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Lavrov Calls US Sanctions on Iran ‘Illegitimate’, Slams Pressure on SWIFT

Sputnik – 06.11.2018

Washington implemented tough unilateral sanctions against the Islamic Republic on Monday following President Trump’s withdrawal from the Iran nuclear deal in May.

Russian Foreign Minister Sergei Lavrov has condemned Washington’s decision to slap Tehran with sanctions, calling the restrictions “absolutely illegitimate” and deeply disappointing, and saying that it was “unacceptable” to hold dialogue in the language of ultimatums.

“As far as the US measures against Iran are concerned, they are absolutely illegitimate,” Lavrov said on Tuesday in Madrid following a meeting with Spanish officials.

“They are being implemented in flagrant violation of the decisions of the UN Security Council, and the way in which these measures are announced and implemented cannot but cause a deep sense of disappointment. We proceed from the idea that the norms of not only international law, but of international dialogue, have not been repealed,” Lavrov stressed.

“Pursuing a policy based on ultimatums and one-sided demands is hardly permissible in our times,” according to the Russian foreign minister.

Pressure on SWIFT Also Unacceptable

Commenting on suspected US pressure on international financial messaging system SWIFT, which implied Monday that it would comply with US sanctions against Iranian financial institutions, Lavrov said that such pressure was also illegitimate.

“Within the framework of the participants of the Joint Comprehensive Plan of Action (JCPOA) agreement, mechanisms are being developed which will allow for the continued implementation of the provisions of this document, first of all as regards [nations’] economic ties to Iran without US participation, and this is not a simple matter,” the foreign minister explained. “You can see how, using unacceptable methods, pressure has been placed on the operators of the SWIFT system. But experts are actively engaged in these issues, and they have a sufficiently stable understanding that this is possible and that such measures will be found.”

On Monday, Washington followed through with plans to renew sanctions against Iran following President Trump’s exit from the JCPOA Iran nuclear deal. The tough sanctions target Iran’s energy, banking and sea-based transport sectors, and threaten so-called secondary sanctions against foreign companies and countries doing business with the Islamic Republic.

The Belgium-based SWIFT financial messaging service announced that it would be suspending some Iranian banks’ access to the system, making no mention of US sanctions. Calling the move “regrettable,” SWIFT’s statement said it had taken the step “in the interest of the stability and integrity of the wider global financial system.”

All of the JCPOA’s other signatories, including Iran, Russia, China and several European powers, have made an effort to save the landmark nuclear deal and bypass the US sanctions or otherwise limit their impact. This has included the development of a Special Purpose Vehicle (SPV) on trade. China and India, the largest importers of Iranian crude oil, have resisted US secondary sanctions threats, and were granted exemptions along with five other oil-importing countries plus Taiwan.

November 6, 2018 Posted by | Economics | , , , , | 1 Comment

Austria casts doubt on immediate bans lift from Iran

Press TV – March 30, 2016

Austrian President Heinz Fischer has cast doubt on the US and Western resolve for the immediate removal of all anti-Iran sanctions.

Fischer has told IRIB that it is unclear how long it will take for the West to lift sanctions on Iran.

Iran’s historic agreement last year with permanent UN Security Council members plus Germany (P5+1) went into force on January 16 to end 13-years of Western dispute over Tehran’s nuclear program and pave the way for the lifting of sanctions on the country.

But more than two months later, Iran is still awaiting the full opening of business transactions with some companies in the West as some banks are facing restrictions in the US on handling business with Tehran.

The Austrian leader said it was not up to a single country to lift all the sanctions, but that the United States had a part to play.

“Austria alone cannot lift the sanctions. The EU cannot do it alone too, but it is the international community that should do it,” Fischer said.

“The US also plays a role in this regard,” he added.

“A process for sanctions removal has begun, but I cannot make any predictions on how long this issue will last. I hope all sides fully adhere to the [nuclear] agreement.”

The Austrian president was answering a question on issues facing Iranian banks, some of which still seek to join the international payments system, SWIFT, for the resumption of foreign transfers.

The Austrian leader paid a visit to Tehran in September 2015 at the head of a 240-member delegation with the purpose of discussing ways to improve Tehran-Vienna relations.

Not all the banks in Iran have been able to reconnect to SWIFT since the lifting of sanctions was announced in January.

A senior Iranian official said last month that 26 Iranian banks have so far been reconnected to SWIFT after the removal of the economic sanctions against Iran in mid-January.

SWIFT – the Society for Worldwide Interbank Financial Telecommunication – is used by nearly every bank around the world to send payment messages that lead to the transfer of money across international borders. It provides a wide range of service including transmitting letters of credit, payments and securities transactions among 9,700 banks in 209 countries.

However, it became off limits to Iranian banks in 2012 after the implementation of the US-led sanctions against the country. Accordingly, around 30 Iranian banks were blocked from using SWIFT services, literally cutting off Iran from the global banking system.

