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Russian sanctions against Ukraine: "Managed chaos" operation

Author : Oleksiy Kushch

As for Ukraine’s sanctions policy towards the Russian Federation - it has always raised more questions than answers
21:27, 24 April 2019

Open source

Let’s begin with the United States, where no one annexed Alaska on the grounds that it is a "state of Russian maritime glory." There is a clear law on counteracting "the enemies of America," which clearly describes the algorithm for conducting sanctions policy, indicating the basic principles, responsible institutions, transparent regulations, and procedures.

A situation in which a group of landlords from Texas would approve sanctions against foreign companies buying Russian grain is impossible In America. The US sanctions policy is based on three principles.

The first is the translational pressure on the opponent, at which the degree of sanctions gradually rises. The second is the concentration of the main strike on the most significant sectors of the enemy’s economy. In the case of the Russian Federation, this is the banking, military-industrial and energy sectors. And the third principle - do not harm yourself.

That is, if space cooperation with the Russian Federation is beneficial for the Americans, the sanctions do not apply to operations with Russian enterprises in the industry.

Our system of sanctions has the opposite shape, if it can be called the proud term "system" at all. If you take the financial sector, then Russian banks, both private and state-owned, quietly continued to work in Ukraine, with the loss of "one fighter" at the end of last year.

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Yes, we imposed “fake” sanctions against them, for example, in the form of a ban on the payment of dividends.

This is really funny given that the group of these banks suffers losses and in general there is nothing to distribute. As for the energy sector, here all the diversification of risks and the search for alternative suppliers has been reduced to buying Russian gas through Luxembourg and Swiss firms.

At the same time, a new dependency has emerged - coal. As well as traditional oil and petroleum products, because the source of hydrocarbons is the same - Siberia. Not to mention the eternal weeping, sounding from the "Naftogaz" in relation to the reduction of Russian gas transit through the territory of Ukraine.

After all, if the sanction policy is honest, then you need to be ready for anything, including the fact that Russia in 2020 will reduce gas transit through the territory of Ukraine to critical, minimum volumes of 40 billion cubic meters per year.

By and large, the Russian Federation, applying this or that arsenal of pressure on Ukraine, is not particularly embarrassed by the means. Now Moscow has embarked on a new stage in the solution of the “Ukrainian question,” which is called “controlled chaos,” with the maximum weakening of the basic state institutions. Such a way is a variant of "denationalization" of local politics.

To implement this plan, they need to have the hidden levers of regulating the level of loyalty. Moscow no longer wantы to warm up those Ukrainian political forces who speak about Russian language and love for Pushkin, and then they watch the balance of personal accounts in Swiss banks: how many rents give the business projects in Ukraine, including the use of competitive advantage factors derived from their love to Russia.

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At the same time, the Russian Federation is trying to always keep the formal side for its power actions. Moreover, both Ukraine and the Russian Federation are members of the WTO and before introducing new economic restrictions on the other side, they need to be adapted to the requirements of international law.

The underestimation of the formal principle in Kyiv and the predilection for it in Moscow is bearing fruit. Ukraine has already lost three disputes with the Russian Federation in the framework of the WTO, and all because of appealing to emotional, rather than formal arguments.

In this model of long-term confrontation, minds and senses win, and amateurishness and trivial mistakes lose. By and large, our task is to give Moscow as little as possible in matters of formal reasons for any "symmetrical" actions.

And the Russian Federation decides to start a new wave of sanctions against Ukraine, then let them do it unmotivated. In this case, we still have chances of increasing international legal pressure.

And the most important thing is that all time won by us must be used to search for new, diversified directions for the supply of critical imports, above all energy.

Over the past five years, our government, even following the example of Lithuania, which rented a mobile terminal for receiving LNG in Klaipeda, could not do anything of the kind in Odesa, not to mention new directions for the purchase of oil and oil products.

At the end of last year, the import of corn starch, glucose and syrup maltodextrin from Russia to Ukraine was banned. And it was not an economic blow to the aggressor, but a shot to us.

After all, only some producers of this raw material benefited from this ban, but domestic consumers, who used this product on the basis of their technical specifications and technological maps, lost on the same occasion.

And just recently, the Cabinet of Ministers decided to punish aggressor state in full: import of formalin and glassware from the Russian Federation was banned.

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Symmetrical response from Moscow came quickly. As a response, they banned the export of coal, oil and petroleum products to our country, and also banned some of the products of our engineering and light industry in the amount of $ 250 million a year.

This is how our Ministry of Economic Development and Trade exchanged the glassware for Russian oil and oil products. Do you understand the scale of the decisions?

It seems that our Cabinet turned into an arena for cockroach races. But as a result of their congenial decisions, much more significant "fraternal greetings" arrive in response.

And if, following the ban on Russian oil and oil products, the Russian Federation blocks supplies of this raw material from Belarus, - in this case, against the background of spring demand, price tags at gas stations will have to be changed every day.

After all, oil from the Russian Federation is the cheapest logistics for the pipeline, and oil products from Belarus are the most optimal in terms of price and the length of the transport arm. The search for other suppliers will only lead to an increase in the cost of logistics and a long-term increase in the price of gasoline and diesel.

From now on, deliveries of petroleum products and coal from the Russian Federation to Ukraine are possible only when special permits are received in Moscow, which under current conditions become a kind of “Khan label for business.” And a tool for buying the political loyalty of individual financial-industrial groups.

Related: Ukraine’s MFA calls on Donbas citizens to refuse from Russian passports


And the Russian Federation still has a couple of moves in reserve. Last year, according to Rosstat, the export of Ukrainian goods to the Russian Federation amounted to 3.62 billion dollars, and imports - to 5.86 billion, the negative trade balance - 2.24 billion dollars in favor of the Russian Federation.

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If we estimate the structure of imports from Russia to Ukraine, then the supply of mineral products (mainly oil) amounted to $ 2.77 billion.

As for our exports, the Russian Federation may block the supply of metal ($ 1.28 billion per year) and further tighten the purchase of our engineering products ($ 0.68 billion in 2018).

Food industry is also at risk. The final "ban" of it can lead to the loss 670 million dollars annual export earnings.

In order to activate the ban on our metal or food industry products, it is enough to ban, for example, the “cedar” from the taiga at the next meeting of the Cabinet of Ministers. And everything starts.

How to live with aggressive neighbors? We can be taught by Israel, which very clearly shares the protection of national interests and the lobbying of the private “candle factory”.

Although we have to admit that the sanctions of the Russian Federation themselves are not so terrible for us. Much more dangerous is the complete lack of professionalism of our government and the trade special representative in the context of forming adequate responses to the existing external challenges. Our officials have long lived according to the principle: "War will write off everything."

Related: Russia imposes restrictions on supply of crude products to Ukraine

Related: Putin explains facilitated proccess of Russian passports issuance for occupied Donbas citizens

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