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Irwin Cotler On Why He Believes He Was Poisoned In Russia

Irwin Cotler On Why He Believes He Was Poisoned In Russia.

Huffington Post Canada  |  Posted: 03/24/2014 6:26 pm EDT  |  Updated: 03/24/2014 6:59 pm EDT

irwin cotler poison

When Russia issued its blacklist of 13 Canadians on Monday, Irwin Cotler wasquick to express his honour at being included.

“I wear my exclusion from Russia as a badge of honour and am proud to be in such distinguished company,” he said in a statement.

“I have no intention of visiting Siberia. I have no investments in Sochi. I have no desire to visit Moscow and be poisoned as happened on my last trip.”

Yes, poisoned.

HuffPost Canada’s Althia Raj asked the Liberal MP for the backstory, and he said he hasn’t discussed the episode with anyone other than his family and friends until now.

It happened in 2006, when he was in Russia on a parliamentary delegation. He was dining with NDP MP Joe Comartin, who ordered the exact same meal but “nothing at all, happily, happened to him”. However Cotler was not so lucky.

Here’s the story in his own words:

“By the time, I got back to my hotel, I was violently ill. More than I had ever been almost in my life, and I started to throw up blood. I called the people in the hotel and told them I needed a doctor. Instead of sending a doctor, they sent up people to clean up all the blood — in other words, all the evidence that a doctor would need.

“I called the Canadian embassy in Moscow, and they sent a doctor and the doctor looked at me, examined me and told me I had to go right away to the hospital. And they took me into the Russian Medical Centre, the hospital in Moscow and I was held there for several days. I never knew exactly what was being done because I didn’t understand Russian and they didn’t speak English.

“I was subsequently discharged, not feeling well and returned to Canada. Some months later I met a friend of mine who actually had been one of the physicians attending [Soviet defector Alexander] Litvinov, who told me that all my symptoms were the same as Litvinov. Except that they, in my case, probably just wanted to intimidate me and temporarily disable me, but not to kill me.

“There were a number of incidents at that time, of people being poisoned. When I was at my reunion of my Yale Law School class, I learned from talking to my classmate who became a president of the European Court of Human Rights that he too was poisoned around the same time in Russia. So it didn’t appear to be coincidental.

“But then, the final part about this, is rather intriguing. In 2010, during the Intra-Parliamentary Conference to combat anti-Semitism, I called the Russian Embassy in Ottawa because they hadn’t yet given us the names of their parliamentarians to attend the conference and they said, ‘Oh Mr. Cotler, we’re sorry. We want to get two high-ranking people so please call us next week and we will give you the names.’

“And I called them back the next week, and they gave me the names and then they said to me, ‘Why don’t you come visit us in Russia?’

“And I said, ‘You know, the last time when I was there, I was poisoned.’ And then, just like that, the answer was, ‘We’re sorry. That was a mistake, it won’t happen again.’

“So I haven’t been back since then, but now I guess they made it official that I am banned from returning. But it is not the first time — I was arrested and expelled in 1979. I was banned at that time for defending political prisoners in the Soviet Union whom they accused of consorting with criminal elements in the Soviet Union and named them, like the great Andrei Sakharov, the human rights dissident.

“Now I suspect, it has nothing to do with the Ukraine but probably because I tabled a Private Member’s Bill regarding Sergei Magnitsky.”

Magnitsky was an accountant and auditor in Moscow who uncovered a corruption scheme and testified against several senior Russian officials. He was subsequently imprisoned and died in jail in 2009 at the age of 37. Cotler chairs an intra-parliamentary group on Magnitsky, and he says that is like a “red flag” to Russia.

“My sense is that’s probably the retaliatory reason in my case.”

Cotler said some of the Americans also banned by Russia were people who had worked on the Magnitsky file. Cotler has blogged about Magnitsky’s case for HuffPost.

Cotler said he also doesn’t think the sanctions Russia imposed on the 13 Canadians today will have any impact.

“I don’t think it will have any effect. In my case, it only encourages me and inspires me to intensify my advocacy. And I don’t need to go to Russia for purposes of that advocacy. Our intra-parliamentary group for Sergei Magnitsky is international, it contains parliamentarians from over 20 countries.”

