Page 22 - RusRPTMar20

2.14 ​Politics - misc
Former shareholders of Yukos, once Russia’s largest oil company, won a huge victory in court in February as the Hague Court of Appeal ordered Russia to pay $50 billion for the company’s seizure. The ​ruling is the latest in a 15-year legal battle between Yukos’ former owners and Moscow. In 2003, the firm’s CEO Mikhail Khodorkovsky, then-Russia’s richest man and a vocal Putin critic, was arrested at gunpoint on a Siberian tarmac. Yukos was then broken up and seized by the state as compensation for billions in unpaid tax claims. In 2014, a Dutch court ruled that the state had expropriated Yukos’ assets and must pay its former owners (Khodorkovsky not included) $50 billion in compensation. The ruling was, however, overturned by a district court in 2016. Yet Tuesday’s ruling swings back to the 2014 verdict and paves the way for Yukos’ former owners to seize assets owned by the Russian state abroad. But the saga is not yet over: Moscow will appeal the judgement to the Dutch Supreme Court in a few months. The potential payout is one-sixth of Russia’s 2020 state budget. Putin has already proposed guaranteeing the supremacy of domestic law over international law in the Russian constitution.
The US levied additional sanctions against Rosneft in February​, adding its subsidiary Rosneft Trading to the Specially Designated Nationals (SDN) list for its dealings with Venezuela. Didier Casimiro, the head of Rosneft Trading, was also added to the Treasury’s blacklist. The sanctions are fundamentally targeted at Venezuela, as the US looks to weaken the Maduro regime’s sources of revenue. They should have little effect on Rosneft itself. Rosneft Trading was established in Switzerland in 2011 to implement the oil giant’s overseas projects. One expert estimates that it makes up less than 1% of Rosneft’s total profits. The bigger challenge is that sanctions on the Rosneft subsidiary will hurt pre-existing oil contracts. Per Treasury’s SDN regulations, any entities that continue to do business with Rosneft Trading will face the risk of secondary sanctions after a generous wind-down period ends in May 2020. In addition to buying oil from Venezuela, Rosneft Trading has contracts with Iraqi Kurdistan, Thailand, and Egypt that may suffer.
The next day Rosneft announced that it earned record profits in 2019,
worth RUB708bn ($11bn). This is a 5.3% increase from the previous record established in 2018. Despite a 6.2% drop in average oil prices from 2018, Rosneft was able to boost profits by increasing the volume of oil sales by a whopping 20.1%.
Slovak Prime Minister Peter Pellegrini accompanied by Economy Minister Peter Ziga (both Smer-SD) met with the new Russian Prime Minister Mikhail Mishustin ​on February 26, being the first European official to be received by new Russian PM, the Slovak News Agency reported. According to Pellegrini, Slovakia as the EU member “is aware of complications that hamstring ties between the EU and Russia, but Slovakia also holds its own views on how relations with Russia, including sanctions, should look and is ready to present them,” he said, as cited by the news agency. Slovakia has been among countries that has objected to the constant application of sanctions no Russia. “We can surely achieve a lot more with dialogue than with certain harsh stances from either one side or the other,” Pellegrini stressed. Among the key issues discussed were supplying and transporting natural gas, the issue of nuclear waste disposal, building a deep nuclear fuel repository, trade, tourism, cultural and educational exchanges.
22​ RUSSIA Country Report​ March 2020 ​ ​www.intellinews.com