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Russia-France Mistral dispute

French proposals on termination of Mistral contract don't suit Russia — media

The proposals imply that about €785 million will be returned to Russia, which the country will only be able to obtain after its government issues a permission to sell the vessels to any third party

© AP Photo/Laetitia Notarianni

MOSCOW, May 15. /TASS/. France has drafted and sent Moscow proposals on termination of a French-Russian agreement on construction of Mistral helicopter carriers for Russia, the Kommersant business daily reported with reference to "sources in the sphere of military-technical cooperation."

These proposals "imply that about €785 million will be returned to Russia, which the country will only be able to obtain after its government issues a written permission to sell the vessels to any third party without any reservations," the newspaper said.

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It said "Moscow does not agree with such an approach," assesses its "expenditures and losses in connection with the broken contract at €1.163 billion and does not intend to issue any permits for re-export until the money is returned."

"The option with the return of the sum mentioned in the French proposal does not suit us at all, and Deputy Prime Minister Dmitry Rogozin already informed French Defense and National Security Secretary General Louis Gautier, authorized to hold talks on their part, of that. They are now preparing their arguments," the source said.

According to assessments of the French weekly Le Point, annulment of the deal to supply Mistrals to Russia may cost France €2-5 billion in connection with failure to implement the contract.

The €1.12-billion contract to build the Mistral amphibious assault ships for the Russian navy was signed in June 2011. In case it is not implemented, France will have to pay Russia a penalty fee.

The first Mistral, the Vladivostok, was floated in October 2013. It was expected to be handed over to Russia by the French side in the fall of 2014, but the handover did not take place.

The second Mistral, the Sevastopol, was to be delivered to Russia in October 2015, but the deal was suspended too.

France suspended the delivery of Mistrals to Russia as part of a package of sanctions the European countries imposed on Moscow for what they claimed was its alleged role in destabilization of southeast Ukraine.

Russia has constantly dismissed allegations that Moscow could in any way be involved in hostilities in Ukraine’s southeast.

Russian deputy premier Rogozin said May 9 that France can’t make decisions on the sale of Mistral helicopter carriers without Russia’s consent as the Russian Federation has the end user certificate.

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