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Press review: Ukraine’s attempt to undermine CIS and gas deficit threat in Russia

November 22, 2016, 13:00 UTC+3 MOSCOW
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© Konstantin Cherginskiy/TASS

 

Media: Putin’s state-of-the-nation address to focus on public administration

Russian President Vladimir Putin may be expected to deliver his annual address to the Federal Assembly on December 1, 2016, three sources close to President’s administration told RBC. Under the Russian constitution, the delivery of the annual state-of-the-nation address is the head of state’s duty. In his speech, the president puts forward his vision for the fundamental paths of the country’s development not only for the coming year but also for the long term as well. Last year, the president delivered his address on December 3.

This year, Putin may announce the introduction of reforms for the public administration system, and is likely to carry on the tradition of not highlighting international issues in his address, according to experts speaking with RBC. Dmitry Orlov, head of the Agency for Political and Economic Communications, told the newspaper that the most pressing issues today are the need to lift administrative barriers for businesses and find new sources of economic growth.

According to Kommersant business daily, the presidential address will focus on administrative reforms, particularly the gradual dismantling of the system of Presidential Plenipotentiary Envoys may be announced as they "have carried out their objectives," but is unlikely to feature any economic highlights. Also, the newspaper wrote, the president may announce the name of the new Minister of Economic Development after the former Minister, Aleksey Ulyukayev, was relieved of his official duties due to the loss of confidence on November 15.

 

RBC: Rosneft, Novatek warn Medvedev about gas deficit threat from price liberalization

Russia’s top oil producer, Rosneft CEO, Igor Sechin and co-owner of Novatek, the country’s largest independent natural gas producer, Leonid Mikhelson have requested that Prime Minister Dmitry Medvedev abandon the project to liberalize gas prices nationwide. I

In a joint letter submitted to the Prime Minister on November 7, Sechin and Mikhelson warned that otherwise the gas giant would monopolize the market and the two independent gas producers would be forced to cut output, RBC said.

The experiment to sell gas at unregulated, market-oriented prices, proposed by Russia’s Federal Antimonopoly Service (FAS) implies that gas price controls will be scrapped in three regions - Tyumen Region, Yamalo-Nenets Autonomous District and Khanty-Mansi Autonomous District - starting 2017, which means that Gazprom would undercut prices set by FAS, in those regions. According to Sechin and Mikhelson, "this kind of pricing experiment will have negative impact on the sector without providing equal economic conditions for all gas market participants."

Deputy Head of the Federal Antimonopoly Service Anatoly Golomolzin said in September that the governments of Khanty-Mansi Autonomous District and Tyumen Region, Gazprom, independent producers and consumers welcome the pilot project on gas price liberalization. Novatek and Rosneft are Gazprom’s main competitors on the local gas market, and the three regions involved in the experiment are their key areas.

 

Izvestia: Ukraine’s attempt to undermine CIS backfires

Kiev’s drive to turn CIS member-states against Moscow has boomeranged as it ruined Ukraine’s trade ties, Izvestia wrote citing a report by the Russian Institute for Strategic Research. The recent policy by Ukrainian politicians to replace cooperation within the organization by purely bilateral contacts has totally failed, sparking a plunge in trade turnover between Ukraine and other member-states, since they prefer to maintain and boost their pro-Russia course, the report said.

According to head of Russia’s State Duma (lower house of parliament) Committee for CIS Affairs Leonid Kalashnikov speaking with the newspaper, Ukraine is going down the same path as some other states. "Ukraine’s problems may be explained by using Bulgaria or Moldova as examples. The first is already ‘fed up’ with full-fledged EU membership, the other has already managed to feel the detriments of EU association. In Bulgaria, industry and agriculture have hit rock bottom over the years, the same is happening in Moldova, since having associated membership stipulates complying with EU standards. And only now both countries prefer to have presidents who focus on the Eurasian development trajectory," Kalashnikov told Izvestia, adding that this is a good lesson for Ukraine, which "has had an economic and political spat not only with Russia, but other CIS countries."

 

Izvestia: Public representatives in state-owned companies may face fines for breaching duties

Government representatives on boards of directors and supervisory boards of companies with state participation will become financially liable for improperly executing their duties, two sources close to the government told Izvestia. A source in the Economic Development Ministry, which proposed the initiative, told the newspaper that the respective amendments to the current law, which are now being developed by the Ministry, will fill the gaps in the legislation on the absence of this kind of responsibility at the moment.

Oleg Vyugin, head of the board of directors for MDM Bank and an independent director on Rosneft’s board, told Izvestia that the initiative was proposed following cases where government representatives, who are obliged to stick to the directive regarding vote decisions, voted differently.

The Economic Development Ministry’s official representative told the newspaper that the amendments impose a 5,000-ruble fine for the first violation and up to 15,000 rubles in fines, or disqualification for 1-3 years for repeated violations.

 

Kommersant: Disruptive innovations to create new challenges for tax authorities

Since disruptive technologies are having such a major impact on today’s world, new companies that emerge daily, such as Uber, are difficult to regulate, Head of Russia’s Federal Tax Service (FTS) Mikhail Mishustin said in an interview with Kommersant. "New technologies enable the creation of added value, which is not obvious, blurring the lines on how to regulate and tax it. It looks like IT gurus have brought about changes, which caught economists by surprise. Small and unknown online companies are tapping markets and influencing whole sectors of the economy. Usually their operations are in the electronic services sphere, which means borders do not limit their businesses," he noted.

According to Mishustin, one of the responses to this challenge is the law on value-added taxation on the operations of foreign companies, which provide electronic services, with service location. This measure is in store to be introduced starting January 2017.

 

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

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