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Press review: Can Brexit boost Russian-UK trade ties and will Donbass talks offer any hope

Top stories in the Russian press on Wednesday, September 18

RBC: Talks on Donbass likely to pave the way for Normandy Quartet summit

The Contact Group for settling the crisis in eastern Ukraine, consisting of the representatives of Russia, Ukraine and the self-proclaimed republics, will gather for the second time over the past month in Minsk on Wednesday. Should the sides manage to coordinate the schedule of a step-by-step disengagement of forces in the conflict zone and approve a single text of the so-called Steinmeier formula, outlining the terms for confirming the Donbass special status, no other obstacles will be left for holding the Normandy Quartet’s summit between the Russian, Ukrainian, French and German leaders, RBC writes. Moscow has repeatedly said that the summit would be held if these two conditions were fulfilled. The leaders of France, Germany and Ukraine earlier signaled their readiness for holding the talks. However, Moscow’s position has so far remained the only stumbling block. Last week, Kremlin Aide Yuri Ushakov said that Russia sought "an iron-clad agreement," which would encourage real steps on resolving the crisis. He also said that the summit’s exact date would be agreed on after the Contact Group’s meeting on September 18. The last time the Normandy Four leaders met was in 2016.

Experts interviewed by RBC believe that the parties should have no more disagreements regarding the disengagement of forces on the Donbass border. Here there should be no surprises and the schedule is likely to be endorsed, Ukrainian political scientist Vladimir Fesenko told the paper. However, challenges could emerge when discussing the formula proposed by incumbent President Frank-Walter Steinmeier. According to Director of Ukraine’s Institute of Global Strategies Vadim Karasev, Kiev views the Steinmeier formula as a "red flag". The text suggests at first holding the elections and then returning control over the border to Ukraine, which Kiev finds unacceptable, he explained. It is also unclear who will control the election process in the war-torn region. The expert believes that the formula could be confirmed if it implied some interpretations, but this would be still enough for holding the top-level meeting. "The summit may be disrupted only if Moscow starts insisting that the special status should be written down in Ukraine’s Constitution," he said. However, now there are greater chances that the sides will come to terms, Karasev said, explaining that this was in the interests of both Kiev and Moscow.

"Zelensky cannot do what his predecessor Pyotr Poroshenko had done. He has a different electoral mandate, namely to end the war. Meanwhile, Russia needs to save face. It seeks the Normandy Four meeting since this will pave the way for it towards unfreezing dialogue with the West and lifting some sanctions," the expert said.


Izvestia: Envoy says Brexit could iron out problems in Russia-UK trade ties

The United Kingdom’s withdrawal from the European Union could lead to new bilateral deals with Russia and solutions to some problems in mutual trade, Russia’s Trade Representative in the UK Boris Abramov said in an interview with Izvestia published on Wednesday. "Brexit won’t trigger any direct consequences for Russia since we have been trading under the WTO’s rules and will continue to do so. However, Brexit’s indirect effect is important for us," Abramov said. On the one hand, a hard Brexit will cut economic growth rates and Britain’s demand for imported goods. On the other hand, after the UK’s suspended membership in the EU’s Customs Union, duties will be again levied on European goods. The prices on them will be higher and this will make Russian goods more competitive on the British market. So, Russian companies could strengthen their positions in such spheres as agriculture, metallurgy, chemicals, hi-tech and medicine, he explained.

"Brexit could spur on a review of outdated bilateral agreements and upgrade our trade’s structure," Abramov pointed out. For example, some patients in Russia need hard-to-come-by medicines produced in the UK, but some British licensing rules and the lack of a deal on trade in this sector with Russia stonewall the supplies. "After the country’s withdrawal from the EU, there will be chances of solving these problems," he noted. Speaking on the Russian market, Abramov noted that British interest here would rely on economic and political factors. If both countries’ economy continues growing and political turbulence in these relations ends, this will be a signal for businesses. Should both governments make efforts on signing a new deal, there will be a positive effect, he stressed.

The trade representative noted that rising prices on energy resources in 2016 boosted Russian exports. After energy prices stabilized in 2018, bilateral trade continued increasing and in the first six months of 2019, this growth reached 7.7%. The key drivers here were platinum (45% of Russia’s entire non-raw material and non-energy exports to the UK), fertilizers (5.4%), fish and seafood (17%), as well as items made of non-precious metals (22.9%), the envoy said.

Over the past years, British investors have focused on areas, less inclined towards political risks. Among those fields are scientific and research activity, pharmaceutical production, machine building, the localization of industry in Russia and a strategic partnership between Rosneft and BP. Touching on whether the UK could step up sanctions against Russia after Brexit, Abramov noted that this depends on the internal political climate and the leadership’s desire to use confrontation with Russia for its national goals. "They may play this card but now we don’t see any signs of that moving in this direction," he stressed.


Nezavisimaya Gazeta: Assad brands Kurdish alliance as terrorists

The Assad government has labeled an international alliance composed of Kurdish militias, the Syrian Democratic Forces (SDF), as terrorists. This conclusion can be drawn from a letter sent by the Syrian Foreign Ministry to UN Secretary-General Antonio Guterres, Nezavisimaya Gazeta writes. This is the first time that Damascus is using such harsh wording against these units, which are controlling Syria’s northeastern areas. Damascus claims that the alliance’s command is operating in line with schemes by the United States and Israel. While fighting on the side of an international coalition, the SDF has committed war crimes, Syria’s Foreign Ministry emphasized. The letter says that Syrian government forces are planning to liberate the territories occupied by the SDF. This concerns northeastern areas, which are still under US control.

