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US to impose more sanctions on Russia for ‘supporting Assad’

US ambassadors Nikki Haley and John Huntsman confirm further sanctions on Russian companies to be announced Monday

Alexander Mercouris

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Two US ambassadors – Nikki Haley, the US’s ambassador to the UN, and John Huntsman, the US’s ambassador to Russia – have confirmed that the US Treasury Department will be unveiling further sanctions on Russia tomorrow in retaliation for Russia’s continued support for President Assad.

Nikki Haley’s comments were made on CBS News’s “Face the Nation” programme.  The Washington Post quotes them as follows

You will see that Russian sanctions will be coming down.  [Treasury Secretary Steven Mnuchin] will be announcing those Monday, if he hasn’t already.  And they will go directly to any sort of companies that were dealing with equipment related to Assad and chemical weapons use. I think everyone is going to feel it at this point. I think everyone knows that we sent a strong message, and our hope is that they listen to it.

John Huntsman’s comments were contained in a letter to the Russian government, details of which were disclosed by a Russian government source to the Russian newspaper Kommersant.  Here is how Interfax reports them

Washington has warned Moscow of preparing new sanctions over Russia’s support for the regime of Bashar al-Assad, the Kommersant newspaper wrote, citing unnamed sources.

“One of these days U.S. Ambassador Jon Huntsman sent the Russian Foreign Ministry a letter saying that the U.S. authorities were preparing new sanctions against Russia. This time, simply ‘for the support’ for Syrian president Bashar al-Assad,” the article said.

The letter consisted of two parts, the paper said.

“In the second part of his message Jon Huntsman notifies Moscow that Washington intends to introduce new sanctions against time. This time, for supporting the Syrian regime,” the article said.

The first part of the letter “sets out the motivation behind the military operation against Syria launched by Americans and their allies,” the paper said.

“In the U.S. view, the Syrian authorities were responsible for the use of chemical weapons against their own people, and the international community must take steps to stop Bashar al-Assad,” Kommersant said.

Nikki Haley’s comments suggest that the US Treasury Department is once again looking at sanctions of Russian individuals and companies – especially companies involved in the defence sector – rather than further sectoral sanctions, which the US Treasury Department has previously ruled out.

That the US would follow up the missile strike by applying more economic pressure on Russia in order to try to force Russia to change its policy in Syria was in fact clearly hinted at by US President Trump in his speech on Friday announcing the missile strike on Syria

The combined American, British and French response to these atrocities will integrate all instruments of our national power: military, economic and diplomatic. We are prepared to sustain this response until the Syrian regime stops its use of prohibited chemical agents.

I also have a message tonight for the two governments most responsible for supporting, equipping and financing the criminal Assad regime.

To Iran and to Russia, I ask: What kind of a nation wants to be associated with the mass murder of innocent men, women and children? The nations of the world can be judged by the friends they keep.

No nation can succeed in the long run by promoting rogue states, brutal tyrants and murderous dictators. In 2013, President Putin and his government promised the world that they would guarantee the elimination of Syria’s chemical weapons. Assad’s recent attack and today’s response are the direct result of Russia’s failure to keep that promise.

Russia must decide if it will continue down this dark path or if it will join with civilized nations as a force for stability and peace. Hopefully, someday we’ll get along with Russia and maybe even Iran, but maybe not.

I will say this, the United States has a lot to offer with the greatest and most powerful economy in the history of the world.

(bold italics added)

The threat and the bribe are clear enough: the US will go on imposing sanctions on Russia if Russia continues to support President Assad’s government; but will provide Russia with massive economic assistance if it changes course (abandons its “dark path”).

These statements come on the eve of a UN Security Council session on Monday at which the US, Britain and France will propose a draft Resolution affirming that a chemical weapons attack took place in Douma on 7th April 2018 – something Russia and Syria categorically deny, and which the OPCW has not confirmed – and requiring President Assad to make “full disclosure” of his chemical weapons stocks – which both Russia and Syria say Syria no longer has.

Presumably the intention is to try to bully Russia to vote or abstain on this Resolution, and to impose sanctions if it vetoes it.

There is in fact no possibility that the sanctions – or the threat of sanctions, if they are postponed till after the vote on the Resolution – are going to make Russia change its position.  Russia’s deputy Foreign Minister Sergey Ryabkov has already reaffirmed that Russia has its “red lines” and intends to stick by them.

