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Press review: US embassy’s Jerusalem move sparks storm and EU firms fear countersanctions

May 16, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Wednesday, May 16

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© EPA-EFE/ABIR SULTAN

 

Izvestia: US embassy move to Jerusalem, Israel’s crackdown on protests split global community

The events that followed the decision to relocate the US Embassy to Jerusalem have divided the international community, Izvestia writes. In response to Israel’s crackdown on Palestinian demonstrators and clashes that have left over 60 people dead, Turkey and South Africa recalled their ambassadors from Israel for consultations.

On the other hand, some other countries plan to follow Washington’s suit and relocate their embassies to Jerusalem. For one, Paraguay will officially relocate its embassy as early as next week, Paraguayan Ambassador to Israel Max Haber Neumann, told Izvestia. "We are going to act according to schedule, the relocation will take place next week," he vowed.

Paraguay is the third country after the US and Guatemala, which declared its intention to relocate its embassy to Jerusalem.

In addition, the Honorary Consulate of the Czech Republic is expected to open in Jerusalem next week, Czech Foreign Ministry’s Spokesperson Michaela Lagronova informed the paper. According to the spokesperson, the consulate operated in Jerusalem until 2016 when the then Honorary Consul died. So, the issue at hand is its reopening, she stressed. This is expected to happen next week, as the Honorary Consul, an important Israeli entrepreneur, has already been chosen, Lagronova pointed out.

Prague’s stance has become a kind of challenge to the European Union, the paper notes. Most of its member-states criticized both Washington’s decision to relocate its embassy to Jerusalem and the Israeli military’s actions against Palestinian protesters. At the same time, Romania and Hungary said earlier that they also could relocate their diplomatic missions to Jerusalem.

 

Kommersant: Duma’s countersanctions bill may jeopardize EU businesses’ future in Russia

EU businesses are very concerned about the wording of a new bill unanimously approved by the State Duma (lower house of the Russian parliament) on Tuesday. The bill expands the president’s and the government’s powers to impose restrictions in response to "unfriendly US actions" and envisages penalties for a new type of crime, that is, "actions to enforce foreign sanctions" and "actions conducive to" imposing anti-Russian sanctions.

European companies working in Russia are facing a difficult dilemma - either violate US sanctions and be targeted by them or comply with them and face criminal proceedings in Russia, Kommersant writes.

Mattias Schepp, Chairman of the Board of the Russian-German Chamber of Commerce, is certain that Russia’s economy will ultimately be affected by that law, if German companies contributing to its modernization have to leave the market.

"The law’s authors perhaps just did not think that ‘legal entities registered in Russia’ can apply to any structures, including, for example, European companies. In practice, that could mean the departure of European businesses from Russia, primarily banks," Kommersant’s businesses source stressed.

The bill has little effect on the state of affairs with the sanctions that have already been imposed, since it has no retroactive effect, says Alexei Panich, a partner with Herbert Smith Freehills. "However, if you sign a contract as a Russian structure of a Western company, that is undoubtedly going to work, since you won’t be able to abandon the deal. This is a serious risk, as a result of which Western companies will be very cautious and will at least avoid inking long-term contracts," the paper quotes him as saying.

 

Izvestia: Cryptocurrencies to become part of Russia’s legal framework

The State Duma (lower house) Nation-Building Committee is expected to approve an initiative on Wednesday legally enshrining basic digital economy norms. The bill’s authors believe that will help regulate and develop the new field of economic relations, an online sphere, where tokens and cryptocurrencies are used, Izvestia writes. Digital currency will not become a legal tender so far, but experts consider cryptocurrencies to be promising saying that they should be made part of the legal framework.

The bill’s purpose is to set the legal groundwork for regulating cryptocurrencies’ turnover and conducting transactions with them, the committee’s head Pavel Krasheninnikov told Izvestia.

"We are removing the existing risks of using digital assets in an uncontrolled digital environment, for example, to whitewash criminal proceeds or finance terrorism," the lawmaker emphasized.

