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Serbian President Alexander Vucic is going to meet with US Vice President Mike Pence in Washington. According to Kommersant, the visit by the Serbian leader to the United States is of fundamental importance, as he is expected to clarify Belgrade's foreign policy priorities. The experts interviewed by the newspaper believe that opportunities for Serbia to balance its trajectory between the West and Russia are running out.
Kommersant sources in Western diplomatic circles in the Balkans say that several key topics could be discussed during the talks. Among them plans to supply Russian weapons to Belgrade (six MiG-29 fighters, 30 T-72 and 30 BRDM-2 tanks), prospects for granting diplomatic status to Russian personnel from the Humanitarian Center in Nis, and Serbia's alignment of its foreign policy towards Russia with the European Union. According to the newspaper, this information was confirmed by the decision taken at the end of last week by the House of Representatives demanding that the Pentagon regularly report on Russian-Serbian military cooperation.
Most Serbian experts are convinced that under the circumstances, Belgrade's ability to keep on pursuing a policy of walking a tightrope between Russia and the West is becoming increasingly limited. Political scientist Dejan Vuk Stankovic agrees that the Serbian president’s visit to Washington will be the moment of truth for choosing either the West or Russia.
Political scientist Dusan Janic agrees that Belgrade’s current course cannot last long. "President Vucic continues to balance without a clear strategy in foreign policy. However, this year Serbia will have to decide on either the West or Russia, because of the way the situation in the region is unfolding, and the position of the world players themselves who are tired of the constant maneuvering by Belgrade," he told Kommersant. According to him, tackling the status of the Humanitarian Center in Nis will become the “loyalty test”.
Attorney Vladimir Makeev, representing the interests of Yevgeny Nikulin accused of organizing hacker attacks against the United States, wrote a letter to US President Donald Trump, in which he complained about abuse by US special agents, Izvestia reports citing the letter available to the newspaper.
According to Izvestia, Makeev urged the US leader to note the illegal attempts by the US special agents to extract bogus testimony from the Russian citizen in order to falsely incriminate him on alleged intervention in the American election campaign. In addition, another letter with a request to inform the Ministry of Foreign Affairs of the Czech Republic about the violation of Nikulin's rights was sent to the Russian Foreign Minister Sergey Lavrov, the newspaper said.
According to the letter, FBI special agent Jeffrey S. Miller tried to arm-twist Nikulin into an ‘extradition deal’ to the United States by having him incriminate himself in hacking the servers of the Democratic Party so as to compromise the election campaign in the media. For pinning this ‘blame’ on himself, Nikulin was promised that this criminal case against him would be dropped and he would get monetary compensation along with US citizenship. Makeev told the newspaper, Nikulin is enduring attempts to break him down psychologically so that he’ll agree to a deal with the US special services. "In addition, Nikulin has a sick stomach and kidneys, he requires a special diet, and he has severe pains. He is not getting needed medication, and the prescribed diet does not meet his condition," Makeev pointed out.
The decision on the extradition of the Russian citizen will have to be made by Prague’s chief prosecutor.
Russia’s Natural Resources Ministry, Trade and Industry Ministry still do not have a unified position on what requirements for using Russian-made equipment needs to be included in the licensing terms for cultivating subsoil areas, Kommesant wrote.
According to the newspaper, the Natural Resources Ministry wants to avoid strict rules, preferring to select Russian products only if they are commercially viable. The Ministry of Industry and Trade, however, insists on binding the use of products officially recognized by Russia to the licenses. Experts interviewed by Kommersant believe that the industry has so far replaced just somewhat simple elements.
The majority of Kommersant sources in oil companies reacted to the possible requirements with restraint, noting that they already give priority to Russian producers in areas where it is possible. A source in Russneft believes that the initiative would stimulate the release of new models of equipment. A source in one of the oilfield service companies fears that with the onset of stringent requirements, companies will begin ‘cheating’ on equipment.
SBS Consulting partner Sergey Artemyev told the newspaper that import substitution in oil and gas engineering has had varying success. "Relatively simple elements and units (pumps, fittings, latches) are localized by the private sector, in part by the licensing scheme," he explained. However, complex solutions that require years of development are still difficult to implement primarily because of technical risks, high cost and uncertain payback for single use. The proposal to include use of equipment made in Russia in the licensing terms will spur its consumption, but will also strengthen the expansion of state support for localization and import substitution, Artemyev noted.
