Digest of headline news as of 3:30 p.m. Moscow time on August 10:
BUSINESS & FINANCE
*** POSSIBLE NEW SANCTIONS AGAINST RUSSIA CAN BE REGARDED AS DECLARATION OF ECONOMIC WAR - MEDVEDEV
The possible intensification of economic sanctions against Russia can be regarded as the declaration of an economic war, and it will be necessary to respond with economic, political, and other methods, Russian Prime Minister Dmitry Medvedev said at a meeting with staff of the Kronotsky State Nature Reserve in the Kamchatka Territory.
"I would not like to comment on any talk about future sanctions. The only thing I can say is that if there is some sort of ban on banks' activities or the use of a particular currency, it can be described in a totally straightforward way as the declaration of an economic war. And it will be necessary to react to this war with economic methods, political methods, and other methods, should the need arise. And our American friends should realize that," Medvedev said when asked by a participant in the meeting what other sanctions could be imposed on Russia and how they could impact the Russian economy.
*** RUSSIAN GOVERNMENT NOT PREPARING RESOLUTIONS ON ADDITIONAL TAX HIKES FOR CERTAIN ECONOMIC SECTORS - SILUANOV
The Russian government is not currently preparing decisions on additional tax hikes for certain sectors of the economy, but will prepare a report on the additional revenues of natural resource companies accrued due to changing external dynamics and exchange rate effects, First Deputy Prime Minister and Finance Minister Anton Siluanov told reporters.
"The government, in keeping with presidential instructions, will prepare a report on additional revenues accrued through changes in external dynamics and exchange rate effects. In considering this matter, we will closely study all the circumstances, give a hearing to the arguments of the companies and of experts, and estimate the possible consequences. Separately, we will study the possible impact of the given proposals on the business climate," Siluanov said.
*** PUTIN HAS NOT AGREED TO INCREASED TAX BURDEN FOR METALS AND CHEMICAL SECTORS, HAS INSTRUCTED GOVERNMENT TO STUDY THIS MATTER - PESKOV
Russian President Vladimir Putin has made no decisions related to increasing the tax burden on the metals, mining, chemical and petrochemical sectors, and has instructed that the government, presidential press secretary Dmitry Peskov told reporters.
"As of yet, there are no such meetings on the agenda, since the president has not agreed to any decisions so far. The president has given his agreement for the government to consider this matter in an expert format," Peskov said, responding to a question on whether the president is planning to conduct meetings with representatives of businesses which could be impacted by decisions associated with changes to the tax burden.
*** RUSSIAN ANNUAL INFLATION TO QUICKEN TO 2.8%-3% IN AUG - CENTRAL BANK
Russian inflation in annual terms will quicken to 2.8%-3% in August, the Central Bank said in a commentary on inflation.
"The pace of consumer price growth in August will be 2.8%-3.0%, according to preliminary estimates. By year-end, inflation is expected in the interval 3.5%-4%," the Central Bank aid. If confirmed earlier forecasts that inflation would rise above 4% in 2019 due to the increase in the VAT rate.
"At present the processes that will facilitate inflation's return to the 4% target are taking shape," it said. Annual inflation increased to 2.5% in July from 2.3% in June and 2.4% in the spring months. "The increase in annual inflation was due primarily to the normalization of food product price dynamics, which were influenced by several factors," it said.
*** LOWER GLOBAL GRAIN HARVEST, RUBLE WEAKENING MAY INCREASE INFLATION IN H2 - ECON MINISTRY
A lower global grain harvest and rising wheat prices may add 0.2-0.3 percentage points to Russian inflation in 2018, the Economic Development Ministry said in a report on inflation.
Ruble weakening in August may result in higher inflation in the second half of the year, but the impact will be limited due to the reduced exchange rate pass-through effect on inflation.
The ministry maintains its forecast for either 0.1% deflation or nil inflation in August. In annual terms, this implies inflation will quicken to 2.9%-3.1% from 2.5% in July.
"The decline in the grain harvest worldwide and an increase in wheat prices on global exchanges (wheat futures have risen nearly 20% on the Chicago Board of Trade since the beginning of July) is the main risk for food price inflation, which a smaller grain harvest in Russia, given the record high inventories, did not itself create. The additional contribution to inflation in the on the part of this market might amount to 0.2-0.3 percentage points," it said.
*** RSPP: ADDITIONAL TAX RECOVERY WILL LEAD TO MASS DEPARTURE OF INVESTORS FROM MARKET - STATEMENT
Additional tax recovery on extractive, metallurgical, chemicals and fertilizer companies of over 0.5 trillion rubles will not help raise the country's competitiveness and will lead to a mass departure of investors from the Russian market, the Russian Union on Industrialists and Entrepreneurs (RSPP) said in a statement posted on its website.
*** RUSSIA UNABLE TO OVERTURN UNBUNDLING IN GAS SECTOR IN WTO
The arbitration panel in the Russia's case against the EU at the World Trade Organization (WTO) supported three out of six complaints lodged by Russia against the "Third Energy Package" in the gas sector, the WTO and Russian Economic Development Ministry said.
