Dmitry Birichevsky Discusses Sanctions with Rossiya Segodnya
Interview took place on 29.5.2024
On 29 May 2024, Director of the Foreign Ministry's Department of Economic Cooperation Dmitry Birichevsky sat down with Rossiya Segodnya and was asked a series of questions related to the illegal sanctions regime targeting Russia. There’s been a large amount of activity at Russia’s MFA making selection of reports difficult. Hopefully, readers will find this informative:
Question: The EU plans to ban the transit of Russian LNG through European ports. How will this affect our supplies? Will Russia be forced to change routes in this case? Is Moscow discussing this issue with partners from other countries?
Birichevsky: At the moment, the share of Russian natural gas in the European market is about 15%, of which LNG accounts for significant volumes. At the end of 2023, the main European LNG buyers were Spain, Belgium, France, the Netherlands, and Greece. The ban on imports and transit, which is currently being discussed within the framework of the EU structures, will lead to another round of growth in prices for raw materials, including for European consumers, financial costs for European companies, create new risks to international energy security, and negatively affect the functioning of transport and logistics corridors. Once again, the restrictions imposed will hit directly at their initiators.
The realities are that the sanctions spiral will unwind further. Of course, domestic exporters will have to take into account a possible ban. At the same time, the effective actions of the Russian authorities and economic operators in the period 2022-2023 made it possible to reorient the main vector of supplies of domestic raw materials to new centers of global economic growth, including in Asia - India, China and others. This experience will help to continue to resist the new restrictions. Together with our partners, we regularly work to find mutually acceptable ways to continue cooperation, despite the obstacles created by the West.
Question: How much have the US sanctions imposed in early May against companies and vessels associated with the Arctic LNG-2 project affected the project? Earlier, Reuters reported that Novatek, one of the shareholders of the project, may reduce its scale due to sanctions. Is this true? Is there a possibility that Yamal, Sakhalin-1 and Sakhalin-2 may fall under similar US sanctions in the future? How can this affect Russia's plans to reach the production of 100 million tons of LNG by 2030?
A: Washington's illegitimate actions are aimed at undermining the operation of the Arctic LNG-2 and other LNG projects, including Yamal, Sakhalin-1 and Sakhalin-2. With this in mind, the protection and development of this fuel and energy sector are the most important areas in the framework of activities to strengthen the sovereignty of the Russian energy industry and further improve its efficiency. Given the growing global demand for LNG, the task set by President of the Russian Federation Vladimir Putin to increase domestic LNG production to 100 million tonnes in the next decade must certainly be met.
Obviously, the sanctions will hit the closest allies of the United States. For example, natural gas is one of the priority topics of our cooperation with Japan in the current difficult geopolitical conditions. As far as we understand, Tokyo is interested in further supplies of Russian "blue fuel".
As for the impact of sanctions on the Arctic LNG-2 project, it would be recommended to contact Novatek directly for an answer to this question.
Question: If the EU imposes sanctions on Russian LNG supplies, what will happen to foreign shareholders in joint projects, for example, Yamal LNG – France's TotalEnergies and China's CNPC? Are possible options for working in such a scenario discussed with them? Are these companies going to maintain a stake in the projects?
A: We are cooperating with Yamal LNG's foreign partners in a bilateral format. It should be borne in mind that if restrictions are extended to this project, the situation for TotalEnergies and CNPC may develop differently. The French company Total is under the jurisdiction of an unfriendly state. We constantly hear politicised Russophobic statements by French President Emmanuel Macron about our country. At the same time, we hope that when making decisions, the French authorities will be guided by the principle of economic feasibility in order to prevent serious financial costs for their company and the loss of market share.
Relations with the Chinese side are at a high level. During President Vladimir Putin's state visit to China on May 16-17, the parties agreed to continue strengthening their strategic partnership in the energy sector, including developing cooperation in the field of LNG and assisting major joint projects. We are convinced that all possible difficulties will be overcome on a bilateral basis in accordance with the agreements reached.
We emphasise once again that Russia is open to depoliticised and mutually beneficial cooperation with all interested participants in international economic relations.
Question: The Italian authorities have reacted sharply to Moscow's decision to transfer the Russian subsidiary of Ariston Holding to the temporary management of Gazprom Household Systems. The Russian ambassador in Rome was summoned to the Italian Foreign Ministry, and Italian Foreign Minister A. Tajani promised that the government would protect local businesses. In this regard, is Moscow afraid that other Italian companies will completely leave the Russian market after this precedent? To what extent can the retaliatory measures promised by Rome be painful for Moscow?
A: This reaction on the part of the Italian authorities is puzzling, to say the least. It was the Western countries that provoked the current sharp aggravation of the geopolitical situation and a general crisis of confidence, including in the global economy. Blinded by a sense of their civilizational exceptionalism, European countries have openly played with sanctions tools, which, as many now understand, are a double-edged sword and over time have an increasingly negative impact on the national economies of the initiating countries and their competitive positions in the world market.
