Russian Digest
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UK confirms supply of Storm Shadow long-range missiles in Ukraine
The UK has confirmed it is supplying Ukraine with long-range missiles it requested for its fight against invading Russian forces.
The Storm Shadow cruise missile has a range of over 250km (155 miles), according to the manufacturer.
By contrast, the US-supplied Himars missiles used by Ukraine only have a range of around 80 km (50 miles).
The weapons will give Ukraine the "best chance" of defending itself, UK Defence Secretary Ben Wallace said.
They are fired from aircraft, so the longer range means Ukrainian pilots will be able to stay further from the frontlines.
Once launched, the Storm Shadow drops to low altitude to avoid detection by enemy radar, before latching onto its target with an infra-red seeker.
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https://www.bbc.com/news/world-europe-65558070
"The situation is developing according to the worst-case scenario." The Russian army began to retreat from Bakhmut
The battle for Bakhmut, which has become the longest and most bloody battle of the Ukrainian war, may turn into a new fiasco for the generals of the General Staff.
After six months of intense fighting, during which the army lost up to 30 thousand people killed and wounded, and failed to completely occupy the city, the Russian forces began to retreat.
This was announced on Wednesday by Commander-in-Chief of the Ground Forces of the Armed Forces of Ukraine Oleksandr Syrskyi, and on Thursday confirmed by Z-military correspondents, the head of Wagner PMC Yevgeny Prigozhin and the American Institute for the Study of War (ISW).
According to Syrskyi, Ukrainian troops managed to push back Russian forces up to two kilometers after the regular army of the Russian Defense Ministry came to replace the "prepared" but depleted Wagner forces. They "were defeated and withdrew," Syrsky said.
ISW experts, citing geolocation data, confirm in the May 11 daily report that the Ukrainian Armed Forces conducted “successful counterattacks” to the west and southwest of Bakhmut and were able to “make some progress” in these zones.
“The situation <…> is developing according to the worst of the predicted scenarios,” Prigozhin said on Thursday. “Those territories that have been taken for many months with the blood and lives of our comrades, <…> today, almost without a fight, they are thrown by those who should hold our flanks.”
Z-warriors paint an even bleaker picture. Soldiers of the 72nd Brigade of the Russian Armed Forces, sent to positions southwest of Klescheevka, “simply fled under the counteroffensive of the 3rd Azov Assault Brigade of the Ukrainian Armed Forces,” and “whoever did not escape was killed and crushed by an enemy tank, ” writes Gray zone.
A day later, according to the channel, a similar situation developed in the Khromovo area: “Servicemen of the 9th motorized rifle regiment of the RF Armed Forces were also knocked out of their positions in two areas.”
Almost wiped off the face of the earth and becoming the embodiment of a zombie apocalypse in reality, Bakhmut has turned into a mass grave for thousands of prisoners recruited in the fall of Russian colonies. They are replaced by the mobilized, who have replenished the regular army, whose losses, according to Western data, exceeded 200,000 people killed and wounded.
Five Russians were killed for one dead Ukrainian soldier near Bakhmut, a NATO source familiar with the intelligence told CNN in March. But despite the losses and the involvement of the Chief of the General Staff Valery Gerasimov personally in the leadership of the hostilities, the winter offensive of the Russian army did not bring any significant territorial gains.
Now the army is on the defensive. But chronic combat capability problems “significantly limit” its ability to defend against pinpoint Ukrainian counterattacks, writes ISW.
As for the conquest of new territories, such hopes in the Kremlin no longer seem to exist, Director of National Intelligence Avril Haynes said in early May.
According to her, Putin may have tempered his short-term ambitions on what counts as a victory, and now expects to "consolidate control over the occupied territory in eastern and southern Ukraine and ensure that Ukraine never becomes a NATO ally." That said, it is highly unlikely that Russia will participate in talks on a suspension of hostilities this year unless political factors "change his (Putin's) decision," Haynes said.
Prigozhin accused the units of the regular army of the Russian Federation that they were “abandoning positions without a fight” near Bakhmut
The founder of PMC Wagner, Yevgeny Prigozhin, accused the units of the regular army of the Russian Federation of losing ground in the Bakhmut area without a fight.
“The situation on the flanks is developing according to the worst of the predicted scenarios. Those territories that were taken with the blood and lives of our comrades for many months, passing tens or hundreds of meters every day, today are thrown without a fight by those who should hold our flanks, ”he said.
At the same time, according to the founder of the PMC, the assault squads of his group are successfully advancing in the city itself. According to Prigozhin, the mercenaries had to go "only 625 meters" to its western border.
