"...it is important to talk to Russia. [...] Because first it is our neighbor, and also because it is important that we have a stable relationship with this country, (inaudible). And it is in the name of these principles that we would like to maintain this dialogue. It does not prevent us from standing firm, like we said earlier.

But of course, Europe, as well, need to talk to Russia at a high level, and mainly because there is a major issue, which is arms control.

And over the past few month, we witnessed the de-organization – deconstruction of the regulation system of weapons that – the system that was put in place in – at the end of the ’90s on the strategic armaments. And luckily, we have New START being extended, but we also have the issue of the intermediate nuclear forces.

And all of these regulations are a matter of security to prevent any accident or incidence, to provide some relative transparency. All of that does not exist anymore, so this is what is at stake – the interest to rebuild, to begin to rebuild all of that.

It was discussed by President Biden and President Putin, and this is what we will be working on together based on a common agenda.

So we need to talk to have a strategic stability, to have relational stability between the Europeans and the great neighbor. And all of the initiatives aiming at talking with a willingness of dialogue are there.

And they’re not – the Americans, while they’re specialist in dialogue with Russia, and the Europeans are special experts in sanctions, we need both, and this is what we’re doing."
French Foreign Minister Jean-Yves Le Drian at a joint press conference with US Secretary of State Tony Blinken June 25, 2021

"We have for years promoted relations [with the EU], doing this in a sincere and pragmatic manner. These relations were aimed at integrating things, minimising costs, engaging in mutually beneficial cooperation in a number of areas.  

Regrettably, this largely fruitful work was stymied by the West, by the Brussels elite, who are fully at Washington’s beck and call. European nations, citizens of European countries have nothing to do with this blockade. 

Why did this happen? Because peaceful, mutually beneficial and effective coexistence on the European continent is a nightmare for the United States! Because it means they will be unable to find competitive advantages or fish in troubled waters. No! Any kind of US domination will be out of the question.

As of today, “divide and rule” is the sinister, frightful 21st-century logic, with its conscious intention to sow chaos and attempt to rule.  

We were proceeding from pragmatic decisions that were necessary for our national interests.  Let me remind you that the EU was created as the European Coal and Steel Community; integration in other areas was launched later, with the ECSC transformed into the European Economic Community and subsequently the European Union with a common currency. It all seemed well and good until it dawned on someone in Washington that Europe acquiring its own strong currency and a totally independent energy system was unheard-of impudence.

Can you imagine what it means for the US “deep state” to understand that Europe is energy independent and has its own mineral resources and technologies to produce and deliver these to any location in Europe and neighbouring regions. 

It means leaving the United States out in the cold. Obviously, they could not afford it, because they have no competitive advantage left to them other than the capacity to wreak havoc.  

So, everything was done, as we understand now, to transform the EU from an independent economic integration system into an economic division of NATO, to destroy ties, and deal a blow to the entire edifice of European unity, which we observed."
Foreign Ministry Spokeswoman Maria Zakharova   8 June 2022

"Washington demands more and more sanctions against Russia and the majority of European politicians obediently go along with it. They clearly understand that by pressuring the EU to completely give up Russian energy and other resources, the United States is practically pushing Europe toward deindustrialisation in a bid to get its hands on the entire European market.

These European elites understand everything – they do, but they prefer to serve the interests of others. This is no longer servility but direct betrayal of their own peoples. God bless, it is up to them.
President of the Russian Federation Vladimir Putin 30 September 2022

"On 21 November 1806, Napoleon, by issuing the Berlin Decree, enacted the world-largest embargo ever against the United Kingdom. The Berlin Decree established the so-called Continental System, a Europe-wide blockade forbidding France-aligned European countries to import British goods.   

Initially the embargo seemed to work: the British withdrew from Europe and in a few months the exports to the continent fell by half.

But over time the British found three ways to break the international isolation: circumvention, diversification and diversion. In a few years the UK was capable of replacing the trade with Europe by deepening the ties with overseas colonies and the rest of the world. A life-threatening challenge was turned into a once-in-a-lifetime opportunity to create a still existing symbiotic metropolis-peripheries relationship – ie the Commonwealth.

While the UK gradually recovered from the blockade, France-centered Continental System suffered more and more because of Europe's over-reliance on British imports, from textile to technology. The economic troubles fueled smuggling, prompting Napoleon to intervene, even militarly, as it occurred in Spain. But, eventually, sabotage and imperial overstretch weakened Paris' capability of controlling the Old Continent and quickened Napoleon's downfall.

The UK experienced a pre-modern economic encirclement, a pre-modern form of containment, and turned the isolation from Europe, which was London's main trade partner, into an opportunity to expand into new markets, to strengthen national industries, and to shape its future vital space.

Napoleon's desires never materialised: the UK experienced no high inflation, no stagnation, no economic crisis, no bankruptcy. Conversely, the Continental System would prove crucial in fueling the UK's extraordinary political and economic growth throughout the 19th century."
Emanuel Pietrobon, Geopolitical Analyst, 5 May 2022

An Apartheid International Trading System

"We lost faith in our Western colleagues’ negotiation skills and dependability after 2014, when Crimea-related sanctions were imposed on us...Since then, we have been relying on ourselves and our contacts and connections with dependable partners. As a result of the measures we had taken, we became an agricultural powerhouse. For many years before that, we had been importing large amounts of food."
Russian Foreign Minister Sergey Lavrov  4 June 2022

"Even before Russia's invasion of Ukraine, all the U.S.' major Western trading partners agreed that there must be significant systemic reforms to the WTO's structure and rules to make it a functioning institution.

China and to a lesser degree Russia's presence in the WTO, along with the WTO's own rules, however, make reforming the institution virtually impossible.

Therefore, any consideration of real reform must include eliminating the institution and starting over...By withdrawing PNTR status for certain WTO members, the U.S. is recognizing that it can no longer remain shackled to a framework that no longer functions properly. If the institution is unable to force reform because of the gridlock created by its own rules, then it is time to consider abandoning the institution.
Withdrawing PNTR is a first step in creating a system for countries that adhere to Western democratic ideals."
Robert DeFrancesco, American lawyer

"We drew a lesson from all this, which is to never again rely on these people.

This does not mean that we will stop talking to them. We’ll see what they have to tell us when they get over the current insanity.

Under no circumstances, from here to eternity, will we ever let any critical sphere of our country or our people’s lives depend on Western investment or technology."
Russian Foreign Minister Sergey Lavrov  4 June 2022


"Why, by interweaving our destiny with that of any part of Europe, entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor or caprice?"
George Washington, Farewell Address, 17 September 1796

"Events of this year confirm the special significance of such a factor as accessible and affordable raw materials without which it is impossible to organise any production process or to set up co-production chains. Russia is just about the only country that is completely self-sufficient in terms of natural resources, and the Far East plays a substantial role here. This region is a highly important supplier of crude oil and natural gas, coal, metals, timber and marine biological resources to the domestic market and our foreign partners.

We are staking on the prudent and rational development of Russia’s natural riches under the most stringent environmental standards. First of all, we will refine all extracted raw materials domestically as much as possible. We will also use these raw materials to strengthen the sovereignty of this country, to ensure industrial security, to raise incomes and to develop the regions.

We have already protected the resource extraction industry from unfriendly actions. From now on, only companies with Russian jurisdiction have the right to develop natural resources in Russia.

The Ministry of Natural Resources and Environment together with the Ministry of Industry and Trade and leading business associations has determined the national economy’s demand for strategic raw materials. This information will become the foundation of the revised Strategy for the Development of Russia’s Mineral Resources Base with an extended planning horizon up to 2050."
Vladimir Putin, 7 September 2022

• Russia is uniquely able to run a sovereign currency that is indexed to the value of real commodities.
• The Central bank of Russia uses gold (in part) to regulate the supply and value of the ruble.
• The 'illiquid' ruble means that foreign speculators cannot influence its value.
• Import substitution by new domestic producers, or from suppliers in friendly countries means Russia will import fewer and fewer goods from the west. Therefore western commercial bank treasuries will only be able to hold limited ruble reserves. They will have to come to Russia with gold or acceptable foreign currency if they want more.
• Friendly countries will likely export more goods to Russia, and have better access to ruble reserves. The gross domestic product (based on purchasing power parity) of the eight countries that either refused to apply western 'sanctions' plus 'sanctioned' countries - China, India, Russia, Indonesia, Brazil, Mexico, Iran, and Turkey – is greater than the G7 nations (US, UK, Japan, Germany, France, Italy, and Canada).
  
• If a Eurasian Monetary Fund is created, 'friendly country' currencies will gain some resilience.
• Russia is creating a very stable, carefully controlled currency, with enduring purchasing power - but a currency that is only spent domestically and regionally.

"We always want to make sure that any sanctions that we put in place can at some point - if behavior changes - be reversed in order to make sure that threat actor knows that once sanctions are put in place, the goal is behavioral change ultimately"
- US Deputy Treasury Secretary Wally Adeyemo 17 April 2022

"5,787 new restrictions have been imposed against Russian legal entities and individuals since February 22, and their number has reached more than 8,500 in total. No other country has ever had so many restrictions imposed on it. Even Iran, which has been under sanctions for more than 40 years, comes in a distant second, with only 3,600."
- RT, 12 April 2022

1.1 Prohibit or physically block the import of Russian goods

#1 "...as part of the sixth sanctions package introduced last month, the EU imposed a partial embargo of Russian oil, banning sea shipments of oil to the EU and prohibiting European companies from insuring and reinsuring sea shipments of Russian oil and oil products to countries outside the European Union.

As a result, major energy players such as Vitol, Glencore, Trafigura, Shell and Total stopped trading Russian oil for third countries.

Now, however, they will be able to resume business with Russia. The legal details of the new provision will be published in the Official Journal of the EU"
RT 23 July 2022

#2 In early August the UK removed sanctions on insurance and reinsurance of ships carrying oil to third countries (not the the EU). The UK is the single major ship insurer in Europe. Russia has made it illegal to insure with 'unfriendly countries' anyway, and has developed it's own insurance businesses for it's own oil and LNG carriers.

Reversal: in early September 2022 the EU and UK (oil buyers) agreed they would 'cap' oil prices, and that any 'friendly country' buying oil from Russia at prices higher than the cap would result in withdrawal of insurance on the oil tankers and prohibition on using EU/UK ports to unload. This 'cap' is to start in December 2022. Obviously, the EU and UK don't control the international oil market. This 'initiative' has quite rightly been met with scorn and derision.

"Russia will embargo countries that support the Washington-proposed price cap on its oil...In my opinion, this is a complete absurdity… To those companies or countries that will impose restrictions, we will not supply our oil and oil products, because we are not going to work under non-market conditions”
Deputy Prime Minister of the Russian Federation Alexander Novak 01 September 2022

"In September 2014...Restrictive measures forbade the US export of commodities, services and technologies to support deep-water, Arctic and shale projects of Gazprom, Gazprom Neft, LUKOIL, Rosneft and Surgutneftegas (Forbes 2014). The new US sanctions introduced in August 2017 applied to these five companies and forbade American citizens and companies from participating in their new projects both within and outside Russia (RBC 2017). However, Bogdanov commented that the sanctions would have little effect on Surgutneftegas since it did not have any debt denominated in foreign currencies, did not have any deep-water or (offshore) Arctic projects and had limited dependence on foreign technology (Neftegaz.ru 2014a)."
'Russian Oil Companies in an Evolving World'  Indra Overland and Nina Poussenkova

"OECD Europe has refinery intake of roughly 11 million barrels a day. It has its own crude production of about some 3 million barrels a day. The remainder is imported. Of this, we have some 800,000 barrels a day of Russian crude flowing via Druzhba which will be difficult to replace initially, and another roughly 1.5 million barrels a day of Russian crude heading to OECD Europe via sea...So potentially a very large hole in the European balance..."
Neil Crosby analyst OilX 15 April 2022

"Why should Russia maintain oil production of 10 million bpd if we can (more) effectively consume and export 7 million-8 million bpd without losses to the state budget, domestic consumption? Which is better - to sell 10 barrels of crude for $50 or 7, but for $80?"
Leonid Fedun, Vice President Lukoil 30 May 2022

"Today's package contains a complete import ban on all Russian seaborne crude oil and petroleum products. This covers 90% of our current oil imports from Russia. The ban is subject to certain transition periods to allow the sector and global markets to adapt, and a temporary exemption for pipeline crude oil to ensure that Russian oil is phased out in an orderly fashion. This will allow the EU and its partners to secure alternative supplies and minimises the impact on global oil prices."
European Union press release 3 June 2022

"Member States who have a particular pipeline dependency on Russia can benefit from a temporary exemption and continue to receive crude oil delivered by pipeline, until the Council decides otherwise."
European Union press release 3 June 2022

"Croatian President Zoran Milanovic said that the sanctions didn’t work because they cut energy purchases from Russia, but global prices for energy are on the rise. As a result, Russia is receiving even more revenue than last year. Let them draw their conclusions. Clearly, they have finally started crunching the numbers and trying to figure out what they are doing and what are the consequences"
Russian Foreign Minister Sergey Lavrov 1 June 2022

"Limited spare capacity in the global refining system, together with reduced exports of Russian fuel oil, diesel and naphtha have aggravated the tightness in product markets, which have now seen seven consecutive quarters of stock draws. While a first tranche of SPR releases halted the precipitous decline in OECD industry stocks in March, crude made up the majority of it and product stocks have continued to fall. Notably, middle distillate reserves reached their lowest levels since April 2008."
IEA May 2022 report

'...the REPowerEU strategy appears to be the most feasible.The plan suggests cutting Russian natural gas imports to 101.5 bcm from 155 bcm ( 2021) – in theory, by increasing non-Russian gas supply by 63.5 bcm, and reducing gas demand by 38 bcm.The EU plan to cut two-thirds of its Russian gas imports and replace it elsewhere – by the end of 2022 – is very optimistic...to attract more LNG cargoes, spot prices in Europe should be $2-3/MMBtu higher than the Asian markets. This is leveling now at $35/MMbtu for the rest of 2022 which is more than five times their five-year average.

The bottom line is that it will be impossible for the EU to increase their LNG imports by the crucial 50 bcm milestone. Even if the EU overcomes the technical issues represented by the regasification capacities and the interconnections between the EU countries and Britain, the supply in the global LNG market simply cannot meet the demand.

Although Europe may receive an extra 25 bcm of LNG, it will come attached to a very high price tag, while prices in North America will be largely unaffected. The US is the big winner in this scenario...Europe will have to acknowledge that it will be neither an energy independent or politically independent continent for the foreseeable future.'
'Beggaring Europe: switching cheap Russian gas for expensive American LNG' The Cradle, Daoud Baalbaki 15 June 2022

"More than ever, getting rid of Russian fossil fuels and of fossil fuels in general, is essential. What is at stake is both the need to accelerate the fight against climate change, and, as we can see now, the short-term energy security of the European continent."
Barbara Pompili, EU President 3 March 2022

"Regarding Nord Stream 1, our German partners have agreed that all technical aspects of Nord Stream 1, including the maintenance of gas-pumping turbine units, are subject to British law because – I myself was unaware of this and learned about this from Mr Miller – Gazprom had to sign a contract for the maintenance of these units made by Siemens not with the Siemens main office but with its subsidiary based in the United Kingdom, which slapped sanctions on Gazprom, and agreed to repair the turbines at a Siemens plant in Canada.

What do we have to do with all of that? Canada finally took it but yielded to numerous requests coming from Germany and gave it to Germany, whereas under an agreement with a Siemens subsidiary in the UK, the turbines were to be shipped straight to St Petersburg. Logistics arrangements have changed and the contract has to be revised. The British-based Siemens subsidiary will not even respond to Gazprom’s inquiries.

You can take as many photos with the turbine as you want, but give us the documents, for crying out loud. This is our property. We need to understand the legal status of this property and its technical condition. They give us nothing but chit-chat.

The last turbine is now out of order, so Siemens representatives came to look at it. There is an oil leak, which is an explosion and fire hazard. There is no way for the turbine to remain operational given its current condition. Give us the turbines, and we will turn on Nord Stream 1 overnight. They do not give us anything. They say we are weaponising it. What are they talking about? They themselves messed things up big time and are now not sure what to do about it. They drove themselves into a sanctions dead end.

There is only one way out. In Germany, people are rallying to turn on Nord Stream 2. We are supportive of the demands by German consumers and we are ready to turn it on as early as tomorrow. All we need to do is press the button, but we are not the ones who imposed sanctions on Nord Stream 2."
Vladimir Putin 7 September 2022

Gazprom, Russia's gas giant, said last week that since the beginning of this year, the EU had reduced its imports of Russian gas by 48%, while the EU plus the UK combined have reduced Russian gas imports by 49%.

Gazprom's exports to countries outside the CIS have shrunk this year by more than 35% compared to last year's period.

Still, the gas giant is set to rake in 85% higher revenues this year, to around $100 billion, as natural gas prices surged following the Russian invasion of Ukraine and the significant cut to Russian pipeline gas exports to Europe, an analyst told the Financial Times last week.

"We are going to provide the power of Siberia pipeline 2 within four years. We are going to complete this process and we are going to have the completion and reliable supply of gas without any Europe - and when Europe says that you cannot live without us that's absolutely nonsense! Russia will survive, it's a big territory it's a big country."
Andrey Gurulyov, Member of the Russian Federation State Duma budget expenditure commission 30 September 2022

"Using natural gas from the Russian Federation for decades, the leading European economies clearly had advantages of a global dimension. If they believe they have no use for these advantages, that’s okay with us and does not bother us in any way, because the demand for energy around the world remains high. It is not just about our friends from the People's Republic of China, whose economy is growing fast, as I said and everyone in the world is well aware of, the demand for energy is growing...

...Even the Europeans’ US partners have redirected their LNG tankers to Asian countries...In effect, today it is the biggest economy in the world in purchasing power parity. The Chinese economy is bigger than the American one. Their needs are on the rise, we have stable agreements...Our Chinese friends are tough bargainers. Naturally, they proceed from their national interests in any deal, which is the only way to go. But they are stable and reliable partners and the market is enormous.

But there is more to it. We will also engage in liquefying gas and selling LNG all over the world. As you see, I have already cited an example of the first Arctic LNG-1 tanker ... Everybody is buying it. They will buy it, it will be profitable for them. So we have no problems at all. If European countries want to give up on that, losing their competitive advantages, this is up to them. Let them do it."
Vladimir Putin 7 September 2022

Russia has a plan to be able to produce 110-190 bcm/year of LNG exports by 2025. Russia is already the world's fourth largest LNG exporter at 40 bcm/y LNG exports. There is likely to be very strong competition.

"The EU is the world’s largest LNG importer. In 2021, the bloc purchased 80 billion cubic meters of LNG. Among the union’s major LNG suppliers are the US (28%), Qatar and Russia (20% each), Nigeria (14%), and Algeria (11%)."
RT 24 July 2022

 "Rosatom's cooperation agreement with France's Air Liquide for a project to build a hydrogen production complex on Sakhalin Island has expired...Rosatom said it ...is now "continuing the implementation of the project independently with the participation of a number of Russian and foreign partners.