Russia, unlike Western countries, does not politicize commercial issues in principle and consistently and is ready to provide all necessary support to foreign companies that maintain their presence in the Russian market, provided that they comply with Russian legislation and fulfill their social obligations.
Our forced response measures are targeted and calibrated. The transfer of the Russian subsidiary of Ariston Holding to temporary management was carried out in accordance with the provisions of the Decree of the President of the Russian Federation dated April 25, 2023 No 302, which formed the basis of our special economic measures in connection with the unfriendly actions of some foreign states and international organizations.
In this regard, it is indicative that a significant number of foreign companies remain committed to constructive and mutually beneficial cooperation with our country, guided by rational considerations and objective data on the real potential of the Russian economy.
Question: How likely is it that all the Western companies that have left will be nationalized in Russia? Is there any data on what percentage of foreign enterprises have already been transferred to temporary management by the Federal Agency for State Property Management and/or Russian companies?
Answer: It should be noted that we are talking about temporary management, not nationalization – the introduced measures do not imply a change in property rights. This is a confirmation of the exclusively responsible approach of the Russian side to foreign investment, including from unfriendly countries. The measures taken in accordance with the Decree of the President of the Russian Federation dated April 25, 2023 No 302 in relation to movable and immovable property, securities, shares in the authorized (share) capital of Russian legal entities and property rights affected only the assets of about 10 foreign companies. This number is not comparable with the number of foreign enterprises remaining to work in the Russian market. Economic operators are provided with all the necessary conditions for further commercial activities. The Russian side is invariably aimed at maintaining a constructive dialogue with foreign companies that continue to operate in Russia, regardless of their affiliation with the jurisdiction of unfriendly states.
As practice shows, the business community as a whole is much more responsible and objective in assessing the ongoing processes than the politicians of Western countries. Those who had previously left Russia did so under unprecedented pressure from their governments. At the same time, it is obvious that the vast majority of foreign companies are interested in the preservation and long-term development of their business in Russia.
Question: The head of the Italian-Russian Chamber of Commerce announced the suspension of the system that allowed Russian companies to buy Italian goods for rubles. Is Moscow working on the creation of similar mechanisms with other European countries? Have you received such appeals? How realistic is it now?
A: According to the information we have, the leadership of the Italian-Russian Chamber of Commerce has indeed been working on the possibility of creating a mechanism for banking operations between Russian and Italian companies. At the same time, the Italian authorities torpedoed this initiative, as a result of which work in this direction was curtailed.
We are not aware of the existence or attempts to create systems in other Western countries that would allow Russian companies to purchase goods for rubles. No appeals were received in this regard.
At the same time, it is indicative that it is European business that is interested in the existence of alternative mechanisms that allow financial servicing of foreign economic contracts with Russian operators. Unfortunately for local companies, the European authorities continue to "put spokes in the wheels" of any attempts to revive trade cooperation with our country and sacrifice their own economic priorities to the notorious "transatlantic solidarity", following the lead of the American sovereign.
Russia has been and remains a responsible and conscientious participant in the global economy, fully fulfilling its obligations and open to cooperation with all constructively minded partners. At the same time, the Anglo-Saxons and Europeans, striving to maintain their dominance in world affairs, have chosen the path of confrontation with our country, setting the insane goal of inflicting a "strategic defeat" on Russia. Washington and its satellites have actually unleashed hybrid aggression against Russia, introducing unprecedented restrictive measures in the areas of trade, logistics and finance. Now they are trying to come up with pseudo-legitimate reasons to steal our sovereign gold and foreign exchange reserves.
In this regard, one cannot count on any prospects for establishing economic cooperation with Westerners at the state level. For our part, we are actively developing cooperation with friendly partners from Asia, the Middle East, Africa and Latin America, whose work is based on the principles of equality, mutual benefit and consideration for each other's interests. [My Emphasis]
Again, the main mantra about Western states is repeated—they’re dishonest and untrustworthy—although some Western businesses continue to operate within Russia and have no desire or intent to leave a profitable market. As noted, Russia isn’t nationalizing foreign businesses but placing them under what can be termed state management that doesn’t alter property rights, far different from what Western nations have done, particularly the Outlaw US Empire’s actions that began with Obama, escalated under Trump, and have continued under Biden for ten years with no end in sight.
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This Q&A is from today's weekly7 briefing by Maria Zakharova and complements this interview:
"Question: On May 28, Deputy National Security Adviser to the President of the United States Dalina Singh said that Washington and its partners are ready to use sanctions and export control tools to stop trade between China and Russia in goods and technologies that "threaten the security of the United States and its allies," as well as to take additional measures to prevent Russia from "using the shadow fleet of tankers to supply oil in circumvention of the price ceiling," established by the "Big Seven". What does the Russian Foreign Ministry think about these statements and what can Russia do to prevent US interference in relations between Moscow and Beijing?
"Maria Zakharova: These actions can be qualified in different ways, based on the goals, objectives and real steps taken by the collective West.
"You mentioned the United States of America. But they are not alone. They crush their "allies", "comrades in NATO misfortune".