Evgeny Prigozhin has been in public conflict with the Russian Defense Ministry over the past few days. In early May, he published a video in which he shouted obscenities at the leadership of the Russian Ministry of Defense, demanding to provide Wagner PMCs with ammunition, and then threatened that his group would leave Bakhmut.
On May 9, Prigozhin said that the Defense Ministry brigade had fled from the strategic foothold in the city. On the same day, in one of his appeals, he mentioned a certain "happy grandfather" on whom the future of Russia depends - and who "thinks that he is well," while he may turn out to be "a complete asshole."
According to Meduza sources close to the Kremlin, Prigozhin’s public statements have recently begun to “seriously disturb the country’s top leadership.”
FSB building set on fire in Komi Republic
Unknown people tried to set fire to the Komi Republic.
At about 3:00 am, an unidentified person threw a Molotov cocktail through the window of the building. The bottle hit the window frame, a fire broke out. The total fire area was 1.5 square meters. The attacker fled. Investigators opened a criminal case under the article "terrorist act."
A pensioner from St. Petersburg was sentenced to probation for a note on the grave of Putin's parents
The hand-written note is as follows: “Parents of this maniac, take him with you, he's causing so much pain and trouble, the whole world is praying he would die. Death to Putin, you brought up a monster and a murderer”
A St. Petersburg court slapped Irina Tsybaneva, a 60-year-old retiree, with a two-year suspended prison sentence for leaving a hand-written note on the grave of Russian President Vladimir Putin's parents, Rotonda reports.
The woman was found guilty of desecrating a burial ground while motivated by political hatred. Tsybaneva is also placed on a two-year probation period.
The state prosecution sought a three-year suspended sentence.
Tsybaneva pleaded partially guilty. She did not contest the fact that she had left the note but claimed that her actions were not motivated by political hatred.
“After seeing the news, I was overwhelmed by fear, I felt very unwell. The fear was so strong that I could not cope with it, and this is possibly my fault. I barely remember writing it [the note], I don't have any recollection of the text itself. I realize that I succumbed to my emotions and committed an irrational act. I am sorry that my actions could offend or affect someone,” Tsybaneva told the court.
According to her, she was certain that the note would not be noticed by anyone because it was “rolled in a small tube and did not attract any attention”. The note was also placed away from the grave, the woman clarified.
The retiree was initially placed under house arrest but then she was also prohibited from going online and visiting the Serafimovskoe Cemetery where the grave of Putin's parents is located.
The hand-written note is as follows: “Parents of this maniac, take him with you, he's causing so much pain and trouble, the whole world is praying he would die. Death to Putin, you brought up a monster and a murderer” (as quoted by Mediazona .)
FT: Russia managed to bypass Western sanctions by $1 billion
Russia managed to circumvent Western sanctions in 2022 with the help of its partners in the Eurasian Economic Union (EAEU) - Armenia, Kazakhstan, and Kyrgyzstan. The problem is that it was these countries that significantly increased purchases of dual-value goods that fell under anti-Russian sanctions, but in Russia, they "evaporated" - that is, they did not reach their original destination. According to the Financial Times, about $1 billion worth of dual-value goods in Russia has “evaporated” in Russia.
American and European authorities believe that these goods could be intended to help the Russian authorities - so that they continue to provide for the needs of the army in the war against Ukraine. They could enter the territory of Russia from the EU only under the pretext that Russia would not receive these goods, but would be used exclusively as a transit country. The final recipients were to be companies in Kazakhstan, Armenia, and Kyrgyzstan. The publication concludes that Russia simply used fake customs declarations, which made it possible to "intercept" a significant part of the goods from its partners in the EAEU.
“Where else could these goods go? Why did these countries suddenly need these goods at this time? Who in the region needs these goods the most? Obviously, Russia,” the minister for sanctions in the Estonian government, Erki Kodar, is indignant, commenting on the unprecedented increase in imports to Russia’s partners in the EAEU.
The publication notes that some products, the shortage of which, apparently, is extremely acute in Russia, did not reach their "official" buyers in third countries at all. We are talking about gas turbines, metallurgical and broadcasting equipment. Difficulties with transit underline in part the futility of the EU's attempts to stop the flow of sanctioned products to Russia, even from the territory of the Union. Nevertheless, the European authorities expect that tougher responsibility for helping to circumvent sanctions, including against third countries, through the imposition of secondary sanctions should help solve this problem.
