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Russia Tries to Rein in Chemical Weapons Watchdog

Russia presented a draft resolution accusing OPCW of politicization just before a new probe begins of chemical attacks in Syria

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russia, tries, rein, chem, weapons
FILE - Rubble lines a street in Douma, the site of a suspected chemical weapons attack, near Damascus, Syria, April 16, 2018. VOA

Russia on Thursday presented a draft resolution to the Security Council accusing the UN’s chemical weapons watchdog, the OPCW, of politicization just before a new probe begins of chemical attacks in Syria.

The draft text, seen by AFP, states that the Council — where Russia holds veto power — is the only international body that can impose measures on countries that violate the Chemical Weapons Convention.

The Organization for the Prohibition of Chemical Weapons (OPCW) agreed last year to set up a mechanism that would identify the perpetrators of chemical attacks, a move bitterly opposed by Russia and Syria.

Russian proposal

The proposed resolution notes “with concern the continuing politicization of the work of the OPCW and growing deviation from the established practice of taking consensus-based decisions.”

russia, tries, rein, chem, weapons
FILE – In this April 16, 2018, file photo, people stand in front of damaged buildings, in the town of Douma, the site of a suspected chemical weapons attack, near Damascus, Syria. VOA

UN diplomats said the Russian proposal was aimed at keeping the OPCW in check as it pushes ahead with the investigation to uncover those behind chemical weapons use in Syria.

“What it’s really about of course is the Russians trying to strangle OPCW,” said a diplomat, who spoke on condition of anonymity.

The West pushed through the new blaming powers after OPCW reports confirmed chemical weapons use in Syria, as well as a nerve agent attack on Russian former double agent Sergei Skripal in the English city of Salisbury in March 2018.

“The Russian rationale is to weaken the OPCW and the Chemical Weapons Convention, with an eye on Syria but also Salisbury,” said another diplomat.

Time frame for resolution

It remained unclear when the draft resolution would be put to a vote. UN resolutions require nine votes and no vetoes to be adopted in the council.

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The proposed resolution is backed by China, diplomats said.

“This looks like a desperate bid to prevent further confirmation that the Syrian government, like ISIS, repeatedly used chemical weapons in violation of international law,” said Louis Charbonneau, UN director for Human Rights Watch.

The Russian mission to the United Nations did not immediately respond to an AFP request for comment.

OPCW chief Fernando Arias said in March that the new investigation of chemical attacks in Syria would begin in the coming weeks.

russia, tries, rein, chem, weapons
Russia on Thursday presented a draft resolution to the Security Council accusing the UN’s chemical weapons watchdog, the OPCW. Wikimedia Commons

Western countries are calling on the team to start work on identifying the culprits behind a deadly attack in the Syrian town of Douma in April 2018.

Missile strike

The United States, Britain and France launched a one-off missile strike on Syria in April last year in response to the use of chemical weapons in Douma.

The OPCW said in a report that chlorine was likely used in that attack, which killed more than 40 people, but Russia and Syria have rejected those findings.

Douma attack

The report did not specify who was behind the Douma attack as it was not in the OPCW’s mandate at the time.

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In 2015, the council unanimously agreed to establish the OPCW-UN joint investigative mechanism (JIM) to identify those responsible for chemical attacks in Syria.

But in late 2017, Russia vetoed a bid to renew the mandate of the JIM after the panel blamed the Syrian government for chlorine attacks and for using sarin in a deadly assault on the town of Khan Sheikhun that same year.

Russia has used its veto 12 times at the council to shield its Syrian ally from international action. (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)