March 30, 2016 Posted by | Deception, Economics | , , , , | 1 Comment

A Russian Diplomat’s Take on the World

By Gilbert Doctorow | Consortium News | January 29, 2016

On Jan. 26, Russian Foreign Minister Sergey Lavrov held an important year-in-review press conference before an audience of about 150 journalists, including the BBC correspondent Steve Rosenberg and many other well-known representatives of mainstream Western media. The purpose of this annual event is to look back at issues faced by his Ministry over the past year and to give his appraisal of results achieved.

Lavrov’s opening remarks were concise, lasting perhaps 15 minutes, and the remaining two hours were turned over to the floor for questions. As the microphone was passed to journalists from many different countries, the discussion covered a great variety of subjects, including the likelihood of a new “re-set” with the United States, the negotiations over re-convening the Syrian peace talks in Geneva, British Prime Minister David Cameron’s comments on the findings of a U.K. public inquest into the Litvinenko murder, the possibilities for reestablishing diplomatic relations with Georgia, and prospects for resolving conflicting claims over the Southern Kurile islands so as to conclude a peace treaty with Japan.

To the best of my knowledge, not a single report of the event has yet appeared on major online American, French, British and German newspaper portals or television channels. This was not for lack of substance or newsworthy sound bites, including Lavrov’s headline comment that he agreed with Western leaders who said there would be “no business as usual” between Russia and the West.

As part of his opening comments, Lavrov said, “Our Western colleagues sometimes declare with passion that there can no longer be ‘business as usual with Russia.’ I am convinced that this is so and here we agree: there will be no more ‘business as usual’ when they tried to bind us with agreements which take into account above all the interests of either the European Union or the United States and they wanted to persuade us that this will do no harm to our interests. That history is over and done with. A new stage of history is dawning which can develop only on the basis of equal rights and all other principles of international law.”

Regarding a similar news blackout that followed another major Russian press briefing, the sharp-tongued Foreign Ministry spokeswoman Maria Zakharova commented, what are all these accredited Western reporters doing in Moscow if nothing gets published abroad? Do they have some other occupation?

In keeping with custom, the Russian Foreign Ministry posted the entire video recording of Lavrov’s press conference on youtube.com and posted transcripts in Russian and English on the www.mid.ru site. The Russian version takes up 26 tightly spaced printed pages. This is what I have used, since I prefer to go to the source and do my own translations when I have the option. The English version probably takes 40 pages, given the normal expansion from Russian to English in the translation process.

What I noted first in the television broadcast on Russia’s Pervy Kanal and then in the transcript was both how well prepared Lavrov was to deal with a plethora of issues and how he gave detailed answers that went on for many minutes without making reference to any notes.

Secondly, it was obvious he spoke more “freely,” using fewer diplomatic euphemisms than I have ever seen before. I conclude that he was given a nod by his boss, President Vladimir Putin, not to hold back, to speak with perfect clarity. Given his experience as one of the longest-serving foreign ministers among the major powers and his innate intellect, Lavrov delivered what sounds at times like dictation for essays in proper written Russian.

For these reasons, I have decided to divide my treatment of the press conference into two parts. One will be Lavrov in his own words. And the other will be my conclusions about the international environment in the coming year given Russia’s basic positions, particularly the possible lifting of sanctions on Russia by the United States and the European Union and how the next U.S. administration can best prepare for relations with Russia, assuming there is no dramatic change in the thinking of American elites.

Sergey Lavrov in His Own Words

From the press briefing, I have extracted several big chunks of text that characterize the overarching views on international relations of Lavrov and the Kremlin, applying their Realpolitik prism and focused primarily on U.S.-Russian relations. This is essential if we are not to lose sight of the forest for the trees.

In questions and answers dealing with all countries but one, we hear about separate issues in various locations around the world holding interest mainly for discrete national audiences with their private concerns. With respect to one country, the U.S., Russia’s bilateral relations transcend the minister’s in-basket of contingencies.

Indeed, the whole Russian foreign policy really is about relations with the U.S. as expressed in the first two of the three passages in quotation marks below. The third passage, on sanctions, would seem to be more about relations with the E.U. I selected it because the issue of lifting sanctions will surely be a key foreign policy issue facing Russia in the first six months of this year, and behind it all looms the U.S. position on the question.

Question: Is a “re-set” possible in this final year of Barack Obama’s administration?

Lavrov: “The question should not be addressed to us. Our inter-state ties sank very low despite the excellent personal relations between former U.S. President George Bush and Russian President Putin. When U.S. President Barack Obama came to the White House and former U.S. Secretary of State Hillary Clinton offered a ‘re-set,’ this reflected the fact that Americans themselves finally saw the abnormality of the situation wherein Russia and the USA were not cooperating to solve those problems which could not be decided without them…

“We gave a rather constructive response to the ‘re-set.’ We said that we appreciate the decision of the new Administration to correct the errors of its predecessors. We achieved quite a lot: the New START Treaty, the entry of Russia into the WTO, an array of new agreements on various conflict situations. But somehow this quickly began to drop back to zero. Now everyone, including our American colleagues, is telling us: ‘Just fulfill the Minsk accords on Ukraine and immediately everything will return to normal. We will immediately cancel the sanctions and tempting prospects of cooperation will open up between Russia and the United States over much more pleasant issues, not just in the management of crises; right away a constructive partnership program will take shape.’

