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Press review: Russia’s answer to malware attacks and brewing Kurdish break in Syria

Top stories in the Russian press on Friday, October 27


Izvestia: Syrian Kurds to hold parliamentary elections in early 2018

The Federation of Northern Syria, also known as Western Kurdistan, plans to hold local elections by the end of this year, and a parliamentary vote at the beginning of 2018, Izvestia writes on Friday. Abd Salam Ali, a representative of the Syrian Democratic Union Party (PYD) in Russia, told the publication that "each nationality will be represented in the legislative body, the Arabs and the Kurds will have an equal number of seats, while other ethnic groups will have less seats." "I would like to stress that the issue is not about a drive for independence from Syria, on the contrary, we are insisting on the nation’s federalization, which will strengthen its unity. If the new constitution guarantees rights for each nationality, it will only solidify Syria, and this concerns not only the Kurds," he said, adding that a proposal has been made to rename the country from the Syrian Arab Republic to the Syrian Democratic Federation Republic in order to avoid mentioning particular nationalities in official names.

Meanwhile, top-ranked sources in Russia’s diplomatic circles told Izvestia that the Kurds are doing everything to separate themselves from Damascus and eventually withdraw from Syria, with Washington backing those attempts. "The United States is engaged in a project for an independent Kurdistan, which implies that apart from Syria huge territories will be separated from Turkey, Iraq and Iran. Let’s see how it unfolds, taking into account the notorious views of Damascus, Ankara, Baghdad and Tehran regarding the Kurds," one of the sources said.

Experts interviewed by the newspaper do not rule out that Washington’s support may indeed contribute to the collapse of the country. According to Middle Eastern specialist and former diplomat Vyacheslav Matuzov, "as the defeat of the terrorist groups is nearing, now the issue of control over the territories captured by the Kurdish units is surfacing, and the only right option is to place them under the control of official Damascus." "Other options would spell a division of Syria and a direct path to a new war taking into account the position of Turkey, which has deployed its troops to Syrian soil for opposing the Kurds," he said, adding that "the main thing the Americans should do is to stop encouraging the Kurds to create their own governing bodies and pushing them towards independence."


Izvestia: How writing off world debt helps Russia help its producers

The Russian government plans to write off other countries’ debts by concluding export contracts with Russian producers in amounts equaling those debts, Izvestia says with reference to Chief Executive Officer of the Russian Export Centre Petr Fradkov. A precedent has just been set as Madagascar acquired medical equipment from Russia worth $15 mln with partial debt relief. "We were not as interested in the amount (of the contract), but rather in the precedent itself," Fradkov stressed. When asked what countries could use the same mechanism, he replied that those are "almost all countries that borrowed (funds), for example, Cuba and many others.

Speaking about exports of Russian goods, he said that the agreement with China’s Alibaba to open a national platform, has proven to be successful. "One should realize that China is the biggest e-commerce market in the world, and it is necessary to bring Russian companies there," he said, adding that one can kill two birds with one stone here - raising brand awareness and expanding efficient logistics.

The plan is to make similar agreements with other Internet platforms, especially in leading marketplaces in the Asian-Pacific Region, the CEO said. "We intend to bring Russian products to Japan’s Rakuten and Indonesia’s Lazada in the near future. We also have plans in store for a marketing campaign to promote open ‘points of presence’ of Russian goods aimed at informing foreign customers about available Russian products and their advantages," he said.


Kommersant: Russia’s answer to ransomware: compulsory cyber insurance by 2020

Strategic sector enterprises throughout Russia may be obliged to obtain cyber security insurance certificates starting in 2020. Kommersant business daily says that the move is part of a pending cyber insurance project, obtained by the newspaper, which is being drafted within the government’s ‘Digital economy’ program. The country’s top lender Sberbank heads the working group developing the program. The plan implies that an industrial auditing standard for information security will be imposed on the banking sector, airports, railway stations, metals, machine-building, shipbuilding, aviation companies, and will be compulsory for them, the paper says.

