Welcome to the Caspian Daily, where you will find the 10 most important things you need to know on Caspian Sea Region. We appreciate ideas, reports, news and interesting articles. Send along to Caspian[at]moderndiplomacy.eu or on Twitter: @DGiannakopoulos
1The Iranian minister of science, research and technology says the Islamic Republic is ready to boost “science diplomacy” with other countries following the removal of anti-Iran sanctions with the implementation of an agreement between the country and the P5+1.Mohammad Farhadi said in an interview with IRNA on Thursday night that Iran has, over the past few months, made arrangements for cooperation with a number of regional and European universities. He said that among the priorities of his ministry in the post-sanctions era is shoring up scientific collaboration with other countries through professor and student exchange programs, holding joint scientific courses, and if necessary, establishing foreign university branches in Iran, including in free zones.
2A landmark gas deal between China and Russia that has been years in the making looks set to be finalized, as the countries prepare to mark the 70th anniversary of victory in World War II.”The gas deal looks very likely to be confirmed at the final moment because of its large scale and importance due to international practices,” Andrey Denisov, the Russian ambassador to China said, adding that he was sure that there will be an agreement but that the details won’t be disclosed until the last minute. In May 2014, after 20 years of negotiations, China and Russia agreed to build a natural gas supply line, known as the “eastern route”, that is supposed to deliver 38 billion cubic meters of gas to Beijing and Northeast China annually, starting in 2018. Chen Yurong, an expert with the China Institute of International Studies, said that the Russian ambassador might have been referring to the “western route”.Negotiations on the western route, a 2,800-kilometer supply line to deliver 30 billion cubic meters of natural gas annually to China’s Xinjiang Ugyur autonomous region over 30 years, began in 2006. [ChinaDaily]
3OSCE Minsk Group plans to organize a meeting between the Armenian and Azerbaijani Foreign Ministers on the sidelines of the UN General Assembly session in September, the group’s U.S. Co-chair said. In an interview with Azerbaijani news agency APA, James Warlick stated that the Co-chairs plan to travel to the region, but failed to mention certain dates. He also noted that it is highly necessary to reaffirm the sides’ commitment to the peaceful settlement of the Nagorno Karabakh conflict.The American diplomat once again stated that “the return of Artsakh adjacent areas is one of the key elements of negotiations.”
4The International Atomic Energy Agency and Kazakhstan signed an agreement on Thursday to locate the world’s first bank of low-enriched uranium (LEU) in the ex-Soviet nation to ensure fuel supplies for nuclear power stations and encourage nuclear non-proliferation.The $US150 million ($209 million) bank, containing the raw material for making fuel for nuclear power plants, will be built in Ust-Kamenogorsk in northeastern Kazakhstan. It will be governed by Kazakhstan’s laws but will be fully managed and operated by the IAEA.The storage facility, set to become fully operational in 2017, is intended to provide IAEA member states with confidence in a steady and predictable supply of fuel for nuclear power stations even if other supply mechanisms are disrupted.
5Afghan President Ashraf Ghani has discussed trade, economic, energy, and transport cooperation with his visiting Turkmen counterpart, Gurbanguly Berdymukhammedov. The Turkmen state news agency reported that the talks in Kabul on August 27 touched upon the project to build the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.The sides also discussed the construction of a Turkmenistan-Afghanistan-Tajikistan (TAT) railway, which is currently under construction. Ghani’s office quoted the Afghan president as saying plans to transfer electricity to Pakistan via Afghanistan were also discussed.
6The evolution of negative Western narrative on Russia. “Russia made significant changes from the Soviet totalitarian system, but instead of acknowledging this progress, Russia is characterized by exploiting misleading historical analogies as ‘closed’, associated with the KGB, the Soviet Union, ‘relentless propaganda’, ‘government control’. The opinions of the Russian citizens on their political system or their president as well as the actions by the Russian state that do not fit the description of ‘dictatorial power’ are typically omitted from the Western media coverage. The result of this “selection bias” builds up over time to make an overall negative image of the country and the president” Angela Borozna for OpEdNews.