Although the bill does not tackle all the problems outlined by the Russian president, who earlier said it was necessary to determine the status of cryptocurrencies, it does create basic conditions for further regulating this sphere, said Igor Sudets, Director of the Blockchain for Lawyers educational program at Plekhanov Russian Economic University.

"It is important to make sure that cryptocurrencies and tokens are made part of the legal framework. On the one hand, these are the opportunities, which we have no right to pass up. On the other, while they are outside the legal framework, they can be used to give bribes, pay cash-in-hand wages or just steal them," he stressed.

If cryptocurrencies are not legalized in one way or another, Russia will miss the opportunity to bring some substantial financial flows out of the shadow economy, the expert added.

 

Nezavisimaya Gazeta: China, ex-NYC mayor to launch forum rivalling Davos in Beijing

The Chinese capital will host the first session of a newly-established economic forum in November launched by a Chinese think tank and former New York City Mayor Michael Bloomberg. Its objective is to enable China and other developing markets to play a bigger role in global politics, Nezavisimaya Gazeta writes. Former US Secretary of State Henry Kissinger backed the initiative.

Alexey Karneev, Deputy Director of the Institute for Asian and African Studies at Moscow State University, told the paper that China has some experience in establishing conferences that compete with Davis regionally. "I have in mind the Boao Forum (for Asia), which is referred to as the Asian Davos. This year, President Xi Jinping addressed it, announcing a new openness program. It provides to greater access for foreign corporations to those sectors of the Chinese economy, which were not sufficiently open previously, that is to the finance and insurance industries, in addition to telecommunications."

The proposed move is in line with Beijing’s ambitions, the expert went on to say. China used to take a minor role in multilateral international formats. That being said, it is currently one of the leaders in mega projects. The One Belt, One Road initiative is a symbol of the new quality of Chinese foreign policy.

"China needs such forums," Karneev stressed. "For example, Peking University has held its own forum for years. Symposiums are also held in the city of Tianjin. These sorts of regional conventions show China’s willingness to take part in shaping the global agenda. Beijing wants to participate in developing the rules of the game. That’s why such forums are needed."

 

Kommersant: South Korean tanker suspected of smuggling oil to North Korea

Oil might have been secretly pumped from a South Korean tanker to a North Korean vessel in early May in defiance of UN sanctions. A diplomatic source informed Kommersant that Japan, which had registered the possible violation, as well as the relevant UN agencies, have launched a probe into the incident. The South Korean authorities are denying their involvement in that incident. If reports on smuggling oil are verified, that will be the first incident since September 2017 when the UN Security Council passed a resolution slapping tougher sanctions on North Korea.

According to Kommersant’s source, the evidence provided by Japan is sufficient for launching an international investigation. "This is the first time a South Korean vessel is involved in smuggling sanctioned goods since the UN Security Council passed Resolution 2375 on September 11, 2017," the source said, adding that UN agencies will conduct an investigation into the incident at least until August.

The experts interviewed by the paper noted there are several reasons why the South Korean vessel could agree to take part in smuggling oil to North Korea, if these reports are verified. "The motive could be purely economic," Georgy Toloraya, Director of the Center for Russia’s Asian Strategy at the Russian Academy of Sciences’ Institute of Economics, told the paper. "I do not think that move was authorized by the government."

Andrei Lankov, Professor at Seoul-based Kookmin University, shared that view but did not rule out the importance of the political factor in light of the recent thaw in relations between the two Koreas.

"The economic motive is important, that’s for sure. Rice and fuel prices in North Korea are rising, hence the growing desire to make money on that," he stressed. "It is also important that smugglers are likely to understand they will not be severely punished under the current circumstances. The South Korean elite disagrees with the policy pursued by the previous administration and is determined to restore political and economic ties with North Korea, even if it cannot do so openly now."

 

TASS is not responsible for the material quoted in these press reviews

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