Russiabot Newsletter 7 [12.01.2020]
Nord Stream 2 is back online, Duma mulls cryptocurrency, calls for peacekeepers to leave Transnistria, Yefremov goes missing, and a U.S. Navy Ship 'visits' the Gulf of Peter the Great...
The Russiabot Newsletter
Tuesday, December 1st, 2020
Good evening.
I know, it’s been some time since I’ve updated this platform. A number of new obligations in my life have made it difficult to keep up with the research and writing necessary to keep this project going, but I am hopeful that I can start dedicating more time to this effort.
And…damn…how many things have happened since I’ve been away. From Navalny’s poisoning, the War in Artsakh, and the prospect of a new foreign policy shift (not really) under the coming Biden administration, there’s plenty to think about in terms of how the U.S. is, and will be, interacting with the former Soviet Space.
I’ve been thinking a lot about the late Stephen F. Cohen these past three months. His death in September truly deprived the world of a critical narrative on Russia policy that is absolutely essential to pulling the globe out of this quagmire we seem to have agreed to call ‘the new cold war’. I can only hope to work to even fill a crumb of the void he has left behind.
To subscribers and visitors alike, please do not hesitate to reach out as this project moves forward. Input, feedback, and steady conversation is always welcome.
I hope you are all well-
RB
Here are top headlines from Russia, today
Work to Resume on Nord Stream 2 After German o.k., Despite Sanctions
Russian State Duma Reviewing Law on Cryptocurrency Asset Taxes
Russia reax. to Calls For Withdrawal of Peacekeepers from Transdniestria
Celebrated Actor Guilty of Vehicular Manslaughter Vanished en route to Penal Colony, Found
Russia Ministry of Foreign Affairs Issues Complaint Over U.S. Naval Presence Near Vladivostok
1. Work to Resume on Nord Stream 2 After German o.k., Despite Sanctions
(It really took an effort to avoid making a joke about laying pipe here….)
The much-delayed Nord Stream 2 pipeline project is set to resume construction, following the German government’s approval of a Russian pipelaying vessel –The Akademik Cherskiy—to return to work on the 764 mile-long underwater infrastructure plan spanning the Baltic Sea between Russia and Germany.
Work halted on Nord Stream 2 in December 2019, when a package of U.S. sanctions prompted AllSeas –a Swiss Company—to withdraw from its pipelaying activities. Gazprom, the company overseeing construction on the Russian end, rushed this past year to replace any foreign involvement in the effort (effectively nullified by U.S. Sanctions) with Russian alternatives. Hence, the Akademik Cherskiy was transferred from its home port in Vladivostok to the Baltic Sea earlier in the year.
With this approval, work will continue on about 2 miles worth of pipe in German waters starting on December 5th, but requires continued authorization from for work conducted after January 2021.
Behind the scenes, U.S. Congress is rushing to pass a new package of sanctions in the next three weeks to make it difficult for any entity associated with the Nord Stream 2 project –included insurance companies—to stay in business on this contract. This has largely been a bipartisan effort backed by the Trump administration, with little change expected from President-Elect Joe Biden, who has similarly called on European States to withdraw from this new line of natural gas from Russia.
U.S. sanctions on Nord Stream 2 have been a source of tension with European States, which have moved to protect companies working on the project against U.S. sanctions: German localities, for example, have moved to create public trusts to relieve companies impacted by sanctions during the course of work on the pipeline.
Should Nord Stream 2 be completed in the Summer of 2021, deliveries of Russian natural gas to Europe are expected to double by the following Winter.
(Interfax, RIA, Gazeta, Izvestiya)
2. Russian State Duma Reviewing Law on Cryptocurrency Asset Taxes
The Russian State Duma is reviewing a proposed law (no. 1065710-7) to mandate crypto-wallet declarations by any resident of the Russian Federation, effectively treating cryptocurrencies as taxable assets. This would change the country’s tax code to place an income tax on any cryptocurrency reserves at values exceeding 600,000 rubles (~$7,900). Failures to declare these assets would result in a penalty of 40% of the taxable value of the cryptocurrency reserve. Failure to register cryptocurrency assets exceeding 45 million rubles (~$59,000) could result in prison sentences of up to three years.
This law –originally formulated by the Ministry of Finance in September –is a manifestation of Prime Minister Mikhail Mishustin’s objectives to adapt the Russian tax code to accommodate for emerging technologies. This includes oversight over cryptocurrency transactions, to provide greater control over the application of crypto to money laundering and financing of terrorist organizations (as was demonstrated by the operations of the Islamic State network in the past decade).
Should this law be accepted into law –it is currently in the early stages of review in the Committee on Budget and Taxes—it remains to be seen exactly how the government plans to enforce this oversight over crypto exchanges. Namely, it would be very difficult to track individual crypto-wallets without the owner’s consent, as this falls into conflict with the de-centralized nature of the blockchain infrastructure backing the major cryptocurrencies.
This regulatory effort comes as the country attempts to understand and control cryptocurrency use within the country. In July, President Vladimir Putin signed into law restrictions on the use of cryptocurrencies as legitimate payment methods for goods and services within the Russian Federation.
