The woman who’s trying to save Ukraine

Finance Minister Natalie Jaresko on the debt write-down, the war-ravaged economy and Russia.

KIEV — Ukraine struck a critical debt deal Thursday with creditors that averts a default and opens to the door to continued international support for its struggling economy.

The agreement is a victory for Ukraine’s American-born finance minister, Natalie Jaresko. For the past five months, the former U.S. diplomat and fund manager has played the starring role in a highly publicized drama of complex negotiations with private holders of Ukrainian bonds led by Franklin Templeton.

Jaresko got half of what she was asking in debt write-off, accepting that investors take a 20 percent haircut on Ukraine’s $18 billion privately-held sovereign debt. On the other side, Templeton’s bond guru Michael Hasenstab had earlier refused to accept any haircut at all.

The debt restructuring satisfies a demand by the International Monetary Fund for continued financing of the war-torn economy.

Although she has lived in Kiev for the better part of the past three decades, Jaresko is a newcomer to Ukrainian politics. Raised by Ukrainian parents in Chicago, she joined the pro-Western government in December, the same day that she took Ukrainian citizenship.

In the wake of a popular uprising in early 2014 that saw a pro-Moscow president flee to Russia and new elections bring into a power president and Parliament, Ukraine’s economy has been devastated by an undeclared war with Russia over Crimea and its eastern territories. Her job has been to try to save the country from a financial collapse.

Hours after Thursday’s deal was announced, I sat down with Jaresko at her offices in a grim Stalinist building. The place looks the same as I remember it from years back, but the vibe is different. It’s hard to hear any language except English. Officials apologize for the country’s red tape.

I start by asking the finance minister why it took her five months to reach this compromise. Below is a condensed version of our exchange.

Jaresko: It is not a compromise from the position of Ukraine. You’re saying it is a compromise because you are looking at the difference between zero and 40 [the size of the negotiated haircut]. But that’s really not the only issue. Our goal was singular — to meet all three of the IMF goals and we met all three of them. We’ve achieved $15.3 billion in bounced payments [additional funds that debt restructuring generates for the government].

How we got there has always been a combination of coupon, haircut and maturity. What combination? That never really was a critical issue. There are a variety of mathematical combinations that would work. ‘Zero’ was never one of them.

Why did it take five months? One — we have a very unique creditor group with one large creditor, Franklin Templeton, which holds approximately $9 billion of $22 billion [the total Ukrainian public debt]. And they had a very strong belief that Ukraine did not have a solvency problem and did not need a haircut, and there’s no debt relief that was necessary. So it took quite a bit of time to convince the market that liquidity was not the only issue and simple re-profiling would never accomplish all three IMF targets.

POLITICO: Was it because of the Greece parallels?

J: The comparison to Greece in my mind is completely not useful.

P: Was it even an issue?

J: It wasn’t really an issue. When they did a debt restructuring in Greece in 2011-12, the debt was held by European banks. It was basically a bailout by the European Central Bank of the euro and the European banking system. We are not a member of the eurozone, nobody’s bailing out the Ukrainian hryvnia, it is just not comparable. What is also not comparable is the amount of support that Greece has got: They have one quarter of our population, but received over $350 billion in support. Ukraine has a full [IMF-led international bailout package] of $40 billion.

P: The first reaction of many analysts to the deal was that it is not complete without Russia, which holds $3 billion in bonds.

J: It doesn’t work that way. All the eurobonds are included [in the debt deal] including so-called Russian debt. The Ad Hoc creditor committee represents only $9 billion out of $22 billion, so there are a lot of creditors who are not in the Ad Hoc group. Whoever the holders of the Russian bond are today — and you know, it is a tradeable obligation, so I can’t tell you who it is today or tomorrow or who’ll be next week…. If they choose not to participate, and they have the right to choose, they will not have a better deal.

P: Do you expect to receive some help from the IMF to close this payment in December?

