Russia to nationalize assets of Japanese carmaker – trade ministry
Samizdat | October 11, 2022
Japanese carmaker Nissan will sell all its Russian assets to state-owned research and development firm NAMI, the trade ministry has said.
The deal, worth a symbolic sum of €1, was approved by the Japanese corporation and includes a plant in St. Petersburg and sales and marketing facilities in Moscow.
“We have managed to reach a formant where the enterprise remains operational. Key competencies, the production cycle and jobs are preserved,” Russia’s Trade Minister Denis Manturov said in a statement on Tuesday.
Nissan has some 2,000 employees in Russia and after the transfer is completed NAMI will be able to attract other companies as production partners to create joint ventures.
According to the minister, Russian carmaker AVTOVAZ will carry out maintenance services for Nissan vehicles, as well as supply spare parts. The deal will give Nissan the right to buy back the business within six years, the trade ministry said.
The scheme is almost identical to the withdrawal of Renault, a member of an alliance with Nissan. In May, the French carmaker’s 68% stake went to NAMI and its factory in Moscow, which produced cars under the Renault and Nissan brands, was transferred to the city government.
Meanwhile, Nissan reported on Tuesday an estimated loss of $686.2 million from leaving the Russian market.
In 2009 the manufacturer started producing SUV models such as the X-Trail and the Qashqai at its plant in St. Petersburg. The Japanese carmaker suspended production there in March due to supply-chain disruptions, following the conflict in Ukraine.
Moscow aims to ensure balanced global energy market

Samizdat | October 11, 2022
Russia’s actions regarding energy resources are aimed at ensuring market stability, and not creating obstacles for anyone, President Vladimir Putin said on Tuesday while meeting with his UAE counterpart, Mohammed bin Zayed Al Nahyan, in St. Petersburg.
The leader of the UAE is on an official visit to Russia to discuss cooperation between the two countries, as well as regional and international issues.
“We are actively working within the framework of OPEC+. I know your position, our actions, our decisions are not directed against anyone … They are aimed at stability in the world energy markets, so that both consumers of energy resources and those involved in their production, as well as suppliers feel calm, stable and confident. So that the supply and demand will be balanced,” Putin said.
Last week, the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to an oil production cut of 2 million barrels per day starting in November. The reduction, which is the largest output cut since early 2020, was approved despite US pressure to pump more. It is expected to stem the latest slide in global oil prices.
US President Joe Biden expressed disappointment with the decision, and Treasury Secretary Janet Yellen called the move “unhelpful and unwise.”
Russian Deputy Prime Minister Aleksandr Novak, who attended the OPEC+ meeting, said that the output cut is necessary to balance the market before the seasonal decline in demand.
According to Kremlin spokesman Dmitry Peskov, Washington seeks to force through its decisions regarding the oil market and manipulate prices, even at the cost of destabilizing the global energy market.
Analysts interviewed by Bloomberg warn that the output cut may lead to a jump in oil prices above $100 a barrel and force the US to tap its strategic reserves. They also believe that Russia may introduce even larger output cuts than those announced by OPEC+ in response to the introduction of an oil price cap by the EU last week. Given the rise in oil prices, Russia’s oil export profits are unlikely to suffer even with production cuts, they say.
Qatari and US gas won’t save Europe
By Vladimir Danilov – New Eastern Outlook – 11.10.2022
Experts estimate that in order to avoid a catastrophic fall in GDP and the risk of a prolonged economic depression, the total public spending by European countries to mitigate the energy collapse unleashed by Washington will have to exceed €1 trillion! A crisis of this magnitude would result in more bankruptcies and a domino effect in the finance sector, the scaling back of investment programs by businesses and a drop in consumer demand. The main negative effect will be that a number of the most energy-intensive industries will become uncompetitive due to gas shortages and rising energy costs. Depending on what scenario will unfold, such industries would be forced to reduce production by up to 60% compared to 2021. In turn, the shutdown would result in job cuts that could affect upwards of 1.5 million people.
Under these circumstances, objective No. 1 for Europe is to make its way out of the energy crisis as quickly as possible along with finding gas suppliers to the EU market that are not affected by the anti-Russian sanctions imposed by the Europeans themselves.
Under pressure from Washington, Europe has ditched cheap and guaranteed pipeline gas supplied via Nord Streams 1 and 2. It even acquiesced to the terrorist attack by the US and its accomplices to undermine the two pipelines in the Baltic Sea. Under these circumstances, the EU has been forced to turn its attention to global LNG suppliers in the hope of improving its disastrous energy supply situation by increasing cooperation with them.
Qatar is famously the world’s leading LNG market now, accounting for 26.5% of all shipments. Australia is in second place with 26%, while the US (14.7%) and Russia (10%) are in third and fourth place, respectively.
However, the US, despite its pompous declaration when initiating the gas war with Russia that it would provide Europe with gas, after the Europeans did expel Russia from their market, has already declared that it in fact cannot provide the EU with gas. US shale investors have admitted that the amount of production they have so far is all they can hope for. Therefore, as The Financial Times reported, US shale oil and gas producers have already warned that they will not be able to increase production to help Europe deal with the energy crisis this winter.
