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Russia, India to bypass the dollar in defence deals

American sanctions are increasingly making the USD irrelevant

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Presently, some $2 billion worth of arms deals are presently hitting a snag over how settlement is to be made for defence transactions between Russia and India as US sanctions stand in the way. The issue has led to the US Dollar being dropped as a means of payment, with the Ruble and Rupee being considered as alternatives.

The Economic Times reports:

New Delhi: Efforts to break the logjam over Russian defence deals because of US sanctions have zeroed in on a rupee-rouble transfer as the only way out but both sides are finding it difficult to find banking institutions through which such payments can be routed.

Financial sanctions by the US have hit India’s arms trade with Russia hard, with payments for weapons and equipment worth over $2 billion getting stuck, including those for critical projects such as the repair of leased nuclear attack submarine INS Chakra.

Senior officials told ET that after several rounds of consultations, it has become evident that a rupee-rouble transfer-–pegged on the exchange rate of an international currency—is the solution. As of now, India signs defence contracts with Russia for which payments are made in US dollars.

With US sanctions making this impossible, contract payments have been frozen since April. A top official said that a foreign currency-—say the Singapore dollar-—could be used as the benchmark and contract payments would be conducted directly.

However, the two nations are still struggling to find banks that would run the risk of facing US sanctions for transferring the money. Sources said that on the Indian side, the banks being talked to include Vijaya Bank and Indian Bank.

On the Russian side, its largest banking entity in India, Sberbank, was involved in talks. However, the Russian bank has not given any commitment on making the payments. A decision is still to be taken but the idea is to involve banks with the least exposure to American sanctions.

Other options that were looked at included payments to non-sanctioned entities in Russia after its flagship arms trading company Rosoboronexport came under sanctions by the US Office of Foreign Assets Control (OFAC).

“This option was decided against as it would have opened up a lot of legal and audit issues, especially as defence deals are looked at very closely. No one wanted to take a chance,” a top official involved in talks to resolve the issue told ET.

US sanctions ban business ties with entities designated as Specially Designated Nationals (SDN). After fresh notifications in April named Rosoboronexport, Indian banks were pressured into freezing all lines of credit (LoCs) to Russian arms companies, resulting in all deals coming to a halt.

Payments worth over $100 million were blocked in less than a month with payments of over $2 billion facing uncertainty. This includes a payment of over $15 million to Russia that would have been used to repair the damaged INS Chakra nuclear submarine that met with an accident in late 2016.

Also impacted are ongoing submarine repairs besides purchases of missiles and ammunition. The signing of a $5-billion deal to purchase the S400 air defence system from Russia is also under a cloud.

The US has imposed sanctions against Russia for interfering in the 2016 presidential election and its actions in Crimea, Ukraine and Syria.

India has long been one of Russia’s top military equipment customers going back nearly six decades, and another deal is in the works for India to purchase the S-400 SAM system from Russia, a deal worth some $5 billion.

During the past five years, 62 percent of India’s defense imports have been from Russia.

In addition to defence, India and Russia have a strong cooperation in areas of energy and communications, as well as their positions on international issues ranging from climate change to fighting terrorism, combatting Trump’s tariffs regimes, and the preservation of the Iran nuclear deal.

Russian investments in India encompass areas such as nuclear energy and telecommunications; Indian companies have invested heavily in Russian hydrocarbons and are involved in the joint exploration and extraction of oil and gas

A few weeks ago, in Sochi, Narendra Modi, the Indian Prime Minister, met with Russian President Vladimir Putin in an effort to boost their relations as well as to identify further areas of mutual interest. India seems also to be keen on potentially doing business within the EAEU, of which Russia is a member, further strengthening their trade relationship. Russia was also instrumental in getting India membership in the Shanghai Cooperation Organization (SCO), a Eurasian political, economic and security bloc.

