Two years on from annexation, Russia's control of Crimea remains fraught with the difficulties
In February 2016 the release of the Ukrainian National Security and Defence Council transcript in the anniversary week of the annexation (28 February 2014) showed just how easy it had been for the Russians to take over the peninsula. The new Minister of Defence Ihor Tenyukh spelled out the situation: “I’ll speak frankly. Today we have no army. It was systematically destroyed by Yanukovych and his entourage.” Ukraine could mobilise only 5,000 troops and needed these to defend Kyiv. The operation was over within days, and Putin would put the cherry on the cake by patronisingly “thank[ing] those Ukrainian servicemen who refrained from bloodshed”. 
But two years after the annexation, the situation is not one of stable incorporation into Russia. Reliable opinion polls cannot be taken, but the Crimean Tatars and many local Ukrainians remain opposed to the occupation, and are therefore targeted for persecution. Since September 2015 the peninsula has been subject to a partial blockade by Crimean Tatar and Ukrainian nationalist activists, exacerbating its many economic problems. Russia continues to subsidise Crimea with money its declining economy cannot afford. And with the growing confrontation between Russia and Turkey, Crimea is suddenly at the centre of many lines of conflict. It is becoming increasingly militarised, it has been a key strategic territory for Russia’s operation in Syria, and an important land mass from which Russia can monitor vulnerable areas in the Caucasus. What’s more, it is a possible site for countermeasures from Turkey and the possibly radicalised Crimean Tatar community.
Vladimir Putin’s idea of an eternal Russian Crimea, “as sacred to Russia as Jerusalem's Temple Mount”, was always a myth. Crimea has gone back in time to the seventeenth and eighteenth centuries, when it was constantly fought over by global powers such as Moscow, the Ottoman Empire and Cossack Ukraine.
The Crimean Tatars
Disappearances, extrajudicial killings, torture and ill-treatment have all been documented in Crimea since the annexation.. The NGO “Crimea SOS” keeps a running count of human rights abuses which it depicts on a map of Crimea. A total of 220 have been recorded as of 9 March 2016. Following the annexation Russia began issuing its own passports in the region. The imposition of Russian citizenship and issue of Russian passports was carried out with great speed in 2014 (one month from 18 March). Administrative barriers made it extremely difficult to hang on to Ukrainian citizenship. An administrative Russian “census” conducted in October 2014 showed a jump in the number of people identifying themselves as “Russians” from 60.4 percent to 65.4 percent, with the number of “Ukrainians” falling from 24 percent to 15.7 percent. According to Crimean Tatar leaders, between 35,000 and 40,000 individuals had left Crimea since the occupation by February 2016, and 17,000 to 20,000 of these were departing Crimean Tatars. Eighteen Crimean Tatars were abducted in 2014, with five missing presumed dead.
After an initial period in which Russia made overtures to the Crimean Tatars about the potential benefits of their rule, the attitude of the occupying authorities towards the Crimean Tatar leadership has grown increasingly hostile. Refat Chubarov and Mustafa Dzhemilev, the elected leaders of the Crimean Tatar representative body the Mejlis, were prevented from returning to Crimea while serving their duties as members of parliament in Kyiv and banned from Crimea for five years for alleged “extremism”.
The occupying authorities have promoted loyalist groups to replace the Mejlis, most of them “political technology” projects. Milli Firka (the “National Party”), Qirim (“Crimea”) and Qirim Birligi (“Crimea Union”) have duly spoken out against “extremism” and the blockade of Crimea. Without any evidence, pro-Russian authorities claim that Crimean Tatar support is evenly split between Qirim Birigli and the Mejlis, although the former is a puppet organisation and the Mejlis was last elected in October 2013. The Mufti has taken a more pro-Russian position, and is under pressure to replace his Spiritual Administration of Muslims of Crimea (DUMK) with the rival “Tavrian Muftiat” – a pro-Russian Islamic group that has links to the radical Lebanese Al-Ahbash sect.