It is going to be very difficult for the Security Council member states to find a compromise on the Syrian resolution, Ryabkov warned. I don’t want to make assumptions on how the work will go on, but one has to understand that we have obvious ‘red lines.’ Probably, there are some kind of important ‘red lines’ for the Western group as well.”

“We’re going to evaluate the proposal of the Western troika with a critical eye. We don’t decide anything for ourselves in advance – if there are reasonable elements there, we’re going to work on them,” he said…..
The process of destruction [of Syrian chemical weapons in 2013-14] was carried out in close cooperation of the involved countries, including the US, and under strict international supervision,” Ryabkov said. “Therefore, I don’t understand the endless, primitive and unsubstantiated bogus stories, which are made up – sometimes by high-ranking US officials, that Russia didn’t fulfil its obligations.”

I will also here restate my repeatedly stated view that the Western Powers hugely misjudge the impact of sanctions on Russia.  As a self-sufficient continental economy with minimal debt levels, a balanced budget, big reserves, a surplus on the current account, and more than sufficient technology and capital to drive its own development, Russia not only can survive sanctions; it can actually thrive on them.

In my opinion some Western commentators have become altogether too excited because the immediate response to the sanctions the US imposed a week ago was a dip in the Russian stock market and a fall in the rouble, which however has since stabilised.

That there would be a panicked reaction on the part of certain Western investors to the latest round of sanctions was entirely unsurprising, especially as the Russian company most affected by the sanctions – Oleg Deripaska’s Rusal – is one of Russia’s companies which has most heavily integrated itself into the Western financial system.

Deripaska – most unwisely as things have turned out – starting from the mid-2000s was one of the most aggressive Russian business leaders in offshoring his businesses. 

Thus Rusal, though its corporate headquarters and the bulk of its production are in Russia, is actually incorporated in the British offshore tax haven of Jersey, and its shares are traded not just on the Moscow stock exchange but also internationally. 

This international profile, and Rusal’s repeated heavy borrowings in Western financial markets, has left Rusal intensely vulnerable to US sanctions.

Given Rusal’s size it was inevitable that any sanctions imposed on it would have a temporary impact.  However whatever happens to Rusal – and despite official denials nationalisation is a distinct possibility – for the reasons I have said, the Russian economy will adjust to it, just as it has successfully adjusted – as I also repeatedly predicted – to every round of sanctions that the West has imposed on it since 2014.

This also is true of any further sanctions the US and the Western powers are going to impose on Monday or later in connection with the Syrian crisis.

The same point was made about the latest sanctions by none other than Russia’s former Finance Minister Alexey Kudrin, who is someone who as a general rule never misses an opportunity to talk down the prospects of the Russian economy when he can

This (the current situation in the financial markets – TASS) will not affect strongly the economic growth. On the other hand, it will require the Central Bank to pay extra attention to inflation, so I think we should not wait for the Central Bank to cut the key rate in the nearest half-year.

Despite the exit of some foreign investors from the Russian stock market, nevertheless, we now have a high price for oil. In this respect I do not expect any serious new fluctuations. In addition, the weakened rouble helps Russian exports, and a number of industries are likely to earn. In general the balance will be quite good, it will not affect strongly the economic growth.

(bold italics added)

For what it’s worth my opinion is that the weakening of the rouble is an unalloyed blessing.  One of the malign consequences of the Central Bank’s policy of keeping real interests at 5% is that it has caused the rouble to strengthen more than it is in the Russian economy’s interests that it should.

A dip in the rouble will not only strengthen exports and deter imports, but at a time of rising oil prices it will also improve the Russian government’s budgetary position.

As for the effect of any rouble weakening on inflation, I expect it to be small and temporary – just as it was in 2016 – and with inflation currently at an annual rate of 2.4% as against the Central Bank’s target of 4% a brief rise in inflation is nothing to worry about.

For what it’s worth my opinion is that one of the reasons why economic growth last year was less than was expected was precisely because the rouble that year was encouraged to strengthen excessively, which had a negative effect on industrial growth.

