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Crisis in Ukraine; Russian Duma Drafts Response to Western Sanctions; U.N. Envoy Detained in Ukraine Apparently Released; Meeting in Paris; Ukraine's Prime Minister

Aired March 5, 2014 - 12:30   ET



ASHLEIGH BANFIELD, CNN ANCHOR: Russia is warning other countries, particularly in the West, to butt out of its intervention in the Ukraine or else it will cost you.

In Moscow today, lawmakers are actually going so far as to draft up a law, a Russian law, that would -- or at least analyze whether they can, that would allow the Russian government to just grab hold and seize American and European companies, and American and European assets and properties if Russia ends up getting slapped with sanctions over what's going on in Ukraine right now.

Got two key reporters on this topic. Our correspondent Phil Black in Moscow right now and our chief business correspondent, Christine Romans here in New York.

Both of you have a very interesting perspective on this. To Russia first, Phil Black, again, it's a lot of tough talk. At the same time, there is diplomacy effectively going on.

How likely is it that Russian law would allow this, or whether that even matters?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Well, if sanctions are implemented against Russia, Ashleigh, you know, we know that Russia will retaliate, and they'll retaliate as strongly as they possibly can because that's their style, basically.

Recent history shows, the talk from officials here shows, that when they come under pressure from the international community, when they believe that they are being harassed unfairly, they come back with what they call an asymmetrical response, something that is much bigger, much stronger, or perhaps coming at the other side in a way unexpected.

In this case, Russia's ability to influence the American economy is kind of limited, so what they're talking about here, this one idea that we know of, we're sure they're talking about others, is the ability to hit the companies that have been investing in this economy directly.

This would obviously be very significant for those companies, some of them big multinational, some of them much smaller, but it would have a very impact -- very powerful impact there.

We know that they behave this way, because we have seen it before. We saw that when the U.S. Congress passed the Magnitsky Act, a law that was designed to punish Russian human-rights abuses in this country, that the Russian parliament responded with a law banning the adoption of Russian orphans by American parents.

Two very unrelated issues, but a very strong response, one that Russia believes send sent the message that said Russia is an independent country, don't mess with our affairs.


BANFIELD: Phil, hold that thought for a moment.

Christine Romans, the first thing I wondered about when I heard that news was, is that crazy? Just because why would you bite the hand that feeds you? Effectively, would there be these American or, you know, all these multinationals saying get your money out while you can?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: It's the hands that feed each other. That's what's so interesting about this. You look at how the past 20 years Russia has convinced the world we're an open place to do business. They have made themselves as this modern place, as modern as New York or London or other big -

BANFIELD: Stable, international -

ROMANS: -- stable international centers.

And if this goes through as these draft laws suggest, it would send a chill through that, and actually hurt even people like Vladimir Putin, if he has any investments in his own companies in that country.

Let me just show you this. There's -- Europe would really be hurt, $462 billion in trade between E.U. and Russia. That's way more than U.S. trade, right? So that's how you have to go after those multinational companies to really hurt the U.S.

Russia is important to U.S. companies, because, look, U.S. foreign direct investment into Russia, $14 billion. Those are companies who have invested $14 billion. That's even more than the E.U. does.

Look at these American companies that do business there, Boeing, Cargill, Ford, General Motors has a big plant in St. Petersburg, ExxonMobil. All of them have a very big presence, so we asked (inaudible).

But Boeing, you know, watching developments closely, they tell us in a statement to determine what impact. This is the kind of language we're getting from a lot of companies. They are watching.

They will not speculate about what kind of reaction there could be, but they're watching very carefully.

We don't know what the U.S. and Europe --

BANFIELD: Speaking of diplomacy, by the way, they've got to watch every word they said to you --

ROMANS: Oh, absolutely.

BANFIELD: -- because this could shatter stock prices.

ROMANS: Absolutely.

BANFIELD: This could shatter the markets here, there, all around the world.

ROMANS: And shatter confidence in doing business in Russia.

BANFIELD: Well, doesn't this shatter their confidence when they have direct threats from the prime minister that we're going to see your assets?

I would never invest in a country --

ROMANS: We don't know what the U.S. and Europe are planning in terms of sanctions. Maybe they're going to target key Russian authorities or people who are running key, Russian, state-owned businesses and confiscate their cash and assets around the world.

Remember, some of these corporate titans in Russia have diversified in part because of the uncertainty in Russia. They have diversified with all kinds of holdings around the world. It's a fascinating place to be, especially 20 years into Russia trying to convince the global marketplace that they do business just like everyone else.