Russian Forces Attack Simferopol Military Unit; 1 Injured, According To Reports | Zero Hedge

Russian Forces Attack Simferopol Military Unit; 1 Injured, According To Reports | Zero Hedge.

It seems, despite all the market’s belief that Putin would go quietly into the night once more, that the situation is escalating:

  • *GUNMEN STORM UKRAINE ARMY INSTALLATIONS IN CRIMEA: UKRAINE DEFMIN SELEZNYOV
  • *GUNMEN STORMING CRIMEA BUILDINGS SHOOTING IN AIR: SELEZNYOV
  • *UKRAINIAN OFFICER WOUNDED BY LIVE AMMUNITION, HAYDUK SAYS
  • *ATTACKS ON UKRAINIAN UNITS INCREASING: NAVY CHIEF HAYDUK

Of course, the big question now is how will Ukraine respond? Because attacking (and injuring) citizens sure seems like a red-line someone should not be crossing (although, as per the referendum, that region is now Russian).

#Crimean unit under attack is the photogrammetric center of the Chief Directorate of Operational Support of the Armed Forces of #Ukraine |PR

— Euromaidan PR (@EuromaidanPR) March 18, 2014

BREAKING #Ukrainian military unit in #Simferopol under attack. #Russian snipers on the scene, one injured! -D.Tymchuk |PR News #Crimea

— Euromaidan PR (@EuromaidanPR) March 18, 2014

Of course there is no confirmation that these are “Russian” troops per se but it is on the heels of news (via Slashdot) that:

this excerpt from The Examiner: “The Security Service of Ukraine (SBU) confirmed March 16 the arrest of a group of Russians in the Zaporizhzhia (Zaporozhye) region of Ukraine. The men were armed with firearms, explosives and unspecified ‘special technical means’. This follows the March 14 arrest … of several Russians dressed black uniforms with no insignia, armed with AKS-74 assault rifles and in possession of numerous ID cards under various names. One of which was an ID card of Military Intelligence Directorate of the Russian armed forces; commonly known as ‘Spetsnaz’.

And the response by Ukraine has to be weighed based on this statement from the PM:

  • *UKRAINE WON’T RECOGNIZE CRIMEA ANNEXATION, TURCHYNOV SAYS
  • *UKRAINE SEEKS TO AVOID CRIMEA ESCALATION, HAYDUK SAYS
  • *RUSSIAN TROOPS BLOCKING 38 UKRAINE UNITS IN CRIMEA, HAYDUK SAYS

Russian Forces Attack Simferopol Military Unit; 1 Injured, According To Reports | Zero Hedge

Russian Forces Attack Simferopol Military Unit; 1 Injured, According To Reports | Zero Hedge.

It seems, despite all the market’s belief that Putin would go quietly into the night once more, that the situation is escalating:

  • *GUNMEN STORM UKRAINE ARMY INSTALLATIONS IN CRIMEA: UKRAINE DEFMIN SELEZNYOV
  • *GUNMEN STORMING CRIMEA BUILDINGS SHOOTING IN AIR: SELEZNYOV
  • *UKRAINIAN OFFICER WOUNDED BY LIVE AMMUNITION, HAYDUK SAYS
  • *ATTACKS ON UKRAINIAN UNITS INCREASING: NAVY CHIEF HAYDUK

Of course, the big question now is how will Ukraine respond? Because attacking (and injuring) citizens sure seems like a red-line someone should not be crossing (although, as per the referendum, that region is now Russian).

#Crimean unit under attack is the photogrammetric center of the Chief Directorate of Operational Support of the Armed Forces of #Ukraine |PR

— Euromaidan PR (@EuromaidanPR) March 18, 2014

BREAKING #Ukrainian military unit in #Simferopol under attack. #Russian snipers on the scene, one injured! -D.Tymchuk |PR News #Crimea

— Euromaidan PR (@EuromaidanPR) March 18, 2014

Of course there is no confirmation that these are “Russian” troops per se but it is on the heels of news (via Slashdot) that:

this excerpt from The Examiner: “The Security Service of Ukraine (SBU) confirmed March 16 the arrest of a group of Russians in the Zaporizhzhia (Zaporozhye) region of Ukraine. The men were armed with firearms, explosives and unspecified ‘special technical means’. This follows the March 14 arrest … of several Russians dressed black uniforms with no insignia, armed with AKS-74 assault rifles and in possession of numerous ID cards under various names. One of which was an ID card of Military Intelligence Directorate of the Russian armed forces; commonly known as ‘Spetsnaz’.

