The Real Russia. Today.

Russia pursues ‘domestic offshores’ to help battered oligarchs, and the Duma drafts new draconian Internet legislation

Tuesday, April 10, 2018

• Amid financial uncertainty, Russia cancels its first bond auction in 2.5 years
• Washington could impose sanctions on Russian sovereign debt
• Russia moves to open domestic “offshores” to help battered oligarchs
• Yulia Skripal leaves the hospital for a “secluded location”
• Ilya Yashin tangles with Moscow's mayor
• The government returns to the idea of nationalizing the Russian Red Cross
• Kemerovo's old governor becomes its new speaker of the regional parliament
• The State Duma drafts new legislation to crack down on social media “fake news” and more
• Traffic collisions are down in Russia, but migrants are responsible for more than ever, officials say

Story of the day: Sanctions fallout continues 📉

“Russia’s currency plunged to the weakest level since December 2016 and the government canceled a bond auction as the toughest U.S. sanctions yet combined with an escalation in tensions over Syria to rattle investor sentiment,” reports Bloomberg. The auction was scheduled for April 11, and would have been Russia’s first since August 2015.

🤫 How things could get worse

Russia’s economy and currency are expected to weather the latest U.S. sanctions, but Washington could escalate its pressure on Moscow, if it wishes. On April 5, 2018, lawmakers in the U.S. Congress introduced a bipartisan bill that would impose additional sanctions on Russia for the poisoning of the Skripals in England. The bill would allow the president to apply the Countering America's Adversaries Through Sanctions Act to any Russian citizen known to be involved in the alleged assassination attempt. It would also prohibit U.S. citizens from any transactions relating to new Russian sovereign debt (issued 180 days after the bill is enacted).

What’s considered Russian sovereign debt? The restrictions would apply to bonds and new foreign exchange swap agreements with a maturity of more than 14 days issued by Russia’s Central Bank, the National Welfare Fund, the Russian Federal Treasury, and any agents or affiliates of these institutions. The sanctions would also extend to “any other financial instrument” (that needs more than two weeks to mature) issued by Sberbank, VTV Bank, Gazprombank, the Bank of Moscow, Rosselkhozbank, Promsvyazbank, or Vnesheconombank.

💌 Help is on the way, oligarchs

As the ruble depreciates against the dollar and euro, the Russian government’s first assistance to its suffering oligarchs is taking shape: the creation of domestic offshores in Kaliningrad and on Russky Island, south of Vladivostok. These new zones would offer special tax and regulatory benefits.

If implemented, the project would allow certain Russians to transfer their businesses to Russia from other countries (including offshores) without changing their legal form or financial infrastructure. They could also move their corporate capital without paying additional taxes. “Residents” of these zones would receive status as international commercial enterprises, which could be registered in a single day, without disclosing key information about its management or shareholders. Residents of these offshore zones wouldn’t have to pay taxes on any income earned abroad — a sweet deal for one of the companies hardest hit by the new U.S. sanctions: Oleg Deripaska’s Rusal, which last year earned almost 80 percent of its revenue ($7.9 billion) outside Russia.

She's out! 🏥

Yulia Skripal was discharged from the hospital on Tuesday, more than a month after being poisoned with what the British authorities say was a Russian nerve agent. Officials at Salisbury District Hospital told BBC News that “this is not the end of [Yulia’s] treatment, but it marks a significant milestone.” Her father, former spy Sergey Skripal, is on the mend, but still needs to be hospitalized.

So where is she? The BBC reports that Yulia Skripal has been taken to a “secluded country house somewhere in Britain while discussions take place over her future safety and protection.” This is rather tricky because she is a Russian citizen and Moscow has demanded consular access. British officials denied rumors earlier this week that the Skripals have already arranged to assume new identities in the United States, saying such talk is still “premature.”

Yashin loses his draft board chairmanship 👉

Opposition activist and municipal deputy Ilya Yashin has lost his seat on the Krasnoselsky district draft board. Yashin, who was elected as a local councilman in September 2017, says Mayor Sergey Sobyanin removed him for political reasons and appointed Mikhail Biryukov in his place, defying a law that says either Yashin or his deputy must head the district’s draft board. City Hall says this was the draft board’s decision, denying that it even has any paperwork documenting Yashin’s dismissal (though the mayor’s office is supposed to approve these decisions).