As for Qatar, this small state in the Middle East prefers to trade gas with Asia rather than with Europe for a number of reasons. First, because there is a smaller shipment distance. And second, the Qatari leadership is highly sensitive to political demands from the EU regarding energy exporters. In addition, it is also important that China, the main consumer of Qatari gas, pays a premium for every 1,000 cubic meters of LNG.
Against this background, as well as the imposition of sanctions against Russia and a significant reduction in Russian fuel supplies, the cost of gas in Europe continues to rise at a galloping rate. To do something about the rise, the EU has made the utopian decision of reducing gas consumption by 15% from August 1, 2022 to the end of March 2023, even though many Europeans refuse to do so. In addition, the European Commission head Ursula von der Leyen, who is far removed, among other things, from the economic laws in force in the world, has announced that the EU will consider introducing a ceiling price for imported Russian gas amid the energy crisis. However, as might be expected, so far the EU member states have not been able to agree on this measure, which runs counter to any supplier of goods, and indeed to WTO rules.
Under these circumstances, European leaders doubled down on their attempts to, at least on the individual country level, reach an agreement with Qatar on additional gas supplies. For this reason, a number of European politicians of various ranks have already paid repeated visits to Qatar over the past six months.
The US has become involved in persuading Qatar to supply more gas to Europe, including at the expense of its commitments to provide gas to Asia. According to “Washington’s strategists,” it is not difficult for the US to put pressure on Qatar, considering that the largest US military base in the entire Middle East is stationed in that country. This means there is no need to smuggle in, similar to the terrorist attacks against North Streams 1 and 2, appropriate “saboteurs,” explosives, organize the operation, etc. Furthermore, it was with the aim of fully tying Qatar to the US that, during the visit of the Emir of Qatar Tamim bin Hamad Al Thani to the White House in early February this year, US President Joe Biden called Qatar a “major non-NATO ally” and the Emir a “good friend and a reliable and capable partner.” In addition, the US leader promised that Qatar would soon be assigned a “major non-NATO ally” status.
Right now Qatar sells about 5-10 million tons of LNG to Europe. Over the next 5 to 10 years, as Saad al-Kaabi, Qatari Minister of Energy, promised at the Energy intelligence forum conference in London, 12-15 million tons of Qatari natural gas will flow steadily into Europe if the situation remains as it is and if European countries continue to struggle with other sources of energy. For its part, however, Qatar is demanding that the EU sign a long-term contract for LNG supplies, which Doha was encouraged to do by a recent 15-year agreement Germany signed on LNG supplies from the US. Doha is also being persuaded by Europe’s plans to find an alternative to gas from Russia, in which Qatar, with its plans to invest tens of billions of dollars in boosting production over the next five years, could be a key part of the solution. At the same time, Qatar imposes rather stringent conditions, giving buyers little scope to divert supplies, unlike contracts with the US. However, EU leaders have been demanding shorter contracts, demagogically explaining their position by the desire to reduce pollution, which has already brought negotiations on import deadlines to a standstill since March. And as for the EU’s “drive to reduce pollution,” this demagogy by European leaders is nothing short of hilarious, given that more and more EU countries are actively switching to coal.
In a bid to reach a gas deal with Europe, the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, came to the Czech Republic on October 5 at an official invitation from President Miloš Zeman. This meeting with the Emir of Qatar was important for the Czech and European authorities at large, as the EU hoped that, if the negotiations turned out to be successful, they could establish alternative routes for gas supplies amid the energy crisis. Alternative to Russia, that is. In this regard, the Qatari leader was also scheduled to speak at an informal meeting with EU member state leaders on October 7, and the visit itself was to last several days. However, the meeting turned into a major scandal: on October 5 the sheikh only had time to meet with Miloš Zeman immediately after his arrival in the country and Prime Minister Petr Fialla, before his plane left Prague. As Czech diplomatic sources explained, “the Qatari side has put forward demands that the Czech side cannot meet.”
To further clarify the situation, it should be recalled that Qatar’s geographical location gives it leeway in terms of gas supply channels. Today, up to 68% of Qatar’s LNG production is destined for Asia and 27% for Europe. Europe consumes about 450 billion cubic meters of gas a year, and Russia used to supply about half that volume. Therefore, the US proposal of 15 billion cubic meters of LNG (at higher prices than pipeline Russian gas) as an alternative to Russian gas, made back when starting the gas war in the European market, can only be regarded as a mockery and as a clear non-competitive struggle for the European gas market. Thus, it was already back then clear to everyone, except for some EU leaders like Ursula von der Leyen, Charles Michel and Josep Borrell who are explicitly subsidized by the US, that the US was firmly putting the EU on the line by forcing it to give up Russian gas altogether.
It is also no secret that Russia has been supplying LNG by tankers to the very Klaipeda, Lithuania, which claims it is receiving Qatari gas. In reality, however, Russia and Qatar have a very simple agreement – Russia supplies LNG from Yamal to Lithuania and it is considered Qatari, while Qatar supplies its LNG to China and it is considered Russian. The scheme benefits Qatar because it saves on transport costs and, in these circumstances, Doha will not abandon it for the “noble idea” of saving Europe.
