Moscow may stop supplies of 'humanitarian aid to certain territories' in favor of financing construction and infrastructure projects in Crimea and the Kaliningrad Region, RBC writes citing the minutes of a September 1 meeting headed by Deputy Prime Minister Dmitry Kozak that was obtained by the newspaper. Following that meeting, the Finance Ministry was requested to "strike off expenses on providing humanitarian aid to certain territories in 2019-2020 from the draft federal budget for 2018 and the planned period of 2019 and 2020," RBC said. The wording ‘humanitarian aid to certain territories’ most likely means aid to the self-proclaimed Donbass republics, a federal official and two sources close to the Kremlin told the publication.
"Crimea as a territory of Russia needs immense aid from the state. If we don’t close an evident gap in the development of the peninsula within the next two years everyone will wonder why Crimea had been incorporated," political analyst Oleg Bondarenko told RBC. The expert believes the development of Crimea and Sevastopol is a goodwill issue, similar to Kaliningrad. According to Alexey Makarkin, First Vice President of the Center for Political Technologies, funds are earmarked for the benefit of regions that Russia is not going to give away in any case, whereas the future status of the Donbass republics remains unclear.
Still, the fact that Moscow is likely to suspend ‘humanitarian aid’ to Donbass does not mean that financial support to the self-proclaimed republics will stop, two sources in the State Duma (lower house of parliament) and another one in the government told the newspaper. During the early stages of the conflict in eastern Ukraine, Russia approved targeted subsidies for rebuilding infrastructure in Donbass, including energy, highways and railroads, and housing construction, which were named as humanitarian aid to certain territories of Ukraine in the government’s secret decree, a source familiar with the document told RBC. He added that the subsidies were paid through the government’s reserve fund, which is a reserve in the budget formed annually to finance operations under the government’s decisions. The source assumes that the suspension of targeted subsidies on restoring Donbass’ infrastructure is mostly likely the case here.
Washington was behind some efforts to sway Russia’s regional elections by financing various organizations, head of the Federation Council's Committee on State Sovereignty Andrey Klimov told RBC. The committee has proof confirming the involvement of other countries, mainly the US, in Russia’s regional election on September 10, the senator said and another two Council’s members confirmed that. Oleg Morozov, a member of the commission, told the newspaper that specialists from Russia’s financial watchdog provided the facts confirming Western involvement.
According to Klimov, foreign countries transferred finances to Russian funds in order to support certain candidates running to become regional heads. The money was transferred through the territory of a Russian ally within the Eurasian Economic Union (EAEU). "Funds were transferred (to Russia) from a foreign organization through a country that has no law on foreign agents," he explained. "Several countries influenced the Russian election," Klimov said. "The United States is the most powerful center, from which this type of activity originates, as a rule it comes from Washington," he noted, adding that funds were transferred to Russia "in cash, in quasi-money, and in cryptocurrencies." The Russian financial watchdog informed Klimov that "US dollars" were transferred to Russia’s political strategic organizations through Kazakhstan, a source in the watchdog told RBC.
Indeed, the United States contributes to programs that may influence the political environment in a country, Yevgeny Minchenko, a political scientist and head of Minchenko Consulting, told the publication. However, the issue is most likely about expert institutions and media sources, rather than about bankrolling particular election stages, he added. "This is pointless since it is more efficient to change (social) sentiment using ‘soft power’ than to fund a particular candidate’s campaign," Minchenko noted. The accusations by the Federation Council's committee against Washington’s meddling in local elections also are a response to similar statements made by the US, the expert pointed out. If Russian senators prove that the accusations are well-grounded all grant recipients connected with foreign funds will start running into even more problems, he concluded.
Libya's Deputy Prime Minister Ahmed Maiteeq who is paying an official visit to Russia this week, believes that Moscow can play an important role in settling the Libyan crisis, he said in an interview with Kommersant daily. "Russia has been fostering ties with Libya for more than 35 years, and I am confident that it is still able to play a very important role both in Libyan unification and in the collective war on terror," he said, adding that this is the reason why he "was among the first officials of the Libyan government to visit Russia back in the summer of 2016." "Libya is going through a very difficult period in its history, and we need all our friends standing shoulder to shoulder with us in order to unite the country, help tackle terrorism and bring a strong and vibrant Libya back to the global community," Deputy PM said.
