Scrap metal, a strategic raw material, urgently needed by domestic enterprises, is shipped from Ukraine to Russia-controlled Transnistria. The plant, controlled by the Kremlin oligarch, takes Ukrainian scrap metal to manufacture products, which might be used to strengthen the infrastructure of the aggressor country and produce weapons and military equipment that will be used against the Armed Forces of Ukraine in Donbas
The Ukrainian authorities have repeatedly stated that, in addition to armed resistance to Russian aggression, they are fighting at the diplomatic and economic fronts. Kyiv imposed sanctions against Russian companies and oligarchs associated with the Kremlin. This was supposed to smash the interests of direct and indirect sponsors of war in eastern Ukraine, those who contributed to the annexation of Crimea. However, as it usually happens in Ukraine, the written rules does not always correspond to reality. It turned out that some businessmen from the Ukrainian business quietly cooperated with the odious Russian oligarch Alisher Usmanov, thus sponsoring a businessman, who is close to the Kremlin. And the Ukrainian government, which introduced sanctions against the aggressor, takes it lightly.
Scrap metal is a strategically important raw material for Ukrainian metallurgists. In recent years, its storage has dropped to critical volumes. The problem has escalated, so the government has increased the export duty four times to restrict exports in the last three years. However, this did not solve the problem, since the main scrap exporter has an ace in the hole.
The major share of Ukrainian scrap metal is exported to the Moldovan Metallurgical Plant, which is located on the territory of unrecognized Transnistria and is on Ukraine’s sanctions list. Ukrainian enterprises are not allowed to supply products for this enterprise. According to media reports, the plant officially belongs to the unrecognized Transnistrian government, but in fact, it is controlled by a team of Kremlin oligarch Alisher Usmanov. On behalf of the Russian government, Usmanov’s company supplies raw materials to enterprises of Donetsk/Luhansk People’s Republic.
According to "Ukrmetallurgprom" (includes 15 leading Ukrainian metallurgical enterprises – Ed.), in 2017, 486 thousand tons of scrap metal were exported from Ukraine, of which 270 thousand tons (or 56%) fell on Moldovan Metal Plant. "Now the situation is getting even worse: for January-April 2018, 135 thousand tons (63%) out of 216 thousand tons exported from Ukraine, went to this Transnistrian enterprise," Ukrainian metallurgists say in their letter to the central authorities, law enforcement agencies, and "Ukrzaliznytsya" (state railway), demanding to take immediate measures to stop the supply. The letter was sent to President Petro Poroshenko, Prime Minister Volodymyr Groisman, Head of the Security Service of Ukraine Vasyl Hrytsak, Secretary of the National Security and Defense Council Olexandr Turchynov, Minister of Infrastructure Volodymyr Omelyan and acting head of "Ukrzaliznytsia" Evgen Kravtsov.
For example, in August 2018, Ukrainian steelmaking facilities were supplied with the strategic raw materials only by 89%. Characteristically, this indicator accounted to a month when scrap metal was not exported to Transnistria. However, the market insiders assure that in September, the cars started going to the unrecognized republic. The scheme, which allows circumventing the sanctions, is extremely simple. According to the documents, the cargo is sent to Moldova, the Moldovan trader Novastal Prim. However, in fact, he goes to Rîbnița (Transnistria), that is straight to Moldovan Metal Plant.
Neither the government nor the National Security and Defense Council and Ukrzaliznytsa see any problems with the export of strategic raw materials to the plant associated with the Russian oligarch Alisher Usmanov.
Moldovan Metal Plant consumes free electricity of the Moldovan TPP; it uses gas from Russian Gazprom and belongs to Russian Inter RAO company.
It turns out that Russians issue bills for gas to official Chisinau, although the unrecognized republic consumes it. If you remember, Gazprom tried to involve Kyiv a similar scheme, when the Russian monopolist wanted Ukrainian authorities to pay the bills of occupied Donbas republics. This scheme gives the plant a competitive advantage and an ability to buy scrap at a higher price.
But one should not forget that the Moldovan Metal Plant is located on the territory of the unrecognized Pridnestrovian Moldavian Republic (PMR), which is essentially a Russian enclave in the territory of an independent country. "Therefore, the export of strategic raw materials can be regarded as support for the pro-Russian regime in Transnistria, which is equal to supporting separatists in Donbas, is a direct threat not only for the development of Ukrainian metallurgy but also for the national security of Ukraine," Ukrmetallurgprom stressed.
The Transnistrian metal products are supplied to the Russian Federation, "and it can be assumed that it will be consumed not only to strengthen the infrastructure of the aggressor country but also to manufacture weapons and military equipment that will be used against the Armed Forces of Ukraine in occupied Donbas," the association said.
May 14, 2018, sanctions were imposed on Moldovan Metal Plant, they provided for the blocking of assets, restriction of trade operations, prevention of capital outflow from Ukraine, suspension of economic and financial obligations. That is, the Ukrainian state understands that the work of the Moscow Plant of Ironworking threatens the country's security, but, as practice shows, these sanctions work only on paper. In fact, they are neglected by Ukrainian exporters of scrap metal that are well-known in high offices, and none of the sanctions against the MMP is being implemented. Why so – this is an open question.
For example, Ukrmetallurgprom asked the Ukrainian authorities, law enforcement agencies, and Ukrzaliznytsya to implement the convention on the cargoes carriage at the Moldovan Metal Plant (Rîbnița station) as soon as possible, as well as to provide for and implement measures against violators of sanctions against the plant. "Taking into consideration the risk of violating the sanctions, organizing alternative supply schemes for raw materials from Ukraine to the Moldovan Metal Plant, via neighboring stations or other consignees, and taking into account the fact that Moldovan Metal Plant is the only Moldovan enterprise and is territorially located in Transnistria, transportation of key metallurgical raw materials - ferrous scrap metals - to all recipients through the closest to Rîbnița stations should be banned," reads the letter.
In simple terms, the metallurgists are asking the Ukrainian authorities to "close this thing down," which allows scrap exporters to disregard the country's national security when seeking for rent. Interestingly, this is not what the government or the National Security and Defense Council is asking for, but the Ukrainian business, which contributes to Ukraine’s GDP and is extremely weak due to the negative situation on world markets.
“The position of the Ukrainian authorities, in this case, is incomprehensible. Of course, they must first protect domestic enterprises that pay the taxes. For example, the US protects its producers,” Institute for Economic Security CEO Olexandr Ryabchenko notes. According to him, Ukraine does not comply with its decisions on sanctions, and it has a negative impact on the country's image and its attractiveness for the investors. Under such circumstances, those business entities that honestly pay taxes cannot feel secure enough. In addition, this case once again demonstrates our country’s double standards to the European governments - we ask the EU to extend sanctions against Russia, but we ourselves still do not comply with them.
Read the original text at 112.ua.