` Committee of the State Duma for the ` Budget and Taxes ‘ Recommends Writing-Off `Ten Billion’ of DPRK’s Debts ‘

#AceFinanceNews – Moscow – March 19, 23:14 – Committee of the State Duma for the budget and taxes has issued a recommendation to the MPs to ratify an agreement between the Russian government and the Democratic People’s Republic of Korea on settling the DPRK’s debt to Russia on the Soviet-era loans issued to that country.

The document that was submitted for ratification by the Russian government features the agreements reached at the negotiations that lasted almost twenty years and took account of the special features of financial, political and economic relations between Russia and North Korea.

Debt settlement embraces all the categories of reciprocal financial claims and obligations of the former USSR and the DPRK, with the precise parameters registered on the date when the agreement is signed.
Overall amount of the DPRK’s financial obligations to Russia stood at an equivalent of $ 10.96 billion as of September 17, 2012.

“This amount is rather conventional in many ways – not only because of the exchange rate but also due to the interest rates accumulated over a huge period or, in other words, a non-return of the loans because many of them were issued in the 1980’s,” Sergei Storchak, a deputy minister of finance said at the session.

“We applied a standard pattern in which we write off 90% of the debts amount and 10% is left over,” he said. “We agreed to utilize this 10% for financing the joint projects implemented on the North Korean territory.”

There projects are related to the energy sector, healthcare, and the country’s foodstuff security.

“Frankly speaking, we hope we’ll be able to attain agreement in the course of future joint work on allotting plots of land for construction of a gas pipeline on the DPRK territory,” Storchak said adding that Russia’s major producer and exporter of natural gas, OAO Gazprom, continues eyeing a possible integration in the Korean market of gas.

For this purpose, it will need some land acquisitions and “a part of the debt can be utilized for this purpose,” Storchak said.

Russian government officials say settlement of debts on the loans issued by the former USSR with the observance of conditions coordinated with Pyongyang pursues three objectives.

In the first place, it removes the problem of North Korea’s outstanding debt to the Russian Federation that was an irritating factor for bilateral relations for quite some time.

Secondly, the agreements that have been reached enable Russia to exert noticeable influence on the DPRK’s social and economic development through projects in healthcare, education, and the energy sector, since Russia will have a say in the decisions on their financing.

Thirdly, owing to the presence of big enough debt claims, Russia will have an opportunity to take part in multilateral talks on settling the North Korean debts in the format of the Paris Club of Sovereign Debtors and to influence the terms of debt repayments in Pyongyang’s interests.

TASS – Russian Media News –

#AFN2014

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`In Terms of Billions of Dollars, Trade is Higher between Russia and the EU, but the US remains Europe’s Biggest Export Market’

#AceFinanceNews – Russia will switch to other trade partners if economic sanctions are imposed by the US and the European Union, the Russian President‘s Press Secretary Dmitry Peskov has said.

“If one economic partner on the one side of the globe impose sanctions, we will pay attention to new partners from the globe’s other side. The world is not monopolar, we will concentrate on other economic partners,” RIA news quotes Peskov.

Trade

In terms of billions of dollars, trade is higher between Russia and the EU, but the US remains Europe’s biggest export market.

Net trade between Russia and the US was $38.1 billion in 2013, according to US Chamber of Commerce data. The US exported $11.26 billion to Russia, and imported $26.96 billion worth of goods.

Russia exports more than $19 billion of oil and petroleum products to the United States, as well as $1 billion in fertilizer products, according to Chamber of Commerce data.

“Is Russia going to be cut off from the world? That is very unlikely given what Russia provides to the world, which are oil, gas, raw materials,” Alexis Rodzianko, president of the American Chamber of Commerce in Russia told Reuters.

Russia is very dependent on trade with the EU, as member states account for about 50 percent of total Russian imports and exports. In 2012, trade between the two neighbors reached €123 billion.

One of Russia’s most valuable exports to Europe is something factories and households run on every day: natural gas. Europe imports one-third of its natural gas from Russia, with Germany being the biggest client importing nearly 30 billion euro annually. In 2012, 75 percent of all European imports from Russia were energy.

Many countries in Europe have strategic partnerships with Russia’s state-owned gas giants, Rosneft and Gazprom.

According to Eurostat data, Russia accounts for 7 percent of total imports and 12 percent of total exports in the 28 European Union bloc, making it the regions third most important trading partner, behind the USA and China.

US companies with big Russia presence

Several of America’ biggest companies- Boeing, Cargill, Ford, General Motors, ExxonMobil, to name a few- all have a huge presence in the Russian market.

Boeing’s investment in Russia is deep, as the aerospace carrier sources a considerable amount of steel, titanium, and aircraft parts from Russian companies. Boeing receives about 35 percent of its titanium from state-owned, Rostec. In 2013, Boeing’s deliveries to Russian carriers were valued at $2.1 billion, and the company plans to spend $27 billion in Russia, Bloomberg reports.

