the process of introducing the House bill, which includes only the loan guarantees, for a vote in the Senate.

It was not immediately clear how many Republicans on the committee would back the legislation as proposed by Menendez. A committee spokesman said committee members were still negotiating what would be in the package. Senator John Barrasso, a Republican of Wyoming, said earlier on Tuesday he would introduce an amendment to expedite the supply of natural gas from the United States to Ukraine. But the measure is given little chance of being passed in the Senate, where it is not expected to bring the Kiev government quick relief.

Corker said he hoped a Ukraine bill would pass before Congress leaves for next week's recess.

If approved by the Senate, Menendez's bill would have to pass the House of Representatives before being sent to President Barack Obama for his signature.

The Obama administration has been pushing Congress for a year to approve a shift of $63 billion from an IMF crisis fund to its general accounts to maintain U.S. influence at the lender and make good on a commitment from 2010. (Full Story)

The House passed a bill last week backing $1 billion in loan guarantees for Ukraine. It did not include the IMF funding. Some Republicans worry about the fund's lending to richer European nations and possible losses on IMF loans.

Some Senate Republicans said members of the party in the House wanted to trade the IMF funding for a change in tax rules the Obama administration proposed for certain tax-exempt groups, which they see as an effort to unfairly target conservative organizations.

House Republicans declined comment on the IMF measure, noting that they had already passed Ukraine legislation. Senator John McCain, an Arizona Republican and senior foreign relations committee member, said the bill should not be held up by the IMF issue.

"There should be nothing that impedes the Congress from speaking on the issue of Russia invading another country," he said. "If it's in or if it's out, none of that matters to me. What matters to me is that we get the message out."

In the House, a symbolic resolution condemning Russia's action in Ukraine passed by a 402-7 margin on Tuesday. The resolution "is a very important declaration of support for the people of Ukraine during this crisis, condemning in clear and unmistakable terms Russia's unprovoked aggression," said Republican Representative Ed Royce, chairman of the House Foreign Affairs Committee.

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