Duma, know your place! Oh, don’t be afraid of sanctions, Russians! Struggle with a blogger
February 17, 2022
Duma, know your place!
President Vladimir Putin thanked members of the State Duma for their awareness and understanding of the political situation, reflected in the adoption of an appeal to the President to recognize the independence of the LNR/DNR. According to Putin,
“...parliamentary deputies, as in any country, in Russia, are guided by public opinion, by the opinion of their constituents; they feel it subtly. In this regard, it is quite obvious: In our country, the vast majority of people sympathize with the residents of Donbas, support them, and hope that the situation there will radically change for the better for them.”
The Russian leader did not deem it necessary to communicate his perspective on the future of this document: On the one hand, Russian law does not require the President to respond to the appeal of the parliament publicly; on the other hand, Putin is well aware that the Russian parliament is an imitation body of power, which has no real powers and is entirely under the control of the Kremlin. The next day, presidential spokesman Dmitry Peskov clearly articulated: “The President has received the appeal, he has responded to it, he has taken it into account.” Period.
The position of the Russian authorities on this issue was pronounced some time ago by Foreign Minister Sergei Lavrov: Recognition of LNR/DNR independence would mean Russia’s withdrawal from the Minsk agreements. The official position of the Kremlin is that the Minsk agreements are aimed at “solving the problems of Donbas” and “protecting the Russian-speaking population.” Still, it seems that the value of the Minsk agreements to the Kremlin lies elsewhere.
The text of the document is drafted to allow for ambiguous interpretation of many of its provisions. If one side wishes to block the resolution of the conflict, that can be arranged. Russia is doing this successfully by constantly demanding that Ukraine adopt bills that society and political elites do not support. At the same time, the Kremlin successfully uses France and Germany (sometimes even the U.S.) to its advantage, forcing them to support its interpretation of the Minsk agreements. As a result, the Ukrainian authorities are floundering between Scylla and Charybdis, between public opinion and the combined pressure of Russia and the West, depriving themselves of the opportunity to conduct a meaningful and coherent policy—to the Kremlin’s benefit.
Oh, don’t be afraid of sanctions, Russians!
The Russian authorities have decided to reassure a population agitated by rumors about new Western sanctions, especially those restricting foreign currency transactions for Russian banks. The Minister of Finance, Anton Siluanov, expressed justified skepticism about the possible restriction of Russian banks’ access to the financial communications system SWIFT, saying it would be “unpleasant, but not fatal.” If such a measure comes into play, Russia will switch to other possibilities for transmitting financial information, whether the financial messaging system managed by the Bank of Russia (SPFS), the teletype, or “we will carry payments in suitcases (I exaggerate),” the Minister added. I agree with Minister Siluanov about the possibility of using the teletype and even pigeon mail. Still, I’m afraid I have to disagree with him about the possibility of using the SPFS—I have already said that banks with euro or dollar accounts in the United States and the Eurozone are not connected to this system (“We won’t let Belarus offend”).
At the same time, the Minister said honestly that it is much more dangerous to impose restrictions on correspondent accounts of Russian banks in dollars and euros, which would block the possibility of all transactions. In this case, according to the Minister, it is essential which banks it will be.
But the introduction of even the most brutal sanctions should not scare the Russian population; the state will take all the risks, the Minister said. “It is clear that we will provide all deposits, all settlements with our depositors, including foreign currency ones... We have enough foreign exchange liquidity, foreign exchange reserves for this.” Indeed, all foreign currency deposits of the Russian population amount to $95 billion, which is 15% of Russia’s gold and foreign currency reserves. In addition, the Bank of Russia and Russian banks constantly have a significant stock of foreign currency on hand. The last time this figure was published was on December 1, 2018—it was $44 billion. But we can assume it has not changed much since then: During 2020-2021, the reserves of Russian banks in their cash vaults grew every quarter.
Unprecedented (creative) verdict
A court in Moscow has upheld a lawsuit by the Russian Prosecutor General’s Office against car dealer Rolf and company founder Sergei Petrov to seize property worth 19.4 billion rubles ($255 million) from the state.
Between 2007 and 2016, Sergei Petrov was a member of the State Duma, where he openly opposed Kremlin policy on many fundamental issues. In particular, he voted against the Dima Yakovlev law, which prohibited the adoption of Russian children by foreign citizens, and the adoption of the “Yarovaya Package,” which gave law enforcement agencies unlimited access to information of telecommunications operators. Petrov was one of three State Duma deputies who refused to participate in Crimea’s annexation. The Kremlin suspected Petrov of providing financial support to Alexei Navalny but could find no confirmation.
In the summer of 2019, Petrov and the top managers of Rolf were accused of violating currency laws and illegally withdrawing 4 billion rubles from Russia. One of the managers was arrested as part of this criminal case, and the court is now considering his disposition. Petrov and two other managers left Russia.
In the fall of 2021, the prosecutor’s office filed a lawsuit to recover almost 13 billion rubles from Petrov, accusing him of participating in the management of Rolf while he was a member of the State Duma. During the hearing of the lawsuit, the prosecutor’s office increased the amount of the claims to 19 billion rubles. Rolf was held jointly and severally liable for the claim, and the court ordered the company to pay the sum claimed. According to Anatoly Kupriyanov, Petrov’s lawyer, the court decision is unprecedented and not based on applicable law.
