Ukraine 101:

• Ukraine's richest man Rinat Akhmetov doubled his wealth in 2016, to $4.6 billion, according to Forbes. (Kyiv Post, 03.21.17)

West’s leverage over Russia:

• The European Union has extended for six months sanctions against 150 Russia-linked people over the conflict in eastern Ukraine. The blacklist includes Russian politicians, businessmen and law-enforcement officials, as well as former Ukrainian President Viktor Yanukovych and senior members of his administration and the leadership of the self-proclaimed Donetsk and Luhansk People’s Republics (DNR and LNR). All individuals mentioned in the list are not allowed to enter the European Union, while their assets in European banks are to be frozen. The regulation came into force on March 15 and is set to expire on Sept. 15, 2017, according to the Official Journal of the European Union. (TASS, 03.15.17, AP, 03.13.17)

 Russia’s leverage over West:

• Bulgaria’s United Patriots, a nationalist coalition that’s poised to hold the balance of power after this month’s snap election, would seek to end European Union sanctions against Russia if it makes it into government. (Bloomberg, 03.14.17)

Russia’s leverage over Ukraine:

• Russia is not giving special treatment to holders of passports from two Ukrainian breakaway republics, despite the Kremlin’s partial recognition of the regions, the news website RBC has reported. Holders of the passports are allowed to stay in Russia for 90 days visa-free. They are then obligated to leave the country or obtain a residence permit like any other Ukrainian citizen. (The Moscow Times, 03.20.17)
  • The Russian arm of Austria's Raiffeisen Bank International is preparing to offer services to holders of passports from two self-proclaimed republics in rebel-held eastern Ukraine, its boss said on March 16. (Reuters, 03.16.17)

Casualties and costs for Russia, West and Ukraine:

• At least 9,940 people have been killed in the conflict between government forces and Russia-backed separatists in eastern Ukraine since it erupted in mid-April 2014, the Office of the U.N.'s High Commissioner for Human Rights said on March 15. (RFE/RL, 03.16.17)
• Russian citizens lose about 4,380 rubles ($75) annually because of Russian counter-sanctions, according to research by the Gaidar Institute for Economic Policy, the Russian Academy of National Economy and Public Service and the All-Russian Academy of Foreign Trade. (RBTH, 03.21.17)
• Ukraine’s National Security Council has ruled to halt all cargo traffic passing between government-held areas and the separatist-controlled regions of Donetsk and Luhansk. Council Secretary Oleksandr Turchynov said that traffic would remain blocked until the Russian-backed separatists cede control of coal mines in Donbas and fulfill their part of the 2015 Minsk agreement. (The Moscow Times, 03.15.17)
  • The National Bank of Ukraine says it has slashed its estimate for economic growth in 2017 to 1.9% from the 2.8% predicted in January due to the blockade. (AP, 03.21.17)
  • Russia accused Ukraine of “consciously” rejecting its own land and people by imposing a blockade of separatist-held territory in the country’s east. (Bloomberg, 03.17.17)
  • Ukrainian opposition lawmakers have demanded an explanation from authorities after the arrests of several dozen activists who were blocking trade with eastern areas held by Russia-backed separatists. Ukraine's main security agency, the SBU, said that it arrested 43 "blockader" activists at three sites on March 13 after they refused to surrender weapons. (RFE/RL, 03.14.17)
• Ukrainian President Petro Poroshenko has imposed sanctions on five banks with Russian capital functioning in Ukraine. A statement on the presidential website on March 16 said that Poroshenko signed a decree introducing sanctions on Sberbank, VS Bank, Prominvestbank, VTB Bank and BM Bank for a one-year period. (RFE/RL, 03.16.17)
  • Russia's biggest bank Sberbank is looking "very actively" at options for a quick exit from Ukraine, the bank's chief executive German Gref said on March 21. Gref also told reporters that Sberbank's loan-loss provisions in Ukraine made up around 70% of its potential losses. (Reuters, 03.21.17)

Impact of Russia’s actions vis-à-vis Ukraine on other countries:

• The biggest beneficiary in President U.S. Donald Trump's budget—the Defense Department—released a broad wish list on March 16, signaling what it would do with its proposed $54 billion windfall. ''Russia and China continue to rise and assert themselves, often in a destabilizing fashion or at the expense of U.S. interests,'' the Defense Department budget request says, explaining why the U.S. military needs more money for readiness. (New York Times, 03.16.17)
• The Swedish government and part of its political opposition agreed on March 13 to boost defense spending by 500 million crowns ($55.7 million) this year to bolster military capabilities in the face of growing security concerns in the region. (Reuters, 03.13.17)
• The German government has presented a draft law that would impose fines of up to 50 million euros on social networks that fail to delete hate speech or fake news, in what amounts to the most draconian clampdown by a European country against internet platforms such as Facebook and Twitter. (Financial Times, 03.14.17)
• Russia’s state-run TV network Channel One issued a mocking response to a NATO effort to analyze comedy shows on Russian television as examples of “strategic communication,” a term often invoked as a euphemism for propaganda. One show, “KVN,” was singled out by NATO as an exemplar of state-run efforts to use comedy to manipulate public opinion. (The Moscow Times, 03.16.17)

Red lines and tripwires:

• A U.S.-led battalion of more than 1,100 soldiers will be deployed in Poland from the start of April, a U.S. commander said on March 20, as NATO sets up a new force in response to Moscow's 2014 annexation of Crimea. More than 900 U.S. soldiers, around 150 British personnel and some 120 Romanian troops will make up the battlegroup in northeastern Poland, one of four multinational formations across the Baltic region. Russia has condemned the deployment as an aggressive strategy on its frontiers. (Reuters, 03.20.17)

