Posted tagged ‘Friend or Foe’

Bartering – An Act of Desperation

September 26, 2018

“Special Purpose Vehicle aims to keep Iran in 2015 nuclear deal with barter system

Russian foreign minister Sergey Lavrov with EU external affairs chief Federica Mogherini in New York on Tuesday. Photograph: Alexander Shcherbak/TASS

By Patrick Wintour Diplomatic editor Wed 26 Sep 2018 01.00 EDT The Guardian

Source Link: EU, China and Russia in move to sidestep US sanctions on Iran

{What’s next, wampum? – LS}

The European Union, Iran, China and Russia have set out a plan to sidestep unilateral US sanctions designed to cripple the Iranian economy and force the Iranians to renegotiate the nuclear deal signed in 2015.

European diplomats hope the proposed measure – known as a special purpose vehicle (SPV) – will help persuade an increasingly reluctant Iran to stay inside the deal in the hope of rescuing its economy.

Speaking on the sidelines of the UN general assembly in New York, Federica Mogherini, the EU external affairs chief, said the SPV was designed to facilitate payments related to Iran’s exports – including oil – and imports, so long as the firms involved were carrying out legitimate business under EU law.

The aim is to make the SPV available not just to EU firms but to others, she added.

In his address to the United Nations general assembly, Iran’s president, Hassan Rouhani, stressed Tehran’s continued commitment to the deal and accused the US of pressurising other countries into violating the nuclear agreement.

“Confronting multilateralism is not a sign of strength,” he said. “Rather, it is a symptom of the weakness of intellect. It betrays an inability in understanding a complex and interconnected world.”

But the US president Donald Trump’s secretary of state, Mike Pompeo, addressing an anti-Iran pressure group, said he was “disturbed and indeed deeply disappointed” by the EU plan.

“This is one of the of the most counterproductive measures imaginable for regional and global peace and security,” Pompeo said.

Versions of the SPV floated by thinktanks suggest it could underpin a sophisticated barter system that can avoid US Treasury sanctions. For example, Iran could ship crude oil to a French firm, accumulating credit that could then be used to pay an Italian manufacturer for goods shipped the other way, without any funds traversing through Iranian hands or the banking system.

A multinational European state-backed financial intermediary would be set up to handle deals with companies interested in Iran transactions and with Iranian counter-parties. Any transactions would not be transparent to the US, and involve euros and sterling rather than dollars.

The proposal is additional to a blocking statute passed by the EU in August that theoretically makes EU companies immune from sanctions imposed by the US in pursuit of its Iran policy. In theory, the statute empowers EU firms to seek compensation from US Treasury for trying to impose extra-territorial sanctions in breach of the statute. So far this statute has not been tested in court.

Richard Nephew, a former Barack Obama official and author of The Art of Sanctions, expressed scepticism on Twitter, saying that for the SPV to be taken up, European firms – many with either US employees, or US subsidiaries – must still be prepared to take the risk of being sanctioned by the US.

He also suggested US sanctions could be applied to the traded good as much as to the cash to fund the trade. He predicted few firms would take that risk, outside some SMEs [small and medium-sized enterprises] heavily dependent on Iran for their income.

Jarrett Blanc, another former Obama staffer for the Iran deal, broadly agreed with Nephew, but was more sympathetic, writing that “the symbolism here is probably Europe’s most important contribution, and it may be sufficient depending on what China, India, Turkey do on oil”. He added: “The payment mechanism move opens the door to a longer-term degradation of US sanctions power.”

Either way, Europe needs a solution soon after months of railing against US economic imperialism. The vast majority of European firms are planning to pull out.

Trump announced two sets of US secondary sanctions in May, and other sanctions imposed in August cover shipping and insurance. The other more important sanctions – aimed at ending Iranian oil exports, still the heart of the faltering Iranian economy – do not bite until 5 November.

In advance of the oil sanctions, Iran’s crude sales to China fell 21% between May and August, according to Eurasia Group. But it is unclear how long China will stick to that trend.

The assumption is that many countries like India and Russia will continue to trade with Iran and challenge the US to try to impose sanctions, pointing out that in reality it is the US, by tearing up the agreement and not them, that is in breach of UN resolutions.

Turkey Prepares For First Batch Of Russian S-400 Air Defense Missiles

August 23, 2018

Rosoboronexport’s Director General Alexander Mikheev said that the defense company would begin implementing a contract for the supply of its advanced S-400 missile defense systems to Turkey in 2019, the RIA Novosti reported.

By by Tyler Durden Thu, 08/23/2018 Zerohedge

Source Link: Turkey Prepares For First Batch Of Russian S-400 Air Defense Missiles

{I wonder if these systems will respond to another Russian infraction into Turkish air space. – LS}

“The contract [on the S-400 supplies to Turkey] will be implemented within the agreed time limits. In 2019 we will start implementing the contract,” the company’s director general and CEO Aleksandr Mikheev told reporters on Tuesday.

Washington has expressed great concern that NATO member Turkey’s upcoming deployment of the Russian S-400s could pose a serious security risk for U.S.-made weapons used by Turkey, including the Lockheed Martin F-35 Lightning II, a fifth-generation combat aircraft.

Rosoboronexport told Turkey it would switch to the Lira, instead of using the dollar to complete the transaction, the RIA news agency reported.

In April, Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin had agreed to expedite the delivery of the missile systems for 2019.

