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Press review: Moscow wants international Nord Stream probe and US to limit AI chip exports

Top stories from the Russian press on Thursday, June 29th
The Nord Stream gas pipeline, September 29, 2022 Guardia Cstera de Suecia vía AP
The Nord Stream gas pipeline, September 29, 2022
© Guardia Cstera de Suecia vía AP

MOSCOW, June 29. /TASS/. Russia still insisting on international probe into Nord Stream sabotage attacks; US contemplating tougher sanctions on AI chip exports to China; and latest EU summit to discuss how to legally tap frozen Russian funds for rebuilding Ukraine. These stories topped Thursday’s newspaper headlines across Russia.


Izvestia: Russia insists on need for international probe into Nord Stream sabotage

Russia is calling for establishing an international group to investigate the sabotage of the Nord Stream natural gas pipeline, as European countries are refusing to share the findings from their national probes with Moscow, Dmitry Polyansky, Russia’s first deputy permanent representative at the UN, told Izvestia. Although Moscow does not currently plan to convene a UN Security Council meeting on the issue, it is not ruling the option out, he added.

Although the impression is forming that Russia was hit hardest by the sabotage, this is not entirely true, said Vitaly Danilov, director of the Center for Applied Analysis of International Transformations at the Peoples’ Friendship University of Russia (RUDN). "We were impacted, indeed, but Germany and Denmark were hit harder. It is the German economy that is disintegrating now because [its] energy component <…> which was based on cheap, stable energy supplies from Russia, has actually collapsed," he explained. "As for Denmark, it was a hub for distributing Russian gas to northern Europe," he added.

Danilov told Izvestia that those countries that have been conducting their own probes into the attack are, in fact, aware of who blew up the Nord Stream gas pipelines and who "the beneficiary of those events" is. However, these nations are taking no action based on what they have learned; they are simply unable to do anything as their hands are effectively tied by the obligations of trans-Atlantic solidarity, he insisted. This is the main reason why they have remained mum about the investigation, even though they may have "all the facts of the crime" in hand already. "Thus, they will neither conduct any publicly transparent investigations nor keep Russia informed of their findings," the expert asserted.

Nevertheless, Moscow is seeking to highlight the economic aspects of the Nord Stream attack as much as possible in the hopes that this may prompt other countries, primarily those in the Global South, to focus more intensely on how the West habitually deals with those nations that resist falling in line with its dictates, Danilov concluded.


Vedomosti: US mulling tougher restrictions on export of AI chips to China

The Biden administration is weighing imposing in the near future more restrictions on the sale to China of microchips for artificial intelligence (AI), which could give the Chinese military access to US technology, the Wall Street Journal and Financial Times reported, citing sources. The US Commerce Department may ban exports of AI chips, in particular by semiconductor makers Nvidia and AMD, to customers in China and other countries "that raise red flags for Washington," without special licenses, as early as July.

Computing accelerators made with the use of US technology may be affected. The new measure will be an element of the rules for toughening export controls that the US announced last fall. Among other formal pretexts, the sources mentioned US concerns that China may be using such chips in projects to develop weapons or for hacking attacks.

Although any new US sanctions would not be able to undermine China’s ambitions in AI, they may have an impact on its capacities, Sergey Lukonin of the Center for Asia-Pacific Studies, told Vedomosti. Additional export controls may put at least some brakes on China’s AI progress, as Nvidia is the leading manufacturer of such chips. China is likely to develop its own analogues, but it is still unclear how much time it would take Chinese chip makers to launch large-scale production. In the scenario outlined by the media, China may resort to new retaliatory measures, as it did in May when Beijing imposed restrictions on purchases from US chip maker Micron, Lukonin concluded.

Nvidia engineers have expressed doubts about the correctness of the Biden administration’s actions, given that the company itself is dependent on Chinese rare earth metals, said Alexey Maslov, director of Moscow State University’s Institute of Asian and African Studies. The US chip maker is concerned that China could take retaliatory measures, a move that could reasonably be expected, the expert added. In particular, China could partially substitute US imports with its own goods, nor has the gray market disappeared, Maslov noted. Washington is pursuing the goal of slowing down the rise of Chinese technology at least a bit, Maslov argued; otherwise, China will be on a par with the US in just a few years.


Izvestia: EU summit to discuss whether it can tap frozen Russian funds

On June 29-30, EU leaders will gather in Brussels for their latest summit. As is already traditional, the series of meetings will affirm the bloc’s commitment to "support Ukraine for as long as it takes," according to the official invitation from European Council President Charles Michel. With this end in mind, Brussels will attempt to identify legal loopholes that would allow it to confiscate profits, in the form of interest accrued on Central Bank of Russia assets now frozen in the EU, that would subsequently be channeled to Kiev.