Air Liquide...announced on Friday that it intends to exit Russia. The company said it signed a memorandum of understanding with the local management team...to transfer its activities in Russia in the framework of a management buyout. This is subject to Russian regulatory approvals.

Rusatom Overseas, Air Liquide and the Sakhalin regional government signed a memorandum of understanding in the spring of 2021 to study the possibility of building a complex on Sakhalin Island to produce up to 100,000 tonnes of hydrogen per year. The parties completed a feasibility study for the project in February 2022....Rosatom is considering a total of ten pilot projects in the field of hydrogen energy. Rusatom ...is now developing these projects. The company is doing research on large-scale hydrogen transportation and production and working with metal companies."

 “US persons are prohibited from engaging in any transaction – including gold-related transactions – involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation.”
US Treasury 2022

"In order to ensure, under the current conditions, the state’s technological independence and security based on the full life cycle of production from raw materials to final products, the Russian Federation Government was instructed to develop and implement a set of priority measures to create demand for domestic solid minerals (including rare and rare earth metals, titanium, lithium, manganese, beryllium, tantalum and wolfram) in certain critical sectors of the economy (metallurgy, the defence, chemical and medical industries, and construction).

These measures should, in particular, provide for a consolidated order for specific types of goods (machinery, assemblies, installations and materials) with an increase in the share of Russian solid minerals in the chain of their manufacture; the creation of Russian production capacities and technologies for the processing, mining and exploration of minerals, and the geological study of minerals; the utilisation of waste components of mining and processing activities, ashes and slags; the geological and economic reassessment of recorded state reserves; the assessment of probable mineral resources; and the adjustment of strategic planning documents for the development of the mineral resource base and industries regarding the coordination of goals, activities, indicators and deadlines.

The Russian Federation Government, together with the Federal Assembly chambers, was instructed to work out the issues of stimulating the exploration and mining of strategic and scarce types of raw materials and to make the necessary amendments to the legislation.

The Government, with the participation of the Russian Academy of Sciences, Rosatom State Corporation and other interested organisations, was instructed to determine the priorities for the development of the mineral resource base of solid minerals in conjunction with the forecast for scientific and technological development in order to create promising high-tech products and materials for the long term. In addition, the instructions relate to the development and implementation of a federal scientific and technical programme aimed at providing comprehensive support for geological exploration, mining and industrial processing of solid minerals, as well as the accelerated substitution of imported technologies and equipment with Russian equivalents.

The Government was instructed to organise prompt and coordinated support to address these tasks, including using the mechanisms of the Russian Federation Government Coordination Centre."
Instructions following an audit of the implementation of legislation and presidential decisions aimed at developing a promising mineral resource base 28 June 2022

“The nickel alloy market is estimated at around $10 billion and expected to grow by 8–10% over the next five years. That is why we see a great opportunity for Nornickel to enter new high value-added markets and actively promote nickel, the Company’s strategic product.”
Denis Sharypin, Nornickel Head of the Marketing Department 23 August 2022

"I will emphasise it once again – Russia has been and remains one of the world’s main food producers and exporters. We supply our agricultural products to 161 countries. Last year, we exported over 43 million tonnes of grain, including 33 million tonnes of wheat. This year, we expect good grain harvests, which will allow us to increase our supplies to the external markets up to 50 million tonnes."
Vladimir Putin, 30 June 2022

"Together with the State Council Commission on Agriculture, the Government has been instructed to amend the Agriculture and Fishing Development Strategy until 2030 to set forth a growth rate of at least 3 percent for agricultural output; set annual performance indicators for the import substitution of critical agricultural products as well as products used by the agriculture industry and fisheries; state support measures for these sectors, including to promote new export opportunities for finished products and increasing funding for the state programme to rehabilitate and reclaim farm land."
Presidential Instructions following meeting on agricultural industry, fisheries and related sectors’ development April 26, 2022

"In addition, there is also a problem with Russian grain exports. Although the West loudly proclaims that grain is not covered by the sanctions, it coyly remains silent about the sanctions on vessels carrying Russian grain. They are not accepted in European ports and are denied insurance. All logistics and financial chains linked with grain supplies to the world markets are under Western sanctions."
Russian Foreign Minister Sergey Lavrov 1 June 2022

"Western countries, which have artificially created several problems by closing their ports to Russian ships and disrupting supply and financial chains, should seriously think about what is more important to them: to use food security as a media stunt or to overcome the challenge with concrete steps. It's up to them."
Russian Foreign Minister Sergey Lavrov 31 May 2022

"...volatile weather results from ‘the combination of a high continental weather pattern, with the occasional blocking in the seasonal paths of cyclones’ (ibid., p. 3), producing ‘dry hot east winds’ which blow all the way ‘from Central Asia across the Volga, Northern Caucasus and the Ukraine’ (ibid.). These hot winds from the deserts bring high temperatures and virtually no rainfall, causing serious droughts across the whole chernozem region."
'Persistent farmland imaginaries: celebration of fertile soil and the recurrent ignorance of climate' Oane Visser 2020

"The company is also focusing on foreign trade. In 2021, exports amounted to almost 3 million metric tonnes. Our main goal is to fully bypass international trade mediation and work directly with the importing countries. Egypt is probably our main client. Over two agricultural seasons, we ranked highest among Russian exporters with 1.5 million metric tonnes of wheat.

Moreover, with our partners from friendly countries, we are transitioning to payments in national currencies. For example, we have signed several contracts with our Turkish partners. The latest of these, signed in March, is payable in rubles; the overall total will be about 3 billion rubles."
Dmitry Sergeyev CEO of the United Grain Company 6 July 2022

#1 On 22nd July 2022 Russia came to an agreement with the United Nations to allow facilitate grain ships leaving Ukraine via the Black Sea. Turkey and the UN will inspect the empty ships (with Russian and presumably Ukrainian observers) as they enter the Black sea in order to confirm they are not carrying weapons to Ukraine.
The price for this agreement is that the sanctions on Russian grains must be removed. I think this refers to sanctions on insurance, port access, and shipping companies, as well as on specific sanctioned products. Time will tell.

"Officially, the sanctions on our fertilisers and food have been lifted, but in reality certain restrictions remain. This is a complicated and insidious situation. It appears that there are no direct sanctions affecting our products, and yet there are restrictions concerning logistics, chartering ships, money transfers and insurance. Many of these restrictions persist, although credit should be given to the efforts of the UN Secretary-General and the United Nations in general: when it comes to chartering ships, many restrictions are being lifted despite the sanctions imposed on the ports we ship cargo from. Nevertheless, this sector is being released from the restrictions and the vessels can already call at our ports. So, the situation is improving.

There are still certain restrictions that prevent us from ensuring that the interests of all consumers in global food markets are being served. As a result, prices on the global markets are going up. But we hope that the remaining restrictions will be lifted. This is the first point.

Second. You may remember my meetings with our friends in Africa and African organisations. As I said in my speech, we promised to do everything we could to serve the interests of the developing countries – specifically, by ensuring supplies to their markets, including supplies of Ukrainian grain. When we discussed this, that was the understanding.

What we see is more audacious deceit. And they did not deceive us: they deceived the international community, their partners in Africa and other countries that desperately needed food. It is a con job, impudence and disgraceful conduct towards the partners who were supposed to benefit from the deal. It was a hoax, see?"
Vladimir Putin 7 September 2022



"Of the 87 ships that left Ukrainian ports carrying grain, 32 remained in Turkey, and I believe that was a fair part of the deal because Turkey was the country that arranged this entire process and therefore is certainly entitled to this. Three went to South Africa, three to Israel, seven to Egypt, 30 to the European Union, and only two ships headed for the poorest countries under UN food programmes – for Yemen and Djibouti. They carried 60,000 tonnes of grain, or a mere 3 percent.

I would like to ask the Foreign Ministry to take this into account when interacting with our partners, including the UN. True, we cannot influence this process, cannot direct how much food goes where, but nevertheless, we consider it right to increase supplies to the poorest countries...

In May-August of this year, the Russian Federation supplied 6.6 million tonnes of grain to world markets, including wheat, barley and corn, of which as much as 6.3 million tonnes went to Asia, Africa and Latin America. Overall, by the end of the year, we will supply 30 million tonnes of grain and are ready to increase our exports to 50 million tonnes or more, because thank God, this year's harvest is good."
Vladimir Putin 9 September 2022

Looks like Türkiye acts as middleman for some shipments, but the noise from the west about the starving south can't receive grain due to Russia has been shown to be a lie. Very little of it was ever intended for those most in need.

"Let me add that restrictions on the operations of Russian metal and steel manufacturers are a clear act of unfair competition (I repeat, we can see this in other industries as well), they are attempts by Western countries to restrain Russian businesses as leaders in world metallurgy and redistribute the markets, of course, in their favour.

I would like to stress once again that Russia will always be a reliable and responsible supplier of metallurgical products to foreign customers and partners regardless of any current political troubles. We will also be reliable partners to those who are looking for beneficial, predictable business cooperation, but we will not act against our own best interests in relations with those who have adopted an openly unfriendly stance towards us. This applies not only to the metal market, but also to our other exports..."
Vladimir Putin, 1 August 2022

"Our foreign customers and partners have always seen and continue to see cooperation with Russian metallurgists as predictable and mutually beneficial.

...the Western states have imposed illegal restrictions on Russian companies. This includes a ban on shipping ready-made products, as well as the purchase of certain components for manufacturing - rolled metal products, steel sheets, rods, etc."
Vladimir Putin April 20, 2022

"...these unfriendly steps towards Russian metallurgists are only serving momentary political interests...they have suspended ties that took years to establish and that hinged on reasonable parameters like business reputation, mutual interest and economic efficiency.

There was no place for these key concepts, which are crucial to businesses, in the political games of Europe’s bureaucrats...there is no reason to believe that there will be any essential change in our partners' behaviour. We have to take this into account when implementing our metallurgy development strategy at the corporate and state levels.

...Businesses are already rebuilding their logistics and production chains and looking for new suppliers and clients in order to keep enterprises working and protect the interests of their staff.

...we should not forget about the long-term development of the metallurgy industry, the implementation of its future plans, and seek not only to ensure the steady operation of the entire metallurgical complex and to maintain production volumes but to boost production capacity and expand the range of goods produced domestically.

I suggest that we discuss a potential industry development model with the business representatives here, based on the current state of affairs and thinking far ahead.

I want to stress the importance of domestic demand, which needs to be supported and stimulated – primarily, by expanding the scope of residential, infrastructure, commercial and industrial construction, and by producing more metal-based goods.

I want to repeat that long-term projects and programmes are necessary to support the demand for Russian metals. The impact of such projects and programmes will serve the entire economy. It will benefit the Russian regions and their residents."

Obviously, new clients have to be found from amongst the 'friendly' countries. But Russia may be a price taker. Metallurgical exports fell about 20% year-on-year in Q2 2022, steel prices are down due to muted global demand, sheet metal product demand in particular is down, domestic consumption is down. New markets are being found, but at a discount to export markets lost in Europe. For all these reasons, Evraz, Russia's largest steel goods manufacturer, is struggling.

But as Evraz makes 28% of all Russian railway wheels and 97% of Russian train-tracks, it has to be regarded as a strategic company. The more so that it has partnered with Gazprom to mutually explore pipeline transport of hydrogen gas, a process that requires 'high spec' steel and special welding techniques. The hydrogen gas is derived from re-formatted natural gas, and the CO₂ waste stream from this process can be captured and stored deep underground in depleted natural gas reservoirs. Gazprom has a great deal of experience in carbon capture and storage. Hydrogen gas can only be transported in licensed gas pipelines, and who can produce and certify the specialised steel pipes has a strategic and economic advantage.  Russia generally takes majority control of strategically important companies by one means or another, so I expect Evraz to be added to the Russian government strategic asset list.

Currently Evraz North America is privately owned, with one major shareholder (who recently resigned as chairman), and the company is listed on the UK stock exchange. The UK has blocked trading in it's shares, and sanctioned the companies products and financial transactions (including dividends and repatriated profits from the US subsidiary). Clearly, Evraz Russia is ripe for de-listing and takeover by the Russian government - who will also inherit it's debt. The majority shareholders loss on assets of Evraz North America can be dragged for decades through the WTO and various courts.

Tin plate (used in food canning, aerosoal spray cans etc) in Russia is in short supply due to 'sanctions'. In 2014 Belarus funded an enterprise to make tin plate to export to Europe, but it has fallen into bankruptcy. In August 2022 Belarus took on the companie's debts, and nationalised it. As tin plate to Europe is now 'sanctioned', Belarus has turned east. Belarus will supply it's own annual needs of about 30,000+ tonnes (previously all imported) first, and then supply tinplate to Russia, Kazakhstan, Africa and Central Asia instead. The plant is aiming to produce around 9,000 tonnes a month by November 2022, and reach the full capacity of 150,000 tonnes of tin plate annually by 2024.

International conditions for expansion of steel use are currently unfavorable to Russia. Domestic demand is key to the survival of the Russian steel industry. As always, the government has to pay for this by subsidising or funding new projects. As it happens, infrastructure development is the Russian governments main priority. Russia is the largest country in the world, with vast distances between towns. The eastern and northern regions are poorly served with road and rail. New industries in the near arctic are hampered by poor roading, poor communication, poor water, poor housing, and poor public facility infrastructure. A large amount of investment money is needed, and not all of it can be supplied by the rather carefully controlled Russian budget. Foreign investment is needed.

The government brought in a regime of tax breaks for foreign investors - an important source of capital. Westerners will no longer be able to invest in Russia. But other countries, such as China, the UAE, Saudi Arabia will.

A combination of private domestic and foreign investment. plus Russian government investment, funded from budget surplus and cheap loans from the Central bank might make up for losses of longstanding steel contracts with the west.

Russian steel products are likely to be sold at discounted prices, if that is what it takes to keep the industry alive. Better prices also help cement in long term relationships.

And Russia plans ahead for the long term. It has a plan for an economy that improves its citizen lives (the number one priority of government, according to President Putin). That plan involves a lot of coordination of private and public investment, and involves a lot of logistics planning, a lot of big projects. And that involves a lot of steel.

Coal Industry
Russia is the third-largest coal exporter, after Indonesia and Australia. Russia provides about 18% of world coal exports by volume. Almost 23% of Russia's coal goes to China (over 45 million tonnes a year), and about 22% goes to the EU (almost 39  million tonnes in 2021). South Korea and Japan took roughly 17 million tonnes each in 2021. 

The Elga coal deposit in Yakutia has reserves of about 2.2 billion tonnes. It is not only the largest coal deposit in Russia, it is also one of the largest coking coal deposits in the world. Coking coal is 'metallurgical coal', that is, it is the carbon source used in making carbon steel.

On April 8th 2022 the EU prohibited import of Russian coal, with the restriction due to come into effect on 10 August 2022. This is surprising given the EU's dependence on Russian coal imports. Maybe the eu will import it (at great expense) from Australia. On 21 July 2022 the UK also prohibited the import of Russian coal as from 10 August 2022.

Both China and India are increasing imports of Russian coal to take advantage of the reduced price. Turkey has started importing larger than usual quantities of coal from Russia (1.8 million tonnes in June 2022, which, if annualised, is a bit over 21 million tonnes per year) If fact, Russian overall coal sales have increased slightly since the start of the Ukraine operation.

Titanium

Russia is the world's 4th largest titanium exporter, valued at USD$471 million in 2020. Main export markets 2 years ago (millions) were Germany $148, US $132, China ~$29, UK ~$27, Ukraine $22.5. It's imports in 2020 were modest (millions), Kazakhstan ~$19, China ~$9, Estonia $10.7, US ~$7, Ukraine ~ $6.

Most of the world titanium dioxide concentrate produced in the world is for the bright white pigment used in white paint and in plastics. Only a small percentage of the mined ore is used to smelt into titanium metal, an energy intensive and technically complex process. Russia has 3 large titanium mines. Russia's largest titanium mine is Ruchar, with 3 billion tonnes of ore containing 15% titanium. The Pudozhsky mine in the Republic of Karelia.has 516.7 million tonnes of ore (8.1% titanium). This mine also contains resources of about 1 million oz of platinum and 2.4 million oz of gold.The Yugo-Vostochnaya Gremyakha mine in Murmansk Oblast.has 585.3 million tonnes of titanium ore grading out at 8.51% titanium.

Russia is not listed in the US Geological Survey data on tonnage of titanium production. The UGS gives its data in weight of titanium dioxide, rather than ore containing a certain percentage of titanium oxide. Perhaps Russia's reserves are simply being air-brushed out. Even so, Russia is the worlds third largest producer of 'smelted' (sintered) titanium 'sponge', 33,000 metric tonnes per year. China is the worlds largest producer (110, 000 tonnes). Japan is second largest titanium sponge producer (50,000 tonnes).

The Russian State owns the world's largest titanium producing company VSMPO-AVISMA Corporation, which is a subsidiary of state-owned Rostec corporation. While titanium is a not uncommon mineral, it is, of course, a strategic mineral, important in aircraft and spacecraft manufacture. Russia produces about a third of global titanium used in the aviation sector. In addition to titanium, VSMPO-AVISMA produces aluminum, magnesium and steel alloys, and exports products to 50 countries around the world. VSMPO-AVISMA has facilities in USA, Ukraine, Germany, England, and Switzerland. Boeing USA has invested heavily in  a joint 50:50 venture with VSMPO-AVISMA created in 2007, 'Ural Boeing Manufacturing'. The joint venture makes titanium components for Boeing finishing in Boeings USA factories, as well as parts for Airbus. VSMPO-AVISMA also supplies manufactured parts for Embraer, Safran, and Rolls-Royce.

"In an interview with Design News, Boeing’s chief materials maven Alan Miller brushed off concerns about relying on a Russian source for titanium. Miller said that Boeing has done a lot of collaborative work in developing new high-strength alloys in collaboration with Russian titanium experts.

Boeing’s alliance with the Russian titanium industry has been growing since the early 1990s. As of 2008, VSMPO-Avisma will become Boeing’s biggest titanium supplier, moving ahead of US companies TIMET and RMI Titanium. As part of the deal, Boeing is helping develop Russia’s aircraft production capabilities."
Design News July 30 2007

A second production line was launched in 2018. This highly automated 82 million dollar expansion, located in a special economic zone called 'Titanium Valley' machines parts for Boeings new civilian airliners. The 'titanium valley' special economic zone has special tax concessions and customs fast-tracking for investing companies, as well as guaranteed infrastructure.

Ironically, while Russia has been the reliable partner, the US has not. The Boeing officials should have been more concerned with their own politicians de-stabilising a mutually beneficial partnership with their 'sanctions'.

