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Moscow has no intention of selling Russian diplomatic property in the United States and will hire a reputable American law firm to sue the US government, which authorized the closure of the Russian Consulate General in San Francisco and two trade missions, the Russian Foreign Ministry said. As for selling Moscow’s property, that’s what US Secretary of State Rex Tillerson offered his Russian counterpart Sergey Lavrov during several closed-door meetings, Kommersant’s sources said.
Alexey Ivanov, Director of the Skolkovo Institute for Law and Development at the Higher School of Economics, told the paper that the procedure called "the procurement of legal services" has been used on numerous occasions in some high-profile cases, like the Yukos case. He recalled that Russia had set up an independent non-profit organization, the International Center for Legal Defense, which "helps, if necessary, bypass tender rules during the procurement of legal services."
Meanwhile, Managing Partner of Kulkov, Kolotilov and Partners Maxim Kulkov suggested that a lawsuit could be filed with a US court on recognizing the unilateral decision to close the Consulate General and trade missions as illegal. "Russia is interested in returning the buildings to consular status, since judging by the statements of US officials, they do not encroach on the ownership of the property," he said in an interview with Kommersant.
BGP Litigation Associate Denis Durashkin said that the issue at hand could be a lawsuit to seek fair compensation on the basis of the Fifth Amendment to the US Constitution. He noted that lawsuits against the federal government are reviewed by the United States Court of Federal Claims.
Experts interviewed by the paper noted though that the upcoming lawsuit has no prospects from a legal viewpoint. "The US Department of State did not seize the property denying it consular status and stripping it of diplomatic immunity. Russia will have to prove the actual expropriation of property, which is problematic, because it still has the right to dispose of the property, for one, to sell it," Durashkin said.
Pyongyang will not accept anyone’s mediation services, including the initiative put forward by German Chancellor Angela Merkel to arrange multilateral talks on North Korea’s nuclear program (based on the Iranian model), some high-ranking Russian diplomatic sources interacting with the authorities in Pyongyang on a permanent basis informed Izvestia.
They assured the paper that North Korea will not agree to the Berlin-backed multilateral talks. "The North Koreans are not interested in contacts with anyone except for the Americans, and Pyongyang intends to demand from them solid security guarantees," one of the sources said, adding that the issue at hand is bilateral negotiations with the US.
According to Vasily Kashin, an expert at the Russian Academy of Sciences’ Institute for Far Eastern Studies, Pyongyang needs mainly the absence of preconditions and requirements for denuclearization.
"Only then will it be prepared to hold talks not about renouncing nuclear weapons, but about limiting and abandoning the tests of these weapons," he noted. At the next stage, North Korea is likely to raise the issue of withdrawing US troops from South Korea (there are over 28,000 US military there) and abandoning all military exercises near the Korean Peninsula, the expert added.
The paper recalled that, amid Pyongyang’s reluctance to discuss the nuclear issue with any third parties, Switzerland’s and Sweden’s proposal to act as mediators in tackling the North Korean nuclear and missile issue has remained unanswered to date.
New US sanctions against Russian energy export pipelines have begun to frustrate the Nord Stream-2 construction project just by looming as a threat, Vedomosti writes.
Rainer Seele, CEO of Austrian energy major OMV, which has invested in the project, admitted on Wednesday that bankrolling such large-scale projects became almost impossible after these sanctions were imposed. The lack of explanations by the US Treasury on how the new law will be applied creates uncertainty, which complicates drumming up sources of investment, he noted. This means that the project’s financing scheme will have to be revised. Partners will have to rely more on their own funds and work with Russian or Asian banks, he added.
However, Russia’s energy giant Gazprom said the project will go ahead in spite of the sanctions. "Nord Stream-2 will be fully financed," Gazprom CEO Alexey Miller’s spokesman quoted him as saying in an interview with the paper.
Meanwhile, a Nord Stream 2 representative told Vedomosti that there are no plans yet to change the approach to financing it. However, the ratio (70% in project lending and 30% in long-term loans) could be optimized, he said.
Raising $6.5 bln in project financing may prove to be an overwhelming task, according to Fitch’s Dmitry Marinchenko. "Under the threat of sanctions, attracting funds from a syndicate of international banks is ruled out. If there are difficulties with loans, Gazprom at some point will have to provide financing out of its own pocket," Vedomosti quotes him as saying.
On the other hand, Andrey Polischuk of Raiffeisenbank told Kommersant that even the total absence of project financing is not a huge problem for Gazprom. "Gazprom currently has about $13 bln on its balance sheet, in addition to $8.5 bln in deposit accounts. Besides, the company has a low debt load, and it can easily attract money from the market," he stressed.
Moscow is ready to extend the decision to freeze one-third of its payments to the Council of Europe, specifically, about 11 mln euros earmarked for the work of the Parliamentary Assembly of the Council of Europe (PACE) in 2018, Deputy Speaker of Russia’s State Duma (lower house of parliament) Pyotr Tolstoy told Izvestia. This move stems from the fact that the PACE has not yet amended its regulations ruling out the possibility of stripping national delegations of their powers.
"Russia froze PACE payments, as it refused to take part in the assembly’s work. This decision was made in connection with the organization’s discriminatory policies. We believe that our participation in it is pointless until its regulations are amended. A reminder that the Russian delegation was fully stripped of its voting rights at PACE. Until this is changed, Russia will not return to the Parliamentary Assembly and, accordingly, will not pay any fees," Tolstoy promised.
He recalled that Russia was robbed of an opportunity to be fully involved in PACE’s work by a decision of the minority of its members.
"Moscow proceeds from the assumption that PACE consists of parliamentarians from countries that are elected by the people," he explained. "Accordingly, stripping any delegation of the voting right, that is, of the right to speak in PACE, is discrimination against the people of the largest European country."
The European Union’s economy has lost more than $100 bln after anti-Russian sanctions were imposed, while losses to the Russian economy came to about $55 bln, according to UN estimates. Although some experts disagree with such assessments, it is hard to deny that the new package of US restrictive measures sparks growing concern in EU business circles, Nezavisimaya Gazeta writes.
In particular, German entrepreneurs are haunted by possible fines on their projects in Russia and call on European politicians and diplomats to prevent tougher sanctions against Moscow. "Under the new rules, the US government can fine foreign companies if they are engaged in the projects related to investment, maintenance or equipment manufacture for Russian pipelines. This particularly concerns the Nord Stream-2 project," the Russian-German Chamber of Foreign Trade said in a statement.
Economic sanctions in any form only harm businesses and economic ties, the chamber’s spokesman Alexey Knelz told the paper. "As the Russian-German Foreign Trade Chamber, we call on the EU and Germany to come up with countermeasures to protect German companies from potential US sanctions, if they are indeed imposed," he stated.
Meanwhile, the experts interviewed by Nezavisimaya Gazeta noted that the UN’s estimates, including Russia’s losses, raise eyebrows. According to Bogdan Zvarich, a senior analyst at Freedom Finance, they are likely to be overestimated, because they do not take into account the fact that "Russian manufacturers have received a fresh impetus due to countersanctions and import substitution." "We believe that Russia’s losses are about $45-50 bln," he pointed out.
However, Pavel Sigal, First Vice President of Opora Rossii (Russia’s Support), believes that these estimates are likely to be understated. "They do not take into account the indirect damage due to the withdrawal of Western companies from the Russian market and the need to come up with complex schemes for financing the Nord Stream project, weapons production and capital outflows. That is, in reality, the amount could be much higher, if we look at the effect on the overall investment climate," he explained.
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