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Press review: Moscow-Kiev swap in the cards and can Brexit boost Russian-UK economic ties

Top stories in the Russian press on Thursday, November 28

RBC: Russia, Ukraine gearing up for prisoner swap ahead of Normandy Four summit

Talks on carrying out an all-for-all swap of prisoners who were captured during the conflict in southeastern Ukraine have entered their final stage, four sources familiar with the negotiations and representing different sides told RBC. One of the sources said the lists had been approved and Ukraine was ready to hand over 250 individuals in exchange for 100. The lists have been drawn up by the Trilateral Contact Group, which holds regular meetings in Minsk and most recently gathered there on Wednesday. It brings together the representatives of Russia, Ukraine, the Organization for Security and Co-operation in Europe (OSCE) and the unrecognized Donetsk and Lugansk People’s Republics.

A source close to Ukrainian President Vladimir Zelensky’s office told RBC that progress on a new swap was confirmed in a draft communique, which had been prepared by experts for the leaders of the Normandy Four group (Russia, Germany, France and Ukraine) and could be endorsed after their meeting. The first summit of the Normandy Quartet over the past three years is due to be held in Paris on December 9. A source in the Ukrainian presidential office said the success of this swap depends on the outcome of this meeting. Zelensky plans to raise this issue at his meeting with Russian President Vladimir Putin.

As the Paris summit is approaching, the parties are willing to show their readiness to come to terms and it is easier to do this through a prisoner swap, Ukrainian political scientist Vladimir Fesenko said. "This is probably the only issue that both sides view positively. Other issues are more challenging."

According to a source in the Trilateral Contact Group, it’s early to say that the swap will definitely take place. "Now, ahead of the summit, we are at the crossroads. If the talks are successful and the work in Minsk goes ahead, we hope that the all-for-all swap will be carried out, the law on a special status of Donbass will be extended and the effort will continue on disengaging forces along the contact line," he pointed out. However, there is still the risk that Kiev could try to withdraw from the Minsk agreements, the source warned.


Izvestia: Swedish court’s ruling on Gazprom unlikely to affect talks with Kiev

Gazprom’s defeat in a Swedish court won’t change the negotiating positions of Moscow and Kiev on a new transit deal, experts interviewed by Izvestia said. On Wednesday, the court of appeal in Sweden’s Svea rejected Gazprom’s complaint against a decision by the Stockholm arbitration court on gas supplies to Ukraine. This is an interim verdict and a decision on Gazprom’s two other lawsuits, including on transit, will be made in 2020. It will shed light on whether the court will confirm the gas giant’s debt to the tune of $2.6 bln.

Analysts believe that although this decision is negative, it still does not turn the tide ahead of the upcoming talks on gas transit. Deputy Director at the National Energy Security Fund Alexey Grivach believes that on the one hand, Gazprom’s defeat in court could complicate talks, but on the other hand, this interim decision gives the parties time to reach an agreement.

The current contract on gas transit through Ukraine expires on December 31, 2019 and there is still no deal for 2020, and the sides are running out of time to conclude it. At the moment, no constructive agreements, which could result in signing the deal, have been achieved and that’s why the decision could be made only by the two countries’ presidents, Head of Department at the Russian Academy of Sciences’ Energy Research Institute Vyacheslav Kulagin said. According to the expert, transit could fully stop unless the sides come to terms.

The best solution for Russia would be to keep transit through Ukraine at a volume of 40-50 bln cubic meters next year, the expert said. Plan B would be to use all the current capacities bypassing the neighboring state and boost LNG supplies. But this is not the best scenario for either party, he noted.

Head of the National Energy Institute Sergei Pravosudov believes that Russia won’t be able to ensure full gas supplies to its European clients without transit through Ukraine and that’s why the contract will be definitely signed. "The contracts have been signed and in the next two or three years we will need Ukrainian transit until Nord Stream 2 and TurkStream operate at full capacity. And if Europe significantly increases Russian gas imports, we will need it in the future as well," he explained.


RBC: Worldwide popularity of the Russian language on the decline

The number of foreigners studying the Russian language in schools, colleges and universities around the world has nearly halved during the post-Soviet period, according to a report by the Center for Sociological Research at the Russian Ministry of Education and Science, published by RBC. The Russian language is used in 27 countries and is ranked tenth worldwide by the total number of speakers, the document says. According to the center, in the early 1990s a total of 74.6 mln people spoke Russian. This number has dropped to 51.2 mln by 2004 and to 38.2 mln by 2018.