BANFIELD: It just sounds so self-destructive. I get what he's trying to do, fight tit-for-tat, but this just sounds so self-destructive in the end.

ROMANS: It wouldn't be good for markets.

BANFIELD: It wouldn't be good for markets.

All right, Christine Romans, thank you. Phil Black in Moscow for us, thank you, as well. He's getting the story for us on a regular basis and doing an excellent job, all of our overseas correspondents working very, very hard and doing a great job.

I also have new information on the U.N. envoy who was effectively -- I don't want to see roughed up, but certainly intimidated by armed gunmen and held in a cafe.

I've got updated information. Right after the break, I'm going to get it to you. Stay tuned.

(COMMERCIAL BREAK) BANFIELD: All right. I've got more information as this U.N. envoy, Robert Serry, has been at the top of our news today. But more information on what's actually been developing in Crimea.

As the story broke, that man with the blue tie, Robert Serry, U.N. envoy to the Ukraine, was intimidated and approached by 10 to 15 armed men who took him to a car, held him at gun-point, prevented him from leaving.

He was then somehow taken to a cafe, and blocked from leaving, as well. And I can tell you that there was a representative from ITV who was with him at the time who has been sending out a series of tweets that may give us some resolution to this.

The ITV representative's name is James Mates. I'm going read these tweets in succession for you. First one is, "Robert Serry has now agreed to go straight to the airport and end his mission in Crimea."

The second tweet is, "Crowd chant, Russia, Russia, as U.N. envoy leaves coffee shop and scrambles into waiting car."

The third tweet is "Path of envoy's car blocked by protesters chanting Putin, Putin."

Fourth tweet came out, "Car moves slowly off to cries of Crimea, Russia."

Fifth tweet, "Robert Serry finally on his way to the airport, police having forced a way through an angry crowd."

And the last tweet that James Mates from ITV sent out, "Very unpleasant incident over. Robert Serry said very happy to leave Crimea if it helped de-escalate the situation."

We're also getting some reporting that Mr. Serry requested that the ITV representatives remain with him. I can only presume that is for his safety, or at least for his communication channels to the outside world.

But the picture you're seeing is courtesy of ITV. I'm not 100 percent sure if the person on the right-hand side of the screen is Mr. Mates. It's hard to tell from his tweet photograph and then, of course, from his profile tweet photograph, as well.

But I've got a couple more tweets that I've got here that I'm going to read for you, and, again, this photograph that you're seeing is one of the very first photographs that he sent out. You're going to have to bear with me as I try to digest some of this information live.

Some of the tweets that we're now getting, some really dramatic pictures this evening from the shooting and standoff at Belbek Airbase. I apologize, that is an older tweet of his.

Let me move to some of the more recent tweets. "With Robert Serry now. Not kidnapped, but held in coffee shop. Some men outside prevent him from leaving." And then, "Special rep is waiting in coffee shop for help. He asked us to stay with him, and keep filming."

"U.N. special adviser Robert Serry had been visiting navy commander when his car was blocked. Standoff followed."

Next tweet, "He refused to go with the men blocking the car, got out, and walked until he found coffee shop. He's asked ITV News team to stay with him."

Next tweet, "U.N. special envoy Robert Serry's assistant says she saw at least one man with a gun among group who blocked his car." Now, that's different from some of the other reporting that is 10 to 15 armed gunmen.

I'll continue with the tweets. "Outside coffee shop are men are in combat fatigues blocking the door. Some wear pro-Russian black and gold arm band, not allowing anyone in/out."

Next tweet, " Robert Serry has now agreed to go straight to the airport and end his mission in Crimea." And then the succession after that are the tweets that I had just read for you.

That looks like effectively as much of a play-by-play as we can get you courtesy of ITV's James Mates, who was with the U.N. envoy, Mr. Serry, as all of this began to unfold.

The initial reports had come in, there was an envoy who had been kidnapped. If you call being blocked and unable to leave a coffee shop as a U.N. Envoy anything other than kidnapped, say what you will. But this is distressing.

By the way, this envoy is one of Ban Ki-moon's envoys sent to this mission, to the Crimea. He was send to -- I believe he was sent to Kiev originally and then moved his way through from there.

But I want to -- I want to just get Jim Sciutto up if I can. I'm not sure. Jim, are you available to comment on this? All of this is coming in as we speak.