“We are watching developments closely to determine what impact, if any, there may be to our ongoing business and partnerships in the region,” Doug Alder, a spokesman for Chicago-based Boeing, told Bloomberg by email.

Last year, Russia was a $11.2 billion market for the US, with heavy trade in automobiles and aircrafts, according to Commerce Department data.

US automakers have a high exposure to Russian markets, so are closely watching US economic actions against Russia. Ford has sold over 1 million automobiles in Russia, and in 2013, sold 105,000 cars. GM, which has a 9 percent market share, sold 258,000. Both companies have shifted production plants from Europe to Russia, which is set to become Europe’s biggest carmarket by 2016.

ExxonMobil has partnered with Rosneft in exploring the Bazhenov oil field in Western Siberia, a deal that could be worth up to $500 billion. ExxonMobil is planning to build a $15 billion LNG terminal project in the Bazhenov field, and also has joint venture projects set up to explore Black Sea reserves.

Senator Chris Murphy, chairman of the Senate’s subcommittee on Europe, said the sanctions could be extended to Russia’s banks. Russia’s two largest state banks are Sberbank, Europe’s third largest, and VTB. Both banks have a strong industry presence in London, which has indicated it isn’t moving towards the sanctions. A leaked document from Downing Street shows that the UK government doesn’t plan to follow America-led asset freezes or trade restrictions, but are mulling over visa restrictions and travel bans on key Russian politicians.

#ANS2014 

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#AceFinanceNews Moscow March 19 The Council of IMF…

#AceFinanceNews – Moscow – March 19. The Council of IMF and World Bank Governors and a meeting of the G20 financial ministers and central bank governors will be held in Washington on April 11-13.

Storchak cited the financial crisis in Greece, which was discussed within the G20 in terms of its influence on financial stability in general.

Ukraine will not be in the focus of the G20 financial meeting in Washington in April, Russian Deputy Finance Minister Sergei Storchak said “We believe that the G20 remains a club for discussing and preparing decisions on economic issues and financial markets. This is our position,” he said. He also noted that an IMF loan to Ukraine would not be on the agenda of the Washington meeting. “The IMF has a delegation in Kiev, the delegation will return and propose a program,” Storchak said, adding that the decision to issue an IMF loan to Ukraine was in the jurisdiction of the IMF governors. #AFN2014

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` European Union had not passed `Economic Sanction’s ‘ against Russia ‘

#AceFinanceNews – Brussels – March 19 – Pia Ahrenkilde Hansen, spokesperson for the European Commission, said on Wednesday that the European Union had not passed a decision on economic sanctions against Russia.

#AFN2014

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` Crimea’s Pensioner’s get their `Pension’s ‘ raise to resident’s of `Russian Federation’

#AceFinanceNews – Russian President Vladimir Putin has instructed Labour and Social Protection Minister Maksim Topilin to raise pensions of Crimea’s residents to the Russian level.

“All citizens of Russia should be put in equal conditions,” he said on Wednesday.
At the moment, Crimea’s pensions are two times lower. There are 677,000 pensioners in Crimea and Sevastopol.

On Tuesday, Russia signed the agreement on the accession of the Republic of Crimea and Sevastopol.

#AFN2014

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#AceFinanceNews Moscow March 19 Transition of banks operating…

#AceFinanceNews – Moscow – March 19 – Transition of banks operating in Crimea from the payment system of the National Bank of Ukraine to that of the Central Bank of Russia will be not difficult, although Russia has had no such precedents before, former Central Bank of Russia deputy chairman Konstantin Korishchenko told Itar-Tass on Wednesday.

Transition of Crimea’s banks under control of the Russian regulator will proceed painlessly, as “the system of correspondent relations exists between banks and any payments can be carried out within this system for a rather long time,” he said, adding that there would be no difficulties with personnel training.

Moreover, the transition process would create no reasons for curtailing business of certain banks, he said. #ANS2014

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Taiwanese Students protesting ` Trade Deal ‘ with `China ` storm the Legislative Chamber ‘

#AceFinanceNews – About 200 Taiwanese students have stormed the legislative chamber late Tuesday to protest a trade deal with China, which gives the country too much economic influence over its neighbour, Reuters reports.

They were met with police resistance inside, but stood their ground.

The trade deal was initially reviewed by Taiwan’s Nationalist Party without addressing opposition concerns about the country’s economy.

Since the end of the Chinese civil war in 1949, Taiwan’s nationalist government has escaped Chinese Communists to hold dominion over its own land.

China, however, has never formally turned back on its attitude of treating Taiwan as a renegade province, and tactics like military force for restoring ownership have not officially been ruled out.

The two have held their first direct talks in February, widely seen as a progressive step towards diplomacy that goes beyond mere trade relations.

#AFN2014

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