And the response by Ukraine has to be weighed based on this statement from the PM:

  • *UKRAINE WON’T RECOGNIZE CRIMEA ANNEXATION, TURCHYNOV SAYS
  • *UKRAINE SEEKS TO AVOID CRIMEA ESCALATION, HAYDUK SAYS
  • *RUSSIAN TROOPS BLOCKING 38 UKRAINE UNITS IN CRIMEA, HAYDUK SAYS

Putin Responds To US, European Sanctions: Signs Order Recognizing Crimea As Sovereign State | Zero Hedge

Putin Responds To US, European Sanctions: Signs Order Recognizing Crimea As Sovereign State | Zero Hedge.

So much for de-escalating:

  • RUSSIAN PRESIDENT VLADIMIR PUTIN SIGNS ORDER ON RECOGNITION OF CRIMEA AS SOVEREIGN STATE – RIA

Surely to precede Putin’s own executive order recognizing Crimea as the latest member of the Russian Federation. And as for those “crippling” sanctions, via the FT, here is the locals reall think and why the Russian stock market is soaring as we reported earlier.

Moscow investment banker on US sanctions: “It’s as innocuous as we’d hoped”

— Courtney Weaver (@courtneymoscow) March 17, 2014

One also wonders: how long until Russia freezes all assets of McDonalds restaurants operating in Russia.

Putin Responds To US, European Sanctions: Signs Order Recognizing Crimea As Sovereign State | Zero Hedge

Putin Responds To US, European Sanctions: Signs Order Recognizing Crimea As Sovereign State | Zero Hedge.

So much for de-escalating:

  • RUSSIAN PRESIDENT VLADIMIR PUTIN SIGNS ORDER ON RECOGNITION OF CRIMEA AS SOVEREIGN STATE – RIA

Surely to precede Putin’s own executive order recognizing Crimea as the latest member of the Russian Federation. And as for those “crippling” sanctions, via the FT, here is the locals reall think and why the Russian stock market is soaring as we reported earlier.

Moscow investment banker on US sanctions: “It’s as innocuous as we’d hoped”

— Courtney Weaver (@courtneymoscow) March 17, 2014

One also wonders: how long until Russia freezes all assets of McDonalds restaurants operating in Russia.

The Russians Have Already Quietly Pulled Their Money From The West | Zero Hedge

The Russians Have Already Quietly Pulled Their Money From The West | Zero Hedge.

Earlier today we reported that according to weekly Fed data, a record amount – some $105 billion – in Treasurys had been sold or simply reallocated (which for political reasons is the same thing) from the Fed’s custody accounts, bringing the total amount of US paper held at the Fed to a level not seen since December 2012. While China was one of the culprits suggested to have withdrawn the near USD-equivalent paper, a far likelier candidate was Russia, which as is well-known, has had a modest falling out with the West in general, and its financial system in particular. Turns out what Russian official institutions may have done with their Treasurys (and we won’t know for sure until June), it was merely the beginning. In fact, as the FT reports, in silent and not so silent preparations for what will be near-certain financial sanctions (which would include account freezes and asset confiscations following this Sunday’s Crimean referendum) the snealy Russians, read oligarchs, have already pulled billions from banks in the west thereby essentially making the biggest western gambit – that of going after the wealth of Russia’s 0.0001% – moot.

From the FT:

Russian companies are pulling billions out of western banks, fearful that any US sanctions over the Crimean crisis could lead to an asset freeze, according to bankers in Moscow.

Sberbank and VTB, Russia’s giant partly state-owned banks, as well as industrial companies, such as energy group Lukoil, are among those repatriating cash from western lenders with operations in the US. VTB has also cancelled a planned US investor summit next month, according to bankers.

The flight comes as last-ditch diplomatic talks between Russia’s foreign minister and the US secretary of state to resolve the tensions in Ukraine ended without an agreement.

Markets were nervous before Sunday’s Crimea referendum on secession from Ukraine. Traders and businesspeople fear this could spark western sanctions against Russia as early as Monday.