Furthermore, it should not be forgotten that the average volume of standard gas carriers used to transport liquefied gas over long distances is 145,000 cubic meters. From this volume of LNG, 90 million cubic meters of gas are produced after regasification. Each shipping voyage lasts up to 14 days. However, one gas carrier can only make one voyage per month, and the transport itself costs several hundred thousand dollars, which includes fuel, crew salaries and the ship’s rent.
The US does not have that many specialized tankers in principle to at least compensate the EU for Nord Stream 2. Therefore, the people of Europe need to seriously investigate this shady deal by the US to initiate an energy crisis in Europe, namely who was the executor of these blatantly anti-European plans of Washington and how much personal profit have they made from the poverty and misery of ordinary Europeans.
Ukraine halts electricity exports to EU
Samizdat | October 11, 2022
Damage to energy infrastructure caused by Moscow’s air strikes has forced Ukraine’s government to cut off electricity exports to the European Union, taking away a supply source that Kiev claims helped its partners reduce their reliance on power generated with Russian natural gas.
“Today’s missile strikes, which hit the thermal generation and electrical substations, forced Ukraine to suspend electricity exports from October 11, 2022, to stabilize its own energy system,” the Ukrainian energy ministry said on Monday in a statement.
The ministry noted that even after losing control of the Zaporozhye nuclear power plant to Russian forces in March, Kiev had been able to meet its export commitments to European partners, but Monday’s attacks were the largest of the entire conflict. “The cynicism is that the entire supply chain has been hit,” Energy Minister German Galushchenko said. “It’s both electricity distribution systems and generation. The enemy’s goal is to make it difficult to reconnect electricity supplies from other sources.”
Russian President Vladimir Putin said Monday’s air strikes on Kiev and other major Ukrainian cities – targeting military, energy and communications infrastructure – came in response to Ukraine’s attack on the strategic Crimean Bridge on Saturday.
“If there are further attempts to conduct terrorist attacks on our soil, Russia will respond firmly and on a scale corresponding to the threats created against Russia,” Putin announced.
Galushchenko, however, accused Moscow of waging “energy terror” in retaliation for Kiev helping other countries reduce their dependence on Russia. After joining European energy system ENTSO-E back in June, Kiev said it expected to earn some €1.5 billion from electricity exports to the EU by the end of the year.
“That is why Russia is destroying our energy system, killing the very possibility of exporting electricity from Ukraine,” the energy minister claimed.
Ukrenergo, the national power grid operator, claimed its specialists have been “engaging backup supply schemes” and repaired some of the damage by Monday night.
In the meantime the ministry urged “all citizens of Ukraine to unite” and minimize their energy use during the peak demand hours, arguing that not only Ukraine is implementing measures to reduce power consumption, but the “whole of Europe is doing this now.”
Kenya, Tanzania to Fast-Track Dar es Salaam-Mombasa Gas Pipeline in Bid to Cut Fuel Costs
By Fantine Gardinier – Samizdat – 10.10.2022
During a visit to the Tanzanian port city of Dar es Salaam on Monday, Kenyan President William Ruto and Tanzanian President Samia Suluhu agreed to fast-track construction of a new gas pipeline connecting the city to Mombasa, Kenya’s main port.
“We will now expedite the gas pipeline from Dar es Salaam to Mombasa and eventually to Nairobi so that we can use the resources that we have in our region to lower energy tariffs, both for industry, commercial and domestic purposes,” Ruto said, according to Kenyan online news portal Tuko.
“In the shortest time possible, we can access the gas resources that you have in your country to drive industrialization in our country. I am confident that as the ministers get down to work, they will provide a brief to you and me to fast-track the project,” he told Suluhu.
She and Ruto’s predecessor, Uhuru Kenyatta, signed a memorandum of understanding on the long-awaited pipeline last year, which would extend 373 miles and cost $1.1 billion.
Just days after Ruto took office last month, he was forced to slash fuel subsidies, thanks to an International Monetary Fund (IMF) bailout that included such neoliberal stipulations in its contract. By mid-October, the prices of several types of fuel are expected to increase sharply in Kenya, putting a dent in Ruto’s plans to improve the country’s economic life for millions of Kenyans.
Ruto’s visit, his fourth foreign trip since taking office but his first focused on bilateral deals, is aimed at further bolstering Kenya’s burgeoning trade with Tanzania, its southern neighbor and fellow former British colony.
“We want to double trade, which is doable,” he said. Kenya-Tanzania bilateral trade amounted to nearly $1 billion last year, according to The East African. Years ago, their rivalry led to mountains of trade barriers being imposed, but both countries have labored in recent years to slash them as competition has turned toward cooperation.
“In total, our experts identified 68 barriers which were reviewed and 54 non-tariff barriers were removed and now we want our cabinet secretaries to deal with the remaining 14 so as to ensure there is freewill to trade,” Suluhu said on Monday.
Last month, Suluhu also penned a deal with Mozambican President Felipe Nyusi to expand trade ties as well as defense cooperation, with both nations desiring to quell a cross-border insurgency and re-establish and expand trade.
Last year, Uganda, Tanzania, French-owned oil giant Total, and China National Offshore Oil Corporation (CNOOC) signed a series of deals to build a massive 900-mile-long gas pipeline from western Uganda’s oil fields to the Tanzanian port of Tanga. The East African Crude Oil Pipeline (EACOP) will pass along the southern edge of Lake Victoria, circumventing Kenya before crossing northern Tanzania. It is expected to begin pumping oil in 2025 and cost $10 billion.