“We are open for cooperation with everyone on an equal, mutually advantageous basis. We, of course, do not want anyone to build their policy based on the assumption that Russia and not Ukraine must fulfill the Minsk accords. It is written there who must fulfill them. I hope that this is well known to the USA. At least, my latest contacts with U.S. Secretary of State John Kerry, the contacts of Deputy Secretary of State Victoria Nuland with Assistant to the Russian President Surkov indicate that the USA can sort out the essence of the Minsk accords. Grosso modo, everyone understands everything. …

“I have just mentioned that people have begun to promise a new ‘re-set.’ If we fulfill the Minsk accords, then immediately everything will become fine, with splendid and tempting prospects.

“But the cooling off of relations with the Administration of U.S. President Barack Obama and the end of the period associated with ‘re-set’ began long before the Ukraine. Let’s remember how this occurred. First, when we finally got the consent of our Western partners to terms of our joining the WTO which were acceptable to Russia, the Americans understood that it was not in their interests to keep the Jackson-Vanik amendment. Otherwise they would be deprived of those privileges and advantages which are linked to our participation in the WTO. They began to prepare for the removal of this amendment.

“But Americans would not be Americans if they simply abolished it and said ‘Enough, let’s now cooperate normally.’ They dreamed up the ‘Magnitsky Act,’ although I am certain that what happened to Magnitsky was not set up. I very much hope that the truth will become known to everyone. It is disgusting how a provocation and speculation were built up around the death of a man. Nonetheless, this was done and you know who lobbied for this ‘Magnitsky Act,’ which immediately replaced the Jackson-Vanik amendment.”

[The Magnitsky Act was enacted by the U.S. Congress in 2012 with the goal of punishing Russian officials believed responsible for the death of Sergei Magnitsky, a lawyer who died in prison in 2009 amid accusations and counter-accusations of fraud.]

“This all began when there was still no Ukraine [crisis], although they now try to lay the blame on violations of OSCE principles. Everything that is going on between the West and Russia is explained by the fact that Russia did not fulfill its obligations, did not respect the world order which was put together in Europe after the Helsinki Act [of 1975], etc. These are all attempts to justify and find an excuse for continuing the policy of containment. But this policy never ended.

“After the ‘Magnitsky Act’ [in 2012], there was the completely inappropriate, overblown reaction to what happened to Edward Snowden, who found himself in Russia against our wishes [in 2013]. We did not know about this. He did not have a passport – his document was canceled while he was in flight. He could not go anywhere from Russia because of decisions taken in Washington. We could not help but give him the possibility to remain in Russia so as to stay safe, knowing which articles of the law they were threatening him with. The Americans made no secret about this. This was done simply as an elementary protection of a person’s right to life.

“U.S. President Barack Obama then canceled his visit to Russia. They made a huge scandal. Dozens of telephone calls came in from the FBI, from the CIA, the State Department. There were direct contacts with the President. They told us that if we do not give up Snowden, then relations will be broken off. The USA canceled the visit. It did not take place but U.S. President Obama came for the G-20 Summit in St. Petersburg, where we, by the way, did something useful – we reached agreement on the principles of the removal of Syria’s chemical weapons.

“Ukraine was just a pretext. The Ukrainian crisis is linked not so much with justified concern over an alleged violation by Russia of the Helsinki principles (although everything began with Kosovo, with the [1999] bombing of Yugoslavia, etc). This was an expression of irritation that the coup d’etat did not lead to the results that were expected by those who supported it.

“I will tell you honestly that we don’t hold a grudge. We have no such traditions in relations between states. We understand that life is tougher than any ideal, romantic scheme like ‘re-set’ or similar. We also understand that this is a world in which there are harsh clashes of interests that come down to us from the age of the West’s total domination and it is in the midst of a long transition period to a more durable system in which there will not be one or even two dominant poles – there will be several. The transition period is long and painful. Old habits die slowly. We all understand this.

“We understand that the USA is interested in having fewer competitors even with regards to those comparable to it in size, influence, military power, economy. We see this in the relations between the USA and China, in how the USA works with the European Union, trying to create a ring around it via the Transatlantic Partnership, and to the east of Russia, to create a Trans-Pacific Partnership which will not include Russia and China. Russian President Vladimir Putin spoke about this in detail when he analyzed the processes at work in the world economy and politics. We understand all of this.

“Surely every age brings with it new tendencies, frames of mind in one or another of the elites, especially in major countries which see in their own fashion the ways to fight for their interests. It would be very bad and ruinous for all of us if these processes moved outside the framework of generally accepted norms of international law.

“Then, simply put, everything would be topsy-turvy, and we would be drawn into a world of anarchy and chaos – something like what is going on in the Near East, perhaps without bloodshed. Each would act as he reckons necessary and nothing good would come out of this. It is very important to observe some kind of general rules of play.

