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Press review: Russia's 'crushing response' to US sanctions and Moscow's offer on Syria

Top stories in the Russian press on Monday

Nezavisimaya Gazeta: Russia preparing ‘crushing response’ to US sanctions ‘bill from hell’

Moscow is ready for the bill introduced by US senators on measures against the Kremlin elite and on banning transactions related to Russia’s new sovereign debt, Chairman of the Russian State Duma’s (lower house) Financial Markets Committee Anatoly Aksakov told Nezavisimaya Gazeta. The lawmaker noted the US sanctions’ impact on Russia’s financial system would be insignificant. "It is more symbolic and moral rather than important in material terms," he said.

A source close to the Kremlin has not ruled out that Russia could retaliate with its "crushing" military and strategic measures and review some its international commitments.

"If the unproven meddling in US election gives them the right to cause economic damage and deal a blow to the nation’s welfare, it’s not surprising that Russia could draw up measures, including military and strategic ones, which can result in irreparable losses for the Americans’ economy and profits," the source told the paper.

"I won’t be surprised if soon Russia reviewed some its international commitments given the changes in the international situation. One should always remember that particular commitments were made in a certain international and legal context. The United States is showing this to the entire world today by renouncing its international commitments every day, including in the sphere of control over non-proliferation of nuclear weapons (deal with Iran) and also in tariff and non-tariff protectionism in trade."

The Defending American Security from Kremlin Aggression Act of 2018 (DASKAA), aimed at increasing economic, political and diplomatic pressure on Russia in response to Moscow’s alleged continuing interference in US elections was introduced last week by a bipartisan group of US senators.

The US "bill from hell" suggests sanctions against Russian political figures, oligarchs, family members and other individuals as well as restrictions against transactions related to investment in energy projects supported by Russian state-owned or parastatal entities. Another important measure of the initiative is the demand to ban transactions pertaining to the Russian sovereign debt, which has been discussed this year many times, the paper says.

The new package of measures was inspired by the Helsinki summit between Russian President Vladimir Putin and US President Donald Trump. Moscow considers that Washington’s sanctions initiatives have been triggered by the domestic political struggle in the US.


Kommersant: North Korea, Russia accused of violating UN resolution

US media reports leaked a draft report of the United Nations’ Security Council on North Korea, which accused Pyongyang of violating the organization’s resolutions, Kommersant writes. The document says that Pyongyang has not stopped developing nuclear and missile weapons despite the June 12 agreements reached at the meeting with US President Donald Trump. North Korea is also blamed for going beyond the limit on buying oil products (500,000 barrels per year) envisaged by the UN Security Council’s resolutions. It also says that fuel is purchased through a ship-to-ship transfer in the open seas, which is a rude violation of the sanctions. Besides, Pyongyang is suspected of continuing its military cooperation with Syria and arming Houthi rebels in Yemen.

A diplomatic source told Kommersant the document was leaked to the media after Washington refused to take into account the stance of Moscow and Beijing, which disagree with certain resolution provisions. A consensus of all members of the UN 1718 sanctions committee is needed to endorse the document.

According to the source, the leaks of draft documents to the US media when Russia and China voice their disagreement have become common practice. "This is the violation of the rules of behavior in the UN Security Council," he said. "It looks like blackmail and does not encourage a constructive solution to the problem." The committee members need to settle their differences by September 3, otherwise the document is unlikely to be approved.

US Secretary of State Mike Pompeo also accused Moscow of violating the UN Security Council’s resolution on North Korea. According to him, Russia continues issuing work permissions for migrants from North Korea. The Russian Foreign Ministry has rejected these allegations, insisting that the resolution bans signing new contracts rather than issuing permissions.

Russian government sources told the paper that until 2017 some 38,000 North Korean migrants could be officially employed in Russia. After the restrictions were introduced under the UN Security Council’s Resolution 2375, this quota was cut to 24,000 by the end of 2017.


Nezavisimaya Gazeta: Washington rejects Moscow’s offer to join Syria post-war rebuilding effort

The United States has once again rebuffed Moscow’s proposal to participate in Syria’s post-war reconstruction and repatriating refugees, Nezavisimaya Gazeta writes. The offer was sent in a July 19 letter by Russia’s Chief of General Staff Valery Gerasimov to Chairman of the US Joint Chiefs of Staff Joseph Dunford, Reuters reported, citing a US government memo.

