Izvestia: Why Russia agreed to return to the grain export deal

Moscow reserves the right to exit the grain deal, Russian President Vladimir Putin said on November 2, warning this would happen if the promises given by the parties to the agreement were broken. Earlier that day, Putin ordered Russia’s full return to the Black Sea initiative. Turkey acted as a key mediator in the negotiations on the export of food from Ukraine. Experts interviewed by Izvestia doubt that the Kiev regime will strictly follow its guarantees. What’s more, the deal’s future itself remains unclear.

"Ukraine can give any guarantees. But there is no certainty that they will not bypass them, to put it mildly," ex-Director General of the UN Office in Geneva Sergey Ordzhonikidze told Izvestia. "In general, the benefits of this deal are not clear, politically or economically," he added.

Resuming the deal is a positive development, which once again demonstrated the role of Ankara as the leading mediator between Moscow and Kiev, Ozturk Yilmaz, a member of the Grand National Assembly of Turkey (parliament), told Izvestia. According to him, immediately after Moscow announced its withdrawal from the deal on October 29, Turkey embarked on great diplomatic efforts.

The grain market did not expect the news about Russia's return to the deal, Sovecon chief Andrey Sizov told Izvestia. According to him, Russian exports will continue to grow in any case.

Despite Russia’s return, the deal itself expires on November 19. The parties were negotiating its prolongation, but Moscow’s main claim still remains unanswered: restrictions on the export of Russian agricultural products and Rosselkhozbank, the main operator of transactions in the agricultural sector, have not yet been lifted.

 

Izvestia: SCO sets sights on creating its own system of bank payments

Russian Prime Minister Mikhail Mishustin at the summit of the heads of government of the Shanghai Cooperation Organization (SCO) invited the club’s members to create their own system of electronic exchange of financial information and bank payments. Analysts interviewed by Izvestia believe that the system would be another step towards moving away from settlements in dollars and euros. For Russia and China, Western currencies are becoming increasingly toxic because of the ability of European and American regulators to not only monitor but also block transactions.

Analysts suggest that the parties may talk about creating a multilateral system for the exchange of electronic information based on the Financial Messaging System of the Bank of Russia (SPFS). This sort of network should work in the same way as SWIFT does, where banks from various countries confirm transfers in foreign currency.

"Implementing such a project with SCO countries can be an excellent alternative to SWIFT. However, to become an attractive alternative for SCO countries, the system still needs to remove technical limitations. In particular, banks noted additional costs due to increased security measures, as well as the high cost of messages," financial analyst at the CMS group of companies Vladimir Sagalaev told Izvestia.

"If a certain financial instrument based on a multi-currency basket will start working at least in several years, this will have a significant positive effect on normalizing trade between the countries of the Shanghai Cooperation Organization. Now they are complicated by the threat of sanctions from unfriendly countries," Yelena Frolova, commercial director at Vekprom, said.

 

Nezavisimaya Gazeta: Israel may form right-wing government

Israel’s elections to the Knesset (parliament) are now over, leaving Benjamin Netanyahu's opponents discouraged. His Likud party won, garnering more votes than predicted by the polls with the help of its allies. According to Nezavisimaya Gazeta, the only thing standing between Netanyahu and re-election as prime minister is a dispute with religious groups, whose popularity is far higher than one might anticipate.

What’s remarkable about Netanyahu's performance is the success of his partners. He frequently enters into deals with United Torah Judaism and Shas parties. But in these elections, even the Religious Zionist Party, a group with a reputation for being on the far right, has seen unparalleled success, which could make the formation of a government rather difficult.

The growing number of religious Jews in society has had an impact on the election outcome. According to preliminary data, a high turnout of around 71% was provided by young people from religious families.

For Russia and Ukraine, the most important thing in the Israeli elections is the country's course under a new prime minister. The news about Netanyahu’s expected return to power, in addition to being a politician who has a reputation in finding common ground with Moscow, was met with cautious optimism in the Russian Foreign Ministry. "We expect that the new government … will maintain a course towards the development and strengthening of multifaceted cooperation with Russia," Russian Foreign Ministry spokeswoman Maria Zakharova said.

 

Nezavisimaya Gazeta: Saudi Arabia on high alert expecting imminent Iranian attack

Part of the US presidential administration's attention is now turning away from Ukraine and toward the Middle East. Riyadh has warned the Biden administration that Iran is ready to strike Saudi targets in the near future. The continuous domestic protests have compelled Tehran to reevaluate its diplomatic strategy, despite the two regional rivals having undertaken a number of talks since last year to improve their official relations. According to Nezavisimaya Gazeta, Saudi Arabia has been explicitly accused of inciting anti-government uprisings.

Early in October, two weeks after Iranians took to the streets in large demonstrations protesting the death of a Kurdish woman Mahsa Amini, Western think tanks issued a warning that Tehran would attempt to shift the focus of the conversation by attacking Saudi Arabia. However, experts said that one of the most likely scenarios was indirect strikes against the kingdom's infrastructure from Yemeni soil.

"Saudi Arabia is ill-prepared for a direct military confrontation with Iran in a one-on-one format," military expert Yuri Lyamin told the newspaper. "The events of the last decade have shown, the kingdom's armed forces experienced serious problems even in the conflict with the Houthis. Moreover, the Saudi air defense and missile defense systems could not reliably cover strategically important objects from the missiles and drones that the Houthis have, and their amount and range of models are very limited compared to what Iran has," he added.

At the same time, the expert noted that despite some souring in relations between Washington and Riyadh, they still have very close relations, including as far as the military and military-technical spheres go. "So, Riyadh will obviously continue to rely on Washington's support in the event of any serious threats," he added.

 

Vedomosti: Russia may revise tax agreements with Turkey, UAE

Russia’s Ministry of Finance has begun preparing a list of friendly countries to revise the double tax avoidance agreement, Deputy Finance Minister Alexey Sazanov told Vedomosti. According to him, the ministry is preparing proposals for the government to start negotiations with Malaysia, Turkey, and the United Arab Emirates (UAE).

"In terms of negotiations on tax agreements with friendly countries, we are preparing proposals for submission to the government for consideration. They concern Malaysia, Turkey, as well as the UAE if a corporate income tax is introduced there," Sazanov said.

The purpose of the revision of the agreements, according to Sazanov, is to reduce the cost of attracting direct investment from these countries from real investors - residents of these jurisdictions.

Revising the double tax avoidance agreement with friendly countries is an important task at the moment, since the agreements boost the development of mutual relations between states by establishing favorable tax rates, B1 partner Marina Belyakova said.

The agreements should also be reviewed with other major Asian economies that are willing to do business and invest in Russia, such as India and Indonesia, Dmitry Semchishen, a tax expert, believes.

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