Kommersant: Ukrainian parliament pushes to sever official ties with Russia
The Verkhovna Rada (the parliament) of Ukraine might decide next week to cut diplomatic relations with Russia. According to Kommersant, this amendment will be included in the ‘On the reintegration of Donbass’ law, which the parliament plans to consider in its second reading on November 16. Sources in the Verkhovna Rada told Kommersant that delegates from the majority of factions might vote in favor of this step. The next stage, after Ukrainian President Pyotr Poroshenko approves the decree, Russian diplomatic institutions in Ukraine, and their Ukrainian counterparts in Russia will be closed. Kiev expects Belarus or Switzerland to represent its interests in Moscow.
"The law on the reintegration of Donbass will classify Russia as an aggressor country - I hope that the necessary votes will be amassed. Maintaining diplomatic relations after this would already be a crime on the part of the Ukrainian Foreign Ministry. These ties are already broken," the amendment’s author Ivan Vinnik told Kommersant.
At the same time, according to Kommersant's sources in Kiev, severing diplomatic relations with Russia right now was not part of Pyotr Poroshenko's plans. On the contrary, the agreements reached with Ukraine, during the most recent October visit by the State Department's special envoy to Kiev Kurt Volker, looked like something new was in store. Washington was going to present the law to Moscow as evidence of Kiev's goodwill and constructive approach.
Despite the fact that Poroshenko wants to avoid confrontation with the Americans, sources in Kiev told Kommersant that given the current climate the president and his allies would have no choice but to support the amendment. At the same time, the majority of sources interviewed by Kommersant in the Verkhovna Rada are convinced that Vinnik's amendment will eventually be approved. According to them, lawmakers have no alternative but to sever relations with a country recognized as an aggressor.
"Following the parliament's decision, the president must sign a decree on cutting diplomatic ties. Then the Foreign Ministry, in agreement with the president, announces when Russian diplomats must leave Ukraine. This does not apply to consular employees, since their activities are regulated by the Vienna Convention on Consular Relations and the bilateral consular agreement between Ukraine and Russia," a source in the Ukrainian Foreign Ministry told Kommersant about possible future developments.
"At the same time, Kiev would begin negotiations with a third country, so that its embassy represents Ukraine's interests in Russia - transfers notes, correspondence, information to the Russian Foreign Ministry. Potential candidates for this role are Belarus as the most convenient country geographically and neutral Switzerland," Kommersant's source added.
Izvestia: Russia-NATO ties still stuck in the mud - envoy
Relations between Russia and NATO are still going nowhere, although after a two-year timeout, it was possible to boost political dialogue and resume military contacts, Russia's Permanent Representative to NATO Alexander Grushko told Izvestia.
"We cannot talk about progress. NATO continues to stick to the decisions of the Wales and Warsaw summits, and all practical cooperation is still frozen," he said.
At the same time, Grushko noted a number of changes that have occurred in relations between Moscow and the North Atlantic alliance lately. "After a two-year pause, the political dialogue somewhat intensified, communication became more focused on objectives. It is important that high-level military contacts were renewed," he said.
According to Grushko, there have been no significant changes in US approaches to the role of the North Atlantic alliance under President Donald Trump. The United States "plays first fiddle in the alliance in terms of determining the priorities and spheres of NATO's activity," he said. "It is too early to judge the new administration’s policy, but significant changes in the US approaches to the alliance’s role has not happened, with the possible exception of ramping up demands on Europeans to increase military budgets," the diplomat said.
The buildup of NATO forces in Eastern Europe provides the basis for projecting the alliance's forces in the region, and Russia will have to take these actions into account in its military planning, Grushko said. "As a matter of fact, an endless chain of events is united by a single mission - to master the military theater in Central and Eastern Europe, to create the potential for using force," he said.
Moscow is also focused on cooperation to resolve the situation in Afghanistan with all interested parties, but NATO is not ready to restore interaction with Russia, Grushko added.
In 2017, three meetings of the Russia-NATO Council took place at the level of permanent representatives. The latter was held in Brussels on October 27.
Kommersant: Gazprom wins tax break thanks to foreign partners
Using foreign partners’ complaints against the taxation of mining projects in Russia, Gazprom won a reduction in the mineral extraction tax to levels seen by independent gas producers for its Achimov deposits, Kommersant wrote. The benefit will cover not only Gazprom's joint ventures with OMV and Wintershall, but also monopoly structures developing deposits with reserves of 1 trillion cubic meters of gas. According to Kommersant's estimates, in 2018 Gazprom and its Achimov JV’s taxes will drop by 2.8 bln rubles ($47.23 mln), facilitating a savings of 2.2 bln rubles ($37.11 mln) from that for the monopoly itself.
