Kosovo attack: Who benefits?

Jamie Dettmer is opinion editor at POLITICO Europe. 

The European Union and the United States have been trying to persuade Serbia and Kosovo to end their enmity and normalize relations for more than a decade.

There were finally signs of promise in April, when Serbian President Aleksandar Vučić and Kosovo’s Prime Minister Albin Kurti finally gave tacit, if begrudging, approval to an EU-brokered plan that would see the two finally sprinkle some soil over the hatchet.

But despite all the cajoling and coaxing, it wasn’t to be.

U.S. and European officials have insinuated that Kurti was more to blame here, with EU foreign policy chief Josep Borrell drawing attention to the failure to establish an association of municipalities in northern Kosovo, which would have allowed Kosovo’s Serbs some autonomy in an enclave where they’re a majority.

Behind the scenes, U.S. and European officials have also quietly praised Vučić for a slow and halting tilt toward the West, secretly supplying some arms to Ukraine and moving to reduce Serbia’s dependency on Russian energy supplies.

This is why last week’s astonishing clash between armed Serbs and police in the village of Banjska, in northern Kosovo’s Zvečan municipality, is especially perplexing — and it’s worth asking whose interests it serves.

Kosovo’s leaders quickly blamed Vučić for the attack, which also involved a siege of an Orthodox monastery. A Kosovan policeman and three Serb gunmen were killed in the clash. And Kosovo’s President Vjosa Osmani said Friday that “the (armed) group simply exercised the intentions and the motives of Serbia as a country and Vučić as the leader.”

Osmani maintains Belgrade was trying to copy Moscow’s 2014 annexation of Crimea, which began with so-called little green men infiltrating the Ukrainian peninsula. “They are trying to carry out a Crimea model in the Republic of Kosovo, but we will absolutely not let that happen,” she added.

Kurti has called for sanctions to be imposed on Serbia for what he describes as a state-sponsored terrorist attack, warning that if the crime goes unpunished, Belgrade will repeat it. Vučić planned and ordered an attack in northern Kosovo “to destabilize” the country with the goal of starting a war, he said.

In response, Vučić has angrily denied these allegations but has noticeably hardened his rhetoric, possibly as a sop to Serbian ultra-nationalists. More alarmingly, however, Serbia has been building up its forces near the border with Kosovo since the deadly clashes, which the White House has described as “unprecedented.” And according to U.S. National Security Council spokesman John Kirby, on a phone call with Vučić, Secretary of State Antony Blinken urged an “immediate de-escalation and a return to dialogue.”

If Belgrade did have a hand in the attack, however, it would appear to pull against the caution Vučić has displayed since Russia’s invasion of Ukraine, hedging his bets between the West and Serbia’s traditional Slavic ally. Vučić didn’t join in on Western sanctions against Russia but has condemned the invasion, and says he’s keen to pursue Serbia’s bid for EU membership.

If Belgrade did have a hand in the attack, it would appear to pull against the caution Aleksandar Vučić has displayed since Russia’s invasion of Ukraine | Andrej Cukic/EFE via EPA

Marko Đurić, the Serbian ambassador to the U.S., echoes Vučić’s argument that planning or approving an attack in Kosovo at this juncture would make no sense and potentially ruin Belgrade’s improving relations with the West. “We have a lot to lose by any kind of escalation in Kosovo,” he told POLITICO — including harming the country commercially.

Đurić also said the attack has complicated the country’s domestic politics, noting that “the far right in Serbia is going to try and exploit this to the greatest extent possible.”

But Kosovo’s leaders have a case against Belgrade that needs answering.

To support the allegation that Vučić endorsed the attack, they highlight the role of Milan Radoičić, the deputy leader of the Serb List — a party that dominates Serb politics in northern Kosovo and has close links with Vučić’s Serbian Progressive Party.

Nicknamed the “boss of the north,” Radoičić admitted to organizing and leading the attack in a statement issued by his lawyer, saying he was solely responsible. “I didn’t inform anyone from the government structures of the Republic of Serbia about this, nor from the local political structures from the north of Kosovo and Metohija, nor did I get any help from them, because we already had had different views on the previous methods of resisting Kurti’s terror,” he said.

But Kurti dismisses the idea that Radoičić would have gone ahead without Vučić’s approval. “I have no doubt that Radiočić was only the executor. The one who planned and ordered this terrorist, criminal attack on our state, in order to violate our territorial integrity, national safety and state security, is none other than President Vučić,” he told reporters.

Other officials in Pristina also say it would be stretching credulity to think Aleksandar Vulin, the head of Serbia’s BIA intelligence agency, would have been unaware of a planned attack.

Bojan Pajtić, a Serbian law professor and former president of the autonomous province of Vojvodina within Serbia, agrees the Banjska provocation wouldn’t have gone ahead without the security agency’s knowledge, saying it is improbable that the BIA would have failed to notice an operation being prepared by a heavily armed formation consisting of dozens of people in such a small area. “The BIA normally knows who drank coffee with whom yesterday in Zvečan,” he said.

“When an incident occurs that is not accidental, but the result of someone’s efforts, you always wonder whose interests it is in,” Paltić said. “In this case, it is certainly not in the interest of Aleksandar Vučić, because after the last attempt at dialogue in Brussels, in the eyes of the West, in relation to Kurti, he still looked like a constructive partner.”

Pajtić isn’t alone in querying who’s interest the attack was in, and so far, both Washington and Brussels have been extremely cautious in their comments. European Commission spokesperson Peter Stano said the EU will wait for the completion of the investigation before coming to any conclusions on what he described as a terrorist attack. Washington, careful to keep its language neutral, hasn’t been specific about who it blames either.

This, of course, stands in sharp contrast to Moscow, which predictably grandstanded as Serbia’s traditional protector, accusing Pristina of ethnic cleansing in northern Kosovo — the very same lie used to try to justify Russian President Vladimir Putin’s full-scale invasion of Ukraine.

“This incident, the most serious example of violence in Kosovo for years, turned the tables on Vučić,” said Dimitar Bechev, a visiting scholar at Carnegie Europe. And he, too, questioned whether the attack was a rogue operation by Serbian ultra-nationalists and Kosovo’s Serb leaders.

“Should the story of Radoičić freelancing be corroborated, it would appear that Vučić has lost control over his erstwhile proxies,” he said.

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Western sanctions on Russian diamonds set to disrupt a global industry

G7 experts are set to arrive in India on a fact-finding mission this week ahead of the expected announcement of a new embargo on importing Russian diamonds. An EU ban has also been under discussion for months – but imposing new regulations on the global diamond market is no easy feat. 

Experts from the G7 and Belgium will discuss potential sanctions on Russian-mined diamonds this week on a visit to the Indian cities of Mumbai and Surat.

The trip is the latest step forward in months of negotiations among Western powers over how to impose sanctions that could transform a sprawling – and often controversial – global industry. 

Around one-third of the world’s supply of diamonds are mined in the Siberian region of Yakutia by Russian state-owned company Alrosa. The diamond industry overall contributes around $4.5 billion to the Russian economy annually, making it one of the largest sectors in Russia to avoid the sweeping sanctions imposed by Western powers since the start of the full-scale invasion of Ukraine in 2022.

But this is not for lack of trying. Individual countries such as the US and UK have introduced their own sanctions on the luxury stones even while discussions over diamond sanctions among the EU stalled due to pushback from member state Belgium.

Belgium’s port city of Antwerp is home to the centuries-old Diamond District – the world’s largest diamond trading hub.

Approximately 84% of the world’s rough-cut diamonds and 50% of all polished diamonds are traded through the Belgian city, equivalent to around $220 million dollars’ worth of diamonds every day.

Belgium has argued EU sanctions would excessively penalise its economy while leaving other EU economies relatively intact and Russia free to sell its diamonds outside the bloc. 

