United States And France Threaten To Cancel Major Military Contracts As Sanctions Against Russia Begin To Take Hold

Hagel House Syria 4Sept2013
U.S. Secretary of Defense Chuck Hagel (L) testifies alongside Secretary of State John Kerry at a U.S. House Foreign Affairs Committee hearing on Syria on Capitol Hill in Washington, September 4, 2013. The U.S. Senate Foreign Relations Committee will meet on Wednesday afternoon to proceed with its vote on an authorization for the use of military force in Syria, the panel's chairman said in a statement.

The U.S and French governments could end up canceling contracts with Russian companies that are worth billions of dollar if sanctions against Russia are fully implemented, according to reports.

The Hill reported on Tuesday that lawmakers in Washington are demanding that Chuck Hagel cancel Mi-17 helicopter orders from Russian arms company Rosoboronexport. The move comes after Russia relented on its annexation of Crimea in the face of global diplomatic pressure.

"Given Russia's recent actions that violate the sovereignty and territorial integrity of Ukraine, including its support of the illegal referendum for Crimean separation, we strongly urge you to terminate these contracts," the letter stated. While the helicopters are not for U.S use, they are being purchased with U.S. taxpayer’s money for use by the Afghan Air Force.

Under the executive order that President Obama signed on Monday, Hagel does have the authority to make the call to cancel the contracts, Rosa DeLauro (D-Conn.) and Kay Granger (R-Texas), each a spokesperson, said. However, in canceling the contract, the U.S. would be setting the newly formed Afgan Air Force back significantly considering the obtainment of a new aircraft equipped well enough for the Afghan terrain may prove costly and time consuming.

“Under an Executive Order signed by President Obama Monday, those that operate in the Russian arms sector may be subject to sanction,” they wrote. 

"As noted by President Obama in his Executive Order, Russia's recent actions 'undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets, and thereby constitute an unusual and extraordinary threat to the national security and foreign policy of the United States,” they added.

The other lawmakers were Rep. James Moran (D-Va.), Keith Ellison (D-Minn.) and Rep. Elizabeth Esty (D-Conn.)

Meanwhile, a report in Defense News, said that the Defense Minister of France, Jean-Yves Le Drian said on Wednesday that the European country may cancel the contract to build two advanced helicopter carriers for Russia worth an estimated 1.2 billion euros or $1.65 billion should sanctions against the ex-soviet country be carried out.

“We will deliver civilian hulls,” Le Drian said at an aeronautics and defense conference organized by business daily Les Echos. “It’s a reality. The client can then arm the two ships. We will deliver, under the signed contract, a package which is not armed.”

Le Drian said cancelling the contract would be an extreme measure but if it were to happen it would appear in a third set of sanctions against Russia.

“The heads of government and state will decide three sets of measures,” he said. “If there are industrial measures, it will be in the third set.

“We are at the first set. If there are industrial measures, it will be in the third set. The second set is military,” Le Drian said.

The first ship, Vladivostok, is due for delivery at the end of the year.

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