This comes on the heels of the Bad Rabbit cyber attacks earlier this week against Russian mass media outlets and, reportedly, on banks. The Federal Security Service has warned about massive new attacks by foreign intelligence services to destabilize the country’s financial system, even against several of the nation’s biggest lenders, Kommersant writes. However, market players interviewed by the newspaper were split in their opinions on the initiative. Some think that the issue is relevant, whereas others consider it unreasonable to make cyber insurance compulsory.

The move makes Russia a global leader in the area of cyber risk management and insurance since "no other country has made such changes in the area yet," the document says. The proposal is to amend the insurance legislation, adding a new type of insurance, and the tax law as expenditures on this type of insurance will reduce the tax base. According to the program, "currently cyber risk insurance is unexplored and unclear for the majority of consumers of this service." As of now, less than 20 insurance agreements have been made in the country, the bulk of them are by companies with foreign ownership and with foreign insurers, Kommersant adds.


Kommersant: Yandex.Money ready for pilot projects to explore Bitcoin potential

Chief Executive Officer of Yandex.Money Ivan Glazachev, who previously served as Executive Director at Russian Standard Bank, and joined Yandex in March 2017, says the time is ripe for exploring the potential of cryptocurrencies. "With cryptocurrencies, we are currently at the same stage as we were in the 2000s when e-wallets appeared. The market was fresh, operations were not regulated, and the first experience formed the basis for the market’s regulation," he told Kommersant in his first interview after being appointed Yandex.Money CEO. “Now we have an opportunity to test the technology in a ‘sandbox’ mode. One can talk endlessly about Bitcoin, whether it is good or bad, risky or not, but at some point we should step in and test the waters. In this respect we are open and would like to have a dialogue with the regulator, even about certain pilot projects at our company’s facilities,” he said.

Glazachev considers blockchain technology to be "a promising technology for a number of areas, such as the state sector and big business." However, "in the heavy transactional business where the operations themselves are miniscule and include only the sender and the receiver, blockchain technology is irrelevant and not very applicable," he said, adding that it still may be used in alternative payment methods. According to the CEO, Yandex.Money is currently cooperating with working groups discussing various ideas related to cryptocurrencies. "It has been noted recently the operations with cryptocurrencies should only be available for professional market players, which is actually making them equal to securities. This is one approach. Another is to open the market, but in a 'sandbox' mode," he said, adding that the company is interested in the latter.


Komsomolskaya Pravda: Central Bank official hails Russia’s banking system as stable

Russia’s banking system has passed the most difficult stage of recovery, and is now stable and sustainable, the Central Bank’s Deputy Chairman Vasily Pozdyshev said in an interview with Komsomolskaya Pravda. "I think that we have passed the most challenging stage of the banking sector’s recovery, and we intend to fully eliminate all frauds within two or three years," he said. "The Russian banking system is stable and sustainable, and its key indicators that rose in January-September 2017 testify to this. The banking sector’s assets increased 5.1%, loans provided to the economy - by 4.3%, loans provided to individuals - by 8.4%," the deputy chairman said. He added that the majority of 350 banks with withdrawn licenses over the past four years are small-sized lenders. "All are concerns about the number of withdrawn licenses, though one should take a look at other figures. The total amount of those banks’ assets equaled only 5.3% of all assets of the Russian banking system," he noted.

According to Pozdyshev, the amount of suspicious transactions by Russian lenders has dropped 20-fold over the past four years and totaled 34 bln rubles ($588 mln) in the first half of this this year, whereas in 2013 suspicious transactions by banks involved in such operations on withdrawal of funds abroad were worth an estimated 1.7 trillion rubles ($29.3 bln). The deputy chairman added that the regulator also tries to restrict direct financing of foreign counterparties by local financial institutions. "For many years Russia’s banking system has been a net creditor for foreign counterparties, and the majority of cases were fraudulent transactions. The position (of the Central Bank) is simple here: Russian banks should finance the Russian economy, companies, and citizens," he said.


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