Tracing the stones 

If the typical diamond mined in Russia is then traded in Belgium, the next stop on its journey to the jewellery shop window is almost certainly in Surat on India’s west coast, where 80% of the world’s diamonds are cut and polished.

Here the diamond trade employs around 1.5 million people and is worth around $30 billion in both imports and exports.

Employees work on diamond polishing machines at a factory in Surat, India, on June 1, 2022. © Punit Paranjpe, AFP

Once polished, the majority of gems are likely to end up in either New York – gateway to the world’s largest market for polished diamonds, the United States – or Hong Kong to be channelled into the Chinese market.

However, diamonds can bounce between multiple other destinations. Botswana and Canada are also major producers while Israel, Dubai and India are significant trading hubs. There is also a growing cutting and polishing industry in the Chinese cities of Guangzhou and Shenzhen. 

In short, from mine to retail, any diamond “will change hands usually a number of times”, says Edahn Golan, a diamond industry analyst based in Tel Aviv.   

Herein lies a fundamental problem with imposing sanctions: traceability.  

Most diamonds are initially exported as rough gems that have not yet been cut or polished. At first, they can be fairly easily tracked.

“International trade of rough is somewhat regulated,” says Golan. “Every time you want to export a rough diamond from one country and import into another, there’s paperwork involved that denotes where the diamond was mined, the origin, the shipper, the company that’s selling the diamond and the recipient.”

Complications arise when diamonds are traded multiple times between different locations.

If traders in Antwerp or Tel Aviv prepare parcels of diamonds to send to a manufacturer, they can mix similar stones from (for example) Russia, Botswana or Canada. The whole package is then labelled as being of “mixed” origin from that point onward.

When a parcel of mixed diamonds arrives, specialist scientists or experienced traders may be able to identify the geographical origin of individual gems – but this is not done on an industrial scale. In this way, large numbers of Russian stones could easily fly under the radar.

“That is one of the primary ways of avoiding the sanctions,” says Golan. “Traders can add one stone that came from anywhere else in the world, close up the parcel, ship it as ‘mixed’ origin, and it’s perfectly legal.”

A worker holds a rough diamond at the Diamonds of Alrosa factory in Moscow, Russia on April 30, 2021.
A worker holds a rough diamond at the Diamonds of Alrosa factory in Moscow, Russia on April 30, 2021. © Tatyana Makeyeva, Reuters

Tracing a diamond’s origin is even more complicated for exports of polished gems.

Even as a car made up of parts manufactured around the world will be labelled as Japanese if it is assembled in a factory in Japan, a similar principle holds for diamonds. A stone that comes from anywhere in the world can be classed as “Indian” if it has been polished and cut in India.

This is an issue that current US sanctions on imports of rough Russian diamonds does not address. “Right now, the US has what I would call ‘softer’ sanctions on the importation of Russian diamonds,” says Paul Zimnisky, a diamond industry analyst based in New York. 

“Russian-origin diamonds can still be imported as long as they were transformed or cut and polished outside of Russia.”

New technologies

New sanctions from the G7 aim to go further than existing US sanctions to “block all Russian-origin diamonds from Western consumer markets”, says Zimnisky.

To do this, the G7 has said it will implement a new traceability system, which could see Antwerp function as a central sorting hub where Russian stones are eliminated and others are allowed to enter G7 markets.

The technical aspects of the sorting system have not yet been revealed, although experts have their theories.

“I think sanction enforcement will be some combination of document-based auditing via customs but will also incorporate the new tracking technology on the market, which uses high-resolution imaging to ‘fingerprint’ a stone and then register it on a blockchain-like system,” says Zimnisky.

Golan says the SWIFT banking system could be used to track payments, along with non-invasive laser technology that marks each individual stone with a unique identification.

However, Golan foresees issues with either system. First, industry actors across the entire global trade, manufacture and retail pipeline will need to implement the same technologies simultaneously.

Second, he says, “even the best technologies don’t work for every diamond. And below a certain size, economically, tracing even doesn’t make any sense. There are some diamonds that trade for $4 or $5 [or] $6 per carat ­– nobody wants to trace them”.

Smaller diamonds are even more likely to fly under the radar, Golan adds, as a laser-marked diamond that is then divided into smaller stones will not retain the unique identity mark on every piece, making it impossible to use the system to validate the diamonds’ origin.

New markets?

Belgium, initially resistant to sanctions packages, has been brought round by the promise of expanding the measures to cover all G7 countries, rather than just the EU, and by the promise of a central role for Antwerp’s diamond industry.

During a September visit to New York where he met diamond industry leaders, Belgian Prime Minister Alexander De Croo said that new traceability measures should be introduced in time for sanctions on Russian diamonds to be imposed by January 2024.

There are also promising signs of cooperation from India, whose leadership has striven to maintain diplomatic ties with both Russia and the West since the full-scale invasion of Ukraine.

Russian diamond producer Alrosa has suspended rough diamond supplies for September and October at New Delhi’s request, India’s Gem and Jewellery Export Promotion Council said on Wednesday.

The move was put down to an attempt to counter oversupply in the global market and stabilise diamond prices amid weak demand. But, Golan says, the pause in Russian diamonds entering India lines up neatly with potential sanctions from the West.

If sanctions are imposed, as expected, Zimnisky believes the international diamond trade will simply adapt. “We might see certain categories of non-Russian diamonds trade at a premium from time to time. I don’t expect a material price impact in the near term at least, as the trade has had ample time to prepare for this.”

Golan predicts an inevitable boost within G7 markets for diamonds from countries such as Botswana and Canada.

Outside the G7 market, sales of Russian diamonds may well expand into countries still maintaining diplomatic ties with Russia.

India’s internal retail market for diamonds grew steadily in 2022 and there are positive signs of demand recovering in China, according to an annual report from international diamond company De Beers.

“My guess is that we will find a lot more traders trying to sell in China,” Golan says. “China is still a depressed market, but just last month we saw a little increase in [diamond] jewellery sales since Covid.”

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New US sanctions to plug loopholes that let Russia get Western tech

The US has announced a raft of new sanctions aimed at people and companies in countries, notably NATO member Turkey, that sell Western technology to Russia that could be used to bolster its war effort.

The US is slapping sanctions on more than 150 businesses and people from Russia to Turkey, the United Arab Emirates and Georgia to try to crack down on evasion and deny the Kremlin access to technology, money and financial channels that fuel President Vladimir Putin’s war in Ukraine.


The sanctions package is one of the biggest by the State and Treasury departments and is the latest to target people and companies in countries, notably NATO member Turkey, that sell Western technology to Russia that could be used to bolster its war effort.

The package also aims to hobble the development of Russia’s energy sector and future sources of cash, including Arctic natural gas projects, as well as mining and factories producing and repairing Russian weapons.

“The purpose of the action is to restrict Russia’s defense production capacity and to reduce the liquidity it has to pay for its war,” James O’Brien, head of the State Department’s Office of Sanctions Coordination, told the AP.

From Russia to Turkey to the UAE

The US is imposing sanctions on a newly established UAE company, which provides engineering and technology to Russia’s Arctic liquefied natural gas project, as well as multiple Russian companies involved in its development.

Putin wants the Arctic LNG 2 project to produce more liquefied natural gas and make Russia a bigger player in the energy market. In July, Putin visited the LNG site in Russia’s far north and said it would have a positive impact on “the entire economy.”

The US package includes sanctions on several Turkish and Russian companies that the State Department says help Moscow source US and European electronic components –such as computer chips and processors — that can be used in civilian and military equipment.

The department also is targeting Turkish companies that have provided ship repair services to a company affiliated with Russia’s Ministry of Defence.

Before the war, O’Brien said, Russia imported up to 90% of its electronics from countries that are part of the G7 wealthy democracies, but sanctions have dropped that figure closer to 30%.