"During last November’s Dubai Airshow, the company and Boeing announced an extension of Ural Boeing Manufacturing joint-venture “for years to come.” A Memorandum of Understanding covered the supply of titanium of current and future commercial aircraft programs, including the 737/MAX, 767, 777/777X, and 787, making the Russian company the largest supplier of titanium parts to Boeing. The two companies would also work together on new alloys and technologies. In a press statement at the time, Boeing Commercial Airplanes CEO Stan Deal described VSMPO-AVISMA as “a reliable and valuable partner to Boeing for almost 25 years.”"
Airinsight.com February 28, 2022

The 'sanctions' means that Boeing 'suspended' buying titanium from Russia. Boeing had been diversifying titanium sources in recent years, and while it still relies on Russia for 30% of its overall titanium metal supply, Boeing believes it can increase its supplies from domestic US suppliers, China, Japan and Kazakhstan in sufficient quantity to replace Russia. The US produces about 100,000 tonnes of titanium dioxide a year, but has to import a further 1,000 000 tonnes of TiO₂ a year, mostly for use as a white pigment. It is discretely quiet about the machined parts it obtains from its Ural Boeing Manufacturing joint venture. According to various industry internet resources these parts are still delivered by roundabout means that comply with the letter, but not the 'spirit' of the so-called 'sanctions'. It seems there is a certain amount of 'don't ask, don't tell' going on.

Boeing has suspended the supply of aircraft parts to Russian airlines, and suspended training in Russia. The EU banned the sale and trade in aircraft and aircraft parts in February 2022, but didn't ban imports of titanium, as such.

"Airbus has said it relies on Russia for half its titanium needs, while state-backed VSMPO-AVISMA provided a third of Boeing's needs under a deal renewed last November [2021]. Last month, Boeing said it had suspended buying Russian titanium. Aerospace officials say Airbus is partly concerned about the reliance on Russia at suppliers like France's Safran, which uses titanium to make jet engine parts and landing gear.Safran said in February it had reserves for several months and depended on Russia for less than half its needs."
Reuters 12 April 2022

Will the American and European aircraft part manufacturing trade return? That is really 'will the American and EU 'sanctions' end'? If you 'tool up' to make specific parts for specific airline models, as Boeing did, it is a big financial blow if you have to walk a way from it. Well the French seem to have got cold feet, because on 22 July 2022 the EU abandoned the proposal to impose sanctions on VSMPO-AVISMA - mainly due to objections from France.

If Boeing walks away from their Russian investment, they might lose the Russian specialist titanium metallurgic expertise as well as the modern bespoke production capacity. Or they may pay a huge salary for the experts to emigrate to America. America's loss may end up as Russia's gain.

USA mainly imports titanium ore from South Africa (27%) Madagascar (18%), Australia (15%) and Mozambique (15%). China, which has the worlds largest titanium ore reserves (230 million metric tonnes titanium dioxide) - is also a massive titanium ore consumer. Not only did it consume all the ore it produced, China also imported 3.6 million tonnes of titanium mineral concentrate in 2021, mainly from Mozambique (32%), Australia (14%), Vietnam (13%), and Kenya (9%) (U.S. Geological Survey, Mineral Commodity Summaries, January 2022). While China exported titanium-based manufactured products it remains a nett importer of its own resource. No doubt it met its own needs for titanium metal first. Australia has the worlds second largest titanium ore reserves, with 160 million metric tonnes of titanium dioxide. India has the worlds third largest titanium ore resource, at 85 million metric tonnes, but has relatively little mine production.

Nuclear Industry

Russia’s Rosatom exports fuel for Brazilian nuclear power plants and radioisotopes for medical purposes. Rosatom is also interested in participating in the construction of new power units in Brazil, including low-capacity nuclear power plants, both land and floating plants, because it has unique and extensive experience, and technologies that are not available elsewhere in the world.
Russia Press Statement 16 February 2022

Russia is an important supplier of nuclear fuel assemblies (including to Ukrainian nuclear power plants), and is also involved in building nuclear power plants in Turkey, Egypt, and Brazil.
The El Dabaar nuclear power plant project will be Egypt’s first nuclear power plant. It has a design-lifetime of 60 years. When completed in 2028, the plant will have 4 reactors capable of producing 4,800 megawatts. The Russian government is meeting  85% of the $30 billion cost, but as a loan to the Egyptian government. The remainder is met by the Egyptian government and investors.Rosatom will supply the nuclear fuel for its design lifetime, and maintain and repair the reactors for ten years. In 2021 Russia started training Egyptian specialists to take over the work in full after the ten year period.

"We would like to highlight that the initiative from Fennovoima's management to terminate the EPC contract - which is such a major step for the project - was taken without any detailed consultation with the project's shareholders, the largest of which is RAOS Voima (an 100% subsidiary of Rosatom), with a 34% stake.

"The reasons behind this decision are completely inexplicable to us. The project has been progressing and we had established a good working relationship with our client."

Rosatom added: "We reserve the right to defend our interests in accordance with applicable contracts and laws."
World Nuclear News 3 May 2022

In late March 2022 Finland reneged on it's fixed-price contract with Rosatom to build a 1, 200 megawatt nuclear power plant. No doubt Rosatom will sue them.

Rosatom has an agreement with Uzbekistan to construct two VVER-1200 nuclear reactors to be operating by about 2028. Russia has financed most of the 13 billion cost, and will train Uzbek technicians in all aspects of nuclear technology deployment. The reactors will meet about 15% of Uzbekistans expanding energy needs. (Currently, most Uzbek electricity is generated from natural gas. It also imports electricity from neighbouring countries.) Uzbekistan has the world's 7th largest uranium resources, mostly exported to USA, China, and South Korea.

Defense industry

"A lot has been done over 2021. Our consolidated revenue grew by almost 10 percent and amounted to 2.06 trillion rubles. We have crossed the important psychological milestone of two trillion. We have been trying to achieve this for a long time and, finally, last year we surpassed this barrier, this milestone.

Our consolidated net profit increased by almost 47 percent and constituted 163.5 billion rubles. EBITDA increased by 18 percent to 335 billion. The total market value of our assets is a new indicator that we introduced last year. It is 980.5 billion rubles, which is 50 percent higher than in 2020; this means that the value of our assets is constantly growing.

The share of civilian products in the consolidated net profit amounted to 45.5 percent."
Sergey Chemezov, CEO of Rostec State Corporation 18 May 2022

The Russian Government-owned Rostec Corporation ('State Corporation for Assistance to Development, Production and Export of Advanced Technology Industrial Product') is the largest player in the Russian defense industry. The Russian government has long wanted to see civilian product spin-offs from defense technology, as has happened in the west. The President set Rostec a target of a civilian market segment of "50 percent by 2030". As Sergey Chemezov noted, they have already achieved 45.5%, and, 'thanks' to both covid-19 and western sanctions, it is almost certain this target will be met much earlier than expected.

The western sanctions have created a strong imperative for Russia to innovate across many industries. The Russian military has been a major source of innovation since the earliest times, and the pace seems to have accelerated under external pressure. While the most advanced hypersonic missiles are unlikely to be exported, the various track-decision-launch integrated layered defense systems are exported. They are already competitively priced, fairly efficient, and are likely to become a popular option for countries needing a defensive posture as a major part of homeland security.

The updating of the strategic defense system, including the massive liquid fueled Sarmat ICBM, has allowed Russia to design and build an unbeatable nuclear strike missile. The Sarmat can reach into space, has a range that allows attack from any direction (including via the South Pole), has an ability to accelerate, and a degree of maneuverability.

Advances in satellite-based electronic intelligence for military operational purposes, including sophisticated integrated optical and radar technology, is not usually 'for sale'. But again, there are spin-offs in commercial space vehicle satellite deliveries, as well as other civilian spinoffs.

Sergey Chemezov outlined some of the accomplishments of Rostec in the military sphere in 2021 and projects for the future -
- Rostec will use its experience in the special military operation in Ukraine to develop 'pocket-sized' drones that are all but invisible. They will be used for fire control and real-time military intelligence, especially useful in urban warfare.
- Total redesign and equipment refit of the 1980's Tu-160M missile carrier, fitted with Rostec's new NK-32 engine ("We have actually created a totally new aircraft. It looks like the previous model on the outside, but in fact, everything is new")
- The Checkmate fifth generation light tactical 'stealth' fighter with a modified Su-57 engine. Flight testing is due in 2023 and production is due in 2027. (This aircraft was designed mostly for export)
-  Okhotnik UCAV drone with an innovative flat jet nozzle that makes it less visible to radar with production due in 2023.
- the first Russian-made diesel gas-turbine engine (the M55R), to be used in Russian frigates

Electricity sector

Russia is a nett energy exporter.  Russia's Electricity exports in year end January 2022 were $179M and imports were $2.11M, a nett export value of $177M. Russia exports electricity mainly to Finland ($116M, 9 terawatt-hours nett), about 10% of demand, China ($22.2M), and Lithuania ($20.1M), with smaller amounts to Kazakhstan and Latvia. In May 2022 Finland refused to pay Russia for the electricity Russia had already supplied, Fingrid saying "Due to these restrictions payments for sold Russian electricity can no longer be made." As a result, Russia cut off power to Finland until Finland had paid its debt.

The Russian grid is run by the national grid company Rosseti, which is 88% owned by the Russian government. Rosseti is one of the largest grid companies in the world. So far the west's trade restrictions haven't had a major impact. The Rosseti CEO says that "large-scale" transition to domestic equipment and "solutions"  has been accelerated by the restrictions, implying it was already under way. He says Rosseti is "giving a lot of our time to it" and has "accomplished quite a lot". Russia historically has produced most electricity from thermal generation (coal and gas). About 68% is from thermal sources, but many of the turbines and associated equipment is old and long overdue for upgrading.Upgrading had already started prioe to the recent sanctions, but mostly affected small capacity turbines. It was cheaper and easier to buy foreign medium and large turbines (mainly Siemans and GE). Maintenance was done solely by overseas specialists, and parts of course came from overseas. The Russian government now has to build it's own large turbines, fund Russian scientists and technologists, find made solutions to technically challenging parts of turbine manufacture, solve technical problems, and subsidise the local manufacturers in perpetuity. All of which it can do over time.

Russia has long had the ability to make power station transformers, including for nuclear reactors and renewable energy. Russia in fact exports such products. Overall, the sanctions will accelerate the already-planned modernisation of Russia's thermal power generation.

As at 2021 electricity supply reached 860 billion kilowatt-hours, 56 billion higher than 2020. Time will tell if this growth rate (7%) in supply will continue. According to Kommersant, there are forecasts that electricity exports over summer 2022 may reach 1.35 billion kWh. The massive 2022 drought in China restricted China's electricity supply at a time when airconditioning was desperately need, and as a result, Russia's exports to China jumped by 35%. The value of electricity sold to China in the first 6 months of 2022 reached $125 million - more than fives times greater than for the whole of the previous year. Rosseti's revenue increased to 1.1 trillion rubles in 2021, 100 billion rubles more than 2020. A major focus of investment of some of this revenue is to 'de-bottleneck' distribution of electricity from the Murmansk Region (which has a surplus from it's hydro, nuclear, and wind power plants).

"Providing the Eastern Operating Domain with electricity, our largest project at the moment, is our top priority, no doubt about it."
Andrei Ryumin, CEO Rosseti 12 July 2022

The grid has also been extended to mining companies in isolated areas of Russia's autonomous regions and one of the republics in Russia's East - as well as port facilities in the Far East.

Aviation sector - civilian aircraft

Russia, the largest country in the world, is the world's 11th largest aviation market. Quite apart from the EU banning all business jets, and passenger and cargo airliners in the EU airspace, the EU has banned the sale, trading and leasing of aircraft to Russia.

Aircraft parts, vital to repairs and airworthiness certification, are also banned. In response, the Russian government will provide it's own airworthiness certifications, has placed the leased overseas owned aircraft on it's own domestic register, has allowed the terms of existing leases to be unilaterally changed, and has allowed the Russian government to "add exceptions" to foreign aircraft ownership rights. The law was put in place days before about $10 billion of leased aircraft were to be re-possessed. Russia leases about 515 foreign aircraft.

"Not all of Russia's 35 airlines, about 15 of which represent 95% of the country's traffic, are relishing what experts have already warned could spiral into aviation's largest default.
"We hope to avoid registering our planes in Russia; we want to return them to leasing companies," a source at one of the airlines said."The airline would become an accomplice. The law provides a way to register in Russia, but does not oblige the airline to do so....It is the first step to the kidnapping of the airplanes."

Moscow's government insists special measures are needed in the face of sanctions on the economy that President Vladimir Putin has described as "akin to a declaration of war". Lawyers say a three-way legal battle between airlines, lessors and insurers could last for a decade."
Reuters 15 March 2022

As it turns out the major lessor, AerCap, terminated the lease on the aircraft and engines that it could not seize back, and 'wrote off' their value. Perhaps some time in the future the leases may be reactivated, but who knows what is in the contracts and what effect sanctions have on obligations by either party...

"In AerCap’s first-quarter report...the company said: “In response to the Russian invasion of Ukraine and sanctions imposed by the United States, the European Union, the United Kingdom and other countries, we terminated the leasing of all our aircraft and engines with Russian airlines. Prior to the Russian invasion, we had 135 aircraft and 14 engines on lease with Russian airlines, which represented approximately 5% of AerCap’s fleet by net book value as of December 31, 2021. We have removed 22 aircraft and 3 engines outside of Russia, and 113 aircraft and 11 engines remain in Russia.”
John Helmer 26 July 2022

Russia is already building it's own passenger aircraft, the UMC-21, the TU-214 and the SSJ-100. Because of the sanctions affecting component availability, the united Aircraft Corporation can only deliver two MC-21's in 2022, rather than the 4 initially planned. A fully import-substituted version should be built by 2023, and certified with the substitute components for sale in 2024. The Sukhoi SSJ's contain foreign parts, and 19 have already been built, and will be delivered.  Work on an import-part free version of the SSJ regional jet started in 2018, and a fully import-free version is expected to be available in 2024. This seems very optimistic, as the engine for the SSJ-100 is produced by a French-Russian joint venture, and the French components have stopped being delivered. The Russian side is toying with the idea popular with the Germans, that is, some form of 'temporary' control of the local assets of the French company in order to ensure a supply of spare parts from stock on hand.

"To prevent disruptions, the Ministry of Industry and Trade reportedly proposed an idea to legalize the transfer of foreign companies’ property to Russia-registered enterprises. The move could ensure that the property of foreign companies, that terminated their business in Russia due to the international sanctions, would be temporarily managed by Russian entities and resources such as spare parts for SaM146 engines could be seized to secure the maintenance of SSJ100 jets"
AeroTimeHub, Gabriele Petrauskaite 31 March 2022

At the moment, only 2 or 3 of the longer range narrow body TU-214 aircraft are produced per year. Russia will build additional construction capacity and increase this to up to 10 per year. They will replace the Airbus and Boeing planes Russia has used up until now.

Russia also produces a wide body passenger plane, the Ilyushin-IL96 long range aircraft, as well as the Soviet-era Ilyushin Il-76, a four-engine turbofan airlifter used for cargo.

Spare parts will be made for all the domestically produced planes at a proposed new manufacturing center in Kazan, capital of the Republic of Tatarstan. Russia hopes to have it up and running by the end of 2023. Its focus will be on parts for domestically manufactured aircraft.

Russia had relied heavily on Ukraine for helicopter parts, at least. But following the 2014 coup in Ukraine, Russia has joined China in joint production of aviation products - engines, helicopters, parts, specialised cockpit glass. A China-Russia joint company has already been buying Russia's Ka-32A11BC on contract to the Shanghai Ministry of Public Security. China uses the twin engine multi-purpose mi-8 and the newer mi-17 helicopters in various versions, both military and civilian. China has used the various helicopters produced by Russian Helicopter manufacturers for many years.

The Rostec-owned plant in Ulan-Ude produces helicopters at a 'state of the art' modern facility, producing for customers all over the world. As well as high tech versions of the Mi-171, the 'Russian Helicopters' Rostec subsidiary is producing an advanced fully digital single engine civilian light helicopter, the VRT-500 for release about 2023. However, the engine was expected to be from Pratt & Whitney Canada - there is no chance for that now. Where an engine might come from is unclear at this point, but it is very likely it will be either Russian designed, built, and certified, or it will be from a reliable partner.

Russia certifies the overseas companies that do maintenance and repair on the helicopters that Russia has sold. NATO is a party to the conflict in Ukraine, and repairs Ukraine's Russian helicopters via companies in Bulgaria and the Czech Republic. As of 14 July 2022, Russia has suspended their certification, and stopped supplying spare parts.

The prohibition on the import of foreign civilian airplanes has given the domestic civilian aviation industry a massive boost. Russia's United Aircraft Corporation (UAC) is now producing civil aircraft "in large quantities: not large enough yet, but we are striving towards this" - Sergey Chemezov, Rostec, May 2022

"I would like to note that in general, Russian air carriers will soon be thoroughly re-equipped. Our airlines, including Aeroflot, have placed the largest order package in modern history, for about 500 Russian-made mainline aircraft. By the way, as far as I know, the United Aircraft Corporation and Aeroflot have signed a respective agreement on the sidelines of this Eastern Economic Forum, and the figures in there are quite impressive – over a trillion, I think.

This high demand should become a powerful incentive for aircraft factories and design bureaux, for many related industries, including electronics and aircraft components, and, of course, for the schools training professional personnel including engineers and skilled blue-collar workers in the aviation industry."
Vladimir Putin 7 September 2022

Backdown Record

#1 In early August the UK removed sanctions on insurance and reinsurance of aircraft, aircraft parts, and aero-gas turbine engines. 

Medical industry

Russia produced the world's first covid 19 vaccine, showing it was fully capable of meeting the needs for technically advanced immunilogical products domestically.
Rostec's Natsimbio (National Immunobiological Company) subsidiary supplied over 100 million sets of all kinds of vaccines "from the coronavirus to flu, and various other diseases" to domestic customers in Russia. Most were domestically manufactured.

Russia's Direct Investment Fund financed ChemRar to develop the world's first anti-coronavirus drug, Avifavir. It is currently sold in at least 15 countries. The Russia's Direct Investment Fund is also backing a project to localise production of the Sputnik V vaccine in Brazil.

In 2010 Prime Minister Vladimir Putin announced the Russian government plan to 'onshore' the pharmaceutical sector of the economy. This seems realistic with regard to antibiotics, as generic (off patent) antibiotics can in principle be manufactured by anyone from various precursor chemicals. China dominates the manufacture and global supply of these chemicals because it has low labor costs, government subsidies, and lower environmental standards. Given their global dominance, China has economies of scale.

The antibiotics made from these precursors are immensely important. The broad spectrum fluoroquinolone antibiotic Ciprofloxacin for example, is highly important in treating bacterial sepsis within the body cavity, bone and joint infections, respiratory infections, anthrax, typhoid, urinary tract infections and so on. China has the intention of becoming the 'pharmacy of the world', and will achieve this goal for medium and smaller countries. Large technically advanced countries could make the precursor chemicals, but will need government subsidies to do so.