BANFIELD: You heard that succession of tweets I just read from the ITV?

SCIUTTO: I did. I did. And listen, I think it's worrisome. It's not necessarily surprising.

You have all these emotions being stirred up in those parts of Ukraine, a lot by Russian propaganda, a lot by frankly having a lot of guns with -- guys with guns on the ground there, outside of their bases, some in uniform, some in these ad hoc kind of defense groups made up of pro-ethnic Russians in the area.

And you also have some people who genuinely feel that these protests that toppled the elected government in Kiev were done by law-breakers, right, or that it was instigated by the West, that sort of thing.

So to see them, you know, let that anger out against a U.N. official who they will see as identified with the West, I think it's -- what it is, it's a reminder that you have a very volatile mix on the ground there.

You have these emotions being stoked up for political effect by the Russians. And that's a dangerous thing to do because once they are stoked up, it's hard to put that genie back in the battle.

BANFIELD: All right, so let's move on as we - you know, hopefully this has resolved itself if Mr. Serry is on his way to the airport. Resolved -- if you want to call it resolved. I mean a U.N. envoy feeling as though he's being chased out of the country he was there to represent or at least to observe is distressing to say the least.

And all of this as top level diplomacy is about to play out. I think we're only moments away right now, Jim, from the meeting between Sergei Lavrov, the Russian foreign minister, and the United States Secretary of State John Kerry. As we await those pictures, I may have to interrupt you, so pardon me if I do, but maybe set the stage a little bit for what happened this morning and what may be about to happen now.

SCIUTTO: Well, this is what we've been waiting to happen for some time. What the U.S. officials have been waiting for, direct contact with the Russians and also getting direct contact between -- not just between the U.S. and Russia, Kerry and Lavrov, but also between the Ukrainian side, this current interim government there, and the Russians, as well. That's still what hasn't happened.

So Kerry and Lavrov had their pull-aside earlier. Now they're going to have a more formal sit-down. And what we're hearing is that the real goal of this is to also get the Ukrainians at the table so all the parties are there and they're discussing the way out, the off-ramp. What's going to satisfy Russia's concerns, what's going to de-escalate this crisis.

Meanwhile, while they're taking this diplomatic track, they are amping up the pressure from the financial side and on the military side. On the military side first, you have more U.S. aircraft going to the Baltic states. That's to the north of Ukraine bordering Russia, NATO allies. You have an air wing that's been in Poland, just to the west of Ukraine, also a NATO ally that's being extended. And later in the week, you're going to have a U.S. ship go into the Black Sea, previously scheduled. But again, you know, sort of a pincer movement showing the American commitment to that area, showing strength.

And another bit of pressure on the financial side, talk of sanctions. You have the Senate Foreign Relations Committee tomorrow that's going to vote on a non-binding resolution, but a resolution that has some very punitive measures in there, sanctioning Russian individuals, Russian banks, Russian companies. Just to remind, as the president has said repeatedly over the last week, that there should be costs for Russia's invasion of Ukrainian sovereign territory. BANFIELD: Sure. And the Russian president said there should be costs for anybody who wants to impose sanctions on my country. And you're going to have your assets freezed.

SCIUTTO: Absolutely.

BANFIELD: I mean there is just this ridiculous financial war of words. Maybe not so ridiculous. Maybe that's the solution to all of this. The financial war of words at least stops the guns from fighting.

Jim Sciutto, national security, stand by if you will, for a moment, and thank you for that.

I also want to get Elise Labott up, who has been on the road. She's traveling with the secretary of state. She is currently in Paris and has been reporting for us all throughout the night because it is night where you are and it has been a very busy day. We're only halfway through our day, Elise. But as the secretary gets ready to host this meeting with Sergei Lavrov, set the stage and let us know what the mood is there. What that pullout meeting actually yielded, if anything, and if the Ukrainians actually want to stick around for any of this.

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: Ashleigh, this is actually the third meeting that Secretary Kerry has had with Foreign Minister Lavrov. As you say, they met earlier today with a group of foreign ministers from U.K., France, Britain, Germany, all trying to get Minister Lavrov to sit down with the Ukrainian foreign minister.

Secretary Kerry met huddled again with Foreign Minister Lavrov and now they're meeting for a third time as we speak, all in an effort to get Russia to sit down with the Ukrainian foreign minister, calling it a real test as to Russia, whether Russia is willing to de-escalate the situation.

