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Press review: Russia wants unconditional property return and Kiev replies to Malorossiya

July 19, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Wednesday, July 19

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Flags of the Donetsk People's Republic

Flags of the Donetsk People's Republic

© Alexander Kravchenko/TASS

 

Kommersant: Russian envoy asserts US should unconditionally return Moscow’s diplomatic assets

Diplomats from Russia and the United States held talks in Washington about coming to terms on various issues, but chiefly the spotlight was on the spat over Russian diplomatic property in the US, seized on orders of the previous Obama

administration. The meeting between Deputy Foreign Minister Sergey Ryabkov and Under Secretary of State for Political Affairs Thomas Shannon, that were considered the "last chance" to reach a compromise, did not lead to a decisive agreement, Sergey Ryabkov said in an interview with Kommersant.

"All talks with Americans have been tough lately. We do not have courteous conversations with all its pleasantries, since the positions are well known and there are very few signs of rapprochement. It worries us. We believe that Washington's reluctance to recognize obvious things complicates the situation, and drives the relationship even further into a dead end," Ryabkov told the newspaper.

According to the diplomat, this concerns the issue of Russian diplomatic property in the US and many other elements on the current agenda, ranging from humanitarian issues to travel conditions for officials, including diplomats, on Russian and US soil. "There is very little progress on all these issues," he said.

Talking about the Strategic Arms Reduction Treaty (New START), Ryabkov noted that the deadline for the treaty’s enactment is approaching - February 5, 2018. "In general, the implementation is going well, but there are technical issues that require constant attention. Unfortunately, under the new administration, the American side has slowed down for a number of reasons, including the absence of people in high positions. We are pushing for it to ensure that these issues are resolved more vigorously."

As for the confiscated Russian diplomatic property, Ryabkov told the newspaper "We would rule out connecting the talks in any way to allocating a new site for the construction of a new US Consulate General in St. Petersburg. The Americans arbitrarily, without any motives or reasons have withdrawn our diplomatic property and in the same way should return it - without any additional conditions."

"All in all, the conversation was quite thorough, direct, without attempts to smooth out any rough edges. I hope to see results and we expect that pause in the dialogue will not be prolonged," Ryabkov told Kommersant.

 

Vedomosti: Looming sanctions drive Gazprom to push ahead with Turkish Stream

Gazprom has quietly started laying the second thread of the Turkish Stream pipeline for gas transit to Europe, a contractor and a federal official told Vedomosti. According to one of the sources, around 20-25 km of the pipe has already been laid on the Black Sea’s floor. The work is being carried out by Audacia, a pipe-laying vessel from the Swiss company Allseas, which won Gazprom’s tender for laying the pipe under water.

According to marinetraffic.com, the ship has been moving recently at a constant average speed of 4-5 km per day along the route where Turkish Stream’s first thread was laid. This corresponds approximately to the specified working speed of pipe laying, the newspaper wrote.

So far, Gazprom has only reported the construction of the underwater section of Turkish Stream’s first thread. The same pipelayer - Audacia was engaged in pipe-laying in the shallow water area. Gazprom has so far remained mum on the placement of the second thread of the pipeline.

A representative from Allseas told Vedomosti that 100 km of the pipeline had been built, but did not specify whether the construction of the second thread had begun. A source in Gazprom told Vedomosti that Audacia is engaged in "technical work", but did not elaborate on it.

Tatiana Mitrova, Director of the Skolkovo Energy Center, told Vedomosti that growing risks of new sanctions by Washington drove Gazprom to push ahead with the Turkish Stream project. According to the expert, Gazprom has to choose the lesser of two evils.

"On the one hand, (the company faces) the risk of an incomplete workload of the second thread and the obviously difficult negotiations with Turkey and Europe, while on the other, the risk of not constructing anything because of US sanctions looms," she told the newspaper

 

Nezavisimaya Gazeta: Kiev cobbling together new bill on reintegrating Donbass

Ukrainian authorities have announced plans to adopt a new law under the provisional title "On the de-occupation and reintegration" of the Donbass regions beyond Kiev's control. However, Donetsk has recently announced the creation of a new state called Malorossiya. The Ukrainian Verkhovna Rada will hash over the bill on de-occupation and, most likely, adopt it in September, Nezavisimaya Gazeta wrote.

According to Nezavisimaya Gazeta’s sources, the draft legislation on "de-occupation and reintegration" is focused on recognizing a part of Donbass as territory that was "occupied and effectively controlled by Russian troops", as well as about the Ukrainian side abandoning its antiterrorist operation and approving a new line of action in the region.