“In the process, it turned out that there were no legal grounds for such a decision. The court introduced a new punishment—civil forfeiture, which is not stipulated by any law. In particular, it concerns joint responsibility of legal persons with physical persons, which is impossible in the absence of victims, and there are no victims in this case.”
In 1982, with the rank of major, Sergei Petrov was dismissed from the Soviet Army and excluded from the CPSU for participation in the unofficial democratic organization and anti-Soviet agitation. He founded Rolf in 1991—the company is the largest car dealer in Russia.
Mystery: Blocked social
The official Instagram page of the head of Ingushetia Republic, Mahmud-Ali Kalimatov, has been blocked.
“My page in the social network Instagram was blocked. I did not allow violations of the social network rules, and the reason for restricting access to the page is still unclear. My press service is looking into the matter,” the head of the republic wrote in his Telegram channel.
Kalimatov’s accounts in the social networks Vkontakte, Odnoklassniki, and Facebook and the messenger Telegram remain active. On Instagram, the head of the region has more than 133,000 subscribers.
I would not be surprised if it turned out that the initiator of this blockade was the head of the neighboring region, Ramzan Kadyrov. Relations between Chechnya and Ingushetia are very tense and unfriendly.
Struggle with a blogger
On Wednesday, the apartment of famous Russian political blogger Valery Solovey (340,000 subscribers on YouTube) was searched, after which he was detained and questioned as a witness. During the search, Solovey’s means of communication, schemes of administration of information resources, and other materials were seized for examination.
According to Solovey’s lawyer, Alexei Dobrynin, the search and interrogation were conducted as part of a criminal case initiated last fall over publications on the internet that fall under the Criminal Code article on inciting hatred or enmity based on membership in a particular social group, committed by an organized group of individuals. “The social group of persons in respect of which the alleged incitement to hatred is understood in the decree on the search of the home—law enforcement agencies,” said the lawyer.
According to the investigation, Solovey made publications about employees of the Russian authorities in the anonymous Telegram channel General SVR. (General of the Russian Intelligence). The administrator of this resource is a citizen of Ukraine living in Kharkiv.
Until June 2019, Solovey was a professor at MGIMO (Moscow Institute of International Relations). At the end of his contract, the administration suggested that he stop working because he “conducts anti-state propaganda and undermines political stability.” In 2020, he began actively urging Russians to attend protests. And at the beginning of 2021, Solovey announced the creation of his political party.
I do not doubt that the law enforcement authorities want to frighten Solovey and force him to leave Russia under the threat of arrest. His energetic, ironic, on-the-verge-of-conspiracy criticism of the Russian authorities and constant remarks about President Putin’s poor health seem to have bored the Kremlin. I don’t think that if he leaves the country, Solovey will cease his journalistic activities, but he will undoubtedly lose his earning power.
Beautiful tech dreams
The Ministry of Economic Development has published a White Paper—the summary analysis of the development of high technologies in Russia and abroad. The document covers 10 areas: artificial intelligence, Internet of Things, mobile communication networks of the fifth generation (5G), quantum computing, quantum communications, distributed registries technology, electricity transmission and distributed intelligent power systems, technology for creating energy storage systems, including portable, new materials and substances technologies, advanced space systems. For each direction in the White Paper, there is a cross-section of development trends, publication monitoring, and patent activity as objective indicators of the potential of Russian technologies in new markets. The Ministry plans to update the document annually.
In the economy à la Putin, all development depends on the state controlling companies. Technological development in this sense is no exception: The President sets tasks, the government sets road maps, ministries and state-owned companies report on their implementation. Here is how this process is described in the White Paper:
“In 2019, the President of the Russian Federation has set an ambitious goal for major companies to achieve leadership positions in global technology markets. In this regard, the Government of the Russian Federation has identified 16 high-tech areas, and the relevant work is organized within the framework of agreements of intent concluded between the Government of the Russian Federation and state corporations and companies with state participation.
“Agreements are critical tools for planning and management in the sphere of technological development. Their implementation by their authority is ensured by Deputy Chairmen of the Government of the Russian Federation, specialized federal bodies of executive power (Ministry of Economic Development of Russia, Ministry of Industry and Trade of Russia, Ministry of Energy of Russia, Ministry of Education, and Science of Russia). General coordination is carried out by the First Deputy Chairman of the Government of the Russian Federation and the Ministry of Economic Development of Russia.
“In our country, the leaders in the development of high-tech areas are also the largest companies (Sberbank, MC RDIF, Rostelecom, Rostec State Corporation, Rosatom State Corporation, Roscosmos State Corporation, Rosseti, Rosneft, Russian Railways, Gazprom), all of which provide a significant contribution to the economy.”
Throughout the document, its authors view the Russian technology sector in isolation from the global process, arguing that Russia can produce all the necessary technologies on its own. Only at the very end of the White Paper do the authors acknowledge that:
“Whatever measures the government takes, only the leading companies and the entrepreneurial community together can ensure the successful development of high-tech areas.”
They also note the main risks faced by the Russian technology sector:
“One of the most significant of them is the strong dependence on imported components and equipment, including those needed for research and development. Sanctions and other restrictions hurt the production and export of high-tech products... Another significant risk is the shortage of qualified specialists, including those needed to work with innovative solutions.”