In March, Tanzania also announced a massive new liquefied natural gas (LNG) project expected to draw $10 billion in investment. Rising energy costs thanks to a global inflation problem and Western sanctions on Russia, the world’s largest energy exporter, have created problems for nations like Kenya, that import much of their energy, but opportunities for nations like Tanzania, which export it or have untapped reserves.
UAE President to visit Russia for bilateral talks
The Cradle | October 10, 2022
The President of the United Arab Emirates, Sheikh Mohamed bin Zayed al-Nahyan, will visit Russia on 11 October to discuss a series of national and international topics with his Russian counterpart Vladimir Putin.
The bilateral talks were announced by the Russian Presidential Spokesman Dimitry Peskov on 10 October.
The visit comes less than a week after OPEC+ member and nonmember states decided to cut oil production output by 2 million barrels per day, defying the hopes and expectations of the Biden administration to curb rising energy prices.
White House Press Secretary Karine Jean-Pierre accused OPEC+ on 5 October of “aligning with Russia,” and claimed their decision “is shortsighted while the global economy is dealing with the continued negative impact of [Russia’s] invasion of Ukraine,” in reference to the crisis caused by western sanctions imposed on Russia’s energy sector and attacks on Russian energy infrastructure.
Jean-Pierre added that President Joe Biden is consulting with congress “on additional tools and authorities to reduce OPEC’s control over energy prices.”
In May of this year, the US Senate approved the No Oil Producing and Exporting Cartels (NOPEC) Act, which could open OPEC member states and their partners to antitrust lawsuits for “orchestrating supply cuts that raise global crude prices.”
The bipartisan legislation would modify US antitrust law to revoke the sovereign immunity that protects sovereign states from lawsuits. This, in turn, would give the US attorney general the ability to sue OPEC+ members like Saudi Arabia, the UAE, or Russia in federal court.
According to the New York Times, analysts have argued that Saudi Arabia is determined to bring the price back above the $90 benchmark.
However, the chief of Saudi Aramco’s operations, Amin Nasser, said that the move to lower output was a decision made based on the international energy markets and fears over a looming recession.
“Even if we decide we are going to increase investment, it is going to be difficult; it will take a number of years,” Nasser said as he warned that the world could experience a serious supply crisis in the energy sectors.
NetZero destroys NetZero: Europe can’t make solar panels because green electricity costs too much
By Jo Nova | October 9, 2022
Ironies don’t get better than this: Thanks to the renewable energy transition, Europe can’t afford to make renewable energy.
When will the message get through that renewable energy is not sustainable?
European photovoltaic plants and battery cell factors are temporarily closing or quitting altogether because of obscenely high electricity prices. When the plants were built they expected to pay €50/MWh, but now they are €300 – 400/MWh. And the situation may last another couple of years, so it’s hard to see how these manufacturers can avoid leaving permanently.
So much for all the solar jobs. Europeans are being reduced to being installers while the production of panels shifts to coal fired China because electricity is so much cheaper. Most of the wind turbine industry has already moved to China.
European solar PV manufacturing at risk from soaring power prices – Rystad
Jules Scully, PV Tech
Around 35GW of PV manufacturing projects in Europe are at risk of being mothballed as elevated power prices damage the continent’s efforts to build a solar supply chain, research from Rystad Energy suggests.
The consultancy noted that the energy-intensive nature of both solar PV and battery cell manufacturing processes is leading some operators to temporarily close or abandon production facilities as the cost of doing business escalates.
It’s not the only thing in jeopardy:
“Building a reliable domestic low-carbon supply chain is essential if the continent is going to stick to its goals, including the REPowerEU plan, but as things stand, that is in serious jeopardy,” [said Audun Martinsen, Rystad Energy’s head of energy service research].
Tell us what “affordable means:
The consultancy revealed that while power prices in Europe have retreated significantly since record highs in August, rates remain in the €300 – 400/MWh (US$297 – 396/MWh) range, many multiples above pre-energy crisis norms.
While Europeans have benefitted from reliable and affordable electricity, the research suggested that low-carbon manufacturers have based their build-up of production capacity on stable power prices of around €50/MWh.
And the country with the most fossil fuels wins:
The high costs of European PV manufacturing were revealed in a recent report from the International Energy Agency (IEA), which found China is the most cost-competitive location to manufacture all components of the solar PV supply chain, with costs in the country 35% lower than in Europe.
Eric Worrall | What’s Up With That? | October 9, 2022
… Shortly after the above was published, a French solar module plant was closed;
The obvious question, if renewables are so cheap, why don’t these plants relocate to a large plot of land, disconnect from the grid, and power their manufacturing facilities from their own low cost renewable energy products?
Seems an obvious solution – but for some reason renewable manufacturers seem to be choosing to shutter their plants, rather than switching to consuming their own product.
Is PayPal About to Go Bankrupt?
BY IZABELLA KAMINSKA | THE DAILY SCEPTIC | OCTOBER 9, 2022
With the stock prices of both Credit Suisse and Deutsche Bank under pressure, many in the financial field are becoming concerned the world could be facing a renewed financial crisis. But this time around events could play out very differently. It might not even be banks that pose the greatest financial risk to consumers. It could be payment providers like PayPal.