J: It is too soon to say that. Right now I think everyone, the G7 and the IMF… we hope the Russians… will choose to participate. This is the best possible deal and the most apolitical way to handle this piece of debt. You know there are extremes on both sides of the spectrum. Those in Russia who believe that they have to have a full repayment and not participate in the restructuring. Those in Ukraine who believe they don’t have to repay anything because Crimea has been illegally annexed, eastern Ukraine has been invaded and occupied, tens if not hundreds of billions of dollars in assets have been either stolen or removed or destroyed. There are lawsuits pending in all different kinds of courts for all different kinds of damages.

P: A crucial condition for the deal to succeed is the ability of the Ukrainian government to jumpstart the economy in a year or two. After going for haircuts or postponing payments, you have to try harder now to sell the country to investors.

J: Just the opposite — it is easier. Had we not met the collaborative agreement, had we been forced to use the moratorium, that might put us off in time from the expected return to markets in 2017. But the fact is that now we have this agreement and we’ve provided a recovery mechanism which puts the creditors on the same win-win situation with Ukraine. We are all now commonly incentivized to see Ukraine returning to growth, because the creditors don’t get any returns on those warrants [debt instruments tied to future economic growth] if we don’t return to growth.

P: It is good risk management, but don’t you think it is going to affect the trust of investors in the long-term?

J: I don’t think we could have had a more positive outcome. Especially from the perspective of attraction of investments, which is different from attracting debt, because Ukraine needs a lot of equity investments instead.

P: Okay, so speaking of selling the country to foreign investors and of you as the Ukrainian fundraiser-in-chief these days, do you also think that Ukrainian war economy is the best investment plan to attract foreign businesses?

J: No, I don’t think that this is what we are doing. With our official creditors, official government and international partners, yes, we are asking for humanitarian support, grant aid, we are asking them for military support and financial support in a form of official credit. With the foreign investment community — that’s not what we are asking for. We are asking them to take a look at the economy that has unfortunately gone through years of recession. But we are amazingly competitive today compared to the last few years and to our neighbors. That competitive advantage is huge for businesses. If you take it together with benefits of DCFTA [the EU and Ukraine signed the Deep and Comprehensive Free Trade Area (DCFTA) on June 27, 2014, as part of their broader Association Agreement], which comes into full force on January 1 [2016] with full and open access to the European markets…. If you take it together with natural, human and intellectual resources, Ukraine is one of the most competitive countries for foreign investment in the region right now.

P: The Ukrainian economy has changed dramatically in the last five years, going from a large industrialized giant to a mostly agrarian type.

J: The portion of the economy that is destroyed by the war in the east, the heavy industries of metallurgy and heavy steel, frankly speaking, were some of the least competitive pieces of the economy. They were extremely valuable to us in terms of trade balance and export. 20 percent of the economy has been destroyed.

P: What kind of investment image or vision do you sell now? It was about heavy industries before, but now what are those investment priorities?

J: We inherited heavy industries from the Soviet Union. Now, when you look at the benefit of peace, we are going to rebuild the Donbass. Local factories that have been unfortunately destroyed, many of them probably will not be rebuilt. Those are not investments from the last 20 years for the most part. That was what we inherited from the Soviet Union. So the balance is clearly changed and now it needs to move more into IT and intelligence.

P: So you see it as an opportunity.

J: Absolutely. Heavy industries were tied to Russia and the former Soviet Union. Now Ukrainian companies are finding new markets, they are using DCFTA to refocus their standards so they are able to export to the EU. And even if you don’t want to export to the EU, being able to do it gives you maybe an access to the Middle East, North Africa, Asia. Our minister of agriculture was just in Egypt; we’ve become one of the largest exporters of agricultural commodities to Egypt.

Now, do we want to be exporting only commodities? That is also, frankly, a part of the Soviet legacy. Our vision is to move to value-added agricultural products, food processing. That doesn’t mean we don’t want to export commodities. No, exporting commodities is good! But that’s the Soviet legacy, like the industrial east was a Soviet legacy. Ukraine’s future lies in human capacity, which is IT, other areas of development based on the highest levels of education. It is a great benefit of inheriting some of those industries from the Soviet Union. But is it where we want to end up five, 10, 20 years from now? No, it is nowhere near that.