It probably will. What it will also do is force Russia to engage China far more actively in bilateral trade and ultimately to transact using either Rubles or Renminbi, and bypass the dollar. Perhaps even using gold, something which the price of the yellow metal sniffed out this week, pushing itself to 6 month highs. It will also make financial ties between the two commodity-rich nations even closer, while further alienating that “imperialist devil,” the US.

Of course, the west thinking like the west, and assuming that all that matters to Russia is the closing level of the Micex, believes that a sufficient plunge in Russian stocks would have been enough to deter Putin. After all, the only thing everyone in the US cares about is if the S&P 500 closed at yet another all time high, right?

What the west didn’t realize, as we predicted a month ago, for Putin it is orders of magnitude more important to have the price of commodities, primarily crude and gas, high than seeing the illusion of paper wealth, aka stocks, hitting all time highs. Especially since in Russia an even smaller portion of the population cares about the daily fluctuations of the stock market. As for the oligarchs, if there is someone who will be delighted to see their power, wealth and influence impacted adversely, if only for a short period of time, it is Vladimir Vladimirovich himself, whom the west misjudged massively once more. Not to mention that the general population will be even more delighted, and boost Putin’s rating even higher, if these crony billionaires are made to suffer by the west, if only a little.

(Here we would be remiss not to comment on his easy it supposedly is for Obama to freeze the assets of a few corrupt Russian billionaires, and yet the very proud Americans who nearly brought the entire financial system to the brink in 2008, are now richer than ever.)

In the meantime, some of Russia’s oligarchs are effectively welcoming the challenge. Bloomberg reports:

Alisher Usmanov, the country’s richest person, controls his most valuable asset, Metalloinvest Holding Co., Russia’s largest iron ore producer, through three subsidiaries, one of which is located in Cyprus, an EU member nation. The 60-year-old also owns a Victorian mansion in London that he bought in 2008 for $70 million, according to a May 18, 2008, Sunday Times newspaper report. He’s lost $1.5 billion since the crisis began, according to the Bloomberg ranking.

“We are concerned with the possible sanctions against Russia but don’t see any dramatic repercussions for our business,” Ivan Streshinsky, CEO at USM Advisors LLC, which manages Usmanov’s assets, including stakes in Megafon OAO and Mail.Ru Group Ltd., said in an interview at Bloomberg’s offices in Moscow today.

“Mail.Ru and Megafon revenue is coming from Russia and people won’t stop making calls and using the Internet,” he said. “Metalloinvest may face closure in European and American markets, but it can re-direct sales to China and other markets.”

Great job, Obama: you just pushed Russia and China even closer by necessity! Furthermore, it should come as no surprise that while Russians were pulling their money from the west, western firms were getting out of Dodgeski.

One senior Moscow banker said 90 per cent of investors were already behaving as if sanctions were in place, adding that this was “prudent exposure management”.

These moves represent the flipside of the more obvious withdrawal of western money from Russian markets that has been evident over the past fortnight.

Traders and bankers said US banks had been particularly heavy sellers of Russian bonds. According to data from the Bank for International Settlements, US banks and asset managers between them have about $75bn of exposure to Russia.

Joseph Dayan, head of markets at BCS, one of Russia’s largest brokers said: “It’s been quite an ugly picture in Russian bonds the last few days and some of it has to do with international banks reducing exposure.”

Although foreign banks have not yet begun cutting credit to Russian companies en masse, bankers said half a dozen live deals to fund some of Russia’s biggest companies were in limbo as lenders waited to see how punitive western sanctions would be.

So the bottom line is that Russia, thinking a few steps ahead, already has withdrawn the bulk of its assets from the West, and why not. Recall that a year ago it was revealed that the same Russians who were supposed to be punished in Cyprus had mostly withdrawn their funds in advance of the bail in: they tend to know what is coming. It was the ordinary Cypriot citizens, who had done nothing wrong, who were most impaired.

And so while the Russian response is already known, we wonder just how true is the inverse: just how prepared is the west, and especially Europe, to exist in a world in which a third of Germany’s gas is suddenly cut off? We can’t wait to find out early next week.

The Russians Have Already Quietly Pulled Their Money From The West | Zero Hedge

The Russians Have Already Quietly Pulled Their Money From The West | Zero Hedge.