7Russia and China are developing drones that could make stealth aircraft obsolete. According to Zarchary Keck writing in The National Interest, both Beijing and Moscow have begun development of unmanned aerial vehicles that have the goal of finding, detecting, and possibly even eliminating enemy stealth aircraft. China’s stealth detection drone, called the Divine Eagle, is believed to be specially built to counter stealth aircraft while they are still far from the Chinese mainland. Popular Science notes that the drone’s “long range anti-stealth capabilities can be used against both aircraft, like the B-2 bomber, and warships such as the DDG-1000 destroyer … the Chinese air force could quickly intercept stealthy enemy aircraft, missiles and ships well before they come in range of the Mainland.” The Divine Eagle features multiple different radar systems, including X/UHF low band radar systems, according to Popular Science. These systems could be used to track stealth aircraft like the F-35 at long distances, as most stealth technology is created to avoid high band radar systems, thereby eroding one of the key advantages of the fifth-generation plane. [Business Insider]
8Azerbaijan is one of Italy’s main trade partners, Manuela Traldi, Italy-Azerbaijan Trade Institute ITAZERCOM head, said at a presentation entitled “Investments in Azerbaijan: Business Environment and Opportunities.” The presentation was held as part of the EXPO-2015 international exhibition in the Italian city of Milan. AZPROMO head Rufat Mammadov made a presentation on the investment environment and business opportunities of Azerbaijan. He informed the participants about the economy of the country and Azerbaijan-Italy economic and trade relations. He said that as a result of the successfully carried out socio-economic policy, Azerbaijan has achieved sustainable economic growth. The country has created a favorable investment and business environment, which led to its becoming a foreign investor.
9Troubles in Russia, China slow Kremlin’s pivot to Asia. A growing economic crisis in Russia and a growth slowdown in China that has rattled world markets means about $113 billion worth of joint projects ranging from gas pipelines to power grids have been stalled or delayed.With a major crackdown on corruption also in progress in China, and Russia hit by sanctions, falling oil prices and a collapsing currency, some joint Russian-Chinese projects may be delayed indefinitely, industry sources and analysts say. The developments represent a major challenge to President Vladimir Putin’s strategy of a pivot to Asia, spurred last year by the imposition of Western sanctions on Moscow for its role in the Ukraine crisis” Katya Golubkova and Denis Pinchuk for The Japan Times.
10Under the annual military cooperation plan between Azerbaijan and Turkey, a new group of the aircraft of Turkey’s Air Force has arrived in Azerbaijan to participate in the TurAz Falcon 2015 exercises being held between the two countries’ air forces. More than 30 means of aviation as well as MiQ-29, F-16 fighters jets, Su-25 strike assault, F-4E bomber, C-130 Hercules military transport planes, Mi-35 combat, Mi-17 and Sikorski UH-60 combat transport, Cougar AS532 search and rescue helicopters are participating in the exercises, the Defense Ministry said.
Ukraine: Commission proposes to criminalise the violation of EU sanctions
The European Commission is today putting forward a proposal to harmonise criminal offences and penalties for the violation of EU restrictive measures. While the Russian aggression on Ukraine is ongoing, it is paramount that EU restrictive measures are fully implemented and the violation of those measures does not pay off. The Commission proposal sets out common EU rules, which will make it easier to investigate, prosecute and punish violations of restrictive measures in all Member States alike.
Violating EU sanctions is a serious criminal offence
The implementation of EU restrictive measures following the Russian attack on Ukraine shows the complexity of identifying assets owned by oligarchs, who hide them across different jurisdictions through elaborate legal and financial structures. The proposed Directive will establish the same level of penalties in all Member States. Thereby it will close existing legal loopholes and increase the deterrent effect of violating EU sanctions in the first place. The main elements of the proposal include:
- A list of criminal offences, which violate EU sanctions, such as:
- making funds or economic resources available to, or for the benefit of, a designated person, entity or body;
- failing to freeze these funds;
- enabling the entry of designated people into the territory of a Member State or their transit through the territory of a Member State;
- entering into transactions with third countries, which are prohibited or restricted by EU restrictive measures;
- trading in goods or services whose import, export, sale, purchase, transfer, transit or transport is prohibited or restricted;
- providing financial activities which are prohibited or restricted; or
- providing other services which are prohibited or restricted, such as legal advisory services, trust services and tax consulting services.
- Offences will cover circumventing an EU restrictive measure: this means bypassing or attempting to bypass restrictive measures by concealing funds or concealing the fact that a person is the ultimate owner of funds.
- Common basic standards for penalties: depending on the offence, the individual person could be liable to a maximum penalty of at least five years in prison; companies could be liable to penalties of no less than 5% of the total worldwide turnover of the legal person (company) in the business year preceding the fining decision.