Sanctions, he said, “are effective” and “put a ceiling on Russia’s wartime production capacity.”

“Russia is trying to run a full production wartime economy, and it is extremely difficult to do that with secretive episodic purchases of small batches of equipment from different places around the world,” O’Brien said.

However, analysts say Russia still has significant financial reserves available to pursue its war and it’s possible for Russia to import the technology it seeks in tiny batches to maintain defense production.


“Russia could probably fill a large suitcase with enough electronic components to last for cruise missile production for a year,” said Richard Connolly, a specialist on Russia’s defense sector and economy at the risk analysis firm Oxford Analytica.

Russia, he said, also gets a lot of electronic components from Belarus, “so even if we whack all the moles, Belarus will still provide the equipment for as long as Lukashenko is in power.”

Both Turkey and the UAE have condemned Russia’s invasion of Ukraine but have not joined Western sanctions and sought to maintain ties with Russia.

Russian Industry and Trade Minister Denis Manturov said this year that trade between Russia and the UAE grew by 68% to $9 billion in 2022, according to Russian state news agency Tass.

Are sanctions effective?

Despite countries still doing business with Russia, the State Department believes sanctions are working, O’Brien said, noting that “the way to measure success is on the battlefield.”


“Ukraine can shoot down most of what the Russians are firing, and that tells us that there’s a gap,” he said. “The battlefield debris shows us Russia is using less capable electronics or sometimes no electronics at all.”

Nonetheless, Russia has been pummeling Ukraine with frequent missile attacks, including two over the past week that killed at least 23 people in Ukraine.

This is partly because Russia is “still getting hold of these electronic components and they are largely functioning as they did before,” said Connolly, the Russia analyst.

The latest sanctions package targets multiple Russian companies that repair, develop and manufacture weapons, including the Kalibr cruise missile. But to really turn the screws on Russia, analysts say Western companies need to think twice before selling crucial technology to countries known to have a healthy resale market with Russia.

“We need to work much harder with companies in our own countries to ensure that they are not feeding the re-export market,” said Tom Keatinge, director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute in London.


“Many of them may be celebrating a rise in sales to the UAE or Turkey and not realising, or not choosing to realise, that the rise is being driven by re-export business as opposed to genuine business happening in the UAE and Turkey,” he said.

The United Arab Emirates has insisted it follows international laws when it comes to money laundering and sanctions. However, a global body focused on fighting money laundering has placed the UAE on its “grey list” over concerns that the global trade hub isn’t doing enough to stop criminals and militants from hiding wealth there.

Turkey, meanwhile, has tried to balance its close ties with both Russia and Ukraine, positioning itself as a mediator.

Turkey depends heavily on Russian energy and tourism. Last year, however, Turkey’s state banks suspended transactions through Russia’s payment system, Mir, over US threats of sanctions.

The extent of US sanctions

Including the latest sanctions, the State Department says the US has targeted almost 3,000 businesses and people since Russia invaded Ukraine in February 2022.

“The United States and its allies and partners are united in supporting Ukraine in the face of Russia’s unprovoked, unjustified and illegal war. We will stand with Ukraine for as long as it takes,” US Secretary of State Anthony Blinken said in a statement.

The State Department also sanctioned a Russian citizen for being associated with the Wagner mercenary group and for facilitating shipping of weapons from North Korea to Russia.

Also targeted were a Russian oligarch who the State Department says has personal ties to Russian Defense Minister Sergei Shoigu and organised crime, as well as a Russian Intelligence Services officer and a Georgian-Russian oligarch. The State Department has said Russia’s Federal Security Service worked with the oligarch to influence Georgian society and politics for Russia’s benefit.

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BRICS hypocrisy on offshore reform

Andrea Binder is a Freigeist fellow and research group leader at the Otto Suhr Institute of Political Science at Freie Universität Berlin and the author of “Offshore Finance and State Power.” Ricardo Soares de Oliveira is professor of the International Politics of Africa at Oxford University and is currently writing a monograph titled “Africa Offshore.”

Of all the challenges in global governance discussed at the latest BRICS summit in Johannesburg, the role of offshore financial centers should have loomed large. Instead, the issue barely got a noncommittal half paragraph on page eight of the summit’s 26-page declaration.

In an example of breathtaking hypocrisy, BRICS countries rail against the global financial architecture but offer no collective action on offshore banking, and they also continue to be among its major users themselves.

Data leaks such as the Pandora Papers and Panama Papers have shown just how vast amounts of cash end up in jurisdictions that cater to wealthy nonresidents by offering secrecy, asset protection and tax exemption. And according to economist Gabriel Zucman $7.8 trillion — or about 8 percent of global wealth (and 40 percent of corporate profits) — are currently hidden in such tax havens.

What’s interesting is that a considerable share of this originates from BRICS and other developing countries. The U.N. Conference on Trade and Development, for instance, estimates that $88.6 billion leave Africa every year in the form of illicit capital flight, much of it ending up offshore.

The fact that this offshore world is underpinned by the interests of the rich world and also a majorly exacerbates global inequality should fire up BRICS countries.

And certainly, they are quite vocal in denouncing the role of offshore finance: In the 2020 Moscow Summit declaration, for instance, BRICS member countries reiterated their “commitment to combating illicit financial flows, money laundering and financing of terrorism and to closely cooperating within the Financial Action Task Force (FATF) and the FATF-style regional bodies […], as well as other multilateral, regional and bilateral fora.” They have also rightly called out the West for setting up these mechanisms decades ago.

In practice, however, whatever global multilateral action is currently being taken is at the level of the G7 and the Organisation for Economic Co-operation and Development — even if these ambivalent reforms are often protective of the West’s offshore interests. BRICS countries, meanwhile, do almost nothing, despite being the largest global source of capital flight, according to a 2014 report by Global Financial Integrity.

And this lack of multilateral action perfectly aligns with the way individual BRICS countries have engaged with the offshore world thus far.

Brazil currently stands as the world’s second largest borrower from offshore financial markets. India long accepted a double-taxation agreement with Mauritius, which enabled significant foreign direct investment and tax avoidance by the wealthy until 2016. The country also created of an offshore financial center in Gujarat. Meanwhile, Russia’s hydrocarbons are traded through opaque offshore jurisdictions, and its elites have notoriously thrived in such systems. Then, there’s perhaps the most significant — and counterintuitive — stakeholder in the offshore world, which is China. Its state-owned enterprises are major users of jurisdictions like the British Virgin Islands, where they register secretive subsidiaries.

In short, BRICS countries are just as implicated in the offshore world as the Western economies they lambast. The reality is that their governments and political elites both benefit from and need the offshore financial world — and there are four reasons for this:

First, these countries engage in institutional arbitrage by accessing more efficient institutions — and, sometimes, institutions that don’t exist domestically, like credible contracts or a non-political judiciary — offshore.

They also seek access to cheaper and less constrained financing in offshore money markets, where they get access to the U.S. dollar and international investors that are unavailable onshore.

Heavily hit by sanctions — as in the case of Russia since 2022 — the offshore world is also a lifeline for BRICS countries, allowing for the circumvention of punitive measures.

And finally, BRICS elites frequently use such facilities for their own personal purposes, including hiding illicit money and assets.

Thus, closing these discretionary offshore avenues may well have implications for their personal survival — or the survival of their regimes.

This is why multilateral action from BRICS members remains rhetorical at best. And unilaterally, they either do nothing, or selectively implement anti-offshore measures as political tools of regime consolidation and to punish rivals. While continuing to criticize the West, they also voice few qualms regarding the thriving offshore roles of Hong Kong, the United Arab Emirates or Singapore.

The latest summit declaration’s vague language of “international cooperation” and “mutual legal assistance” simply highlighted all this once more, and it even eschewed the previous declaration’s references to the FATF or anything smacking of coordination with the West.