In February 2023, the European Union banned the transit of dual-value goods through Russia. However, some EU members believe that this is not enough, as the ban applies to specific categories of goods. For example, Lithuania and Estonia fear that Russia will continue to import necessary goods using false documents under the pretext that they are not on the banned list. The authorities of countries neighboring Russia demand a complete ban on the transit of goods through the Russian Federation in order to avoid such cases and minimize the risks of deliveries of sanctioned products. They propose to introduce a similar ban against Belarus. In the event of an urgent need for some humanitarian goods, such as medical products, Estonia and Lithuania propose to create a list of exceptions - in their opinion, this can solve the problem.
At the same time, the real figures of "shadow imports" to Russia can be much higher. The FT cites a discrepancy between the EU’s export declaration and Kazakhstan’s import report, which suggests that the gap between goods sent from the EU and received in Kazakhstan is about $2.9 billion. Moreover, in 2021, all imports from the EU to Kazakhstan amounted to about $450 million. The publication hints that it is not only about “shadow imports”, but also about the fact that Kazakhstan is helping Russia by reselling European products to it. In total, the volume of such trade, which does not reach official buyers, can be estimated at several billion dollars.
https://www.ft.com/content/76fc91b2-3494-4022-83d0-9d6647b38e3d
U.S. attorney general OKs transfer of forfeited funds from indicted/sanctioned Russian businessman for use in Ukraine
U.S. Attorney General Merrick Garland has authorized the first transfer of forfeited Russian assets for use in Ukraine, he said on Wednesday.
The Justice Department last year charged Russian oligarch Konstantin Malofeyev with violating sanctions imposed on Russia after its invasion of Ukraine, saying he provided financing for Russians promoting separatism in Crimea.
At that time, Garland said, he also announced "the seizure of millions of dollars from an account at a U.S. financial institution traceable to Malofeyev’s sanctions violations."
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"There will be a disaster." The hole in the Russian budget has set a new record
The federal budget deficit for the first four months amounted to 3.4 trillion rubles, according to preliminary data released by the Ministry of Finance. This is half a trillion more than the annual plan (2.9 trillion rubles) and even a little more than for the entire last year when the deficit amounted to a record 3.345 trillion.
Budget revenues in January-April amounted to 7.78 trillion rubles. - 22% lower than a year earlier. Non-oil and gas revenues even grew compared to last year: 5.5 trillion rubles, or 5%. The receipt of the main taxes (current, profit) has normalized after a temporary reduction in January and is consistently higher than the level of 2021 (as less subject to statistical base effects), the Ministry of Finance notes, in general, the volume and trajectory of non-oil and gas revenues are in line with the plan.
Summed up oil and gas revenues. The rate of their decline in annual terms is accelerating: for 4 months already -52% compared to last year (according to the results of the quarter it was -45%), or 2.82 trillion rubles. This is partly a base effect: last spring, oil prices skyrocketed, and with them budget revenues.
“Oil and gas are crushing us,” Finance Minister Anton Siluanov said in April, noting that innovations in taxation of the industry would help rectify the situation. The discount of Russian Urals oil to benchmark Brent has been limited since April, but the result is not yet impressive. According to the results of the first three months, the deficit amounted to 2.4 trillion rubles. — thus, in April it exceeded a trillion.
The main role was played by expenses: 11.2 trillion rubles. four months - 26% more than a year ago. For the quarter, the budget spent a little more than 8 trillion - thus, in April, spending amounted to 3.13 trillion rubles. The Ministry of Finance writes that the growth of budget spending is slowing down after a surge in January-February when it advanced much of the spending. Experts see no slowdown. “For us, the benchmark is 2.4 trillion rubles. for April - if spending crosses this line at the end of the month, we will consider this an acceleration [of spending after a slowdown in March],” wrote Hard Digits analysts.
The main reason for the growth of the deficit is again in spending - it increased by almost 0.8 trillion rubles. against March and remain above the seasonal norm, Alexander Isakov, an economist for Russia at Bloomberg Economics, said.
The Ministry of Finance continues to insist that by the end of the year, spending will fit into the plan (29.06 trillion rubles). And with them, the deficit. “So far, the benchmarks [budget deficit of 2% of GDP] are not changing,” Siluanov said, but deviations are possible depending on oil and gas revenues.