In February 2016 the de facto Crimean Prosecutor Nataliya Poklonskaya began moves to shut down the Mejlis completely. The main Crimean Tatar media outlet, ATR, has already been permanently closed in the peninsula, resuming activities on “mainland” Ukraine. Blanket application of Russia’s new law against “extremism” has been used to close down many NGOs and media outlets during enforced “re-registration” of organisations as Russian. The use of the Russian law against “separatism” criminalises any groups or individuals campaigning to restore Ukraine’s territorial integrity.
In order to fight back against Russian occupation Crimean Tatar activists have been forced to ally themselves with Ukrainian nationalists. The authorities in Kyiv have tried to make up for many years in which they have neglected the Crimean Tatar issue, meeting two long-standing demands which they had persistently raised before the annexation of Crimea. In March 2014, following the annexation, the Ukrainian parliament recognised the Crimean Tatars as an “indigenous people” and the Mejlis as the “higher representative organ of the Crimean Tatar people”. Parliament also classed the 1944 deportation of the Crimean Tatars as “genocide” in November 2015. Nevertheless, radical Crimean Tatars have talked of setting up a new “Crimean Republic” in Kherson, just north of Crimea in “mainland Ukraine”.
The economic situation
Accounts of the economic situation in Crimea since the annexation vary wildly. According to official statistics, which are most likely optimistic, the inflow of Russian money has led to economic growth in Crimea. Official statistics forecast 10.1 percent growth in 2015. Manufacturing and extraction industries are supposedly growing, though official reports omit details. If Russia were to broadcast that it were using Crimea to extract from confiscated oil and gas platforms in the Black Sea, this would be very controversial. Inflation, however, surged to just over 100 percent. Nominal average wages rose 170 percent in 2014, but only by 19.2 percent in real terms, and remained at about half the Russian average. Inflation in Crimea in 2015 was twice the Russian average.
Unofficial accounts paint a completely different picture of the peninsula, albeit by interpreting official statistics. By October 2014, according to one non-government expert, exports were down 80 percent, imports were down by 86 percent and investment was down 86 percent. Retail trade fell from $4 billion to $2.7 billion. Total trade turnover was down from $1.7 billion to only $167 million. After sanctions, Crimea’s only remaining trading partners were Panama, Turkey and Ukraine - until Russia started a trade war with Turkey over the winter of 2015-16. As of summer 2015, 46 percent of “imports” still came from “mainland” Ukraine and 31 percent of “exports” still went to “mainland” Ukraine. This means that the blockade launched by the Crimean Tatars in September 2015 could do even more damage.
Estimates of the total amount Russia has spent on the peninsula since annexation also vary widely. The Russian economist Natalia Zubarevich has calculated that Russia subsidised Crimea with 125 billion roubles ($3 billion) in 2014.
In September 2015 Crimean Tatar activists, supported by Ukrainian nationalists, began a blockade of land traffic just north of the Isthmus of Perekop – the narrow strip of land connecting Crimea and “mainland” Ukraine. Even before the blockade water supply was a problem in Crimea, with 85 percent of local water coming through the North Crimea Canal from the river Dnipro. The blockade also meant that food supplies from “mainland” Ukraine were also limited (though there was some evidence of circumvention of the blockade at sea), forcing grocery prices up in Crimea by 10 percent. The impact of this price rise must be situated in the context of a marginal rise in salary and high levels of inflation in the peninsula.
In November 2015 an explosion at a power station in Kherson complicated matters further by causing an electricity blackout in Crimea. The attack was again attributed to Crimean Tatar activists or their Ukrainian nationalist supporters, though without clear proof. Crimea was blacked out and a state of emergency was declared temporarily. One Russian source estimates that at that point Crimea could only meet 20 percent of its electricity needs locally. The local energy supplier Krymenergo began publishing an energy rationing schedule; electricity cut-offs every few hours have been the norm since November 2015. In December, Russia added an extra emergency supply cable over the Kerch Strait, providing extra capacity of up to 400 megawatts daily. However, a second line will be needed in the longer term if this is to be a sustainable solution. Russia retaliated against these actions by escalating its trade war with Ukraine, and was allegedly behind cyber attacks on the Ukrainian power grid in February 2016.
