UKRAINE WRAP | Putin: Western political pressure speeding up Russia's integration with Belarus

July 01 2022 — 16:31

Ukraine requests Turkey detain Russian-flagged ship carrying Ukrainian grain

Ukraine has requested that Turkey detain and arrest the Russian-flagged cargo ship Zhibek Zholy carrying a cargo of Ukrainian grain taken from the Russian-occupied port of Berdyansk, according to a Ukrainian official and document seen by Reuters.

The Ukrainian foreign ministry official, citing information received from the country's maritime administration, said the 7,146 dwt Zhibek Zholy had loaded the first cargo of some 4,500 tonnes of grain from Berdyansk, which the official said belonged to Ukraine.

Reuters

July 01 2022 — 16:29

Russian envoy to Bulgaria to ask Moscow to shut embassy after mass expulsions

Russia's ambassador to Bulgaria said on Friday she would ask Moscow to close its embassy in the Balkan country after her appeal for Sofia to reverse what she called an unprecedented hostile step to expel 70 Russian diplomatic staff was ignored.

In a statement addressed to the Bulgarian people, the ambassador, Eleonora Mitrofanova, said the closure of the Russian embassy would inevitably lead to the closure of Bulgaria's embassy in Moscow too.

Bulgaria, an EU and Nato member state and once a close ally of Russia, has been roiled by diplomatic tensions after outgoing Prime Minister Kiril Petkov on Tuesday announced the expulsion of 70 Russian diplomatic staff on espionage concerns.

The move, which followed a sharp deterioration in ties over Russia's invasion of Ukraine, was the largest ever expulsion of Russian diplomats by Sofia and more than halved the size of Moscow's diplomatic footprint in Bulgaria.

Mitrofanova on Thursday told Sofia to reverse its decision by midday on Friday or face the prospect of Moscow ending its physical diplomatic presence in Bulgaria altogether.

Petkov earlier on Friday rejected her ultimatum.

"Unfortunately our appeal to Bulgaria's ministry of foreign affairs was ignored," Mitrofanova wrote in a statement. "I intend to quickly put the question of the closure of Russia's embassy in Bulgaria before my country's leadership, which will inevitably mean the closure of the Bulgarian diplomatic mission in Moscow."

In Moscow, Kremlin spokesperson Dmitry Peskov told Russia's Interfax news agency that the Russian foreign ministry would study the embassy closure idea and report to President Vladimir Putin if necessary. Russia has accused Petkov of acting against Moscow on the orders of unnamed foreign forces, something he has denied..

Reuters

July 01 2022 — 13:58

For the first time, US is sending more gas to Europe than Russia

For the first time, the US is supplying more natural gas to Europe than Russia sends by pipelines, according to the International Energy Agency.

Europe is seeking alternatives such as US liquefied natural gas to Russian supplies after Gazprom PJSC slashed shipments through Nord Stream, its biggest pipeline to Europe, and cut off shipments to countries that didn’t comply with new payment terms. Russia met more than a third of the European Union’s gas demand last year. 

“Russia’s recent steep cuts in natural gas flows to the EU mean this is the first month in history in which the EU has imported more gas via LNG from the US than via pipeline from Russia,” IEA Executive Director Fatih Birol said in a tweet. “The drop in Russian supply calls for efforts to reduce EU demand to prepare for a tough winter.”

The increase in US LNG imports comes as the nation ramps up output of the super-chilled fuel after starting exports from the Gulf Coast in 2016, transforming global energy trade. US shipments remain strong even after a fire at the Freeport LNG plant in Texas, which has been shut for prolonged repairs. 

After Russia’s war on Ukraine, the EU in March agreed on an additional 15-billion cubic metres of US LNG this year in a bid to displace Russian gas. In an ambitious target, the bloc has sought to replace a third of Russian gas with LNG from various sources this year. Russia ships about 150-billion cubic metres of gas to Europe via pipelines every year, and another 14-billion to 18-billion cubic metres of LNG.

