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Washington publishes bizarre ‘non-sanctions’ list, leaving some off

US announces no new anti Russian sanctions but produces list cobbled together from Kremlin directory and Forbes Russia rich list

Alexander Mercouris

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Six months after President Trump very grudgingly signed into law a bipartisan bill voted for overwhelmingly seeking sanctions against US ‘enemies’ such as Russia and Iran, the Trump administration, as it was legally mandated to do, has produced its ‘name and shame’ list of prominent Russians.

The best thing that can be said about the list is that it is bizarre.  The senior Russian government officials named in the list appear to have been indiscriminately chosen because they appear in the Kremlin’s and the Russian government’s directories of prominent officials.  As for the wealthy individuals in the list, it seems that they have simply been transplanted onto the list from Forbes.

Some attempt does seem to have been made to keep certain Russian officials of actual or reputed pro-Western views off the list.  Russia’s Central Bank Chair Elvira Nabiullina is not on the list, and nor is the liberal former Finance Minister Alexey Kudrin.  Unsurprisingly, neither is Anatoly Chubais, the ultra liberal Yeltsin official who masterminded Russia’s disastrous and hugely corrupt privatisation drive in the 1990s.

All I would say about the exclusion of Nabiullina and Kudrin from the list is that irrespective of their views both are currently loyal to Putin, and their exclusion from the list will cause them nothing but trouble in Russia.

As for Chubais, any list genuinely intended to ‘name and shame’ individuals responsible for creating corruption in Russia should certainly include him.  Arguably no other single individual bears a heavier weight of responsibility for the explosion of corruption which took place in Russia than him.

Not all prominent people in Russia who might be broadly described as pro-Western liberals have however managed to avoid inclusion in the list.

German Gref, Russia’s liberal former Economics Minister and close ally of Alexey Kudrin, who is now Chair of Sberbank, is included in the list.  Presumably he is there because Sberbank – Russia’s biggest bank – forms such an essential part of Russia’s financial architecture.

Sberbank by the way is one of the state owned Russian banks which were targeted by the sectoral sanctions imposed on Russia by the US and the EU in July 2014.  Far from being hurt by the sanctions it is now in rude health.

As for the other wealthy Russians in the list, it seems that anyone in Russia who is or is reputed to be a billionaire is automatically included.  These seems to be the case irrespective of whether they are pro-Putin or not.

Putin himself – much to his chagrin – is not on the list.  It is not clear why.

To say that publication of the list has been an anti-climax would be an understatement.  After months of speculation about what new ferocious sanctions the US was about to impose on Russia and on the people named in the list, it is not an exaggeration to say that a mountain has moved and produced a mouse.

Some Democratic Congressmen were unable to hide their anger, and in testimony before the Senate Banking Committee US Treasury Secretary Steven Mnuchin tried to appease them by assuring them that more sanctions against Russia were indeed on the way.  Whether however they will ever come and how severe they will be if they do is however another matter.

Alongside the ‘name and shame’ list but attracting far less publicity was a classified report the US Treasury Department provided to Congress which was described by Bloomberg in this way

An accompanying report on the effect on Russia’s sovereign debt from possible U.S. sanctions was classified, Senator Bob Corker confirmed in a statement on Tuesday. Congress had requested an unclassified version of the report.

The fact that this report was classified shows the sensitivity and legal difficulty of action against the sovereign debt of Russia, one of the world’s leading economic powers.

It is known that some Democratic Congressmen have been lobbying for action against Russia’s sovereign debt.  As I discussed recently, in practical terms that means action to stop US investors buying Russian sovereign bonds.  As I also discussed recently, that would be unlikely to deter other foreign investors, and given the current state of the Russian economy it would have only a limited effect anyway.

The fact that this report is classified suggests that the Treasury Department and the Federal Reserve Board are advising against it.

It is clear that other wilder proposals to seize Russia’s financial reserves in the US or to disconnect Russian banks from the SWIFT interbank payment system have been dropped.

Why after all the threats and bluster has the US come up with so little?

It is possible that at a certain level President Trump’s well known wish for better relations with Russia has had a certain influence.  However the problem for the US is that ultimately Russia is simply not vulnerable to sanctions.  I discussed this recently in an article for RussiaFeed

Summary

What all these proposals have in common is that they highlight is the simple fact that the sectoral sanctions which were imposed by the West on Russia in 2014 have failed.