"Today, China is the main source of the key ingredients for both penicillin and another class of antibiotics, cephalosporins. Together these drugs comprise two-thirds of the antibiotics used in the U.S. each day...when a giant cargo ship ran aground in the Suez Canal, global trade was snarled. More than 200 vessels carrying billions of dollars’ worth of goods were left waiting to get through the canal. Such a bottleneck could pale in comparison to potential antibiotic shortages. If U.S.-China tensions were to escalate over Taiwan, trade corridors and supply chains would be at risk of massive disruption—including the freighters expected to bring antibiotics to America’s hospitals and pharmacies."
MarketWatch 28 April 2021

It is clear to me that the US intends to manufacture critically important medicines domestically in future for strategic reasons (90% of the drugs consumed in USA are generics, most finished generics are imported - mostly from India - and the 3 major US resident generic drug manufacturers Mylan, Sandoz and Teva have relocated generic drug production to China. Western domestic single batch preparation of generic antibiotics precursors and intermediates is low profit margin, inefficient, and can't compete with slowly emerging continuous flow production [CFM]).
 

"Continuous manufacturing is best described as a series of processes that optimize drug production to a continued flow of drugs. This is in contrast to the widely used batch manufacturing, which consists of complex processes rendered across the world where materials are made in large batches, rather than in a consistent flow.

Denoted as one of the top 10 emerging technologies, a November 2021 World Economic Forum (WEF) report stated that CFM could effectively “revolutionize” the process of drug manufacturing by allowing greater personalization of each medicine made on-demand that would not need to be shipped across multiple locations. Yet adopting CFM will likely be a long process, particularly while producing complicated assets like biologics.

...As of now, Baxendale says that some aspects of CFM are appearing in the pharmaceutical industry rather than a wholesale transfer to flow chemistry. New tools and new processes still need to be created, and many companies consider CFM at a proof-of-principle stage, says Baxendale. Although CFM could play an increasingly more visible role in the industry, Kappe anticipates seeing the use of both batch manufacturing and CFM in a hybrid system in the years to come."
 Pharmaceutical Technology May 20, 2022

India has a massive trade imbalance with China, and is very dependent on China for the active ingredients for medicine manufacture. Strategically, India is likely to produce at least the more important active ingredients locally in the future.

Russia is somewhat dependent on imports from India at this stage. I suspect Russia will indeed slowly move to re-shore manufacture of critical medicines. In principle Russia can import active ingredients from China at very favorable prices, but once again, they would be wise to expand their domestic active ingredient production facilities, at least for medicines of critical importance. And if they have the capital to further build the sector, Russia certainly has the educational-technical capacity to develop continuous flow techniques right from the very start - driving down costs.

Russia already subsidises strategically important industries. It already takes a 51% shareholding in industries that are strategically important. Expending and subsidising a chemical precursor industry for domestic insurance would be fully in line with their current strategic practice.

"Ravi Uday Bhaskar: Sanctions do not apply to medicines and agriculture. So, even discontinuation of supply in the shadow of western sanctions may not have a serious impact because Russia possesses its own capabilities to manufacture active pharmaceutical ingredients as well as formulations.

In fact, Russia's domestic market is good, and they are capable of getting things done.

Sputnik: China is a major supplier of active pharmaceutical ingredients (APIs) which are the raw materials for medicine. If Beijing tries to fill the void in the Russian market created by European countries ceasing to supply medicines, do you fear any disruption in the supply of basic materials?

Ravi Uday Bhaskar: I do not think so. China is one of the most prominent suppliers of APIs, intermediates, and basic chemicals. That's why it will not have any serious effect on supply of raw materials from China.

Europe also imports APIs and other raw materials from China. Ukraine may face problems with raw materials but Russia will not face any disruption as it has good relations with China. And Russia itself is capable of tackling challenges resulting from western sanctions.

Sputnik International 11 March 2022

The 'Pharma-2020' and 'Pharma-2030' initiatives required Western pharmaceutical companies locate their production in Russia. Abbott, Johnson & Johnson, Novartis, GlaxoSmithKline, and Pfizer are among the large Western drug companies producing vaccines, generic medicines, or Russian branded products.Russia remains a lucrative market for western (mainly European) pharma companies.

Russia sold out Veropharm, its major medical products company, in 2014 to the US owned Abbott Laboratories. The pharmaceutical industry in general is exempt from the western illegal trade restrictions, and Abbott intend to remain operating in Russia, as are most US major drug companies.

"We remain committed to providing essential health products to those in need in Ukraine, Russia, and the region, in compliance with current sanctions and while adapting to the rapidly changing situation on the ground.”
Johnson and Johnson spokesperson March 2022

"...major opportunities will open up if they leave, and the market will accommodate new players. I am 100 percent confident that the substitution of foreign owners and manufacturers will improve the quality of services for Russian citizens. I am 100 percent confident."
Vladimir Putin April 20, 2022

“We take good care of those foreign businessmen who stay [in Russia]. We have extremely great respect and the same care for those businessmen who, under pressure, are now forced to wait it out, but who have already said that they will resume their activities here as soon as possible"
Dmitry Peskov, Kremlin spokesman, 12 June 2022

"Margarita Simonyan: Mr President, I would like to show you something that I have brought with me especially. It is juice, and it used to be so nicely coloured. It does not matter what sort of juice it is; you cannot even see the brand here, although it is a popular one. And now – do you see? A small picture and the rest is white. Why is that? And this is happening on a massive scale.Because we ran out of paint. The producer of paint for such packaging has left Russia, and the producer of the packaging also announced that they are leaving. I bought this two weeks ago, and soon this will disappear.

Vladimir Putin: Whenever any decisions are taken, the key issues must be singled out. What is key for us? Being independent, sovereign and ensuring future-oriented development both now and for the future generations? Or having packaging today?

Unless we have sovereignty, we will soon have to buy everything and will only produce oil, gas, hemp fibre, saddles and sell rough logs abroad....

...The issue is not about import substitution, the issue is to establish our own capabilities based on progress in education, science and new promising schools of engineering.

We will always be given packaging materials and other simple things, event telephones and smartphones. What we have never been given and never will be is critically important technologies. We have never been given them before even though we had problem-free relations with our Western partners in the previous decades. This is the problem.

And when we begin to stand up for our rights, we are immediately slapped with some sanctions and restrictions; this is what the problem is all about.

Therefore, we must commit ourselves to that and have the capacity to reproduce critically important technologies on the basis of what I mentioned.
And with that base we will always be able to manufacture the goods you mentioned: packaging materials, telephones and smartphones. If we realise that and keep focusing on solving fundamental issues, we will resolve everything else without a problem.

Let me reiterate: others are already coming to that place – those who produce the packaging materials, those who produce the paints. We are also starting to produce paints and other consumer goods as well as goods employed in industry in a broader sense. We can make anything – I have absolutely no doubt about that.

Obviously, some things will be lost, other things will be made on a new basis, much more advanced – the way it happened earlier. Therefore, when we talk about import substitution, we will substitute some thing(s) while other things will have to be done on a totally new promising basis of our own making."
Margarita Simonyan, CEO RT News, and Vladimir Putin, President of Russia, at the St. Petersburg International Economic Forum Plenary Session 17 June 2022

Soon after the start of the operation to expel Ukrainian forces from the newly declared breakaway republics, the EU and US closed it's airspace to Russian flights. This effectively ended most Russian overseas tourism, putting Russia's Aeroflot's fleet of aircraft almost out of work. As a result, Russia has focused on domestic air transport, subsidising domestic airfares until October 2022. Russian airlines also received a subsidy in 2022 to make up for lost international air routes and restrictions on flights to 11 airports in southern and central Russia associated with the operation in Ukraine. These restrictions will stay in place until August 2022, at least.

The government's overall objective is for Russian airlines to carry at least 100 million passengers in 2022.

"I must note that recently Russian shipbuilding companies have faced difficulties with supplies of foreign equipment and parts for civilian vessels. We know the reasons for this: our Western partners are failing to comply with their commitments for purely political considerations...I recognise that the replacement of foreign equipment and components in the production of fishing and other civilian vessels may affect the parameters of current projects...

In general, let me stress that, as you know, the situation in the world and the actions of our Western partners have shown once again that we need be proactive in developing our own competences in shipbuilding. I have said this many times.

It is impossible to substitute every imported part, and there is no need to do this, but it is necessary to achieve technological sovereignty in critical positions of ship equipment, and in the most significant production processes and technologies. We need to make sure that as many operations as possible to equip, retrofit and repair ships are carried out in Russia...

We need to set in motion the initiatives of Russian shipbuilders, their domestic suppliers and customers, to support the upgrading of our shipyards and offer convenient financial mechanisms so that new orders for high-quality, modern vessels, including ice-class ships, are completed in Russia in order to increase the capacities of the Northern Sea Route and our other Arctic projects. All this is necessary to increase the workload of domestic enterprises and to create jobs in this complex, high-tech industry...

Construction of high-tonnage ships is one of the main prospective areas in Russian shipbuilding. We have already decided to subsidise part of the costs of these projects when they are connected with the localisation of plants and the creation of cutting-edge Russian technologies in this area.
Vladimir Putin 18 August 2022

"Since the London Market’s Joint War Committee (JWC) listed the Black Sea a week before the conflict began, much has happened...Apart from the physical damage to ships and many vessels being trapped, underwriters have been faced with a variety of challenges from the ever expanding sanctions regimes which failed to deter the attack, have failed to stop the conflict and have not yet changed the political path adopted by Russia.

For insurers whose reason for existence is to support trade, it is difficult to thrive in an environment where they are being compelled to stop themselves and others from trading. Having put expensive compliance teams in place and embedded due diligence, they are under intense pressure. This is further evidenced in the advent of self-sanctioning where entities take a policy decision not to broke or write any new or renewal business in certain countries. The situation is legally constricted as running risks cannot simply be cancelled unless there is contractual reason to do so.

Problems have arisen from the speed and number of measures as well as the difference between sanctions and asset freezes, plus variations between different national measures. These can leave clients at least partially without cover and underwriters similarly without reinsurance. Additionally, the reinsurance market has felt the need to utilise territorial exclusions, so many underwriters are now significantly and unexpectedly exposed without the protection they had expected to have.

The situation remains very fluid, with new developments daily, so underwriters will proceed with great caution, if at all, as the penalties for errors are high."
Neil Roberts, Head of Marine and Aviation at Lloyd’s Market Association June 2022

#1 "...as part of the sixth sanctions package introduced last month, the EU prohibited European companies from insuring and reinsuring sea shipments of Russian oil and oil products to countries outside the European Union.
As a result, major energy players such as Vitol, Glencore, Trafigura, Shell and Total stopped trading Russian oil for third countries.

Now, however, they will be able to resume business with Russia. The legal details of the new provision will be published in the Official Journal of the EU"
RT 23 July 2022

#2 In early August the UK removed sanctions on insurance and reinsurance of ships carrying oil to third countries (not the the EU). The UK is the single major ship insurer in Europe. Russia has made it illegal to insure with 'unfriendly countries' anyway, and has developed it's own insurance businesses for it's own ships. For example, State-owned Sovcomflot, Russia's biggest shipping company, now insures it's own fleet itself. through 'Russian National Reinsurance Co'. (also state owned). The Russian National Reinsurance Company has become the main reinsurer of Russian ships.
What this 'sanctions backdown' really means is that London is losing insurance business, and this is a futile attempt to rescue a bit of what little is left.

"The Russian Industry and Trade Ministry has offered imposing a ban on exports of wood and a number of articles made from it until the end of this year. The ban will cover unfriendly countries that have been put on the list, including the US and EU countries. Birch raw wood (the main raw material for paper production) and chip fuel placed under the ban are critical goods for the European Union...In its turn, the ban on exports of peeler block (raw material for plywood production) amid the EU’s anti-dumping duties on ready plywood from Russia will prevent European producers from boosting capacities of their own enterprises using Russian raw materials"
Russian Industry and Trade Ministry 11 March 2022

"However, soon supplies to the EU could become questionable. The thing is that Belarusian enterprises won’t be able to obtain new international certificates of compliance of standards of sustainable forest management and certificates of conformity guaranteeing respect for the rights of wood industry workers known as FSC."
Belsat 4 March 2022

"...we are ready to fully meet the demand of agricultural producers in Indonesia and other friendly countries for nitrogen, phosphorous and potassium fertilisers and raw materials for their production. Russia’s share of mineral fertiliser in the world market amounts to 11 percent and exceeds 20 percent in some varieties. Last year, we sent abroad 37 million tonnes of these products.

We certainly intend to continue fulfilling in good faith all of our contractual obligations for the supply of food, fertiliser, energy resources and other critical goods. In this context, we consider it vital to restore the supply chains disrupted by sanctions"
Vladimir Putin, 30 June 2022

In February 2022 Lithuania banned the transhipment of Belarusian potassium from its port of Klaipeda. Almost all Belarusian potash (10-11 million tonnes per year) was exported from there. As a result of Lithuania's actions, new facility are being built at St. Petersgurg to export the Belarus production. Lithuania will lose it's lucrative port charge income.

"Considering that Russia and Belarus are the biggest suppliers of fertiliser to the global market, I would like to discuss with you ways of satisfying the demand on the global market and our permanent customers.

I think we have 15 percent of the global trade, and 25 percent in some fertilisers, which is a very significant amount in the world markets.
Low use of fertiliser obviously brings down the next year’s harvest outlook. All that is very regrettable."
Vladimir Putin June 25 2022

"The EU has indeed avoided a direct and comprehensive ban on the import of Russian agricultural products.

...despite prohibiting the import of certain types of Russian fertilizers, the EU has introduced exemptions to fulfill its own needs.

The import of fertilizers from Russia into the EU this and the following seasons (until 9 July 2023) is permitted in an amount equal to the average annual volume of imports of these products (imports of potassium chloride are allowed in the amount of 837,570 tonnes, other restricted fertilizers - in the amount of 1,577,807 tonnes).

EU Member States are also authorised to grant, at their own discretion, access to EU ports of vessels flying the Russian flag, as well as entry to the EU of Russian road carriers for the purposes of importing or transporting agricultural products, including fertilizers and wheat, that are not subject to restrictions.

...What the EU fails to mention is that anti-Russian unilateral sanctions are still distinctly detrimental for key Russian producers and exporters of agricultural products. They affect directly or indirectly the export, financial and transport capabilities of Russia, including in the food sector. The ultimate goal of these actions is obvious - to undermine the Russian economy, including the agro-industrial complex.

...Stringent measures are being introduced or proposed to police the proper implementation of the anti-Russian sanctions regime, including criminal liability for either circumventing or assisting in circumventing unilateral sanctions, which, according to instigators of these measures, should induce economic operators in EU Member States to terminate their cooperation with Russian partners. Consequently, cargo transports, as well financial and insurance services are seriously hindered and logistics chains are disrupted, also due to total customs inspection of all goods imported into the EU from Russia. Western financial and commercial entities, intimidated by the prospect of penalties for violating the sanctions regime, are either delaying or frequently annulling their transactions.

Furthermore, individual restrictions have been imposed against the owners and chief executives of leading Russian producers and exporters of fertilizers - Uralchem, Eurochem, PhosAgro, Akron...The future of factories that belong to them in some EU Member States also hangs in the balance.

Evidently, the European Union is engaged in a deliberate campaign to obstruct the export of Russian food products and fertilizers, including to prevent Russia's access to third markets. Behind the smoke-screen of its habitual hypocritical rhetoric the EU is busy aggravating what is already a precarious situation in terms of global food security."
Russian Foreign Ministry press release 3 June 2022

#1 On 22nd July 2022 Russia came to an agreement with the United Nations to allow facilitate grain ships leaving Ukraine via the Black Sea. Turkey and the UN will inspect the empty ships (with Russian and presumably Ukrainian observers) as they enter the Black sea in order to confirm they are not carrying weapons to Ukraine.
Part of the price for this agreement is that the sanctions on Russian fertilisers must be removed. I think this refers to sanctions on insurance, port access, and shipping companies, as well as on specific sanctioned products.

"We are aware that the European Commission has lifted the sanctions on the supplies of Russian fertilisers, and we certainly welcome this decision. However, the European Commission issued a clarification on this matter on August 10, whereby only EU countries can buy our fertilisers, but we and Belarus cannot ship our fertilisers through the ports of European countries to the developing economies of Asia, Africa or Latin America, which is an act of discrimination against our partners from these parts of the world.

Massive amounts of our fertilisers (100,000 tonnes, I believe) are stored at the ports of some European countries. Our manufacturers – primarily of potash fertilizer – are willing to give them for free to the developing countries in dire need of these fertilisers. I want the Foreign Ministry to work through this issue"
Vladimir Putin 9 September 2022


"I would like to ask the UN Secretariat – I discussed this matter with UN Secretary-General Antonio Guterres the day before yesterday – to use its influence on the European Commission’s decision not in word, but in deed and to demand that they, our colleagues from the European Commission, lift these clearly discriminatory restrictions on developing countries and provide access for Russian fertilisers to their markets.

Also, the day before yesterday I apprised Secretary-General Guterres of the fact that 300,000 tonnes of Russian fertilisers are stocked at the EU seaports. We are ready to make them available to developing countries for free."
Vladimir Putin 16 September 2022

The truth is revealed. The EU is holding Russian/Belarusan bulk fertiliser to ransom in European ports, preventing the transhipment to their destination. Port storage charges will now be massive. So the companies are willing to donate the fertiliser to poor countries and write off the loss. The companies are most unlikely to pay the port charges, and are most unlikely to ever use those european ports again.

Forcing Russia (and Belarus) to export through Russian ports might add costs for Belarus, but exports via the Black Sea is probably the shortest and cheapest route anyway, eve if infrastructure might be a bottleneck.. This EU restriction gives Russia the high ground - Russia will not supply Europe with any fertiliser so long as Russia cannot send fertiliser to the global south via European ports. Once again, the Europeans are over a barrel - either totally remove the sanctions without any conditions (and possibly wipe the port charges), or go buy fertiliser from 'somewhere else'. Of course, Russia may hold out for full restitution - payment for the fertiliser, cancellation of port charges, and complete wiping clean of all sanctions.

Russia has developed its own 'secure' domestic smartphone, the AYYA. It is based on based on a domestic operating system (Aurora) and on the android system. It will be available in late 2022.

Electronics Industry

"Military and aerospace markets are the most closed both for foreign companies and private Russian designers and electronics manufacturers. However, in many cases technological inferiority of enterprises controlled by government doesn’t allow them to fulfill tasks of Defense Ministry and it makes them to get private companies as subcontractors of the second level to take part in most projects on designing and manufacturing military equipment of new generation. In this year the first precedent of direct interaction was set between private company and military customer."
Ivan Pokrovsky, Electronica Publishing House 2008

 Globally, the high-tech end of electronics manufacturing is worth $1 trillion, and it is dominated by China. Not only is it hard to compete on a global market, the area is capital intensive and crowded. The Huawei 5G wireless network debacle shows that even if you are big, cheap, and cutting edge, the 'unfriendly countries' will find a reason to block your products. (On the other hand, perhaps Huawei were simply naive.) Russia does have a prescence in manufacture and sale of 'electronica' in general, but it is rather small. In the Soviet days it was more advanced than the US, but no longer.

