MOSCOW. Feb 19 (Interfax) - The following is a digest of Moscow newspapers published on February 19. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Almost three months after Russian and Ukrainian military vessels clashed off the coast of Crimea, the European Union is ready to expand sanctions against Russia. But Monday's meeting of EU foreign ministers showed the new measures will be relatively modest. Instead of imposing additional economic sanctions, they decided to expand the list of Russian citizens barred from entering the EU. Their names should be announced in coming days (Kommersant, p. 1).
The moratorium on government purchases of foreign furniture that Russia imposed in 2017 has not justified the hopes of Russian suppliers. They are lobbying to expand the ban to purchases by state companies and monopolies. Market players hope for additional revenues of 100 billion rubles over three years. But the Antimonopoly Service is opposed, fearing this could lead to higher prices and lower quality furniture (Kommersant, p. 1).
Protectionist measures imposed against Russian goods, including sanctions, cost the country $6.3 billion in 2018, the economy ministry reported. A total of 159 restrictions against goods made in Russia imposed by 62 countries were in place at the end of 2018, including 25 EU measures that cost Russia $2.4 billion and 22 Ukrainian measures that cost $1.2 billion. The metals industry and agriculture were hardest hit, suffering $4 billion and $1 billion in losses, respectively (Vedomosti, p. 4).
Russian environmental watchdog Rosprirodnadzor is proposing to dramatically increase fines for environmental violations for large enterprises and for high-risk facilities. It argues that current fines do not serve as any deterrent for large companies. Sources agree that now even major companies pay just a few million rubles in fines per year, which is just a tiny fraction of their revenue (Kommersant, p. 7).
OIL & GAS
Lukoil is close to signing a contract with KazMunaiGas on the development of the little-explored Zhenis block in Kazakhstan's sector of the Caspian Sea. The Russian company is prepared to invest $350 million in exploring the offshore block and be compensated with oil if a discovery is made. Experts reckon production could be profitable even with a small discovery, given a low tax burden (Kommersant, p. 9).
BANKING, FINANCE & INSURANCE
The Central Bank of Russia has asked the participants of its express payment system, which will enable individuals to instantly transfer money to one another by mobile phone number independently of the banks where they have accounts, not to charge a commission for the initial period of its operation. Banks will be able to use the system for free this year, but starting in 2020 the CBR intends to charge a commission of 1-6 rubles, depending on the amount transferred (Vedomosti, p. 1).
Vostochny Bank board member and shareholder Sherzod Yusupov, whose complaint to Russian police led to the arrest of Baring Vostok founder Michael Calvey on fraud charges, denied in his first comments on the case that there was a shareholder dispute at the bank as claimed by Calvey. The case concerns the transfer of a 59.9% stake in International Financial Technology Group to Vostochny by First Collection Bureau as compensation for a debt of 2.5 billion rubles (Vedomosti, p. 11).
REAL ESTATE & CONSTRUCTION
Russia's prime minister has ordered the authorities to decide by the end of March whether the country should build more concrete roads, which are more expensive to build but last at least two times longer than roads with asphalt pavement. There are now only about 1,300 km of federal roads with concrete pavement in Russia, just 3% of the total, though in the 1980s there were more than 10,000 km (Vedomosti, p. 4).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Russia's Communications Ministry is preparing an extensive program to modernize all 148,000 remaining public payphones in the country. They might be outfitted with equipment to notify the public of emergency situations. The funding might come from the universal services reserve to which telecom providers contribute, with spending cut for no longer popular public Internet access points (Kommersant, p. 1).
Russia's Communications Ministry has drafted four resolutions with rules for distributing subsidies for the development of cross-cutting technologies, such as blockchain, big data and AI. The government will provide 21 billion rubles in subsidies for this purpose in 2019 alone. IT Development Fund companies will get 5 billion rubles, and 5 billion rubles will be spent on pilot projects of the most developed technologies in priority sectors such as healthcare (Vedomosti, p. 11).
AUTOMOTIVE & ENGINEERING
The biggest government order for civilian helicopters in Russia, for 150 aircraft worth almost 40 billion rubles, has run into financing problems. Russian Helicopters delivered the first eight helicopters to the National Air Medical Service on February 8, but it has not been paid yet, sources said. The financing arrangement for the contract is now being discussed. Delivery of all 150 helicopters is supposed to be completed in 2021 (Vedomosti, p. 10).
Russia will complete construction of a factory to manufacture Kalashnikov assault rifles in Venezuela by the end of 2019, the head of state company Rostec said. A similar plant will open in India in a few months, and an agreement will be signed soon on joint production of Kalashnikov rifles in Saudi Arabia (Kommersant, p. 3).
Russian state company Rostec estimates that United Aircraft Corporation, which it took over late last year, needs at least 250 billion rubles of investment. The money is needed foremost to get the medium-haul MC-21 airliner and short-haul SSJ75 to serial production. Rostec hopes to raise the funds from the government and private investors, but this will not be easy (Kommersant, p. 9).
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