P: Speaking of what Ukraine inherited, let’s look at close trade ties with Russia. It is still a large part of the economy. War or no war, it is still going to be there in coming years. Now, because of international sanctions, some Russian companies are trying to find their way back to Ukraine, expanding trade with eastern Ukraine rebels. Ukrainian companies are also trying to get access to Russian consumers. Do you think that this kind of forced economic cooperation out of desperation and necessity could lead to reconciliation?

J: No, I don’t. The trade situation is getting worse between the two countries, not better. There are more and more non-tariff barriers being placed on Ukrainian exports to Russia by the Russian government. Clearly, there’s a more anti-import environment there, judging from the bulldozed food. I think it is natural to have them as a trading partner and I’m very hopeful when the war is over we can return to normal trade relations, I have no issue with that.

But for Ukraine, though, the numbers will never look the same. One is because a big part of our trade was gas and we will never import 100 percent of gas from Russia again. We will always diversify to the extent possible our gas purchases between the reverse gas from Europe and Russia. Number two, as we’ve done energy reforms by increasing prices and eliminating subsidies to Naftogaz [the country’s gas monopoly], eliminating corruption that used to exist in purchasing from Gazprom, globally gas prices are going down and the usage in Ukraine is going down.

And, coming back to what you’ve said, a large part of the industrial complex that was a major gas user has been destroyed. I don’t know when and if it will be rebuilt. So there are parts of trade that are just historic legacies that most likely are not going to return. I think Russian companies moving back to Ukraine is also an element of DCFTA, that kind of access to the European market is not available to Russian companies back in Russia. It is available if they manufacture in Ukraine.

P: I have one more question that pops up in every conversation about you abroad: your citizenship. You’ve been granted a Ukrainian passport. According to local laws, you have less than two years to decide whether you want to keep your American passport or a new Ukrainian one. What will be behind your future decision?

J: I haven’t thought about it.

P: Too busy?

J: I will always comply with the Ukrainian law.

P: It is a major decision in anyone’s life, isn’t it?

J: Not today. Today it is debt restructuring, tomorrow it is going to be tax reform. The day after, the 2016 budget. And after that — I hope sleep will be my fourth major decision. And then at some point, spending some time with my kids.

So right now I just want to focus on getting as much done as possible and as quickly as possible. You were talking about returning to growth, our goal to return to growth already next year.

We just don’t have time. We need to move, move, move.

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The West is pressuring Ukraine not Russia– British diplomat

The West is finding it easier to demand the implementation of peace agreements from Ukraine than to increase pressure on Russia, says Ian Bond, the director of foreign policy at the Center for European Reform and a veteran member of the British diplomatic service. According to Bond, Ukrainian President Petro Poroshenko, knowing the position of his partners, finds himself in a very difficult position. Therefore, the solution to the problem of Russian aggression must be sought in the capitals of Western countries, which must be encouraged to take decisive action.

We begin our conversation with the question that is most frequently asked in Ukraine — is there a problem with the format of the negotiations when the most powerful Western players are not participating, most notably the United States?

Right now the problem stems from the fact that in this format Russia can pretend that it has nothing to do with the conflict in eastern Ukraine and that it is sitting at the negotiating table on the same basis as France and Germany, as a neutral country with no special interest in the matter, which sincerely wants to put an end to the bloodshed.

But in reality that is not the case. Russia is a party to the conflict. This is why the format is invalid. The format itself enables Russia to put pressure on the Ukrainian government but to remain on the sidelines, saying that the situation has nothing to do with the Russian government.

Would the presence of other countries in the negotiations give better results or would it only lead to Russia’s departure from the negotiating table.?

The questions is what would change if Russia did leave the negotiating process if Russia is not negotiating honestly anyway? I understand the position of President Petro Poroshenko, who is forced to hold on to the so-called “Normandy format” and the Minsk process because he knows the position of his Western partners, who are not yet ready to support him fully and to strengthen Ukraine’s defense capability. But this process is not producing any results because one of the parties is manipulating the process in order to prevent the achievement of any positive results.

Critics of President Poroshenko have reacted very sharply to his efforts to carry out that part of the agreement that has to do with amendments to the Constitution on the issue of territorial rule. In particular, they say that there is nothing special about the eastern region other than the fact that part of this territory is occupied by troops and mercenaries from neighboring Russia. They say that since Ukraine has no control over this territory and does not control the border, as is called for in the Minsk agreements, any legitimization of the control over this territory by people that Kyiv calls terrorists would be an unjustified concession by Ukraine to Russia and especially to Western partners, who are trying to pressure the victim and not the aggressor in this conflict.