Not only is India keen to preserve its business ties, whether Washington likes it or not, through diplomacy, but they are actively engaged in doing commerce with other nations which Washington has issued sanctions against, including Iran, also using national currencies in their bilateral trade, and Venezuela, so that dodging Washington’s demands relative to Russia is not the only example of India’s determination to stand up for its interests.

Recently, China debuted its Petroyuan, an oil futures market using the Chinese yuan instead of US dollars. Putin has called for Russia to move away from the dollar, asked the Europeans to conduct trade with Russia using the Euro, and developed its own SWIFT system for domestic transfers in order to avoid using the American based financial processing system.

China and Russia have been moving towards doing bilateral commerce using their national currencies, also avoiding the use of the USD. The more the US tries to use its currency, financial systems, and market share as a club, the more the nations of the world seek independence from it. In an economic sense, it is another way in which America is making itself irrelevant to the rest of the world.

 

 

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ColinNZRed Pilled ThoughtCrimesAJnormski1 Recent comment authors
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ColinNZ
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ColinNZ

This is the REAL trade war, and the US is about to get owned … it will take time, but it is unstoppable now.

Red Pilled ThoughtCrimes
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Red Pilled ThoughtCrimes

they NEED the money from tariffs

AJ
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AJ

Why cant India just pay in physical gold & avoid the banks altogether.

normski1
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normski1

Where there’s a will there’s a way and I’m confident Russia and India will find a solution to the problem!.

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Trudeau’s Top Bureaucrat Unexpectedly Quits Amid Growing Corruption Scandal

In a scathing letter to Trudeau, Wernick said that “recent events” led him to conclude he couldn’t hold his post during the election campaign this fall.

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Via Zerohedge


Since it was exposed by a report in Canada’s Globe and Mail newspaper earlier this month, the scandal that’s become known as the SNC-Lavalin affair has already led to the firing of several of Trudeau’s close advisors and raised serious questions about whether the prime minister was complicit in pressuring the attorney general to offer a deferred prosecution agreement with a large, Quebec-based engineering firm.

And according to the first round of polls released since the affair exploded into public view…

…it could cost Trudeau his position as prime minister and return control to the conservatives, according to the CBC.

Campaign Research showed the Conservatives ahead with 37% to 32% for the Liberals, while both Ipsos and Léger put the margin at 36% to 34% in the Conservatives’ favour.Since December, when both polling firms were last in the field, the Liberals have lost one point in Campaign Research’s polling and four percentage points in the Ipsos poll, while the party is down five points since November in the Léger poll.

Meanwhile, as the noose tightens around Trudeau, on Monday another of the key Canadian government officials at the center of the SNC-Lavalin scandal has quit his post.

Michael Wernick, clerk of the privy council, the highest-ranking position in Canada’s civil service and a key aide to Justin Trudeau, announced his retirement Monday. Trudeau named Ian Shugart, currently deputy minister of foreign affairs, to replace him.

In a scathing letter to Trudeau, Wernick said that “recent events” led him to conclude he couldn’t hold his post during the election campaign this fall.

“It is now apparent that there is no path for me to have a relationship of mutual trust and respect with the leaders of the opposition parties,” he said, citing the need for impartiality on the issue of potential foreign interference. According to Bloomberg, the exact date of his departure is unclear.

As we reported in February, Canada’s former justice minister and attorney general, Jody Wilson-Raybould, quit following allegations that several key Trudeau government figures pressured her to intervene to end a criminal prosecution against Montreal-based construction giant SNC. Wernick was among those she named in saying the prime minister’s office wanted her to pursue a negotiated settlement.

Wernick has since twice spoken to a committee of lawmakers investigating the case, and during that testimony both defended his actions on the SNC file and warned about the risk of foreign election interference, as “blame Putin” has become traditional Plan B plan for most politicians seeing their careers go up in flames.