The sanctions did not break the Russian economy, or cause a popular revolution in Russia, or lead to an oligarchs’ coup against Putin – all things their advocates variously predicted would happen because of them.

Nor have they achieved their stated purpose, which is to force Russia to change its policies towards Ukraine….

The key point is that the Russian economy is many orders of magnitude bigger and more sophisticated than the sort of economies – such as those of Cuba, Iran, Iraq, Libya, North Korea and Venezuela – upon which the US has imposed sanctions previously.  Applying the supposed lessons of the impact of sanctions on those economies in the case of Russia makes no sense, even if those lessons had been learnt correctly, which they have not. Unlike all those economies Russia’s economy is far bigger, already possessing the technology, capital and resources it needs to develop autonomously.

As a self-sufficient continental economy sanctions on Russia almost by definition can have only a limited impact, and one which over time must diminish anyway.

As it happens the most effective sanctions the West could have imposed on Russia, both in terms of their impact on the Russian economy and their limited impact on the economies of the West, were the sectoral sanctions which were imposed in 2014.

Those sanctions did stop for a time the flow of capital from the West into Russia at a time when Russia was facing heavy debt repayments and when the price of its main export products – oil and gas – was collapsing.  The result was to deepen the recession caused by the collapse of oil and gas prices whilst further lowering the value of the rouble in a way which intensified the inflation spike.

With oil prices now rising, most short term Russian foreign debt repaid, and with the rouble floating, none of the sanctions discussed in this article look like they can have anything like the impact on Russia that the sanctions imposed in 2014 did.

The fact that the Russian economy successfully – in fact almost effortlessly – adjusted to those sanctions despite the difficult conditions ought to serve as a warning that further sanctions against Russia will not work, and…..are counter-productive.

As for the idea that slapping sanctions on wealthy Russians will provoke them into launching a coup against President Putin, to anyone genuinely familiar with the situation in Russia the idea is absurd.

What putting the names of such people on a ‘name and shame’ list and threatening them with sanctions is far more likely to do is get them finally to heed President Putin’s call to repatriate their money from abroad.

President Putin has been pushing hard for this ever since the first round of sanctions was imposed on Russia back in 2014.

Wealthy Russians and the Russian business community in general have however proved to deaf to these calls, presumably calculating that they would be exempted from Western sanctions which were intended to target only those people close to the Kremlin.

Now that they know that anyone listed in Forbes is a likely target they may finally reconsider.  That at least is what the Financial Times seems to think

The threat of further sanctions may inadvertently help the Kremlin achieve the long-elusive goal of getting oligarchs to repatriate capital stashed in the west: the finance ministry is preparing to issue a $3bn bond on discounted terms for Russia’s top businessmen. “Everyone is thinking long and hard about it,” says a former member of Mr Putin’s cabinet.

A sanctions policy that actually advances President Putin’s objectives makes little sense.  It is strange that no one in Washington seems to realise it.

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Peace on Korean Peninsula within reach, if only Trump can remove Pompeo & Bolton (Video)

The Duran Quick Take: Episode 152.

Alex Christoforou

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RT CrossTalk host Peter Lavelle and The Duran’s Alex Christoforou discuss the results of the Putin-Kim summit in Vladivostok, Russia, aimed at boosting bilateral ties between the two neighboring countries, as well as working to contribute to a final peace settlement on the Korean peninsula.

Putin’s meeting with Kim may prove to be a pivotal diplomatic moment, as North Korea continues to work towards normalizing ties with the U.S. amidst ongoing denuclearization talks with the Trump White House.

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Via the BBC…

Russian President Vladimir Putin has said North Korean leader Kim Jong-un needs international security guarantees if he is to end his nuclear programme.

Such guarantees would need to be offered within a multinational framework, he added, following talks near Vladivostok in Russia’s far east.

Mr Kim praised the summit as a “very meaningful one-on-one exchange”.

Mr Putin said North Korea’s leader was “fairly open” and had “talked freely on all issues that were on the agenda”.

The meeting followed the breakdown of talks between the US and North Korea in February, when Mr Kim met US President Donald Trump in the Vietnamese capital Hanoi.

Those talks reportedly stalled over North Korea’s demand for full economic sanctions relief in return for some denuclearisation commitments – a deal the US was not willing to make.

Speaking after the talks on Thursday, Mr Putin said he wanted to see full denuclearisation on the Korean peninsula.

But he said this could only be achieved through respect for international law.

“We need to restore the power of international law, to return to a state where international law, not the law of the strongest, determines the situation in the world,” he said.