They want to try and get these international monitors on the ground, try and get some dialogue going and saying, listen, we understand that you have important concerns and interests in Ukraine, particularly in the Crimea. Let's get those monitors in. Make sure that nothing is going on. Prove to you that Russian interests are being protected and pull back from the brink, Ashleigh.

BANFIELD: All right, Elise, keep an eye on that meeting for us and alert us exactly to the time that we are able to get our first images of the secretary of state, either with Sergei Lavrov, foreign affairs minister of Russia, or if there is actually any kind of comment that's going to be made post meeting. And let's hope for that because, at this point, every word is gold in this standoff.

I want to take a quick break. But when we come back, what about that off-ramp? Weren't we talking about an off-ramp yesterday? And how much of the word off-ramp is going to be part of the ongoing discussions today while diplomacy works its way, and at the same time, threats continue all over the world, including in America. Back after this.

(COMMERCIAL BREAK) BANFIELD: Our continuing coverage of the crisis in Ukraine. We've got two significant developments that are about to get underway. And we're watching both of them. We're going to bring them both live to you when they happen. One is a NATO press conference that is now about 25 minutes overdue. So we're continuing to watch for that. You can see the empty podium and no speakers. And when they speak, you will hear them.

And maybe even more significant for this American domestic audience is what the secretary of state is about to say when he emerges from a very significant meeting with his counterpart. The Russian foreign minister, Sergei Lavrov, is either set to or meeting very much at this moment with John Kerry, the secretary of state of the United States, in Paris.

This is a very significant face-to-face meeting. There have been a couple pullout meetings, as Elise Labott reported earlier on today. Pullout meetings, meaning almost drive-byes, because they were meeting with other things with other people. But this is an sit-down - an official sit-down between the United States foreign representative and the Russian foreign representative. A person who's not in that meeting right now, the Ukrainian representative.

And whether there's going to be one of these face-to-face meetings between the Russians and the Ukrainians remains to be seen, which is why we want to watch very carefully what the secretary of state has to say when he comes out of that meeting, if anything at all.

In the meantime, there are a couple of things that are happening, as well. There is a significant development on the Ukrainian front, because our Matthew Chance was able to sit down with the new Ukrainian prime minister and have a significant interview about the state of affairs there. He joins me live now.

And I can see that it is a foggy night. It is late where you are. Could you digest for us the significant talking points that you were able to glean from the prime minister and where the circumstances stand right now from where you're standing, vis-a-vis what's going on in Paris.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, well, obviously, the emphasis is very much on the diplomatic process at the moment. It was a very strange interview that we had, as a matter of fact, with the interim prime minister of Ukraine.

Arseniy Yatsenyuk is his name. He's only 39 years old. He's very new in this job. He's only been doing it for a matter of, you know, a week or so. And clearly feeling a lot of pressure. His country's at the center of an international storm. It's on the verge of bankruptcy. And, of course, elements of it have been invaded by its giant neighbor, Russia. So, obviously, a very pressurized job.

A lot of emphasis on diplomacy taking place in Paris, elsewhere as well. It emerged that in the past few days or so there has actually been a telephone conversation between Prime Minister Yatsenyuk of Ukraine and his Russian counterpart, Dmitry Medvedev, the Russian prime minister, in which, according to Yatsenyuk, he made the point that it was unacceptable what Russia had done and called on it to tackle the crisis with diplomacy.

At the same time, the prime minister made it quite clear to me that there would be consequences. There are other options should diplomacy fail. Take a listen.


ARSENIY YATSENYUK, UKRAINIAN PRIME MINISTER: We have just two options on the table. The first one is a political option. Another one is military. I believe that the right one is to use all diplomatic and political tools to tackle the crisis and to stop the invasion.

CHANCE: Are you saying that if diplomacy fails, the possibility of war with Russia is still on the table as far as you're concerned?

YATSENYUK: I do not support any kind of military force or military actions. As for me, this is the way to nowhere.


CHANCE: Well, one of the things the U.S. secretary of state wants is direct talks between Ukraine and Russia. At the moment, though, it's the Kremlin that's not playing ball, Ashleigh.

BANFIELD: All right. We'll continue to watch. An excellent job securing that interview. Thank you, Matthew Chance, live in Ukraine for us.

And I just want to reiterate, that CNN has our live cameras trained on two news conferences that were awaiting from both NATO and from the secretary of state, John Kerry. He's expected any moment. So as we continue our live coverage, I'm going to hand over the baton to our Wolf Blitzer, and that's starting right after this quick break. Thanks for being with us.