Earlier today we reported that according to weekly Fed data, a record amount – some $105 billion – in Treasurys had been sold or simply reallocated (which for political reasons is the same thing) from the Fed’s custody accounts, bringing the total amount of US paper held at the Fed to a level not seen since December 2012. While China was one of the culprits suggested to have withdrawn the near USD-equivalent paper, a far likelier candidate was Russia, which as is well-known, has had a modest falling out with the West in general, and its financial system in particular. Turns out what Russian official institutions may have done with their Treasurys (and we won’t know for sure until June), it was merely the beginning. In fact, as the FT reports, in silent and not so silent preparations for what will be near-certain financial sanctions (which would include account freezes and asset confiscations following this Sunday’s Crimean referendum) the snealy Russians, read oligarchs, have already pulled billions from banks in the west thereby essentially making the biggest western gambit – that of going after the wealth of Russia’s 0.0001% – moot.

From the FT:

Russian companies are pulling billions out of western banks, fearful that any US sanctions over the Crimean crisis could lead to an asset freeze, according to bankers in Moscow.

Sberbank and VTB, Russia’s giant partly state-owned banks, as well as industrial companies, such as energy group Lukoil, are among those repatriating cash from western lenders with operations in the US. VTB has also cancelled a planned US investor summit next month, according to bankers.

The flight comes as last-ditch diplomatic talks between Russia’s foreign minister and the US secretary of state to resolve the tensions in Ukraine ended without an agreement.

Markets were nervous before Sunday’s Crimea referendum on secession from Ukraine. Traders and businesspeople fear this could spark western sanctions against Russia as early as Monday.

It probably will. What it will also do is force Russia to engage China far more actively in bilateral trade and ultimately to transact using either Rubles or Renminbi, and bypass the dollar. Perhaps even using gold, something which the price of the yellow metal sniffed out this week, pushing itself to 6 month highs. It will also make financial ties between the two commodity-rich nations even closer, while further alienating that “imperialist devil,” the US.

Of course, the west thinking like the west, and assuming that all that matters to Russia is the closing level of the Micex, believes that a sufficient plunge in Russian stocks would have been enough to deter Putin. After all, the only thing everyone in the US cares about is if the S&P 500 closed at yet another all time high, right?

What the west didn’t realize, as we predicted a month ago, for Putin it is orders of magnitude more important to have the price of commodities, primarily crude and gas, high than seeing the illusion of paper wealth, aka stocks, hitting all time highs. Especially since in Russia an even smaller portion of the population cares about the daily fluctuations of the stock market. As for the oligarchs, if there is someone who will be delighted to see their power, wealth and influence impacted adversely, if only for a short period of time, it is Vladimir Vladimirovich himself, whom the west misjudged massively once more. Not to mention that the general population will be even more delighted, and boost Putin’s rating even higher, if these crony billionaires are made to suffer by the west, if only a little.

(Here we would be remiss not to comment on his easy it supposedly is for Obama to freeze the assets of a few corrupt Russian billionaires, and yet the very proud Americans who nearly brought the entire financial system to the brink in 2008, are now richer than ever.)

In the meantime, some of Russia’s oligarchs are effectively welcoming the challenge. Bloomberg reports:

Alisher Usmanov, the country’s richest person, controls his most valuable asset, Metalloinvest Holding Co., Russia’s largest iron ore producer, through three subsidiaries, one of which is located in Cyprus, an EU member nation. The 60-year-old also owns a Victorian mansion in London that he bought in 2008 for $70 million, according to a May 18, 2008, Sunday Times newspaper report. He’s lost $1.5 billion since the crisis began, according to the Bloomberg ranking.

“We are concerned with the possible sanctions against Russia but don’t see any dramatic repercussions for our business,” Ivan Streshinsky, CEO at USM Advisors LLC, which manages Usmanov’s assets, including stakes in Megafon OAO and Mail.Ru Group Ltd., said in an interview at Bloomberg’s offices in Moscow today.

“Mail.Ru and Megafon revenue is coming from Russia and people won’t stop making calls and using the Internet,” he said. “Metalloinvest may face closure in European and American markets, but it can re-direct sales to China and other markets.”

Great job, Obama: you just pushed Russia and China even closer by necessity! Furthermore, it should come as no surprise that while Russians were pulling their money from the west, western firms were getting out of Dodgeski.