“I’m deeply concerned about my country right now, its politics and where it’s headed. I worry about foreign interference in the upcoming election,” he said in his first appearance before the House of Commons justice committee, before repeating the warning a second time this month. “If that was seen as alarmist, so be it. I was pulling the alarm. We need a public debate about foreign interference.”

Because somehow foreign interference has something to do with Wenick’s alleged corruption.

Incidentally, as we wonder what the real reason is behind Wernick’s swift departure, we are confident we will know soon enough.

Anyway, back to the now former clerk, who is meant to be non-partisan in service of the government of the day, also criticized comments by a Conservative senator and praised one of Trudeau’s cabinet ministers.

Wernick’s testimony was criticized as overly cozy with the ruling Liberals. Murray Rankin, a New Democratic Party lawmaker, asked the clerk how lawmakers could “do anything but conclude that you have in fact crossed the line into partisan activity?” Green Party Leader Elizabeth May said he seemed “willing to interfere in partisan fashion for whoever is in power.”

Whatever Wernick’s true motives, he is the latest but not last in what will be a long line of cabinet departures as the SNC scandal exposes even more corruption in Trudeau’s cabinet (some have ironically pointed out that Canada’s “beloved” prime minister could be gone for actual corruption long before Trump). Trudeau had already lost a top political aide, Gerald Butts, to the scandal. A second minister, Jane Philpott, followed Wilson-Raybould in quitting cabinet.

Separately, on Monday, Trudeau appointed a former deputy prime minister in a Liberal government, Anne McLellan, as a special adviser to investigate some of the legal questions raised by the controversy. They include how governments should interact with the attorney general and whether that role should continue to be held by the justice minister.

As Bloomberg notes, the increasingly shaky Liberal government hasn’t ruled out helping SNC by ordering a deferred prosecution agreement in the corruption and bribery case, which centers around the company’s work in Moammar Qaddafi’s Libya. Doing so would allow the company to pay a fine and avoid any ban on receiving government contracts. That decision is up to the current attorney general, David Lametti; of course, such an action would only raise tensions amid speculation that the government is pushing for a specific political, and favorable for Trudeau, outcome.

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France To Ban Yellow Vest Protests In Neighborhoods With “Ultra” Radicals

Philippe added that he has asked the State Judicial Agent to “systematically seek the financial responsibility of troublemakers.”

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Via Zerohedge


France is cracking down on “yellow vest” protesters following a weekend of renewed violence – as the Macron administration announced on Monday that it would ban demonstration in several areas of france – including the Champs Elysees in Paris, if “ultra elements” are present, according to Interior Minister Edouard Philippe.

‘We will ban demonstrations if ultra elements’ are present, said Philippe, according to CNEWS.

The ban will apply to “neighborhoods that have been most affected as soon as we have knowledge of” the “ultras.”

“I am thinking of course the Champs-Elysees in Paris, the place Pey-Berland in Bordeaux, the Capitol Square in Toulouse”, Philippe added, where “we will proceed to the immediate dispersal of all groups.

Philippe added that he has asked the State Judicial Agent to “systematically seek the financial responsibility of troublemakers.”

Saturday marked a significant escalation in violence during the group’s 18th straight week of protests – which began as a revolt against a climate-change gas tax and expanded into a general anti-government movement.

As we noted on Sunday, the riots were so severe that French President Emmanuel Macron cut short a vacation at the La Mongie ski resort in the Hautes-Pyrénées following a three-day tour of East Africa which took him to Djibouti, Ethiopia and Kenya.

Macron said over Twitter that “strong decisions” were coming to prevent more violence.

Macron said some individuals — dubbed “black blocs” by French police forces — were taking advantage of the protests by the Yellow Vest grassroots movement to “damage the Republic, to break, to destroy.” Prime Minister Edouard Philippe said on Twitter that those who excused or encouraged such violence were complicit in it. –Bloomberg

Sounds like things are about to get a lot more violent in Gay Paree.