The really big difference between 2007 and 2022 is that bank runs no longer look like the image above, they look like this:

That’s what I was faced with when I tried to transfer £500 from my PayPal account to a regular bank account. On Sunday morning the same message was still occurring. A quick scan of social media proved I was not alone.
“Boycott PayPal” was also trending on Twitter.
So what might the error message indicate about the business?
Here’s what we know so far.
In the last 48 hours a sneaky amendment to PayPal’s acceptable use policy widely captured the public’s attention. Free speech advocates had spotted that customers agreeing to the update would be allowing a sum of $2,500 to be lifted from their accounts if PayPal ever found them guilty of “sending, posting, or publication of any messages, content, or materials” that “promote misinformation” or “present a risk to user safety or wellbeing”.
When word got out, those already concerned about the company’s draconian turn started shutting their accounts and urging others to do the same on social media.
For some, the action proved the final straw.
On Saturday evening U.K. time, PayPal’s former president David Marcus distanced himself very clearly from the action. Elon Musk, whose pathway to billionairehood started in 2000 when his company X.com was merged with Peter Thiel’s Confinity to create the PayPal of today, later tweeted that he agreed.

Readers of the Daily Sceptic and members of the Free Speech Union (such as myself) will already know that over the past few months PayPal has been on a whirlwind tour of shutting down the accounts of platforms and media sites it has deemed guilty of spreading misinformation. In many instances, those affected, such as the Daily Sceptic, were not even consulted ahead of the fact and had little idea of what specific text, post or media had violated PayPal terms.
So why exactly would PayPal descend to this level of reputational self-harm?
It’s hard to know for sure, but chances are the decision rests on pressures PayPal itself is facing with respect to its legal duty to enforce Know-Your-Customer (KYC) and Anti-Money Laundering (AML) rules. If I was to take an educated bet, it’s the counterterrorism section of the rulebook that is most relevant.
These days it’s hard to imagine that banks weren’t always responsible for screening transactions and making judgements about their legitimacy. But until the Financial Action Task Force (FATF) was formed in 1989 with a view to combatting money laundering, banks only really cared about screening credit risk. It wasn’t until 2001 and the 9/11 attacks on the Twin Towers (and the introduction of the Patriot Act) that the scope of banks’ responsibilities in this field was expanded to include combatting the financing of terrorism too.
Tackling terrorist financing and criminality was easy enough when everyone was on the same page about what constituted terrorism or financial crime. But one man’s freedom fighter is another man’s terrorist. And in an increasingly polarised world, it’s become harder for ordinary bank employees to differentiate free-speech critical of authority from radicalising terrorist content, such as that distributed by Isis on social media to recruit new members.
It wasn’t the job they were hired to do.
Three factors have muddied the waters further.
The first is the scale of penalties directed at banks found in breach of AML/KYC regulation. The fear of being slammed with fines has made banks and payment providers like PayPal hugely risk-averse and inclined to err on the side of caution when facing any ambiguity. If something even whiffs of misinformation, from their point of view it’s better to shut it down than to run the risk of getting a fine.
Second, is a lack of resources. Human arbitration is costly, and screening activities would be unaffordable if they were to be done by living, breathing individuals. This is why banks and payment providers like PayPal have invested huge sums of money in cost-saving screening technology to detect illegal transactions both actively and preemptively. The problem here is that most of these tools, known as suptech or regtech, are algorithmically applied with limited human oversight. That means it’s mostly artificial rather than human intelligence deciding who gets to stay on a platform and who gets frozen out. As yet, robots are not well known for their sense of nuance, empathy or capacity to process ambiguity. How they decide what they decide is a black-box interpretation of the inputs they’ve been programmed with.
The third issue is the structure of the KYC/AML policing system itself. Since the scale of the task is so enormous, it goes beyond the scope and capacity of any existing government agency. Knowing this, governments, very similar to how they managed the enforcement of lockdown policy, realised it would be more cost-efficient to outsource the policing of their own rules to the banks and payment companies directly. But this is a strategically coercive dynamic. If payment companies don’t fall in line, they risk having their licences removed and their businesses shut down. Non-compliance is therefore not an option. PayPal isn’t perfect, but the pressure it is facing is very similar to the pressure pubs, restaurants and supermarkets faced under Covid. The structural problem here, as with the retail sector during Covid, is those payment companies are not legislative specialists. They take for granted that the governments know what they are doing and that the rules they are setting are human rights compatible and in line with the laws of the land. Nor do the payment companies have the capacity to investigate the rights and wrongs of every case. This is a job for the legal system, which is already excessively costly to access for most ordinary individuals.