And while de-dollarization was again bandied about, BRICS countries remain keen on access to offshore dollars. Moreover, several of the bloc’s newly admitted states have deeply problematic records when it comes to money laundering and illicit financial flows. This is especially true of the UAE — an aggressively growing offshore financial center with dense layers of secrecy, and which the FATF placed on its “grey list” due to “strategic deficiencies” in its efforts to counter money laundering.

Given all this, what are the chances of BRICS-initiated reform in this area? Realistically, the only reason they would take action is because they care about their own regime stability. Though offshore mechanisms may seem like useful short-term levers, their long-term impact is likely to have troubling consequences for their economies. In time, offshore finance supercharges inequality and begets financial instability, which can lead to the toppling of regimes. Brazil experienced this first-hand in the 1982 financial crisis, which had a significant offshore component.

Of course, Russia’s dependence on offshore financial facilities to circumvent sanctions means it can be written off as reformer. But one would hope that some of the others might belatedly come to see an enlightened self-interest in going beyond their rhetoric.

For now, however, even this seems highly unlikely as, in the immediate future, the availability of offshore services continues to come in handy, while their negative impact on domestic inequality remain largely hidden from public view.

Besides, fighting domestic inequality isn’t really a major concern for many of these governments anyway.

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brics common currency push & expansion plans: where does india stand?

The story so far: In a bid to deepen ties in Asia and Africa, the heads of the BRICS nations (Brazil, Russia, India, China, and South Africa) are scheduled to meet in Cape Town, South Africa on August 22-24 this year. The bloc, which is seen as a counter to the G7, is also mulling expansion.

The BRICS nations’ foreign ministers met in Cape Town on June 2, 2023, to strengthen the bloc’s influence globally. Expansion was on agenda as ministers from Algeria, Argentina, Iran, Saudi Arabia, the United Arab Emirates, Egypt, and Kazakhstan were also present.

In a post-meeting statement, South Africa’s foreign minister Naledi Pandor said that Shanghai-based New Development Bank (NDB) had briefed the BRICS minsters about potentially using alternative currencies to ensure the bloc does not become victim to sanctions which affect countries not involved in the original issue.

External Affairs Minister S. Jaishankar with his counterparts from Brazil, Russia, China and South Africa after a meeting of BRICS Foreign Ministers, in Cape Town, South Africa, Thursday, June 1, 2023.

External Affairs Minister S. Jaishankar with his counterparts from Brazil, Russia, China and South Africa after a meeting of BRICS Foreign Ministers, in Cape Town, South Africa, Thursday, June 1, 2023.
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The bloc also issued a joint statement titled ‘The Cape of Good Hope’, underscoring the use of local currencies in international trade and financial transactions between BRICS and its trade partners. The BRICS represent 41% of the global population, 24% of the world’s GDP, and conducts 16% of the world’s trade.

Origins of BRICS common currency

Last year, soon after invading Ukraine, Russian President Vladimir Putin, proposed the idea of ‘alternative transfer mechanisms’ with BRICS partners and an ‘international reserve currency.’ Addressing the BRICS business forum via video link, on June 22, 2022, Mr. Putin said that Russia was actively redirecting its trade flows and economic contracts to ‘reliable partners’ such as India, China and other BRICS nations to counter crippling sanctions levied by the European Union, the US, UK and other Western powers.

Pushing for independence from the US dollar and Euro, Mr. Putin said that Western sanctions were neglecting basic principles of market economy, free trade and the inviolability of private property as Russia was forced to seek new markets and strengthen ties with nations in Asia and Africa.

Russian President Vladimir Putin attends a BRICS+ meeting during the BRICS summit via a video link in the Moscow region, Russia June 24, 2022

Russian President Vladimir Putin attends a BRICS+ meeting during the BRICS summit via a video link in the Moscow region, Russia June 24, 2022
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The idea for a common BRICS currency is based on the bloc’s aim to globally realign the geopolitical situation to suit its member nations’ economic, geographic and demographic advantages. The bloc, which was created in 2009, established the multilateral New Development Bank (NDB) in 2015 for mobilising resources for infrastructure and projects in emerging markets and developing countries. Via NDB (previously known as the BRICS Development Bank), BRICS aims to counter the West’s dominance in global financial institutions like the World Bank or the International Monetary Fund.

BRICS expansion & economic influence

Through the years, several nations have expressed interest in joining BRICS to counter Western alliances like G20, NATO, and the European Union. In the recently concluded BRICS Foreign ministers’ meet, over 40 countries expressed interest in joining the bloc. Among those interested are Iran, Saudi Arabia, the United Arab Emirates, Argentina, Cuba, Democratic Republic of Congo, Gabon, Kazakhstan and Algeria.

Prior to joining the bloc, many prospective nations have invested in NDB, the latest being Algeria. Its president Mr. Abdelmadjid Tebboune said his country formally applied to join the NDB with a $1.5 billion contribution. Bangladesh and United Arab Emirates joined the NDB in 2021, while Uruguay’s request was also accepted. In March this year, Egypt became an investor in NDB.

Currently, Argentina, Saudi Arabia, and Zimbabwe are mulling investments in NDB and also seek membership in the bloc. In May, Saudi Arabia expressed interest in investing in the bank as it seeks to diversify its investments in Asia. Aiming to build closer ties with India and China, Saudi Arabia — the world’s largest oil exporter — sees this as an opportunity to expand its market.

BRICS’ expansion has been hit by the sanctions on founding member Russia, which has a 18.98% stake in NDB, due to its invasion of Ukraine. In March 2022, NDB was forced to halt all new transactions in Russia citing “unfolding uncertainties and restrictions.” Several global banks and nations halted Russia’s SWIFT transactions, froze the Russian central bank’s assets and assets of certain Russian individuals.

Shareholders of the New Development Bank

Shareholders of the New Development Bank

BRICS’ expansion is also being stalled by India and Brazil opposing China’s approach towards increasing the bloc’s influence. Brazil fears that the bloc’s expansion will attract countries which view BRICS as an opposing force to the European Union and the United States, while India wants rules to be framed about how nations will be considered for membership over time.

In the recent Cape Town meeting, Indian External Affairs Minister S Jaishankar called the expansion a “work in progress.” He said that it was necessary to view how BRICS engages non-BRICS countries and what would be an appropriate format for the bloc’s possible expansion. Concurring with India, Brazil’s Foreign Minister Mauro Vieira said that BRICS is a brand which has to be taken care of as it represents a lot. In contrast, Chinese Vice Minister Ma Zhaoxu said that its proposed BRICS+ was developing ‘very fast’.

Push for local currency usage

To attract more countries to the bloc, BRICS has pushed for the usage of the member nations’ local currencies for bilateral trade, also reiterating this in the joint statement from the Cape Town meet.

While the statement made no direct reference to the sanctions on Russia, the bloc noted the complications created on the world economy by “unilateral economic coercive measures such as sanctions, boycotts, embargoes and blockades,” calling for a peaceful resolution of the situation in Ukraine via dialogue and diplomacy.

Initially, when Russia was hit with sanctions, India mulled reviving its Rupee-Rouble trade agreement – an alternative payment mechanism to settle dues in rupees instead of dollars or Euros. However, talks were dropped later as traders found the currency conversion expensive and Moscow refused to keep a rupee surplus amounting to $40 billion in its reserves. It used the Chinese Yuan to pay for part of its oil imports from Russia, skirting Western sanctions.

This handout image provided by the UAE Ministry Of Presidential Affairs shows UAE President Sheikh Mohamed bin Zayed al-Nahyan (R) welcoming Prime Minister of India Narendra Modi during an official reception in Abu Dhabi, on July 15, 2023.

