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RA’s Daily Russia News Blast – December 7, 2020

Today in Russia: Dutch ruling on Yukos: What does it mean for Russian overseas assets? Health Minister calls for regional travel restrictions; More protests in Belarus; Nord Stream 2: US threats continue, Russia will do “everything” in its power to defend its interests; What’s Russia up to in Afghanistan?; Want a US visa, Mr/Ms Kuril Islands resident? You’re Japanese-born now; Netherlands next in line for double tax agreement scrutiny

On Friday, the Netherlands’ top court ruled that shareholders from ex-oil giant Yukos could continue their pursuit of Yukos for $50 billion in compensation against the Russian state pending a final judgement from the Netherlands’ Supreme Court.

Kommersant wrote [in Russian] of the more than decade-long saga: After 10 years of litigation, the Permanent Court of Arbitration in The Hague ruled that Yukos shareholders were owed $50 billion, for violating the Energy Charter Treaty, which was provisionally signed by Russia but never ratified by the Duma. While Russia pulled out of the treaty officially in 2009, dispute settlement and investor protection clauses would remain in effect for an additional 20 years. On February 5, the Dutch Supreme Court will hear substantive arguments relating to the case, and Russia had asked the court to suspend the execution of decision from courts of lower instances, but on Friday this request was denied.

Deputy Minister of Justice and Russia’s Commissioner at the European Court of Human Rights Mikhail Galperin said [in Russian] that earlier this fall, a Dutch court blocked an attempted takeover of a Russian vodka brand in the Netherlands, adding, “Speaking of such attempts, we asked the Supreme Court of the Netherlands to stop them, so that until the dispute is resolved on the merits, it would be impossible to impose appropriate seizures on property.” Galperin added that Russia has filed a petition to refer the case to the European Court in Luxembourg and that in other jurisdictions, such as the District of Colombia in the United States, the court ruled that it will await the decision on the merits of the Dutch Supreme Court before making its own ruling.

Russia’s Ministry of Health has called for [in Russian] a restriction of movement between regions in Russia. Health Minister Mikhail Murashko said “The second wave shows us that the outbreaks arising within the country, including, probably, require consideration of a certain restriction on the movement of individuals, including between the subjects, and sometimes also within the subjects, in order to limit the spread of infection.”

On Sunday, opposition protesters again took to the streets, continuing nearly four months of demonstrations against strongman Alexander Lukashenko since he stole the country’s presidential election in August. “In contrast to mass Sunday protests that have taken place since the August vote, the opposition has for weeks sought to foil a toughening crackdown by staging numerous smaller protests,” Minsk police said around 300 people were taken into police custody and water cannons were used by police while authorities put limits on internet connectivity to stymie protester communications on the encrypted Telegram messaging app.

The US has called for a “moratorium” on the Nord Stream 2 pipeline that it has long been trying to block. Last week, Congress sent to President Donald Trump’s desk the National Defense Authorization Act for 2021, which included provisions for sanctions against entities participating in the Nord Stream 2 pipeline. While it remains unclear whether the President will sign the bill as it stands into law, it is a sign that the US has no intention of letting up the pressure on the beleaguered pipeline between Russia and Germany. The US acting ambassador to Germany Robin Quinville told German daily Handelsblatt that “Now is the time for Germany and the EU to impose a moratorium on the construction of the pipeline,” adding that “The pipeline is not only an economic project but also a political tool that the Kremlin is using to bypass Ukraine and divide Europe.”

Russia, for its part, says it will defend [in Russian] its interests in the pipeline, which is being built by state energy giant Gazprom. Kremlin Spokesman Dmitry Peskov said Russia “will do everything to protect our interests and to protect the interests of international commercial projects,”

Nodirjon Kirgizbaev, a former Uzbek diplomat and a policy analyst, wrote in The Diplomat that Russia’s presence in Central Asia is “predicated on the threats from Afghanistan,” and stymie the region’s development. On November 24, Foreign Minister Sergei Lavrov delivered a message by video to the Geneva International Conference on Afghanistan highlighting the ongoing instability emanating from Afghanistan and continuing threats of Islamic State militants. Kirgizbaev argues that “Despite the weakening of the Islamic State’s positions in the Middle East and Afghanistan, it is apparent that statements made by Russian officials about the existing threat of the spread of the conflict into Central Asia are both a reaction to Western policy and a desire to make the problem of international terrorism in Afghanistan topical in order to maintain Moscow’s influence in the region.”

Last week, Japan protested Russia’ deployment of S-300 surface-to-air missile systems on the disputed Kuril Island chain, located off the coast of Japan’s Hokkaido island. On Sunday, Russia’s Foreign Ministry blasted the US State Department for requiring Russians born on the islands which now make up the disputed portion of the Kuril Island chain to list Japan as their birthplace in order to receive a US green card. This policy has been in place since 2018. The Foreign Ministry complained that “The Kuril Islands were handed to the U.S.S.R. as part of a 1945 decision. Today, the State Department challenges the results of World War II, encouraging revanchism,” adding on its Telegram channel, “Do we need more proof that the U.S. is a revisionist power?” while demanding that the Americans know their “borders” and “red lines.” The US official position since 2014 has been to recognize Japan’s sovereignty over the Russian-controlled disputed islands.

The Yukos compensation issue in the Netherlands’ Supreme Court is not the only bilateral issue riling the two countries. Now it looks as if the Dutch wil be the next in line to have its double taxation agreement with Russia either scrapped or renegotiated, following forced renegotiations with Cyprus, Malta, and Luxembourg over the previous months. Kommersant wrote [in Russian] that the Ministry of Finance announced on Friday that it would begin the process of “denouncing” the agreement, perhaps in an effort to force the Dutch to accept Russia’s new terms in its attempt to claw back more overseas tax revenues:

The ministry said that the negotiations to amend the treaty were unsuccessful – an option similar to that previously adopted by the authorities of Cyprus, Malta and Luxembourg did not suit the other side. Experts recall that the threat of denunciation sounded during the dialogue with Cyprus – the message may be an attempt to persuade partners to accept Russia’s terms. The Dutch economy is much less dependent on Russian business than the Cypriot economy, and a break in the tax agreement with this country is still likely, despite the fact that this could create problems for the Russian state business.

PHOTO: Yukos was previously Russia’s largest oil and gas firm before being dismantled and partially folded into oil giant Rosneft. The Dutch Supreme Court will hear the case over $50 billion in compensation to former shareholders in February 2021 (AFP).