Mafia and oligarchs
Russia’s policy towards Crimean politics ironically resembles that of Kyiv in the 1990s. The local elite is a fusion of old nomenklatura and mafia groups and has been left free to enrich themselves – for Kyiv in the 1990s this was tolerated as long as the offenders did not support Russia. For Moscow, it is tolerated as long as they do. Crimean “Prime Minister” Sergey Aksyonov and the de facto chair of the local assembly Vladimir Konstantinov keep their networks in firm control. Big Russian business has always been present in Crimea, but has not expanded significantly since 2014. Ukrainian oligarchs who have business interests in Crimea have survived by simply accepting the new rules. Pro-Kremlin figures like Viktor Yanukovych and Viktor Medvedchuk have not had their interests or property expropriated. Ukrainian billionaire Ihor Kolomoisky, on the other hand, seems to have been targeted by the Russian newcomers because of his reputation for financing Ukrainian volunteers fighting in east Ukraine and his role in the now closed Privatbank. No less than 250 of his assets in Crimea have been taken over.
Crimea is as corrupt as it was before 2014. One prominent local businessman Aleksey Chaly was elected as “people’s mayor” at a public meeting in Sevastopol on 23 February 2014, which began the whole “Crimean Spring” (annexation). Despite this dubious claim to fame, at a local level he was a symbol of the link with Russia, and was also a scientist with a reputation as a “cultured oligarch”, who set up an Agency for Strategic Development in Sevastopol during his time as “mayor”. But in December 2015 he resigned, defeated in his attempts to combat the old nomenklatura and mafia. His nemesis as governor, Sergey Menyailo, was one of Putin’s men.
Local Crimean mafia have made contact with their Russian equivalents; but the peninsula has been criminalised for so long that they seem able to hold their own anyway, and indeed are profiting from the inflow of Russian funds and the increase in smuggling opportunities. Crimea hopes to rival other key criminal havens and transit points like Odesa. By government decree, Aksyonov himself is responsible for distributing all nationalised property – a decision which allows few controls against corruption. One commentator described the determination of local elites to control their own patch as being like “some sort of a separatist movement" in itself – “they adopt laws that contradict Russia's federal legislation and scare off Russian investors”.
The threat of sanctions has also kept big business from Russia out of Crimea. Although Aeroflot has reportedly resumed flights, big Russian banks have not moved in. Forty-one Ukrainian banks packed up and left Crimea. Their premises and other assets have now been taken over by the previously obscure Russian National Commercial Bank (RNKB) and Sea (Morskoi) Bank in Sevastopol. These banks were also given the privileged position of distributing state funds. This was clearly a manoeuvre to avoid sanctions. However, when the link between RNKB and VTB were uncovered, they were also made subject to sanctions. A second constraint has been the threat that legal action. Ukraine is planning to sue Russia for $37 billion for illegal seizure of assets in Crimea since February 2014. Claims and counter-claims in Stockholm and The Hague have reached $100 billion.
The main loss Ukraine has sustained is its energy company Chornomornaftogaz (Black Sea Oil and Gas). Its drilling rigs were seized by paratroopers after the annexation. Instead of being snatched up by Gazprom, however, Chornomornaftogaz was taken over by a new local Crimean company with the same name. It may now be extracting resources offshore in the oil fields between Crimea and Romania – Crimea is not as short of natural gas as it is of electricity.
Crimea and Syria
The Russian Black Sea Fleet has been substantially reinforced since March 2014, and Russia has unilaterally abandoned the maximum limits set by the 1997 and 2010 basing agreements with Ukraine. Two new frigates have been added, the Admiral Grigorovich and Admiral Essen, the missile cruiser Moskva and two diesel submarines. In total there will be 30 new ships by 2020. Ukrainian sources counted “more than 200 military units” arriving in 2015, including all types of vessel and various aircraft. Russian Iskander missiles have reportedly been sent to Crimea.
Crimea has been at the centre of Russia’s Syrian intervention since September 2015, for air-bone and naval operations, supply and training. Without Sevastopol and the nearby Belbek airport, Russia would not have been able to sustain the operation for six months – which is one possible reason why the worsening conflict between Turkey and Russia, the threat of further restrictions on air space and the closure of the Dardanelles may have persuaded Moscow to scale its operations back.