“To answer your question, I would like for the USA to have a ‘re-set’ with the whole world, so that the ‘re-set’ was general, so that we could gather together and reconfirm our commitment to the UN Charter, to the principles embodied in it, including non-interference in internal affairs, respect for the sovereignty and territorial integrity and the right of peoples to self-determination, the right of peoples to choose their own future without interference from outside.”

Question: At the Munich Security Conference in 2007 President Putin said to the West “you need us more than we need you.” Is that still Russia’s position?

Lavrov: “Ideally we both need one another to face the challenges and threats. But, the reality is different. The West comes to us much more often for help than we come to the West.”

(Lavrov said that in response to Western sanctions, Russia was striving to be self-sufficient and promoting import substitution, but not trying to cut itself off from the world and ready for cooperation based on equality.)

“We must do everything to ensure we do not depend on the whim of one or another group of countries, above all from our Western partners” – as happened when the West took offense at Russia for supporting ethnic Russians in Ukraine who did not recognize the 2014 coup d’etat.

“I have cited Dmitry Yarosh [leader of the radical nationalists, the Right Sector] that they wanted to destroy Russian speakers in Ukraine or deprive them of their rights. We want to insure ourselves against such situations. …

“I note that it’s not we who are running to our European colleagues and saying ‘Let’s do something to remove the sanctions.’ Not at all. We are focused on not depending on such zigzags in Western policy, not depending on Europe’s saluting the USA. But in our bilateral contacts our European colleagues, when they come to us or meet us in international forums, say: ‘Let’s think of something. Help us carry out the Minsk accords, otherwise these sanctions will do a lot of damage. We want to turn the page.’

“It turns out that in this situation we are needed more by them than they are needed by us. Including for fulfillment of the Minsk accords. … Yes, we have influence in Donbass [the ethnic Russian section of eastern Ukraine] and we support them. Surely, without our help and humanitarian deliveries Donbass would be in a pitiful state. But one also has to exert influence in Kiev. We need the West to influence the Kiev authorities, but so far this is not happening.

“Or look at the question of the Iranian nuclear program. At the decisive stages of these negotiations we were literally bombarded with requests when it was necessary to solve the questions of exporting enriched uranium in exchange for natural uranium, which was the key condition for achieving agreements; when it was necessary to resolve the question about who will convert the enrichment sites at Fordu into research for production of medical isotopes, etc.

“They came with requests to us, requests which carry a significant financial burden, or at least which do not bring any material benefit. But we fulfilled our part of the work. Now everyone is calling us and our Chinese colleagues about the North Korean problem: ‘help us do something to make North Korea observe its obligations.’ Or take the case of Syria….

“I can’t think of any requests we made to our Western colleagues recently. We don’t believe it is proper to make requests. After you sign agreements following negotiations, you now have to execute obligations, not to make requests for favors.”

Question: Will the sanctions end early?

Lavrov: “I’d say that among a large number of our partners there is the awareness that they cannot go on this way any longer, that this is harmful to them. Our justification for speaking about some possible positive changes comes down to the following: our Western partners more and more often begin to understand that they have fallen into a trap of their own making when they said that they will lift the sanctions after Russia fulfills the Minsk accords. They have now understood that, very likely, this was a ‘slip of the tongue.’

“But in Kiev this was heard very often and was interpreted as an indulgence allowing them not to carry out the Minsk accords. Their failure to perform not only means that Kiev does not have to undertake any actions and fulfill its obligations. It also means that the West will have to keep the sanctions in place against Russia. It was necessary to prove all of this to some gentlemen who are in Kiev fanning radical attitudes. …

“The West understands the hopelessness of the present situation, when everyone pretends that Russia must fulfill the Minsk accords but Ukraine can do nothing – not change its constitution, not give a special status to the Donbass, not put through an amnesty, not organize elections in consultation with Donbass. Everyone understands that no one will resolve these things for Ukraine.

“Everyone understands that this is abnormal, something pathological which emerged in turning the Ukrainian crisis, which arose as a result of an absolutely illegal, anti-constitutional coup d’etat, into a measuring stick for all relations between Russia and the West. This is absolutely abnormal, an unhealthy situation, artificially fanned from countries that are far removed from Europe. Europe no longer wants to be held hostage to this situation. For me, this is obvious.”

General Conclusions

In presenting these three long excerpts from Lavrov’s Jan. 26 press conference, my intention was to give readers a feel for Lavrov’s method of argumentation and his somber tone in what was delivered without notes and in response to questions from journalists in the audience.

In his prepared opening remarks, Lavrov had already set out some of the key points in the overall approach to international affairs from Russia’s analytical tool of realism and national interest. The number one issue facing Russia and the world from his perspective is to arrive at a new system of managing international affairs. Russia’s relations with the West are part and parcel of this broader challenge.

This wished-for new system would be one built on full equality of relations between states, respect for their interests and non-interference in internal affairs. Lavrov was repeating Vladimir Putin’s call upon nations to re-dedicate themselves to the principles of the United Nations Charter that Putin issued in New York in September 2015 at the 70th anniversary gathering of the General Assembly. The new system of global governance will come about as a result of reforms to the basic international institutions whereby political and economic power is reallocated in ways that reflect changes in relative economic and military power of nations from the days when these institutions were established.