At this point, the Russian government has no oversight over cryptowallets and associated asset exchanges.
(Vedomosti, The Bell, RBK, RBK, TaxPravo)
3. Russia reax. to Calls For Withdrawal of Peacekeepers from Transdniestria
Sergey Lavrov –the Russian Minister for Foreign Affairs—negatively reacted to Moldovan President-Elect Maia Sandu’s comments concerning the withdrawal of Russian peacekeepers from the breakaway Trans-Dniester region (the unrecognized state of Transdniestria).
“It is difficult to judge exactly what Madam Sandu intended with her statement on the need to withdraw Russian peacekeepers [from Transdniestria], but the fact that this will hardly help any future settlement –and we can hardly accept such a demand –is, quite simply, irresponsible”
- Sergey Lavrov, speaking from Moscow
Lavrov highlighted that Russian peacekeepers are in the region as part of the Organization of Security and Cooperation in Europe’s 5+2 format, which, the foreign minister emphasized, originally brought about an end to hostilities between Moldova and Transdniestrian separatists in 1992. Under this arrangement, Russian peacekeepers patrol the contact line between the two territories parallel peacekeepers from Ukraine and Moldova, in addition to providing security for Soviet-era military equipment storage facilities in the Commune of Kolbasna.
The Transnistrian War was originally fought in 1992 following the breakup of the Soviet Union, where the Trans-Dniester region’s heavily Russian-Ukrainian population revolted over concerns that the newly independent Moldova would integrate with Romania.
In total, some 1,500 Russian peacekeepers are currently deployed to Transdniestria. President-Elect Sandu called on the withdrawal of these forces during her press circuit tour following her victory in Moldovan elections on November 15th. Much to Moscow’s irritation, Sandu emphasized that peace in the region could only truly take hold if these Russian forces leave the country, to be replaced by an OSCE-led civilian observation mission, similar to the ongoing OSCE operation in Eastern Ukraine.
Moscow’s reaction to these statements can be taken as a greater symptom of unease towards the results of Moldovan presidential elections. Sandu’s political party, the Party of Action and Solidarity, is vocally pro-EU, falling in contrast with her predecessor’s more Russia-oriented policy approach. Nevertheless, Sandu appears to recognize the 40% of voters who favored Igor Dodon during the elections in November, vowing to simultaneously improve relations with Russia while working for closer integration with the European Union.
Maia Sandu will be inaugurated as President of Moldova on December 24th.
(Interfax, Interfax, Gazeta, RIA)
Worth a Look: a series of photo essays by Transnistrian photographers documenting everyday life in this land caught in between.
4. Celebrated Actor Guilty of Vehicular Manslaughter Vanished en route to Labor Colony, Found
It seems that the entire ordeal surrounding Mikhail Yefremov’s fatal drunk driving prosecution has been marred in a combination of theatrics and incompetence. From false witness testimonies, dismissed lawyers, and onsets of stress-induced mini-strokes, the case finally has concluded: Yefremov was sentenced in October to 7.5 years at correctional colony No.4 in the Belgorod Oblast (where soccer stars Kokorin and Mamayev once served time over an assault charge).
Following a 20-day quarantine prior to processing, Yefremov’s lawyers claimed that the actor briefly vanished during transport to the colony on November 30th, and neither his legal team nor the authorities could account for his whereabouts during this time. Nevertheless, Yefremov eventually arrived at his destination, where he is set to remain for the duration of the 7.5 year sentence.
Yefremov—who was convicted of manslaughter while driving drunk—originally acknowledged responsibility in the Moscow Crash on June 8th which killed Seregi Zakharov (no relation to the Ministry of Foreign Affairs Spokeswoman), appearing to admit culpability in a widely shared video recorded immediately after the accident. Yefremov’s Jeep Grand Cherokee is caught on video swerving into the opposite lane of traffic.
Mikhail Yefremov is a widely celebrated actor in Russia’s film and theater industries, holding the title of “Honored Artist of the Russian Federation” since 1995. In recent years, Yefremov offered vocal criticism of the Kremlin’s actions both domestically and abroad.
5. Russia Ministry of Foreign Affairs Issues Complaint Over U.S. Naval Presence Near Vladivostok
The Russian Ministry of Foreign Affairs (MID) issued a formal complaint to the U.S. Government over claims that the USS John McCain –an American destroyer of the 7th Fleet—entered Russian territorial waters in the vicinity of the Gulf of Peter the Great, a Russian internal water claim near the city of Vladivostok. The MID originally announced that the American destroyers made a two-kilometer incursion into Russian waters on November 24th, something which the government called an outright “provocation” by American forces. The American ship was confronted by the Admiral Vinogradov, a Russian Udaloy-class Destroyer.
At the time of the interception, the United States was performing a freedom of navigation exercise in the region, according to the 7th fleet, as the U.S. government does not recognize Russian claims to this body of water. In 1984, the Soviet Union established firm borders throughout its maritime borders, which included a complete claim over the Gulf of Peter the Great.
Earlier in November, three Russian warships conducted operations some 200 miles off the coast of Alaska during the course of military exercises called Ocean Shield in the Bering Sea.