This in itself is a huge blind spot for the financial system. There’s a very strong case to be made that the way democratic governments have gone about enforcing AML legislation is not compatible with human rights at all. The enshrined right of habeas corpus might even be under threat. The FATF has itself belatedly realised this. Back in October 2021, it noted in a “stock-take on the unintended consequences of the FATF standards” that (my emphasis):
Situations have arisen in the course of FATF evaluations concerning the interaction between the FATF Recommendations on combating TF (particularly R.5 and R.6) and due process and procedural rights (e.g. to legal representation, fair trial, and to challenge designations, etc.), which have been considered on a case-by-case approach as they arise in specific country contexts. In addition, the FATF has also been made aware of instances of the misapplication of the FATF Standards, which are allegedly introduced by jurisdictions to address AML/CFT deficiencies identified through the FATF’s mutual evaluation or ICRG process, potentially as an excuse measures with another motivation. This information often comes as a result of stakeholder input or when the attention of the FATF or its members is drawn to a particular issue, such as when another international body is reviewing legislation or actions are taken by national authorities. Analysis in the stocktake has therefore focused on the due process and procedural rights issues most often arising in evaluations or feedback.
The stock-take identified the following factors as key examples of where misapplication of FATF standards had affected due process and procedural rights:
- excessively broad or vague offences in legal counterterrorism financing frameworks, which can lead to wrongful application of preventative and disruptive measures including sanctions that are not proportionate;
- issues relevant to investigation and prosecution of TF and ML offences, such as the presumption of innocence and a person’s right to effective protection by the courts;
- and, incorrect implementation of UNSCRs and FATF Standards on due process and procedural issues for asset freezing, including rights to review, to challenge designations, and to basic expenses.
Readers can hopefully see the issue.
The entire regulatory system since 2008 has focused on ensuring that the 24-hour payment banking infrastructure we have become used to will never face the risk of going down again.
Put bluntly, the style of service disruption currently being experienced at PayPal is something major banking and payment institutions are not supposed to be able to get away with. At least not for long. So yes, it does feel like a big deal.
For the most part, the practice of shuttering access through website maintenance, downtime or error messages is more commonly seen at cryptocurrency platforms during extreme bitcoin selloffs. Closing access to people’s accounts or pretending to do website maintenance often gives operators the time to raise the liquidity they need by slowing redemptions. But it’s far from a transparent or honourable policy.
For PayPal to have triggered a run on itself because it was merely following government orders is not just unfortunate, it is careless. But it also speaks of a deeper problem at the heart of the anti-money laundering regulatory structure. The entire system we have created may no longer be fit for purpose. Consider, for example, that despite many billions of dollars spent on FATF compliance, a company like Wirecard, whose business model in retrospect looks to have been based on fraud as a service (FAAS), could so easily rise to the top of the German stock market. Nor has any of the regulation been successful at combatting the type of electronic financial fraud (mostly based on phishing attacks or social engineering) that impacts users every day.
We need to seriously ask if the benefits outweigh the collateral damage also being incurred.
But while PayPal might not be entirely responsible for its own actions on the KYC/AML front, its business model may be more vulnerable to this sort of fallout than most people appreciate. The culpability for that lies with PayPal exclusively.
A key revenue generator for the group has always been the interest revenue it absorbs from all the customer balances it holds. (You may not have realised it, but if you have any significant sums in a PayPal account, you won’t be collecting interest on them.) A large outflow of deposits could easily inhibit the company’s ability to raise this income and harm its overall revenue-generating capability. (You don’t have to hold balances at PayPal to use it.)
More critical for PayPal at this juncture will be its inability as a payments company to access the central bank lender-of-last-resort backstop. That means if the group is genuinely facing challenges meeting transfer and redemption requests, it will only be able to turn to wholesale liquidity markets to make up the difference. The degree to which customer balances are locked up in harder-to-liquidate securities or bonds will largely determine its success here. Frustratingly for PayPal, in the current illiquid bond market, there’s a good chance that selling these quickly and without a loss could be challenging. The alternative path for PayPal will be to use these securities as collateral for temporary loans. But the expense here is potentially open-ended if there are no obliging counterparts. That may (or may not) be why the company is currently restricting transfers.
Before rushing to conclusions, it’s important to stress the company still has recourse to liquidity from fully-funded (in fact over-collateralised) entities. We may not know the makeup of that liquidity, but solvency is unlikely to be an issue over the longer term. The biggest problem facing users today will be uncertainty over how quickly they can transfer funds out of the PayPal ecosystem.
What I can say is that in the modern digital age, bank runs will be different. We may even long for the days when tellers transparently shut up shop when the vaults ran dry. At least it was clear what was going on. These days, on the other hand, it will become ever harder to differentiate a bank run from a maintenance issue on a website. Such matters will be shrouded in plausible deniability and uncertainty. Suffice it to say, corporate communication departments will always err towards disinformation of their own sort, that any such outage is nothing out of the ordinary.
Even more concerning is that in the event of a run, customers will no longer be able to tell if those with better connections aren’t unfairly cutting ahead of them in the redemption queue. Virtual queues may seem technologically efficient, but there’s no transparency to them at all.
That’s why if you’re caught out by any of these policies you already don’t stand a chance of getting your account back unless you have existing connections to the management or a platform of your own. None of this is progressive or encouraging.
Izabella Kaminska is the Editor of the Blind Spot, a financial news media service focused on the news everyone else is missing.
PayPal was not contacted for this piece, which is based on the opinions of the author.
Germany’s Green Party In Dire Straits
From most loved, to most hated… audiences are drowning out Green Party speakers at campaign rallies.
By P Gosselin – No Tricks Zone – October 8, 2022
The German Greens, who are partners with the SPD socialists in Germany’s government, are sinking dramatically in the public opinion polls as it becomes clear Green Party leader and Economics Minister Robert Habeck is driving the country’s economy into the ground at a dizzying speed.