A source told the newspaper, that Ukraine’s Western partners are not concerned with the plan of action set out in the new bill, but with the way this plan will be perceived by the Russians. "A military operation is a logically sound response to external aggression and occupation. If the West supports this terminology, then it will be possible to unblock the issue of peacekeepers (the status of Russia will change). However, the main question is how Russia will react to it," the source said.

At the same time, Kiev claimed that the bill, fully complies with the Minsk agreements. According to Ukrainian Interior Minister Arsen Avakov, "the Ukrainian government, as before, intends to resolve the conflict exclusively by political and diplomatic means."

According to the newspaper’s source, Kiev postponed considering the new law until September. Ukraine’s consultations with Western leaders amount to the fact that "only the West can persuade Russia to adopt a new Ukrainian format of action in Donbass", the source said. Negotiations with the Russian president are expected to be held primarily by the Normandy mediators - the President of France and the Chancellor of Germany.

 

Nezavisimaya Gazeta: Ruble trying to build on its BRICS base

The ruble occupies the 20th place out of 150 currencies in terms of its use in international settlements and the Russian currency accounts for 0.26% of transactions worldwide, Nezavisimaya Gazeta wrote citing a report by the Russian Institute for Strategic Studies (RISS). Researchers called for a sober assessment of the ruble’s place, which is not only a financial instrument, but also a reflection of the nation’s economy.

"If we compare the ratio of the national currency's share in international settlements to the country's place in the global economy and trade, then this ratio for the ruble - around 15% - corresponds to the positions of the currencies of emerging economies such as China (6th place) and Mexico (18th place)," the report said. At the same time, according to RISS experts, the popularity of the Russian currency in international transactions is still quite high. "Despite economic sanctions, the ruble's share in the total volume of payments in Russia’s foreign trade is at a level comparable to the Chinese yuan," the report said. According to the results of Q3 2016, this indicator was 23%, while the share of RMB (yuan) in China's foreign trade sank to 22%.

"It is too early to talk about the possibility for the ruble to become an international currency. For this a currency should be stable, which in turn implies a stable economy. Under the current conditions, where the ruble is very dependent on the energy market’s undercurrents, the ruble is a currency with high volatility. In this case, using it in international settlements carries increased risks, which repels foreign companies," Finam analyst Bogdan Zvarich told Nezavisimaya Gazeta.

"The ruble will not become the world’s reserve currency in the near future. Russia’s economy has a very slim share on the world’s GDP - around 2.5%, and exports are even smaller. Moreover, our exports are also very limited both by the list of goods and by the number of consumers. Another important factor is underdeveloped financial market and significant volatility of the national currency," Forex Optimum analyst Ivan Kapustiansky told the newspaper.

"Nevertheless, the transition from a raw material economy to an economy with large additional capital is a very slow one. Every year the share of non-oil and gas goods in exports increases, but it is still far from prevailing. Therefore, at this point the government needs to strengthen the ruble as a regional currency - this is what the ruble is - and in the future this will become a strong base for including the ruble in the world reserve currency basket," he added.

 

Izvestia: Foreign companies in Russia to pay 'Google tax' for individual entrepreneurs and legal entities

Foreign providers of electronic services operating in Russia will have to pay the now-infamous "Google tax" for legal entities and individual entrepreneurs. Currently such companies after registering with the Federal Tax Service are entitled to pay tax only for individuals. Such changes in the regulatory regulation are currently under review in the Federal Tax Service, a federal agency representative told Izvestia.

According to the newspaper, the authors of the bill considered it unfair that Russian companies selling software in online stores pay VAT, while foreign ones like Google, Apple, and others do not.Now foreign electronic services should be registered as tax residents and transfer 15.25% VAT to the Russian budget. "It would be convenient for both market participants and the state," the Federal Tax Service told Izvestia.

Deputy General Director of the Internet Development Institute Ekaterina Lobanova believes that in this case Russian legislation follows the EU’s lead. "It is logically sound to provide an opportunity for suppliers to pay taxes for legal entities and individual entrepreneurs," she told the newspaper.

According to Head of the Russian Association of Internet Trade Companies Alexey Fedorov, the same should happen with such sites offering housing for rent like AirBnB, Booking.com and so forth, and then with employment sites such as YouDo, Avthor.ru, and others. They will become tax agents for all their craftsmen, housekeepers, maids, tutors, and so on.

According to the Federal Tax Service, foreign companies that sold electronic content on Russian soil in Q1 2017 paid VATs totaling around 2 bln rubles ($33.73 mln).

 

 

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

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