According to the bill introduced by the Finance Ministry to the government, there won’t be a multiplying co-efficient for deposits with depths of more than 3,300 m - the reason why Gazprom paid a higher mineral replacement tax than independent gas producers. The mineral replacement tax on gas for such deposits might be reduced by 40% starting from 2018, whereas the tax on gas condensate production will remain unchanged.
Initially, the Foreign Investment Advisory Council brought up the issue of reducing the severance tax for Gazprom’s joint ventures at an October 16 meeting, when Prime Minister Dmitry Medvedev was asked to lower taxes for the Wintershall subsidiary, since it suffered from a sharp hike in the mineral replacement tax for Gazprom. However, in the end, not only will Gazprom's JV with foreigners use this benefit, but so will Gazprom's projects in the Achimov deposits - this was confirmed to Kommersant by several sources familiar with the situation.
Currently, the Achimov deposits already have a preferential mineral extraction tax rate, which is half that of the standard one. The new incentives will lead to a reduction in the average rate of mineral extraction tax on Gazprom’s Achimov deposits by approximately 40%.
Nezavisimaya Gazeta: Russian economics swaying demographics
Kremlin officials reported a decline in Russia’s mortality trend, as well as a drop in the birth rate. Since the beginning of the year, the number of deaths in Russia decreased by 32,000 people, according to Russian Deputy Prime Minister Olga Golodets. At the same time, according to Rosstat, in the first 9 months of 2017, 1.2 mln children were born, 164,000 (11.5%) less than in January-September 2016. Experts interviewed by Nezavisimaya Gazeta call this trend a demographic collapse.
"The birth rate’s dependence on incomes is unquestionable," Mark Goikhman, a leading analyst at TeleTrade told the newspaper. "In 2014, the population’s real disposable income sank 0.7%, in 2015, it dropped by 3.2%, and in 2016, it plunged by another 5.9%. In September 2017, a 0.3% reduction was seen compared to September 2016. Although these are average figures, they convey a real decline in the chances of providing for future children," he added.
The birth rate is one of the most reliable indicators of public sentiment, the newspaper wrote. "A number of factors influence the decision to have children. The leading factor is not only stable income on an average level, but also confidence in the future, the availability of quality medical care and education," Associate Professor at the Plekhanov Russian University of Economics Kiril Parfyonov told the newspaper. Although, according to him, attempts to attribute the decline in the birth rate to just economic crises is "a solution lying on the surface and, unfortunately, incorrect.
"The economic decline and the seriously sharp budget deficit did not allow the state to stimulate the birth rate. Federal subsidies for families with multiple children ceased to be adjusted for inflation two years ago, and this measure cannot break the general trend in the standard of living and social stagnation," Goikhman added.
According to Nezavisimaya Gazeta, the level of uncertainty and anxiety in society might be one of the main contributing factors to the situation and investing in social policy could be right move for the government.
Izvestia: Facebook and Twitter intend to localize data in Russia
The largest US social media companies decided to meet the requirements of Russian legislation. Facebook plans to create a representative office in Russia, and Twitter intends to transfer servers with Russian citizens’ personal data to the country, according to Izvestia. Thus, these companies will comply with the requirements of the "On Personal Data" law. Several sources told the newspaper that Twitter is currently choosing the location for its servers.
Twitter’s headquarters did not comment on the information, but Russia’s Internet watchdog officially confirmed to Izvestia that the social media company promised to localize the servers with data of Russian citizens, in order to adhere to the requirements of the law.
"Roskomnadzor (Russian Internet watchdog) has received a letter from Twitter confirming its readiness to localize databases in Russia by mid-2018. The service is constantly monitoring this agreement’s implementation," Roskomnadzor told the newspaper.
At the same time, several sources familiar with the situation told Izvestia that Facebook representatives are looking for an individual to head the company’s division in Russia and are choosing an office.
One of the sources told Izvestia that the earnings of the American corporation on the Russian market have become quite significant. To increase it further, a decision was taken to start "working closely" with the Russian authorities. According to Leonid Delitsyn, leading analyst at Finam investment holding, in 2016, Facebook managed to earn $70-100 mln in Russia, this figure might surge 25-30% in 2017. The social network sells ads directly through the main site.
President of the SuperJob recruiting portal Alexey Zakharov told Izvestia that usually foreign Internet services create representative offices in other countries when they reach a certain level of revenue and understand that it's time to work more actively with advertisers and increase profits. Thus, if Facebook starts making long-term plans for Russia, it means that the company has to comply with the requirements of this legislation.
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