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Press review: US midterms’ ramifications for Russia and Monaco's arrest of Russian tycoon

Top stories in the Russian press on Thursday, November 8


Kommersant: Midterm election outcome to hamper Russian-US ties

After the November 6 US midterm elections, each side declared victory, Kommersant business daily writes. The Republicans secured a more sizeable majority in the Senate, while the Democrats gained control over the House of Representatives. In any case, according to experts questioned by Kommersant, the standoff between the executive and legislative branches in the United States will grow, which is bound to reignite the narrative on the Trump-Russia collusion allegations. The need to come to terms with Congress may force Trump to drop his plans on normalizing ties with Moscow, which is not a priority for him ahead of the 2020 presidential election, the paper says.

Experts interviewed by Kommersant are confident that after the Democratic Party secured control over the House of Representatives, the destabilizing factors will have a greater impact for Russian-US relations.

Anton Fedyashin, Professor at the American University in Washington, DC, notes that the sanctions against Russia had been approved by the Republican majority in Congress. "After this election the trend may only worsen, given that now the more anti-Russian minded Democrats will play first fiddle in the House of Representatives," he said. According to the expert, it is highly likely that taking advantage of control over the lower chamber, the Democrats will launch a new series of investigations against Trump’s allies, and this will inevitably concern the accusations of collusion with Russia during the 2016 presidential campaign.

In general, after losing the majority in the House of Representatives, Trump will find it more difficult to pass bills for successfully carrying out his reforms, the expert said. "In this situation, the Republican administration will be forced to seek points of consolidation with the opposition. One of a few of these points is criticism of Russia and anti-Russian sanctions," Fedyashin said.

Vladimir Batyuk, Chief Research Associate at the Russian Academy of Sciences’ Institute for the US and Canadian Studies, said that amid the continuing domestic political struggle in the US there is one fundamental issue that Russia is an enemy. "The difference is only that the Republicans view China as America’s major foe, while the Democrats, who gained control over the House of Representatives, consider Russia as the key enemy. That’s why the sanctions pressure on Russia will inevitably grow."

However, when considering sanctions against Russia, the US Congress has to take into account the interests of the US business community, which can be a factor of restraint on this policy, Batyuk said.

Vladimir Milovidov, head of the international finances department at the Moscow State Institute of International Relations, noted that the US economy remains volatile and the outcome of the 2020 presidential election will depend on its successes. Washington needs to boost its presence on global energy markets, and it won’t be an easy task to squeeze Iran out of there. Forcing Russia out of these markets is even a more difficult task and Moscow has the possibilities of regulating the output volume. "Given this, we won’t see the most frightening scenarios, and we've gotten accustomed to the rhetoric," Milovidov said.


Izvestia: Monaco's detention of Russian tycoon takes the spotlight

Russian billionaire Dmitry Rybolovlev, who was detained in Monaco earlier this week, has been released on bail, Monaco Prosecutor General Sylvie Petit-Leclair told Izvestia, without giving details on the sum. The tycoon and owner of AS Monaco football club, has been accused of corruption in Monaco. The case hit the headlines in 2017 when the Le Monde newspaper published an investigative article alleging that Rybolovlev had created an entire network of loyal law enforcement officials to settle a dispute with Swiss art dealer Yves Bouvier.

One piece of evidence implicating the businessman was his lawyer’s contact with high-ranking law enforcement officials in Monaco. Together with the Russian tycoon, the country’s former top justice officials were placed in custody.

Rybolovlev has been in particular accused of influence peddling, which has no parallel in Russian legislation, Head of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin told the paper. It’s unclear how it was possible to arrest the mogul based on the analysis of phone calls that his lawyer had made two years ago, he noted.

Rybolovlev’s detention on accusations of exerting influence over state officials in a broader sense may be viewed as corruption charges, lawyer Yevgeny Korchago told the paper. "At least, this may result in freezing all of Rybolovlev's business projects in Monaco. If he is found guilty, the assets and accounts will be arrested, and he may face a real sentence," the lawyer said.

According to Shokhin, the frequent arrests of Russian entrepreneurs abroad signal that Russian businesses should behave more carefully since this sort of case may be the start of show trials.

Another lawyer Timur Marshani said Rybolovlev would have to prove that he was not involved in corruption schemes and also explain the origin of his fortune. Background checks will be carried out on his family members and affiliated persons under French legislation. Russia’s law enforcement agencies may join these checks, and even request his extradition if there are grounds for that, he said.


Kommersant: Putin, Netanyahu won’t hold talks in Paris after media leak on new Syria strike

News broke on Wednesday that Russian President Vladimir Putin and Israeli Prime Minister Benjamin Netanyahu would not hold a meeting in Paris during the events marking the 100th anniversary of the end of World War I, Kommersant writes. The meeting was not cancelled because it had never been planned, Kremlin Spokesman Dmitry Peskov told reporters. Israel seeks this meeting and hopes that it would be held by the end of this year, according to media reports.