"We consider such steps by Washington as interference in trade and economic relations between sovereign states. It can also be characterized as compensation for one's own failures in the economy. Probably, this is a desire to somehow make up for lost time or their own lag in certain areas of the economy, science and technology through such illegitimate methods. This can be qualified as waging a trade war, as part of hybrid aggression, a hybrid war against our country, against other states, as a policy of deterrence, inflicting a "strategic defeat". There are quite a lot of terms and words that could describe it. We have no problems with terminology. And the whole world is experiencing problems with reacting to such a destruction of world economic ties.
"We believe that the uncontrolled abuse of sanctions tools by the United States will ultimately lead to the international community gradually abandoning the use of the financial and logistics infrastructure of the West. No public and regularly repeated threats by representatives of the US administration to use unilateral illegal restrictive measures against the Russian Federation will force our country to abandon mutually beneficial cooperation with partners from third countries, including China, which fully complies with the norms of international law. I am singling it out because it was mentioned in your question, but this applies equally to everyone who is ready to build relations with us on such a basis.
"We categorically reject attempts at artificial, politicised interference in the functioning of global energy markets. We strongly condemn such politically motivated measures as the establishment of price ceilings, the introduction of unilateral restrictive measures on the transportation and sale of oil and other raw materials from any country or group of countries, and attempts to create "cartels of buyers". The funniest thing is the demand to reduce the price. Or a declaration that purchase prices will be formed not by supply and demand, not by the seller, but by the buyer or the buyer's cartel. This, of course, is the craziest thing.
"As we can see today, such unfair and illegitimate practices lead to the destruction of the mechanisms of international energy cooperation that have been developed over several decades, the fragmentation of markets, a significant increase in the cost of energy and, as a result, inflationary pressure. As a result, this leads to the degradation of the global security system, including the energy system.
"Responsible participants in international economic relations have to correct the consequences of such short-sighted steps. In this context, Russia is actively cooperating with constructively minded partners both in bilateral and multilateral formats. Today I spoke about Eurasian economic cooperation.
"The supply of Russian energy resources to the countries of the Global South has a steady upward trend. Western countries, accustomed to manipulating energy prices for the sake of their own domestic political situation and geopolitical ambitions, are forced to reckon with this reality. Hence such nervous statements by the United States about taking some "additional measures to prevent Russia." Moreover, it is far from being of a market nature, aimed solely at creating competitive advantages for themselves and ousting other key players from the world market, including Russia.
"Russia is consistent in its actions and is traditionally aimed at maintaining global energy security in the interests of the development of states and their constructive cooperation on the basis of mutual respect and international law.
"Separately, I would like to say that now we also have to disavow the lies of world leaders that Russia allegedly undersupplies energy resources to Western markets (this is what official London has allowed itself to do). Absolutely not true. We supply to everyone who wants and with whom we agree on the price and the form of delivery. We do not have a single deal that would be blocked on our part for some political opportunistic reasons. This has never happened. For us, these are market relations of mutually acceptable trade and economic cooperation, financial and economic benefits.
"It was the West that tried to stop all this and put it under its own control. When this failed, it literally "cut off" from the other side the possibilities for the normal receipt of our energy resources. I am talking about the European Union, which, it turns out, has become a victim of US policy in this area.
"We have built stable ties and contacts with them, as well as the appropriate infrastructure. For many years, we have heard how the United States has been urging the European Union not to receive Russian energy resources, not to develop cooperation, not to build relevant projects. After failing to dissuade and intimidate the EU, they undermined Nord Stream 1 and Nord Stream 2. The evidence is a statement by US President Joe Biden and former US Deputy Secretary of State Victoria Nuland.
"Of course, there must be a final investigation. Our own is being conducted on this matter. In the Nordic countries, the investigation was stopped. Although they stated that they would definitely hold it. Germany, apparently, is also curtailing the investigation. The Russian proposal in this regard, sent to the UN Security Council for an international investigation under the auspices of the Secretary-General, was blocked by the Anglo-Saxons. But our investigation will still continue and will be completed. Obviously, the United States of America is behind this."
It is madness! Madness, I say!
Humanity is energy starved. Perhaps it doesn't look that way to Americans cruising around in their enormous SUV dinosaur-burners, but to rural South Asians cooking dinner with burning dried cow dung, the global energy deficit is a constant reality. Maybe the Europeans can afford to please their American masters by thumbing their noses at the Russians and saying "To hell with your bread! We will eat American cake instead!" (not recommended, but there is no accounting for taste), but there are plenty of buyers in the world who will jump at the chance for cheap blue fuel. The demand far outstrips supply, so trying to sanction the supply is beyond ridiculous. It is baffling how the Empire's managers imagine that could work.
The only explanation I can think of is that westerners are habituated to seeing the world = USA + Europe + (a couple insignificant former British Empire outposts). That the world has nearly another 7 billion people on top of that completely slips westerners' tiny, insular little minds. Perhaps westerners have completely forgotten what tangible, non-finance economic activity is? They don't do much of anything productive anymore so that wouldn't be a surprise.