"...Russia's semiconductor technology was also brilliant in the former Soviet Union. At that time, the Soviet Union did not have any channels to obtain technology and equipment from the West, but it still achieved good results in the early days. With the strong support of the Soviet Union's planned economy, the gap between the Soviet Union and the United States in the semiconductor field was not large in the early days...in 1957, the world's first semiconductor company Fairchild was born in Silicon Valley, and the Soviet Union also had its own first semiconductor manufacturing plant in 1959...

Judging from the current state of the semiconductor industry in Russia, its technological accumulation in the upstream design and manufacturing of semiconductors comes from the legacy of the former Soviet Union on the one hand, and the upgrading of backward western production lines on the other hand. Products appeared, but eventually disappeared in the long history due to various reasons, and its semiconductor industry was eventually reduced to extensive sales of rare materials...

...It is difficult to cultivate world-leading products on the barren semiconductor industry soil. By October 2020, MCST announced its latest CPU - Elbrus-16C, which uses TSMC's 16nm process, which consists of 12 billion transistors. However, at this time, the mainstream CPUs on the market already use the 7nm process, and the Soc of the flagship mobile phone uses the 5nm process"
MinNews 17 August 2022

Communications equipment sales are the next biggest by value ($230 million), but make up only 10% of total sales.

Security systems are the third biggest sector by value ($215 million), but make up only 9% of sales.

Commercial equipment and medical electronics sales are fourth biggest by value at $100 million, but together make up only 4% of the market. Automotive electronics are worth $80 million in sales and make up 3% of industry sales volume. Consumer electronic segment was about the same. Industrial electronics make up 20% of sales (worth $50 million).

Total market value of electronic products in 2019 was "estimated at $2.74 billion". These figures are for 2020, via 'Expo electronica'.

However, according to the (presumably Russian) Electronics Developers and Manufacturers Association, annual sales of domestically-built 'electronica' equipment comes to $15 billion, and exports of Russian-made electronics bring in about $1 billion. "Overall, the industry’s gross income stands at $6bn". In 2007 the total Russian 'electronics' manufacturing - equipment, components and units - was valued at over $8 billion [pdf]. That was 15 years ago, $15 billion today sounds reasonable. Maybe there is a difference between 'electronica' equipment and electronics.

An unspecified 'number' of branches of major global manufacturers work in Russia (or at least did, in 2020).

"Amount of electronic components manufacture in Russia made up to 400 million in 2007, a quarter of which is due to export deliveries. Average annual growth for the last five
years is about 10%. In 2008—2009 we expect much higher figures related with the beginning of IC manufacturing for smart cards at the new 0.18 EEPROM line at NIIME and Mikron (Sitronix) company and extension of technological potential of a number of state enterprises financed according to the national target program."
Ivan Pokrovsky, Electronica Publishing House 2008

According to Expo electronica, 36% the electronic industry are involved in either production of custom items or purchase and resale of components, 30% work in marketing and development of electronic devices, 18% specialise in development and marketing of modular components, 8% of companies are involved assembly and testing of modules and equipment, 5% are involved in 'completing production' (whatever that means), and 3% are involved in manufacturing cases for equipment. The Russian government would like to eventually replace all government PC's (and presumably servers) with Russian designs and components. Annual sales of domestically-built products were $15 billion in 2020. Only about 15% of this is due to military equipment exports (built with Russian electronic systems). The Pantsir air defense system and the Krasukha mobile electronic warfare systems would be examples.

"Russia’s state arms exporter Rosoboronexport sealed defense deals with international companies worth roughly $2.35 billion at the Army-2020 international military-technical expo held in the outskirts of Moscow. Rosoboronexport has inked contracts to deliver cutting-edge electronic warfare systems (EW), such as the Krasukha mobile EW system and the latest mobile Repellent-Patrol electronic countermeasures complex — for the first time in the history of military-technical cooperation between Russia and foreign states. ...the mobile electronic warfare system “Krasukha” protects command posts, groupings of troops, air defense systems, and vital industrial, administrative and political facilities. The Krakusha-4 system analyzes the signal type and impairs enemy radar stations by powerful jamming emissions at ranges of up to 300 kilometers (186 miles). As a result, enemy aircraft lose their capability to detect targets and aim their precision weapons against them."
Caspiannews.com 29 August 2021

The electronics/electronica industry employs 360,000 people. The Russian Ministry of Industry and Trade confirms the 'domestic civilian electronics sector' is worth $15 million.

Sales drop off in years prior to 2020 were attributed to "mainly due to a reduction in orders from the Russian military-industrial complex. Delays in financing and a lack of large-scale military projects explains the slowdown." This may have changed recently, but I suspect only to an extent. Practical military equipment needs 'sturdy' workaday processors that can survive shaking and jarring when in the active military environment. At the military workstation (and probably missile) level lower 'spec' microprocessors - which Russia produces - are more than adequate.

Russia has been shut off from 'high end' semiconductors, at least from unfriendly countries. Russia probably could quietly acquire the relatively small number of very advanced semiconductors it needs from friendly countries, but strategically, it seems more likely they have developed their own. It would be a big - but not impossible - task to start cold to reach the extremely high level of technical competence to make these very advanced chips. Small numbers of these specialist chips for limited-run advanced projects may well already be made by Russia's research institutes contracted to the Russian military industrial complex. If so, the Government is unlikely to mention it.

"In general, the semiconductor industry of the Soviet Union, whose main purpose is military industry, does not pursue the power and commercial possibilities of pure semiconductor technology. It only needs to be practical and durable enough to ensure the effectiveness of military units. From the military industry [point of view] it is said that this move [breakup] of the Soviet Union is actually not a problem. Even today, semiconductors used in the industrial and military fields are not advanced process chips, but mature ones with higher reliability and durability in various extreme environments.

For example, the temperature ranges required for normal operation of civilian chips, industrial chips and military chips are very different. Civilian grade requires 0°C~70°C, industrial grade requires -40°C~85°C, and military grade requires -55°C~125°C. This is only an indicator of temperature. Industrial and military grade chips also have anti-interference and impact resistance. Even aerospace-level radiation resistance and other requirements, these are difficult to achieve with more sophisticated and smaller advanced process chips, so even if today's Russia is almost out of the global semiconductor industry chain, it can produce [them] to a certain extent."
MinNews [slightly edited for sense] 17 August 2022

"Defense and commercial companies in Russia rely heavily on foreign-made microchips. While Russian engineers provide the design specifications, the technology is assembled by Taiwan Semiconductor Manufacturing Company, or TSMC. Following the Feb. 24 invasion of Ukraine, TSMS ceased production of Russian-designed Baikal and Elbrus microchips."
DefenseNews, 9 June 2022

"Microelectronics manufacture, particularly semiconductor one, is most attractive for investors. While establishment of modern manufacture for electronic equipment costs
several million or tens of million dollars, establishment of semiconductor manufacture needs several hundred of million or several billion dollars."
Ivan Pokrovsky, Electronica Publishing House 2008

Russia has several companies involved in production of semiconductors for one purpose or another, including paycards and the like. Mikron chips are internationally certified, and Mikron is already producing chips for the Russian automobile industry. According to one Russian social news website Mikron already produces microcircuits for automotive instrument clusters and has presumably 'generic' components "body electronics and engine management systems, driver assistance systems and lighting equipment". Mikron says it is developing, or intends to develop, around 72 kinds of microcircuits (both generic and bespoke) for Russian car manufacturers, a range which will allow 80% of electronic components to be domestically sourced.

 In April 2022 Russia announced a $38.3 billion digital transformation plan which includes $5 billion to design and manufacture its own 90-nanometer process nodes by December 2022 - and produce their own 28-nanometer node by 2030.

The Mikron Group is Russia's largest producer and exporter of microelectronics. It is based in the “Moscow Technopolis”, a special economic zone with favorable conditions for business. It is jointly controlled by Rostec and Sistema and produces products for both military and civilian purposes.

Russia imported about 100 million USD of microchips in 2020. Import statistics will now cease to be visible to the west. This makes it easy to import specifically configured lower-level chips used in industry (perhaps including for some missiles) from friendly countries (possibly as very well-paid intermediaries).

"The statement did not accuse these or any of the other countries named – a diverse group that included Armenia, Georgia, China, Brazil, Israel, India, Singapore and Taiwan – of facilitating sanctions-dodging...the nations were among “certain common transshipment points through which restricted or controlled exports have been known to pass before reaching destinations in Russia or Belarus.”

“In some instances, controlled U.S. items may be legally exported to these and other jurisdictions as inputs for the production of other finished goods. However, further export to Russia or Belarus of those finished products and goods, potentially through additional transshipment points, may be prohibited,” the statement read...

...Washington imposed punitive measures on an Uzbek company over its dealings with a sanctioned Russian firm that it said 'amounted to' collusion in sanctions-dodging. Promcomplektlogistic company “has actively supported” Russian company Radioavtomatika in its “effort to evade U.S. sanctions,” the State Department said at the end of June.

Its transgressions included “providing electronic components such as microcircuits to Radioavtomatika,” which procures foreign items for Russia’s defense industry.""
eurasianet 12 July 2022

The west may cut Russia off from some specialised products, but it is impossible to cut it off from a reliable supply of all the electronic components it needs.

"At present, Russia’s electronic market accounts for 0.4% of the worldwide market, according to the EDMA.
At such a small scale, Russian companies do not have the opportunity to provide a high level of guarantees, and comprehensive offerings, customers require.
The dependence on basic foreign technologies is very high, which increases the risks associated with sanctions.

Maintaining competitiveness is also an issue. Public firms operate on a contractual basis, receiving [Government] budget financing. This deprives them of incentives to increase their production’s economic efficiency. On the other hand, private companies are forced to compete against multinational corporations, which does not allow them to develop, due to high Russian demand for foreign-manufactured products."
Expo electronica 13 January 2020

Russia has announced (April 2022) an accelerated plan to increase it's domestic digital capabilities, in line with it's strategy for it's digital economy. About $33 will be spent on the development of technologies needed for semiconductor production encourage the further development of domestic chips and local electronic modules, build out infrastructure for datacenters, develop the skills of the technical workers, and market it's own electronic products and solutions.

Russia has a relatively low level of involvement in industries producing technically advanced electronic equipment for the public. Perhaps this will slowly change. Right now, Russia is likely to focus on state-sponsored production of those electronic components and manufactures that are critical to Russia's security. In 2018 the production of "electrical equipment, electronic and optical equipment"  amounted to less than 5% of industrial output overall. Russia imported 73% of its 'electronics' and electronic components. I doubt this will change for quite a long time, particularly as there will likely be an oversupply of 'electronica' in the world.

There is increasing global competition to sell electronics and components. For example, India announced in 2021 that it would develop a semiconductor manufacturing business (it is also developing an electronic repair industry). The US is also trying to develop a domestic chip manufacturing capacity. Russia is flush with money, and is a reliable customer. The rest is predicable.

It's true that the electronics sector can be a large employer, especially if you look at it in the widest sense, including the other industries enabled by it. And this area may end up being its strength. Employment in good tech-related jobs is one of the goals of the Russian government, and Russia is very strong in Science, Technology, Engineering, and Maths education. The program to develop the tech industry is ambitious. The Russian Ministry of Industry and Trade's draft strategy for the Russian electronics sector out to 2030 includes these elements:

• Growth of domestic production by two and a half times
• Grow the value of the domestic civilian electronics sector from $15 million to $74 million.
  
• Increase the share of domestic components in microelectronics from 20% to 80%.
• Create design centres, strategic alliances, joint ventures, encourage within-industry cooperation, and develop programs to share competencies.
• Initially focus on telecommunications, navigation equipment, computer technology, automation systems, and similar.
• By 2024 include currently developing and emerging technologies such as the Internet of Things (to increase demand for microprocessors, sensors and such), 5G, smart energy.
  
• In 2025 expand data centres, build software defined networks that interact with data centres, balance telecom load etc (i.e. smart telecoms).
• Drive implementation of widespread digitalisation of industry..

It is clear that Russia has a long term strategy to bring digital technology to everyone, right across the vast country. It has the vision and the money to do it.

"In 2022, 355 companies (vs 282 companies in 2021) from Russia, Austria, Armenia, Belarus, Germany, China, and Norway exhibited at ExpoElectronica and ElectronTechExpo. The trade shows were attended by 16,435 industry professionals from 20 countries and 70 regions of Russia, among which 8,151 visited for the first time. The number of visitors increased almost by 50% compared to last year. The share of visitors from Russian regions also increased by 45%...experts discussed import substitution, consolidation of the industry to overcome the sanctions, and use of domestic products."
ExpoElectronica and ElectronTechExpo 18 April 2022

Looking ahead, there is no reason why Russia cannot further develop it's own rather modest electronics sector and increase sales to friendly countries. Friendly countries may well be interested in Russia as a trade partner for some electronic products, because they can bilaterally trade for Russia's raw materials. Right now, Russia simply doesn't need the west's products. In principle, and in the long run, Russia may open up to the wests low-end disposable consumer electronics - if they are competitive. But friendly countries will always receive the most favorable treatment.

"The Presidential Executive Order says federal and regional government authorities, other government authorities, local self-government bodies, and organisations and individuals under the jurisdiction of the Russian Federation shall operate on the premise that special economic measures are to be applied to certain legal entities, individuals and organisations under their control, starting on the day the Executive Order comes into force.

The document introduces a ban on government authorities at all levels, as well as organisations and individuals under the jurisdiction of the Russian Federation, implementing agreements (including foreign trade contracts) with legal entities, individuals and organisations under their control that are subject to the special economic measures, and on executing obligations under existing agreements (including foreign trade contracts) to individuals under the sanctions where such obligations are not satisfied or are partially satisfied.

The Executive Order also bans conducting financial operations whose beneficiaries are individuals under sanctions.

In addition, the document imposes a ban on exporting products or raw materials manufactured or extracted in Russia when they are delivered to individuals under sanctions, or by individuals under sanctions to other individuals"
Executive Order On Imposing Retaliatory Special Economic Measures in Connection with the Unfriendly Actions of Certain Foreign States and International Organisations
3 May 2022
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'This Executive Order was signed to protect the national interests of the Russian Federation in response to unfriendly actions, which contradict international law, undertaken by the United States and joined by other foreign states and international organisations, aimed at introducing restrictions against Russian citizens and legal entities.

The President resolved that in light of the risk of natural disasters and man-made emergency situations endangering the life and safety of people and threatening the national interests and economic security of the Russian Federation, arising due to the violation by certain foreign entities and individuals of their obligations under the Agreement of the Development of the Piltun-Askokhskoye and Lunskoye Oil and Gas Fields on the Basis of Production Sharing, signed on June 22, 1994, special economic measures shall be applied to these foreign entities and private individuals under their jurisdiction.

In particular, the Government of the Russian Federation is to establish a Russian Limited Liability Company, which will take over the rights and obligations of Sakhalin Energy Investment Company in accordance with this Executive Order. The ownership of the company’s property, created within the framework of the above Agreement, shall be transferred forthwith to the Russian Federation.'
Russian Executive Order June 30 2022

"Americans stand to lose heavily too, as the production sharing arrangements dating back to the Yeltsin era had been forced out of Russian government when it was in dire economic straits during the transition from the Soviet period and was in no position to negotiate optimal deals. Come to think of it, something like 262 such so-called production sharing agreements (PSAs) were squeezed out of the Russian government by western oil companies by the time Yeltsin retired. 

After coming to power in 1999, President Vladimir Putin set about the mammoth task of cleaning up the Aegean stables of Russia’s foreign collaboration in the oil sector. The “decolonisation” process was excruciatingly difficult, but Putin pulled it through and got rid of as many as 260 (out of 262) PSAs. In fact, Sakhalin-1 and Sakhalin-2 are the very last remaining two PSAs harking back to post-Soviet Russia’s decade of humiliation under Yeltsin."

Any surprises why the Biden Administration hates Putin so much and wants him out of power in Moscow? "
M.K. Bhadrakumar 10 July 2022

“Sakhalin-1 is a valuable non-Middle East source for Japan, which depends on the Middle East for 90 per cent of its crude oil imports. There is no change in maintaining the interests of Japanese companies in it.”
Industry minister Koichi Hagiuda, August 2022

"Should the executives at Gazprom Germania “carry out the procedure of the voluntary liquidation” as ordained, the long-term gas contract held by German companies with the German subsidiary as their partner was at risk.

These long-term contracts are highly lucrative, as they were agreed upon before the record spike in gas prices and are usually hedged against massive price swings to allow for stable business planning.

As per German law, any transfer of ownership in “critical” infrastructure requires the go-ahead of Habeck’s ministry, which was not given. Fearful of additional attempts to interfere with the subsidiary, the German government did something it had never done before.

“I’ve lived to see Germany nationalise Russian companies operating in Deutschland, what a time to be alive,” commented legal scholar Jakub Jaraczweski.

Gazprom Germania will be steered by the federal network agency until 30 September 2022, although the government has yet to comment on what will be done with the subsidiary of the Russian state company afterwards."
Euractiv.com 5 April 2022

"Will there be any political decisions that run counter to contract clauses? We will ignore them and suspend deliveries if these decisions are inconsistent with our interests, our economic interests in this case. We will then stop supplying gas, oil, coal, or fuel oil, suspend all our deliveries and fully comply with our contractual obligations. Notably, the people who are trying to impose things on us are not in a position to dictate their will to us. Let them come to their senses."
Vladimir Putin 7 September 2022

"We are the largest North American producer by volume in the rail and large diameter pipe markets. We also hold leading positions in the West Coast plate as well as the Western Canada oil country tubular goods and small diameter pipe markets.

Our diverse range of manufacturing capabilities allows us to produce a wide array of specialty steel products: plate, coiled plate, welded and seamless pipe for oil and gas applications, rail and wire rod and bar. We take a dynamic approach to manufacturing, using the geographic accessibility and production flexibility of our facilities to respond quickly to changes in the market for maximum efficiency and cost savings. Our Product Technology Centers in Pueblo and Portland and our Research and Development complex in Regina enhance our ability to develop high strength steel products for the most demanding applications."
Evraz North America

"ENA [Evraz North America] will be the first North American line pipe producer qualified for high-pressure, 100 percent hydrogen pipeline transportation.
Testing is being conducted at a RINA-CSM S.p.A, a leading independent European research center specializing in hydrogen and fracture mechanics. All pipe samples are produced in Regina, Saskatchewan and made from steel at ENA Regina Steel, the Company’s EAF-based steel mill.
Hydrogen is a core component of ENA’s alternative energy strategy, which also includes carbon capture, utilization and storage (CCUS) and geothermal energy."
Evraz, 11 July 2022

"Russia paved the way into outer space for the entire world, and I believe that every Russian citizen is proud of our space achievements. Many generations of Russian engineers and designers created a tremendous scientific and technological basis, and it is necessary to convert this basis into specific services that the Russian economy needs today.