Combined with Russian LNG, which keeps arriving in Europe except for the UK, the country may still be a bigger overall gas supplier to Europe than the US. In 2021, Russia was the third-biggest supplier of LNG to Europe, after the US and Qatar and ahead of Algeria, according to BP PLC’s annual statistical review of world energy.

Reuters

July 01 2022 — 13:30

EU Looking to ban Russian gold in new sanctions package

The European Union is working on new sanctions to target Russian gold, matching a move by the Group of Seven nations aimed at further choking off Moscow’s revenue sources, according to people familiar with the matter.

Russia is the second largest gold mining country in the world, and its gold exports were estimated to be worth £12.6bn in 2021. When the UK, the US, Japan and Canada unveiled their plans to ban new gold imports from Russia earlier this week, Britain said the measure would have a “huge affect” on Vladimir Putin’s ability to fund his armed forces and oligarchs’ attempts to avoid the affect of financial sanctions by buying bullion. 

Industry analysts are less enthusiastic, describing the ban as largely symbolic because penalties imposed on Russia after its invasion of Ukraine have effectively already closed off European and US markets. And even flows to traditional centres of trading in London and Zurich have mostly dried up due to self-sanctioning by the industry.

Preparations for the new sanctions package are ongoing and some nations will be pushing to add more measures to the proposals before they are presented to member states for approval, one of the people said.

The new package will also cover fixes to previously approved measures, which could include adjustments to rules around the transit of sanctioned goods to the Russian enclave of Kaliningrad, said the people, who spoke on condition of anonymity to discuss private discussions.

Some officials have raised concerns that Lithuania could be pressured into allowing banned goods to transit through the country to Kaliningrad. Lithuania is imposing restrictions in line with sanctions agreed by the whole bloc, and people as well as the vast majority of goods continue to move freely between the two parts of Russia.

Still, prohibitions on more Russian goods are set to come into force this month and the European Commission has been seeking to agree new guidance with Vilnius before then amid worries the standoff could escalate.

One of the people said any rules on applying sanctions would need to be for the whole EU and not single out Lithuania. Moscow has threatened to retaliate against the EU member state if it continues to block rail transport of goods such as steel.

G-7 leaders meeting in Germany this week also agreed to discuss options to cap the price of Russian oil, including through the prohibition of services, such as insurance needed to transport crude and petroleum products, unless the oil is purchased at or below an agreed price.EU ambassadors, however, were told at a meeting this week that the mechanism wasn’t coming to fruition in the near future, one the people said.

A number of EU nations have been pushing for tougher sanctions, including on gas, but there is little appetite in the wider bloc for such bolder actions at this stage, as the continent grapples with potential shortages and rising prices.

Instead, the focus in the near future will more likely be on enhancing and expanding existing measures, such as restrictions on technology exports, as well as sanctions on Russian tycoons and entities, the people said.

Member states have so far frozen nearly 14-billion euros ($14.6bn) of assets belonging to sanctioned individuals, according to the people. The EU and its allies are working on ways to better identify and target the assets of sanctioned individuals, while some countries are seeking guidance on how to deal with the costs of managing frozen assets.

Reuters 

July 01 2022 —  13:00

World’s top pension fund writes off Russia stocks, sells bonds

Japan’s Government Pension Investment Fund (GPIF) said Friday that it’s been selling Russian assets since March following the invasion of Ukraine, marking down some values to almost zero in the process.

The world’s biggest pension fund has substantially reduced holdings of Russian bonds, which can still be traded over-the-counter. The fund has been largely stuck with the country’s stocks, as foreign investors face trading restrictions, chief investment officer Eiji Ueda said in the GPIF annual report.

“Since Russia-related assets have been deleted from benchmarks in March, asset managing companies have been selling them on our behalf while taking into account the liquidity of the market,” Ueda said in the report.

