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Russia, Iran, Syria warn the United States against launching new strikes on Syria

Russian Foreign Minister Sergei Lavrov said the circumstances surrounding the chemical attack in the Syrian town of Khan Sheikhoun that killed more than 80 people were still not clear

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U.S. Navy guided-missile destroyer USS Porter (DDG 78) conducts strike operations while in the Mediterranean Sea which U.S. Defense Department said was a part of cruise missile strike against Syria, VOA

Syria, April 15, 2017: Russia, Syria and Iran have warned the United States against launching new strikes on Syria and called for an international investigation into the chemical weapons attack in Syria.

The foreign ministers from Russia, Syria and Iran, meeting Friday in Moscow, said any further unilateral action by the U.S. in Syria would be met with “grave consequences” and pose a danger to the entire world.

The U.S. fired 59 Tomahawk missiles at Syria’s al-Shayrat air base last week in response to a chemical weapons attack in Syria days earlier.

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Russian Foreign Minister Sergei Lavrov said the circumstances surrounding the chemical attack in the Syrian town of Khan Sheikhoun that killed more than 80 people were still not clear.

He criticized the world’s chemical weapons watchdog, the Organization for the Prohibition of Chemical Weapons, for not sending experts to the site of the attack to investigate.

“We consider it unacceptable to analyze events from a distance,” he said. Lavrov said the investigation should also be widened to include experts from many nations.

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Russia has rejected accusations from Western countries that Syrian President Bashar al-Assad was behind the attack. Russia has alleged that the victims were killed when Syrian warplanes hit a rebel chemical arsenal. The U.S. accuses Assad of deliberately launching the attack.

“The use of chemical weapons as a pretext for violation of the sovereignty and territorial integrity of an independent state — a member of the United Nations — is a very dangerous activity,” Iranian Foreign Minister Mohammad Javad Zarif said. “It is essential to prevent such acts as the events in Khan Sheikhoun in [the] future.”

Lavrov said the U.S. missile strike on Syria was Washington seeking “excuses for regime change.” He added, “These attempts will not succeed, this will not happen.”

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Lavrov met Friday with his counterparts from Syria and Iran after U.S. Secretary of State Rex Tillerson visited Moscow earlier this week. Syrian Foreign Minister Walid Moallem said Friday’s meeting sent a “strong message” to Washington.

Russia and Iran are strong allies of Assad’s government and have backed the president during Syria’s six-year civil war. (VOA)

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Russia’s Alternative to Western Credit Card Debuts in London

Russia will next year diversify its foreign currency holdings in its National Wealth Fund

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Employees demonstrating a payment card
Employees speak while demonstrating a payment card during a tour at a branch of VTB bank in Moscow, Russia. VOA

A Russian backed bank payment card, introduced after Western sanctions upended Russia’s financial system five years ago and prompted Visa and Master card to deny electronic services to some of the country’s leading banks, is set for its European debut on London Wednesday, when a pilot project will be launched in collaboration with the Dutch global payment company PayXpert.

Moscow authorities hoped to get the MIR card accepted eventually in foreign markets, but progress has been slow outside Russia for the MIR payment system,  which operates outside of Western-controlled international financial systems such as Swift, which banks use to transfer money.

The pilot project with PayXpert “will lay the foundation for new promising trends in the foreign expansion of Russian payment cards,”  according to Vladimir Komlev, the head of Russia’s National Card Payment System, which operates the MIR system.

De-dollarization efforts

The effort is seen by analysts as part of the  Kremlin bid to de-dollarize the Russian economy to lessen the sting of Western sanctions. A Russian Finance Ministry official this month told Reuters that Russia will next year diversify its foreign currency holdings  in its National Wealth Fund, which supports Russia’s public pension system, aiming to lower the share of dollars in the fund’s reserves.

Dmitry Dolgin of the Dutch banking group ING said in  a report this month that de-dollarization efforts are now obvious across most sectors, including local business loans and bank-held international assets, although he said the dollar’s role  has actually increased in company and household savings and cash assets, partly because dollar interest rates have been higher than those offered for euros.

Credit Cards offers unique features
American Express, Visa and Master Card is displayed in this image. Each Credit Card offers unique features and benefits, along with unmatched privileges. Pixabay

U.S. authorities have been able advance sanctions by targeting companies that use dollars, and the establishment of electronic payment systems not tied to the dollar or largely controlled by U.S. businesses is one way for the Kremlin to reduce the impact of the West’s serial punishment of Moscow. Washington and the European Union have imposed a wave of sanctions since 2014 to punish Russia for the 2014 annexation of Ukraine’s Crimean peninsula, alleged meddling in the 2016 U.S. elections, and the poisoning of a defected Russian spy in England.

Komlev told Reuters this year that “In the next three years we want MIR cards to be operational in countries where Russians are used to traveling.” He projected MIR cards would be operational at some banks in at least a dozen countries by the end of this year. Turkish banks started to conduct transactions this year with MIR, which means both “peace” and “world” in Russian.

MIR was launched initially as a national payment system, with the first cards issued in December 2015. Russia’s leading bank, state-owned Sberbank, started issuing them in October 2016, and by the end of last year more than 70 million MIR-based cards had been issued by 64 Russian banks. The Kremlin has mandated that state welfare and pension payments must be processed through the system by next year, along with salaries paid to civil servants.

The card has a long way to go before it rivals VISA our Mastercard internationally. It is not accepted by international shopping platforms or major online booking services for airlines and hotels, although APEXX Fintech, a British start-up global payment company, said Thursday it would now start working with the MIR system. Among smartphone applications only Samsung has concluded an agreement with the MIR system.

Meanwhile, de-dollarization has been moving quickly. Russia’s Central Bank has currency swap deals in place with Iran, China and Turkey, allowing direct trade to be conducted in local currencies instead of U.S. dollars. Russia reportedly lost $7.7 billion in its bid to reduce dollars held in its reserves. Some of the dollars were turned into gold, and since January the bank has purchased 96.4 metric tons of gold.

People stand in line as they wait to enter the bank with their card
People stand in line as they wait to enter a branch of Sberbank of Russia bank. VOA

Alexei Zabotkin, head of the Russian Central Bank’s monetary policy department, has conceded that it would be impossible to completely empty the country’s foreign exchange reserves of dollars, as this would be  “fraught with excessive risks.” According to central bank data the  National Wealth Fund has $45.5 billion, 39.17 billion euros and 7.67 billion British pounds.

In August, the state-controlled Rosneft oil giant announced it would stop using the U.S. dollar for its export contracts.

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Nonetheless, analysts say there are limits on how far Russia can de-dollarize – the ruble is highly volatile and remains unattractive for investors and de-dollarization brings additional and sometimes prohibitive trading costs.

European regulators will be watching the London project closely. EU officials have been sympathetic about Russia’s de-dollarization bid, suspecting that as a spin-off the euro will be boosted as an international currency. In June the European Commission concluded that “the euro clearly stands out as the only candidate that has all the necessary attributes of a global currency that market participants could use as an alternative to the U.S. dollar.” (VOA)