I think they have grounds for their conclusion. But when it comes to President Poroshenko, I can understand his position, since, as I said, until he has full support of his Western partners, he may feel that he has no other choice than to demonstrate to these partners that he is doing everything in his power to carry out the agreements.

But the problem, in my opinion, lies precisely in the fact that, as you mentioned, the West is putting pressure on Ukraine, knowing that it has more leverage with Ukraine than with Russia.

But this can undermine the position of President Poroshenko, whom the (Western partners) assure of their friendship and support, because opposition to him and the way he wants to implement these decisions in parliament keeps growing.

Of course. But he does not have much choice. If he rejects the Minsk agreements because they are not being fulfilled by Russia, there will be voices in the West stating that they, supposedly, knew all along that this Ukrainian government is filled with unreliable neo-Nazis and that the Russians were right after all. And there will be many politicians in different parts of Europe who will interpret this situation that way.

But regarding the special status for occupied Donbas territories, it will be necessary to create some special conditions, even temporary ones, whether we like it or not. But here it important to be very careful even on the question of decentralization. Because the local governments have not changed; they continue to be weak and corrupt, so decentralization can only strengthen the corrupt local officials or gangsters. And that way control and the chance for legal structures in these territories will only weaken. Decentralization can be carried out only after cleaning out the corruption in the top leadership. Only that way will it be possible to build a strong society over the next 10-20 years.

Decentralization is no panacea. Because special status for the occupied Donbas territories means that all kinds of Pushilins, Zakharchenkos and other thugs and Russian agents that have crawled out from who knows what holes over the last eighteen months will receive permanent power in the occupied territories. Because when the Russians say that it is important to decentralize power, they really mean that power over the occupied territories needs to be centralized in Moscow and that they will decide who will govern these areas. And this will be fatal for Ukraine as well as for those people in the occupied territories who dream that sometime in the future there will be an honest government in this territory.

Actually, this is something many Ukrainian observers would agree with. They say that they could easily find a common language with the inhabitants of the occupied territories themselves if they weren’t fighting with Russia there. This is why they are questioning the German Foreign Affairs Minister Frank-Walter Steinmeier who keeps saying that it is necessary to present these arguments to the Russians once again. They see that this approach is not working.

The German foreign affairs minister has always opted for a soft approach, so his statement does not surprise me at all. There are continuing problems on the German side, although Chancellor Merkel is a bit tougher, but still not enough in my view. However, things are still better than two years ago. But Steinmeier continues to think that if we keep explaining to the Russians they will finally understand they have chosen the wrong way. But I don’t think this will convince Putin.

If the negotiations do not produce results because of the format or other circumstances, what would be a more effective way to stop Russian aggression in Ukraine, since Western politicians are not ready to agree even to this description (of events)?

I think the description is completely accurate. The first thing the Western politicians should do is help Ukraine defend itself. This is a sovereign state that has a right to self-defense. I think we do not emphasize this enough. By deciding not to provide military means of defense to Ukraine, we have equated the victim to the aggressor. We need to provide help in training and in the military-industrial sector. And additionally, we can do more in terms of sanctions against Russia.

Americans are much more advanced in this than the Europeans. They always find the loopholes used by the sanctioned individuals to bypass the sanctions and they close them. We could do more in that direction. When the Prime Minister of Great Britain David Cameron talks about the importance of the fight against money laundering, it is important for all of the EU, for all the countries that have created comfortable conditions for laundering Russian “dirty money” to make the process of hiding money and avoiding sanctions more difficult for the Russians.

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Horlivka (Gorlovka): Rocket Launchers, Self-Propelled Mortars And Tanks Are Found

Another identification project of the Russian equipment concentration places is finished.