Russia versus Turkey
The growing confrontation between Russia and Turkey after the shooting down of a Russian plane in Turkish air space in November 2015 has transformed the strategic situation in the region more generally. In February 2016 Russia conducted large-scale military exercises in Crimea to emphasise the front-line role it could play in any future confrontation.
Ankara in turn has responded to Russia’s diplomatic and economic pressure (as well as its sponsorship of the Kurds) with counter-moves towards its own potential allies in the region - Azerbaijan, Ukraine and the Crimean Tatars. Turkey talked of compensating for lost Russian investments in Ukraine’s military industries after a successful trip by the Ukrainian and Crimean Tatar leadership to Ankara in March 2016. After initially responding with caution over the Crimean Tatar issue in 2014 and 2015, Ankara has now backed the formation of a controversial Islamic battalion in Ukraine from November 2015. The battalion is based in Kherson, from where it could either reinforce the front in the Donbas or the blockade at the Isthmus of Perekop into Crimea, where the Tatars already staged their blockade. Ankara has helped supply arms and uniforms to the group, although the number of recruits is only just in the hundreds. The de facto Crimean authorities responded by increasing checks on Crimean Tatar men aged 18 to 40 who were hoping to cross the Isthmus. Kyiv’s ability to control the battalion is under question (it is sponsored by a major Crimean Tatar businessman), even if it becomes a magnet for Crimean Tatar and other Islamic radicals, undermining a tradition of non-violent Crimean Tatar politics and protest dating as far back as the 1960s.
Crimea may not be the centre of diplomatic attention, which is currently concentrated in east Ukraine, this does not mean that the situation on the peninsula has stabilised. In fact it’s the opposite. Crimea is at the centre of an intense strategic struggle in an increasingly unstable region. It is also helping Russia to export its influence to the Middle East, and possibly the Balkans too.
The EU should not therefore assume that the issue of Russian occupation can be safely left on the backburner. The EU should also ignore claims that sanctions are irrelevant and cannot change the status quo; “island Crimea” was always going to difficult to integrate into Russia proper, and its economy faces severe problems, becoming a haven for criminals and smugglers.
The human rights situation is getting worse, as a major confrontation looms between the occupying authorities and the soon-to-be-banned Mejlis, with possible spill-over effects affecting the chances for peace in eastern Ukraine.
Ukraine’s problems cannot be isolated from one another. What happens in Crimea affects what happens in east Ukraine and what happens in Kyiv – or what doesn’t happen, as the government is constantly distracted (or distracting itself) from real reform. The EU’s non-recognition policy with regards to Crimea is also an important part of its more general policy of supporting Ukrainian sovereignty.
The EU should therefore tighten up the loopholes in the non-recognition and sanctions regime. There can be no solution to the broader problems of the region without paying more attention to Crimea.
 The author is grateful to Ridvan Bari Urcosta for his help with the research for this brief.
 Andrew Rettman, ‘West told Ukraine to abandon Crimea, document says’, EU Observer , 24 February 2016; https://euobserver.com/foreign/132425
 ‘Address by President of the Russian Federation’, 18 March 2014; http://en.kremlin.ru/events/president/news/20603
 Though see the poll at ‘Despite Concerns about Governance, Ukrainians Want to Remain One Country’, Pew Research Center , 8 May 2014; www.pewglobal.org/2014/05/08/despite-concerns-about-governance-ukrainians-want-to-remain-one-country/
 ‘Presidential Address to the Federal Assembly’, 4 December 2014; http://en.kremlin.ru/events/president/news/47173 Presidential Address to the Federal AssemblyPresidential Address to the Federal Assembly
‘OSCE-ODIHR/HCNM, Report of the Human Rights Assessment Mission to Ukraine’, 12 May 2014; www.osce.org/odihr/118476
 See the map at http://crimeamap.krymsos.com/eng/map.html
 See the figures at www.vz.ru/news/2015/3/19/735268.html
 Interview with Mustafa Dzhemilev, 10 February 2016; www.rbc.ua/rus/interview/dzhemilev-voprosu-deokkupatsii-kryma-udelyaetsya-1455039385.html
 Likhachev, ‘Dva goda repressii’, page 3.
