The U.S. Senate on Jan. 1 overrode President Donald J. Trump’s veto on a military budget bill that is beneficial for Ukraine in three key ways. The vote was 81-13 with 6 senators not voting.
Firstly, the $740.5 billion National Defense Authorization Act provides $250 million in military aid to Ukraine, less than the $300 million allocated in 2020.
Secondly, the law introduces new sanctions for Russia’s Nord Stream 2 gas pipeline.
And thirdly, the U.S improves transparency in corporate ownership, measures that could affect Ukrainian oligarchs and boost the fight against corrupt officials.
New sanctions
The bill sanctions the Nord Stream 2 pipeline, which links Russia and Germany through the Baltic Sea and is currently under construction. The $11.6 billion, 1,230-kilometer pipeline bypasses Russia’s main natural gas transit route in Ukraine, doubling existing Russia to Germany transit capacity to 110 billion cubic meters annually.
The sanctions come as Russia is continuing its military aggression against Ukraine and threatens Europe’s security. If launched, the new pipeline will increase Europe’s dependence on Russian gas.
In 2019 the U.S. sanctioned foreign vessels and company executives involved in the Nord Stream 2 project, bringing the construction of the pipeline to a halt. However, this week Russia has resumed the construction project in an effort to complete the pipeline before new sanctions come into effect. They have an estimated 157 kilometers to complete, mostly through Danish waters.
The new sanctions passed on Jan. 1 apply to companies that provide insurance, testing, inspection and certification services for the pipeline.
The bill also extends the ban on financing activities that involve recognizing Russia’s sovereignty over Ukraine’s occupied Crimea peninsula and restrictions on military cooperation with Russia.
Corporate transparency
Another clause of the budget bill, called the Corporate Transparency Act, effectively bans anonymous shell companies from operating in the U.S.
According to the legislation, companies will have to disclose their beneficiaries to the Treasury Department.
The bill deals a blow to anonymous companies that have been often used by criminals and corrupt officials from all over the world.
“This landmark victory against dirty money goes to show that a good idea — and a dedicated group of advocates — can make real progress, even in the face of our current partisan division,” Nathan Proctor, campaign director of the U.S. Public Interest Research Group, said in a statement. “Make no mistake: This is a historic win. It’s not a mystery why criminal enterprises traffic illicit goods or commit fraud. They do it for the money. The fact that anyone could create a company with no record of who owned it made it far too easy to move dirty money. This game-changing win is a blow to this criminal activity.”
Daria Kaleniuk, executive director of Ukraine’s Anti-Corruption Action Center, argued that, in addition to the new transparency regulations, other measures are needed to combat Ukrainian oligarchs and corrupt officials.
“It’s important to have a complex of U.S. measures: stepping up the sanctions of the Treasury Department and the anti-foreign kleptocracy initiatives of the Justice Department,” she told the Kyiv Post. “The former imposes sanctions on individuals and companies owned by them, and the latter conducts criminal investigations such as the one against (Ukrainian oligarch Ihor) Kolomoisky. Cooperation with the Department of State may also make the annulment of U.S. visas more effective.”
She added that progress could be made in this direction after President-elect Joe Biden’s inauguration on Jan. 20.