Holdings of Russian government bonds dropped to 3.77-billion rubles in March, down 75% from 15.07-billion rubles a year earlier, the report said. The fund also held a small amount of Eurobonds issued by the Russian government and entities, according to its disclosure.

GPIF was stuck with some equities, including 46.1-million shares of Sberbank, 46.8-million of Gazprom PJSC and 1.6-million of Lukoil PJSC, and has written off their value as almost zero. In March last year, the Japanese fund held about 91.2-billion yen ($673m) worth of Russian stocks.

Still, the loss from Russian stocks represents only a small part of its global portfolio. Its biggest international equity holding at the end of March was in Apple Inc., with 99.3 million shares as of March 31, worth 2.1-trillion yen at that point, it said.

 A large portion of GPIF’s asset — more than 75% of foreign bonds and about 87% of foreign stocks — is passively managed. On the whole, Japan’s pension fund returned 5.4%, or 10.1-trillion yen, in the year ended March 31, with assets totalling 196.6-trillion yen, it said.

Reuters 

July 01 2022 —  12:47

Bulgaria destroys naval mine off its Black Sea coast

Bulgaria's military late on Thursday carried out a controlled explosion of a Soviet-era naval mine that had drifted close to the country's Black Sea coast, the defence ministry said on Friday.

Black Sea countries began to report the appearance of such mines floating in the sea after Russia invaded Ukraine in February. Russia and Ukraine accuse each other of planting them.

The defence ministry said the mine was first noticed some 27 nautical miles east of the mouth of the Kamchia river by a motor ship.

“Military experts classify the mine as an anchored “YaM” type, placed in a combat position. The mine has been destroyed with a controlled explosion carried out by a group of divers,” it said in a statement.

The Black Sea is a major shipping artery for grain, oil and oil products.

Reuters 

July 01 2022 — 12:26

Putin: Western political pressure speeding up Russia's integration with Belarus

Russian President Vladimir Putin on Friday said political pressure from the West was pushing Russia to accelerate its integration with neighbouring Belarus.

Russian defence minister Sergei Shoigu last week said the two countries must take urgent joint measures to improve their defence capabilities and troops' combat-readiness.

Reuters 

July 01 2022 — 11:08

Former F1 supremo Ecclestone condemned for 'extraordinary' Putin comments

Former Formula One supremo Bernie Ecclestone drew condemnation on Thursday after the 91-year-old defended Russian President Vladimir Putin in a television interview as a “first class person” he would “take a bullet” for.

The Briton, who is no longer involved in Formula One, also told ITV's Good Morning Britain that Ukrainian President Volodymyr Zelenskyy could have ended the Russian invasion of his country by talking to Putin.

British foreign secretary Liz Truss said the comments were “absolutely extraordinary”.

Formula One said in a statement they were “his personal views and are in very stark contrast to the position of the modern values of our sport”.

Ecclestone had warm relations with Putin, establishing the now-cancelled Russian Grand Prix.

“He's a first-class person and what he's doing is something that he believes is the right thing he was doing for Russia,” said Ecclestone, who has a history of controversial statements. “Unfortunately he's like a lot of business people, certainly like me, that we make mistakes from time to time and when you've made the mistake you have to do the best you can to get out of it.”

Ecclestone noted that Zelenskyy was a former comedian.

“I think it seems as if he wants to continue that profession,” he said. “I think if he'd have thought about things, he would definitely have made a big enough effort to speak to Mr Putin, who is a sensible person and would have listened to him and could have probably done something about it.” 

Reuters 

July 01 2022 — 10:44

Putin offers Russian Railways investment in new Indonesia capital

President Vladimir Putin offered to have Russian Railways invest in Indonesia’s new capital, in a sign of warming ties with Southeast Asia’s biggest economy as the US and its allies seek to isolate Moscow.

Putin said Moscow could take part in President Joko Widodo’s plan to move Indonesia’s capital to the island of Kalimantan from Jakarta, according to a statement by the Russian Embassy in the country. He made the comments during Jokowi’s visit to Moscow on Thursday, it said.