The sector is facing a difficult situation, and the main task of my colleagues and myself is to increase, rather than reduce, specific standards. We need to provide the Russian economy with essential space services, in the first place. This includes navigation, communications, data transmission, meteorological and geodetic information, etc. These are the services that are in greatest demand today, and it is impossible to imagine our everyday life without them."
Yury Borisov, Director General of the Roscosmos State Corporation 26 July 2022

"Angara-A5M launch vehicle in 2028, General Designer of the Energia Rocket and Space Corporation Vladimir Solovyov said.

"If the decision to build it [a space station] is made before the end of the year, the first stage will begin in 2028 with the launch of the Research and Power Module by the Angara-A5M carrier rocket... The interlinked node and airlock modules will be launched by the Angara-A5M launch vehicle from the Vostochny [Cosmodrome]," Solovyov said in an interview with the Russian Space magazine, an official publication of the Roscosmos state corporation.

The module will have to be "retrofitted with various systems, including a gyrodyne block, to be able to use it for several years as the main module," he said.

After that, a basic unit should arrive at the station, making it possible for the station to have four cabins and two toilets, Solovyov said."
Interfax 26 July 2022

"... the head of the Russian space program has demanded that the British government divest its shares in OneWeb and that the broadband satellite operator not provide services to foreign militaries in order to launch a new batch of spacecraft...In November 2021 OneWeb and Intelsat revealed that they had demonstrated the constellation’s capabilities to representatives of the U.S. Army and Department of Defense."
Parabolic Arc 2 March 2022

On March 4, Rogozin ordered a stop to preparations for the launch of a Soyuz-2.1b rocket carrying OneWeb satellites from the Baikonur Cosmodrome. The decision was made because "OneWeb has disobeyed our lawful demand to provide necessary information as to whether or not the system will be used for military purposes for the benefit of the Pentagon and military agencies of NATO member states."
Interfax 13 April 2022

"We are entirely clear on how to proceed. The main conclusion is not to rely in our plans on the West as a negotiating partner. It has proved ...it is ready to violate its own principles and resort to outright theft and robbery. The sanctity of private property and the presumption of innocence...have been upended and crudely violated.

We have already made our conclusions. We will rely only on ourselves and our trustworthy partners, the overwhelming majority of which are not part of the former “golden billion.”

We have enough buyers of our energy resources. We will work with them. Let the West pay much more than it paid to the Russian Federation and let them explain to their own people why they have to be made poorer."
Sergey Lavrov

"China is our biggest trade and economic partner among foreign countries, with more than $100 billion in mutual trade.

And that does not include major projects related to oil, gas, aviation, machine engineering, nuclear energy and other industries.

But in today’s conditions, small and medium-sized businesses have many opportunities to join a great variety of projects, on both sides."
Vladimir Putin April 20, 2022

"It is clear that all kinds of restrictions imposed at the height of the anti-Russia frenzy have led to spikes in energy prices and have destroyed the existing logistics chains, which has affected the economy and foreign trade of regional countries. The situation is completely different in those regional states which opted to maintain normal relations with Russia and refused to join the sanctions war, despite unprecedented pressure by Western countries.

Positive dynamics was reported in the first quarter of 2022 in Vietnam, Malaysia, Indonesia (GDP growth over 5 percent) and the Philippines (over 8 percent). Cambodia expects to report similar yearend figures in 2022. Export-import transactions went up in Indonesia (38 percent), Malaysia (23 percent) and Vietnam (15.6 percent).

We have taken notice of our ASEAN partners’ growing interest in Russian oil, fertilisers and food. Statistics show that Russian exports to these countries have grown in January-March 2022. For example, our exports to Vietnam reached $971 million (up 48.2 percent year on year).

The delivery of our chemical and foods products to Thailand has increased by 54 percent and 185 percent, respectively. We can report an increase of bilateral trade with Indonesia (up 89 percent), Malaysia (up 38.5 percent), Myanmar (up 128 percent) and Laos (up 50 percent). Draw your own conclusions.
Foreign Ministry Spokeswoman Maria Zakharova 8 June 2022

"True, there have been some good shifts [authors note - in international cooperation against covid]. One of them is the United States’ return to the World Health Organisation (WHO). Some hotheads in Washington believe that, now that they have returned, they will make others do their bidding.

There are fewer than 50 Chinese people in the WHO Secretariat, 25 Russians, over 200 Americans, and more than 2,000 NATO representatives. The past US administration said China was manipulating the WHO. That is not true. Otherwise, we are admitting the complete helplessness of 2,000 NATO members who should be the majority in the WHO Secretariat.

Nevertheless, there are some positive results though. This problem has been recently considered at the UN General Assembly and the Security Council. It is important now to focus on equitable collaboration within the WHO. Besides the attempts at carrying out “soft coups” and establishing their own rules in the organisation, hardly based on consensus, an idea has been suggested to move the main decision-making on global health policies outside the universal organisation."
Sergey Lavrov 19 Feb 2021

"April 1, 2022, '“Sputnik nasal vaccine, world’s 1st registered СOVID vaccine in nasal form, is especially effective vs. highly transmissible Omicron & other emerging variants not only in terms of protection from infection but alsо at preventing transmission." According to the document published on the state register of medicines, the nasal spray version of the Sputnik V vaccine is to be applied in two doses according to the document published on the state register of medicines, reported CNA on October 13, 2021."
Precisionvaccinations.com April 26 2022

"I would like to emphasise that only domestic parts and components were used in creating the Sarmat missile. This will, of course, facilitate its production by defence industry enterprises and expedite its use in the Strategic Missile Forces."
Vladimir Putin, April 18 2022

The Motor Sich manufacturing factory in Zaporizhzhia Ukraine makes engines (turbo-prop, turbo-fan and turbo-shaft) for drones, airplanes, helicopter engines (including engines for several of Russia's military helicopters), and marine gas engines, among other things. It's main market was Russia, but that ended after the coup in Ukraine in 2014. As a result, Ukraine looked for new markets and more capital and found some of what they wanted in China's partly state-owned Skyrizon Aviation. Skyrizon bought a 41% share in Motor Sich in 2017, with 250 million of new capital to be injected, and an assembly and servicing plant in China to be opened. USA then 'sanctioned' Motor Sich company, resulting in the capital injection and China facility being scotched. Some bizarre dodgy share-issue dealings by Ukraine almost gave Skyrizon a controlling shareholding. This was blocked by the Ukraine government.  Ukraine announced in March 2021 that it intended to unilaterally nationalise Motor Sich and 'compensate' the China-based shareholders. Skyrizon Aviation placed a suit against the Ukrainian government for 4.5 billion at the Permanent Court of Arbitration in the Hague. In the meantime, Ukraine explored Turkeys interest in buying a 50% stake in Motor Sich.

"High-precision long-range air- and sea-based missiles in Zaporozhye have destroyed the production facilities of Motor Sich plant, which produced aircraft engines for combat aircraft of the Ukrainian Air Force, including UAVs"
Russia Ministry of Defense, 26 May 2022

Russia's strike ended production of the Al-450 turbo-prop engine used in the Turkish Baykar Bayraktar drone, currently in use by Ukraine against Russian forces (assisting the two newly independant Republics to remove Ukrainian forces from their territory). The AI-450 engine cost about $250,000 USD. (Russia has destroyed a number of Baykar Bayraktar drones entering Donesk and Lughansk, and also destroyed facilities storing these drones.

"According to objective laws governing the economy, it is obvious that in this ongoing sanctions frenzy, if I may say so, the European Union and its people will inevitably face consequences that will be hard to reverse. The same applies to the world’s poorest countries, which are already at risk of hunger.

Let me emphasise that full responsibility for all this lies squarely with the Western elites, who are ready to sacrifice the rest of the world for the sake of preserving their global dominance."
Vladimir Putin, 12 May 2022

"The euro and dollar exchange rates for the first time in 20 years caught up. Predictions about the onset of a systemic crisis in the euro area are beginning to come true.
First, the EU members shot themselves in the head with a sanctions pistol. Now they are reaping the bitter fruits of a decline in production, supercritical food inflation, the loss of competitiveness of their goods and the expectation of winter in ice dwellings without our gas.
In global terms, this is confirmation of the extremely ill-conceived nature of the sanctions against Russia. Sanctions don't work. Sanctions are harmful to the Europeans themselves. The euro is weakening."
Dmitry Medvedev deputy chairman of Russia's Security Council 12 July 2022

"Today's exports bans are worth €10 billion and target areas in which Russia is vulnerable, e.g. quantum computers and advanced semiconductors. This will degrade Russia's technological base and industrial capacity and prospects (beyond purely military) in the medium term."
EU press release (8 April 2022)

Today's import bans are worth €5.5 billion and will cut revenue streams for Russia and its oligarchs, on products from wood to cement, from seafood (e.g. caviar) to liquor (e.g. vodka). In addition, loopholes between Russia and Belarus have been closed as far as possible by mirroring the import bans in place for Belarus, as well as aligning – where feasible – our restrictions and import bans with those of our partners, notably the UK and the US."

"Incidentally, the global crisis is largely caused by these sanctions. Those who conceived them proceeded from short-sighted, exaggerated political ambitions and Russophobia, at the expense of their own national interests, their own economies and the wellbeing of their people, as primarily demonstrated by the rising inflation in Europe. In some countries, the annual rate of inflation is approaching 20%, while prices in the eurozone increased by over 11%, on average."
Vladimir Putin, 12 May 2022

" Russia has already suspended gas supplies to Poland, Bulgaria, Finland, the Netherlands, Denmark and to some extent Germany because they refused to comply with the new payment system."
Interfax, 2 June 2022

"Expectations by some EU countries that LNG would quickly substitute Russian pipeline gas are self-deceptive. Global LNG demand will exceed supply in 2022 (436 million tonnes vs. 410 million tonnes), new projects will not become operational until 2024, while current infrastructure will be unable to ramp up production by more than 10.6 million tonnes (15 billion cubic meters) per annum."
Russian Ministry of Foreign Affairs 9 June 2022

"The spike in gas prices was also driven by the systemic strategic mistakes of the European Commission, which has pursued the irrational policy of abandoning long-term gas contracts in favour of spot contracts (in September 2021 the price per 1,000 cubic meter exceeded USD 1,000 and reached the record high of USD 3,600 in March). Meanwhile, according to experts, Russian pipeline gas in Q1 2022 would have been 40% cheaper for Europeans than spot prices. It is important to note, that, in line with the EU energy model, whatever the buying price of Russian gas, EU companies sell it to downstream to power generators and companies (and therefore to citizens) at spot prices, making super-profits. As a result, generating companies go bankrupt, energy shortages are preprogrammed, and, consequently, prices for regular consumers grow. Yet the EU authorities fail to explain this to citizens."
Permanent Mission of the Russian Federation to the European Union 3 June 2022


"...we are proposing today to tighten our hard-hitting EU sanctions against the Kremlin, enforce them more effectively and extend them until January 2023. Moscow must continue to pay a high price for its aggression.”
Ursula von der Leyen, President of the European Commission 15 July 2022

"From the early days of gas supplies to Europe in the 1960s the USSR and, subsequently, the Russian Federation proceeded from the premise that energy cooperation should never become contaminated with politics. Following the escalation of anti-Russian rhetoric in some EU quarters in the 2000s we repeatedly urged the EU to refrain from politicizing energy cooperation, highlighting the mutually beneficial nature of this partnership which brings our economies closer and enhances security in Europe.

Heeding calls by the EU and seeking to increase mutually beneficial cooperation with our Western neighbours, Russia has over the past decades embarked on new domestic oil and gas projects while constructing pipelines for carrying these products to Europe. To this end the EU-Russia Energy Dialogue was inaugurated in 2000 and its internal well-developed composition established. The “EU-Russia Energy Cooperation until 2050” roadmap was adopted in 2013. Work was ongoing to ensure the convergence of energy standards and discuss the feasibility of coordinating energy strategies
.
Even in the course of gas “conflicts” between Russia and Ukraine in 2005-2006, 2008-2009 and after 2014 Russia invariably demonstrated its reliability and guaranteed an uninterrupted energy supply in accordance with its obligations. At the Gas Exporting Countries Forum in Doha in February 2022 the Russian side reaffirmed its commitment to continue exporting natural gas to international markets, including to Europe.

By disseminating baseless claims about Russia’s supposed plans to terminate hydrocarbon supplies to EU, our adversaries in the EU and across the ocean seek to pull Russia away from Europe, sever the ties that bind us, even in spite of the enormous damage this will cause to EU economies and its citizens. Unfounded allegations that Moscow is using energy supplies for political aims are part and parcel of the fact-twisting information warfare unleashed by the EU and the US, the latter seeking to increase its LNG exports to the EU.

There are simply no alternatives to Russian energy resources in the European market in the short term. Should their supplies be restricted, immense difficulties for the EU’s economy and citizens will follow. Some EU capitals are well aware of the fact. Hence, amidst public calls to renounce Russian energy resources, some countries are in fact increasing natural gas shipments from Russia to fill their underground storage facilities.

Thus, it is the EU which, by imposing or planning to impose further unilateral sanctions against Russian energy supplies, is politicizing the energy sphere, attempting to use interdependences between energy consumers and suppliers as an instrument of political pressure, while damaging its own economy and the well-being of its citizens and aggravating what is already a precarious situation in the global energy markets."
Permanent Mission of the Russian Federation to the European Union 3 June 2022

'Siemens Energy has withdrawn its services and maintenance support for Russia in order to comply with Western sanctions ..Siemens Energy said in a statement to Reuters that the turbines were manufactured in Canada and need to be returned regularly for maintenance. One of the turbines is currently being overhauled in Montreal, Siemens Energy added.

“Due to the sanctions imposed by Canada, it is currently impossible for Siemens Energy to deliver overhauled gas turbines to the customer ......Russian technical compliance watchdog Rostekhnadzor ordered the facility to idle several turbines in Portovaya because of “technical faults and the expiry of overhaul deadlines”, according to Gazprom.'
Upstream online 15 June 2022

"the Association of German Chambers of Commerce and Industry (DIHK) said on Monday. "A total of 16% of industrial companies are forced to respond to the current energy situation by reducing production or partially abandoning some areas"...energy-intensive businesses, where readings are twice as high as the average across industry, are hit particularly hard, with a total of 32% of energy-intensive companies forced to cut all or part of their production...many companies had yet to purchase significant volumes of gas for the current year, and only half had already covered their needs through contracts.
Sputnik 25 July 2022

"Actions by Kiev authorities are the only obstacle in the way of commercial vessels entering and departing from Black Sea ports of Ukraine. Upon Kiev’s decision approximately 420 naval mines of an outdated design have been placed in the basin of the Black Sea and the Sea of Azov. Due their technical inadequacy these mines are coming off of their anchors (cables) and are thus putting all vessels of the Black Sea states at risk. The Ukrainian origin of the naval mines has been confirmed, their precise location is unknown. Earlier some of these mines were cleared near the coast of Romania and Turkey. These explosive devices are frequently uncovered near the coastal strip of the Odessa region....

...maritime corridors are being opened on a daily basis from 08.00 to 19.00 (Moscow time) in the Sea of Azov (length 115 miles, width 2 miles) and the Black Sea (length 139 miles, width 3 miles).Their coordinates and details have been widely circulated among the international community. In the Mariupol area this corridor is fully operational.

In the Odessa region it is the responsibility of the Ukrainian side to ensure the safety of vessels leaving ports and proceeding to the assembly area. Kiev avoids liaising with representatives of foreign states to which the vessels belong in order to ensure their safe passage to the assembly area.

The humanitarian corridor in the Black Sea has been open since 27 March 2022"
Russian Foreign Ministry press release 3 June 2022

"Russia expects to have a good wheat harvest this year, which will allow our country to offer 25 million tonnes of grain for export from 1 August 2022. Our capacity for exporting fertilizers from June to December 2022 will amount to at least 22 million tonnes (20% of global consumption over this period).

Since the launch of the special military operation Russia has continued to provide humanitarian assistance to countries in need through bilateral and multilateral channels. Via the UN World Food Programme Russian food aid was delivered to Lebanon, Tajikistan, Kyrgyzstan, Cuba, Yemen and Sudan. On a bilateral basis assistance was provided to Sudan and Cuba - 20,000 tonnes each.

Meanwhile, illegitimate unilateral restrictions imposed by the EU, the US and their satellites remain the main obstacle to normal export relations between Russia (and Belarus) and buyers of grain and fertilizers."
Russian Foreign Ministry press release 3 June 2022

"The food market has been disrupted most severely. I said this at the recent St Petersburg International Economic Forum, and I want to say it again: they printed money, distributed it in their wealthy countries and, like a vacuum cleaner, started scooping up all the food from the global market. Only recently, the United States was a food exporter – a net exporter – but now, I think, their imports are about US$17 billion more than their exports. This is a dismal indicator for food markets around the world.

Meanwhile, the soaring cost of essential agricultural commodities such as grain has hit the developing countries and markets the hardest as this is where bread and flour are vital for the survival of most of the population.

I think it was French Queen Marie Antoinette who, looking over a crowd of starving citizens from her palace, reportedly said with indifference: “If they have no bread let them eat cake.”

This is the same cynicism that certain Western countries are now showing by destabilising the global production of agricultural products and dealing with this matter by restricting, for example, supplies of Russian and Belarusian fertilisers and impeding exports of Russian grain to world markets."
Vladimir Putin June 24 2022

"Incidentally, the Americans have adopted sanctions on our fertilisers, and the Europeans followed suit. Later, the Americans lifted them because they saw what this could lead to. But the Europeans have not backed off. Their bureaucracy is as slow as a flour mill in the 18th century. In other words, everyone knows that they have done a stupid thing, but they find it difficult to retrace their steps for bureaucratic reasons."
Vladimir Putin June 17, 2022

"Cooperation in the chemical industry and the production of environmentally friendly mineral fertiliser is progressing at a good pace. In 2021, Russian companies supplied almost 10 million tonnes of fertilisers worth about $3.5 billion to the Brazilian market."
Vladimir Putin 16 February 2022

"...Russia provides a third of the palladium metal used in sensors and memory products produced by U.S. companies. Russia is also a “crucial” source of C4F6 (hexafluorocyclobutene), which several U.S. suppliers buy and purify for advanced node logic device etching and advanced lithography processes for chip production, Techcet wrote in advance of the invasion as Russia build up troops along the border of Ukraine in recent weeks."
Fierce Electronics 25 February 2022

"Ukraine makes more than 90% of the high-grade neon in gas-phase lasers used to make chips produced by U.S. semiconductor companies. The gas is a byproduct of Russian steel manufacturing which is purified in Ukraine, said market research company Techcet. Neon prices soared during the Russia-Ukraine conflict in 2014."
Fierce Electronics 25 February 2022

"New production of high-purity neon used in the production of microelectronics for smartphones, card and other equipment has been launched in the Bauman Moscow State Technical University in Russia.