By itself, there is nothing particular new in this vision. It has been in the public domain for years and guided calls for readjusting the voting powers within the International Monetary Fund. The novel element, which will be shocking to many in Washington, was Sergey Lavrov’s clear and repeated identification of the United States as the power frustrating the renewal of world governance by stubbornly defending its hegemonic control of institutions and seeking to consolidate still further its control over its allies in Europe and Asia at the expense of their national interests and in furtherance of its own interests.

Hence, Lavrov’s mention of the TPP and TIPP projects. Hence, his repeated mention of forces from afar, meaning the U.S., that have imposed European sanctions on Russia against the wishes of separate E.U. member states.

At one point, in responding to a journalist from Japan, Lavrov completely abandoned veiled language. He said Russia favored in principle giving a permanent seat on the UN Security Council to Japan, but would do so only when it was clear Japan will contribute its own national views to deliberations, broadening the perspectives on the table, and not merely provide the United States with an additional voting member under its control.

It is interesting that Lavrov explicitly denied that Russia feels “offended,” or as I have written using an alternative translation, “holds a grudge” over how it has been treated by the United States in the downward spiral of relations from the high point of the 2009 “re-set” to today’s nadir.

The context for this remark is the ever-present denunciations in mainstream Western media of Vladimir Putin’s speeches on foreign affairs. Putin’s observations on how things went awry since the end of the Cold War are regularly categorized as “diatribes” and “revisionist,” by which is meant aggressive, threatening and possibly irrational.

Lavrov said Russia acknowledges it is a tough world out there and competition is harsh. That is the true sense of his headline remark that there can be no return to “business as usual” or the idealistic notions underlying the “re-set” even when the current sanctions against Russia are lifted.

Russia is nonetheless open for business on equal and mutually advantageous terms where and when possible. In this regard, Lavrov is in complete agreement with American experts like Angela Stent at Georgetown University who advise the incoming U.S. administration in 2017 against planning some new “re-set.” They come to that common conclusion from diametrically opposed premises over who is responsible for the new reality.

Lavrov speaks of our being in a long and painful transition period from a world dominated by the West, which in turn is dominated by one power, the United States, to a multipolar world with a number of key participants in global governance. But that does not exclude amelioration and he appears to share the view now spreading in Western media, that U.S. and European sanctions will be lifted in the near future.

One recent example of this expectation that generates euphoria in Western business circles appeared in Bloomberg online the day before Lavrov’s news conference: “Russian Entente Nears as Allies Hint at End of Ukraine Sanctions.”

The important message, which Sergey Lavrov delivered on Jan. 26, is that Russia has not and will not mend its ways. He told us Russia did not beg for relief from sanctions and is not trading its support for Bashar al-Assad in Syria in return for relief over Ukraine.

We may be sure that the United States and the European Union will present the lifting of sanctions as a trade-off. But the reality will be a retreat from a policy that is unsustainable because it harms Western interests far more than Russian interests. This was the sense of Lavrov’s insistence that the West needs Russia more than Russia needs the West.

The present, ongoing economic harm to European farmers and other select sectors of the economy from Russia’s tit-for-tat embargo is obvious. The harm to U.S. interests is more subtle.

It was recently highlighted in an article published in Foreign Affairs magazine by a research fellow of the Cato Institute entitled “Not-So Smart Sanctions.” There we read that the Washington establishment is finally worried over the creation by Russia and China of alternative global financial institutions to those based in Washington.

The BRICS Bank, the Asia Infrastructure Development Bank, the introduction of bank clearing centers competing with SWIFT: all are intended to end, once and for all, America’s possibilities for inflicting crippling economic pain on those falling into its latest list of enemies as was done to punish the Kremlin over annexation of Crimea and intervention in Donbass.

Lavrov spoke repeatedly about defending “national interests” as the guiding principle of foreign relations. In this connection, the shadow of Hans Morgenthau, a founder and major theorist of America’s Realist School, may be said to have shared the podium with him. But Lavrov and the Russians have taken to a new level the principles set out in Politics Among Nations, Morgenthau’s famous textbook which generations of American college students once studied in their Government 101 courses.

Lavrov’s Russia is calling upon nations to shed their chains, to stop pushing their national interests to one side while listening to instructions from Washington. Nations should compete and jostle for influence in a free market of ideas and influences, while playing by generally recognized rules.

If the rules are followed, the international environment will not collapse into chaos notwithstanding sharp contradictions between nations.


Gilbert Doctorow is the European Coordinator, American Committee for East West Accord, Ltd. His latest book Does Russia Have a Future? (August 2015) is available in paperback and e-book from Amazon.com and affiliated websites. For donations to support the European activities of ACEWA, write to eastwestaccord@gmail.com. © Gilbert Doctorow, 2015

January 30, 2016 Posted by | Economics, Progressive Hypocrite, Timeless or most popular | , , , , , , | 1 Comment

Anti-Russian Sanctions Cost West Influence, Credibility, and $100 Billion

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Sputnik – 26.12.2015

For nearly two years, independent journalists and analysts in the US and Europe have been saying that sanctions against Russia should be repealed. Now, surprisingly, even the hawkishly anti-Russian foreign policy journal Foreign Affairs has joined the chorus, a recent article suggesting that sanctions have been nothing but a costly mistake.