Mr Kim greeted Russian officials warmly when he arrived in Russia on Wednesday.

The North Korean leader was entertained by a brass band in Vladivostok before he got inside a car flanked by bodyguards, who – in now familiar scenes – jogged alongside the vehicle as it departed.

What do we know about the summit?

According to the Russian presidential spokesman, Dmitry Peskov, the Kremlin believes the six-party talks on North Korea, which are currently stalled, are the only efficient way of addressing the issue of nuclear weapons on the peninsula.

Those talks, which began in 2003, involve the two Koreas as well as China, Japan, Russia and the US.

“There are no other efficient international mechanisms at the moment,” Mr Peskov told reporters on Wednesday.

“But, on the other hand, efforts are being made by other countries. Here all efforts merit support as long as they really aim at de-nuclearisation and resolving the problem of the two Koreas.”

What do both sides want?

This visit is being widely viewed as an opportunity for North Korea to show it has powerful allies following the breakdown of the talks with the US in February.

The country has blamed US Secretary of State Mike Pompeo for the collapse of the Hanoi summit. Earlier this month North Korea demanded that Mr Pompeo be removed from nuclear talks, accusing him of “talking nonsense” and asking for someone “more careful” to replace him.

The summit is also an opportunity for Pyongyang to show that its economic future does not depend solely on the US. Mr Kim may try to put pressure on Moscow to ease sanctions.

Analysts say the summit is an opportunity for Russia to show that it is an important player on the Korean peninsula.

President Putin has been eager to meet the North Korean leader for quite some time. Yet amid the two Trump-Kim summits, the Kremlin has been somewhat sidelined.

Russia, like the US and China, is uncomfortable with North Korea being a nuclear state.

How close are Russia and North Korea?

During the Cold War, the Soviet Union (of which Russia is the main successor state) maintained close military and trade links with its communist ally, North Korea, for ideological and strategic reasons.

After the Soviet Union collapsed in 1991, trade links with post-communist Russia shrank and North Korea leaned towards China as its main ally.

Under President Putin, Russia recovered economically and in 2014 he wrote off most of North Korea’s Soviet-era debt in a major goodwill gesture.

While it is arguable how much leverage Russia has with the North today, the communist state still regards it as one of the least hostile foreign powers.

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Putin meets Kim for the first time (Video)

The Duran Quick Take: Episode 151.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a look at the historic meeting between Russian President Vladimir Putin and North Korean leader Kim Jong Un in the city of Vladivostok in the Russian Far East.

The meeting marks the first ever summit between the two leaders.

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Via RT…

Leaders of Russia and North Korea sat down for a historic summit in Vladivostok, expressing hope it will revive the peace process in the Korean Peninsula and talks on normalizing relations with the US.

The summit on Russky Island, just off Vladivostok, started a little late because President Vladimir Putin’s flight was delayed. North Korean leader Kim Jong-un had made the trip by train, arriving on Wednesday.

In brief public remarks before the talks, the two leaders expressed hope the summit will help move forward the reconciliation process in the Korean Peninsula. Putin welcomed Kim’s contributions to “normalizing relations” with the US and opening a dialogue with South Korea.

Kim said he hoped the Vladivostok summit would be a “milestone” in the talks about denuclearizing the Korean Peninsula, but also build upon “traditionally friendly ties” between Russia and North Korea.

The North Korean leader also made a point of thanking Putin for flying all the way to Vladivostok for the meeting. The Far East Russian city is only 129 kilometers from the border with North Korea.

The historic summit takes place less than two months after Kim’s second summit with US President Donald Trump in Hanoi fell apart without a breakthrough on denuclearization. The US rejected North Korea’s request for partial sanctions relief in return for moves to dismantle nuclear and missile programs; Washington insists on full disarmament before any sanctions are removed.

Denuclearization of the Korean Peninsula is the main subject of the Kim-Putin summit, but there will also be talks about bilateral relations, trade, and humanitarian aid. The first one-on-one meeting is scheduled to last about an hour, followed by further consultations involving other government officials.

Following the summit, Putin is scheduled to visit China.

 

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Kim And Putin: Changing The State Of The Board In Korea

The future of Korea could be decided by these two men today.

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Authored by Tom Luongo:


Today is a big day for Korea. The first face-to-face summit of Russian President Vladimir Putin and North Korean Leader Kim Jong-un takes place.

At the same time the 2nd annual Belt and Road Forum kicks off in Beijing.