One senior Moscow banker said 90 per cent of investors were already behaving as if sanctions were in place, adding that this was “prudent exposure management”.

These moves represent the flipside of the more obvious withdrawal of western money from Russian markets that has been evident over the past fortnight.

Traders and bankers said US banks had been particularly heavy sellers of Russian bonds. According to data from the Bank for International Settlements, US banks and asset managers between them have about $75bn of exposure to Russia.

Joseph Dayan, head of markets at BCS, one of Russia’s largest brokers said: “It’s been quite an ugly picture in Russian bonds the last few days and some of it has to do with international banks reducing exposure.”

Although foreign banks have not yet begun cutting credit to Russian companies en masse, bankers said half a dozen live deals to fund some of Russia’s biggest companies were in limbo as lenders waited to see how punitive western sanctions would be.

So the bottom line is that Russia, thinking a few steps ahead, already has withdrawn the bulk of its assets from the West, and why not. Recall that a year ago it was revealed that the same Russians who were supposed to be punished in Cyprus had mostly withdrawn their funds in advance of the bail in: they tend to know what is coming. It was the ordinary Cypriot citizens, who had done nothing wrong, who were most impaired.

And so while the Russian response is already known, we wonder just how true is the inverse: just how prepared is the west, and especially Europe, to exist in a world in which a third of Germany’s gas is suddenly cut off? We can’t wait to find out early next week.

Vladimir Putin Ignores Ukraine Warnings From Obama

Vladimir Putin Ignores Ukraine Warnings From Obama.

WASHINGTON – One by one, President Barack Obama’s warnings to Russia are being brushed aside by President Vladimir Putin, who appears to only be speeding up efforts to formally stake his claim to Ukraine’s Crimean Peninsula.

In the week since Obama first declared there would be “costs” if Putin pressed into Crimea, Russian forces have taken control of the region and a referendum has been scheduled to decide its future. Obama declared the March 16 vote a violation of international law, but in a region where ethnic Russians are the majority, the referendum seems likely to become another barrier to White House efforts to compel Putin to pull his forces from Crimea.

“The referendum vote is going to serve for Putin, in his mind, as the credibility and legitimacy of Russia’s presence there,” said Andrew Kuchins, the director of the Russia program at the Center for Strategic and International Studies.

If Crimea votes to join Russia, the referendum could also put Obama in the awkward position of opposing the outcome of a popular vote.

The White House has tried to match Russia’s assertive posture by moving quickly to impose financial sanctions and travel bans on Russians and other opponents of Ukraine’s new central government. U.S. officials have also urgently tried to rally the international community around the notion that Russia’s military maneuvers in Crimea are illegal, even seeking support from China, Moscow’s frequent ally against the West.

“I am confident that we are moving forward together, united in our determination to oppose actions that violate international law and to support the government and people of Ukraine,” Obama said Thursday.

The European Union also announced Thursday that it was suspending talks with Putin’s government on a wide-ranging economic agreement and on granting Russian citizens visa-free travel within the 28-nation bloc — a long-standing Russian objective.

The White House says it still believes a diplomatic solution to the dispute with Russia is possible. Obama spoke with Putin for more than an hour Thursday, outlining a potential resolution that would include Russia pulling its forces back in Crimea and direct talks between the Kremlin and Ukraine.

But the fast-moving developments in Crimea may mean that the ultimate question facing Obama is not be what the U.S. can do to stop Russia from taking control of Crimea, but what kind of relationship Washington can have with Moscow should that occur.

White House advisers insist the U.S. could not go back to a business as usual approach with Russia if Moscow were to annex Crimea or recognize its independence. But that may be seen as empty threat to the Kremlin after the U.S., as well as Europe, did just that in 2008 after Russia recognized the independence of Abkhazia and South Ossetia, two breakaway territories of Georgia. Russia also continues to keep military forces in both territories.

Privately, U.S. officials say Russia is running a similar playbook as it seeks to increase its influence in Crimea. And regional experts say Putin also appears to have a larger goal: influencing central government lawmakers in the Ukrainian capital of Kyiv as they prepare for elections later this spring.

“It says to the Ukrainians, Don’t mess with me or I’ll slice off a finger,” said Matthew Rojansky, a Russia analyst at the Woodrow Wilson International Center for Scholars.

