Press review: Kremlin’s sanctions sting US embassy and Russia warns Poland on monument law

Vedomosti: Kremlin slaps precedent-setting restrictions on US embassy staff and property

The Russian Foreign Ministry announced retaliatory measures to the sanctions passed by the US Congress, which had brought about the expulsion of 35 Russian diplomats in December 2016 and the confiscation of two Russian diplomatic properties in the US. Starting from August 1, the American embassy will lose the right to use the Ambassador's dacha in Serebryany Bor and the warehouse in southern Moscow, and by September 1, the US will have to reduce diplomatic and technical personnel in Russia to 455 people, which is in line with the number of Russian envoys in the US. According to experts, interviewed by Vedomosti, this might mark the beginning of a sanctions and diplomatic war.

The Ministry of Foreign Affairs did not divulge to the newspaper the precise number of the US diplomats expected to leave, although earlier President Vladimir Putin said that 755 people out of 1,000 US diplomats and technical workers in Russia will have to cease their activities in the country.

Chairman of Presidium of the Council on Foreign and Defense Policy Fyodor Lukyanov told Vedmosti that US State Department representatives had already anonymously said they would not label these Russian measures a response to the expulsion of Moscow's diplomats and the seizure of its real estate in 2016, but as an independent action. Therefore, according to the expert, new US responses are inevitable. The two countries are entering into a full-fledged sanctions-diplomatic war. The Russian measures will cause significant material costs and complicate the work of American diplomats in all areas of relations with Russia, the expert said.

According to the newspaper’s source in the industry, the measures are unlikely to affect tourists. The worse the relations between the countries, the more they are loyal to ordinary tourists - submitting documents is simpler, number of refusals cut back, and repeated visas are prolonged almost without fail, the source said.

Moscow's tit-for-tat measures might be accompanied by tightening restrictions on cooperation with the West within the country, political analyst Alexey Makarkin told Vedomosti. According to him, the number of unwanted foreign organizations may increase, additional difficulties may arise in scientific exchange. In addition, the commercial sphere might see problems - the field that so far has been left out of the equation - with Western companies employing Russians having to face some serious issues, the expert said.

Vedomosti: Russian economy bounces back, yet domestic labor market faces deficit

The scarcity of labor resources troubling Russia could hinder the nation’s economic recovery and growth, the Central Bank and the Ministry of Economic Development both said in their comments on the key rate and in a report on the state of the economy. Economic Development Minister Maxim Oreshkin told Vedomosti that several trends indicate a gradual onset of a deficit in the labor market, In particular, active economic growth increases demands for labor, but due to demographic issues, it is limited. According to the top official, though the growth of salaries so far corresponds to the present economic growth rate, that trend may change in 2018.

The Central Bank shares the same concerns. Thus, due to the increased structural deficit of labor resources, wages are growing more intensely than labor productivity - reforms are needed to improve the quality of human capital and increase the territorial and professional mobility of workers, the newspaper said.

Dmitry Polevoy, ING Bank Chief Economist for Russia and the CIS, told Vedomosti, that economic growth is determined by investment, the number of employees and their productivity, but the economically active population will shrink in the coming years. Raising salaries to retain employees or attract new ones will spark price hikes, which the Central Bank fears so much, he noted.

There are risks of "overheating in the labor market", some economic sectors enjoy a rapid recovery, Chief Economist of Alfa Bank Natalia Orlova told the newspaper. According to her, wages are rising due to the shortage of labor.

According to Deputy Director of the Center for Labor Market Studies at the Higher School of Economics Rostislav Kapelyushnikov, unemployment is close to the historical minimum, but it is too early to come to the conclusion that the Russian economy has reached full employment. According to the newspaper, the large generation began dwindling into a small one five years ago, and back then there was still no acute shortage of personnel in the real sector. That said, it can be avoided if the economy is modernized.

Izvestia: Poland may face heavy costs from Russia for law on demolishing WWII monuments

Moscow has warned Warsaw that it won’t turn a blind eye to Poland’s legislative stipulations for dismantling monuments to Soviet WWII soldiers, which is part of the country’s so-called decommunization law, the Russian Foreign Ministry told Izvestia. According to the Ministry, the measures might be "asymmetrical". According to the sources in the Russian diplomatic circles, several options are being considered, such as personal sanctions against Polish politicians involved in drawing up the legislation, economic measures and active work on all sorts of international venues to draw attention to this problem.

"The Polish authorities should be aware that their unfriendly actions regarding these memorials will not go by without any consequences, and commensurate retaliatory measures will be taken against the Polish side, which may be asymmetric," the newspaper reported quoting the statement by the Foreign Ministry’s Department of Information and Press.

The Ministry told the newspaper that the problem of dismantling Soviet monuments is invariably "touched upon in contacts with our Polish and foreign partners, at international venues, including the OSCE, the Council of Europe and the CSTO."

On June 22, the Polish Sejm voted to amend the law on prohibiting propaganda supporting communism or other totalitarian systems on the names of buildings and facilities, and it also includes dismantling monuments and commemorative signs to Soviet soldiers who liberated Poland from Nazi occupation in 1944-1945. On July 17, 2017, Polish President Andrzej Duda approved changes to the law. 

Kommersant: Russia to begin widely accepting Alipay system

Chinese payment services are on the move expanding their presence in Russia. Alipay (part of the Alibaba Group) has agreed on a partnership with VTB as an acquiring bank service provider for Alipay, the company’s head of Business Development in Russia Bogdan Zadorozhny and VTB 24 Vice-President Alexey Kirichek told Kommersant. The service will be primarily focused on Chinese tourists in Russia, whose number has been steadily growing lately and is already approaching 1 million per year.

VTB is the first major acquirer to strike an agreement on mass inclusion with Alipay, Zadorozhny told the newspaper. The commercial terms of cooperation between VTB and Alipay were not disclosed. According to a Kommersant source in the financial market, the average rate on offline card acquiring has reached 1% for the largest retailers, and 2-3% for small and medium-sized businesses. Earlier, Alipay agreed on acquiring in the luxury retail segment with Russian Standard bank.

According to VTB 24, Alipay is bound to be the most popular in Moscow, St. Petersburg, Khabarovsk, Vladivostok, Blagoveshchensk and Irkutsk. "The number of tourists from China in Russia continues to grow. The potential volume for this market is 300 bln rubles ($5.03 bln) per year," Kirichek told the newspaper.

The partners expect that Alipay in Russia will be used by more than 1 million people annually. According to the border service, China ranks first in the number of tourists visiting Russia.

Izvestia: Russian telecom watchdog bans third-party user data collection of top social network

Russia’s telecom watchdog has banned third-party companies from collecting public personal information from VKontakte’s users, according to the service’s note available to Izvestia. The watchdog’s press service confirmed this information to the newspaper.

The federal service told the newspaper that according to the Federal Law "On Personal Data" it is allowed to process personal data provided by its owner, however according to the same law, processing such data is possible only with the consent of the owner.

According to the agency, users’ personal data cannot be stored, processed and transferred without their consent. "If user data was collected in the social network before, this practice should be terminated," the federal agency’s press service said.

Deputy Director of the Coordination Center for TLD RU Sergey Kopylov told Izvestia that in the majority of cases users share their personal data in an open, accessible manner.

"Either we must immediately limit access to the data, or give everyone the opportunity to use it," Kopylov stressed. "Any company can use publicly available data. It does not matter what exactly is said in the user agreement of the social network, third parties are not bound by this contract. In addition, the social network itself will not be able to control who collects the data on its users," he added.

The number of VKontakte’s active monthly users, according to the social network, comes to 95 million people.

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