Experts do not understand how the Ministry of Finance will be able to meet the figures approved by law. To do this, the budget will have to reduce spending below last year's level for the remaining eight months, Isakov writes. It is difficult for analysts to imagine how to do this in the pre-election year. Isakov disagrees with the Ministry of Finance’s statement that spending is approaching the seasonal norm, unless “the amount of spending is actually at the seasonal norm, but here we are not sure about the total amount of spending for 2023.” If expenses correspond to the season, then, based on the average April share of 8.7% of annual expenses, they are 35.6 trillion rubles. This is 6.6 trillion more than planned.
Over the past 12 months, the budget deficit amounted to 7.9 trillion rubles, MMI analysts drew attention to. “It is already obvious that no 29.9 trillion rubles. there will be no spending this year,” they write. They expect spending to be at least 33 trillion, but revenues may well reach the planned 26 trillion: “Thus, the deficit so far looms in the region of 7 trillion. This is not a disaster, because there are still reserves. If it ends, it will be a disaster.”
Cyprus handed 800-page US dossier on Russia sanctions breaches
Cyprus has received an 800-page dossier from the US government detailing sanctions breaches by local individuals and entities that are alleged to have enabled the Russian billionaire, Alisher Usmanov, to conceal his immense wealth.
As the island’s leader Nikos Christodoulides vowed to push ahead with the prosecution of law and audit firms that had aided the oligarch, Washington released documents that amounted to a toolkit to facilitate the process. At least two other dossiers are expected to follow.
Revealing receipt of the “data package” on Tuesday, Christodoulides insisted a new era had begun in the EU member state long known as “Moscow on the Med” due to its financial ties with Russia – and reputation for soft-touch regulations.
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EU wants to put the squeeze on Russian crude smugglers
Hopes of tackling the ‘shadow fleet’ illegally transporting Moscow’s crude are growing.
An EU effort to close loopholes that allow Russian oil to flow into the European Union is finding broad support from member countries, officials and diplomats have said.
Representatives from the 27 member countries met Thursday to discuss technical aspects of the 11th package of sanctions against Russia — a response to Moscow's invasion of Ukraine.
According to three people with knowledge of the talks, there is currently no major opposition to stepping up enforcement of existing energy embargoes — even from countries believed to be benefiting from undeclared imports of Russian crude.
“Of course this package is different from the others, focusing on circumvention, and it will have a different impact so we are taking our time to look at all the proposals," said an EU diplomat from a country that has faced pressure to cut energy ties with Russia. “But for us, enforcement isn’t proving to be a major issue — we don’t have red lines on this.”
https://www.politico.eu/article/eu-wants-to-put-the-squeeze-on-russian-crude-smugglers/
South Africa loaded weapons onto Russian vessel, U.S. envoy says
The United States believes South Africa loaded weapons and ammunition onto a Russian vessel docked at the country’s main naval base in December, Washington’s envoy to South Africa said on Thursday.
U.S. Ambassador to South Africa Reuben Brigety told a media roundtable that the United States took the matter seriously and had raised concerns about arming Russia during recent diplomatic and trade discussions with a visiting South African delegation in Washington.
Brigety, who attended the meetings in Washington, said the weapons and ammunition were placed on the ship, the Lady R, which docked at the Simon’s Town naval base outside Cape Town between Dec. 6 and 8.
“We are confident that weapons were loaded onto that vessel and I would bet my life on the accuracy of that assertion,” Brigety said, according to media excerpts from the roundtable. “Given that, the deviation from South Africa’s policy of nonalignment by the actions of Dec. 6 through 8 are inexplicable.” Brigety offered no proof of his assertion.
Read More:
https://www.washingtonpost.com/world/2023/05/11/south-africa-russian-weapons-ship/
The Swiss government approved the confiscation of the reserves of the Central Bank of the Russian Federation in favor of Ukraine
The Swiss authorities do not see obstacles in the legislation in order to confiscate the frozen reserves of the Russian central bank in favor of Kyiv.
The use of the assets of the Central Bank of the Russian Federation for the restoration of Ukraine is "legally possible," Fabian Mayenfisch, spokesman for the State Secretariat for Economics, told RIA Novosti.
In total, 7.4 billion francs ($8.3 billion) of the Russian Central Bank, which fell under Western sanctions in the very first days of the war, were discovered and blocked in Switzerland.
Since the end of March, the Swiss government has decided to launch mandatory reporting on these assets, the publication of which will take place once a quarter.
Switzerland is closely following discussions in the European Union about the possible use of the assets of the Central Bank of the Russian Federation, the Cabinet said on Wednesday.
European Commission. Let us remind you that after many months of discussions and consultations with lawyers, I came to the conclusion that it is impossible to confiscate the frozen reserves since state immunity applies to them.