The months-long political crisis in Ukraine bubbled over late last month when protesters in Kyiv ousted pro-Russian President Viktor Yanukovych. Amid the chaos, thousands of Russian forces took control of Crimea, a strategically important outpost in the Black Sea where Moscow has a military base.

The outcome of the Crimea referendum is not guaranteed, but there are clear indications the region will choose to side with Russia. About 60 per cent of Crimea’s population already identifies itself as Russian. And Crimea’s 100-seat parliament voted unanimously Thursday in favour of joining Russia.

The referendum had been scheduled for March 30, but was pushed up two weeks. And while the original vote was only on whether Crimea should get enhanced local powers, the peninsula’s residents will now also vote on whether to join Russia.

U.S. officials say they believe Putin was involved in orchestrating the referendum, though the Russian leader made no public statements about the planned vote. Earlier in the week, Putin said Russia had no intention of annexing Crimea, while insisting its population has the right to determine the region’s status in a referendum.

U.S. officials say they also see an unlikely ally emerging in China, which has frequently sided with Russia at the United Nations Security Council in blocking Western actions. While China has not condemned Russia’s actions outright, Beijing’s ambassador to the U.N. this week said it supported “noninterference” and respects Ukraine’s sovereignty and territorial integrity.

Susan Rice, Obama’s national security adviser, spoke this week with Chinese State Councilor Yang Jiechi. The White House said the officials agreed on the need for a peaceful resolution to the dispute that “upholds Ukraine’s sovereignty and territorial integrity.”

It appears unlikely China would actually take punitive actions against Russia. U.S. officials say Beijing is largely acting out of self-interest and appears to view the developments in Crimea through the prism of a nation that also has ethnic minorities who live in border regions and identify more closely with neighbouring countries.

Russia Rejects Demands To Leave Crimea

Russia Rejects Demands To Leave Crimea.

Russian President Vladimir Putin speaks during a press conference in his country residence of Novo-Ogaryova outside Moscow on March 4, 2014. Russian President Vladimir Putin on March 4 said that deposed Ukrainian president Viktor Yanukovych had no political future but asserted he was legally still head of state. AFP PHOTO / RIA NOVOSTI PRESIDENTIAL PRESS SERVICE - POOL / ALEXEY NIKOLSKY        (Photo credit should read ALEXEY NIKOLSKY/AFP/Getty Images)

PARIS/KIEV, March 5 (Reuters) – Russia rebuffed Western demands to withdraw forces in Ukraine’s Crimea region to their bases on Wednesday amid a day of high-stakes diplomacy in Paris aimed at easing tensions over Ukraine and averting the risk of war.

The European Union offered Ukraine’s new pro-Western government 11 billion euros in financial aid in the next couple of years provided Kiev reaches a deal with the International Monetary Fund. Germany, the EU’s biggest economy, also promised bilateral financial help.

Scroll down or click here for live updates

Ukraine’s new finance minister, Oleksander Shlapak, caused a fall in the Ukrainian bond and currency markets by saying his economically shattered country may start talks with creditors on restructuring its foreign currency debt.

A U.N. special envoy had to abandon a mission to Crimea after being stopped by armed men and besieged inside a cafe by a hostile crowd shouting “Russia! Russia!” Dutch diplomat Robert Serry agreed to leave Crimea to end the stand-off.

And the U.S. Defense Department, in an apparent attempt to signal resolve to Moscow, announced military measures to support eastern European NATO allies adjoining Russia and Ukraine.

Russia and the West are locked in the most serious battle since the end of the Cold War for influence in Ukraine, a former Soviet republic with historic ties to Moscow that is a major commodities exporter and strategic link between East and West.

Ukraine pulled out of a trade deal with the EU under Russian pressure last year, sparking months of protests in Kiev and the Feb. 22 ouster of President Viktor Yanukovich, a Russian ally.

Ukraine says Russia has occupied Crimea, where its Black Sea fleet is based, provoking an international outcry and sharp falls in financial markets on Monday, though they have since stabilised.

The foreign ministers of Russia, the United States, Britain, and Germany met their French counterpart and French President Francois Hollande in Paris to try to start a diplomatic process to defuse the crisis.

But diplomats said it was not clear whether Russian Foreign Minister Sergei Lavrov would take the crucial step of attending talks with Ukraine’s new foreign minister, a member of a government Moscow has described as illegitimate.