The comprehensive analysis, written by CATO Institute Visiting Fellow Emma Ashford, offers few kind words for Russia or its leaders, using phrases like ‘Kremlin cronies’, and alluding to Russia’s ‘behavior’, as if the country was a child that needed to be taught a lesson. Nonetheless, as far as Western sanctions against Russia are concerned, Ashford laid down the truth. And the truth stings.

At first glance, the analyst suggested, “considering the dire state of Russia’s economy, [Western] sanctions might appear to be working. The value of the ruble has fallen by 76 percent against the dollar since the restrictions were imposed, and inflation for consumer goods hit 16 percent in 2015. That same year, the International Monetary Fund estimated, Russia’s GDP was to shrink by more than three percent.”

“In fact, however,” she notes, “Western policymakers got lucky: the sanctions coincided with the collapse of global oil prices, worsening, but not causing, Russia’s economic decline. The ruble’s exchange rate has tracked global oil prices more closely than any new sanctions, and many of the actions taken by the Russian government, including the slashing of the state budget, are similar to those it took when oil prices fell during the 2008 financial crisis.”

“The sanctions have inhibited access to Western financing, forcing Russian banks to turn to the government for help. This has run down the Kremlin’s foreign reserves and led the government to engage in various unorthodox financial maneuvers, such as allowing the state-owned oil company Rosneft to recapitalize itself from state coffers. Yet the Russian government has been able to weather the crisis by providing emergency capital to wobbling banks, allowing the ruble to float freely, and making targeted cuts to the state budget while providing financial stimulus through increased spending on pensions.”Therefore, Ashford points out, “even with continued low oil prices, the [IMF] expects that growth will return to the Russian economy in 2016, albeit at a sluggish 1.5 percent.”

“Nor are the sanctions inflicting much pain on Russia’s elites,” the analyst wistfully continues. “Although Prada and Tiffany are doing less business in Moscow, the luxury housing market is anemic, and travel bans rule out weekend jaunts to Manhattan, these restrictions are hardly unbearable. One target, the close Putin adviser Vladislav Surkov, has dismissed them as harmless. “The Only things that interest me in the US are Tupac Shakur, Allen Ginsberg, and Jackson Pollock,” he said. “I don’t need a visa to access their work.””

Most importantly, Ashford notes, “when the sanctions are judged by the most relevant metric –whether they are producing a policy change – they have been an outright failure.”

“Whatever punishment the sanctions have inflicted on Russia,” Ashford writes, “it has not translated into coercion,” despite the Obama administration’s expectations “that it would have by now.”

Furthermore, “the Kremlin has also managed to circumvent the sanctions, partly by turning to China. In May 2014, Putin visited the country to seal a 30-year, $400 billion gas deal with it, demonstrating that Russia has alternatives to European gas markets. That October, Moscow and Beijing also agreed to a 150 billion yuan currency swap, allowing companies such as Gazprom to trade commodities in rubles and yuan – and thus steer clear of US financial regulations.””Even in Europe,” the analyst points out, “Russia has been able to find loopholes to avoid sanctions: in order to obtain access to Artic drilling equipment and expertise, Rosneft acquired 30 percent of the North Atlantic drilling projects belonging to the Norwegian company Statoil.”

Paradoxically, Sanctions Boost Putin’s Popularity

As for the sanctions’ impact on Russia’s political leadership, Ashford suggests that this may be the area where they are “most counterproductive. The sanctions have had a ‘rally round the flag’ effect as the Russian people blame their ills on the West. According to the Levada Center, a Russian research organization, Putin’s approval rating increased from 63 percent” before Crimea’s accession to Russia “to 88 percent by October 2015. In another poll, more than two-thirds of respondents said they thought the primary goal of the sanctions was to weaken and humiliate Russia.”

… And Weaken Western Influence Worldwide

Moreover, Ashford argues, sanctions “have also encouraged Russia to create its own financial institutions, which, in the long run, will chip away at the United States’ economic influence. After US senators and some European governments suggested that the United States might cut off Russia’s access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system, the Russian Central Bank announced that it was going to start negotiations with the other BRICS states – Brazil, India, China, and South Africa – to create an alternative.”

“To lessen its dependence on Visa and MasterCard, Russia has made moves toward setting up its own credit-card clearing-house. And it has moved ahead with the proposed BRICs development bank, which is designed to replicate the functions of the World Bank and the International Monetary Fund.”

These measures add up, Ashford suggests, raising “the worrying possibility that the United States will someday have a harder time employing economic statecraft,” (i.e. applying economic pressure), not just against Russia, but against other, smaller nations as well. “In a world where more institutions fall outside the reach of the United States and its allies, [potential] targets can more easily circumvent US sanctions.”