Nusantara, as the new capital will be called, is set to begin construction in August after the pandemic stalled its development.

Jokowi has courted investors including Abu Dhabi and Taiwan’s Foxconn Technology Group to help build a renewable energy-powered city from scratch. 

Russian energy companies are also keen to operate in Indonesia, especially in developing nuclear power, Putin added.

Atomic energy is a key part of Indonesia’s net-zero emissions plan.

Indonesia has come under pressure by the US and other countries to prevent Putin from joining the Group of 20 summit, which is set to take place in Bali. The Russian leader made no comment on whether he’ll attend in person.

Reuters 

July 01 2022 — 10:28

Indonesia leader targets food crisis during Russia-Ukraine peace mission

Indonesia's president ended a trip to Ukraine and Russia by saying he hoped for progress reintegrating global food and fertiliser supply lines disrupted by the conflict, and offered to be a diplomatic bridge between the two nations.

President Joko Widodo, who is the G20 president this year, was speaking at a news conference alongside his Russian counterpart Vladimir Putin after a bilateral meeting in Moscow on Thursday.

His trip followed a visit to Kyiv on Wednesday where he met with Ukrainian President Volodymyr Zelenskyy.

“I really appreciate President Putin who said earlier that he will provide security guarantee for food and fertiliser supplies from both Russia and Ukraine. This is good news,” said the Indonesian president, who is widely known as Jokowi.

July 01 2022 — 09:05

Russia to start trial against US basketball star Brittney Griner

US basketball player Brittney Griner goes on trial in Russia on Friday on drug charges that could see her face up to 10 years in prison in a case caught up in the fraught relations between Moscow and Washington.

Griner, a star in the US-based Women’s National Basketball Association (WNBA), was detained at Moscow’s Sheremetyevo Airport on February 17, just days before Russia invaded Ukraine, unleashing a broader confrontation with the West.

Russian authorities said the 31-year-old athlete was carrying vape cartridges containing hashish oil, a substance illegal in the country. She was charged with smuggling a large quantity of drugs, an offence that can carry up to 10 years in prison.

July 01 2022 — 09:05

Ukraine 'now has clear European perspective', EU's von der Leyen says

Ukraine now has a “very clear European perspective” following the European Union's decision to grant the country candidate status to join the bloc, European Commission President Ursula von der Leyen said in a speech to the Ukrainian parliament.

“Ukraine now has a very clear European perspective. And Ukraine is a candidate country to join the European Union something that seemed almost unimaginable just five months ago,” von der Leyen said in a speech by video-link to the assembly on Friday.”

So today is first and foremost. A moment to celebrate this historic milestone, a victory of determination and resolve and a victory for the whole movement that started eight years ago on the Maidan,” she added. 

Reuters 

July 01 2022 — 08:58

Russia arrests scientist for alleged collaboration with Chinese secret services

Russia has detained a scientist in Siberia on suspicion of state treason for allegedly collaborating with China's security services, the state news agency TASS reported on Friday, citing regional authorities and the man's family.

Dmitry Kolker, a doctor of physics and mathematics at Novosibirsk State University, whose website says he is head of a quantum optical technologies laboratory, was detained on charges of high treason, TASS quoted the Novosibirsk judicial department as saying.

Kolker and the Sovetsky regional court in Novosibirsk, one of Russia's largest cities, situated around 2,800km (1,750 miles) east of Moscow, did not immediately respond to emailed requests for comment. A lawyer for Kolker could not be reached.

A number of Russian scientists have been arrested and charged with treason in recent years for allegedly passing sensitive material to foreigners. Critics of the Kremlin say the arrests often stem from unfounded paranoia.

State treason is punishable by up to 20 years in jail.

TASS cited Kolker's family as saying he was accused of collaborating with Chinese security services.

Kolker has previously lectured at an international conference in China and had now been moved to a prison in Moscow, his son, Maxim said.