But what does the draft board say? Members of the Krasnoselsky district draft board told the newspaper Kommersant that Yashin basically shirked his board duties. He reportedly attended just three of the last 15 meetings, leaving Mikhail Biryukov to perform his role as chairman (which is why the board apparently offered the job to him formally this week). In January, the district chief enlistment officer says he asked Yashin to submit his candidacy for the next board, but he allegedly never responded. A month later, Yashin supposedly agreed to a new membership arrangement that listed Biryukov as the board’s chairman, sources told Kommersant. Yashin denies this, calling it a “blatant lie.”

What are you up to, Red Cross? 🕵️‍♂️

The Russian government is once again kicking around the idea of nationalizing the Russian Red Cross, which has raised more than 100 million rubles ($1.6 million) for the victims of the shopping mall fire in Kemerovo, without disclosing how it plans to spend these funds. The organization provoked similar suspicions in 2012, when it failed to account publicly for how it allocated money raised for flood relief in Krymsk. According to Kommersant, the state doesn’t plan to act anytime soon, however. The legislation now being “finalized” was first drafted in 2015.

Meet the new boss, same as the old boss 🤝

Ten days after ending his 21-year governorship in Kemerovo, Aman Tuleyev quietly celebrated his retirement by becoming speaker of the regional parliament, winning the support of all but one deputy in a special session. Tuleyev was the only candidate. A day earlier, the former speaker of the parliament suddenly resigned, telling reporters that he was stepping down “because the opportunity to vote for Aman Tuleyev has appeared.”

Not everybody’s celebrating. Representatives of the State Duma faction for “A Just Russia” are demanding a review of the decision to appoint Tuleyev to the head of Kemerovo’s parliament, saying that his return to politics means he refuses to “acknowledge his own political responsibility” for a deadly shopping mall fire last month. On April 6, the head of United Russia’s Duma faction, Deputy Speaker Sergey Neverov, criticized Tuleyev for seeking the speaker’s position in Kemerovo, saying he thought it was “wrong.”

Take that, fake news (and more) ⛔️

The State Duma has revised draft legislation that would impose a whole series of new restrictions on social media in Russia. The bill is hard to summarize, but here’s the gist:

• Every major social network would be required to establish representation in Russia, to make it easier for the Russian authorities to communicate with these companies.
• All major social networks would be forced to identify their users by their phone numbers. This would effectively make it impossible for Russians to use social media anonymously, because individuals have to surrender their passport information when purchasing SIM cards.
• At their own users’ requests, all major social networks would be required to delete any information that violates Russian laws. Within 24 hours.
• At the request of Roskomnadzor (Russia’s federal censor), all major social networks would have to delete any “unverified publicly significant information presented as reliable information.” In other words, the Russian government could force social networks to remove anything it says is “fake news.”
• All major social networks would be required to prevent users from publishing content that promotes “pornography or a cult of violence.” They’d also be required to delete all obscene language. Yes, you read that right: the law would ban all swearing.

In a special report, Meduza also answered the following questions: What’s considered “a major social network”? Why does online anonymity matter in Russia? How are social networks supposed to delete “illegal” posts? How is Roskomnadzor going to identify “fake news”? What happens to the social networks that don’t comply? Could such a law actually work in Russia? And will lawmakers actually pass this?

• Read the whole story: “Russian lawmakers drafted a new version of their latest lousy idea to regulate social media. But just how bad is it?”

Blame the migrants 🚦

Traffic collisions and deaths in car crashes were down in 2017, but Russian traffic officials say foreign drivers were responsible for more accidents than in 2016. While the total number of collisions dropped 2.5 percent on the year (to 169,400), the number of crashes involving drivers from the Commonwealth of Independent States rose 4.2 percent (to 4,200). “They come here exclusively for work, they speed, and they don’t really know the traffic rules. I don’t see a solution to this problem, right now. The traffic police are gradually being deprived of their authority, and soon there simply won’t be anyone to stop these violations,” Vyacheslav Lysakov, the deputy chairman of the State Duma’s State Construction Committee, told Kommersant.

Yours, Meduza