 The Mejlis is the plenipotentiary body of the Qurultay, which has been elected every five years since 1991. Local Mejlises exist in every Crimean Tatar settlement.
 ‘50% of Crimean Tatars support "Qirim Birligi": Nimetullaev’, QHA , 23 October 2014; http://qha.com.ua/en/politics/50-of-crimean-tatars-support-quot-qirim-birligi-quot-nimetullaev/132495/
 ‘Results for Elections to Qurultay Known’, QHA , 19 June 2013, http://qha.com.ua/results-of -elections-for-qurultay-known-127731en.html
 ‘”Tavricheskii muftiat” ulichili v sviaziakh s opasnoi livanskoi sektoi’, Islam News , 2 July 2015; www.islamnews.ru/news-466828.html
 See http://minek.rk.gov.ru/rus/index.htm/news/288164.htm
 Communication with Crimean journalists, 13 March 2016.
 Yana Goriunova, ‘Dob’iut li sanktsii ekonomiku Kryma?’, Krym.Realii (krymr.org) , 12 January 2015; http://ru.krymr.com/content/article/26790109.html
 Elena Sergeeva, ‘Ekomomicheskoe padenie Kryma’, Krym.Realii (krymr.org) ,5 January 2016; http://ru.krymr.mobi/a/27467430.html
 Thomas De Waal, ‘The New Siege of Crimea’, The National Interest , 9 July 2015; http://nationalinterest.org/feature/the-new-siege-crimea-13291
 Yuriy Gorodnichenko and Aleksandr Talavera, ‘Effektivna li blokada Kryma‘’, Ukraïns’ka pravda , 10 November 2015; www.epravda.com.ua/rus/publications/2015/11/10/566657/
‘Energosistema Kryma’, http://peretok.ru/multimedia/infographics/energosistema-kryma.html
 See http://gup-krymenergo.crimea.ru/consumers/servarea/techcond/gom-2
 Elena Arakelian and Anastasiia Medyntseva, ‘Krym nepuganykh oligarkhov’, Komsomolskaia Pravda , www.kp.ru/daily/26283/3160865/
 ‘Kak proshla natsionalizatsiia ukrainskikh ob’ektov v Krymu’, RIA Novosti , 27 February 2015; http://ria.ru/economy/20150227/1050081202.html
 Mark Galeotti, ‘Crime And Crimea: Criminals As Allies And Agents’, RFE/RL , 3 November 2014; www.rferl.org/content/crimea-crime-criminals-as-agents-allies/26671923.html
 Sambros, ‘Imitating Chavez’.
 Mansur Mirovalev, ‘Corruption eats Russia-annexed Crimea from within’, Al Jazeera , 2 September 2015; www.aljazeera.com/indepth/features/2015/08/corruption-eats-russia-annexed-crimea-150831120645728.html
 Andrey Sambros, ‘Imitating Chavez: A Year of Nationalization in Crimea’, Carnegie Centre , 19 March 2015; http://carnegie.ru/publications/?fa=59421
 Natasha Doff, ‘Putin v. Poroshenko: European Court Claims Near $100 Billion’, Bloomberg , 23 February 2016; www.bloomberg.com/news/articles/2016-02-23/putin-v-poroshenko-european-court-claims-reach-100-billion
 Falcon Bjorn, ‘Drilling Rigs of ‘Chernomornaftogaz’ Were Captured By The Russian 104th Regiment’s Paratroopers’, Inform Napalm, 17 September 2015; https://informnapalm.org/en/drilling-rigs-of-chernomornaftogaz-were-captured-by-the-russian-104th-regiment-s-paratroopers/
 Dmitrii Boltenkov, ‘Krepost’ Krym’, VPK , 25 March 2015; http://vpk-news.ru/articles/24412
 ‘Ukraine military say Russia deploys Iskander air defense missiles in Crimea’, Kyiv Post , 4 December 2014; www.kyivpost.com/article/content/ukraine/ukraine-military-say-russia-deploys-iskander-air-defense-missiles-in-crimea-374075.html
The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.