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Press review: Lavrov meets Kim Jong-Un in Pyongyang and France to fix up new Iran deal

June 01, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Friday, June 1

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© Valery Sharifulin/TASS

 

Nezavisimaya Gazeta: Russia’s top diplomat meets Kim Jong-Un in Pyongyang

Russian Foreign Minister Sergey Lavrov on Thursday became the first high-ranking Russian official who met with North Korean leader Kim Jong-Un in Pyongyang. During the visit shortly before the planned meeting between the leaders of the United States and North Korea, Lavrov called on Washington and Pyongyang to bear responsibility for the situation. According to Nezavisimaya Gazeta, Moscow opposes forceful pressure on North Korea and proceeds from the fact that the solution to the nuclear problem cannot be completed until the sanctions against North Korea are lifted.

In an interview with Nezavisimaya Gazeta, Head of Korea and Mongolia Department, Institute of Oriental Studies, Russian Academy of Sciences Alexander Vorontsov said, "Lavrov's visit showed that Russia continues to cultivate relations with North Korea, while seeking to play a significant role on the Korean peninsula and contribute to the success of the summit between North Korea and the United States. Everyone is interested in the denuclearization of the Korean peninsula, including Russia."

"When the process of denuclearization works, participation by all countries of the region, including Russia, will be required. Then it would be logical to restore the six-party talks, as Lavrov recalled in Pyongyang," Vorontsov added.

Konstantin Asmolov, a leading researcher at the Institute for Far Eastern Studies of the Russian Academy of Sciences, believes that "at the moment the most appropriate format for the negotiations would be a quadrilateral one." "The fact is, the issue lies in concluding a peace treaty, which brings an end to the Korean war. The participation of the Soviet Union in it was nominal. Unlike the Americans and Chinese volunteers, Soviet participation in the war was very specific and limited," he pointed out.

Nevertheless, Russia still plays a role in the Korean settlement, although not as significant as China does. According to the expert, this is partly due to the fact that Moscow has less leverage. "The main thing is not to forget that, according to the Russian Foreign Policy Concept, the Far East has a lower priority in comparison with the Middle East and especially with the former CIS," Asmolov stressed.

 

Izvestia: France to attract Iran deal participants to draft new accord with Tehran

Paris is ready to launch a global negotiating process with Tehran in the context of the US withdrawal from the Iran deal, a high-ranking source in French Ministry of Foreign Affairs told Izvestia. The Senate Foreign Affairs, Defense and Armed Forces Committee confirmed this information, adding that Paris is considering the possibility of signing a new agreement with Tehran and withdrawing from the old one. Preserving the Joint Comprehensive Plan of Action (JCPOA) accord, as well as developing a more complete document signed by all parties to the deal, including the United States that left it, was already discussed by French President Emmanuel Macron during a summit with Russian leader Vladimir Putin. The issue was also discussed during Macron’s meeting with US President Donald Trump.

The new document should include all additional items that bother participants of the deal. "In addition to the problem of nuclear weapons, we are concerned about Iran's activities related to ballistic missiles, as well as its growing military presence in the Middle East. That is why we would like to launch a global and comprehensive negotiating process with Tehran," a source in the French Foreign Ministry told the newspaper, adding, "We want Iran to understand and accept that it is necessary to act together."

The French Senate confirmed to Izvestia that Emmanuel Macron is trying to gather current and former JCPOA participants at the negotiating table and conclude a new, amended framework agreement with Tehran. "The president's intention is that France may withdraw from the current agreement with Iran, but only in order to launch negotiations on a new, more complete document. It will certainly take some time," French Senator, Vice Chairman of the Senate Foreign Affairs, Defense and Armed Forces Committee Robert del Picchia told Izvestia, adding that at the same time, it is very important to maintain relations with Tehran, including on trade and the economy.

 

Kommersant: Naftogaz of Ukraine demands Gazprom hike transit tariff

Naftogaz of Ukraine is ready to maintain the rate of transit of Russian gas through Ukraine in 2020-2028 at around the current level, if Gazprom agrees to pump 110 bln cubic meters per year and increase tariffs in 2018-2019 by a third - in total by $2.3 bln, Kommersant wrote. Otherwise, Naftogaz intends to recover court-imposed compensation from Gazprom for impairing its gas transportation system for up to $11 bln. Kommersant sources close to Gazprom brand this ‘blackmail’.