As for the political effect of sanctions, President Putin’s landslide victory in the recent Russian Presidential elections shows that they have the opposite effect to the one the US and the Western Powers suppose they do.  Far from weakening President Putin’s political standing inside Russia, they are strengthening it.

The repeated failure of the West’s sanctions policy towards Russia seems however to have little or no effect on its advocates.  All the indications are that rather than reverse course its advocates in the West are doubling down on it.  In doing so they are doubling down on a policy which has repeatedly failed, and I expect it to go on doing so whether in relation to Russian policy towards Syria or anything else.

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Skripal and Khashoggi: A Tale of Two Disappearances

Two disappearances, and two different responses.

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Authored by Finian Cunningham via The Strategic Culture Foundation:


Two disappearances, and two very different responses from Western governments, which illustrates their rank hypocrisy.

When former Russian spy Sergei Skripal went missing in England earlier this year, there was almost immediate punitive action by the British government and its NATO allies against Moscow. By contrast, Western governments are straining with restraint towards Saudi Arabia over the more shocking and provable case of murdered journalist Jamal Khashoggi.

The outcry by Western governments and media over the Skripal affair was deafening and resulted in Britain, the US and some 28 other countries expelling dozens of Russian diplomats on the back of unsubstantiated British allegations that the Kremlin tried to assassinate an exiled spy with a deadly nerve agent. The Trump administration has further tightened sanctions citing the Skripal incident.

London’s case against Moscow has been marked by wild speculation and ropey innuendo. No verifiable evidence of what actually happened to Sergei Skripal (67) and his daughter Yulia has been presented by the British authorities. Their claim that President Vladimir Putin sanctioned a hit squad armed with nerve poison relies on sheer conjecture.

All we know for sure is that the Skripals have been disappeared from public contact by the British authorities for more than seven months, since the mysterious incident of alleged poisoning in Salisbury on March 4.

Russian authorities and family relatives have been steadfastly refused any contact by London with the Skripal pair, despite more than 60 official requests from Moscow in accordance with international law and in spite of the fact that Yulia is a citizen of the Russian Federation with consular rights.

It is an outrage that based on such thin ice of “evidence”, the British have built an edifice of censure against Moscow, rallying an international campaign of further sanctions and diplomatic expulsions.

Now contrast that strenuous reaction, indeed hyper over-reaction, with how Britain, the US, France, Canada and other Western governments are ever-so slowly responding to Saudi Arabia over the Khashoggi case.

After nearly two weeks since Jamal Khashoggi entered the Saudi consulate in Istanbul, Turkey, the Saudi regime is this week finally admitting he was killed on their premises – albeit, they claim, in a “botched interrogation”.

Turkish and American intelligence had earlier claimed that Khashoggi was tortured and murdered on the Saudi premises by a 15-member hit squad sent from Riyadh.

Even more grisly, it is claimed that Khashoggi’s body was hacked up with a bone saw by the killers, his remains secreted out of the consulate building in boxes, and flown back to Saudi Arabia on board two private jets connected to the Saudi royal family.

What’s more, the Turks and Americans claim that the whole barbaric plot to murder Khashoggi was on the orders of senior Saudi rulers, implicating Crown Prince Mohammed bin Salman. The latest twist out of Riyadh, is an attempt to scapegoat “rogue killers” and whitewash the House of Saudi from culpability.

The fact that 59-year-old Khashoggi was a legal US resident and a columnist for the Washington Post has no doubt given his case such prominent coverage in Western news media. Thousands of other victims of Saudi vengeance are routinely ignored in the West.

Nevertheless, despite the horrific and damning case against the Saudi monarchy, the response from the Trump administration, Britain and others has been abject.

President Trump has blustered that there “will be severe consequences” for the Saudi regime if it is proven culpable in the murder of Khashoggi. Trump quickly qualified, however, saying that billion-dollar arms deals with the oil-rich kingdom will not be cancelled. Now Trump appears to be joining in a cover-up by spinning the story that the Khashoggi killing was done by “rogue killers”.

Britain, France and Germany this week issued a joint statement calling for “a credible investigation” into the disappearance. But other than “tough-sounding” rhetoric, none of the European states have indicated any specific sanctions, such as weapons contracts being revoked or diplomatic expulsions.