The photos of various Russian military equipment were found in the online profiles of the militants. The equipment (BM-21 ‘Grad’ rocket launchers, self-propelled mortars, tanks) is stored on the military range near the village of Karlo-Marksovo, situated between Horlivka and Yenakiieve (Donetsk Oblast). Also the 2S1 ‘Gvozdika’ mortars are hidden in a non-residential premises and the location of one of the Russian military bases is disclosed – it is the territory of the ‘Yenakiieve social rehabilitation secondary school of the I-III levels’ [boarding school].

Yuriy Kasyanov uploaded several pictures to his online profile on August 6, 2015. These photos taken by a ‘SOS Army’ drone were published with the following comment: “This is the collaborators’ military range near Karlo-Marksovo. The illegal armed formations of the so-called DNR regularly train here. Today we ‘attended’ the shooting practice of an armored regiment. This range is definitely not the only one.”

Thanks to the OSINT investigation, we can add here also the photos of the Russian equipment on this military range taken by the militants themselves.

Please note that the ‘Gvozdika’ self-propelled mortar with the hull number ‘514’ has been noticed in the center of Horlivka during different celebrations for several times already. It seems that the mortars with ‘5xx’ numeration are located in Horlivka area on a constant basis.

The first photo is from August 2, and the Victory parade in Horlivka on May 9 is shown on the second one.

The pictures taken by Leha Lavronenko in June show ‘Gvozdika’ mortars, ‘Grad’ missile launchers and other military equipment on this range (the place is marked with orange color on the map below).

In one of the pictures on the horizon you can see the winding tower and gob piles of the ‘Red Partisan’ coal mine (marked with the red).

Most of the interesting profiles of the Russian militants are added to the ‘Peacemaker’ database (i.e. Chernomeza Nikolai and Vyalshin Ganibal).

Here are other photos from their profiles and the profiles of their comrades.

The ‘3’ digit in a diamond can be seen in the photo below. It is written over the half worn original Russian mortar’s number ‘441’.

Vyalshin Said Ganievich, a Russian militant, published yesterday a set of fresh pictures with the Russian tanks.

About the Russian military base in the territory of boarding school.

The exact location of the non-resident premises where the ‘Gvozdika’ mortars are noticed cannot be found for now. But this building is the permanent location where these mortars are stored – this is proved by the pictures taken in different time (take a look at the photo from February 2, 2015).

Please note that there are loud-speakers in the premises, it may help in the identification of this place.

Ukraine Central Bank Cuts Key Interest Rate to 27%

Rate cut is a result of slowing inflation

KIEV, Ukraine—Ukraine’s central bank lowered its key interest rate to 27% from 30%, citing reduced inflation risks.

The National Bank said slowing inflation meant “it is possible to start a softening of monetary-credit policy,” though the bank added it would have to keep monetary policy relatively tight to keep inflation slowing.

Ukraine’s central bank raised the key interest rate to 30% in March from 19.5% following a sharp decline in the value of the national currency, which caused prices to skyrocket. Yearly inflation peaked in April at more than 60%, though the National Bank said in June that it expected year-end inflation to be 48%.

The rate cut is “the beginning of gradual monetary policy normalization after the bank was forced to raise rates aggressively to stabilize the hryvnia,” said Piotr Matys, analyst at Rabobank.

Earlier Thursday, Ukraine’s government said it had reached a debt-relief deal with private creditors that included a 20% write-down on the face value of their Ukrainian bonds.

“The good news keeps on coming in Ukraine,” said Timothy Ash, emerging markets analyst at Nomura. The central bank is “obviously trying to reinforce the local view that this debt deal is good news.”

Four Ways the West Could Counter Putin in Ukraine

A man inspects debris while standing outside his house, which according to locals was damaged by recent shelling in a fight between Ukrainian government forces and Russian-backed separatists in Donetsk, Ukraine, August 17. So far, the West has reacted to the current cycle of violence only with statements of concern, which Moscow predictably ignores

This month, Russia stepped up military pressure on Ukraine, concentrating about fifty thousand troops along its border with Ukraine, using its proxy militias to shell Ukrainian government positions in the Donbas, and threatening Kiev with “a big war.”

The current escalation indicates Russian discontent with Ukraine’s refusal to make unilateral concessions such as allowing the creation of a demilitarized zone in Shyrokyne near the city of Mariupol without reliable guarantees that Russian-backed separatists won’t take back this area after Ukrainian forces withdraw.

