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Press review: Moscow's aid to Kurdistan and cyber-threats for Russian defense sector

Top stories in the Russian press on Monday, November 7

Izvestia: Iraqi Kurdistan awaits Russia’s assistance

Iraqi Kurdistan has requested arms shipments from Russia, Foreign Minister of the Kurdistan Regional Government Falah Mustafa told Izvestia daily following his visit to Moscow, where he held talks with Deputy Foreign Minister and Russian Presidential Envoy for the Middle East and Africa Mikhail Bogdanov. "We’ve applied for this kind of assistance, since the issue of tackling terrorism is crucially important now. The struggle for the so-called capital of the Islamic State (terror group, outlawed in Russia) is underway. In this respect, we assume that the global community and our allies in particular, with Russia among them, need to support us," he said, adding that Moscow "is going to examine the request and try to help." Also, he added, Iraqi Kurdistan has applied for "humanitarian aid (from Russia) for refugees coming from other parts of Iraq and from Syria."

Asked about the idea to initiate talks with Baghdad on proclaiming Kurdish regional independence after Mosul’s liberation, he said: "Now the time is ripe for reviewing potential cooperation with Baghdad via negotiations and defining the future (of Iraqi Kurdistan), including (proclaiming) independence." "The discussion on future relations between Arbil and the Iraqi central authorities will be the first step in this direction," Falah Mustafa said, adding that it is important to "find a formula that both sides will be satisfied with." He also said that he expects all partners and allies to support the decision "if Iraqi Kurdistan and Baghdad reach an agreement on the issue" since he insists on "conducting a dialogue and reaching agreements through peaceful means."

The current situation in Syria was one of the issues on the agenda during the talks between Falah Mustafa and Mikhail Bogdanov. According to the Russian diplomat, Iraqi Kurdistan is already in touch with the Iraqi military on Mosul’s liberation, and its principled stance is that it is necessary to tackle the Islamic State both in Iraq and in Syria, as "it is hardly possible to fight terrorists in one country and allow them to strengthen in the other." However, at this stage, the issue of the region’s involvement in the military operation against IS (terror group, outlawed in Russia) on the territory of the neighboring country "is being considered at top levels," he said.


Izvestia: Rostec tackling cyber-threats for defense sector

Russia’s state-owned corporation Rostec has set up a center for pinpointing, preventing and liquidating aftermath of cyberattacks, Izvestia writes on Monday with reference to Alexander Evteev, Information Security Director at RT-Inform (Rostec’s IT service). The system has been operating in test mode for a year, Evteev noted. "Within the year, we’ve come across one or two real threats every month, particularly viruses, which are used for cyberespionage and financial fraud. Meanwhile, the total amount of unusual activities, which we had to analyze, ran into the thousands," he said.

According to Evteev, anomalies in PCs in the defense sector will be ferreted out in 24-hour cycles, and all cases will be reported to the Federal Security Service (or FSB). The plan is to introduce the new system to enterprises primarily involved in armed services procurement, he said. Potentially, the system might be introduced in other structures to protect government agencies from the attacks, though it is likely to be facing tough competition from commercial competitors, Izvestia wrote.


Kommersant: Sberbank to create nationwide on-line service

Russia’s top lender is planning to build a so-called national eco-system, or a network of organizations being created around one technological platform, which uses its services, on the basis of its resources and infrastructure, similar to global e-commerce giants, such as China’s Alibaba Group and Tencent, or America’s Google, Amazon and Facebook, Kommersant business daily wrote citing sources familiar with the plan.

According to one of the sources, Sberbank’s Chief Herman Gref planned to present the idea at a meeting covering on-line trade with Russian President Vladimir Putin in Novo-Ogaryovo last week. Given the scale of the project in Russia, it may top 65 trillion rubles (or 27% of revenues of Russian companies) by 2025, the newspaper said. Another source said the lender has an appropriate client base, its own technological platform, analysts and sufficient funds for investments. Potentially, the system may cover the biggest sector groups - consumer goods, real estate, education, medical care, tourism, telecoms, public services, software and applications production, business services, construction, production, financial services, Sberbank’s presentation said.

Head of Alibaba Group’s Russian division, Mark Zavadsky, told Kommersant that the company is open to any proposals and is considering close cooperation with one of several strategic partners in Russia. He added that the group "is in talks with Sberbank on various issues - from integration of payment tools to joint marketing activities," as it "sees its mission in Russia as helping to create here an ecosystem, similar or even better than the one that was created in China with the help of Alibaba."


Kommersant: Car producers bent on keeping state subsidies

Russian auto manufacturers are seeking to convince the government to keep traditional state subsidy measures for next year, Kommersant writes. According to sources in the sector speaking with the newspaper, the Association of European Businesses (AEB) has prepared a letter addressed to the Industry and Trade Ministry requesting to extend the scrappage program, including trade-in, for at least one year. This comes after the Ministry applied to the government last week proposing to abandon the scrappage program. According to Kommersant, there is no understanding among market participants whether they can expect the state support next year and its extent.

All of Russia’s biggest car producers are skeptical about the Industry and Trade Ministry’s idea to replace traditional programs of targeted support for demand and are increasingly worried about the prospects for 2017. A source in Avtovaz told the newspaper that the company sees no "signs of a market recovery" over the short-term, and in this environment, programs for stimulating demand (utilization, leasing, trade-in) should be extended to 2017 and "until other supporting measures will prove to be efficient."


Vedomosti: Rosneft managers may get part of shares purchased by the company

The Fund Energy owned by former Minister of Energy Igor Yusufov, which had been the first to report that Rosneft could purchase its own shares, said that a partial share option may be the next step in the company’s privatization program. According to a federal official who spoke with Vedomosti business daily, a minor stake may be used for a share option for the management, but not more than 0.1%. Another source told the newspaper that this possibility has been initiated by Rosneft and is now under discussion.

According to the date provided by Rosneft, the company’s management and its subsidiaries own 0.155132% of shares, with the biggest stake (0.1273%) owned by Rosneft’s CEO Igor Sechin. The initial plan was to sell the 19.5% stake to one strategic investor, as was requested by Presidential Aide, Andrei Belousov, whereas the option being discussed implies a consortium of investors, several officials told Vedomosti. Analysts say the share option program may turn out to be very profitable for the management as oil prices are expected to rise over the long-term. Also, share option programs often have positive effects on ratings and raise companies’ capitalization.


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