The Israeli premier wants to discuss the issue of Iran’s presence in Syria, which has become more vital after a Russian surveillance aircraft was shot down over Latakia. Israel says it is forced to continue strikes on Iranian facilities in Syria and insists that Tehran is using the Russian military as a shield.

On Tuesday, Israel’s Kan 11 TV channel reported that Moscow had canceled the meeting between Putin and Netanyahu in Paris. According to the report, the agreement on this meeting had been reached between Russian Security Council Secretary Nikolai Patrushev and Israel's National Security Council Director Meir Ben-Shabbat. The TV channel claimed that Moscow had decided to call off the meeting after Israeli media reported on a new airstrike against Syria in the wake of the Il-20 crash over the Mediterranean Sea in mid-September. The date of the second attack has not been revealed, but it was allegedly carried out after Netanyahu’s address at the UN General Assembly on September 27. The Yediot Ahronot newspaper writes that the second attack was aimed at examining Russia’s reaction and assessing the depth of the crisis between Russia and Israel. According to the report, the Russian military did not remain indifferent to the attack and voiced protest via the Russian-Israel communication mechanism, but preferred not to publicize the information on this strike in order not to deepen the crisis.

Moscow sent S-300 missile systems to Syria to "cool hot heads," the Russian Defense Ministry said earlier. The delivery of the systems was completed on October 2. Israel says this step worsened the situation in the region. "The Syrian military cannot use the equipment that they receive in a right way. If it is used incorrectly, civilian aircraft may be shot down. Air transportation in the region is jeopardized," Minister of Jerusalem Affairs and a member of the Knesset Ze’ev Elkin warned.


Izvestia: Washington’s November sanctions won’t isolate Russia, but may hit ruble

Russia will roll out a tit-for-tat response to any unfriendly diplomatic steps included in the second package of US sanctions, Chairman of the Russian Federation Council’s (upper house of parliament) Foreign Affairs Committee Konstantin Kosachev told Izvestia. Experts interviewed by the paper say Washington’s move is unlikely to seriously shatter Russia’s positions in the global financial system. However, the forecast about one more package dubbed the "bill from hell" is more pessimistic as these economic restrictions may hit the ruble.

Speaking on Moscow’s possible response, Kosachev said that concerning the economy, Russia should be more accurate and selective, in order not to harm its own interests. "But as for politics, in particular diplomacy, I’m an ardent supporter of tit-for-tat measures," the senator stressed.

According to Kosachev, Russian-US relations now are at their lowest point and Washington’s new sanctions cannot have any influence on them. The senator noted that the new sanctions, which are linked to the Skripal case, would have a negative effect, but it would not be critical. "Russia’s economy is developing in line with its own laws. It can move forward without cooperation with the US," the lawmaker emphasized.

Deputy Director of the Center for Comprehensive European and International Studies at Russia’s Higher School of Economics Dmitry Suslov told Izvestia both bills currently considered by Congress imply tough measures against Moscow. The "bill from hell" stipulates a full ban on any communications with Russia’s state banks and this means isolating Russia from the global financial system, which is controlled by Washington. "However, it’s very unlikely that in this situation Washington will accept that, and the Europeans would hardly back this. The US cannot initiate a full blockade of the Russian financial system unilaterally."

To reduce the possible damage of the US measures for the Russian economy the Russian government has drawn up a plan to wean the economy off the dollar, the paper says.


Vedomosti: Russia’s natural resources minister threatens to ban lumber exports to China

Minister of Natural Resources and Environment Dmitry Kobylkin has warned that Moscow could completely suspend lumber exports to China unless it helped Russia on forest regeneration, Vedomosti writes. China, as a major consumer of Russian lumber that accounts for 66% of exports (12.9 mln cubic meters in 2017), should help solve the issues of deforestation and forest regeneration, the top official stressed.

However, Russian Federation Council (upper house) Speaker Valentina Matviyenko voiced skepticism about this idea, saying that Russia should bring matters under control itself and neither China nor anyone else would be able to do that.

In the first half of 2018, nearly 7,400 cases of illegal logging (470,600 cubic meters) were registered in Russia, Head of the Federal Forestry Agency Ivan Valentik said in his September interview with TASS.

Russia has never banned lumber exports, but threatened to do so in 2009, Director General of Lesprom Network Alexei Bogatyrev said. However, it’s unlikely that exports will be suspended now as Russia is a member of the World Trade Organization and China is the major consumer of Russian lumber. A far more efficient method is to increase tariffs, he noted. This policy has already led to cutting the export of unprocessed timber and creating a large number of processing plants in the country. The risk of limiting exports may encourage China to invest in creating man-made forests in Russia, Bogatyrev said. However, the problem of illegal logging is unlikely to be solved without clamping down on it, he noted.

If Russia decides to ban lumber exports to China, the niche will be filled by Japan and South Korea, the expert said. Domestic prices won’t be affected by this move because there is the lack of lumber on the market, the expert said.


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