Canadian Prime Minister Justin Trudeau said he was “concerned” by the gruesome claims about Khashoggi’s killing, but he reiterated that Ottawa would not be scrapping a $15 billion sale of combat vehicles to Riyadh.

The Saudi rulers have even threatened retaliatory measures if sanctions are imposed by Western governments.

Saudi denials of official culpability seem to be a brazen flouting of all reason and circumstantial evidence that Khashoggi was indeed murdered in the consulate building on senior Saudi orders.

This week a glitzy international investor conference in Saudi Arabia is being boycotted by top business figures, including the World Bank chief, Jim Yong Kim, JP Morgan CEO Jamie Dimon and Britain’s venture capitalist Richard Branson. Global firms like Ford and Uber have pulled out, as have various media sponsors, such as CNN, the New York Times and Financial Times. Withdrawal from the event was in response to the Khashoggi affair.

A growing bipartisan chorus of US Senators, including Bob Corker, Marco Rubio, Lindsey Graham and Chris Murphy, have called for the cancellation of American arms sales to Saudi Arabia, as well as for an overhaul of the strategic partnership between the two countries.

Still, Trump has rebuffed calls for punitive response. He has said that American jobs and profits depend on the Saudi weapons market. Some 20 per cent of all US arms sales are estimated to go to the House of Saud.

The New York Times this week headlined: “In Trump’s Saudi Bargain, the Bottom Line Proudly Stands Out”.

The Trump White House will be represented at the investment conference in Saudi Arabia this week – dubbed “Davos in the Desert” by Treasury Secretary Steven Mnuchin. He said he was attending in spite of the grave allegations against the Saudi rulers.

Surely the point here is the unseemly indulgence by Western governments of Saudi Arabia and its so-called “reforming” Crown Prince. It is remarkable how much credulity Washington, London, Paris, Ottawa and others are affording the Saudi despots who, most likely, have been caught redhanded in a barbarous murder.

Yet, when it comes to Russia and outlandish, unproven claims that the Kremlin carried out a bizarre poison-assassination plot, all these same Western governments abandon all reason and decorum to pile sanctions on Russia based on lurid, hollow speculation. The blatant hypocrisy demolishes any pretense of integrity or principle.

Here is another connection between the Skripal and Khashoggi affairs. The Saudis no doubt took note of the way Britain’s rulers have shown absolute disregard and contempt for international law in their de facto abduction of Sergei and Yulia Skripal. If the British can get away with that gross violation, then the Saudis probably thought that nobody would care too much if they disappeared Jamal Khashoggi.

Grotesquely, the way things are shaping up in terms of hypocritical lack of action by the Americans, British and others towards the Saudi despots, the latter might just get away with murder. Not so Russia. The Russians are not allowed to get away with even an absurd fantasy.

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US-China trade war heats up as surplus hits record $34 Billion (Video)

The Duran – News in Review – Episode 136.

Alex Christoforou

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According to a report by the AFP, China’s trade surplus with the United States ballooned to a record $34.1 billion in September, despite a raft of US tariffs, official data showed Friday, adding fuel to the fire of a worsening trade war.

Relations between the world’s two largest economies have soured sharply this year, with US President Donald Trump vowing on Thursday to inflict economic pain on China if it does not blink.
The two countries imposed new tariffs on a massive amount of each other’s goods mid-September, with the US targeting $200 billion in Chinese imports and Beijing firing back at $60 billion worth of US goods.

“China-US trade friction has caused trouble and pounded our foreign trade development,” customs spokesman Li Kuiwen told reporters Friday.

But China’s trade surplus with the US grew 10 percent in September from a record $31 billion in August, according to China’s customs administration. It was a 22 percent jump from the same month last year.

China’s exports to the US rose to $46.7 billion while imports slumped to $12.6 billion.

China’s overall trade — what it buys and sells with all countries including the US — logged a $31.7 billion surplus, as exports rose faster than imports.

Exports jumped 14.5 percent for September on-year, beating forecasts from analysts polled by Bloomberg News, while imports rose 14.3 percent on-year.

While the data showed China’s trade remained strong for the month, analysts forecast the trade war will start to hurt in coming months.

China’s export jump for the month suggests exporters were shipping goods early to beat the latest tariffs, said ANZ’s China economist Betty Wang, citing the bounce in electrical machinery exports, much of which faced the looming duties.