Factors and scenarios that could cause resumption of large-scale hostilities or lead to accidents between Western and Russian forces in Europe:

• Two Ukrainian marines were killed and seven wounded on March 20 in a fierce attack by Russian-backed forces near the frontline village of Vodyane, some 10 kilometers east of Mariupol in Donetsk Oblast. According to official statement published by Ukraine’s military press center, the army’s positions were attacked by an enemy sabotage unit. According to Gazeta.ru sources among Donbas separatists, however, it was two platoons of Ukrainian marines that tried to advance at Vodyane, losing up to 15 servicemen in action. (Kyiv Post, 03.20.17, Russia Matters, 03.20.17)
• Russia has been building up its armed forces along the Ukrainian border and is in the process of establishing four new divisions: the 150th Motorized Rifle Division in the Rostov region, the 10th Armored Division and the 3rd Mechanized Division in the Voronezh region and the 144th Motorized Rifle Division near Smolensk. They will be headquartered 50, 45 and 255 kilometers from the border, respectively. In addition, the headquarters of the Russian 20th Army has been moved closer to Ukraine—from its former base east of Moscow to Voronezh. A new 8th Army headquarters is being established in the Rostov region. And three motorized rifle brigades that were previously located deep inside Russian territory, near Kazakhstan and in the Volga basin—the 9th, 23rd and 28th—are also being shifted westward. They will be based in the Belgorod, Bryansk and Voronezh regions, all less than 50 kilometers from the Ukrainian border. (Eurasianet, 03.20.17)
• Russia has launched unprecedented land, air and sea drills in annexed Crimea in a coordinated training exercise involving thousands of troops. The action is billed as significant by the military as it is said to be the first time in the history of the Russian army that three large airborne units have been “simultaneously alerted.” (Independent, 03.20.17)

Arming and training of Ukrainian forces by Western countries:

• No significant developments.

Strategies and actions recommended:

• No significant developments.

Analysis:

• Richard Sokolsky, a nonresident senior fellow at the Carnegie Endowment, writes: “The new standoff between NATO and Russia may become the new normal, but the relationship is unlikely to be stable and is rife with possibilities for miscalculation. The more NATO and Russia escalate and counter escalate with military responses that the other sees as hostile, the greater the chance of a conflict due to an accident, miscalculation, or military incident that spins out of control. …The escalation of a local war over a small parcel of Baltic territory to a regional, or even theater-wide, conflict would likely result in a Russian defeat unless Moscow was successful in threatening or using nuclear strikes to cow NATO into submission.” (Task Force on U.S. Policy toward Russia, Ukraine, and Eurasia, 03.13.17)

Other important news:

• European security watchdog OSCE on March 16 prolonged its monitoring mission to Ukraine by one year until March 2018. OSCE monitors recorded more ceasefire violations in both Donetsk and Luhansk regions between the evenings of March 17 and 18 compared with the previous reporting period, but fewer ceasefire violations in both between the evenings of March 18 and 19 compared with the previous 24 hours. (Reuters, 03.16.17, OSCE, 03.20.17)
• The European Parliament is calling on Moscow to free more than 30 Ukrainian citizens who are in prison or other conditions of restricted freedom in Russia, Crimea and parts of eastern Ukraine that are controlled by Russia-backed separatists. (RFE/RL, 03.16.17)
• Ukraine is developing a new indigenous lightweight fighter aircraft, according to a new report. However, the project has existed in some form for more than 10 years. (National Interest, 03.21.17)
• Ukrainian lawmakers have approved a bill that requires national television and radio stations to have at least 75% of their programming in the Ukrainian language. (RFE/RL, 03.17.17)
• Russia marked a low-key third anniversary of the seizure of Crimea from Ukraine, as Kiev blasted the annexation of the strategic Black Sea peninsula as a “crime.” State-run television showed footage of sparsely attended concerts and parades in cities across the country and there was much less fanfare over the event than in previous years. (AFP, 03.18.17)
  • The European Union on March 17 condemned Russia’s seizure of Ukraine’s Crimea territory, calling Moscow’s annexation of the Black Sea peninsula a “direct challenge to international security.” (RFE/RL, 03.17.17)
  • The United States on March 16 issued a sharp condemnation of Russia’s seizure of Crimea and the referendum that Moscow staged there and later held up as justification for the annexation. (RFE/RL, 03.16.17)
• The White House announced nominees for six senior Pentagon jobs on March 16. David Joel Trachtenberg, nominated for the No. 2 policy job, penned a December 2015 commentary saying the Obama administration failed to adapt to a changing reality with Russia following its annexation of Crimea, incursions into eastern Ukraine and more aggressive military exercises. (AP, 03.16.17, Defense News, 03.16.17)
• The European Commission agreed on March 16 to send Ukraine 600 million euros ($643.2 million) to help its finances, ending months of delays over EU conditions linked to the loan. (Reuters, 03.16.17)
• Secretary of State Rex Tillerson will travel to Russia next month, a week after a NATO summit meeting that he is skipping, State Department officials said Monday. (AP, 03.21.17)
• Ukrainian lawmaker Serhiy Leshchenko on March 21 released new financial documents allegedly showing that President Donald Trump’s former campaign chairman, Paul Manafort, laundered payments from the party of disgraced ex-leader of Ukraine Viktor Yanukovych using offshore accounts in Belize and Kyrgyzstan. (Washington Post, 03.21.17)