Press review: OSCE to visit Crimea and what Schroeder's appointment offers Rosneft

Izvestia: OSCE mission may visit Crimea during 2018 presidential vote

Crimea may be monitored by the Office for Democratic Institutions and Human Rights of the Organization for Security and Cooperation in Europe (OSCE) during the presidential election in 2018, Izvestia says. When asked about the upcoming visit by international observers to Russia, a source in the organization did not rule out that its representatives might visit the peninsula, adding though only if the mission deems it necessary based on assessments, the publication writes. Representatives are expected to arrive in Russia in December, the source said, as international experts plan to study "the political context and select the best observation format" for the upcoming presidential vote in March 2018." "The mission will outline its recommendations and draft a plan to assign observers to Russia. Only those regions where observation is to be specified, will be covered. Until the plan is drafted, it is unknown where our observers will go," a source in the OSСE’s Office for Democratic Institutions and Human Rights said.

A source in Russia’s Central Electoral Commission explained to Izvestia that OSCE’s interest in the peninsula stems from its desire "to dig up as many violations as possible. “In the West’s anti-Russia campaigns, this will be used as an allegation that Russia’s elections are not legitimate. And most probably any decision by the Office for Democratic Institutions and Human Rights regarding Crimea will be negative, since Europe so far has not acknowledged Crimea as Russian territory. In any case, the Office for Democratic Institutions and Human Rights does not shape the future of elections, and their visit will not affect the legitimacy of the elections,” the Central Electoral Commission highlighted, adding that Crimea will not be left without international observation either.

Jaroslav Golik, a member of the Czech parliament, told the newspaper that he had already received an invitation to Russia’s 2018 presidential election. "Obviously, I am ready to go to any region in Russia, including Crimea. I should admit that it is of a special interest for me, and I have visited the peninsula several times for various goals after 2014," he pointed out. "If the OSCE decides to send observers to Crimea there will be a meeting and it would be an important step by the West towards bettering relations with Russia. The more western representatives visit Crimea, the less slander will be spread globally," the politician added. However, Director of the Institute of the Newest States Alexey Martynov doubts that relations between Russia and the West will improve soon. "It will be a serious reference point to stop senseless talk about whether Crimea is ours or not. Crimea is Russia, and assuming this, the Office for Democratic Institutions and Human Rights will make a decision. Their observers will arrive if they concur with Russian legislation," he noted.

Yarovaya anti-terror legislation to impact foreign telecom operators

The Yarovaya laws obliging telecom operators to store data starting from July 1, 2018, will cover Russian subsidiaries of foreign companies, as confirmed by the Moscow-based Internet Research Institute. As a result, the controversial package will have international repercussions, Kommersant writes on Monday. "Foreign firms holding licenses on providing communication services in Russia may be covered by the ‘Yarovaya package’ and consequently bear risks related to any violation of foreign rights norms," Karen Kazaryan, an analyst at the Russian Association of Electronic Communications, explained.

The prominent anti-terror legislation initiated by State Duma (lower house) member Irina Yarovaya and Federation Council (upper house) member Viktor Ozerov, obliges communications operators to store data on the receipt, transmission, delivery and processing of voice data and text messages, images, and audio and video material for three years. Operators are obliged to keep "the heaviest" content - images, audio and video data - for six months. They will also be required to supply this information at the request of the special services. However, revealing personal data to intelligence agencies means violating the European regulation on protection of personal data, which will come into force on May 25, 2018. Orange Business Services, which is part of France Telecom, is already studying those risks and may eventually abandon the Russian telecom market, Kommersant writes. The company’s marketing director Darya Abramova confirmed to the newspaper that "Orange is considering the risks concerning the simultaneous application of GDPR (General Data Protection Regulation) and Russian laws."

According to Irina Levova, strategic project director at the Internet Research Institute, the requirements of collecting, storing and turning over personal data to security services bear high risks to a company’s reputation. "Potentially, what will minimize risks in the legal framework is what the Russian government prescribes in terms of procedure, timeline and storage volume in subordinate legislation, which has not been approved yet," she said, adding that at the moment "a solution to the issue is not clear for companies." The ‘Yarovaya’ package may also cover websites of foreign media, such as BBC, CNN and other global TV stations, and online trade platforms, which may eventually be forced to leave Russia, Kommersant said.