“We will watch for downside risks to China’s exports” in the fourth quarter, Wang said.

Analysts say a sharp depreciation of the yuan has also helped China weather the tariffs by making its exports cheaper.

“The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi (yuan),” said Julian Evans-Pritchard, China economist at Capital Economics.

“With global growth likely to cool further in the coming quarters and US tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained,” he said.

According to Bloomberg US President Donald Trump’s new U.S.-Mexico-Canada Agreement isn’t that different from the North American Free Trade Agreement that it replaced. But hidden in the bowels of the new trade deal is a clause, Article 32.10, that could have a far-reaching impact. The new agreement requires member states to get approval from the other members if they initiate trade negotiations with a so-called non-market economy. In practice, “non-market” almost certainly means China. If, for example, Canada begins trade talks with China, it has to show the full text of the proposed agreement to the U.S. and Mexico — and if either the U.S. or Mexico doesn’t like what it sees, it can unilaterally kick Canada out of the USMCA.

Although it seems unlikely that the clause would be invoked, it will almost certainly exert a chilling effect on Canada and Mexico’s trade relations with China. Forced to choose between a gargantuan economy across the Pacific and another one next door, both of the U.S.’s neighbors are almost certain to pick the latter.

This is just another part of Trump’s general trade waragainst China. It’s a good sign that Trump realizes that unilateral U.S. efforts alone won’t be enough to force China to make concessions on issues like currency valuation, intellectual-property protection and industrial subsidies. China’s export markets are much too diverse:

If Trump cuts the U.S. off from trade with China, the likeliest outcome is that China simply steps up its exports to other markets. That would bind the rest of the world more closely to China and weaken the global influence of the U.S. China’s economy would take a small but temporary hit, while the U.S. would see its position as the economic center of the world slip into memory.

Instead, to take on China, Trump needs a gang. And that gang has to be much bigger than just North America. But most countries in Europe and East Asia probably can’t be bullied into choosing between the U.S. and China. — their ties to the U.S. are not as strong as those of Mexico and Canada. Countries such as South Korea, Germany, India and Japan will need carrots as well as sticks if they’re going to join a U.S.-led united trade front against China.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the escalating trade war between the United States and China, and the record trade surplus that positions China with a bit more leverage than Trump anticipated.

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Via Zerohedge Trump Threatens China With More Tariffs, Does Not Seek Economic “Depression”

US equity futures dipped in the red after President Trump threatened to impose a third round of tariffs on China and warned that Chinese meddling in U.S. politics was a “bigger problem” than Russian involvement in the 2016 election.

During the same interview with CBS’s “60 Minutes”, in which Trump threatened to impose sanctions against Saudi Arabia if the Saudis are found to have killed WaPo reported Khashoggi, and which sent Saudi stock plunging, Trump said he “might,” impose a new round of tariffs on China, adding that while he has “great chemistry” with Chinese President Xi Jinping, and noting that Xi “wants to negotiate”, he doesn’t “know that that’s necessarily going to continue.” Asked if American products have become more expensive due to tariffs on China, Trump said that “so far, that hasn’t turned out to be the case.”

“They can retaliate, but they can’t, they don’t have enough ammunition to retaliate,” Trump says, “We do $100 billion with them. They do $531 billion with us.”

Trump was also asked if he wants to push China’s economy into a depression to which the US president said “no” before comparing the country’s stock-market losses since the tariffs first launched to those in 1929, the start of the Great Depression in the U.S.

“I want them to negotiate a fair deal with us. I want them to open their markets like our markets are open,” Trump said in the interview that aired Sunday. So far, the U.S. has imposed three rounds of tariffs on Chinese imports totaling $250 billion, prompting China to retaliate against U.S. products. The president previously has threatened to hit virtually all Chinese imports with duties.

Asked about his relationship with Vladimir Putin and the Kremlin’s alleged efforts to influence the 2016 presidential election, Trump quickly turned back to China. “They meddled,” he said of Russia, “but I think China meddled too.”

“I think China meddled also. And I think, frankly, China … is a bigger problem,” Trump said, as interviewer Lesley Stahl interrupted him for “diverting” from a discussion of Russia.

