Comment: Ukraine and EB5

Table of Contents:
1) Military Situation
2) Geopolitical Situation
3) Military Scenarios
4) Consequences on EB5 in Congress

1) Military Situation

  • Russia is poised to attack Ukraine from 3 sides: South, East & North: Each of the prongs has 30,000 to 40,000 troops of a Combined Arms Army which is roughly equivalent to one US Army Corps. This is almost the entirety of Russian offensive capability
  • The above is supported by a total naval blockade of Ukraine with the combination of three Russian sea fleets: Baltic, Northern and Black sea fleets.
  • Massive air force capability including bombers that are nuclear capable has been deployed

2) Geopolitical Situation

  • Geopolitically, Russia appears to be trying to destroy or seriously weaken NATO--Ukraine appears to be only a pawn in this process. 
  • The key objective of Russia appears to be Germany. NATO without Germany is inconsequential. The German economy cannot be disentangled from the Russian economy at this time.
  • The threat of an attack is a far more potent geopolitical weapon than an actual attack.

3) Three Military Scenarios

  • There are three scenarios of Russian military action of increasing level of intensity.
  • No Military Action: Russians take no military action
  • Low Intensity: This is most likely. Russians may attack only from the East in the Donbass region. The region is already controlled by Russia through their separatist allies in Donbass.
  • High Intensity: Russia may attack on all three fronts, most importantly from the North attacking Ukraine's capital Kiev--demolish the current government and install a Russia friendly government.

4)  Consequences on EB5 in Congress

  • Omnibus Appropriations: Which military scenario Russians choose will have a major impact on the timing of appropriations, because appropriations involve very intense and extended negotiations--and with Congress more preoccupied with Russia if they choose the High Intensity aggression, the timing of appropriations is likely to slip. Our analysis is that (a) If Russians take no military action, appropriations will happen in March (b) If Russians choose Low intensity military action, appropriations will happen in April (c) If Russians choose High intensity military action, appropriations may be delayed till May.
  • Impact on RC Reauthorization: If Russia takes military action, the topmost priority of Congress will be to give President Biden everything he needs to counter Russia. Congress will also be very responsive to American public opinion about the Ukrainian crisis. All other priorities–even the Supreme Court nomination–are likely to be delayed. RC reauthorization is not high on the list of Congressional priorities. If there is no military action and hence appropriations proceed on schedule, there is a good chance that some form of RC reauthorization can be done in March or April. But if there is high intensity Russian military action, Congress may not get to RC reauthorization till the second half of 2022 or beyond. 

Stay tuned to ILW.COM for the latest on RC reauthorization..

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