This handout image provided by the UAE Ministry Of Presidential Affairs shows UAE President Sheikh Mohamed bin Zayed al-Nahyan (R) welcoming Prime Minister of India Narendra Modi during an official reception in Abu Dhabi, on July 15, 2023.
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Recently, India signed the Rupee-Dirham deal during Prime Minister Narendra Modi’s visit to Abu Dhabi. While UAE Ambassador to India Abdulnasser Alshaali said that the deal was not a move to de-dollarise the global economy, the agreement aims to interlink the two nations’ payment and messaging systems as well as increase the circulation of the rupee in the Gulf region. As of date, the Reserve Bank of India has allowed banks from 18 countries to trade in rupees— Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka, Tanzania, Uganda and the United Kingdom.

India’s BRICS partner China already trades with over 120 countries using the yuan. The push for local currency deals among the bloc and globally is seen as the bloc’s move to assert its economic potential and get closer to a EU-like common currency.

BRICS Pay and common currency

Facilitating easier transactions between BRICS nations, the bloc launched the BRICS Pay project in 2018 under the BRICS Business Council, enabling digital payments between members without converting to their respective local currencies. The payments mechanism will combine central bank digital currencies (CBDC) and decentralised currencies (i.e. cryptocurrencies). It is still in the discussion stages.

The push for a common EU-like currency has found support from two member nations — Russia and Brazil. While Mr. Putin was the first to propose it, Brazil’s new President Luiz Inacio Lula da Silva has been a vocal supporter for a common currency as well. He claimed that such a move would help developing countries reduce their dependency on the U.S. dollar.

Logo of proposed BRICS Pay system

Logo of proposed BRICS Pay system

However, NDB’s Chief Financial Officer (CFO) Leslie Maasdorp ruled out any immediate plans to introduce a BRICS common currency. Despite the bloc’s growing economic clout, Mr. Maasdorp opined that even the Chinese Renminbi was far from achieving the status of a reserve currency. Similarly, South Africa and India have both denied any talks of a BRICS currency. India has asserted that its focus is on strengthening its national currency and promoting its trade with all global powers.

In the upcoming BRICS summit scheduled for August 22-24 this year at the Sandton Convention Centre in Johannesburg, South Africa, the BRICS common currency’s biggest advocate — Mr. Putin — will not be in attendance as he faces an arrest warrant issued by the International Criminal Court (ICC) for alleged war crimes in Ukraine. The summit will see both Russia and China push for expansion as India and South Africa remain wary.

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In Lebanon, it is difficult to know what rock bottom is

It is a humanitarian duty for the Council of the European Union to support the people of Lebanon and issue targeted sanctions against those who continue to promote their own interests to the detriment of the population, Zena Wakim writes.

Beirut’s celebrated nightlife has long had a rebellious air: a subversive challenge to conservative dogma, an antidote to rotten politics and a hedonistic emancipation from sectarian street battles. 

But now even the night has been stolen, increasingly affordable only to the rich. Rolling power outages ensure that the city is bathed in darkness. 

Meanwhile, the tourism ministry excitedly predicted 2.2 million visitors this summer. Most will be Lebanese who long since fled, briefly seeing family and friends still trapped in a quagmire.

In Lebanon, it is difficult to know what rock bottom is, perhaps that’s why EU policymakers fail to treat it as a priority. 

Fifteen years of civil war, an Israeli invasion, a Syrian occupation, over 250 unsolved political assassinations, an unparalleled refugee crisis, the world’s worst economic collapse since the 19th century and one of the biggest non-nuclear explosions in history.

The country is an unaccountable mafia state where over 80% of the citizens now live in multidimensional poverty and where ex-warlords turned politicians turned the state into a host they could feed on. 

Or, to quote the World Bank, the government has “consistently and acutely departed from orderly and disciplined fiscal policy to serve the larger purpose of cementing political economy interests.”

Dystopian scenes and parallel realities

Years of financial misconduct by the government culminated in 2019 when Lebanese citizens found their bank accounts effectively frozen, blocked from withdrawing US dollars and only allowed derisory amounts of Lebanese pounds — a currency that has now lost more than 98% of its value in four years. 

The pandemic and the Russian invasion of Ukraine compounded the financial misery prompting more power outages, medicine shortages and mass emigration. 

Some took to refugee boats across the Mediterranean. Some scavenged for food in dumpsters. 

Others conducted armed heists on banks to demand their own savings, becoming folk heroes in the process.

But amid these dystopian scenes, under cover of banking secrecy laws, the country’s politically connected were living in a parallel reality. 

While ordinary people, those not politically connected, were unable to access their funds, political elites transferred over $10 billion (€9.06bn) out of the country siphoning the pot of liquidities collectively owned by all depositors. 

It wasn’t too complicated since 18 of the 20 largest Lebanese banks are owned by politically exposed individuals.

A whole country running on cash is a win-win for kleptocrats

In lieu of a banking system, Lebanon now runs on cash. In lieu of people to form a thriving economy, Lebanon survives on remittances from abroad (accounting for 38% of GDP).

Using central bank-issued licenses, a few privileged firms in the country are allowed to process these money transfers, conveniently located in areas run by ruling parties. 

One of them is BOB Finance whose chairman is a long-standing ally of the Governor of the Central Bank and the head of the Banking Association. 

The worse the economy, the more urgent the need for remittances. More remittances mean higher profits for the elite’s crony companies.

It is just one of many schemes in Lebanon’s Ponzi economy, and another example of why the banking sector remains a quagmire. 

The cash economy creates a win-win situation for the kleptocrats. The longer Lebanon goes without an IMF plan, the more cash they make. 

And when, or if, said plan should come to fruition and the banking sector gets restructured, they will be the first to show up with the cash to acquire what remains of the economy, including its ailing banks. 

Their industrial-scale looting will go unpunished, and the parasitic networks will continue to strangle the country to destitution.

That is, unless Europe decides to get serious and punish the wrongdoers with travel bans, asset freezes and seizures.

Is there anything left to destabilise?

It is regularly heard in Brussels circles that Syria and Iran are much more of a priority than Lebanon and that sanctions should focus first on Damascus and Teheran. 

The reality is that handling Lebanon as an unrelated matter is an intellectual construct which can only be entertained by bureaucrats who do not grasp the extent of state capture in Beirut.

It has also been a long rhetoric that one shouldn’t rock the boat in Lebanon as long as the refugees are “there” and that any targeted sanctions on the Lebanese political elite might destabilise the country and the region. But is there anything left to destabilise?

In July 2021, the Council of the EU announced a framework for sanctions against Lebanese figures “undermining democracy or the rule of law in Lebanon” while assuming that the threat of sanctions would be deterring for the corrupt elite. 

The two years which elapsed since the framework was issued not only proved them wrong since the situation continues to deteriorate but it showed how much they underestimated the genius wit of those in power who was given a perfect window of opportunity to put their assets in safe heavens.

The cost of this poor bet is borne by the population alone.

It’s time for the party to be over

On 12 July, the European Parliament adopted a draft resolution calling for sanctions on Lebanese elites obstructing presidential elections and the Beirut port blast investigation and those who have enriched themselves to the detriment of the population. 

It now behooves the Council of the European Union to take action. For those that helped impoverish the country, it is time that the party stopped.

Heading the opposite direction from Lebanese visitors this summer will be the elites, jetting out to European properties bought with money looted from the state, perhaps with bags of cash to deposit in European banks. 

They may drive past Gemmayze, the lively neighbourhood for Beirut’s “real nightlife” peppered with bars, galleries, and restaurants that many now struggle to afford. 

It is also the place where the port explosion ripped through three years ago and for which still nobody has been held accountable. Impunity has robbed Beirut of its soul.

While civil society tracks corruption and proceeds to have them restituted to Lebanon, while the victims of the Beirut port explosion gather their last resources to push for justice, while courageous journalists and intellectuals risk their lives to seek accountability, it is a humanitarian duty for the Council of the European Union to support their fight and issue targeted sanctions against those who continue to promote their own interests to the detriment of the population.