With fulsome declarations of support for Ukraine and vociferous denunciations of Russia having long ago become de rigueur elements of any gathering of Western leaders, no matter the venue or format, the upcoming summit promises to center around a debate on how the bloc could tap into some 200 billion euros in frozen Russian central bank funds for the reconstruction of Ukraine. Although this topic has been raised repeatedly by both US and European politicians, each time they reluctantly prefaced their remarks by stating that current US and EU legislation bars them from legally seizing Russian assets. However, last week, European Commission President Ursula von der Leyen revived the topic, unexpectedly for her colleagues, as she announced that Brussels will once again propose tapping into not the frozen assets themselves, which still de jure belong to Russia, but rather the profits generated by the funds for the rebuilding of Ukraine.

While the upcoming EU summit is unlikely to have the final word on how to handle such a sensitive issue, as a European diplomat noted, it should at least "offer recommendations in this regard."

According to John Kavulich, a US political analyst and senior research editor at Issue Insight, the West’s hesitation to transfer Russian assets to Ukraine, instead of spending Western taxpayers’ money, has been "a manifestation of their cowardice in the past 17 months." "They remain hesitant to use some of the [Central Bank of Russia] funds fearing lest other economies, who are afraid of sanctions, should withdraw money from lenders in Canada, the EU, Great Britain, the US or other jurisdictions," Kavulich told Izvestia. Against this backdrop, he argues, $340 billion worth of Central Bank of Russia assets will remain frozen, "until the Russian government agrees to allocate the sum for the restoration of Ukraine, and, possibly, pay taxpayers in those nations which supported Ukraine, including NATO member countries," something that he said would be far too naive to expect from Russia.


Nezavisimaya Gazeta: Moscow, Tehran seeking closer ties in law enforcement

The head of Iran’s Law Enforcement Command, Ahmad-Reza Radan, wrapped up his two-day visit to Moscow, where he held talks with senior Russian security officials. The trip, which, as the guest himself underscored, was aimed at boosting cooperation between the relevant agencies, came days after the attempted armed mutiny by Wagner Private Military Company (PMC) founder Yevgeny Prigozhin. While this could not but affect assumptions about the purpose of the visit, experts believe that the negotiations focused on other issues.

Cooperation between Russian and Iranian law enforcement agencies has repeatedly drawn the attention in the West since last fall’s protests against Iran’s strict rules for women’s attire, which morphed into a full-fledged anti-government opposition movement. Against this background, the Biden administration suspected Moscow of allegedly sharing with Tehran its experience in how to handle street protests, "based on its rich experience in suppressing demonstrations." Meanwhile, protests against the Iranian political system have subsided ahead of next year’s parliamentary elections.

Amid intensified communications in the sphere of security, the visit by Iran’s police chief to Russia looks like a logical continuation of bilateral cooperation to Russian International Affairs Council expert Nikita Smagin. However, the expert pointed to sporadic rumors since last year alleging that Moscow could supply its equipment to Iranian law enforcement agencies so that the latter could perform certain tasks. In the context of these discussions, the expert told Nezavisimaya Gazeta, sending special equipment for quelling mob violence and video surveillance systems was mostly discussed.

Smagin doubts that Radan’s visit would make any difference in terms of either internal political disputes in Iran or political communications between Russia and Iran. "In general, [the visit] implies some niche cooperation or potential technical exchanges," he said. "I don’t think the attempted mutiny in Russia played a role, as I doubt that Iran could be of help here," he added. Technical provision for Iranian law enforcement agencies is poorer than that for their Russia counterparts, the expert said. Therefore, the idea behind the visit may be that Russian authorities could somehow help the Islamic Republic in this regard, Smagin concluded.


RBC: Purchases of Russian oil by Indian refineries quadruple

In May, Russia accounted for a record 46% of India’s total oil imports. According to Vortexa, in May India bought 1.96 million barrels per day (bpd) from Russia, a fourfold increase over May 2022, according to the Indian Ministry of Commerce and Trade (MCT). In January 2022, before the West imposed sanctions on Russia, Russian oil produces sold a mere 260,000 metric tons of crude to India, or less than 2% of India’s total oil imports.

The spike in Russian oil supplies to India may have something to do with crude prices. In April 2023, Indian importers paid $68 for a barrel of Russian oil, while Saudi Arabia blends cost around $87 per barrel, and they bought Iranian crude for about $78 per barrel, the Indian MCT said.

Russian Deputy Prime Minister Alexander Novak said that, last year, Russian oil exports to India grew 19-fold to 41 million metric tons, with Russia coming in second among the leading oil suppliers to China and first in oil exports to India.

India has in fact replaced Europe in Russian oil purchases, Kirill Bakhtin, senior analyst at Sinara investment bank, told RBC. In January 2023, the share of Russian seaborne oil deliveries to northern Europe dropped from 41% to zero year on year, while they almost doubled to Asia, from 41% to more than 80%, he pointed out. If Indian refiners do not increase oil imports from Russia further or decide to reduce current import levels, Russian producers could easily find buyers in other developing countries in Asia, Bakhtin believes.

Novak also expects the bulk of demand for Russian oil to come from the Asia-Pacific in 2023, and the region’s demand will grow 60% by 2030, he forecasted. To increase oil exports to these countries, Russia has been building up oil transshipment capacities in ports and developing alternative routes.

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