Habeck, who currently also serves as Vice Chancellor, recently stunned millions of TV viewers when he appeared not to understand what bankruptcy is. Now as tomorrow’s state elections approach in Lower Saxony, the Green Party officials are scrambling to keep Habeck from doing more damage.
Blackout News reports that the Greens are “hiding” Habeck from the public in order to control the damage, and so far he has “had only one campaign appearance”. For that one particular appearance, “the audience had to stay outside, for security reasons” and “exclusively to selected members of his party.”
“In the polls, Robert Habeck has already experienced a significant plunge in the popularity of German politicians in recent days. So it’s no wonder that the Greens are literally hiding their once most popular politician ahead of the election in Lower Saxony,” reports Blackout News.
Desperate to find new sources of energy now that the Russian supply of natural gas has been halted, Habeck has angered his party base by extending the operating life for two nuclear power plants and putting lignite-fired power plants back on line.
In Göttingen, Habeck spoke at an election rally, but only in only in front of hand-picked audience after the police had completely sealed off the event.
Just a day earlier his party comrade Annalena Baerbock was “drowned out” by demonstrators. “Already at the beginning of her speech there was a deafening concert of whistles so that Baerbock could hardly be understood,” reports Blackout News. “In addition, there were shouts such as: ‘Baerbock must go’, ‘war-mongers’, ‘get lost’ and ‘impoverishment and war thanks to the Greens’, and ‘whoever votes Green, votes for war’.”
The mainstream media however, did not report on this.
Once the darlings of politics, the German Greens have seen their popularity plummet spectacularly over the recent weeks as Germany’s economy crashes due to excruciating energy shortages and price inflation.
“Therefore, on October 3, the Minister of Economics spoke only to a few dozen hand-picked party members and a few selected journalists,” according to Blackout News.
Will Lebanon and Israel go to war over the maritime border dispute?
By Robert Inlakesh | Samizdat | October 8, 2022
Israel has announced its readiness for war with Lebanon, as the ongoing US-mediated maritime border demarcation talks head towards a dead end. The issue, however, is not just causing dispute between Beirut and Tel Aviv, but also becoming more prevalent within Israeli politics as it heads into another round of general elections.
On Thursday, Israeli Prime Minister Yair Lapid rejected Lebanese amendments to a US-proposed maritime border demarcation agreement. The previous day, Israeli officials had reportedly been briefed on the deal, which was the cause of much optimism, with an unnamed source telling Axios news that Lapid “made it clear that Israel will not compromise on its security and economic interests, even if that means that there will be no agreement soon.”
Later on Wednesday, Israeli Defense Minister Benny Gantz ordered the military establishment to prepare for an armed confrontation with Lebanon. A four-hour cabinet meeting, which was said to have been attended by major Israeli security establishment figures, was then concluded with a public announcement that the prime minister and defense minister had been granted permission to strike Lebanon without further cabinet approval.
Why are Lebanon and Israel on the verge of war?
In early June, a ship owned by the gas company Energean arrived at the resource-rich Karish field in the Eastern Mediterranean to begin preparations for natural gas production for Israel. Lebanese President Michel Aoun condemned the arrival, warning Tel Aviv against taking any further “aggressive action.” The Karish field, as well as the nearby Qana field, have for years been central to on-off US-mediated negotiations between Lebanon and Israel. The two nations have still not come to any agreement on the demarcation of their maritime borders, with Beirut seeing Karish and Qana as vital to reviving its collapsing economy.
While Lebanon maintains, due to legal arguments put forth in previous negotiations, that the entire area is to be considered ‘disputed waters,’ Israel has maintained that all of the Karish field and the majority of the Qana field are within its own ‘Exclusive Economic Zone’. The Lebanese political and military party Hezbollah, which claims to have 100,000 battle-ready troops at its disposal, then weighed in on the debate, vowing to protect Lebanon’s rights to its oil and gas.
Secretary General of Lebanese Hezbollah Seyyed Hassan Nasrallah declared that if no maritime border deal were reached and Lebanon is not able to secure its rights, then military action will be taken. Nasrallah vowed that the new reality would be “If we can’t have our resources, nobody can.” Hezbollah’s red line is Israeli extraction from the Karish field before any agreement is signed – if this happens, the group has threatened to strike not only Tel Aviv’s infrastructure at site, but every other Israeli oil and gas facility in the Mediterranean.
Israel has since responded with threats of its own, which have ranged from a vow to eliminate the entire densely populated Beirut suburb that serves as Hezbollah’s stronghold, to Benny Gantz’s recent warning that the whole of Lebanon would “pay a heavy price” for any military action by Hezbollah. Now that the negotiations have reached a “make or break” point, there are significant fears that military action will be taken, either by Israel or Hezbollah.
Empty threats?
The most recent threats issued by the military and political leadership in Tel Aviv have caused panic among Israelis living near the Lebanese border. However, there is a significant possibility that the rhetoric is aimed at a domestic audience. Israel will enter into a new round of national elections in November and the demarcation of maritime borders has recently been weaponized against the current Israeli leadership, causing ministers to act in order to save face.