Russia was unable to overturn the main principle of the Third Energy Package - unbundling - the requirement to separate the ownership of gas sales operations from transportation networks. The preference for suppliers of liquefied natural gas (LNG) remains in force as well as the exemptions from EU gas directives for field pipelines (pipelines through which Norwegian gas comes to Europe are considered field pipelines).
*** NORD STREAM 2 AG REPORTS FILING APPLICATION FOR ALTERNATIVE ROUTE IN DENMARK
The Nord Stream 2 AG project company has submitted an application and Environmental Impact Assessment (EIA) report to the Danish Energy Agency on an alternative route for the Nord Stream 2 gas pipeline through Denmark, Nord Stream 2 and the Danish Energy Agency reported.
Nord Stream 2 said the alternative route passes to the northwest of Bornholm, inside the Danish exclusive economic zone (EEZ) but outside its territorial waters.
"This is an alternative route that does not pass through Danish territorial waters. Nord Stream 2 AG is not withdrawing from the ongoing procedure for the preferred route as applied for in April 2017 which is based on the guidance received from Danish authorities during the successful planning and construction of the existing Nord Stream Pipeline," it said.
*** RUSHYDRO TO USE INCOME FROM SALE OF INTER RAO STAKE TO PAY OFF DEBT
RusHydro is planning to use the 17.2 billion rubles in income from the sale of its stake in Inter RAO to reduce debt, the generating company's CEO Nikolai Shulginov told journalists.
"We have investment. We will simply reduce loans, credit; that's it; that it," he said.
*** RUSSIA BANS IMPORTS OF STONE FRUIT CROPS FROM SERBIA, MACEDONIA EFFECTIVE AUG 15
Russia's Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) has announced a temporary ban on importation of stone fruit crops from Serbia and Macedonia beginning on August 15.
The ban was imposed following the arrival in Russia of a shipment of peaches and apricots containing a hazardous quarantine item: brown rot (Monilinia fructicola), Rosselkhoznadzor said in a statement.
POLITICS & SOCIETY
*** PUTIN, MACRON PRAISE RUSSIAN-FRENCH DELIVERY OF AID TO E. GHOUTA - KREMLIN
MOSCOW. Aug 10 (Interfax) - Russian President Vladimir Putin and French President Emmanuel Macron had a telephone conversation on Friday.
"Exchanging views on the current situation in Syria, the leaders praised the Russian-French operation on the delivery of humanitarian aid and its distribution among the residents of Syria's Eastern Ghouta this July," the Kremlin press service said.
"Vladimir Putin emphasized the importance of further efforts by the international community to facilitate the rehabilitation of Syria's social and economic infrastructure and the return of refugees and internally displaced persons to their places of permanent residence," it said.
*** PESKOV CONFIRMS PUTIN, MACRON DISCUSS SENTSOV IN TELEPHONE CONVERSATION
Russian President Vladimir Putin and French President Emmanuel Macron addressed the case of Oleh Sentsov convicted in Russia of terrorism in a telephone conversation on Friday, Kremlin press secretary Dmitry Peskov said.
"Yes, the matter was addressed," Peskov said when asked by Interfax whether Putin and Macron brought up Sentsov in their telephone conversation, as the Elysee Palace had reported before.
*** PUTIN, ERDOGAN DISCUSS TRADE-ECONOMIC COOPERATION, PRAISE JOINT ENERGY PROJECTS - KREMLIN
Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan have had a telephone conversation to discuss the current state and prospects of continued development of mutually beneficial trade and economic cooperation between the two countries, the Kremlin press service said.
"They positively assessed the implementation of joint strategic projects, primarily those in the energy sector," it said.
*** KIM JONG UN'S ATTENDANCE OF EASTERN ECONOMIC FORUM YET TO BE CONFIRMED - PESKOV
North Korean leader Kim Jong Un's attendance of the Eastern Economic Forum has yet to be confirmed, Kremlin spokesman Dmitry Peskov told the press on Friday.
Reporters asked whether Kim was expected to visit the Eastern Economic Forum.
"There has been no confirmation so far," Peskov said.
*** NEW U.S. SANCTIONS BAD FOR RELATIONS WITH RUSSIA, DE-ESCALATION OF TENSION AROUND N. KOREA - RUSSIAN FOREIGN MINISTRY
The U.S.' request that sanctions be imposed on one individual and several legal entities, including a Russian bank, which has been filed with the UN Security Council Sanctions Committee on North Korea, will not help normalize Russia-U.S. relations or reduce the tensions surrounding North Korea, the Russian Foreign Ministry said in a statement on its website.
"The new sanctions planned by the United States not only fail to improve the atmosphere of Russia-U.S. relations but also contravene the logic of the de-escalation of tensions surrounding North Korea," the statement said.
*** RUSSIA BLOCKS U.S. PROPOSAL AT UNSC N. KOREA COMMITTEE TO IMPOSE SANCTIONS ON RUSSIAN AGROSOYUZ BANK
Russia has blocked a U.S. initiative at the United Nations Security Council's Sanctions Committee on North Korea to impose fresh sanctions on North Korea targeting one private individual and several legal entities, including Russia's Agrosoyuz Commercial Bank, the Russian Foreign Ministry said.