Parties to the Minsk contact group discussed this issue at an August 3-4 meeting but failed to agree. They also bickered over the idea of withdrawing heavy weapons of less than 100 mm caliber. In both cases, the main obstacle has been the lack of reliable guarantees that separatists would keep their part of the bargain.

Escalation in the Donbas and maneuvers of Russian forces along the Ukrainian border are designed to impress not only Kiev but also the French and Germans. It was French and German pressure—and U.S. pressure as well—that in July 2015 led the Ukrainian parliament to add to the draft constitutional amendments a provision referring to self-governance in certain districts of the Donbas (which pertain to the Russian-occupied territories). Many Ukrainian MPs see that provision as a concession to Russia, and a potential danger to Ukraine’s sovereignty and territorial integrity.

Ukraine’s parliament plans to vote for the draft constitutional amendments on August 31 and in early September, and Russia still hopes France and Germany will help it push provisions that give it the opportunity to influence Ukraine through the Moscow-controlled separatist areas of the Donbas region.

On August 17, Russian Foreign Minister Sergey Lavrov expressed hope that Moscow—together with Berlin, Paris and Washington—”will be able to help establish direct dialogue” between Kiev and the separatists. But so far, Ukraine has rejected direct negotiations with separatists because they have not been legitimately elected, and consequently are not legitimate representatives of the Donbas people.

Ukraine’s local elections set for October 25, 2015, also annoy Moscow. Russia’s proxy in the Donbas—in violation of the Minsk II agreement—refused to hold elections in accordance with Ukrainian law and scheduled its own elections on October 18 and November 1. The Kremlin wants to force Kiev and the West to recognize the predictable results of such separatist “elections” and thus legitimize the Moscow-controlled regime.

It is also possible that constant shelling will provoke Ukraine to attack Russia in response. If that happens, Russia might use such an attack as an excuse for another major escalation with the involvement of Russian regular troops.

So far, the West has reacted to the current cycle of violence only with statements of concern, which Moscow predictably ignores. Even the August 9 destruction of OSCE vehicles in Donetsk didn’t cause angry reactions from Washington or Brussels.

The West should understand that Moscow’s readiness to fulfill its obligations cannot be bought with concessions at Ukraine’s expense. Putin wants all of Ukraine, and after he gets it, he’ll want the Baltic states.

Only the following measures can stop Russian aggression:

First of all, the West should make clear that any further escalations—even minor ones—will cost the Kremlin dearly. Strong sanctions packages should be on the table, ready to come into force in case of renewed attacks or shelling.

Moscow would think twice before escalating if it knew that such actions would disconnect Russia from SWIFT, and that a possible attack on Mariupol would spark an embargo on Russian oil.

Secondly, the West could deter Russia from constantly transferring military equipment to separatists by compensating Ukraine with defensive weapons deliveries. The Kremlin might lose its eagerness to provide separatists with new battle tanks and APCs if it knew that Kiev would get an appropriate amount of Javelins to neutralize them.

Western counter-battery radars could become a good answer for Russia’s supplies of artillery systems. And so on, until Moscow understands that its military transfers are useless.

Thirdly, the EU must dramatically boost financial aid to Ukraine. One of the main goals of Moscow’s military escalation is to exhaust Ukraine and make it a failed state. Even one-fifth of the EU’s assistance to Greece would help Ukraine overcome its present crisis and deprive the Kremlin of the joy of seeing the Ukrainian economy collapse.

Finally, the West must change its paradigm of helping Ukraine, and begin resorting to the most effective measures instead of the cheapest. France and Germany should remember who blocked Ukraine’s path to NATO common security, and the EU should recall whose oil and gas money allowed Putin to rebuild the army that has killed thousands of Ukrainians.

What is the poverty threshold in Russia?

Poverty level is the minimum income level necessary for a person to sustain their health and meet their basic needs. The amount is established by the government on a quarterly basis and is based on the statistics of consumer prices for goods and services.

The minimum consumer basket in Russia consists of 156 products and services, in the U.S. – 300, France – 250, the U.K. – 350 and Germany – 475.