Analysts note that the Assad regime has branded the Kurdish units as terrorists for the first time since the beginning of the civil war. The SDF command has already responded to these claims, noting that thousands of their fighters had sacrificed their lives in struggling against the Islamic State (terror group, outlawed in Russia). The alliance noted that the Syrian government had been powerless, unable to protect its people from the jihadists who had wreaked havoc. Moreover, the IS continues using the areas controlled by the regime for carrying out terrorist acts in northern and eastern Syria against civilians, the command responded in a statement.

The paper writes that in many respects Damascus’ rhetoric is similar to Turkey’s statements. At the summit in Ankara, Turkish President Recep Tayyip Erdogan stated that the only danger facing Syria was coming from the SDF, backed by Washington. The Turkish leader vowed that unless American partners heeded Ankara’s concerns, it would solve the fate of northern Syrian areas bordering Turkey alone.

"The logics of Damascus is clear: it views the international coalition as occupiers and considers the Kurdish and tribal forces in the SDF as its accomplices, although the regime has actually lost sovereignty over these territories," expert from the Russian Council on Foreign Affairs Anton Mardasov told Nezavisimaya Gazeta.

It is unacceptable for Syrian leader Bashar Assad to have a "parallel Syria" and in this sense, so the positions of Damascus and the Astana trio (Russia, Turkey and Iran) are much alike. According to the expert, it’s important for Russia to show that Syria’s sovereignty is being restored and ensure that Damascus gets all the necessary means for that. It’s also crucial for Turkey to weaken the Kurdish separatists, while Iran seeks to pursue its military goals under the guise of economic projects, he noted.


RBC: Russia to be world’s third largest LNG exporter by 2028, US experts predict

By 2028, there will be only three major producers on the global gas market, which will compete with each other for consumers, RBC writes, citing research carried out by Nikos Tsafos, a senior fellow with the Energy and National Security Program at the Washington-based Center for Strategic and International Studies.

Qatar, the world’s leader on the liquefied natural gas market, will greatly boost its production over the next decade, retaining its top spot with 150 bln cubic meters by 2028 due to its own projects and shares in LNG plants in the US, according to the study. The United States, which does not even rank among the five major producers now, and trails behind Russia in terms of LNG supplies to Asia and Europe, will quintuple its exports, from 28 bln cu m in 2018 to 140 bln cu m by 2028 thanks to launching new projects. Meanwhile, Russia’s LNG output during this period will increase just 2.7 times from 25 bln to 68 bln cu m. Thus, Russia will be the world’s third largest LNG producer. Meanwhile, Russia will remain the number one global producer in terms of the overall gas exports, Tsafos notes.

Meanwhile, the Economic Development Ministry expects that Russia’s LNG production will triple over five years. Based on its forecast, by 2024 this figure will reach 47.9 mln tonnes. According to Sergei Kapitonov, a gas analyst at the Energy Center of the Moscow School of Management Skolkovo, the US center’s forecast is rather conservative. The study takes into account only the current facilities of Sakhalin-2, Yamal LNG, Novatek’s Arctic LNG-2 and two low-tonnage plants, while Russia’s LNG prospects are more promising, he explained.

According to Kapitonov, Russia is planning to launch several other projects by 2028, which will produce 50 mln tonnes of LNG per year, thus increasing LNG output to 100 mln tonnes. Should these plans be fulfilled, Moscow will vie for second place with the US, he stressed. Director of the Fitch corporation department Dmitry Marinchenko notes that the West’s sanctions are a major risk to Russia’s LNG development since the country is still reliant on Western technologies, although Russian gas producer Novatek has been trying to achieve their maximum localization.


Kommersant: Russia may drop charges against US investor Calvey due to lack of evidence

Russia’s Investigative Committee has received a new evaluation on the price of a 59.9% stake owned by the Luxembourg-based International Financial Technology Group (IFTG), which will now "turn the tide" in the ongoing criminal case against the founder of Baring Vostok Capital Partners investment company Michael Calvey and other suspects, Kommersant writes.

The new evaluation has shown that the market price of securities that the Russian Vostochny Bank received as payment for a loan is not 600,000 rubles ($9,300) as originally claimed, but 3.8 bln rubles ($59 mln). Given this new data, the lawyers may demand that the criminal investigation be halted due to insufficient evidence, the paper says.

According to the newspaper, investigator Lyudmila Samoilenko ordered a new evaluation in late April. An expert at the Russian Society of Appraisers (RSA), who has 25 years of experience, received all documents related to the deal, including a conclusion by an auditor at PricewaterhouseCoopers, the questioning of witnesses and the case files.

A source close to Vostochny Bank’s shareholders told the paper that if a full-fledged background check had been conducted and the evaluation by appraisers had been carried out before the criminal case was launched, there would have been no reason to pursue the investigation. The Investigative Committee has not commented on the new details of the probe.


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