Steven Pifer is a senior fellow at the Brookings Institution and a former U.S. ambassador to Ukraine. The views expressed are his own.

(CNN) Vladimir Putin lies. Blatantly. Publicly. And, apparently, without chagrin. But a year since the annexation of Crimea, what does that mean for the West's ability to deal with him regarding Ukraine ?

In February 2014, "little green men" -- the Ukrainian term for professional soldiers wearing Russian combat fatigues but no identifying insignia -- seized key installations and checkpoints around Crimea. The Russian President's website reported the following exchange at a March 4, 2014, news conference

Question: "The people who were blocking the Ukrainian army units in Crimea were wearing uniforms that strongly resembled the Russian army uniform. Were those Russian soldiers, Russian military?"

Question: "But were they Russian soldiers or not?"

Vladimir Putin: "Those were local self-defense units."

Within weeks, Putin admitted they were Russian troops. At the same news conference, Putin said he saw no possibility of Crimea joining Russia and said Moscow would do nothing to "provoke" that. Two weeks later, he presided as the Russian parliament passed legislation annexing Crimea. In a documentary shown on Russian television last Sunday, Putin said he gave the order to take Crimea on February 23, 2014

So, it is clear that Putin can and does lie. But with that in mind, how should Western leaders who must deal with him actually do so?

First of all, they should bear in mind Ronald Reagan's "trust but verify" dictum. Second, while Putin may play fast and loose with the truth, he appears to be a rational actor who calculates costs and benefits. The challenge for the West is to structure agreements so that it remains in his interest to observe them.

Take the 2010 New Strategic Arms Reduction Treaty, which limits U.S. and Russian strategic forces to no more than 1,550 deployed strategic warheads on 700 deployed missiles and bombers. The agreement requires data exchanges, notifications and on-site inspections. The Russians might be able to cheat a little, but not in a way that would give them a militarily significant edge without the United States having time to react.

And the Kremlin has incentives to observe the treaty. If Russia violated it, the United States could relatively quickly add 1,000 strategic nuclear warheads to its deployed ballistic missile force.

The U.S. government concluded last summer that Russia violated a 1987 treaty by testing a banned intermediate-range ground-launched cruise missile. As far as is publicly known, Moscow has not taken the more serious step of deploying the missile.

Washington now seeks to persuade Russia to come back into full compliance and has threatened a variety of costs, including possible military countermeasures -- on top of the opprobrium of Russia's European and Asian neighbors, who would be targeted by such a missile. (It could reach little, if any, of the United States.) The costs of noncompliance for Moscow could be significant.

The question now topping the agenda is whether the West can trust any Russian promises regarding a settlement to the conflict in eastern Ukraine. Sadly, the track record offers little encouragement. Russia effectively did nothing to implement the first Minsk ceasefire, which was agreed to last September. It did not withdraw its military equipment or secure the Ukraine-Russia border.

The Minsk II ceasefire reached in February fared little better at the outset. A Kremlin spokesman dismissed the idea that Russia was a party to the agreement -- even though Russia's ambassador signed it. Russian forces backed those of the separatists attacking the Ukrainian town of Debaltseve in the first days after the ceasefire supposedly had begun. (Putin's continual denials that Russian troops are in eastern Ukraine have zero credibility after the Crimea case.)

Since then, the ceasefire seems to have taken better hold, though it remains fragile at best. At the same time, concern has grown that the port city of Mariupol could be the next separatist/Russian target.

What can the West do to stabilize the ceasefire? An assault on Mariupol (or elsewhere in eastern Ukraine) would probably trigger severe costs in the form of a new round of Western economic sanctions on Russia and the provision to Ukraine of greater military assistance, including defensive arms. As Hans Binnendijk and John Herbst recently suggested in The New York Times, the United States and European Union should tell the Russians now what costs would be imposed if there is an assault on Mariupol, in order to help deter such an attack.

The West may not be able to trust Putin on the ceasefire in eastern Ukraine. But it can do more to raise the potential costs and affect his calculation, and hopefully dissuade him from further military action that would probably bring down the entire Minsk II agreement.