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Press review: Russia unveils bid to fight cyber crime and Samsung Pay faces patent issue

Top stories from the Russian press on Friday, July 30th

Kommersant: Russia offers world community new path to combat cyber crimes

Russia has submitted to the United Nations a draft convention on combating cyber crimes. The 55-page document, covering 23 types of cyber crimes, outlines the procedure of cooperation between nations on extraditing hackers and providing legal assistance in criminal cases, including detecting crimes, arrest, confiscation and recovery of assets. To monitor the implementation of the convention, Russia suggests creating a new mechanism under the UN auspices, dubbing it the International Technical Commission. Experts say that the current legal tools on combating cyber crimes are not enough and a universal convention is really needed. However, Moscow will find it hard to achieve this document’s adoption, experts told Kommersant.

The full name of the Russian document is the United Nations Convention on Countering the Use of Information and Communications Technologies for Criminal Purposes. It's noteworthy that the Convention bans cross-border operations carried out by the states’ computer networks without the approval by their authorities. Russia did not join the key international treaty on fighting cyber crimes - the 2001 Budapest Convention of the Council of Europe - mainly due to this provision, which authorizes such cross-border operations. Russia is the only member-state of the Council of Europe, which has not signed this document. Moscow believes that allowing foreigners to conduct cross-border cyber operations could threaten the country’s security and sovereignty.

Another important flaw of the Budapest Convention is that it criminalizes just nine types of cyber offences, yet over the past 20 years that number has increased. The new Russian Convention identifies 23 such categories. The document also focuses on the key issue of international cooperation and envisages the creation of a number of new bodies and mechanisms. At the national level, these are contact centers that operate full-time 24/7. Dmitry Volkov, technical director and co-owner of Group-IB company specializing in combating cyber crimes, called the new Russian initiative "a rather logical and acute step." According to him, the Budapest Convention "is outdated and no longer efficient," since new types of cyber crimes and cyber threats have emerged over the past years, with hackers using cryptocurrencies for money-laundering purposes.


Nezavisimaya Gazeta: Armenia proposes setting up Russian guard posts along border

Early on July 29, the ceasefire on the Armenian-Azerbaijani border in Armenia’s Gegharkunik Province was broken. An Armenian serviceman was wounded, and Yerevan retaliated against the attack. Now in order to reduce tensions, Yerevan is weighing plans to deploy Russian border guards along the entire border with Azerbaijan. Washington has called on the conflicting sides to take all measures needed for normalizing the situation. The situation on the border has alarmed not only the United States but also the United Nations, Nezavisimaya Gazeta writes.

Acting Armenian Prime Minister Nikol Pashinyan is ready to request assistance from the Collective Security Treaty Organization (CSTO), a Moscow-led security bloc. However, the creation of observer missions is linked to red tape, while the situation on the border is apparently demanding rapid action. In the light of this, Pashinyan called for considering the establishment of Russian border patrol posts along the entire border with Azerbaijan, stressing that this would provide the opportunity to carry out works on the delimitation and demarcation of the boundary without running the risk of military clashes. According to him, this issue will be discussed with Russia soon.

Obviously, Yerevan is fully prepared for this and it is only a matter of formalities. On May 27, the Armenian government decided to grant the Border Directorate of the Russian Federal Security Service (FSB) free use of some lands in the Syunik Province neighboring Nagorno-Karabakh.

Political scientist Armen Khanbabyan notes that the mounting military activity has given rise to the idea that war is again on the horizon. "Apparently, Baku is trying to force Yerevan to make some principal concessions on the issues of the border delimitation. Simultaneously, Azerbaijan insists on opening a transportation corridor for direct links with the Nakhchivan Autonomous Republic," said Khanbabyan, noting that this corridor could be extraterritorial. However, Armenia’s authorities are unlikely to meet halfway. "Border delimitation is possible, but through the meticulous work of experts. Meanwhile, the process may begin only after the withdrawal of Azerbaijani forces from the occupied Armenian lands."


Nezavisimaya Gazeta: Republican Senators pressing Biden to stop Nord Stream 2 pipeline project

US President Joe Biden’s decision not to stonewall the construction of the Nord Stream 2 gas pipeline has sparked new efforts to oppose this in the US Congress. To fight the head of state’s move, a group of Republican Senators is trying to block the president’s Treasury Department nominations. They will drop their veto only if sanctions against Nord Stream 2’s operator are reinstated. The demarche was initiated by Biden’s long-time foe Senator Pat Toomey of Pennsylvania.