"Russia has blocked the United States' proposal at the UNSC [Sanctions] Committee on North Korea [established pursuant to Resolution] 1718 to introduce international sanctions against one private individual and several legal entities, including Russia's Agrosoyuz Commercial Bank, which is accused of allegedly being involved in illegal activities in violation of the existing sanctions regime imposed on this country [North Korea]," the ministry said on its website on Friday.
*** KHRUNICHEV CENTER NOT BANKRUPT, ROSCOSMOS EXPECTS GOVT TO HELP RESTRUCTURE DEBTS - ROGOZIN
Roscosmos has no plans to declare the Khrunichev Center bankrupt, the state space corporation's head Dmitry Rogozin told reporters.
"Its bankruptcy is out of the question. The president's fundamental stance is that production must be maintained and the Moscow plant's land must not be used to pay off its debts," Rogozin said.
Roscosmos is hopeful that the government will help restructure the enterprise's debts.
*** NEW ZVYOZDNY GORODOK TO OPEN ON SITE OF KHRUNICHEV CENTER IN MOSCOW - ROGOZIN
Roscosmos plans to continue production at the site of the Khrunichev State Research and Production Space Center, where an integrated engineering and design center will be built, Roscosmos head Dmitry Rogozin told reporters.
"We will have a big joint event with the Moscow government in September to consider the preservation of the premises of the Khrunichev Center's Moscow plant. This will be a new Zvyozdny Gorodok," Rogozin said.
*** OVER 235,900 SYRIAN REFUGEES HAVE COME HOME IN PAST 3 YEARS - RUSSIAN DEFENSE MINISTRY
The Syrian administration has done much to facilitate refugees' return from abroad, the Russian Defense Ministry said in a statement.
"Since September 30, 2015, 235,979 Syrian citizens have returned home from abroad," including 70,700 women and 120,100 children, the Center for the Reception, Allocation, and Accommodation of Refugees said on the ministry's website on Friday.
"A total of 6,972,711 Syrian refugees, including 2,091,813 women and 3,556,082 children, have been registered in 45 [foreign] states," the center also said.
*** SENTSOV TELLS ACTIVISTS VISITING HIM DOESN'T CONSIDER HIMSELF SICK, REFUSES TO BE PLACED IN CIVILIAN HOSPITAL - FEDERAL PENITENTIARY SERVICE
Ukrainian filmmaker Oleh Sentsov, who has been on a hunger strike at a penitentiary in the Yamal-Nenets autonomous district since mid-May, has told public activists who visited him at the penitentiary that he did not need a transfer to a civilian hospital and did not consider himself sick, the regional office of the Russian Federal Penitentiary Service said in a statement seen by Interfax on Friday.
"Members of the Public Monitoring Commission visited the medical ward of the correctional facility, where they met and talked with Sentsov," the statement says.
*** EX-INTER RAO EXECUTIVE TSURKAN TO STAY IN CUSTODY UNTIL NOV 14
Moscow's Lefortovsky District Court has extended the arrest of Karina Tsurkan, a former Inter RAO executive accused of espionage, until November 14, an Interfax correspondent reported.
"The court has ruled to extend Tsurkan's term in custody until November 14," Judge Anna Antipova said.
The court heard a Federal Security Service investigator's request to prolong Tsurkan's arrest behind closed doors because the case files contain material that constitutes a state secret.
*** POLICE CHECKING LEADER OF JEWISH MOVEMENT IN RUSSIA FOR EXTREMISM - LAWYER
Moscow police officials have visited the office of the Moscow Jewish religious community for a search as part of an inquiry in relation to Alexander Kargin, the leader of the Jewish movement Shahar and representative of the Israeli ruling party Likud in Russia, Kargin's lawyer said.
"Officials from the Anti-Extremism Center of the Interior Ministry department for the Central Administrative District in Moscow came to the office today. During a search, they discovered nationalistic literature not belonging to Kargin but obviously planted in the office," lawyer Igor Zuber told Interfax on Friday.
*** BELARUSIAN INVESTIGATIVE COMMITTEE RELEASES BELAPAN EDITOR-IN-CHIEF LEVSHINA, LAST DETAINEE IN 'BELTA CASE'
The Belarusian Investigative Committee has released the editor-in-chief of the news agency BelaPAN, Irina Levshina.
"Ira has finally been freed," her colleagues told Interfax.
Levshina was the last person detained as part of the "BelTA case."
*** POROSHENKO CALLS NORD STREAM 2 KREMLIN'S 'TROJAN HORSE'
Ukrainian President Petro Poroshenko has urged European countries to stand up for their energy security and not follow Russia's lead in the Nord Stream 2 project.
"Nord Stream 2 is a 'Trojan horse' of the Kremlin against European energy and, ultimately, geopolitical security. The refusal to implement the project within the framework of the Third Energy Package of the EU and deliberate failure of Gazprom to implement the decisions of the Stockholm Arbitration on cases with Ukraine - these are clear and unambiguous signals about the true motives of the gas pipeline and its potential catastrophic consequences for the European Union," Poroshenko wrote on Facebook on Friday.
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