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Press review: Russia, China move away from dollar and Congress targets Nord Stream 2

Top stories in the Russian press on Friday

Izvestia: Russia set to defend its position in PACE

Moscow is committed to upholding its position on Ukraine and on human rights in the Russian Federation in Parliamentary Assembly of the Council of Europe (PACE), Permanent Representative of the Russian Federation to the Council of Europe Ivan Soltanovsky told Izvestia. He noted that the Russian point of view is often distorted by some delegates.

"We have a difficult job ahead of us to explain the truth on many pressing issues that are heavily politicized and distorted," Soltanovsky told Izvestia. "This is mainly due to the current situation in Ukraine and around it. It is an absolute distortion of our position on the Minsk agreements and Donbass," he added, castigating the continuous rumors about the Crimean Tatars as politicized allegations.

According to the politician, the assembly also distorted the facts on the human rights situation in Russia. It is necessary "to firmly dispel any insinuations on the topic," he told the newspaper.

Fundamental contradictions on Ukraine and some other issues may be the reason for introducing secondary sanctions against Russia in PACE, the newspaper wrote. After all, the resolution that returned Moscow to the Assembly also includes use of restrictive measures. Senator Alexey Pushkov told Izvestia that this issue could be raised once again in April 2020, when the PACE Monitoring Committee presents a report on Russia. At the same time, many delegations perceive the restoration of Russia’s rights optimistically. According to lawmakers interviewed by Izvestia, this is a good start for dialogue and resolving the crisis in the organization.


Izvestia: Top Russian, Chinese banks move away from the dollar

Moscow and Beijing have concluded an intergovernmental agreement on switching to settlements in national currencies as part of the de-dollarization campaign announced almost a year ago, Izvestia wrote. VTB and China Merchants Bank will be authorized to carry out settlements, three sources close to the Central Bank told the newspaper.

Chairman of the State Duma Committee on Financial Market Anatoly Aksakov told Izvestia that creating "gateways" between the Russian and Chinese counterparts of SWIFT could become one of the mechanisms for mutual settlements in national currencies.

Aksakov told the newspaper that in order to increase the volume of settlements in national currencies, it will be necessary to form a market for ruble and yuan financial instruments. This will insure against fluctuation risks in the exchange rate on key goods in Russian-Chinese trade. According to him, in the coming years, the share of settlements with China in rubles can increase from the current 10% to 50%.

VTB told the newspaper that the credit institution is the only Russian organization that has a financial license in China. In addition, the bank has correspondent accounts in rubles and yuan, and is also actively promoting the use of Russian and Chinese currencies in foreign trade.

A source familiar with the negotiations told Izvestia that a mechanism for mutual settlements is planned to be set up by 2020. Initially, major state-backed companies will switch to payments in rubles and yuan. The source added that settlements in national currencies would also be carried out on contracts that were originally concluded in US dollars.


Nezavisimaya Gazeta: US Congress, Denmark may slow down Nord Stream 2

In the near future, the United States Congress may adopt a law on Europe’s energy security, which will deliver a significant blow to the construction of the Nord Stream 2 gas pipeline, Nezavisimaya Gazeta wrote. The House’s Committee on Foreign Affairs unanimously approved a bill that slaps an entry ban into the US and freezes the assets of people under US jurisdiction involved in "selling, leasing, providing" ships for laying Russia’s Nord Stream 2 and TurkStream pipelines at sea. According to experts interviewed by the newspaper, the main problem for Gazprom is that the company does not have its own pipe-laying vessels that could build pipelines like Nord Stream 2.

The threat of imposing sanctions against the construction of Russian offshore gas pipelines is insignificant, expert analyst at Finam Alexei Kalachev told the newspaper. "The ban on entering the US and freezing assets is unpleasant, but not so much as to stop work, most of which have already been completed," Kalachev noted. According to the latest information from Gazprom, around 60% of the underwater part of the Nord Stream 2 has already been laid, and now the process is being carried out in Finland's waters.

Meanwhile, leading analyst at the Financial University under the Russian Government Igor Yushkov believes that the threat of sanctions against Nord Stream 2, which prohibits providing pipe-laying vessels, is the main risk to the project. "The company - operator of Nord Stream 2 has received loans to finance the project virtually in full, and all materials have been purchased. Therefore, a ban on funding will no longer have any effect. However, the work on laying the pipe continues. The problem for Gazprom is that the company does not have its own pipelayer vessels that could reliably construct such gas pipeline as Nord Stream 2," the expert told the newspaper.

By the same token, Yushkov noted that approval of the bill by one of the committees is still far from its enactment.

Meanwhile, apart from Washington’s sanctions, there is one more factor that can significantly delay the commissioning of Nord Stream 2. A potential disruption of the pipeline commissioning due to the position of Denmark, who has been delaying the approval of the project. The country remains the only one that has not granted Gazprom permission to lay the pipe through its waters, the newspaper wrote.


Vedomosti: Top Moscow-based car dealer faces criminal charges

The Russian Investigative Committee initiated a criminal case against the owner of the Rolf car dealership Sergey Petrov and several managers of the company for moving 4 bln rubles ($63.4 mln) abroad. Petrov told Vedomosti that he feels that the reason for the searches is an attempted illegal takeover.. According to him, former General Director of Rolf Tatyana Lukovetskaya and former Director for Development and Analysis Anatoly Kairo are suspects in the case. Experts interviewed by Vedmosti believe that the case might be the start of a new trend.

The authorities announced that it filed a criminal case against Petrov under the Criminal Code for transferring funds to accounts of non-residents using forged documents. The maximum penalty for this carries up to 10 years in prison and a fine of up to 1 mln rubles ($15,842).

Petrov believes that the case could be connected to his politics. Petrov financially assisted opposition politicians, several sources close to the businessman told Vedomosti. A source in the presidential administration and another source close to the Kremlin’s internal political bloc told the newspaper that the topic of the arrest of Petrov in was not discussed in Kremlin circles.

At the same time, political analyst Evgeny Minchenko doubts that the situation is connected with Petrov’s participation in politics. The case seems to be a warning that money should not be pulled out of the country, since too many people are doing this, he told the newspaper.

The case could point to a general trend, which means restoring order under conditions when it is more and more difficult for the state to fulfill its obligations, political scientist Alexey Makarkin told Vedomosti. Ordinary business disputes turn into criminal cases and become elements of political campaigns, he said. According to the expert, anyone can become a part of it - Petrov, who did not hide his opposition views, or American businessman Michael Calvey.


Vedomosti: Smartphone manufacturers may be required to install Russian software

The Russian Ministry of Communications and Mass Media has prepared a draft amendment to the law on communication, according to which smartphone manufacturers will be obliged to supply equipment to Russia with pre-installed applications made by Russian developers, Vedomosti wrote referring to a copy of the document.

According to the newspaper, the bill does not indicate how many applications manufacturers will have to pre-install on devices. In turn, the Russian government will create a list of categories of mandatory programs to install. Vedomosti explained that amendments would determine only the type of necessary software - messengers, maps, search engines, and so on.

It was noted that the bill largely repeated the concept of the Federal Antimonopoly Service (FAS) on pre-installed Russian applications on smartphones, which was presented earlier. At that time, Microsoft and Intel opposed the proposition, while Megafon, Group and MTS supported it.

"It is important that the technical details of any new regulation are carefully worked out. First of all, user experience and device security should not be affected. It is also necessary to preserve the existing agreements with manufacturers," a representative of Yandex told the newspaper. Apple did not respond to the request.


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