Senior Research Fellow at the Institute of US and Canada at the Russian Academy of Sciences Vladimir Vasilyev told Nezavisimaya Gazeta this move is unlikely to yield anything productive, but it is a good means to discredit the US president, accusing him of pandering to Russia in the energy field. The expert notes that in 2022 the midterm elections to Congress will take place and most Senators, including those who signed Toomey’s letter, are seeking re-election and have started their fundraising campaign. "In this case, they demonstrated solidarity with the US business circles, which opposed Nord Stream 2 as a project contravening US business interests. The Republican Senators tell them: we understand you, we support you. And don’t forget us, support us," Vasilyev explained.

The commentator also sees a long-term political goal in Toomey’s move. "The Republicans are working on a scenario to possibly impeach Biden. They are looking for charges. Nord Stream 2 and the president’s stance on it could be one of these," he pointed out. It’s noteworthy that Trump’s first impeachment was initiated over Ukraine, [regarding] his attempts to ask Ukrainian President Vladimir Zelensky to provide proof against Biden. So, the accusation against the current leader over betraying Kiev's interests could have a symbolic meaning.


Izvestia: Gazprom up in arms over plans to shatter its export monopoly

A proposal by the Russian Economic Development Ministry to consider the issue on exports of small-scale LNG from Russia by issuing licenses on supplies abroad without coordinating with Gazprom has come under fire. The corporation believes that if the number of Russian LNG suppliers grows, competition between them will escalate. This could result in lower prices and a plunge in budget revenues. Besides Gazprom, just a few companies can supply LNG overseas with some restrictions, experts told Izvestia. The ministry notes that Russia has the opportunity for significant growth in LNG production in the coming decades and it could be spurred on by providing access to small suppliers.

"We see the example of a lobby battle between other gas producers and Gazprom. The first ones want to shatter Gazprom’s export monopoly step-by-step," said deputy chief of Alpari center Natalya Milchakova. Earlier, energy companies asked the president to allow them to export pipeline gas independently, saying they could reach an agreement with European companies on additional supplies, notes leading analyst at the National Energy Security Fund Igor Yushkov.

While Gazprom still has the advantage in pipeline gas exports, its rivals have started using step-by-step pressure tactics, the expert pointed out. "At first, they suggest getting rid of the monopoly on exports of small-scale LNG. And then the issue of pipeline supplies to the Eurasian Economic Union could be discussed," he said.

If Gazprom loses the advantage of exporting pipeline gas, the model in the sector when one company owns infrastructure and simultaneously produces and sells gas could be called in question, Yushkov noted. So, Gazprom is up in arms. If it loses its export advantage, Russian companies will compete with each other on external markets and this could affect gas prices, the analyst pointed out.


Kommersant: Samsung Pay service operations face uphill battle in Russia

The work of Samsung Pay contactless payment service in Russia, which has a 17% share of the market, could be banned over a patent dispute. The holder of the rights to the patent on the system of digital payments has accused the South Korean tech giant of illegal use of technologies and the court has backed its demands. The ruling will enter into force in a month unless it is challenged in court, but experts doubt things will go that far, Kommersant writes. According to attorneys, in the end Samsung could call in question this patent or agree with the holder of the rights.

Samsung Pay was launched in August 2015 and started operating in Russia in a year. According to the National Financial Research Agency (NAFI) as of March 2021, some 32% Russian users of mobile payment services prefer Google Pay, while 30% favor Apple Pay and 17% go for Samsung Pay. The patent in question describes an innovation for carrying out online payments using a mobile device of the buyer and the seller’s payment terminal.

Senior Partner at Intellect law firm Maxim Labzin calls the court’s decision motivated. "If it is upheld, the service’s implementation without bringing any changes will be impossible in Russia regardless of whether it works on devices sold before the court’s ruling or after," he said. According to the lawyer, Samsung has three scenarios now: challenge the decision in a higher court, question the patent’s innovation or come to terms with the claimant, for example, by purchasing a license.

Contactless payments are popular among Russians and over the past years they have been on the rise, so these restrictions are unlikely to last, said Yegor Krivoshea of the Center for Research in Financial Technologies at the Skolkovo-New Economic School. "Most likely a compromise will be found and Samsung users will get the opportunity to use contactless smartphone payments.’

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