This meeting between Putin and Kim has been in the works for a while but rumors of it only surfaced last week. But don’t let the idea that this was put together at the last minute fool you.

It wasn’t.

The future of Korea could be decided by these two men today.

I know that sounds bold. But hear me out.

And while no one seems to think this meeting is important or that anything of substance will come from it I do. It is exactly the kind of surprise that Putin loves to spring on the world without notice and by doing so change the board state of geopolitics.

  • Russia’s entrance into Syria in 2015, two days after Putin’s historic speech at the U.N. General Assembly
  • 2018’s State of the Union address where he announced hypersonic missiles, embarrassing the U.S. Militiary-Industrial Complex which accelerated the Bolton Doctrine of subjugating the world
  • Flying 2 TU-160 nuclear-armed bombers to Venezuela, creating panic in D.C. leading to the ham-fisted regime change operations there.
  • Nationalization of Yukos.
  • The operation to secure Crimea from U.S. invasion by marines aboard the U.S.S Donald Cook during the Ukrainian uprising against Viktor Yanukovich.

Both Putin and Chinese Premier Xi Jinping are angry at the breakdown of the talks in Hanoi back in February. It was clear that everyone expected that meeting to be a rubber stamp on a deal already agreed to by all parties involved.

In fact the two meetings between Kim and Trump were only possible because Trump convinced them of his sincerity to resolve the ‘denuclearization’ of North Korea which would clear a path to rapid reunification.

It’s why they went along with the U.S.’s increased sanctions on North Korea as administered through the U.N. in 2017.

That John Bolton and Mike Pompeo destroyed those talks and Trump was unwilling or unable (who cares at this point, frankly, useless piece of crap that he is) to stop them embarrassed and betrayed them.

They are now done with Trump.

He’ll get nothing from either of them or Kim until Trump can prove he’s in charge of his administration, which he, clearly, is not.

And they will be moving forward with their own agenda for security and Asian economic integration. So I don’t think the timing of this meeting with that of the Belt and Road Forum is an accident.

And that means moving forward on solving the Korea problem without Trump.

It is clear from the rhetoric of Putin’s top diplomat, the irreplaceable Sergei Lavrov, that Russia’s patience is over. They are no longer interested in what Trump wants and they will now treat the U.S. as a threat, having upped their military stance towards the U.S. to that of “Threat.”

If Bolton wants anything from Russia at this point he best be prepared to start a war or piss off.

This is also why Russia took the gloves off with Ukraine in the run up to the Presidential elections, cutting off energy and machinery exports with Ukraine.

To put paid Putin’s growing impatience with U.S. policies, he just issued the order to allow residents of Lugansk and Donetsk People’s Republics to apply for Russian passports.

This will send Bolton into apoplexy. Angela Merkel of Germany will be none too pleased either. Putin is now playing hardball after years of unfailing politeness.

It’s also why Lavrov finalized arms and port deals all over the Middle East in recent weeks, including those with Lebanon, Egypt, Turkey and India.

Bolton, Pompeo and Pence are ideologues. Trump is a typical Baby Boomer, who lives in a bubble of his own design and believes in an America that never existed.

None of them truly understand the fires they are stoking and simply believe in the Manifest Destiny of the U.S. to rule the world over a dim and barbaric world.

Putin, Xi, Rouhani in Iran and Kim in North Korea are pragmatic men. They understand the realities they live in. This is why I see Putin willing tomorrow to sit down with Kim and flaunt the U.N. sanctions and begin the investment process into North Korea that should have begun last year.

Putin would not be making these moves if he didn’t feel that Bolton was all bark and no bite when it came to actual war with Russia. He also knows that Germany needs him more than he needs Germany so despite the feet-dragging and rhetoric Nordstream 2 will go forward.

Trade is expanding between them despite the continued sanctions.

Putin may be willing to cut a deal with President-elect Zelensky on gas transit later in the year but only if the shelling of the LPR and DPR stops and he guarantees no more incidents in the Sea of Azov. This would also mollify Merkel a bit and make it easier for her politically to get Nordstream 2 over the finish line.

There are moments in history when people go too far. Bolton and Pompeo went too far in Hanoi. He will pay the price now. Putin and Kim will likely agree to something in Vladivostok that no one is expecting and won’t look like much at first.

But the reality is this summit itself marks a turning point in this story that will end with the U.S. being, in Trump’s transactional parlance, a “price taker” since it has so thoroughly failed at being a “price maker.”

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