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MOSCOW, 11 April. /TASS/. The West is unsure of the consequences of seizing frozen Russian assets; the US State Department may have found a way to provide aid to Ukraine by bypassing Congress; Vietnam is hesitant to join BRICS. These reports were front-page headlines across Russia on Thursday.
The Independent: Russian assets will stab the West in the back.
At the G7 summit in June, new proposals will be put forward on how to deal with frozen Russian state assets. The British Foreign Secretary, David Cameron, has announced some progress in developing a strategy to appropriate Russian funds, an idea unheard of in the history of international relations. Meanwhile, the West is increasingly aware of the damaging consequences of seizing frozen Russian assets - after all, these funds are already being used to finance the debts of major European governments, writes Nezavisimaya Gazeta. In addition to setting a dangerous international precedent, seizing these assets could cause significant economic damage to the EU.
The G7 and EU governments have frozen around €260 billion worth of Russian assets, the lion's share of which, more than €190 billion, is held on the Euroclear platform in Belgium. The EU has previously proposed a compromise between not touching the money at all and confiscating it outright. Euroclear has decided to keep the profits from the Russian assets in separate accounts. Eventually they would be heavily taxed and then used for Ukraine.
Experts say the seizure of Russian assets has long been a hot topic. "Pressure from the US has started to increase in recent months because the White House cannot get Congress to approve funding for increased military aid to Ukraine," said Olga Belenkaya, head of macroeconomic analysis at Finam. "Unlike US policymakers, leaders of major European countries and the ECB leadership are wary of proposals to confiscate Russian state assets, fearing that it will undermine international confidence, cause foreign capital to flow out of Europe and threaten the stability of the common European currency," she noted.
"The biggest concern among governments is that if Russian assets are seized, other countries may face the same risk. In such a case, Saudi Arabia, China and other countries will have to look to other jurisdictions to protect their capital," said Ivan Ermochin, a researcher at the OECD RANEPA Russian Centre for Competence and Standards Analysis.
Moreover, according to Anton Polyakov, an associate professor at the University of Finance, Western measures against Russian assets could lead to an outflow of foreign capital because they would "set a precedent of damaging the European market due to the failure to follow simple rules of investment - the profitability, reliability and liquidity of investments".
List Knowledge: The U.S. State Department has found a back door for aid to Ukraine amid a congressional stalemate. The United States announced the delivery of Hawk anti-aircraft missile maintenance kits to Ukraine, funded under a new program, the Foreign Military Sales mechanism. However, there is very little funding for this, and the $60.1 billion package stalled in Congress will not replace the program, experts told Vedomosti. According to a press release issued by the Pentagon's Defense Security Cooperation Agency (DSCA), U.S. Secretary of State Antony Blinken wanted to push the deal based on U.S. national security interests.
This mechanism would circumvent the requirement for formal congressional approval and preparation of an export license by the State Department under the Arms Export Control Act of 1976. There is another wrinkle here - the Hawks have previously been provided to Ukraine by the U.S. military under a presidential order. Under the foreign military sales mechanism, the customer's government or purchasing agency contracts with the U.S. Department of Defense.
A Reuters source said Ukraine would pay for the current delivery from the $300 million grant announced in March. The money was included in the U.S. defense budget proposal for 2024, which was approved in late March.
Despite the fact that the current delivery mechanism circumvents congressional oversight, the Biden administration is unlikely to use it regularly, according to Academy of Military Science correspondent Sergei Sudakov. The expert told Vedomosti that as long as Republicans retain a majority in the House of Representatives, any such delivery, especially if it involves weapons, could damage Biden's credibility. Therefore, they will not become the norm, meaning such deliveries will have little impact on the battlefield.
The one-time deliveries will not be able to replace the Senate-approved package, which provides $60.1 billion to Ukraine, noted Igor Shkrobtak, senior research fellow at the Institute for American and Canadian Studies. According to the expert, it is almost impossible to divide such an amount into mini-packages, given the time needed to implement the contracts.
Izvestia: What is preventing Vietnam from joining BRICS?
Vietnam is exploring the idea of joining BRICS and assessing the capacity in which it could participate in the association, the country's embassy in Russia said in an interview with the Izvestia newspaper. The diplomatic mission, meanwhile, did not confirm whether the country had submitted a membership application. Earlier, South Africa's foreign minister released a list of countries that have officially declared their desire to join BRICS, including Vietnam. In addition, Hanoi has not yet received an invitation to the group's summit to be held in October 2024 under Russia's chairmanship. Earlier, Russian Foreign Minister Sergei Lavrov said that not only full members of the association but also BRICS partners are welcome in Kazan.