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The Destabilisation Of Algeria: The Influx Of New Refugees To Europe And A Threat To Its Energy Security

The destabilisation of Algeria will undoubtedly cause problems for Europe. 

The Duran

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Via Oriental Review:


The president of Algeria, 82-year-old Abdelaziz Bouteflika, who has been in power for almost 20 years, has declared that he will not be running for what would have been his fifth term. The announcement was made against the backdrop of widespread protests that have been rocking the country for days. Thus, the latest revolution in the Arab world has succeeded. The question is, what will come next?

Despite being laid to rest countless times, the Arab Spring has continued where it was least expected. Algeria has the same explosive cocktail as Tunisia, Egypt, Libya and Syria, of course: a young, rapidly growing urban population deprived of jobs and opportunities; corruption and poverty amid opulent wealth and luxury; uneasy relationships between ethnic groups (in Algeria’s case, between the Arabs and the Kabyle people, a Berber ethnic group); Islamist activity; and, finally, an unchanging authoritarian leader who rules with the same unchanging palette of ideas as every other dictatorship – “Who else if not me?”, “It will be worse without me”, “You don’t change horses in midstream” and so on. But judging by how calmly the country endured the turbulent events in nearby Tunisia and Libya, with only localised pockets of unrest, many experts were under the impression that the elderly Bouteflika would simply be able to retire by handing the presidency to whomever he wants – namely Prime Minister Ahmed Ouyahia, who has the unspoken title of “successor”. Something has gone wrong, however.

It is unclear why, on 10 February, Bouteflika announced that he would be taking part in the presidential election scheduled for April. It is even unclear how much say he had in this decision. In 2013, Bouteflika suffered a stroke. A year later he was re-elected amid myriad accusations of election fraud and stopped appearing in public. Until last Sunday, that is, when Bouteflika delivered an address to the nation in which he announced he had changed his mind and no longer wanted to run for re-election.

“There won’t be a fifth mandate and it was never on the table as far as I am concerned,” he said. “Given my state of health and age, my last duty towards the Algerian people was always contributing to the foundation of a new Republic.”

On Monday, the government, including Ahmed Ouyahia, resigned. A “cabinet of technocrats” is being put together in its place headed by the now former interior minister, Noureddine Bedoui, and the streets of the country’s capital are filled with cheering crowds.

The biggest potential powder keg for the situation in Algeria, of course, is the fact that the presidential election has been postponed indefinitely. Exactly when it will take place will become clear after the national conference tasked with drafting a new constitution. The presidential election and the voting on it has to take place at the same time.

So, for the time being there is political uncertainty: a president who has either resigned or hasn’t; an emerging government; and a people inspired by what seems to be a victory. There is also the bulldog fight going on behind the scenes at the highest levels of government about which little is known, but which has been hampered by the presence of the country’s unquestioned leader, Bouteflika.

President of Algeria Abdelaziz Bouteflika

It should be remembered, however, that, no matter what you think of him, the current Algerian leaderdid actually bring stability to the country. It was during his presidency that the so-called “Black Decade” – a civil war instigated by Islamists in 1991 – came to an end. After winning the 1999 presidential election, Bouteflika secured an amnesty for the militants and the wave of terror gradually subsided. At the beginning of his time in office, he pursued a fairly flexible policy, didn’t persecute his opponents as long as they didn’t resort to violent methods, and tried to make it so that rising energy prices had a positive impact on the well-being of the people and not just the ruling elite. The system began to stiffen in 2008, however, when a law was passed allowing the president to be re-elected an infinite number of times. This process has now gone so far that opponents of the regime are only going to be happy with serious, rather than cosmetic, changes, and this kind of attitude always spells danger for the future of a country.

If the situation in Algeria comes to bloodshed, then it is unlikely that other countries will stay on the sidelines. Europe will be forced to intervene, if only to prevent a new wave of refugees from Arab countries.

