QUESTION: All right. I want to go to Ukraine.

MS. PSAKI: Okay.

QUESTION: One, I’m wondering if you were --

MS. PSAKI: Oh, sorry. (Laughter.) Sorry about that.

QUESTION: I’m wondering – yesterday, you said that you weren’t able to verify either of these conflicting – the many numerous conflicting reports about these Ukrainian soldiers.

MS. PSAKI: I do have a little bit of new information on that.

QUESTION: Do you have – yes.

MS. PSAKI: The OSCE observer mission on the Russian border facilitated the movement of 437 Ukrainian troops into Russia on August 3rd. The troops had requested OSCE assistance in opening a humanitarian corridor after being surrounded by separatists and finding themselves without food, fuel, and ammunition. All their attempts to negotiate a cease-fire with the separatists had failed. At least 192 of these servicemen returned to Ukraine on August 4th. The OSCE was not made aware of any asylum requests.

We also would note that the Russians have committed to return the rest of the troops as well. That’s the latest number that we have at this point.

QUESTION: Okay. I mean, this situation seems bizarre, no? I just – what I mean, so you have a situation where the Ukrainian army that you support is fighting separatists who you oppose but who are supported by Russia. And somehow the OSCE negotiates safe passage for these Ukrainian troops into Russia where they are not molested; they’re taken care of apparently. And then they – and then some of them go back.

This would seem to me to suggest that the situation is perhaps less – recognizing that there is actual shelling and fighting going on in certain places, what does this tell you about the situation between Ukrainian troops and the Russian troops on the other side of the border? Does it tell you anything?

MS. PSAKI: I’m not sure I would venture to do any broad analysis here, given the other events that have continued to happen on the ground.

QUESTION: Fair enough.

MS. PSAKI: Obviously, in this case the OSCE obviously played a significant role here in assuring their safe passage, and certainly we wanted to note that the Russians have agreed to return the troops.

QUESTION: Okay. So that’s a positive thing?

MS. PSAKI: This particular incident, certainly.

QUESTION: Right. Do --

MS. PSAKI: But obviously, there are a range of other issues that we remain concerned about.

QUESTION: Clearly. I think you’ve – yes, you’ve made that very obvious. But do you think that in the absence – if the OSCE hadn’t been there, are you concerned that there might have been – that this might have led to people dying, bloodshed?

MS. PSAKI: Well, it’s hard to know, Matt. But I mean, it was a situation obviously where they were surrounded by separatists and they had no food, fuel, ammunition.

QUESTION: Right.

MS. PSAKI: So it certainly was not a desirable --

QUESTION: Your position --

MS. PSAKI: -- situation to be sitting in.

QUESTION: Okay. So your position would be then that they – this should never have happened in the first place because there shouldn’t be a separatists attacking the army?

MS. PSAKI: Well certainly. The prime – the, of course, primary point is that, yes.

QUESTION: All right. So the other thing that you were asked yesterday about this Russian military – aviation military exercise that’s going on.

MS. PSAKI: Mm-hmm.

QUESTION: You said you were – the U.S. was very deep – was deeply concerned about it, that it’s provocative. Well, the Russian defense ministry says that this is – this exercise is not taking place really close to the Ukrainian border. It’s a thousand kilometers away. And I’m wondering if given that, if you still have deep concerns about this being a provocative exercise.

MS. PSAKI: Well, I think, Matt, the point I was making yesterday that I think I would certainly stick with is that obviously the conditions and the circumstances that any of these exercises are taking place in are a relevant factor, and that when we’re in a situation where we’re trying to reach a cease-fire where the Russians say they want to reach that, these sort of exercises send a different message.

QUESTION: Right. But I mean, it’s really not close to the Ukrainian border. So if you’re deeply concerned – I mean, how far away can the Russians do military exercises without drawing the concern of the United States? I mean, do they have to be in Vladivostok? I mean, how far away from --

QUESTION: (Inaudible) the Czech Republic?

QUESTION: I mean, it --

MS. PSAKI: I don’t have an exact kilometer (inaudible) measurement.

QUESTION: Siberia? Where do they – where exactly is it that the Russians can have military exercises that won’t – that you don’t think – or that you won’t have concerns are provocative to the situation in Ukraine?