A $100 Billion Mistake

“It is true,” the analyst notes, “that the sanctions have allowed the Obama administration to claim that it is doing something about Russian aggression. From the White House’s perspective, that might be an acceptable rationale for the policy, so long as there were no downsides. In fact, however, the sanctions carry major economic and political costs for the United States and its European allies.”

“The brunt is being borne by Europe, where the European Commission has estimated that the sanctions cut growth by 0.3 percent of GDP in 2015. According to the Austrian Institute of Economic Research, continuing the sanctions on Russia could cost over 90 billion euros [$98.75 billion US] in export revenue and more than two million jobs over the next few years.”

The sanctions, Ashford writes, “are proving especially painful for countries with strong trade ties to Russia. Germany, Russia’s largest European partner, stands to lose almost 400,000 jobs. Meanwhile, a number of European banks, including Societe Generale in France and Raiffesen Zentralbank in Austria, have made large loans to Russian companies, raising the worrying possibility that the banks may become unstable, or even require bailouts if the borrowers default.”US companies, further away and less heavily involved in trade with Russia, are nonetheless also taking a big hit, according to the analyst.

“US energy companies, for their part, have had to abandon various joint ventures with Russia, losing access to billions of dollars of investments. Thanks to prohibitions on the provision of technology and services to Russian companies, Western firms have been kept out of unconventional drilling projects in the Artic and elsewhere. ExxonMobil, for example, has been forced to withdraw from all ten of its joint ventures with Rosneft, including a $3.2 billion project in the Kara Sea.”

This, Ashford says, will cost the company “access to upstream development projects” in Russia, while “putting the company’s future profits and stock valuation at risk and raising the possibility that the money they’ve already invested will be permanently lost.”

“A similar dynamic may harm European energy security, too,” threatening shortfalls in the supply of Russian energy. “The energy consultancy IHS Cambridge Energy Research Associates has predicted that if the sanctions persist, Russian oil production could decrease from 10.5 million barrels per day now to 7.6 million barrels per day by 2025 – bad news for European states, which receive one-third of their oil from Russia. They are even more dependent on Russian gas, which, since it relies more on fixed pipelines, is harder to replace.”

Ultimately, Ashford notes, “it is tempting to believe that the sanctions will eventually work – say, after a few more years –but that is wishful thinking.”

“If the United States continues to insist that the sanctions against Russia need more time to work, then the costs will continue to add up, while the likelihood of changing the Kremlin’s behavior will get even slimmer.”In the final analysis, the expert calls for the winnowing of sanctions, and for an increased effort by US diplomats “to work with their Russian counterparts on issues unrelated to the Ukraine crisis. The United States and Russia collaborated on the Iran nuclear deal,” Ashford recalls, and can cooperate on ending the civil war in Syria, too.

“Engaging Russia on this and other non-Ukrainian issues would avoid isolating it diplomatically and thus discourage it from creating or joining alternative international institutions,” the analyst slyly concludes.

See also: Anti-Russia Sanctions ‘Humiliating’ for Europe

December 28, 2015 Posted by | Economics | , , , | 1 Comment

The NSA Is Also Grabbing Millions Of Credit Card Records

By Tim Cushing | Techdirt | September 16, 2013

In addition to everything else it’s collecting, the NSA also has millions of international credit card transactions stashed away in its databases, according to documents viewed by Spiegel.

The information from the American foreign intelligence agency, acquired by former NSA contractor and whistleblower Edward Snowden, show that the spying is conducted by a branch called “Follow the Money” (FTM). The collected information then flows into the NSA’s own financial databank, called “Tracfin,” which in 2011 contained 180 million records. Some 84 percent of the data is from credit card transactions.

On one hand, what the NSA is doing is exactly what the NSA should be doing: tracing the money flow of terrorist organizations.

Their aim was to gain access to transactions by VISA customers in Europe, the Middle East and Africa, according to one presentation. The goal was to “collect, parse and ingest transactional data for priority credit card associations, focusing on priority geographic regions.”

This is part of the Terrorist Finance Tracking Program, which was set up shortly after the 9/11 attacks and gave the US government access to the SWIFT (Society for Worldwide Interbank Financial Telecommunication) database. This, in and of itself, is not news, having been exposed in 2006. Documents uncovered then showed the program had been in place since 2002, with permission extended to the CIA and the Treasury Dept. as part of Bush’s “Global War on Terror.”

What is new, however, is the fact that the NSA is targeting transactions from major credit card companies, like VISA. This has quite a bit more potential for misuse than SWIFT, which records only banking transactions. VISA responded to this new information with the same quasi-denial we’ve seen from several other companies whose links to the NSA have been exposed.

“We are not aware of any unauthorized access to our network. Visa takes data security seriously and, in response to any attempted intrusion, we would pursue all available remedies to the fullest extent of the law. Further, its Visa’s policy to only provide transaction information in response to a subpoena or other valid legal process.”

Of course, this isn’t “unauthorized” access, not when gathered with a court order or subpoena. But this isn’t as tightly controlled as the spokesperson makes it appear. If pursuing data for “counterterrorism” purposes, the NSA is allowed to skirt the protections of the Right to Financial Privacy Act, thanks to an amendment in the PATRIOT Act. But even with these legal options, it appears the NSA would still rather pursue this in an extralegal fashion in order to circumvent the warrant process.