Meanwhile, the situation in Algeria remains tense. The president’s announcement that he will not run for a fifth term has not quelled the protests. The unrest of the people is now directed against the introduction of a transition period and the creation of a new government that they believe will contain all the same people who are running the country now. The protesters are demanding a regime change, although they are not formulating their position very well. What’s more, following Bouteflika’s decision not to run for re-election on 18 April, no one is ready – there are no other candidates, no one has carried out an election campaign and it would be virtually impossible to do so in the time remaining. It therefore seems that the different sides will now have to talk to each other.

A possible split in the Algerian elite could be dangerous. In fact, that’s why Bouteflika was put forward for president – he united them. The balance among the parties close to power is extremely fragile, but the feelings of unrest and discontent are strong. A number of organisations are taking part in the street protests, including various parties and NGOs, and the longer the protests continue, the more various forces will try to take advantage of them.

Prime Minister of Algeria Noureddine Bedoui

Algeria’s political parties and movements have been divided in their assessment of President Abdelaziz Bouteflika’s decisions. The National Liberation Front has supported the head of state, who “heeded the calls of the Algerian people”. In a statement, the ruling party said: “It allows politicians and members of civil society to take part in the construction of a new Algeria.” Abdelamajid Munasyra, the deputy leader of the moderate Islamist party Movement for the Society of Peace, said that Bouteflika “withdrew his candidacy from the presidential election but remained in power, which violates the constitution”. The Algerian newspaper Elkhabar quotes the politician as saying:

“The political opposition is waiting for the response of the people, whether these decisions will be accepted by the people. But if these steps are not taken, which is likely, then we will stand with the people.”

In a video statement, the head of the Union for Reform and Progress, Zubaidah Assul, called the president’s actions “a political manoeuvre and an attempt to avoid meeting the demands of the demonstrators”. The Algerian politician continued: “From what we have heard, it appears that the president has extended his term in office, and he has not given any indication of how long the transition period will last.” She also noted that the posts of prime minister and deputy prime minister have been filled by representatives of the “old regime”. At the same time, Assul believes that the people will quietly continue trying to oust “the entire regime from power”.

The dissatisfaction of Algerians is being spurred on by the unfavourable social and economic situation in the country. The protesters are demanding pro-Western reforms and they’re demanding changes in the country. According to unofficial sources, more than one million people took part in the protests in Algeria on 1 March.

The lack of a viable successor and the inability of the current elite to solve the economic crisis are contributing to the uncertainty of Algeria’s political future, something that the current regime’s main opponents – the Islamists – will inevitably try to take advantage of. The weakening of the vertical power structure and the continuing protests are creating a breeding ground for the resurrection of Islamist organisations. In particular, Al-Qaeda in the Islamic Maghreb recently published a talk entitled “Algeria…Getting Out From The Dark Tunnel”, which states that the organisation is ready to take advantage of the unrest when the time is right.

The destabilisation of Algeria will undoubtedly cause problems for Europe. Besides the inevitable influx of new refugees, Europe could also face a threat to its energy security, given that Algeria provides a third of the gas consumed in Europe and as much as half of the gas consumed in Spain. At the same time, the weakness of the current government during a possible civil conflict will be exacerbated by the situation in the bordering countries of Libya and Mali. ISIS jihadists have strong positions in both countries, while the lengthy and poorly controlled border with Mali and Libya risks the spread of Islamic fundamentalism into the vast territories of north and north-west Africa.

The US will also not fail to take advantage of the complex situation in Algeria. Under the pretext of fighting terrorism, Washington will easily be able to implement plans to penetrate and consolidate its positions in the Sahel-Sahara Region. A large-scale military presence will also allow the US to secure its interests in reorienting Algeria’s energy policy towards the development of shale gas and implementing its strategic objective of organising the supply of this raw material to Europe.

Whatever happens, Algeria is facing several serious challenges at once and its ability to respond is being severely hampered by a lack of any notable potential leaders either within government or within the ranks of the opposition.

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