The S-400 system also called the Triumph Mobile Multiple Anti-Aircraft Missile System (AAMS), is an advanced Russian missile system designed to detect, track, and destroy aircraft, drones, missiles as far as 402 kilometers (250 miles) away. Moscow had previously sold the missile systems to China and India. The Economist described the S-400 in 2017 as “one of the best air-defense systems currently made.”

Ankara’s decision to acquire the missile systems stems from last year after Moscow and Turkey signed a $2.5-billion deal for the transfer of the technology.

Washington immediately threatened to halt delivery of the F-35 stealth jets if Ankara finalized the agreement with Russia. With the recent passage of the 2019 National Defense Authorization Act (passed by the Senate earlier this month), it warned about the US supplying fifth-generation fighters to Turkey amid declining diplomatic relations.

President Erdogan told Washington that it did not want to depend on Western technology, which is why the country had been turning towards Russia.

“We will not just buy the S-400s and place them in a storehouse. We will use them if need be,” Erdogan said in June.

President Trump’s response was to sign a Pentagon bill into law restricting the delivery of F-35 jets. The bill also called for the US Secretary of Defense to submit a report within three months addressing the impacts of Turkey’s purchase of S-400s on US-made weapon systems in the region.

Both NATO allies have discussed various ways on how to resolve this dispute but it seems that has failed with Turkey migrating towards Russia.

Diplomatic ties between Turkey and the US have plummeted in the last month over the detention of US evangelical pastor Andrew Brunson, which could likely be a front for a much larger issue: Washington wants to destroy the Eurasia integration via economic warfare.

The first victim? Well, of course, it was Turkey, as President Trump launched economic and political sanctions on the country, which collapsed the Turkish Lira against the US dollar.

As to why Turkey is buying the world’s most advanced missile system, well, it is preparing for military conflict.


The U.S Issues Three Warnings to Turkey in Two Days

April 22, 2018

By Ilhan Tanir 2018-04-21 16:25 GMT Assyrian Intl News Agency

Source Link: The U.S Issues Three Warnings to Turkey in Two Days

{Three strikes and you’re out. – LS}

The first of three warnings from Washington to Turkey came on Wednesday morning from the U.S. House Foreign Affairs Committee (HFAC). Speaking before the committee was A. Wess Mitchell, assistant secretary of State for European and Eurasian Affairs at the U.S. State Department.

There were several Turkey-related issues Mitchell addressed. Many of HFAC members questioned the detention and ongoing trial of American pastor Andrew Brunson who has been jailed in Turkey for over 18 months. Mitchell stated that Turkey’s indictment, which also included accusations that Brunson was working with both the Kurdistan Workers’ Party (PKK) and what the Turkish government calls the Fethullahist Terror Organization (FETÖ), to divide Turkey are “laughable.” He also said that Turkey appears determined to purchase the S-400 air defense system from Russia, which could spell US embargoes on Turkey.

Personally, this is the first time I have heard the sanctions message given so clearly. U.S. officials have been talking about the possibility of sanctions on Turkey, but Mitchell’s certainty while speaking appeared new.

Furthmore, Mitchell noted some of the potential impacts of the F35 fighter jet project, which has been much-discussed by certain members of Congress in the past, but again, I do not remember if it was ever mentioned by a US administration official.

Turkey has made large investments in the F35, which is considered to be the next generation fighter jet. Some parts for the F35 are even produced in Turkey. Although the U.S. administration has not made any open or veiled threats regarding the F35 in the past, this week, a senior official at the U.S. State Department stated such possibility.

U.S. officials have been particularly unhappy about the fact that a large number of Russian personnel have expected the arrival of the Russian S-400 to gather information from all other military bases in Turkey. Although Ankara is insistent on its message that the S-400 deal is signed and completed, the US continues to harden its stance on the S-400, and it is likely that we will see heavy embargoes as a result.

The second message from Washington came from the Pentagon on Thursday.

This warning came from U.S. Department of Defense spokesperson Dana White. White pointed out that none of the 105 missiles fired by the U.S. and coalition partners France and Britain at three targets near Damascus were cut off by Russian air defense systems. “The Russian-manufactured air defense systems were totally ineffective,” White said while she noted that the system failed a second time when it accidentally sent missiles two days after the attack.

White added that Washington communicated the message to Ankara that Turkey’s S-400 system will not work with NATO systems.

For any other countries besides Turkey that are thinking of pouring money into Russian S-400s, the Pentagon is effectively stating that these systems are useless, and they will be ineffective especially against U.S. and NATO weapons.

Finally, following the warnings from Congress and the Pentagon, a third warning came from the U.S. State Department.

At Thursday’s press briefing, in response to Ahval’s question as to that whether the U.S. government has confidence in Turkish government that the fair and free elections can be held in Turkey under the state of emergency, State Department Spokesperson Heather Nauert said, “During a state of emergency, it would be difficult to hold a completely free, fair, and transparent election in a manner that’s consistent with Turkish law and also Turkey’s international obligations… We are following this very closely. We have concerns about their (the Turkish government’s) ability to hold it (an election) during this type of state of emergency. We would certainly like to see free and fair elections, but there’s a concern here.”

It should not be forgotten that the U.S. administration never designated the 2017 presidential referendum election as fair, free, or transparent last year.

This time around, just one day after Erdoğan announced a snap election, Washington is already calling into question the legitimacy of the upcoming election under the state of emergency.