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Press review: Black Sea clash not stopping Nord Stream 2 and Russian oil ups China trade

Top stories in the Russian press on Monday, December 10


Izvestia: Kerch Strait incident not hindering progression of Nord Stream 2

The construction of Nord Stream 2 is being carried out strictly according to its approved schedule, the company’s official representative operating the project Nord Stream 2 AG Jens Muller told Izvestia. He noted that by the end of November, around 300 km of pipeline had been laid along the bottom of the Baltic Sea. According to Russian Senator Vladimir Dzhabarov, as for US attempts under various pretexts to undermine the construction of the gas pipeline, they are being made to clear the market for supplies of American shale gas. The European Parliament, in turn, said that the Russian project will ensure reliable gas supplies to EU countries.

New requirements by the United States and some European countries to stop the implementation of the pipeline did not affect its construction, the Nord Stream 2 AG company, responsible for the project, told Izvestia. According to Muller, the project is going according the schedule, and as the company responsible for laying the pipeline, Nord Stream 2 AG does not comment on political disputes and debates.

The US demands to halt the construction of Nord Stream 2 lay bare its attempts to tighten its grip on the European gas market, First Deputy Chair of the Federation Council’s Committee on Foreign Affairs Vladimir Dzhabarov told the newspaper.

"Earlier, the Americans claimed that Russia would blackmail Western Europe with gas supplies and become a monopolist in the market, now they do not hide that everything depends on commercial gain. They want to sell their shale liquefied gas, which is 30% more expensive than the Russian pipeline gas. Although the usual market struggle is there, the methods are completely unscrupulous," the senator told Izvestia. The politician noted that the incident in the Kerch Strait has nothing to do with Nord Stream 2, and therefore it is simply inappropriate to use it as an argument against the project.

Czech MEP Jaromir Kohlicek told Izvestia, Nord Stream 2 is necessary for both the Czech Republic and the entire European Union.


Nezavisimaya Gazeta: Russian oil acts as engine for bilateral trade with China

In 2018, the plans of President Vladimir Putin and Prime Minister Dmitry Medvedev to boost trade with China to $100 bln could come true. Russian officials began saying this figure was within reach even before the decline of oil prices in 2014. However, the Chinese authorities only now have reported that in the first 11 months of this year, the trade turnover between both countries amounted to $97.23 bln, an increase of almost 28% in annual terms. Oil prices primarily helped increase Russian exports, Nezavisimaya Gazeta wrote, as well as the general growth of the total oil supplies to China. Russia has so far delivered more oil to China than in the entire year of 2017.

The volume of exports from China to Russia in 11 months increased by 12% and exceeded $43.45 bln. The imports of Russian goods and services to China rose by 44.3% to $53.78 bln. Thus, the trade balance between Russia and China was positive, whereas earlier deliveries from China prevailed in the structure of mutual trade, the newspaper wrote.

"Obviously, today oil actively helps Russian-Chinese trade. Its supplies in terms of value are increasing. Just in the first 9 months of the year, Russia supplied various types of fuel to the China for $30 bln," the newspaper wrote. By comparison, in the same period last year, the country sold hydrocarbons for only $18 bln.

Russia continues to be a net exporter in bilateral trade, analyst at Alor Broker Alexey Antonov told Nezavisimaya Gazeta. "Based on statistics, we can conclude that the breakthrough in bilateral trade is provided solely by the rise in the volume and price of gas, oil and petroleum products supplied to China. Meanwhile, high-tech products are practically not supplied. By comparison, the United States and the EU mainly supply high-tech equipment to China with high added value," he said.

As a result, the growth in the turnover of commodities and the share of mineral products in the export structure increasingly turns Russia into Beijing's raw material storehouse, which imports exclusively oil, gas, timber and metals, Antonov told the newspaper.


Vedomosti: Central Bank to clamp down on online payment service providers

Two bills regulating the payment market were submitted to the State Duma on Friday and if approved, the Central Bank will regulate the providers of payment apps that enable consumers to pay with smartphones or smartwatches using systems like Apple Pay, Samsung Pay, Google Pay, as well as Mir Pay, being developed by Mir payment system, Vedomosti wrote.

All operations using these payment services go through the global Visa and Mastercard systems, bankers noted. The Central Bank will not directly regulate telephone payment applications, but through financial institutions. For example, banks will be able to work with payment applications only if they do not have access to passwords and codes, and analogues of handwritten signatures, which furnish the right to manage money. Banks will have to check whether telephone transactions comply with the financial regulator’s requirements for information security.

Adopting the amendments will increase expenses for banks and their partners, they will have to reconsider their relations and restructure them under the new conditions, a representative from the online payment service, Yandex.Kassa, told the newspaper.

Another key point is the requirements for foreign money transfer systems, such as MoneyGram. This system is not listed in the Central Bank’s register and is not under regulation, although many Russians use it for cross-border transfers, Board Chairman at the National Payment Council Alma Obaeva told Vedomosti.


Kommersant: Digital ID platform could be launched in Russia by end of decade

The Russian Ministry of Communications and Mass Media is working on a blueprint for a citizen’s digital identity platform put together by the Central Bank and Rostelecom, carrying an estimated worth of 3 bln rubles ($45.24 mln) in private investment, Kommersant wrote. Presumably, the data from the system can be used on a commercial basis, for example, by banks. However, experts fear that the technology may pose a threat to people’s freedom, and could lead to abuse by private companies. A source familiar with the situation told Kommersant that concept would be agreed on this week.

The project’s goal is to provide citizens with an opportunity to manage their data; to transfer it upon request or withdraw; and also to provide convenient, transparent and secure data exchange between citizens, and government and business, Rostelecom said. The Unified System of Identification and Authentication is considered to be the main platform for identification, the Central Bank’s press service clarified. The identification system will be supervised by the Ministry of Communications and the "authorized body in the field of biometric identification." At the moment, Rostelecom is responsible for collecting, processing and storing biometric data.

This project has many critics. Collecting a digital centralized dossier on a citizen can lead to the violation of personal freedom and adversely affect the state of public relations, President of the Information Democracy Foundation Ilya Massukh told Kommersant. The idea is essentially to gather and fuse metadata globally, the same idea for which Facebook and Google are actively criticized, Head of Emerging Technologies in Risk Consulting at KPMG in Russia and the CIS Nikolay Legkodimov told the newspaper.


Vedomosti: Russian Deposit Insurance Agency to sell assets of failed banks

The Russian Deposit Insurance Agency (DIA) will open a sales office in Moscow for assets of banks, which have come under the control of the agency after their licenses were revoked, General Director of the DIA Yury Isaev told Vedomosti.

"We want to sell all our assets faster and more efficiently," Isaev explained. "Compared to last year, the percentage of claims by creditors of banks with a revoked license being satisfied has grown, but it is obvious that this trend needs to be supported," he told the newspaper. As of the end of September, the DIA was in the process of liquidating 345 banks.

"Theoretically, the idea looks good. Maybe it will really help sell some property faster," First Deputy Chairman of the Board of Sovcombank Sergey Khotimsky told the newspaper. However, good assets are usually withdrawn from banks when the license is revoked, and it is quite difficult to return them.

It was reported that the DIA was developing a portal for selling the property of banks during their liquidation and bankruptcy. In addition, the DIA planned to sell assets through the site of one of the largest operators in the asset sales market - the Auction House of the Russian Federation (the company is accredited by the Federal Agency for Property Management and the Ministry of Defense).


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