Shortly before an audacious speech by Mike Pence last weekend, in which the US vice president effectively declared a new cold war on Beijing (see “Russell Napier: Mike Pence Announces Cold War II”), Trump made similar accusations during a speech at the United Nations last month, which his aides substantiated by pointing to long-term Chinese influence campaigns and an advertising section in the Des Moines Register warning farmers about the potential effects of Trump’s tariffs.

Meanwhile, in a rare U.S. television appearance, China’s ambassador to the U.S. said Beijing has no choice but to respond to what he described as a trade war started by the U.S.

“We never wanted a trade war, but if somebody started a trade war against us, we have to respond and defend our own interests,” said China’s Ambassador Cui Tiankai.

Cui also dismissed as “groundless” the abovementioned suggestion by Vice President Mike Pence that China has orchestrated an effort to meddle in U.S. domestic affairs. Pence escalated the rhetoric in a speech Oct. 4, saying Beijing has created a “a whole-of-government approach” to sway American public opinion, including spies, tariffs, coercive measures and a propaganda campaign.

Pence’s comments were some of the most critical about China by a high-ranking U.S. official in recent memory. Secretary of State Michael Pompeo got a lecture when he visited Beijing days later, about U.S. actions that were termed “completely out of line.” The tough words followed months of increases tit-for-tat tariffs imposed by Washington and Beijing that have ballooned to cover hundreds of billions of dollars in bilateral trade.

During a recent interview with National Public Radio, Cui said the U.S. has “not sufficiently” dealt in good faith with the Chinese on trade matters, saying “the U.S. position keeps changing all the time so we don’t know exactly what the U.S. would want as priorities.”

Meanwhile, White House economic director Larry Kudlow said on “Fox News Sunday” that President Donald Trump and Chinese President Xi Jinping will “probably meet” at the G-20 summit in Buenos Aires in late November. “There’s plans and discussions and agendas” being discussed, he said. So far, talks with China on trade have been “unsatisfactory,” Kudlow said. “We’ve made our asks” on allegations of intellectual property theft and forced technology transfers, he added. “We have to have reciprocity.”

Addressing the upcoming meeting, Cui said he was present at two previous meetings of Xi and Trump, and that top-level communication “played a key role, an irreplaceable role, in guiding the relationship forward.” Despite current tensions the two have a “good working relationship,” he said.

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BREAKING: Explosion in Crimea, Russia kills many, injuring dozens, terrorism suspected

According to preliminary information, the incident was caused by a gas explosion at a college facility in Kerch, Crimea.

The Duran

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“We are clarifying the information at the moment. Preliminary figures are 50 injured and 10 dead. Eight ambulance crews are working at the site and air medical services are involved,” the press-service for the Crimean Ministry of Health stated.

Medics announced that at least 50 people were injured in the explosion in Kerch and 25 have already been taken to local hospital with moderate wounds, according to Sputnik.

Local news outlets reported that earlier in the day, students at the college heard a blast and windows of the building were shattered.

Putin Orders that Assistance Be Provided to Victims of Blast in Kerch – Kremlin Spokesman

“The president has instructed the Ministry of Health and the rescue services to take emergency measures to assist victims of this explosion, if necessary, to ensure the urgent transportation of seriously wounded patients to leading medical institutions of Russia, whether in Moscow or other cities,” Kremlin spokesman Dmitriy Peskov said.

The president also expressed his condolences to all those affected by the tragic incident.

Manhunt Underway in Kerch as FSB Specialists Investigate Site of Explosion – National Anti-Terrorist Committee

The site of the blast that rocked a city college in Kerch is being examined by FSB bomb disposal experts and law enforcement agencies are searching for clues that might lead to the arrest of the perpetrators, the National Anti Terrorism Committee said in a statement.

“Acting on orders from the head of the NAC’s local headquarters, FSB, Interior Ministry, Russian Guards and Emergency Ministry units have arrived at the site. The territory around the college has been cordoned off and the people inside the building evacuated… Mine-disposal experts are working at the site and law enforcement specialists are investigating,” the statement said.

Terrorist Act Considered as Possible Cause of Blast in Kerch – Kremlin Spokesman

“The tragic news that comes from Kerch. Explosion. The president was informed … The data on those killed and the number of injured is constantly updated,” Peskov told reporters.

“[The version of a terrorist attack] is being considered,” he said.

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