Zena Wakim is an international lawyer and President of the Board of the Swiss Foundation Accountability Now, whose mission is to support Lebanese civil society in its desire to put an end to the impunity of corrupt leaders.

_At Euronews, we believe all views matter. Contact us at [email protected] to send pitches or submissions and be part of the conversation.

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Is China ready to replace Russian influence in Central Asia?

The focus of the upcoming China-Central Asia Summit summit in Xi’an is the promotion of Beijing’s ‘Belt and Road Initiative’. But according to analysts, the summit is less about the transit of goods and more about Russia’s loss of influence in the region and whether China is ready to take over.

A summit involving the leaders of China and the heads of the five Central Asian states – all former Soviet republics – has been called by Beijing “a milestone on the way to building a RingCentral (China in the centre) Asian community with a common destiny”. It is the first-ever face-to-face meeting between leaders in this format.

The summit’s venue is highly significant: the city of Xi’an, one of the oldest in the world, and where one of the stages of the Great Silk Road once started. Promoting China’s modern take on the ancient trade route – the Belt and Road project – is the official theme of the meeting.

However, for Swedish academic and Russia expert, Stefan Hedlund, it is less about product transit routes than about Russia’s dwindling influence in the region, with China ready to take its place: “It’s the first time that Russia, which for decades, if not a couple of centuries, has been the hegemon in Central Asia, is excluded. And this follows in the wake of Russia losing friendships across the region and China pouncing on the opportunity to become the new hegemon.”

What is the “Belt and Road Initiative”?

The project was launched in 2013 as an amalgamation of strategic concepts that already existed at that time.

The Chinese economy had been declining for years, saturated – like Western markets – with Chinese goods. It needed to look elsewhere to stimulate development.

Formally, the BRI (Belt and Road Initiative) was a mechanism for China to partner with countries around the world, to create reliable strategic routes for Chinese exports and strengthen the economies of partner countries.

The so-called New Silk Road has several routes to the West. Some through Russia, some through Kazakhstan and others through Mongolia. But, in the face of Western sanctions on Russia, these routes were virtually frozen.

One option to the south was via Central Asian countries to the Caspian Sea, and then either by sea or southwards via Iran. This became the main route. Before the summit, the media were talking about the possible expansion of the ports of Turkmenistan and Kazakhstan.

“There is supposed to be a northern spur, going through Russia. But after the war in Ukraine, that is now dead. So the BRI is totally focused on the middle road, which is good news for Kazakhstan and Uzbekistan, and it’s good news for Azerbaijan and Turkey, and it’s very bad news for Russia,” believes Hedlund.

Collision between China and Russia?

The Central Asian states in question – all former Soviet republics – have been considered a zone of Russian influence. However, Beijing stresses that the region is also of crucial importance to China. Beijing has declared Central Asia to be “the only strategic partnership zone around China”, with its ties with Kazakhstan officially designated “perpetual”.

Russia (and the CSTO mechanism) was to some extent a guarantor of security in the region, where traditional economic ties also played a major role. But after the full-scale invasion of Ukraine, this role has been called into question. And the Russian economy, which has been subjected to unprecedented sanctions, no longer looks so attractive.

In addition, China is likely to act prospectively, seeking to influence not only the current leadership of the Central Asian nations but also those who will replace them:

“There is a generational issue as well, in the sense that most of the old guard of leaders in central Asia have gone to universities in Russia. They have Russian networks. They speak Russian. I mean, they’re heavily invested in that network economically,” explains Hedlund. “Whereas the younger generation don’t have that link to Russia. I mean, they’re very nationalistic in many cases. They speak their own native languages and they’re probably more interested in listening to pan-Turkic ambitions of Turkey and President Erdogan than they are in maintaining any form of relations with Russia.”

The competition for influence in Central Asia is no longer with Russia, but quite possibly with Turkey. Turkey has far more cultural and religious clout than China, which has been accused of persecuting Muslims, particularly the Uighurs. China, on the other hand, has incomparably greater financial and economic leverage. 

“You can construct a scenario where the Central Asian countries, the big ones, in particular Kazakhstan and Uzbekistan, really try to play their own game and do so skilfully,” says Hedlund. “And I mean the fact that four of the five regional leaders did go to the victory parade in Moscow. So they’re playing a little bit of all sides here, probably sensing to what extent they can become a player in their own right and play with China and with Turkey without antagonising either side.”

Impact of sanctions

For Moscow, Central Asia has become one of the ways of circumnavigating sanctions. In 2022, countries in the region dramatically increased their imports of Western goods and their trade with Russia. Both have almost doubled, according to reports. 

Now a new 11th EU package is expected to include measures against third countries that help Russia circumvent sanctions, in particular those which re-export banned goods. The list includes companies from countries whose leaders are meeting in Xi’an – including China itself.

There is no doubt that the parties will discuss the issue during the summit. 

Beijing is ambivalent about Western sanctions against Russia. At the political level, at the level of statements from the top leadership, there may be an impression that China actually supports Russia.

But in practice, Chinese entrepreneurs are choosing the West. China is heavily dependent on the US in terms of technology. And experts are highly sceptical that Beijing would opt to aggravate relations already tense relations with Washington for the sake of Moscow. 

Can Russia maintain its influence in the region?

According to Stefan Hedlund, Russia is now being to forced to watch the situation develop from the sidelines: “To my mind, it’s the end of Russia’s pivot to Asia that was launched by Vladimir Putin at the APEC meeting in Vladivostok in 2012 when he said that the purpose of this is for the Russian economy to catch Chinese winds in the sails of the Russian economy. Now, I would say that the Russian economy is a dismasted and drifting wreck in the sea. And the Chinese don’t give favours. If Russia ever believed that China was going to do something for them without getting more in return, they have now learned that it was wrong. They hadn’t done their homework on China the way China had done their homework on Russia.”

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Chinese companies are shipping rifles, body armor to Russia

Chinese companies, including one connected to the government in Beijing, have sent Russian entities 1,000 assault rifles and other equipment that could be used for military purposes, including drone parts and body armor, according to trade and customs data obtained by POLITICO.

The shipments took place between June and December 2022, according to the data provided by ImportGenius, a customs data aggregator.

China North Industries Group Corporation Limited, one of the country’s largest state-owned defense contractors, sent the rifles in June 2022 to a Russian company called Tekhkrim that also does business with the Russian state and military. The CQ-A rifles, modeled off of the M16 but tagged as “civilian hunting rifles” in the data, have been reported to be in use by paramilitary police in China and by armed forces from the Philippines to South Sudan and Paraguay.

Russian entities also received 12 shipments of drone parts by Chinese companies and over 12 tons of Chinese body armor, routed via Turkey, in late 2022, according to the data.

Although the customs data does not show that Beijing is selling a large amount of weapons to Moscow specifically to aid its war effort, it reveals that China is supplying Russian companies with previously unreported “dual-use” equipment — commercial items that could also be used on the battlefield in Ukraine.

It is the first confirmation that China is sending rifles and body armor to Russian companies, and shows that drones and drone parts are still being sent despite promises from at least one company that said it would suspend business in Russia and Ukraine to ensure its products did not aid the war effort.

The confirmation of these shipments comes as leaders in the U.S. and Europe warn Beijing against supporting Russia’s efforts in Ukraine. Western officials have said in recent weeks that China is considering sending weapons to Russia’s military, a move that could alter the nature of the fighting on the ground in Ukraine, tipping it in Russia’s favor. Officials are also concerned that some of the dual-use material could also be used by Russia to equip reinforcements being deployed to Ukraine at a time when Moscow is in desperate need of supplies.

Da-Jiang Innovations Science & Technology Co., also known as DJI, sent drone parts — like batteries and cameras — via the United Arab Emirates to a small Russian distributor in November and December 2022. DJI is a Chinese company that has been under U.S. Treasury sanctions since 2021 for providing the Chinese state with drones to surveil the Uyghur minority in the western region of Xinjiang.

