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Russia Geopolitical Watch – From June 25 to July 1st, 2022

Russia Geopolitical Watch Team: Lauren Lemaire-Hec, Manik Tadevosian, Enzo Pavodan, Simon Bouclier, Amandine Paillette, Olga Shevchuk

06/25/2022: The Lithuanian President said that he would not make concessions to Russia on the issue of transit to Kaliningrad – Enzo Padovan –

On June 25th, Gitanas Nauseda, President of the Lithuanian Republic, announced that his country would maintain its restrictions against the transit of Russian goods to the Kaliningrad exclave. In fact, since June 18th, Vilnius has clearly prohibited the passing of freight trains coming from Russia on its territory. This measure was also completed, on June 21st, by a similar Lithuanian decision, which restricted in its waters the transport of Russian goods targeted by European sanctions. Ultimately, such measures have already directly impacted between 40 to 50% of the supply exchanges between Moscow and the Kaliningrad region. This has caused, in anticipation of possible shortages, movements of panic buying in the recent days. Nikolai Patrushev, a close advisor of Vladimir Putin, has severely condemned the decisions adopted by Lithuania, accusing them of being “moves orchestrated by the West against norms and principles of international Law”, also adding that “Russia will, of course, respond to hostile actions of this kind”.

On June 24th, despite those national decisions, Petras Auštrevičius a European Member of Parliament of Lithuanian nationality, announced that the Commission was working on a proposition tied to these issues. Indeed, said proposition could allow for Russia to supply goods, otherwise forbidden from export, towards the Kaliningrad oblast. Nonetheless, President Nauseda is openly opposed to such measures, maintaining his position according to which his country “must and will apply EU sanctions”. Therefore, no corridor should be established on Vilnius’ land, as the country is willing to use its veto right in order to prevent the proposition from becoming a reality. Against what the Russian authorities have called a blockade, it is likely that they are preparing their own counter-sanctions against Lithuania, which could be adopted in the very near future. 

06/26/2022: G7 countries summit, member states sanction Russia by banning all gold imports from the country – Amandine Paillette –

In a summit that lasted from June 26 to June 28, the G7 countries met in the luxury hotel Schloss Elmau based in Germany. On the first day, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States agreed to a ban on gold imports from Russia as part of new economic measures. Although this new decision only applies to new extractions of the metal, Joe Biden welcomed the measure on Twitter writing that “banning this major export source will deprive Russia of billions of dollars.”

As the Kremlin continues its military intervention in Ukraine, the gold embargo represents a new attempt to isolate Moscow from the international financial system. Indeed, behind China, Russia is the second-largest gold producer in the world, and gold is the second most exported product after energy. The Russian metal represents 15 billion euros, 90% of this trade is destined for G7 countries, including the United Kingdom, which houses one of the world’s main financial centers for trading raw materials. With this decision, the G7 members want to firmly sanction the country, as Boris Johnson stated,”these measures will directly hit the Russian oligarchs”.

Gold being considered a safe asset in case of economic crisis, its price could drastically increase in the face of ongoing inflation. For the time being, the price of an ounce of gold was 1930 euros as of June 28. 

06/27/2022: Bloomberg reports default on foreign-currency sovereign debt in Russia, for the first time in 100 years – Olga Shevchuk-

Bloomberg reported on the failure to pay foreign currency debts in Russia, because on the night of May 27 the deadline for payment in the amount of about 100 million dollars expired. Bloomberg notes that the default is symbolic. Investors, according to Bloomberg, have the right to declare default and wait for sanctions to be lifted from Russia.

The Russian authorities do not admit that the State faced a payment default. “These allegations of default in this case are absolutely unjustified, as last May the necessary payment in foreign currency was made. And the fact that this money was withheld and did not reach the recipients is no longer our problem. In other words, there is no reason to call the situation a default,” said Dmitry Peskov, press secretary to the president.

Russia cannot make payments on dollar bonds due to Western sanctions. The authorities decided to pay investors in rubles, but this can also be considered a default, since the terms of the bond issue do not imply a change of currency.