NSA analysts at an internal conference that year described in detail how they had apparently successfully searched through the US company’s complex transaction network for tapping possibilities.

Whatever’s happening now appears to be the NSA grabbing more data simply because it can. It’s not as if it didn’t already have access copious amounts of financial data, thanks to the government’s fully legal (and fully public) collection of bulk financial records through SWIFT.

Remember: in addition to stealing the data, Treasury also gets it via a now-public agreement. The former CEO of SWIFT Leonard Schrank and former Homeland Security Czar, Juan Zarate actually boasted in July, in response to the earliest Edward Snowden revelations, about how laudable Treasury’s consensual access to the data was.

“The use of the data was legal, limited, targeted, overseen and audited. The program set a gold standard for how to protect the confidential data provided to the government. Treasury legally gained access to large amounts of Swift’s financial-messaging data (which is the banking equivalent of telephone metadata) and eventually explained it to the public at home and abroad.

It could remain a model for how to limit the government’s use of mass amounts of data in a world where access to information is necessary to ensure our security while also protecting privacy and civil liberties.”

Never mind that by the time they wrote this, an EU audit had showed the protections were illusory, in part because the details of actual queries were oral (and therefore the queries weren’t auditable), in part because Treasury was getting bulk data. But there was a legitimate way to get data pertaining to the claimed primary threat at hand, terrorism. And now we know NSA also stole data.

Even when the government has an advantageous agreement to collect bulk data with little oversight, its agencies can’t help but exploit this even further. The collection via “oral queries” is another indicator of these agencies’ (FBI, NSA, CIA) unwillingness to follow even the most minimal of rules. (See also the administration’s 2010 ruling that made the FBI’s warrantless wiretapping legal, which occurred after the agency’s process had slid from issuing tons of National Security Letters to simply calling up the telcos and requesting records.)

The untargeted collection of financial data has raised concerns from those on the “collection” side.

[E]ven intelligence agency employees are somewhat concerned about spying on the world finance system, according to one document from the UK’s intelligence agency GCHQ concerning the legal perspectives on “financial data” and the agency’s own cooperations with the NSA in this area. The collection, storage and sharing of politically sensitive data is a deep invasion of privacy, and involved “bulk data” full of “rich personal information,” much of which “is not about our targets,” the document says.

When even the spies are concerned about about how much data their spy programs are netting, that’s a pretty good sign a bulk records collections effort has gone too far. And it has deeper implications than simply a massive amount of privacy violations. As Marcy Wheeler points out, even the then-Fed chairman Alan Greenspan expressed his concerns about the breadth of the SWIFT collections.

If the world’s financiers were to find out how their sensitive internal data was being used, he acknowledged, it could hurt the stability of the global banking systems.

That’s a scary thought, considering the “global banking system” isn’t all that stable to begin with. A lack of targeting will leave the NSA open to more accusations of economic espionage, something clearly not related to its supposed “national security” agenda.

September 16, 2013 Posted by | Corruption, Full Spectrum Dominance | , , , , | Leave a comment

SWIFT cuts financial ties with Iran over EU sanctions

Press TV – March 16, 2012

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) says it has decided to discontinue services to Iranian banks which are subject to financial sanctions imposed by the European Union.

“Disconnecting banks is an extraordinary and unprecedented step for SWIFT. It is a direct result of international and multilateral action to intensify financial sanctions against Iran,” the Associated Press quoted SWIFT CEO Lazaro Campos as saying on Thursday.

The Financial Times described the service as “one of the key bits of plumbing in the world’s interbank payment systems,” adding that 30 Iranian banks will be cut off from the service as of Saturday, March 17.

The US and EU charge Iran with pursuing military goals under the cover of its civil nuclear energy program and have imposed several rounds of international and unilateral sanctions against Iran to force the country give up its nuclear energy program.

On January 23, the EU foreign ministers approved new sanctions on Iran’s financial and oil sectors, which ban member countries from importing Iranian crude or dealing with its central bank.

Experts believe that SWIFT’s new action is meant to fully enforce EU sanctions, as global financial transactions are impossible without using SWIFT.

Despite tightening sanctions, some analysts have noted that Iran is still able to skirt the sanctions in a few ways. The country, they say, may exchange oil for cash, gold or other commodities directly. Also, Iranian banks that have not been targeted by EU sanctions can still sell oil.

“Throughout the history of the oil trade, someone always gets around trade embargoes one way or another,” said Jim Ritterbusch, a veteran oil trader and analyst.

SWIFT is a clearing system, which oversees the network used by most of the world’s largest banks to conduct financial wire transfers.

SWIFT handles cross-border payments for more than 10,000 financial institutions and corporations in 210 countries. It enables users to exchange financial information securely and reliably, thereby lowering costs and reducing risks.

Established in 1973, the system has been overseen by major central banks, including the US Federal Reserve and the European Central Bank.

March 16, 2012 Posted by | Economics, Wars for Israel | , , | 1 Comment