Instead, the EC proposed to EU member states and international partners to create a fund to which liquid assets from frozen reserves could be transferred under management, and profits from investing these funds could be used to restore Ukraine.
However, the problem remains how much money the Central Bank has in Europe and where it is. According to Bloomberg, as of February, only 33.8 billion euros ($36.4 billion) of the $258 billion that the Bank of Russia held in the EU, according to its own reports, were discovered and actually seized.
In total, the EU froze Russian assets (including individuals and companies) for 68 billion euros. Of this amount, 50 billion euros come from Belgium and 5.5 billion euros from Luxembourg; these two countries host clearing houses Euroclear and Clearstream, which deal with the settlement of international transactions with securities and their storage. Among them should be government bonds, which are purchased in foreign exchange reserves.
The G7 is developing a diamond embargo against Russia
Western countries have been trying for more than a month to figure out how to block Russia from another source of export earnings - the sale of diamonds. Now G-7 countries are set to join the United States, which has already imposed sanctions on Alrosa to limit Russia's diamond earnings, according to a draft communiqué from the May summit seen by the Financial Times. The purpose of the G7 is to create an effective international mechanism for tracing diamonds of Russian origin in order to limit the ability to circumvent sanctions.
In this case, the European Union will be able to impose a diamond embargo, to which one of the largest jewelry centers in the world, Belgium, will agree, now fearing that sanctions will simply lead to the redirection of trade flows to non-Western countries, the newspaper notes. In addition, the United States will be able to tighten its sanctions.
If a working scheme is created, customs in Western countries will require a certificate of original origin of diamonds. Many stones are now described as Indian because they undergo "substantial processing" in the form of polishing or cutting in India, through which more than 90% of the world's diamonds are mined. But the G7 intends to achieve full identification.
In the case of Russian products, this is especially difficult, because Alrosa mainly supplies small stones. However, rough diamond exports from Russia amounted to $4 billion in 2021. And at the end of last year, Russia passed a law that will allow the withdrawal of an additional 19 billion rubles from Alrosa in 2023 - due to a temporary increase in the extraction tax mineral.
It is precisely the reduction of revenues to the budget, from which military operations against Ukraine are financed, that is the main goal of Western sanctions.
A certification system for some diamonds already exists - through the Kimberley Process; a UN-approved strategy to prevent the entry into the market of "blood diamonds." which are illegally mined in Africa and used to finance anti-government armed conflicts. But in this case, customs only require a state certificate confirming that the diamonds meet the requirements of the Kimberley Process.
In addition, there are certification systems for larger and more expensive stones, such as De Beers. But it will be difficult to identify and track the many small stones that Russia supplies, and the cost of such an effort will eat into the already low profits of Indian polishers. “It’s not possible with small stones, period,” Russell Mehta, managing director of diamond dealer Rosy Blue India, told the FT.
Rosy Blue itself simply stopped buying diamonds from Alrosa - just in case, so that there would be no problems with customers.
However, the G7 aims to expand the practice of certification to the extent possible throughout the entire supply chain. The system should have "direct and indirect prohibitions in place to close the possibility of circumventing" the sanctions from the very beginning, the European official said.
The technical solution is now being developed by Spacecode: its equipment is trying to identify the geographic origin of the diamond and apply nano engraving. But before the mass deployment of technology is still far away: the company will be able to present the prototype of the device only at the end of this - the beginning of next year. So, apparently, after the introduction of the diamond embargo, a transitional period will be required, European officials say.
Some industry players have told the FT that it would be better to tighten up the current system with written supplier declarations.
On the issue of sanctions against Russian diamonds, even the position of Belgium has changed, which tried to protect Antwerp, which has been a leading center for the precious stones trade for about 500 years. In a joint effort to reduce Russia's diamond export earnings, Belgium intends to be a "leading partner," Prime Minister Alexandre de Cros told the FT:
We want to knock Russian diamonds out of Western markets. But this cannot be achieved with direct prohibitions. A real result can be achieved only with a combination of direct and indirect bans on working with diamonds mined in Russia.
The tracking system will help prevent “label change” in third countries in order to circumvent sanctions, de Kro believes: “It should be introduced into the sector gradually. This will take time. But that shouldn't stop us."
If such a system is introduced in Washington, it is expected that it will continue to operate after the possible lifting of anti-Russian sanctions in the future, top managers of jewelry companies, who were consulted by Western officials, told the FT. This will expand the fight against "blood diamonds" to situations where military operations are financed by governments, as well as rebel groups in different countries.