There is a graduation for different social groups – the poverty level for workers, retirees and children depends on the amount of required daily food products, among other things.

Apart from the nationwide average poverty level, there are regional values.

The highest amounts are found as a rule in the northern regions of Russia. For example, the average poverty level income per capita in the Nenets Autonomous District in the second quarter of 2015 was set at 18,545 rubles ($280).

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Finland detains Russian on US request; Russians irate

The Ministry of Justice has confirmed that a Russian man has been detained in Finland at the request of the United States.

The Russian news agency Tass reported Wednesday that a Russian national had been detained in Finland following a request from the United States. The Russian Foreign Ministry representative responsible for human rights, Konstantin Dolgov, was quoted by the news agency saying that the individual was detained at the border en route from Finland to Russia.

Dolgov charged that the case was part of the illegal practice by the United States to detain Russian nationals in other countries, and noted that if the case was about intervening in criminal activity, “it would be more logical to first send any relevant information to the suspect’s country of origin,” particularly since Russia and the US already have a contractual framework for cooperation in judicial and criminal matters.

“Our starting point is that he cannot be extradited to the United States,” Dolgov added.

No US request

The foreign ministry official said that Russia expects Finland to review the matter on the basis of constitutional rights and the norms of international law. He said that the Russian embassy in Finland will explore every possible means to resolve the matter.

Hannu Taimisto from the Ministry of Justice told Yle that the United States has not in fact issued an official extradition request, and that Russia may issue one of its own in order to ensure the man’s return. In such a scenario, says Taimisto, deciding which country the man should be sent to would be “complicated”.

The United States has 45 days to issue an official request for the man’s extradition before he is set free. The Russian man in question is wanted for fraud in the state of Minnesota.

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Russia is reviving old Soviet-era armored trains for its $400 billion military plan

The Russian military has begun reviving its old Soviet-era armored trains, a Czech Republic newspaper reported Friday. The revelation, which was hinted at earlier this month when the Russian minister of defense said that four of the armored trains could be recommissioned, is part of Russia’s $400 billion project to modernize and expand its military.

“Russian intentions indicate that in addition to introducing a number of revolutionary new technologies, now comes something of a ‘Renaissance’ of some (supposedly) obsolete categories of military equipment,” the Czech website wrote.

The four trains — the Baikal, Terek, Amur, and Don — were used in troop-support missions in the North Caucasus from 2002 to 2009 as part of a specially formed division of the Russian Railway Troops.

After the end of the war in Chechnya, the Ministry of Defense, under the previous leadership of Anatoly Serdyukov, decided that the trains could be decommissioned. On the orders of Serdyukov, the arms on the train were dismantled, and the cars were sent off to depots.

However, the current defense minister, Sergei Shiogu, has reversed that decision.

Armored trains are generally an old military concept that peaked in use during World War II, but are still useful in very specific military environments.

They are typically used to transport precious cargo and troops into the heart of conflict zones, enabling the fortification of strategic cities and towns. Securing or destroying transport links is often the first thing an invading force does during a war.

The recommissioning of the trains comes as the Russian military prepares to introduce the T-14 Armata tank, which it will transport into conflict zones.

Russia’s military modernization is expected to be complete by 2020.

Read more:

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Ukraine’s financial watchdog reveals illegal payments for Russian gas delivered to occupied areas

The State Financial Inspection of Ukraine has found that Ukrinterenergo, state-owned foreign trade company, paid Russia’s Inter RAO ES JSC for gas that had been delivered to the temporarily occupied territories of Ukraine, in violation of the Ukrainian legislation, according to the Inspection’s website.

During the government-approved inspection of Ukrinterenergo regarding its financial activities in the period from January 1, 2014 to May 31, 2015, the monitors have also found that the company signed contract with a legal entity created for economic activity in the temporarily occupied territory of Crimea under the Russian law on the annexation of the Crimea, which is not recognized by Ukraine. Amendments to the text of the said contract after its signing were revealed, suggesting its forgery.

The Inspection forwarded the results of the revision to the Main Directorate of the Interior Ministry of Ukraine in Kyiv for further assessment of evidence of probable criminal offenses.

The monitors also informed the Cabinet, submitting relevant proposals.

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