The proportion of Russian speakers has significantly declined in Eastern Europe and in the Balkan region — from 38 mln in 1990 to 8 mln in 2015. The number of Russian speakers also decreased in the former Soviet states — from 119.5 mln to 82.5 mln. Meanwhile, Russian has become more popular in the United States, Canada, Australia and New Zealand, where the number of speakers has increased from 1.2 mln to 4 mln.

The Russian language is now restoring its presence around the world, Fyodor Lukyanov, editor-in-chief of the Russia in Global Affairs magazine, told the paper, noting that it’s clear why there has been a growing interest in the Russian language in the Arab world, namely in Syria. However, Russia is doing less for cultivating its culture than other European nations. "France, Germany and even Sweden have stepped up their language and cultural policy, but this is not a priority for us now," Lukyanov said.

Experts at the research center predict that if the world’s population hits 8 bln by 2025, the number of Russian speakers will reach 2.7% or 215 mln. According to one of the report’s authors, Alexander Arefyev, this forecast is alarming. "If no measures are taken, by 2025 the situation could be very sad," he noted.


Kommersant: London forum looks at Russia-UK trade prospects after Brexit

The fifth Russian-British forum of the Roscongress Foundation in London indicated that a potential free trade zone deal between the United Kingdom and Russia within the framework of the Eurasian Economic Union (EAEU) is a major issue on the agenda for future economic relations. Brexit is opening up this opportunity, although it has been quite uncertain so far. Now, only broad prospects for Russia are clear, even given the foreign policy hurdles, which Brexit is unlikely to solve, Kommersant writes.

Boris Titov, Russia’s business ombudsman, told the forum’s panel session that cooperation between the two economies after Brexit would depend on possible talks on a free trade zone and potential supplementary agreements. Probably, this November wasn’t the best moment for such a discussion amid the ongoing Brexit struggle and the upcoming parliamentary polls in the UK. Although British officials attended this forum, the parties did not discuss any particular details. However, the panel discussion showed that the prospects of Russian-UK cooperation are much better than the predicted outcome of talks between the European Commission’s new members with Russia on any trade issues, the paper says.

London, a global financial center, traditionally has great importance for Moscow and capitals across the Commonwealth of Independent States (CIS). Moreover, the UK’s financial sector is very interested in expanding its presence there after Brexit and keeping its role of a hub for post-Soviet finances en route to Europe and the rest of the world.

Unlike the EU, both Russia and the UK have a more developed and less regulated financial technology (fintech) sector and a rather high level of state digitalization. Thus, any further innovations in state regulation would infuse this cooperation with great prospects, according to the paper.


Vedomosti: Russia sees surge in bootleg cigarette sales


The share of counterfeit cigarettes sold in Russia has nearly doubled to 15.6% from 8.4% last year, a study carried out by Nielsen analytical agency, sponsored by major tobacco companies, says. This year, Nielsen has analyzed the situation not only in Russian cities with over 50,000 inhabitants but also in small villages, Vedomosti writes.

Member states of the Eurasian Economic Union are the source of every second bootleg cigarette pack, accounting for 55.4% of the black market, Nielsen writes. Belarus is considered to be the largest source of origin for illegal tobacco. Belarusian-made cigarettes account for 36% of the entire market of bogus cigarettes sold in Russia. Kazakhstan comes in second (8.9%), followed by Armenia (8.8%). The second major source of illegal tobacco are such countries as Iran, Iraq, the United Arab Emirates and Serbia, with a 15.7% share of the total number of illegal cigarettes on the Russian market.

The driving forces behind the growing sales of illegal cigarettes in Russia are the public’s declining purchasing power, the proximity of EAEU states and their logistics, Nielsen notes. The major culprit here is actually the significant difference in price between legal and illegal cigarettes.

People living in Russian villages, whose buying power is far lower, are mostly subjected to the risks of purchasing bootleg cigarettes, Ilona Mirtova, director of a corporate and legal department at Imperial Tobacco said. The situation in Russian cities is not any better. In Moscow, illegal market accounts for 7.3% and in St. Petersburg for 6% (compared with 4% and 3% a year ago).

Russia’s federal budget could lose up to 100 bln rubles ($1.5 bln) from shortfalls in excise duties and value-added taxes in 2019, according to estimates by major tobacco companies. "The situation on the market has reached its historic zenith. The current measures are not enough," said Igor Cherkassky, who heads BAT Russia for countering illegal tobacco products.


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