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Press review: Putin, Zelensky eye swap as goodwill move and US threatens India over S-400s

Top stories in the Russian press on Friday, July 12
S-400 missile defense system Yury Smityuk/TASS
S-400 missile defense system
© Yury Smityuk/TASS

Izvestia: Moscow, Kiev eye potential swap as goodwill gesture

In a demonstration of goodwill, Moscow and Kiev may strike a deal on swapping detainees in the near future, a source in Russian diplomatic circles familiar with the course of the negotiations between Russian President Vladimir Putin and his Ukrainian counterpart Vladimir Zelensky told Izvestia. Politicians and experts also confirmed this to Izvestia. Verkhovna Rada MP, and Ukrainian envoy to PACE Vadim Novinsky noted that the country's parliamentary election on July 21 will contribute to positive changes in bilateral relations and a peaceful settlement in Donbass. Meanwhile, Chairman of the Russian Federation Council’s Foreign Affairs Committee Konstantin Kosachev believes it is crucial that the call was initiated by the Ukrainian side. This means that Kiev received Moscow’s signal of readiness for dialogue.

According to the Kremlin's press service, Ukraine initiated the telephone conversation between the two heads of state. The Russian diplomatic-linked insider on these talks told Izvestia that the parties discussed the possibility of displaying goodwill gestures in the near future. At the same time, according to the source, Kiev's key request — returning 24 sailors — will be implemented only after their sentencing.

"When the court makes a final decision on the sailors — and Moscow is not interested in delaying this process — they will most likely be transferred to Ukraine as a gesture of goodwill," the source told Izvestia.

Meanwhile, according to Kosachev, it would have been better if "the call from Kiev had occurred even earlier." However, the conversation "can only be welcomed." "It is encouraging that it was initiated by the Ukrainian side," the politician said.

The Verkhovna Rada also believes that this conversation should have been held earlier, given that two months have passed since Zelensky took office. "At the moment, the conversation between the two presidents instills cautious optimism — the hope that the peace process will finally get off the ground and both sides would not simulate it, but actually start moving ahead," Novinsky told the newspaper.


Kommersant: Russia, Kyrgyzstan discuss bilateral relations at talks in Moscow

President of Kyrgyzstan Sooronbay Jeenbekov visited Moscow on July 11 on the way from Switzerland. His meeting with his Russian counterpart, Vladimir Putin, was short, and the agenda was kept under wraps. Meanwhile, sources in Bishkek told Kommersant that for Kyrgyzstan it is important to check in regularly with Moscow on the economy, ecology and politics in light of Jeenbekov’s feud with Almazbek Atambayev, the former president.

According to Kommersant, integration within the framework of the Eurasian Economic Union (EAEU) worries Bishkek. Progress here is hampered quite seriously by contradictions with Kyrgyzstan’s neighbors. For example, over the past two years, Kazakhstan’s border guards have repeatedly denied Kyrgyz trucks access, leaving them idle at the border for weeks, inflicting huge losses on the suppliers.

In addition, Kyrgyzstan expects more Russian investment. "In the meantime, among Russian companies, only Gazprom is notably present on the Kyrgyz market, while Chinese and Turkish investors are very active," co-chairman of Pikir Regional Experts Club Igor Shestakov told the newspaper. At the meeting with Putin, Jeenbekov recalled that during the Russian leader’s recent visit to Bishkek more than 50 deals to the tune of more than $6 bln were signed.

Another key economic topic for discussion was the layout of the China-Kyrgyzstan-Uzbekistan railway route. Kyrgyz Foreign Minister Chingiz Aidarbekov noted earlier that it was Russian participation that would make it possible to link up the main highway (which runs through southern Kyrgyzstan) to Bishkek.

"When Jeenbekov’s unexpected visit to Moscow was announced, many decided that this concerns the Atambayev case," Kyrgyz political analyst Emilbek Zhoroyev told Kommersant. "Especially since it was reported earlier that Atambayev was seeking protection from Moscow. Apparently, this did not bring results as Kremlin Spokesman Dmitry Peskov called the process ‘an absolutely Kyrgyz domestic affair.’ However, the Kremlin is probably still worried about potential destabilization in the republic," the expert added.