Israeli opposition leader and former long-time prime minister Benjamin Netanyahu began to lash out at interim-PM Yair Lapid back in September, releasing a video in which he claimed that Lapid had “totally folded in the face of Nasrallah’s threats” and that Hezbollah had forced him to delay extraction from the Karish field. Netanyahu has continued to heavily criticize his political opponents’ handling of the demarcation-line issue, with similar claims that Israel is backing down over the threats issued by Lebanese Hezbollah.
Netanyahu’s words ring true in that Lapid has clearly been forced to take the issue of demarcation of maritime borders very seriously and has conceded on positions held by Tel Aviv in the past. In addition to this, the extraction of gas from the Karish field has also been delayed, as Energean, which owns the rights to extract from the site, was initially prepared to begin operations in late September and has so far refrained from doing so. However, had Netanyahu remained as PM, he would hardly have had any other choice but to do the same.
The threats made by Hezbollah are very serious, and the group apparently has the capacity to follow through with them and destroy all of Israel’s oil and gas facilities. At this time, however, the Israeli far-right camp headed by Netanyahu is blaming the situation on Lapid’s weak governance, saying he is prepared to give away territory that belongs to Israel. For this reason, it is likely that Yair Lapid will attempt to delay extraction of gas from the Karish field in order to sideline the issue until after the elections.
The necessity of a deal for Lebanon
Lebanon sees the Karish and Qana issue as integral to its survival. Some UN experts put the percentage of Lebanese living in poverty at around 80%, while the country endures round-the-clock blackouts, a rising crime rate, and civil instability. Some people have even been spotted searching for food in garbage bins, as well as fighting over loaves of bread at bakeries. Getting its hands on a possible multi-billion-dollar oil and gas field is a matter of life or death for Beirut – but not for Tel Aviv, which enjoys far more economic stability.
The US mediator in the Lebanon-Israel talks, Amos Hochstein, gave an interview to the American owned al-Hurra TV in June, laughing when asked about the prospect of trading the Karish field for Qana. Months later, after Hezbollah upped its threats and the group’s leader, Nasrallah, stated that the Lebanese people would not be laughed at, this issue has become a rather grave one. The US, which has a clear pro-Israeli bias, is now being forced to take the talks much more seriously.
Earlier this year, as the European Union looked for alternative gas suppliers, a deal was inked between Tel Aviv and Brussels, under which Israel would send gas through pipelines to Europe via Egypt. This has encouraged Tel Aviv to announce its plans to double its gas output, and the Karish field is key to achieving this.
The Qana field, however, has not yet been explored and will take time to develop. Despite this, one of the key reasons for Israel’s rejection of the Lebanese proposal is that Beirut refuses to pay Tel Aviv royalties for the gas it would extract from the Qana field should it be handed to Lebanon. Beirut cannot commit itself to such an agreement, because this would mean normalizing ties with the Tel Aviv regime, which still occupies Shebaa farms – an area that Lebanon claims as its rightful territory.
Whether war happens will now boil down to whether bickering between Israeli political parties and individual officials will cause Tel Aviv to adopt a belligerent approach and push forward with gas production in the disputed fields before an agreement is reached. If it does, there can be little doubt that Hezbollah will open fire if its red line is crossed. Israel’s stake in the matter is additional energy revenues, while for Lebanon it is potentially a matter of life or death. Neither side wants war, but one has much to gain and the other has everything to lose.
Robert Inlakesh is a political analyst, journalist and documentary filmmaker currently based in London, UK. He has reported from and lived in the Palestinian territories and currently works with Quds News.
Saudi minister blames Washington for soaring fuel prices in the US
The Cradle | October 8, 2022
Saudi Arabia’s Minister of State, Adel al-Jubeir, rejected claims that the kingdom is behind soaring gas prices in the US, citing instead insufficient refinery production and asserting that the Gulf country does not politicize oil.
“With due respect, the reason you have high prices in the United States is because you have a refining shortage that has been in existence for more than 20 years… You haven’t built refineries in decades,” Jubeir said during an interview on Fox News on 7 October.
“Oil is not a weapon… It’s not a fighter plane. It’s not a tank. You can’t shoot it. You can’t do anything with it. We look at oil as a commodity and we look at oil as important to the global economy in which we have a huge stake. The idea that Saudi Arabia would do this to harm the U.S. or to be in any way politically involved is absolutely not correct at all,” the Saudi official added.
The minister made the claim that the issue on oil production has “been taken out of context by perhaps commentators and analysts,” while assuring that Riyadh is “committed to ensuring stability in the oil markets to the benefit of consumers and producers.”
Following the decision by OPEC+ to cut production output levels by two million barrels per day (bpd), Washington fired back strongly at it’s Gulf partners, with White House Press Secretary Karine Jean-Pierre accusing them on 5 October of “aligning with Russia.”
For weeks before the cut, the US had been lobbying OPEC+ and pressuring it against making the decision, sources told media, as US officials “tried to position the situation as ‘us versus Russia.’”
Saudi officials reportedly told their US counterparts that Washington should boost its own production if it wanted more oil on the market.
Tensions have escalated further between Saudi Arabia and the US in the wake of the production cut, with Secretary of State Antony Blinken saying on 6 October that Washington is reviewing various options regarding its relationship with the kingdom.



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