According to the Ministry of Industry and Trade as well as companies in the field, offshore technologies and IT remain the most problematic areas for import substitution in the oil and gas industry. The Ministry intends to reduce dependence on imports in works in the Arctic from 85% to 65% by 2020 and to 50% by 2025.
Siemens is considering withdrawing from two joint ventures (JVs) in Russia - Siemens Gas Turbine Technologies (SGGT) and Interautomatika, Vedomosti wrote. The company has recently found itself at the center of a scandal on turbine supplies produced by Siemens Gas Turbine Technologies to Crimea, which violates the EU’s sanctions regime. According to the newspaper, Siemens cannot confirm the intention to withdraw from the joint venture it is only assessing the possible consequences.
Siemens owns a 65% stake in SGGT, the remaining 35% belong to Alexey Mordashov’s Power Machines. The JV produced four gas turbine sets for Technopromexport (TPE) – a subsidiary of the state technology holding Rostec - and two of them were later found in Crimea. Siemens has now filed a lawsuit with the Moscow Arbitration Court against TPE and against its own affiliate SGGT, claiming the deal is invalid.
Compliance with the EU sanctions regime is the responsibility of the participating countries, a representative of the European Commission (EC) told Vedomosti, according to a source the EC is "contacting the competent German authorities for this particular case." Angela Merkel’s Spokesman Steffen Seibert told the newspaper, that all eyes are on Siemens to make sure that it is the company’s responsibility that its trading activities do not cover those regions under the sanctions regime.
Nikolay Zaichenko, partner at Nevsky IP Law, told Vedomosti, that most likely, the EC and Berlin will accuse Siemens of flouting the sanctions. "The question is whether Siemens can prove its conscientiousness in the deal with TPE. Formally, most likely, there would be nothing to find fault with. However, this does not guarantee that, as a result, sanctions will not be applied to Siemens,” he noted.
The decision on sanctions will have to be made by Germany, Denis Durashkin, lawyer at BGP Litigation, told the newspaper. However, according to him, considering Siemens actions right now and the fact the contract had restrictions on the supply of turbines to the Crimea, it will be difficult to find a legal loophole or justification for this.
Russia’s Mir payment system has gained another international partner, which is China. Under an agreement with the Chinese company UnionPay and the National System of Payment Cards (NSPK), Russian banks will issue joint (co-baged) debit cards as Mir-UnionPay. According to Nezavisimaya Gazeta, Rosselkhozbank will be the first to issue the new cards.
The UnionPay deal is the third agreement for the Mir payment system, before that the card was used abroad through contracts with American Express and Japan's largest payment system, Japan Credit Bureau (JCB).
According to the newspaper, now along with JCB, Mir would be able to bolster its positions, primarily in the East through cooperation with UnionPay, adding that Mir-UnionPay cards might become useful for tourists.In addition to China and Southeast Asia, UnionPay is accepted by 100% of trade networks in the UAE, over 90% in Thailand, over 70% of networks in Turkey and more than 50% in Egypt.
Head of the Association of Russian Banks Garegin Tosunyan believes that a gradual transition to Mir payment cards will allow the Russian banking system to become more independent. "This ensures the system’s independence in terms of its internal payments. This is our independence from switches, located outside the country," he said.
Olga Ulyanova, Vice President-Senior Analyst at Moody's Financial Institution Group, believes that it is unlikely that Russia will completely abandon the top global payment system cardsbelieves that it is unlikely that Russia will completely abandon international payment system cards. "Maybe Mir will take some insignificant share of the global players' market, but in general, it's unlikely that people that use Mir cards will abandon their international cards. We cannot yet say, that introduction of Mir card will have a significant impact on the Russian bank card market as a whole. We think that at first this influence will be insignificant but will increasingly gain ground," she told Nezavisimaya Gazeta.
"In general, Mir manages its goal to ensure the viability of payments within the sanction regime, albeit costly, though with total state support," Associate Professor at Plekhanov Russian University of Economics Tatyana Belianchikova told the newspaper. "This is a solution for Crimea, as Visa and MasterCard do not work there. Because of Mir, these two giants are afraid to leave the country, knowing that the system will work without them, but the one who stays will win," she added.
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