It is planned to reach a production level of some 70,000 cubic meters of neon a year by the end of 2022, which will increase Russia's share on the global market of this inert gas to 10% (the current share is one percent), Russian Deputy Prime Minister and Industry and Trade Minister Denis Manturov said at a meeting between Russian President Vladimir Putin and the government on Monday."
Interfax 26 July 2022

“If we talk about the income that Finland received from international tourism, then the share of Russians in it was as much as 19%. This is a lot. Annual losses this year will amount to more than 600 million euros [$640 million]. If we add to this the difficulties with the Asian market due to the closing of the sky over Russia, we will lose 2 billion euros [$2.13 billion] every year”
Kristiina Hietasaari - head of 'Visit Finland'

"Everyone knows all too well our misgivings regarding the approaches of the collective West, or whatever you call it – NATO-centricity or Washington’s satellites, it can be framed in all kinds of ways.

This deals with NATO’s aggressive expansionist policy,
the absence of security guarantees for our country,
conditions undermining our security,
the destructive unilateral, illegal and illegitimate sanctions and restrictions,
failing to respect Russia’s interests or take them into consideration in all spheres, including security, economic, financial and humanitarian matters,
endless lying and cheating when discussing subjects that matter for the collective West just as much as they are important to us (although we have been unable to engage in a sincere, frank and pragmatic conversation on many of these subjects lately),
their inability to deliver on their own promises for no particular reason or offer an adequate explanation.

We have discussed this at length and convened all kinds of negotiating formats throughout the second half of 2021. President Vladimir Putin, Foreign Minister Sergey Lavrov and Defence Minister Sergey Shoigu have regularly raised these subjects. All Russian ministers, including the ministers of sport, culture, finance, industry, etc., have discussed these matters from all possible angles.

We need to revise something in the global track so that we do not have to think about rebuilding anything.

I believe that we need to address the root of the problem instead of thinking about minimising the damage it caused when there is nothing left in terms of substance."

[...] We have always believed that every state has the right to its own independent foreign and domestic policies, economy, etc. Countries can create voluntary unions on a mutually respectful footing. If they want their integration to be guided by other principles, this must be something they decide on their own. Whenever countries decide to subordinate their national interests to a supranational structure, they must do so voluntarily.

A state can cede part of its sovereignty if it believes that it can benefit from this. This can include giving up its own armed forces and merging them into a military bloc that would protect the country in question. This may be the best option for it. This way, they can spend their defence budgets on their domestic agenda instead. If they are doing this voluntarily and this is what the people want, and if all the required legal procedures are fulfilled, and referendums held, so be it.

However, what we are seeing is the opposite of that."
Foreign Ministry Spokeswoman Maria Zakharova   8 June 2022 [list formatted by Laurie]

"As many as 11,160 sanctions have been imposed on Russia. No other state has ever faced so many challenges. Therefore, for us it is a moment of truth. We must see our work differently and, as you rightly said, today we have only one party, which is our country. The interests of the Motherland must be superior to any party programmes, and we aspire to achieve that."
Vyacheslav Volodin, Speaker of the State Duma (Parliament) July 7 2022

"...during four out of the past ten months, we have had to live with a military-political operation, which is crucial from every point of view. We fully support your decision to this effect, because what is at stake is the survival of the Russian world. We must stop US globalism, which is attempting to dictate its terms to the rest of the world. Moreover, we must do whatever we can to prevent Nazism and Banderaism from spreading across Europe.

Last time, when fascism and Nazism engulfed the whole of Europe, mankind paid the cost of 71 million lives, 27 million of which were the lives of the best sons and daughters of the great Soviet homeland.

I made it a point to visit the economic forum in St Petersburg, where I followed closely your remarks and jotted down 26 statements. I felt, perhaps for the first time, that we are on the same page for every issue you identified."
Gennady Zyuganov, Head of the Communist Party of the Russian Federation July 7 2022

"I must say that today is not the time for party differences. Today we must consolidate society and remove rather than draw dividing lines between political forces with a view to supporting the national economy and social obligations."
Leonid Slutsky, Head of the Liberal-Democratic Party of Russia July 7 2022

So we need to talk to have a strategic stability, to have relational stability between the Europeans and the great neighbor. And all of the initiatives aiming at talking with a willingness of dialogue are there.

And they’re not – the Americans, while they’re specialist in dialogue with Russia, and the Europeans are special experts in sanctions, we need both, and this is what we’re doing.
French Foreign Minister Jean-Yves Le Drian at a joint press conference with US Secretary of State Tony Blinken June 25, 2021

Around 400 Russian diplomats have been expelled from 28 countries since the launch of Moscow’s military operation in Ukraine, the Russian Foreign Ministry revealed on Monday. According to Deputy Foreign Minister Evgeny Ivanov, diplomatic expulsions became the preferred method of the West even before February 24
RT 25 April 2022

1.3 Block banks from doing international money transfers with Russia

“... everyone tends to understand that this is a trend of time, and sooner or later, in one format or another it will be carried out... But, once again, it should be legal, correct, in accordance with the rules that will be formulated...The question is when it will happen, how it will happen and how it will be regulated. Now both the Central Bank and the government are actively engaged in this.”
Denis Manturov, Minister of Industry and Trade of the Russian Federation 18 May 2022

"The ban on transferring funds abroad by legal entities from countries which support sanctions also remains in force. The restrictions are effective through 30 September 2022."
Central Bank of the Russian Federation 8 June 2022

"The restrictions against Russia imposed by unfriendly countries have affected Russian businesses, and, of course, complicated the logistics of exports and imports and created obstacles to making settlements.

It is necessary to provide entrepreneurs with as much assistance as possible ...including speeding up the transition of foreign trade to rubles and the national currencies of countries that are Russia’s reliable business partners.

I want to emphasise that in the new, changed environment, we need to do this much faster."
Vladimir Putin, April 18 2022

"In order to mitigate sanctions risks to trade and economic cooperation between Russia and Latin America, we are consistently working to introduce alternative financial mechanisms to Western ones, and that includes [...] direct correspondent relations between banks. We are also taking a number of other steps towards this goal"
Foreign Ministry Spokeswoman Maria Zakharov, June 8, 2022.

"When they froze the Russian assets in dollars, euro, yens, and the pound sterling for the amount of more than 300 billion euros or dollars, those were mostly the money kept in Western banks after we received payments from them, from the Western countries, for our gas deliveries. In other words, they paid us, and they stole the money from us because those were the currencies which are linked to the Western banking system"
Sergey Lavrov April 2022

"Sberbank is the largest financial institution in Russia and is majority-owned by the GoR. It holds the largest market share of savings deposits in the country, is the main creditor of the Russian economy, and is deemed by the GoR to be a systemically important financial institution. Within 30 days, OFAC is requiring all U.S. financial institutions to close any Sberbank correspondent or payable-through accounts and to reject any future transactions involving Sberbank or its foreign financial institution subsidiaries. Payments that Sberbank attempts to process in U.S. dollars for its clients — with examples ranging from to technology to transportation — will be disrupted and rejected once the payment hits a U.S. financial institution. To implement sanctions on Sberbank, OFAC issued Directive 2 under E.O. 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (the “Russia-related CAPTA Directive”)."
US Treasury 24 February 2022

"Treasury is taking unprecedented action against Russia’s two largest financial institutions, Public Joint Stock Company Sberbank of Russia (Sberbank)and VTB Bank Public Joint Stock Company (VTB Bank), drastically altering their fundamental ability to operate. On a daily basis, Russian financial institutions conduct about $46 billion worth of foreign exchange transactions globally, 80 percent of which are in U.S. dollars.
The vast majority of those transactions will now be disrupted. By cutting off Russia’s two largest banks — which combined make up more than half of the total banking system in Russia by asset value — from processing payments through the U.S. financial system. The Russian financial institutions subject to today’s action can no longer benefit from the remarkable reach, efficiency, and security of the U.S. financial system."
US Treasury 24 February 2022

"So what we told them to do: they would not be paying directly to Gazprom’s accounts abroad, but they would be paying to a bank called Gazprombank. It is an independent entity. They would be paying the same amount which they have to pay under the existing contracts, but they will pay these amounts to a special account which they have to open with this bank. There would be a parallel account in roubles. So they pay euros, and then inside this bank these euros are transferred to the rouble account, and from this account Gazprom receives roubles.

As of now, they would not be able to keep the money in their banks, the money that they not even owe us, but which they paid to us already. I believe this is something which does not contradict contracts. They would still be paying in euros or dollars or whatever was the currency of the contract, but we will have insurance that this robbery would not happen again."
Sergey Lavrov April 2022

"It is crucially important to support domestic demand and prevent it from shrinking. It is necessary to act both through the budgetary system and to provide businesses with greater access to loans. This is the responsibility of the Central Bank. The bank has already begun lowering the interest rate, which will reduce the future cost of loans in the economy...

....the budget definitely should actively support the economy, fill it with financial resources, maintain its liquidity. We have the capacity for that.

Of course, one needs to act with caution; the Minister and I constantly discuss this."
Vladimir Putin, April 18 2022

"Nevertheless, in the first quarter of this year we are witnessing a record level of budget surplus...It is necessary to be cautious, and as I see it, the key condition is that the financial system remains stable at the federal and regional levels.

What is our current surplus? I believe it is some 1.1 trillion rubles, and the total surplus in the regions is about 0.9 trillion rubles."
Vladimir Putin, April 18 2022

"Let me remind you that the key rate increase by the Central Bank was, however, justified and necessary to stabilise the banking sector and financial markets. The decision proved successful and the Bank of Russia is already lowering the key rate gradually, which will make loans cheaper. Other steps are possible based on the real situation in the sector, but this is the prerogative of the Central Bank."
Vladimir Putin April 25 2022

'Of course, the main condition for a real increase in our citizens’ incomes is the creation of new and well-paid jobs, the acceleration of the economic growth rate, and the development of industry and other sectors.

Overall, the current situation is stable in this regard, as we can see from the electricity production index. This indicator is very good, which points to the dynamic development of the economy. And the number of registered unemployed is relatively low.'
Vladimir Putin 12 May 2022

"The illegitimate freezing of some of the currency reserves of the Bank of Russia marks the end of the reliability of so-called first-class assets.
In fact, the US and the EU have defaulted on their obligations to Russia. Now everybody knows that financial reserves can simply be stolen.
And many countries in the immediate future may begin – I am sure this is what will happen – to convert their paper and digital assets into real reserves of raw materials, land, food, gold and other real assets which will only result in more shortages in these markets."
Vladimir Putin

30.22
In assessing whether assets are freely transferable for regulatory purposes, banks should be aware that assets may not be freely available to the consolidated entity due to regulatory, legal, tax, accounting or other impediments.
Assets held in legal entities without market access should only be included to the extent that they can be freely transferred to other entities that could monetise the assets.

"The paying agent — National Settlement Depository — received funds to pay income on Russian Eurobonds maturing in 2026 in the amount of $71.25 million and due in 2036 in the amount of 26.5 million euros."Thus, the obligations to service government securities of the Russian Federation have been fulfilled by the Russian Finance Ministry in full in accordance with the issuance documentation for Eurobond issues."
Sputnik 20 May 2022

"Payments to holders of Eurobonds issued by the Russian Federation shall be made through authorised Russian lending institutions, the list of which is approved by the Government of the Russian Federation.

Obligations under the Eurobonds issued by the Russian Federation shall be recognised as properly met if executed in rubles in the amount that is equivalent to the value of the obligations in a foreign currency and converted at the foreign exchange rate available on the domestic foreign exchange market of the Russian Federation on the day the Russian Federation made the payment to the central depository."
Executive Order On the Temporary Procedure for Meeting State Debt Obligations in the Form of Government Securities [etc] 22 June 2022

“Unfortunately, we now have no reason to expect the situation with foreign currency to change for the better in the future… Therefore, in September we will be forced to extend the restrictions that were introduced in early March..Even in the most apocalyptic scenario, in the most difficult scenario, cash dollars will circulate in our country. According to our estimates, the population has only about $85 billion in foreign currency cash, both in dollars and euros. Now banks can sell and buy this currency, so the circulation of cash will continue.”
Russian Federation Central Bank Governor Elvira Nabiullina July 2022

"To ensure socioeconomic stability and protect the population, including in connection with the political, economic, and other sanctions imposed on the Russian Federation, Russian individuals or legal entities, and/or the cancelling of business by employers, the President instructed the top officials of Russia’s constituent entities to take comprehensive measures to ensure socioeconomic stability based on the geographical peculiarities of the respective territories.

These measures include targeted support for various categories of citizens facing challenging circumstances; keeping social services available; ensuring uninterrupted functioning of life support facilities, transport, supply and social infrastructure, education, public health and social services institutions, energy, industry and communications facilities; the day-to-day monitoring of retail prices of essential goods, medications and medical goods and their retail availability; labour market monitoring and implementing proactive measures to support employment (including retraining and advanced training courses).

In addition, the Executive Order provides for measures to meet and eliminate increased demand for certain types of goods, work and services; provide support for organisations, individual entrepreneurs and self-employed individuals, including targeted support in the form of monetary funds and other property, or other exemptions and concessions; support for socially oriented non-profit organisations that engage in providing social services, social support and protection, assistance to refugees and internally displaced persons, or in activities related to patriotic education and the encouragement of internal labour migration."
Executive order on measures to ensure socioeconomic stability and protection of the population in Russia 16 March 2022

Law on measures (countermeasures) against unfriendly actions of the United States of America and other foreign countries
June 4 2018 

"The Federal Law is aimed at protecting the interests and security of the Russian Federation, its sovereignty and territorial integrity, the rights and freedoms of citizens of the Russian Federation from unfriendly actions, including the introduction of political and economic sanctions against the Russian Federation, its citizens and Russian legal entities. To achieve these goals, the Federal Law stipulates a list of measures (countermeasures) that can be applied to the United States of America and other foreign states that commit such unfriendly acts with respect to individual entities under the jurisdiction of such states, directly or indirectly controlled by them or affiliated with them, or officials and citizens of such states."

"Russia has been able to withstand this unprecedented pressure. The situation is getting back to normal with the ruble recovering to where it was in the first half of February, which is attributable to a robust trade surplus, which is an objective reality. In the first quarter, the current account surplus exceeded $58 billion, setting a historical high. Foreign cash is returning to the banking sector and household deposits are growing."
Vladimir Putin April 18, 2022

"...Russia is confidently dealing with external challenges due to the responsible macroeconomic policy of the past few years and systemic decisions and solutions to strengthen its economic sovereignty, technological and food security."
Vladimir Putin, 12 May 2022

Import replacement

"Our production companies are gradually filling domestic market niches vacated after unscrupulous partners left the country. This concerns daily staple goods, industrial and service sector equipment, construction and farming machinery"
Vladimir Putin, 12 May 2022.

Food

"We are expecting a good harvest this year. According to preliminary expert estimates, we may harvest 130 million tonnes of grain, including 87 million tonnes of wheat. If this happens, then the projected grain harvests would hit an all-time high in Russian history.
This will make it possible to meet domestic demand, with a substantial safety margin, and to expand global exports for our partners; this is highly important for global food markets."
Vladimir Putin, 12 May 2022

Inflation

"Inflation is gradually subsiding. Last month, inflation rates fell several-fold on March levels. Weekly price hikes are down to 0.1 percent. This closely matches weekly growth rates under Bank of Russia inflation targets."
Vladimir Putin, 12 May 2022

"The Bank of Russia’s baseline scenario expects annual inflation to run at 14.0–17.0% by the end of 2022. Inflation movements will be shaped including by such impactful factors as the efficiency of import substitution processes and the scale and speed at which imports of finished goods, raw materials and components will be recovering. According to the Bank of Russia’s forecast, given the current monetary policy stance, annual inflation will reduce to 5.0–7.0% in 2023 to return to 4% in 2024."
Bank of Russia  Press release 10 June 2022

Wages

In the first quarter of 2022 inflation-adjusted wages rose by 3.1% , but is still not enough to make up for inflation. The minimum wage was slated to be raised by 10% on June 1st 2022.

Self employment

Income attributable to some form of entrepreneurial activity  increased by 23% in the first quarter of 2022. When times become hard, Russians do what they have always done - sell stuff at markets.

Poverty

"In 2021, the subsistence minimum began to be calculated as 44.2% of the median per capita income for the year preceding the year the subsistence minimum was set....In the first quarter of 2022, the poverty line was 12,916 rubles. The population with incomes below the poverty line in the first quarter of 2022 amounted to 20.9 million people, or 14.3% of the country's population.

Compared to Q1 2021, the population with incomes below the poverty line in Q1 2022 increased by 0.1 percentage points, or 0.1 million people. The main reason for the growth was the acceleration of inflation to 11.54% (Q1 2022 vs. Q1 2021), which exceeded the growth in average per capita nominal cash income."
Rostat 2022

Overall, real (inflation adjusted) disposable cash income of the population decreased by 1.2% compared to Q1 2021%.

One of our key national goals, which we discuss all the time, concerns efforts to improve the material situation of Russian citizens and to raise their incomes, especially for those who lead a modest life, to put it mildly. In other words, our main goal is poverty alleviation.

In 2017, people facing this situation accounted for 12.9 percent of Russian citizens. In late 2021, their share decreased to 11 percent. Of course, we have made some headway here. However, its pace and speed are obviously not enough. Even during this year’s high inflation, which, thank God, is gradually subsiding, I set the task of reducing the level of poverty and inequality, a no less important matter.

For this purpose, we are implementing an entire package of measures. From June 1, 2022, we have indexed pensions and subsistence-minimum wage levels by an additional ten percent. They now exceed 2021 levels by 19.5 percent. Our system for supporting families with children now covers much more people than before. From now on, needy families can request monthly payments, that is, after mothers become pregnant and until their children reach 17.

Of course, social contracts play a major role in reducing the level of poverty and inequality, and we have been addressing this matter for a long time. Last year, these programmes involved almost one million people. It is important that social contracts should provide people with real employment opportunities in the future, and that they help them launch their own businesses, no matter how small and modest."
Vladimir Putin 18 July 2022

Welfare of society support payments

The number of people receiving support payments increased by 6% in the first quarter of 2022. Pensions will be raised by 10% on June 1st 2022.

Government Budget

"The budgetary system’s capabilities continue to expand. In January-April, the consolidated budget surplus reached 2.7 trillion rubles, while budgetary spending has grown appreciably over the same period following decisions to finance development projects and purchase prepayments earlier than planned."

Faith in the ruble

"The national currency, the ruble, is growing stronger in conditions of a record-breaking foreign trade surplus. It appears that it is posting better results than all other foreign currencies since early 2022."
Vladimir Putin, 12 May 2022

By mid May the Russian currency briefly hit 55.63 rubles to the US  dollar - the strongest since February 2018. In June 2022 the First Deputy Prime Minister of the Russian Federation said "As concerns the optimal exchange rate, the more or less consensus opinion is that this is a rate in the range of 70-80 rubles per dollar." In other words, the ruble needs to be at the balance point where Russian exports are not too expensive for overseas customers, and the ruble not so weak that vital imports become too expensive for domestic consumers.