In addition to drones, Russia has for months relied on other countries, including China, for navigation equipment, satellite imagery, vehicle components and other raw materials to help prop up President Vladimir Putin’s year-old war on Ukraine.

It’s currently unclear if Russia is using any of the rifles included in the shipment data on the battlefield — Tekhkrim, the Russian company, did not respond to an emailed request for comment. But the DJI drones have been spotted on the battlefield for months. DJI did not immediately respond to a request for comment.

The National Security Council did not comment on the record for this story. The Chinese embassy in Washington said in a statement that Beijing is “committed to promoting talks for peace” in Ukraine.

“China did not create the crisis. It is not a party to the crisis, and has not provided weapons to either side of the conflict,” said embassy spokesperson Liu Pengyu.

Asked about the findings in the data obtained by POLITICO, Poland’s Ambassador to the EU Andrzej Sadoś said that “due to the potential very serious consequences, such information should be verified immediately.”

Although Western sanctions have hampered Moscow’s ability to import everything from microchips to tear gas, Russia’s still able to buy supplies that support its war effort from “friendly” countries that aren’t following the West’s new rules, like China or the Gulf countries.

“Some commercial products, like drones or even microchips, could be adapted. They can transform from a simple benign civilian product to a lethal and military product,” said Sam Bendett, an adjunct senior fellow at the Center of Naval Analyses Russia Studies in Washington, noting that dual-use items could help Russia advance on the battlefield.

Experts say it is difficult to track whether dual-use items shipped from China are being sold to buyers who intend to use the technology for civilian purposes or for military means.

“The challenge with dual-use items is that the export control system we have has to consider both the commercial sales possibilities as well as the military use of certain items,” said Zach Cooper, former assistant to the deputy national security adviser for combating terrorism at the National Security Council.

In cases where the Kremlin craves specific technology only produced in say the U.S., EU or Japan, there are wily ways for Moscow to evade sanctions, which include buying equipment from middlemen located in countries with cordial trade relations with both the West and Russia.

Russia managed to import more than 800 tons of body armor worth around $10 million in December last year, according to the customs data from ImportGenius. Those bulletproof vests were manufactured by Turkish company Ariteks and most were imported straight from Turkey, although some of the shipments arrived to Russia via the United Arab Emirates. Russia also imported some body armor from Chinese company Xinxing Guangzhou Import & Export Co.

Trade data also shows that Russian state defense company Rosoboronexport has imported microchips, thermal vision devices and spare parts like a gas turbine engine from a variety of countries ranging from China to Serbia and Myanmar since 2022.

Dual-use items could also be a way for China to quietly increase its assistance to Moscow while avoiding reprisals officials in Washington and Europe have been threatening in recent weeks if China goes ahead with sending weapons to the Russian military.

Most recently, German Chancellor Olaf Scholz told reporters last week that there would be “consequences” if China sent weapons to Russia, although he also said that he’s seen “no evidence” that Beijing is considering delivering arms to Moscow.

“We are now in a stage where we are making clear that this should not happen, and I’m relatively optimistic that we will be successful with our request in this case,” he said.

Among the military items China has been considering shipping to Russia are drones, ammunition and other small arms, according to a list that has circulated inside the administration and on Capitol Hill for months, according to a person who read that document. And intelligence briefed to officials in Washington, on Capitol Hill and to U.S. allies across the world in the last month, suggests Beijing could take the step to ship weapons to Russia.

“We do see [China] providing assistance to Russia in the context of the conflict. And we see them in a situation in which they’ve become increasingly uncomfortable about the level of assistance and not looking to do it as publicly as might otherwise occur and given the reputational costs associated with it,” Avril Haines, the U.S. director of national intelligence, said in a congressional hearing March 8. “That is a very real concern and the degree of how close they get and how much assistance they’re providing is something we watch very carefully.”

As data about dual-use item shipments to Russia becomes available, Western countries are expected to ramp up efforts to quell these flows.

“We’ve already started to see sanctions against people [moving] military material to Russia. I’m sure we’re going to be seeing the EU and other countries target those people that are helping a lot of this material to get to Russia,” said James Byrne from the Royal United Services Institute, a U.K.-based defense think tank.

Beijing continues to deny that it is ramping up support for Russia in Ukraine. However, several of its top officials have recently traveled to Moscow. President Xi Jinping is expected to make an appearance there in the coming weeks. China recently presented a 12-point peace proposalfor the war in Ukraine, though it was criticized by western leaders for its ambiguity and for its lack of details about the need for the withdrawal of Russian troops.

Leonie Kijewski contributed reporting from Brussels.

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Most G20 nations condemn Russia over Ukraine invasion, China stays silent

Finance chiefs of the world’s largest economies strongly condemned Moscow for its war on Ukraine on Saturday, with only China and Russia itself declining to sign a joint statement. Read FRANCE 24’s liveblog below to see how the day’s events unfolded. All times are Paris time (GMT+1).

This liveblog is no longer being updated. For more of our coverage on the war in Ukraine, please click here.

7:30pm: EU adds sanctions on Wagner for Africa ‘rights abuses’

The EU on Saturday announced additional sanctions against Russia‘s Wagner mercenary organisation for “human rights abuses” in the Central African Republic, Sudan and Mali.

Eight individuals and seven entities tied to the paramilitary group were added to the bloc’s list for asset freezes and a travel ban.

The Wagner Group itself – which is actively fighting in Russia’s war in Ukraine – was already sanctioned by the European Union in 2021.

6:43pm: Russia says West ‘destabilised’ G20 talks

Russia on Saturday accused the West of destabilising the G20 finance ministers’ meeting in India by trying to force through a joint statement on Ukraine that stalled because of disagreements.

“We regret that the activities of the G20 continue to be destabilised by the Western collective and used in an anti-Russian… way,” the foreign ministry said.

5:51pm: Zinchenko captains Arsenal as mark of respect to Ukraine

Oleksandr Zinchenko was named captain of Premier League leaders Arsenal for their trip to Leicester on Saturday to mark the first anniversary of the war in Ukraine.

The Ukrainian international replaced Martin Odegaard as the Gunners’ normal skipper at the King Power stadium and wore an armband in the colours of the Ukrainian flag.

“Zinchenko will wear our captain’s armband today, as a mark of respect and love on the first anniversary of the conflict in Ukraine,” Arsenal posted on Twitter.

5:40pm: Prigozhin says Wagner fighters capture village north of Bakhmut

Russian mercenary boss Yevgeny Prigozhin said on Saturday that fighters of his Wagner group had captured the village of Yahidne, just north of Bakhmut in eastern Ukraine.

FRANCE 24 could not independently confirm the claim, which Prigozhin made in a short audio message.

5:35pm: ‘Hundreds of Parisians and Ukrainians’ march in solidarity with Ukraine

At the march from eastern Paris‘s Place de la République to Place de la Bastille the day after the first anniversary of the Russian invasion on February 24, “hundreds of Parisians and Ukrainians […] were marching in solidarity with Ukraine and also in memory of the victims of the war”, FRANCE 24’s Liza Kaminov reported.



4:18pm: Thousands attend Berlin protest over sending arms to Ukraine

A demonstration against supplying Ukraine with weapons for war with Russia attracted 10,000 people on Saturday, drawing criticism from top German government officials and a large police presence to maintain order.

Organised by a prominent left-wing German politician, the protest comes a day after the one-year anniversary of Russia’s invasion of Ukraine, which drew promises of more weapons from western allies, fresh sanctions against Russia and shows of support for Kyiv across the globe.

“We call on the German chancellor to stop the escalation of arms deliveries. Now! […] Because every day lost costs up to 1,000 more lives – and brings us closer to a 3rd world war,” the protest’s organisers said on their website.