Naftogaz is offering two options - an independent booking by Gazprom of the capacities of Ukraine's gas transportation system or booking by Gazprom's customers. In these cases, Ukrainian law will apply to the contract. Another option is to sell gas to Naftogaz on the eastern border of Ukraine with a return purchase of this volume on the western border (gas swap). In this case, the transit fee will be formalized as a margin between the transactions, and Naftogaz would be ready to use different legislation, including Swedish law, which is currently used in the transit contract. As for the level of tariffs for pumping, Naftogaz insists on raising them in 2018-2019, since it feels they are low.

Gazprom not only does not intend to pump 110 bln cubic meters, but also publicly announced a future decline in transit volume through Ukraine to 10-15 bln cubic meters. According to Kommersant’s sources, in that case Naftogaz would pursue compensation arbitration of around $11 bln.

A source close to Gazprom told Kommersant that Kiev's approach is considered blackmail, explaining that this is why the Russian company is terminating the current transit contract under the Stockholm Arbitration. Another industry source of the newspaper believes that the delivery of gas at the Ukrainian border is traditionally unacceptable for both Gazprom and its European customers, and the swap option carries additional risks. "The situation is in the early stage, the negotiations have not really started, and both sides, naturally, will shoot for the moon," the source said. The source believes that Naftogaz wants to monetize the positive Stockholm decision on transit to the fullest and seeks to play on Gazprom's fear of new legal battles.

 

Nezavisimaya Gazeta: Russian Far East residents prefer Chinese yuan

China has created a land channel for the delivery of yuan in cash to Russia, having noted a surge in demand for their national currency there. Russian business is increasing its settlements in yuan, according to Russian officials. After all, yuan cash is convenient in that it helps businessmen to optimize taxes in foreign trade transactions. According to Nezavisimaya Gazeta, the circulation of Chinese yuan in Russia’s Far East in financial transactions between enterprises has been playing a major role in the people’s lives there.

Today, Russia is not the only country to where China sends its currency. However, the Chinese yuan is gaining increasing popularity in the Russian Federation not only in individual settlements, but also for legal entities. According to the newspaper, yuan circulation has been rising for several years. Thus, in Q1 2016, the volume of foreign trade deals in Chinese yuan for Sberbank’s Far Eastern clients grew 30% compared to Q4 2015 and amounted to 100.3 mln yuan ($15.63 mln).

According to Nezavisimaya Gazeta, this is partially stimulated by Russians in traveling to China and growing trade ties between the countries. According to the Russian Ministry of Economic Development, by the end of this year, the volume of Russian-Chinese trade will reach $100 bln.

At the same time, Mikhail Shchapov, a member of the Russian parliamentary committee on budget and taxes, believes that the growing popularity of the yuan only incurs huge damage to the Russian budget.

"Cash is accumulated in Chinese markets, then invested in illegal logging, and hotels. Similarly, there is a grey market, where, for example, tourist services are provided by Chinese citizens - guides, translators, hotel owners - in Russia, and payments are made in in yuan. That means, that money does not even come to Russia, taxes are not taken from them, there is no control," he told Nezavisimaya Gazeta.

 

Izvestia: Austria's former chancellor believes Russia-US cooperation more beneficial than confrontation

Without Russia, it is impossible to imagine a solution to a multitude of international problems, former Austrian Chancellor Wolfgang Schuessel, who led this European country from 2000 to 2007, said in an interview with Izvestia. The Austrian politician was the guest of honor at the Primakov Readings forum, which was held in Moscow. He talked to the newspaper about the effectiveness of sanctions and the threats and challenges that the global world order faces in the 21st century, as well as China and the United States.

According to Schuessel, right now sanctions are the principal way to show frustration or disagreement with a particular situation, while avoiding a military conflict. Everything depends on progress in the Minsk agreements, he added. If the agreements are gradually implemented, Europe will also gradually ease sanctions. According to the politician, the first priority is to achieve a functioning truce.

Talking about China as one of the challenges to Europe, Schuessel noted that China indeed presents an economic challenge, but the situation does not have negative connotations. However, if Beijing begins to behave like a military superpower, then it might become a real challenge to the region.

As for the United States, if Trump continues to clamp down on aluminum, steel and automotive components, that is, raising import duties on a number of goods from the European Union, he will get a response, Schuessel vowed. He noted that Europe is the largest economic market, and if necessary it also has its own response measures.

Schuessel added that now Putin is a real world player, at the turn of the century Russia was much weaker. According to the politician, Putin solved problems, and that became the success story that changed a lot of things, including the moods of the Russian elite. He told the newspaper that now it would be impossible to present solutions to the Syrian problem or conclude a deal on climate or cybersecurity without Russia, as well as many other international agreements. Schuessel said he hopes that the US administration understands that cooperation is more beneficial than confrontation.

 

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

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