RA’s Daily Russia News Blast – August 3, 2020

Today in Russia: Russian mercenaries in Belarus can’t keep their story straight; Russia says July oil output in line with OPEC+ deal; Trump didn’t believe Russia bounty reports in Afghanistan; Navalny doesn’t just have trouble with Putin, he can’t get along with the press, either; 5.3k new COVID-19 cases in Russia; Belarus presidential candidate Tsikhanouskaya opposes Russia integration; Poland imposes maximum fine against Nord Stream 2, days after Pompeo blasts the project in testimony; The hunt for $240 million in offshore bank bonds; Russia breaks off double taxation agreement with Cyprus; 1 million Moscow motorists’ data stolen by hackers; Russia plans to carry out mass vaccination in October

The 33 Russians detained in Belarus who allegedly work for the Wagner group reportedly gave conflicting testimonies to investigators about their travel plans. Some told investigators they planned to go to Istanbul to “visit Hagia Sophia,” while others cited completely different countries and intentions. “The men gave conflicting testimonies during questioning, with “less than half” saying the group planned to fly from Minsk to Istanbul and the rest naming “completely different destinations,” Ivan Noskevich told Lukashenko in the meeting broadcast on the Belarus 1 television channel Saturday,” Moscow Times wrote. It has been pointed out that in the 2018 poisoning of Sergei Skripal in the UK, the suspects cited their reason for visiting Salisbury as seeing its “world famous” cathedral.

Russia says its July energy production was in line with its obligations in the OPEC+ agreement. Reuters wrote, “The ministry added that its level of compliance with the deal in July was close that recorded in June, when it stood at 99%. Energy ministry data published earlier on Sunday by Interfax news agency showed that Russia’s oil and gas condensate production had increased to 9.37 million barrels per day (bpd) in July, up from 9.32 million bpd in June.” The OPEC+ cuts are set to expire in August.

US President Donald Trump did not believe reports that Russia paid bounties to Afghans to kill US service members. “”It was never brought to my attention, and perhaps it was never brought because I didn’t consider it to be real,’ Trump said during a visit to Orlando, Fla., adding, ‘If it did take place, it would have been brought to my attention and I would take very strong action.‘”

Opposition figure Alexei Navalny does not get along with Russia’s ruling United Russia party. But it seems this acrimonious relationship also applies to his relationship with the press, even independent outlets. Meduza interviewed a Navalny spokeswoman, who defended his Anti-Corruption Foundation’s investigations. Meduza wrote,

Opposition politician and Anti-Corruption Foundation (FBK) founder Alexey Navalny has an uneasy relationship with journalists; not only with reporters from pro-Kremlin outlets, but also with those working for independent media. Navalny regularly criticizes the press for its alleged unwillingness to cover FBK investigations — and is also critical of reporters for refusing to take the opposition’s side in its fight against the Russian authorities. In turn, journalists have reproached Navalny for his handling of conversations with critical reporters, as well as for inaccuracies in the FBK’s investigations. Throughout 2020, Navalny has made increasingly rude statements about editors and journalists, including Meduza correspondents, with his commentary often coming across as more personal than professional. Arguably, Navalny’s relationship with the Russian media industry has never been more strained. 

Russia reported another 5.3 thousand [in Russian] COVID-19 cases on Sunday. COVID-19 figures have been consistent for the past week, ranging in the 5 to 5.5 thousand range. Nevertheless, it was the lowest figure since April, Forbes Russia noted [in Russian].

Belarusian presidential candidate Svyatlana Tsikhanouskaya said she is against forming a union state with Russia but called for maintaining good relations with Moscow,” RFE/RL wrote. She joined the race when her husband Syarhey Tsikhanouski was arrested. She made the comments in an interview with Lenta.ru [in Russian].

Poland imposed the maximum possible fine against the Nord Stream 2 pipeline project, fining Gazprom $57 million “for lack of cooperation in its proceedings with regard to the Nord Stream 2 pipeline project.” The head of UOKiK, Poland’s anti-monopoly watchdog, said,

At the beginning of the year, we requested Gazprom provide us with contracts concluded by its subsidiary with other companies financing the construction of Nord Stream 2…The company failed to provide such information,” the head of UOKiK said in a statement. To my mind, it is an intentional act, the aim of which was to obstruct the ongoing proceedings.

The Polish ruling – a culmination of a long fight with Gazprom over monopolistic practices and the latter’s alleged lack of cooperation – comes days after US Secretary of State Mike Pompeo reiterated in testimony to the US Senate Foreign Relations Committee that the Trump Administration was determined to do everything in its power to thwart the construction of Nord Stream 2, despite Germany’s continued support of the project. Pompeo said, “We will do everything we can to make sure that that pipeline doesn’t threaten Europe,” and noted that sanctions on the firms involved are in the works.

An owner of a fertiliser company and wine merchant walk into a Russian bank. That may sound like the first line of a below-average joke but in 2017 these two individuals, along with close to 250 other savers, did so and walked out proud owners of $240m of guaranteed loan notes. As it turns out, the joke was on the investors. And it wasn’t a funny one. Three years later, they are embroiled in a legal battle that stretches across the European continent.

The Financial Times wrote the above of the ongoing fight to track down the founders of Promsvyazbank, the billionaire brothers Dmitri and Alexei Ananyev. The bank in 2017 was effectively nationalized when it was bailed out by the Russian state. They are accused of embezzling some $1.6 billion, but both have fled Russia to the UK and Cyprus, respectively. Those who purchased notes supposed to be guaranteed by the bank are so far out of luck:

Caught up in this unfortunate set of circumstances are the noteholders, who are desperately trying to get their money back. Critical to their case are a rather unusual set of transactions in PSB’s shares, executed just hours before the bank was placed into administration. These transactions, some noteholders allege, were used by the brothers to extract around $1.6bn for themselves just before the central bank took over.

Russia has broken off its double taxation agreement with Cyprus, Kommersant reported [in Russian]. During the term of the agreement, many Russian companies have used Cypriot jurisdiction. According to various estimates, more than 1.4 trillion rubles were withdrawn to Cyprus in 2018. In 2019 the figure was more than 1.9 trillion rubles. A Russian Ministry of Finance statement wrote of the decision,

In order to fulfill the President’s instruction on taxation of income in the form of dividends and interest paid from the territory of the Russian Federation to the Republic of Cyprus at a rate of 15%, the Ministry of Finance of Russia on August 3 begins the procedure for terminating the agreement.

Kommersant reported [in Russian] that the personal data of 1 million Russian motorists was hacked from the city’s servers and put up for sale. “The data contains VIN codes and vehicle passport numbers (PTS), as well as the names and phone numbers of car owners. Information security experts believe that the base could be of interest to car thieves and social engineering scammers. Due to the increasing frequency of large-scale leaks of personal data, the State Duma is discussing the introduction of criminal liability not only for sellers, but also for buyers of such databases.”

Russia plans to launch a nationwide vaccination campaign by October using a vaccine the Defense Ministry says is ready for use. Teachers and doctors are set to be the first to receive the vaccinations.

PHOTO: The controversial Nord Stream 2 pipeline was the subject of a $57 million fine against Gazprom for non-cooperation in an anti-monopoly investigation. The US has also taken aim at the project despite US ally Germany’s support of the project (REUTERS/Maxim Shemetov/File Photo).