The “Uprising for Peace” was organised in part by Sahra Wagenknecht, a member of Germany’s left-wing Die Linke party.

3:05pm: Hungary signals fresh delay in Finland, Sweden NATO approval

Hungarian Prime Minister Viktor Orban’s chief of staff signalled on Saturday a possible further delay in Budapest’s ratification of Finland and Sweden joining NATO, saying a vote may take place only in the second half of March.

Sweden and Finland applied last year to join the transatlantic defence pact after Russia’s full-scale invasion of Ukraine. But all 30 NATO members need to back the applications and Sweden has faced objections from Turkey for harbouring what Ankara considers to be members of terrorist groups.

With Hungary’s ratification process stranded in parliament since July, Orban aired concerns about Sweden and Finland’s NATO membership for the first time on Friday. Among other criticisms, he has accused both countries of spreading “outright lies” about the health of democracy and the rule of law in Hungary.

2:24pm: Russia stops oil deliveries to Poland via pipeline, Polish company says

Polish energy group PKN Orlen announced on Saturday that Russia had stopped supplying the group with oil through the Druzhba pipeline, which affects about 10 percent of Orlen’s needs.

“Deliveries through the Druzhba pipeline towards Poland were stopped by the Russian side,” the Polish company said in a statement to AFP.

2:11pm: Germany says regrets China’s position on Ukraine war

German Finance Minister Christian Lindner said on Saturday it was “regrettable” that China had blocked a G20 statement to condemn Russia‘s war on Ukraine.

He was speaking to reporters after a meeting of finance leaders from the world’s major economies in Bengaluru.

“But for me it was more important that all the others adhered to a clear position of international law, multilateralism and the end of the war,” Lindner said.

2:03pm: G20 chair India says most members condemn Ukraine war

G20 chair India on Saturday said most members of the bloc “strongly condemned” the war in Ukraine and reiterated their positions demanding Russia’s withdrawal from Ukraine.

In a statement at the end of financial leaders’ meet near Bengaluru, India said the statement condemning Russia’s war was endorsed by all members except Russia and China.

India stuck to the language used in the G20 leaders’ declaration in Bali last year on the conflict, adding that it recognised that the bloc was not the forum to resolve security issues, while acknowledging that such issues can have significant consequences for the global economy.

12:51am: EU targets 121 individuals, entities in fresh sanctions against Russia

New EU sanctions over Russia’s war in Ukraine adopted on Saturday target 121 individuals and entities, including Iranian drone manufacturers, officials said.

The measures, agreed late Friday ahead of Saturday’s formal adoption, are the 10th round of European Union sanctions aimed at undercutting Russia’s finances and military supplies used in its invasion that started a year ago.

They echo sanctions announced Friday by the United States and by Britain, and follow up on a G7 statement that warned of penalties for any country abetting Russia in its war.

11:14am: Macron says will visit China to ‘help us pressure Russia’

French President Emmanuel Macron on Saturday said he would visit China in early April and called on Beijing to “help us pressure Russia” to end the war in Ukraine.

Speaking a day after China called for urgent peace talks as it released its plan to end the war in Ukraine, Macron said peace was only possible if “the Russian aggression was halted, troops withdrawn and territorial sovereignty of Ukraine and its people was respected”.

>> Macron to visit China, calls on Beijing to pressure Putin on Ukraine

“The fact that China is engaging in peace efforts is a good thing,” the French leader said, asking Beijing “not to supply any arms to Russia”.

He also sought Beijing’s help to “exert pressure on Russia to ensure it never uses chemical or nuclear weapons and it stops this aggression prior to negotiations”.

10:12am: Russia’s war in Ukraine is a ‘big catastrophe’, says Germany’s Scholz 

German Chancellor Olaf Scholz said the war between Russia and Ukraine is a “horrible war with much destruction […] a big catastrophe” at a G20 summit in India.

“The world is suffering from this aggression […] but we will do everything we can so that the world remains a good place,” he

said adding that cooperation between India and Germany was “very, very important”.

9:51am: US’s Yellen says ‘absolutely necessary’ for G20 to condemn war in Ukraine

US Treasury Secretary Janet Yellen told Reuters that a strong statement condemning Russia‘s war in Ukraine was “absolutely necessary” for a communique from the G20 finance leaders’ meeting in India concluding on Saturday.

Yellen said in an interview that leaving a war condemnation out of the communique would be a step back from a statement made by G20 leaders last November on the Indonesian island of Bali.

Asked whether there would be no communique from the G20 finance ministers and central bank governors meeting without such a statement, Yellen said negotiations were continuing.

Yellen said in an interview that leaving a condemnation of President Putin’s out of the final communique from the G20 would be a backwards step from the statement made by G20 leaders last November on the Indonesian island of Bali.

8:46am: Biden says he does not ‘anticipate’ China providing weapons to Russia

US President Joe Biden said Friday that he does not “anticipate a major initiative” from China to provide weapons to Russia in its war against Ukraine. 

His comments come days after Secretary of State Antony Blinken told CBS that China was “considering providing lethal support” to Moscow ranging “from ammunition to the weapons themselves” — which Beijing denied. 

In a wide-ranging television interview with ABC News — covering his bid for re-election and the war in Ukraine — that aired Friday evening, Biden appeared to backtrack on Blinken’s comments.

“I don’t anticipate — we haven’t seen it yet — but I don’t anticipate a major initiative on the part of China providing weaponry to Russia,” he said.

7:50am: Belarusian President Lukashenko to visit China in coming days

Belarusian President Alexander Lukashenko will visit China on February 28 for a state visit, the Chinese foreign ministry said Saturday. 

Lukashenko is a close ally of Russian President Vladimir Putin and has backed Moscow’s invasion of Ukraine. 

2:27am: China urges Russia-Ukraine talks, UN supports no nukes clause

China called Friday for urgent peace talks as it released its provided it’s solution to ending the war in Ukraine, but several Western powers rebuffed the proposals while condemning Beijing’s close ties to Moscow.

The United Nations expressed cautious optimism over the Chinese proposals, particularly over its call to avoid using nuclear weapons. 

Russia reacted positively to Beijing’s efforts and Ukrainian President Volodymyr Zelensky offered a muted response, saying Kyiv needed to “work with China” on approaches to put an end to the year-old war.

Zelensky told reporters he was planning to meet with President Xi Jinping after the Chinese leader’s government called for the peace talks, saying it would “be important for world security.”

10:19pm: EU approves 10th package of Russia sanctions on anniversary of invasion

The European Union approved a tenth package of Russian sanctions on the anniversary of Moscow’s invasion of Ukraine, the EU presidency said late on Friday.

“Together, the EU member states have imposed the most forceful and far-reaching sanctions ever to help Ukraine win the war,” the Swedish EU presidency said on Twitter.

“The EU stands united with Ukraine and the Ukrainian people. We will keep supporting Ukraine, for as long as it takes.”

The package includes tighter export restrictions regarding dual-use goods as well as measures against entities supporting the war, spreading propaganda or delivering drones used by Russia.


© France Médias Monde graphic studio

(FRANCE 24 with AFP, AP & Reuters)

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After the Failure Of Their Stablecoin Experiment, Iran And Russia Will Inevitably Adopt Bitcoin

This is an opinion editorial by Q Ghaemi, a stocks and bitcoin analyst and author of the Qweekly Update newsletter.

Earlier this month, reports surfaced that the Central Bank of Iran is working with the Russian Association Of The Crypto Industry And Blockchain to create a stablecoin that will be backed by gold to settle trade. This is not the first foray into the crypto universe for either country, nor will it be the last. But this venture will come to nothing, ultimately bringing both countries one step closer to adopting Bitcoin.

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#Failure #Stablecoin #Experiment #Iran #Russia #Inevitably #Adopt #Bitcoin