The Russian initiative received an "icy reception" in Washington, the report said. The Russian Defense Ministry voiced disappointment over the US side’s inability to honor its agreements on unveiling details about bilateral contacts only based on mutual consent.

Russian military expert Col. Vladimir Popov told the paper: "The Americans are refusing to join humanitarian cooperation with Russia on Syria in order to place the burden of the country’s restoration on Moscow." However, even in the occupied areas they are ready to share responsibility on the rebuilding effort with other countries - Turkey, Jordan, Saudi Arabia and others, he said.

Meanwhile, Moscow and Damascus are likely to get a reliable ally in Idlib, namely China, the paper says. Chinese Ambassador to Syria Qi Qianjin told Al-Watan on Friday that the country’s military was ready to take part in an operation in Idlib’s southwest, where the Uyghur militants reside. According to Austria’s Contra Magazin, if China joins the military operations, Damascus will regain control over the entire Syrian territory, and this will be a "nightmare scenario" for the US and Arab countries of the Persian Gulf.


Kommersant: US sanctions bill may slow down foreign investors’ return to Russian market

Capital outflow from funds focusing on Russia’s stock market slowed down, reaching nearly $150 mln in July, compared with $900 mln in June, Kommersant writes citing the BofA Merrill Lynch report. Over the past four months, net capital outflow reached $2 bln. The highest capital outflow figures were recorded four and a half years ago, when the Russian stock market lost almost $4 bln in investment.

The sharp slowdown in the capital outflow is attributed to foreign investors’ hopes about a thaw in Russian-US relations after the Helsinki summit between Russian President Vladimir Putin and his US counterpart Donald Trump, the paper writes. Although no joint statement was adopted, the sides brought their positions closer on some issues, and the two leaders positively assessed the outcome of talks hinting that new meetings could be held.

"Obviously, by July the echo of April sanctions subsided and high oil prices and hopes for a positive outcome of the meeting between the US and Russian heads of state served as an additional factor encouraging investors to take a break," said Vladimir Vedeneyev, the head of Raiffeisen Bank Capital’s investment department.

The continuing talks with the US authorities on lifting sanctions against Rusal and En+ were positively perceived by the market, Director of Investment Department at the UFG Wealth Management Alexei Potapov said.

However, market participants doubt if the negative trend will be overcome soon. "The overall positive mood related to developing markets is gradually fading away and the sanctions risks for Russian assets are again growing, that’s why the outflow is expected to continue," Potapov noted.

Amid the bill on new "crushing sanctions" against Russia introduced by US senators last week, investors will again adopt a wait-and-see attitude and are unlikely to boost their positions on Russian assets until the situation with new sanctions becomes clear, Head of the Assets Management Department at the General Invest Denis Gorev told the paper.


Izvestia: Syrian delegation to attend independence anniversary celebrations in South Ossetia

The Syrian delegation will take part in the celebrations on the occasion of the 10th anniversary of South Ossetia’s independence recognition, Chairman of the republic’s parliament Pyotr Gassiyev told Izvestia. Syrian President Bashar Assad also plans to pay a visit soon, he said. The invitation to the Syrian leader, who recognized South Ossetia’s independence this May, was given by the republic’s leader Anatoly Bibilov during his July visit to Damascus.

Syria became the fifth UN member-state, which established relations with South Ossetia and Abkhazia, after Nicaragua, Venezuela, Nauru and Russia.

Syrian Ambassador to Russia Riyad Haddad said Damascus did not unveil details about the exact number of delegation members, but confirmed receiving South Ossetia’s invitation. "President Assad’s administration has not reported about the date of his visit due to the Syrian leader’s busy schedule. The issue is in the works," the diplomat said.

Russia has confirmed its plans to participate in the celebrations. "We expect to see Speaker of the Russian parliament’s upper house Valentina Matviyenko and also State Duma Speaker Vyacheslav Volodin. The invitations have been sent to the representatives of more than 10 countries," Gassiyev said.

Tskhinval will welcome guests from the self-proclaimed Donetsk and Lugansk People’s Republics, Nagorny Karabakh and Abkhazia. The Syrian president’s visit may take place soon but it is unlikely to be held during the days of celebrations, he noted.


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