The proposal will now be discussed by the European Parliament and the Council as part of the ordinary co-legislative procedure.
Since the start of the war in Ukraine, the EU has adopted a series of sanctions against Russian and Belarussian individuals and companies. The implementation of EU restrictive measures shows the complexity of identifying assets owned by oligarchs, who hide them across different jurisdictions through complex legal and financial structures. For example, by transferring ownership of sanctioned property to a non-sanctioned third party. They are helped by existing legal loopholes, as the criminal law provisions on breaches of EU sanctions vary across Member States. An inconsistent enforcement of restrictive measures undermines the Union’s ability to speak with one voice.
In May 2022, the Commission proposed to add the violation of EU restrictive measures to the list of EU crimes. At the same time, the Commission proposed new reinforced rules on asset recovery and confiscation, which will also contribute to the implementation of EU restrictive measures. The proposals come in the context of the ‘Freeze and Seize’ Task Force, set up by the Commission in March.
Following the adoption on 28 November of the Council Decision identifying the violation of Union restrictive measures as an area of serious crime that meets the criteria set out in Article 83(1) of the TFEU, the Commission is now putting forward this proposal for a Directive on the violation of Union restrictive measures, as a second step.
Americans are outraged: US has given about $54B of assistance to Ukraine. The EU only 16B
On a broadcast of the Fox Business Network’s “Kennedy,” Rep. Tom McClintock (R-CA) said he will not continue to support aid to Ukraine until the European Union matches the aid already provided by the U.S.
We need a complete audit of the money sent by America. There should be assurances that the country hasn’t had an illegitimate relationship with FTX, and “the millions of dollars that were paid to the Biden family by Ukraine over the years isn’t influencing our foreign policy,” said Tom McClintock. (Through this crypto-exchange FTX the Democrats laundered huge amounts of money that were allocated by the US Congress for Ukraine).
McClintock stated, “I supported the initial assistance to Ukraine. Ukraine is primarily a European security issue. Now, you look at the numbers, the United States has given about $54 billion of assistance to Ukraine. And the EU had only 16 billion.
“So, they’ve got about half of our GDP. But they’ve only given about a third of the assistance that we have. Now, given the fact that’s happening right on their doorstep, not on ours. It seems to me they need to at least match what we’ve already done.
“And then I also believe there needs to be a full audit of where our money has gone and we need assurance that Ukraine’s relationship with FTX is entirely legitimate, as Ukraine contends. And I think the American people would also like to be assured that the millions of dollars that were paid to the Biden family by Ukraine over the years isn’t influencing our foreign policy,” said Tom McClintock.
Europe accuses US of ‘profiting from war’
Top European officials are furious with Joe Biden’s administration and now accuse the Americans of making a fortune from the war, while EU countries suffer. “The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons,” one senior official told POLITICO.
Washington announced a $369 billion industrial subsidy scheme to support green industries under the Inflation Reduction Act that Brussels went into full-blown panic mode. “The Inflation Reduction Act has changed everything,” one EU diplomat said. “Is Washington still our ally or not?”
“We are really at a historic juncture,” the senior EU official said, arguing that the double hit of trade disruption from U.S. subsidies and high energy prices risks turning public opinion against both the war effort and the transatlantic alliance. “America needs to realize that public opinion is shifting in many EU countries.”
The biggest point of tension in recent weeks has been Biden’s green subsidies and taxes that Brussels says unfairly tilt trade away from the EU and threaten to destroy European industries. Despite formal objections from Europe, Washington has so far shown no sign of backing down.
As they attempt to reduce their reliance on Russian energy, EU countries are turning to gas from the U.S. instead — but the price Europeans pay is almost four times as high as the same fuel costs in America. Then there’s the likely surge in orders for American-made military kit as European armies run short after sending weapons to Ukraine.
Officials on both sides of the Atlantic recognize the risks that the increasingly toxic atmosphere will have for the Western alliance.
“The U.S. is following a domestic agenda, which is regrettably protectionist and discriminates against U.S. allies,” said Tonino Picula, the European Parliament’s lead person on the transatlantic relationship.
Cheaper energy has quickly become a huge competitive advantage for American companies, too. Businesses are planning new investments in the U.S. or even relocating their existing businesses away from Europe to American factories. Just this week, chemical multinational Solvay announced t is choosing the U.S. over Europe for new investments, in the latest of a series of similar announcements from key EU industrial giants.
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