06/28/2022: Ilya Yachin arrested in Moscow -Lauren Lemaire-Hec-

The political opponent and deputy of the Krasnoselsky municipal district criticising the Russian invasion of Ukraine, Ilya Yachin was arrested on 28 July while walking in a park. Irina Babloyan, a journalist who accompanied him, reports on her Telegram channel: “I was walking with my friend Ilya Yachin in the park in Khamovniki. The police arrived and took Ilya away, nobody knows where”. At his trial in Khamovnichesky court, it was claimed that police reports indicated that Yashin was stopped to check his papers, to which he allegedly “responded with a rude and categorical refusal”, and also pushed the police officers and grabbed them by their uniforms. Both Ilya Yachin and his girlfriend Irina Babloyan dispute these accusations. The arresting officers did not come to court and the judge refused to call them, “because there are detailed reports and explanations of the case”. Despite the rebuttal of the accused and the witness, Ilya Yashin is charged with disobeying a police order under Article 19.3 of the Code of Administrative Offences of the Russian Federation.

The MP’s lawyer, Vadim Prokhorov, has not been allowed to see the detainee. Indeed, he explained on Facebook: “they won’t let me in despite my identity card and my warrant”

06/29/2022 : Russian Duma now includes entities under “foreign influence” in the category of “foreign agents” -Lauren Lemaire-Hec- 

On 29 June, the State Duma adopted in third reading a law on the regulation of the activities of foreign agents in the Russian Federation. Now, the status of foreign agent will extend to any Russian or foreign legal entity, regardless of its organisational and legal form, another association of persons or an individual, regardless of his or her nationality, which receives foreign support or is under foreign control. 

Foreign agents already faced problems related to their status in Russia. Now, the Duma document states that they will not be able to receive state funding for their activities, teach in state and municipal educational institutions, conduct educational activities in relation to minors, participate in the conduct of state or public environmental expertise. Finally, foreign officials will not be able to produce information for minors or act as organisers of a public event. 

As the co-author of the amendments (the chairman of the Committee on Security and Control of Corruption) Vasily Piskarev explained, the old legislation on foreign agents contained scattered provisions, while the new law aims to systematise them and make the procedure for controlling the activities of foreign-influenced individuals and organisations transparent. “Anyone who sings from someone else’s voice and is paid for it should understand: a foreign agent is the most democratic thing that other countries accept in these cases. Criminal convictions, imprisonment and the like are everywhere if you think about how their children and grandchildren will live in their own country. If these decisions are not taken, it is clear: there will be no state,” he explained.

06/30/2022 : The State Duma adopted a law on extrajudicial closure of media outlets for “false information” and “discrediting” the military -Lauren Lemaire-Hec-

The State Duma adopted on 30 June in third reading a bill that gives the prosecutor general’s office the right to close down media outlets for publishing “false information”, “disrespect for the authorities”, “discrediting the army” and “calls for sanctions”.

This law will give the state more control over these media. Indeed, the Prosecutor General’s Office will be empowered to revoke broadcasting licenses if media outlets share “illegal and dangerous information”, as well as messages expressing “a clear lack of respect for society and the Constitution of the Russian Federation”. The law also specifies the possibility of banning foreign media in Russia “when it is established that hostile decisions have been taken by foreign states with regard to Russian media distributed abroad” – which is directly related to the new law, adopted a day earlier, concerning foreign agents. 

For a first violation, the prosecutor’s office will require the Roskomnadzor to suspend media activities for up to three months, and for a second violation, for up to six months. But if during these periods the media eliminate the said violations, they may resume their activities by decision of the Roskomnadzor.

In case of a second violation, the official registration of a media outlet may be invalidated.

07/01/2022: Diplomatic tensions between Bulgaria and Russia – Simon Bouclier

On July 1, Bulgaria did not comply with Russia’s request not to expel 70 Russian diplomatic envoys. These employees of Russian diplomatic missions are accused by the Bulgarian authorities of using their position as a cover for other activities. The Russian ambassador to Bulgaria, Eleonora Mitrofanova said that “unfortunately, our appeal to the Bulgarian Ministry of Foreign Affairs was ignored. In this regard, I intend to immediately ask the leadership of my country about the closure of the Russian embassy in Bulgaria, which will inevitably lead to the closure of the Bulgarian diplomatic mission in Moscow”. The Bulgarian Foreign Ministry wants to reduce the number of Russian diplomats in Bulgaria so that it does not exceed the number of Bulgarian diplomats working in Russia. This means that 50 Russian diplomats should continue to work in Bulgaria.

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