When asked about potential weapons supplies to the country, Maiteeq replied that "weapons are not what Libya needs at the moment." "We have to focus less on weapons since they always fuel conflicts, and more on the economy, that’s why we need to get back to and finish up all the projects we used to have," he noted. "Without an economic recovery program for Libya, or an economic base, we won’t be able to succeed in the elections and beat terrorism. People need to see that prosperity awaits them, which is why we have to revive many projects that we used to be engaged in with Russia, which have been put on hold," the politician added.
Russian partners previously operating in Libya will not have to participate in tenders, the Deputy PM pledged. "They used to have projects in Libya and we hope they will return here. The Libyan economy is rebounding, even the oil sector. Crude production amounted to 120,000 barrels per day only a couple of months ago, whereas now it exceeds 1 mln barrels per day, which is a great achievement," he highlighted, adding that "several Russian companies that previously had operations in Libya are considering the possibility of returning." According to Maiteeq, Rosneft is most likely to be the first Russian company to tap the Libyan market, followed by Gazprom.
The Crimean issue is gradually losing its importance on the western political agenda as more Europeans are coming to realize that the peninsula is part and parcel of Russia, Germany’s Left Party lawmaker Alexander Neu told Izvestia. "Currently the West is reluctant to acknowledge Crimea as part of Russia as it is important for NATO from the viewpoint of expanding its sphere of influence and getting control of the Black Sea region," the legislator explained. "This is the reason why NATO and the EU are so annoyed about Russia’s re-unification with the peninsula," the politician added. When asked whether the EU and particularly Germany can change the approach to the issue in the foreseeable future, he said that "hopefully this will happen sooner or later." According to the lawmaker, "currently the focus is shifting towards the situation in eastern Ukraine."
Speaking about anti-Russia sanctions and the possibility of their removal in the near future, he said that the restrictions "will be kept." "The European Union has gotten caught in its own trap. Kiev is unwilling to observe the Minsk accords, while the West, with the German government included, is reluctant to put pressure on the Ukrainian authorities regarding the issue," the politician pointed out. According to Neu, the Left Party "has always been against anti-Russia restrictions that have seriously hurt German business." "We insist on the EU and NATO becoming neutral players outside the conflict in eastern Ukraine. At the moment, the opposite is true, Washington and Brussels are the main players on this field, and they only use Ukraine in their struggle against Russia," he stressed.
When asked whether one can expect relations between Moscow and Berlin to become more cordial, he said that he does not expect it in the coming years. "The West, including Germany, is losing its global influence. We are witnessing the revival of such global powers as Russia and China, and the West is not ready to face up to this fact. And that is the reason why we are assuming all efforts to hinder the development of those countries. However, it looks like Moscow and Beijing do not plan to obey anymore," he emphasized.
Russian e-commerce players have proposed introducing a tax on their foreign peers, including AliExpress, Amazon and eBay, Kommersant writes with reference to sources. Russia’s Association of Internet Trade Companies (AITC), an influential lobby, has put together a package of amendments to the Tax Code and the law ‘On information’, a source familiar with the matter told the newspaper. AITC says that companies like AliExpress, Amazon and eBay currently have a competitive advantage over national suppliers, and suggest imposing a mechanism of VAT-registration for foreign on-line services similar to the ‘Google tax’ that came into force on January 1, 2017.
For online-stores that provide cross-border supplies of goods the tax will amount to 15.25% of the final price, one of the sources said. AITC executive director Artyom Sokolov confirmed to Kommersant that the association has drafted such documents. He added that they are currently under review by the government. A representative from the Economic Development Ministry said that the proposals have been received, and the ministry is now preparing its assessment. The Finance Ministry said it is also exploring "such proposals."
Ilya Kretov, head of eBay’s Russian office, said that the move might force certain players to quit the local market. "This will seriously reduce the range of goods supplied to the country. Speaking about eBay, the foreign seller will simply note that it does not supply goods to Russia," he said. President of the National Association for Distance Selling (NADS) Alexander Ivanov believes that the proposals are restrictive. He added that all attempts to tax foreign deliveries in all countries worldwide are loss-making as operational and administrative expenses on them substantially exceed payments.
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