U.S. Secretary of State John Kerry left the meeting at Hollande’s office without making any statement.

Earlier, Lavrov repeated Moscow’s assertion – ridiculed by the West – that the troops that have seized control of the Black Sea peninsula are not under Russian command.

Asked whether Moscow would order forces in Crimea back to their bases, Lavrov told a questioner in Madrid: “If you mean the self-defence units created by the inhabitants of Crimea, we give them no orders, they take no orders from us.

“As for the military personnel of the Black Sea Fleet, they are in their deployment sites. Yes, additional vigilance measures were taken to safeguard the sites … We will do everything not to allow any bloodshed.”

FACE-TO-FACE

Russia did not attend a meeting with Kerry, British Foreign Secretary William Hague and Ukrainian Foreign Minister Andriy Deshchytsia of the so-called Budapest group created to assure Ukraine’s security after it abandoned nuclear weapons in 1994.

But Kerry and Hague said they would try to bring the Russian and Ukrainian ministers together later in the day.

Poland’s foreign minister tweeted that he would attend a meeting in Paris with those two ministers plus the United States, Germany, Britain, France and the Organisation for Security and Cooperation in Europe (OSCE).

But there was no confirmation that all sides would attend the session, which could be the first step in a diplomatic mediation process.

NATO and Russia were holding talks in Brussels amid concerns that a standoff between Russian and Ukrainian forces in Crimea could still spark violence, or that Moscow could also intervene in Russian-speaking eastern Ukraine.

In a sign of heightened tensions in the east, a pro-Russian crowd in Donetsk, Yanukovich’s hometown, recaptured a regional administration building they had occupied before being ejected by police, a Reuters witness said.

The West is pushing for Russia to return troops to barracks, accept international monitors in Crimea and Ukraine and negotiate a solution to the crisis through a “contact group” probably under the auspices of a pan-European security body.

SANCTIONS

France said European Union leaders meeting in Brussels on Thursday could decide on sanctions against Russia if there is no “de-escalation” by then. Other EU countries, including Germany, are more reticent about sanctions.

French Foreign Minister Laurent Fabius said early measures could include restrictions on visas, the assets of individuals and existing discussions on economic ties with Russia.

President Vladimir Putin on Tuesday defended Russia’s actions in Crimea, which used to be Russian territory, and said he would use force only as a last resort.

This eased market fears of a war over the former Soviet republic after sharp falls on Monday, though Russian shares and the rouble slipped again on Wednesday, and Ukraine’s hryvnia dropped against the dollar.

Russian forces remain in control of Crimea, where Interfax reported they seized control of two Ukrainian missile defence sites overnight, and Putin gave no sign of backing down.

In Brussels, European Commission President Jose Manuel Barroso said EU deliver assistance to Kiev would in part be contingent on Ukraine signing an IMF loan deal, which will require painful economic reforms such as ending domestic gas subsidies and letting the hryvnia float.

“The package combined could bring an overall support of at least 11 billion euros over the next couple of years,” Barroso told a news conference. The United States offered Ukraine $1 billion in loan guarantees on Tuesday.

G7 MAY MEET SOON

At his first news conference since the crisis began, Putin said on Tuesday that Russia reserved the right to use all options to protect compatriots who were living in “terror” in Ukraine but that force was not needed for now.

He told his cabinet on Wednesday he did not want political tension to detract from economic cooperation with Russia’s “traditional partners”. But the foreign ministry said Moscow was preparing counter-measures against Western firms if necessary.

Canadian Prime Minister Stephen Harper said after speaking to Obama that the Group of Seven leading industrialised nations were considering meeting in the near future, a move that would exclude Russia, which joined what became the G8 in 1998.

Lavrov told European Union foreign policy chief Catherine Ashton that an EU-brokered agreement signed by political leaders in Kiev on Feb. 21 should be the basis for stabilising the situation in Ukraine, his ministry said on Wednesday.

In Washington, Defense Secretary Chuck Hagel told Congress the U.S. military was stepping up joint training through an aviation detachment in Poland and boosting participation in a NATO air policing mission over the Baltic states, Estonia, Latvia and Lithuania – the only former Soviet republics that are members of the Western alliance.

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