Kolker's daughter said the scientist has been diagnosed with stage four cancer, TASS reported.

Reuters 

July 01 2022 — 08:18

Zelenskyy celebrates retaking of Snake Island

Ukraine on Friday celebrated driving Russian forces from the strategic Black Sea outpost of Snake Island while struggling to hold off intense assaults in the eastern industrial city of Lysychansk.

Russia said on Thursday it had decided to withdraw from Snake Island as a “gesture of goodwill” to show Moscow was not obstructing UN attempts to open a humanitarian corridor allowing grains to be shipped from Ukraine.

Ukraine said it had driven Russian forces off the outcrop after an artillery and missile assault, with President Volodymyr Zelenskyy hailing the strategic win.

“It does not yet guarantee security. It does not yet ensure the enemy will not come back,” he said in his nightly video address.

July 01 2022 — 06:30

China not giving material support for Russia's war in Ukraine — US official

The US has not seen China evade sanctions or provide military equipment to Russia, a senior US official said on Thursday, adding that enforcement measures taken earlier in the week targeted certain Chinese companies, not the government.

The commerce department added five companies in China to a trade blacklist on Tuesday for allegedly supporting Russia's military and defence industrial base as Moscow carries out its war in Ukraine.

US officials have warned of consequences, including sanctions, should China offer material support for Russia's war effort, but have consistently said they have yet to detect overt Chinese military and economic backing of Moscow.

“China is not providing material support. This is normal course-of-business enforcement action against entities that have been backfilling for Russia,” a senior Biden administration official told Reuters, referring to the Commerce blacklist.

“We have not seen the PRC (People's Republic of China) engage in systematic evasion or provide military equipment to Russia,” the official said on condition of anonymity.

The US has set out with allies to punish Russian President Vladimir Putin for the invasion, which Moscow calls a “special operation”, by sanctioning a raft of Russian companies and oligarchs and adding others to a trade blacklist.

China has refused to condemn Russia's actions and has criticised the sweeping Western sanctions on Moscow. Beijing also says that it has not provided military assistance to Russia or Ukraine, but that it would take “necessary measures” to protect the rights of its companies.

The commerce department action means US suppliers need a license before they can ship items to listed companies. But the department also targeted dozens of other entities, including some in allied countries, such as the UK and Lithuania. 

Reuters 

July 01 2022 — 06:15

Russian missile strikes kill 17 in Ukraine's Odesa region — authorities

Russian missiles struck a nine-story apartment building and a resort facility near Ukraine's Black Sea port of Odesa early on Friday, killing at least 17 people and wounding dozens, Ukrainian authorities said.

One missile struck the building in the town of Bilhorod-Dnistrovskyi at about 1am (2200 GMT Thursday), killing 14 people, the emergencies ministry said in a statement. It also wounded 30 people and caused a fire in an attached store building.

Serhiy Bratchuk, spokesperson for the Odesa regional administration, told Ukrainian state television that a rescue operation was under way as some people remained buried under the rubble after a section of the building collapsed.

Another missile hit a resort facility, Bratchuk said, killing at least three people including a child and wounding one more person. Reuters could not independently confirm details of the incident. 

Reuters 

July 01 2022 — 06:00

Ukrainian troops train with British army

Hundreds of Ukrainian troops have completed military training in Britain, including on the Multiple Launch Rocket Systems (MLRS) the British government is supplying to help counter Russian artillery tactics.

Ukrainian troops were filmed earlier this week loading and firing 105mm light guns during exercises in Salisbury, England, one part of a British-led program that has been undertaken by more than 450 Ukrainian armed forces with support from New Zealand. MLRS systems were also shown in use.

The training is part of a wide-ranging international support package following Russia's invasion earlier this year, as the West seeks to help Ukraine repel Russian forces by providing increasingly advanced weapons systems and the skills to use them. Russia says it is conducting a “special military operation” in Ukraine.