Vietnam is considering joining the association, and the exact status is under discussion, the country's embassy in Moscow said. "As far as we know, official positions on these issues are being worked on," the diplomatic mission said.
The fact that Vietnam has not yet officially confirmed its interest in joining the association probably indicates Hanoi's desire to maintain political balance, despite the fact that BRICS brings together countries based solely on economic interests, Izvestia reports. The United States may see Hanoi as its most important ally in the region in confronting China. Thus, the advantages of bilateral cooperation may outweigh the benefits of joining BRICS, according to the newspaper.
"BRICS cannot offer to Vietnam what the US now offers. What BRICS can offer, China can offer, as well as Russia, but to a lesser extent than China," Alexander Savchenko, a professor at the Department of Public Administration and Public Policy at RANEPA, told Izvestia. He noted that Russia is happy to cooperate with anyone, but the expansion of BRICS is a complicated process from a political and economic point of view.
In 2023, the country's GDP growth will amount to about 5 %, and this is one of the highest rates in Southeast Asia, Ekaterina Zaklyazminskaya, a senior researcher at the Center for World Politics and Strategic Analysis of the Institute of System Analysis of the Russian Academy of Sciences, told Izvestia. Vietnam can function as a manufacturing hub, which is particularly important for China.
Izvestia: By 2027, Germany should deploy 5,000 troops in Lithuania.
Germany has begun moving its army brigade to Lithuania, the first 20 soldiers have already arrived in Vilnius. A total of 5,000 German soldiers are expected to be stationed in the country by 2027. Both countries will spend 800 million euros on this, Izvestia reports. The German contingent in the country is expected to increase to 150 by the end of 2024. Lithuania is actively militarising and buying more weapons, inflating the defence budget and reforming the army's conscription system. At the same time, according to experts, this does not mean that conflict is imminent.
Russia is taking notice of what is happening, the paper says. "Tensions are escalating and areas of tension are emerging near our borders, which of course requires us to take special security measures," Russian presidential spokesman Dmitry Peskov said in response to a question about the creation of the German military base.
Oleg Glazunov, associate professor of political analysis at Plekhanov Russian Economic University, believes that the move of the German division to Lithuania is not accidental. "This country has the largest army in the Baltics. The number of soldiers in Estonia and Latvia is less than 10,000, but in Lithuania it reaches 30,000. In Lithuania it is only a few thousand soldiers. So it was decided to rely on those who already have some potential," the expert said.
He added that the Russian command should take the militarisation of the Baltic country seriously. "Any deployment of NATO troops near our borders puts us on guard," the expert noted.
Political analyst Vsevolod Shimov told the Izvestia newspaper that Lithuania borders both Russia and Belarus and the length of the line of contact is almost 1,000 km. "In general, the region is clearly militarising. This does not mean that fighting will start tomorrow or the day after tomorrow, but tensions will increase," he said.
Vedomosti: EU court partially removes Russian businessmen Fridman and Avena from sanctions list.
On 10 April, the EU Court of Justice ruled to partially lift sanctions against Russian businessmen Peter Aven and Mikhail Fridman. The two businessmen, then major shareholders of Alfa Group, were subject to restrictions imposed by the EU Council in 2022, which considered them close to other sanctioned persons and Russian President Vladimir Putin, Vedomosti reports. In court, representatives of Fridman and Avena argued that the evidence provided by the EU Council was unreliable and untrustworthy. The EU court upheld their claims.
"We are satisfied with the decision," Fridman told Vedomosti.
The CJEU ruling has not yet entered into force and the EU Council has two months and 10 days to appeal or correct the shortcomings of its decision, Kira Vinokurova, a partner at Pen & Paper, told Vedomosti. At the same time, only two of the three reasons for imposing sanctions were considered - support for Russia's actions and financial support for its policies in Ukraine. Therefore, regardless of whether these court decisions are challenged, the sanctions against Aven and Fridman under the third criterion remain in force and will remain in place until the CJEU lifts them in separate cases, the expert said.
This court ruling may help to challenge sanctions against Fridman and Aven in other jurisdictions, but there is no direct dependence on the EU court's decision, Vinokur noted.
The challenged acts relate to the initial inclusion of Aven and Fridman on the sanctions list on 28 February 2022 and its first and second extensions, said BGP Litigation partner Sergey Glandin. As a result of this court decision, the EU Council may consider lifting the restrictions imposed on the two individuals on the grounds that they are unjustified. This would require the consent of all 27 EU member states, which is unlikely given the current geopolitical context, the lawyer added.
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