RBC: Schroeder’s appointment to Rosneft board a win-win strategy

The appointment of ex-German Chancellor Gerhard Schroeder to the new board of directors of Russia’s top oil producer Rosneft is expected to expand the company’s global business, RBC business daily says. Taking into account his status as a political heavyweight, Schroeder may lobby Rosneft’s interests internationally, Partner of Goltsblat BLP’s corporate practice Anton Panchenkov told the publication, adding that he considers the move to be politically pretentious rather than economically pragmatic.

According to Chairman of the Board of Top Contact recruitment agency Artur Shamilov, Schroeder’s appointment is a win-win negotiation strategy, which on the one hand gives credit to the ex-chancellor, and on the other hand offers Schroeder an opportunity to promote his own interests abroad. The move is beneficial for both sides and reinforces the long-standing good relations, he said. Shamilov added that foreigners do not often chair the boards of Russian companies, and this strategy is common for firms with a big chunk of foreign capital, focused on international export markets.

However, some experts do not consider it correct to view Schroeder’s appointment to Rosneft’s board as a new trend in Russian corporate management. Sergey Patrakeyev of Kovalev, Tugushi & Partners told RBC that he believes this as an exception. “The appointment of a foreign citizen to head the board of directors of a state-held company should be viewed as a politically-motivated decision, and in such cases, the nominee should be a person with unique aptitudes, which Russian candidates lack," he said, adding that he supposes that Schroeder meets both criteria.

Kommersant: Demand for holidays in Russia to slump in winter

The demand for winter tours across Russia has dropped substantially, Kommersant says citing data provided by market players. Level.Travel said that in January-September 2017, holidays in Russia accounted for 5% of the total sales structure for the winter season, while now it is no longer on the list of destinations in demand. Travelata.ru offers similar data: winter tours across Russia accounted for 14% of sales, whereas now they only make up 2%. On the other hand, the demand for outbound trips is on the rise.

According to Intourist’s Sales Director, Sergei Tolchin, the demand for trips to European alpine winter ski resorts has risen 20% this year compared with 2016, whereas interest in Russian destinations is falling proportionally. Demand for tours across Russia has also become one of this summer’s trends, after two years of stable growth, Kommersant writes.

Travelta.ru says that Thailand has all the chances of becoming the most popular foreign destination for the upcoming winter season, as its share in the sales structure has soared from 9% to 24%. The United Arab Emirates follows Thailand, with the demand rising from 7% to 24%. This destination is considered to be an alternative to Egypt, which has not been reopened yet for Russian tourists. According to Level.Travel, Thailand, India and Vietnam are the most sought after destinations among Russian tourists right now, with 33%, 27% and 9% sales shares, respectively.

Media: Former Itera owner to return to big oil

Igor Makarov, the former owner of Russia’s Itera gas company, who sold its gas business to Rosneft for $3 bln in 2013, plans to acquire a 50% stake in New Stream involved in refining and owned by Dmitry Mazurov through his Areti Group, Kommersant writes citing sources. Several sources familiar with the matter told the newspaper that Areti had agreed to acquire half of New Stream. A source in New Stream confirmed to Kommersant that the two businessmen will jointly own and manage the group, which contains the Antipinsky and Mariysky refineries, as well as production assets in the Orenburg Region. The source added that the partners also plan to optimize debt and will consider "new strategic acquisitions." A source in Areti confirmed the planned deal, adding that the company had always considered promising offers in various segments of the energy sector.

Director of Moscow-based office of Urus Advisory Alexey Panin considers the move to enter New Stream’s capital to be a wise step for Makarov in returning to big oil, while for Mazurov it offers opportunities to attract financial partners, since the Antipinsky refinery has a huge debt, while Makarov would have funds after the Itera deal. "They both can set up a good independent business," he told Vedomosti. Karen Dashyan of Advance Capital sees the deal with New Stream not as an acquisition of refinery assets, but more as a creation of a joint venture for further synergy. He agrees that the new investors are likely to clean up the debt burden.

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