The ruble is a floating currency, relatively little affected by Central Bank interventions. The 'fiscal rule' meant that Russia would pay for social security and domestic infrastructure investment needs primarily from tax earnings, rather than from borrowing money from the Central Bank and never paying back - the US system, which amounts to printing money ('money issuance'). The Central Bank has a limited role as a buffer in times of emergencies to keep the ruble exchange rate within bounds (and thus dampen inflation), which the bank implements through the unsanctioned component of the Central Banks foreign exchange holdings.

"Beginning in 2015, a mechanism was established that made it possible to ensure a fairly stable exchange rate amid conditions of a floating ruble, although the ruble's volatility did increase after the transition to a floating exchange rate, he said.

"The key element of this mechanism was, as you know, the fiscal rule, which thanks to simply automatic procedures established at the regulatory level made it possible to balance the ruble's exchange rate within certain ranges. And not by means of [money] issuance - this is very important.

The Bank of Russia's options for managing issuance expanded and, accordingly, this was one of the cornerstones of inflation targeting, to which the Bank of Russia transitioned in the past seven years. Now this mechanism has virtually evaporated, stopped working. This is due to the blocking of the Bank of Russia's reserves and the automatic suspension or cancellation of the fiscal rule because of this," Belousov said, explaining the need to discuss a new mechanism."
First Deputy Prime Minister of the Russian Federation 20 June 2022

The 'fiscal rule' was introduced in 2015 to reduce Russia's dependence on the price of natural resources (such as gas and oil) dictating the exchange rate of the ruble. A policy on financial stability was developed at the same time, as were 'instruments' to implement the policy.

The fiscal rule limits the extent to which government spending relies on tax revenue from natural resources. Why? Because commodity prices are volatile, and if a budget commits to spend based on assumed tax income, but there is an economic downturn and the prices fall (as they have in the past - oil prices have crashed, as have gas prices), the government books will end up in the red.

In times of high natural resource prices the budget surplus was used by the Russian Treasury to buy foreign currency denominated assets, and then in times of low prices some of the assets (government savings) would be sold to supplement the government budget. The earnings from selling the foreign-denominated assets are, of course, converted into rubles. So there is a balanced flow of foreign currency, buying and selling, depending on (mainly) oil, gas, minerals, and wheat price peaks and troughs. The Federal Treasury controls these money flows, whether buying or selling foreign assets, not the Central Bank. There can be no speculation on currency, as the value of the foreign exchange purchases is limited to the ruble value of accumulated windfall tax from high export prices, and sales of foreign currency are limited to the amount of foreign currency denominated assets purchased in earlier periods of abundance.

"These restrictions mean that these FX operations under the fiscal rule cannot be considered as setting or managing the rouble exchange rate policy. The rouble exchange rate continues to be free-floating, and the Federal Treasury is a large FX market participant that cannot and does not aim at a particular rouble exchange rate.

All purchases and sales of foreign currency are sterilised via the central bank’s monetary policy operations. The Central Bank of the Russian Federation administers the FX purchase and sale operations under the fiscal rule and may stop them if it determines that they are a threat to the financial stability. The foreign currency accumulated by the Federal Treasury’s purchases under the fiscal rule has the effect of increasing Russia’s FX reserves.

However, sales of this foreign currency are limited by the overall amount and schedule of budget spending.

From an FX reserves management perspective, any spending (portfolio outflow) of foreign currency under the fiscal rule is relatively predictable in terms of amounts flowing out during the next few months.

This relatively new type of financial policy has two sets of implications for financial stability:
(i) issues that are commonly experienced worldwide; and
(ii) country-specific issues.
The commonly experienced financial stability issues arose mainly during and after the 2007–09 global financial crisis. Among these, free-floating exchange rates proved to be a generally better shock-absorbing policy than FX intervention-based policy. The trivial conclusion is that, during the crisis, more FX reserves were better than less. Further, excess debt creation in an economy should be more closely monitored and addressed in good time etc.

The country-specific financial stability implications for Russia arise mostly from the industrial structure of the economy, its emerging market economy characteristics, and the sanctions regime that restricts the access of Russian corporations and government to the global capital market.

Russia’s financial stability policy assumes the possibility of FX intervention, including outright sale of foreign currency and foreign currency lending (FX swaps, FX repo and FX lending). Outright foreign currency sales are decided on an ad hoc basis; the timing and amounts are not precisely predictable, and any intervention would require sterilisation via monetary policy operations.

The central bank provides FX lending through overnight swaps available daily on standby terms. Other types of FX lending (repo and loans) may be quickly activated if needed. But the unpredictability as to the timing and amount of any intervention creates a challenge for FX reserves management and, as a result, a strong FX liquidity preference is applied when the FX reserves asset allocation is decided.

Asset allocation decisions (on currencies, asset classes etc) reflect to the extent possible the estimated amounts, currencies and timing of potential reserves usage."
BIS Papers No 104

And there you have it. The 'sanctions' have to a great extent stopped Russia from buying and selling foreign currency denominated assets, and to that extent totally stopped the 'buffering' of the value of the ruble.

The 'tool' Russia has is now only half a tool - it will only work with unrestricted buying and selling of currencies of 'friendly' countries.

What are possible answers? One partial answer would be to junk the commodity indices whose 'spot market' speculations heavily influence the stability of the price and therefore the ruble exchange rate fluctuations.  Indices based on long term contracts would be favorable for everyone. I suspect Russia will move in this direction.

It will be fascinating to see what the Russians come up with to amend or replace the foreign currency balancing system that has worked reasonably well for them so far. Especially as it has put a rein on government spending, as well as reducing  exchange rate volatility.

Russia Federation National External debt

At March 2022 total external debt (private and government) is about (USD) $453.5 billion. This sum includes money owed to foreigners by the Government, the Central Bank, and commercial banks. It also includes money owed directly to foreign investors (loans, trade credits, various securities, private direct investment funds and other entities etc).
Total national external debt has dropped 5.5% since December 2021.

Russian Government (only) external debt

At December 2021 was (USD) 62 billion. Almost all of this was long term securities, probably bonds of some description. All else equal, as the ruble strengthens, this will be cheaper to re-pay. Especially the Euro denominated debt - given the current weakening of the Euro continues (as it perhaps must, given the continual selling to buy rubles for gas).

Current Account (Trade in Goods & Services)

"We do indeed now have a strong current account balance. And while before this current account balance was offset by capital outflow, today the capital outflow is limited. Is this good or bad? From the point of view of the current policy of a floating ruble it is bad, because the ruble is strengthening, but from the point of view of the balance of savings and investment it is good. This is where the debate comes from. We have an investment resource forming in the country, and we now need to properly use it. Basically this is what the government is working on now"
First Deputy Prime Minister Andrei Belousov June 20 2022

Balance of Trade

A record-breaking foreign trade surplus .

Balance of Payments

"According to the Bank of Russia’s preliminary estimate, the current account surplus of the balance of payments of the Russian Federation in January — June 2022 continued to grow and amounted to $138.5 billion, having increased by 3.5 times compared to the corresponding period of previous year."
Bank of Russia 11 July 2022

The fact that imports have been severely curtailed helped reach this result.

Economic growth

"...as for priorities, the importance today of the very factor of economic growth has grown dramatically, since the national goals that the president set are an expression of the interests and expectations of society, of people. Solving the issues of poverty, demographics, quality healthcare, quality education, roads, the environment, housing, and growth in household incomes - achieving these goals without economic growth is impossible, that's obvious. The economic resources that only growth provides are needed for their realization. Therefore, growth in this sense is imperative. The question is, when we will be able to transition to economic growth and on what scale, given the restrictions that exist today."
First Deputy PM Andrei Belousov 24 June 2022

As of June 2022, the Russian Economic Development Ministry estimates economic activity for 2022 will have shrunk by about 8%. The Deputy PM thinks it will turn out to be about 3%-5% over the whole year if the domestic economy receives enough stimulus. A major engine of stimulus of the domestic economy will be investment. As of June 2022 investment growth was up 12.8% year on year. But you have to wonder how much of this 'growth' was simply buy-out of businesses exiting Russia. Investors have been given tax cuts, and a favorable regulatory environment to 'get on with business' without excessive local bureaucratic interference (which Russia is famous for).

Consumer demand for non food products has fallen, which is hardly surprising. It will take years to develop new businesses, new logistics, new confidence. How many years? My guess, based on post -1999 recovery and the covid mobilisation is 2 years of widespread low (barely adequate) income while the rich become richer, and 10 years to a reasonably prosperous middle class and less income disparity between the rich elite and the ordinary people. But it is an experiment that has never happened before in a modern economy (and in a time of global change), so, who knows...

Domestic private and business income/economic stimulation/employment

"...some trends that require special attention. For example, domestic demand is short of 2021 parameters. Corporate and private accounts continue to shrink. Obviously, these factors impact economic development trends, and it is necessary to reduce these risks by relying on our successful experience of targeted actions during the 2020–2021 pandemic.

As before, today, the most important indicator of successful socioeconomic policy is the income of Russian citizens. To ensure positive dynamics here, it is necessary to support consumer demand and improve the opportunities for businesses and regions. In March, we decided to expand the financial aid programme for families with children in need. From April, it was extended to include families with children aged up to 16 years. Backdated payments have been made since May 11.

We have also arranged for additional financial support for the constituent entities, by restructuring regional debt and granting loans from the federal budget....These mechanisms must motivate regions to finance additional economic development programmes, including a capital boost for regional industrial development funds, and they must also ensure that all obligations and programmes are fulfilled on the ground and that major construction projects are continued. All these measures are compulsory.

With respect to businesses, we have developed a lending programme for backbone companies, secured by VEB. Such loans are expected to amount to 1.6 trillion rubles. There are specific decisions to support key industries such as aviation, agriculture and food production....we have expanded the programme for the guaranteed support of lending to businesses by VEB...an instruction has been issued to extend this programme to companies that are yet to obtain the status of major employers but have already emerged from the category of small and medium-sized businesses. Aided by VEB’s guarantees, these organisations will be able to raise over one trillion rubles at attractive, lower rates due to the risk reduction.

Next, in late April, we agreed to take special measures to grant additional resources to the economy – as professionals say, to saturate it with liquidity. This is important for the continuous operation of companies and organisations and for maintaining and even increasing the number of jobs. These measures include deferring social contribution payments for the second quarter of 2022. There was extensive discussion of this matter and a decision was made. Companies which employ almost 52 million people in total will be eligible for this concession.

Social contributions for these organisations will be deferred for a year, starting from May 2023. Overall, businesses will be able to keep around 1.1 trillion rubles in circulation. Essentially, this money will serve as an interest-free loan from the Government. In addition, companies in the production sector will be eligible for social contribution deferment in the third quarter of this year, amounting to another half a trillion rubles.

I have instructed the Government to explore the issue of providing additional preferences with regard to repaying insurance contributions for the third quarter depending on employment and payroll retention. We went through this, as I said, during the pandemic."
Vladimir Putin, 12 May 2022

Extensive debt restructuring is keeping businesses going, keeping people in jobs. The deferment of business 'social contributions' probably starts in May 2022, I suspect the start in 2023 is an error. All these measures can easily be 'rolled over' as needed, especially as high oil prices are providing the government with a windfall of un-budgeted extra money.

Educated workforce

"In 2012, you came out with another major policy essay titled “Social Policy: Building Justice for Russia,”...you wrote that if our ethnic, migration and demographic policies remain sluggish, we – one-sixth of the planet’s land, but only 2 percent of the world's population – we run the risk of becoming, I quote, “an empty space, the fate of which will be decided by someone else.” ...We need to take back thousands of people...who are registered with our foreign missions and are willing to come back. It is imperative to create clusters with excellent health care and education – we can afford it – with jobs and take our people back."
Leonid Slutsky, Head of the Liberal-Democratic Party of Russia July 7 2022

Central Bank interest rates and monetary policy

When the special military operation began in February 2022 the west imposed it's pre-planned sanctions, destabilising the ruble. Russia's Central Bank immediately hiked the key CB interest rate to 20%.This, and other government measures soon saw the ruble start to regain it's purchasing power.

"Let me also note that the Bank of Russia continues easing its monetary and lending policy and making loans more widely available in general. The Central Bank key rate, as you know, has been reduced to 14%.

Given this dynamics, we have taken the decision to reduce the favourable mortgage rate to 9%. Loans at this rate are available as of May, while the favourable mortgage programme has been extended until the end of this year. This decision should be of help to the families that are planning to buy a flat and to improve their living conditions. We should go on thinking about this. And, of course, the favourable mortgage mechanisms will support the construction industry and the related economic sectors."
Vladimir Putin, 12 May 2022

"On 10 June 2022, the Bank of Russia Board of Directors decided to cut the key rate ... to 9.50% per annum." - Press Service Central Bank of the Russian Federation

The Bank of Russia's June 10 2022 forecast is for a key rate averaging 10.8—11.4% for 2022 (perhaps lower than that in the second half of the year), 7–9% in 2023, and 6–7% in 2024.

On the 22nd July 2022 the Central Bank of Russia cut its key interest rate to 8.0%, as inflation was slowing down and consumer demand was subdued. The bank said “... the external environment for the Russian economy remains challenging and continues to significantly constrain economic activity...”

The consensus of Russian experts is that the optimal Central Bank key interest rate is around 5% - 6%, which was the rate prior to the intervention in Ukraine. The Russians are anxious that the key rate is predictable and not subject to large changes.

Bank DOM.RF is a majority Russian government-owned joint stock company which operates as a bank. As well as normal banking operations, it offers mortgages (including state subsidised mortgages for families and to encourage settlement in the Far East) and other loans. State subsidised mortgages from Bank DOM.RF makes up 35% of all mortgages. (which is 830,000 families out of the approximately 55.38 million households in Russia). Mortgage rates are still too high. Even state subsidised mortgages have an interest rate of 7%. They make repaying debt difficult if not impossible. Many household incomes are so low that even loans at low interest rates are still unaffordable. Bank DOM.RF issues mortgage bonds to banks to increase bank liquidity in order to issue mortgages. These bonds now underpin guarantee 10% of the mortgages in Russia. Therefore Bank DOM.RF has been building rental accomodation, but the numbers built are still very small.

Decarbonisation
The EU ban on coal may give Russia a 'glimpse of the future'. Coal burning is the primary long-term driver of irreversible climate change. Like it or not, Russia will ultimately have to leave coal in the ground. In the meantime, coal is in short supply in the world, and, unfortunately, Russian coal finds a ready market.

"I don’t think we are thinking in the context of sustaining. Sustaining means, you know, you sustain, you take some hardships, and hope that, sooner or later, this would be over.

Russia has been under sanctions all along – Jackson–Vanik, then it was repealed, but Magnitsky Act was introduced, then we were punished for the free vote of the Crimeans, we were punished for supporting those who were in favour of keeping the Minsk agreements...and so on and so forth.

So, now we have come to a very straightforward conclusion. We cannot rely on our Western colleagues in any part of our life which has strategic significance, be it food security, which we managed to ensure ourselves after 2014, be it, of course, defence, and be it some strategic sectors where high-tech is developing and indicating the future of the mankind.

We did not have time to achieve self-sufficiency in all these areas, but in most cases, we resolved this issue.

Of course, we are open to cooperation with all other countries who do not use illegal, illegitimate unilateral measures in violation of the UN Charter."
Sergey Lavrov 19 April 2022

"...specific decisions will be made in the near future on the indexation of pensions and all social benefits, as well as the salaries of specialists employed in the public sector. To ensure practical implementation of this policy, I ask the parliamentarians to carefully work out the necessary amendments and legal mechanisms.

These and the other decisions we have been making are aimed at providing direct assistance to the most vulnerable categories of the population – families with children and senior citizens.

The key industries, strategic enterprises, small and medium-sized businesses are also receiving and will continue to receive support.

As a result, by taking the measures I have just mentioned, we have not just softened, but, as I said, we have repelled, blocked the very first crushing blow – as the West believed it to be – of the illegitimate sanctions against our country.

Our banking system, national currency, transport, trade, and the economy in general have withstood the shock and have not crumbled. On the contrary, they now have good resources for development, for the launch of new projects in infrastructure and industry, and for developing and unlocking the potential of all our regions.

Undoubtedly, this is the result of a balanced and responsible socioeconomic policy over the recent years, the implementation of our national projects, and the result of your, my colleagues, concerted and energetic efforts amid today’s extraordinary circumstances...

...we will counter any crude and often inept external restrictions, the destruction of all civilised rights and agreements and attempts to isolate us with greater freedom of entrepreneurship, openness to honest partnerships, respect and reliable protection of owners and genuine investors."
Vladimir Putin 27 April 2022

"The Russian economy’s accumulated potential, including its experience overcoming the 2014 sanctions, will allow the Russian economy to quickly adapt to the latest sanctions and the global crisis. In the coming years, Russia will go through a laborious period of completing the construction of a self-sufficient industrial core, including with respect to the defence industry, high-tech engineering, and the IT sector.

Russia will expand payments in Russian rubles on loans and energy supplies.....The further reformatting of the Russian economy and the departure of Western brands will open windows of opportunity for partner countries in the EAEU to increase the export of services, food, and engineering products. New niches will be vacated on the Russian market, and the EAEU countries will receive privileged access....The US is living beyond its means, "exporting" inflation to developing countries...over the past 20 years, the United States has become the largest debtor in the world; the cost of the dollar does not reflect its real value.

According to a  March 2022 IMF report, over 20 years the share of the dollar has decreased from 71% to 59% due to its replacement with national currencies. The process will accelerate after the erosion of confidence in the dollar due to the theft of Russia's dollar reserves....the scope for de-dollarisation in the global economy remains significant...

This will also be facilitated by the formation of a settlement architecture parallel to the dollar, including new units of accounting (probably tied to real values ​​and resources), as is currently being discussed between the EAEU and China."
Vyacheslav Sutyrin, Valdai Discussion Club, 24 May 2020

This year, our country faced the sanctions against its real and financial sectors that were unprecedented in scale. In February and March, these events caused:
a higher volatility in the financial market,
a weaker ruble,
a sharp rise in inflation expectations,
an outflow of depositors’ funds from banks, and
a feverish consumer demand. 

Financial stability risks rose substantially.

A package of measures was taken to stabilise the situation. They included
 a brief but sharp increase by the Bank of Russia of the key rate on 28 February,
an introduction of restrictions on capital flows,
 a suspension of trades on the Moscow Exchange,
regulatory easing for banks, and
a borrower support.

These measures made it possible to curb the volatility in the domestic financial market, return depositors’ funds to banks, and support the banking sector.

The Bank of Russia managed to fully meet the elevated liquidity needs of banks and stabilise the situation quickly even though fluctuations in cash flows were extreme. The major contributors were the resilience of the banking system, which had been continuously improved in the last few years, as well as the maturity and reliability of the monetary policy operational procedure, which supported liquidity provision and absorption mechanisms.

The financial situation stabilised.

Now, the economy is undergoing transformation. This is a long and challenging stage of the adaptation to new environment. It will take time for companies to readjust their business models and economic relations and for people to revise their consumption habits.
Our key task is to ensure that our country goes through the transformation without extreme losses in the economic activity and avoids macroeconomic stability risks
Alexey Zabotkin, Deputy Governor of the Bank of Russia 12 August 2022