MS. PSAKI: If there are exercises in Siberia, I’m happy to speak to that at the time.

QUESTION: Okay. But you still have – you have concerns about this exercise and it being a provocative action, is that correct?

MS. PSAKI: Yes.

QUESTION: Despite the distance, the rather large distance?

MS. PSAKI: Yes.

QUESTION: Okay.

QUESTION: Jen, the Polish foreign minister is very concerned about these exercises and says that Russia is preparing to invade Ukraine, and that has generated a lot of news. The markets are way down today. Do you have any comment on that?

MS. PSAKI: Well, I think there have been a range of reports and comments out there. I think it’s – there are a few things that we do know. Additional Russian forces continue to arrive along the Ukrainian border, and Russia continues to reposition forces throughout the region. We don’t have specific numbers from here to share, and specifics on troop numbers is difficult to calculate. So I’m not going to make a prediction from here, but certainly the fact that troops continue to arrive is something that we are watching closely and remain concerned about.

QUESTION: And a few hours ago, President Putin said that he was going to develop a response to the sanctions put on his country by the United States and the EU, and that’s also held – the stock market is down 1 percent as we speak. I thought these sanctions were supposed to hurt Russia, not the United States.

MS. PSAKI: Well, I think, one, Lucas, I think the vast, vast, vast majority of the hurt is being felt by Russia. As you noted – or I don’t think – but related to it is the central bank’s statement in Russia that was made as well. I mean, our goal here remains continuing to impose costs to increase the – to impose sanctions to increase the costs and – on Russia and on – and to have an impact on Russia’s actions. And obviously, with everything from the amount of nearly $100 billion in capital is expected to leave Russia, the impact on the energy, financial, and defense sectors, they’re all feeling pain. And that’s, of course, what we are hopeful will have an impact.

QUESTION: But you say you want to affect Putin’s actions, but you just said that Russia is putting more forces along the border. So how are the sanctions making him change his calculus?

MS. PSAKI: Well, I think with every week that passes, we’re seeing more of a dire impact on the Russian economy. And obviously, President Putin has a choice to make. Does he care about the economy and the middle class people and people living in Russia, or does he care about continuing to take aggressive actions as it relates to Ukraine?

QUESTION: Can I just follow up on one thing?

MS. PSAKI: Mm-hmm.

QUESTION: In Lucas’s question he referred to the exercise causing the Polish concern, but you’re talking about – when you say troops, Russian troops moving towards the border, that is something entirely separate from these military --

MS. PSAKI: Separate.

QUESTION: -- from the aviation exercise, correct?

MS. PSAKI: That is entirely separate, yes.

Do we have any more --

QUESTION: Next question, please?

MS. PSAKI: One more on – do we have any more on Ukraine? Go ahead.

QUESTION: One more.

MS. PSAKI: Go ahead, Arshad.

QUESTION: Excuse me if I missed this, but were you asked about the Russian media report saying that Russia is considering barring European airlines from flying over its territory, from flying over Siberia, I think, to go to the Far East?

MS. PSAKI: Well, I think if Russia doesn’t like the sanctions that have been imposed and the impact they’ve had, then the more productive response would be for Russia to stop sending arms and fighters into Ukraine. And that, we feel, is the more appropriate response they could take.

QUESTION: But does it bother you that they seem to be considering retaliation?

MS. PSAKI: Well, I think – sure, but I think our view is that if they want to bring an end to the sanctions, there are clear steps they can take, clear – a clear path they can take.

QUESTION: Well, but Jen, I mean, are you – you’re approaching this with the idea that they want an end to the sanctions. Are you convinced that they do? They certainly don’t have – they certainly haven’t been acting that way, have they?

MS. PSAKI: Well, Matt, I think, again, because the pain has been building and we’ve seen the impact on the economy only growing over the course of the last several weeks, we think there are serious decisions that President Putin will need to make.

QUESTION: As far as these sanctions are concerned if U.S. is asking any other countries not to do business with Russia?

MS. PSAKI: Well, I think, Goyal, you’ve probably seen a range of sanctions that have been put in place by not just the EU, but the Japanese recently put in place some sanctions. So there has been a strong response from the international community.

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