Nezavisimaya Gazeta: Washington threatens India with sanctions over S-400s

The Indian government has revealed as to how the US is trying to torpedo the deliveries of the S-400 system. According to the report, the United States threatens to subject India to sanctions for purchasing the S-400. Thus, Washington will now decide whether it wants to punish the country it considers to be its defense partner. According to experts interviewed by Nezavisimaya Gazeta, the US is unlikely to disrupt the deal, and by doing so it would call into question India’s independent foreign policy.

The anti-aircraft weapon system could lead to strengthening India’s armed forces, counterbalancing China’s power and in the long run ensure India’s supremacy over Pakistan. According to Deputy Director of the Federal Service for Military and Technical Cooperation Vladimir Drozhzhov, if India makes an advance payment by the end of the year, supplies can begin in 2020 and be completed in 2025.

Vinay Shukla, editor and consultant for India Strategic magazine, told Nezavisimaya Gazeta that the payment methods are subject to bank secrecy policy. However, concerning the sanctions, the US itself wants to sell India more weapons, the expert pointed out. According to him, sanctions are a double-edged sword for Washington, since it would close the door on those deals. The expert added he believes that India will not yield to anyone and that the agreement with Russia will be executed.

Reserve Colonel Viktor Litovkin told the newspaper that neither the US nor France had agreed to transfer technology to the Indians while Russia lifts the curtain on its technological progress. Plants are being built in India to manufacture fighters and tanks under Russian licenses. According to him, the S-400 is extremely complex and Moscow has agreed that some of its components should be manufactured in India.


Kommersant: New legislation may scare away global payment systems from Russia

Amendments to the law "On the national payment system" may scare away international payment systems from Russia, Kommersant wrote. Requirements for their subsidiaries in terms of ensuring the continuity of payments, that is, a de facto prohibition of following international sanctions in Russia, are not feasible for global payment systems. If they leave Russia, it would be impossible to use payments cards of Russian banks overseas, and foreign cards — in Russia, the newspaper wrote. The Central Bank and the State Duma insist on adopting amendments to the law during the current session.

At the moment, global payment systems that would have to make adjustments to their operations on the Russian market include Visa, MasterCard, China Union Pay, JCB and others that have subsidiaries in the Central Bank's registry of payment systems operators.

The initiator of the bill, Head of the State Duma Financial Market Committee Anatoly Aksakov told Kommersant that the amendments were made to "prohibit any payment system from prescribing in their rules the possibility of disconnecting Russian banks from conducting settlements with cards. We should not encourage such blackouts or tolerate discriminatory rules." The Central Bank agrees with this position, the newspaper wrote.

Sources close to international payment systems told Kommersant that the decision was unexpected as the amendments were supposed to be discussed this fall, as well finalized and adjusted. Visa and MasterCard declined to comment on the legislative initiative. At the same time, according to experts, as for Russian Visa, MasterCard and other payment systems it is simply not possible to bring their rules into compliance with the requirements of the Central Bank.


Vedomosti: Volkswagen seeks Russia’s state support with localization

Volkswagen Group (VW) proposed to the Russian government to differentiate the system of access to state support in the automotive industry, Vedomosti wrote. The volume of state subsidies should depend on the level of localization of cars and automotive parts of each particular automaker, the German company believes. Volkswagen Group Rus sent a written proposal to Deputy Prime Minister Dmitry Kozak (in charge of the auto industry), employees of two automakers told Vedomosti. A VW representative confirmed that the letter was sent, but declined to comment further. A Kozak representative confirmed the written proposal.

Employees of two auto concerns and a source close to Renault told Vedomosti that Renault Russia also sent a letter to Kozak on the need for a differentiated system of access to state support. The possibility of using a differentiated approach is being discussed, according to a Kozak spokesperson.

Meanwhile, Avtotor, Volvo Trucks, PSMA Rus, and BMW are against any differentiated approaches or changes to the terms of the investment contracts that have already been inked, a source told Vedomosti. According to the companies, the differentiation in the level of state support will create a non-market regulatory mechanism in the industry in order to gain additional market share.

It will be very difficult to develop a system of differentiated access to state support, and it is easier to stimulate localization projects with additional tax incentives linked to the amount of investment and level of localization, VTB Capital analyst Vladimir Bespalov told Vedomosti.


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