Russia builds on G20 success in push to shed sanctions

Russia builds on G20 success in push to shed sanctions
President Vladimir Putin held numerous bilateral meetings at the G20.
By Nick Allen September 9, 2016

Following President Vladimir Putin's spotlight attendance at the G20 summit in China amid a lackluster showing by his former G8 peers, Moscow is redoubling efforts to have Western sanctions removed in 2017. Ostracising us didn't work so let's drop the sanctions and get on with business, is the position being pushed by a vocal phalanx of officials.

"The result [of the summit] is an absolutely obvious end to any attempts to isolate Russia," Alexei Pushkov, chairman of the State Duma's international committee, told the Life Zvuk radio station. "As compared with the previous Group of Twenty summit in Brisbane [in 2014], this one is obviously a demonstration of the success of our foreign policy. And of Vladimir Putin in particular," he said.

According to the lawmaker, the event in Hangzhou on September 4-5 was an accurate reading of "the temperature of global politics" and proof of Russia's renewed international clout.

It is a viewpoint taken by foreign analysts too: "Presidents Xi Jinping and Vladimir Putin cleaned out," Anders Aslund, senior fellow at the Atlantic Council, commented in a note. "This was Putin’s homecoming with 11 bilaterals [meetings with world leaders] out of 18 possible. The West got nothing but an empty communique."

"In Brisbane in 2014, [Putin] had been the outcast because of his military aggression against Ukraine," Aslund wrote. "Hangzhou marked his homecoming, where he broke his international isolation without changing his behaviour."

Before the summit, Putin did one-on-one meetings in Vladivostok with Japan’s Prime Minister Shinzo Abe and South Korea’s President Park Geun-hye. In Hangzhou, he stormed the stage with bilaterals with the leaders of China, Turkey, Saudi Arabia, Germany, France, Britain, the US, Egypt and Argentina. "Apparently, Putin was the most popular politician in Hangzhou, and the many photos show that he loved every minute of it," added Aslund. Moreover, "As chairman, Xi took the privilege to steamroll his poor guests, claiming that the G-20 had overtaken the G-7 of the democratic industrial states."

A week earlier, the Duma's Pushkov primed the G20 summit by attacking the G7 as irrelevant now, saying Russia's expulsion from the Group of Eight leading industrial countries in 2014 over its annexation of Crimea rendered the old group little more a "club of friends of the United States". As a result, Russia is no longer taking part in [the G7's] work and is showing no great interest in resuming it in future," he said.

With lifting Western sanctions now the main goal for Moscow, voices in the business lobby are also turning up the volume. Neither the EU nor the US or Russia are interested in further strengthening of sanctions because it will lead to irreversible consequences, Putin's business ombudsman Boris Titov told journalists on September 7.

"I think that in this situation everything stopped on the line no one will cross to go further, because it will lead to such serious, and not only economic, consequences that it will be impossible to go back. Everyone understands it and does not want it to happen," TASS quoted Titov as saying.

Closing loopholes

On the same day, however, the US enlarged its list of sanctioned Russian entities, adding 11 Russian companies to the list of those sanctioned over Moscow’s annexation of Crimea and support for separatists in East Ukraine, but playing down the significance of the move.

The latest measures are meant to strengthen existing sanctions and shouldn’t be viewed as intensified economic pressure against the Russian government, State Department deputy spokesman Mark Toner said. “We are constantly working to close loopholes,” he said, adding the steps were not related to talks between Putin and Barack Obama at the G20 summit. The EU on September 8 also reportedly moved to extend some parts of its sanctions package.

Kremlin spokesman Dmitry Peskov expressed regret the sanctions were expanded in the days following the leaders’ meeting. “This is seriously discordant with the themes of possible cooperation in sensitive spheres that were discussed at the meeting of both presidents,” Peskov said.

Meanwhile, Russian officials continue to work at a perceived chink in Europe's armour, actively wooing the Parliamentary Assembly of the Council of Europe (PACE), which has spoken in favour of lifting the sanctions and fully readmitting Russia to the body. This was met with dismay by officials in Ukraine, which has constantly urged Western countries to toughen and not relax their stance towards Russia.

“Very complicated, and in our view, very non-constructive processes are taking place,” Ukrainian envoy to the Council of Europe PACE Dmytro Kuleba told the news site. “Their goal is to return the Russian delegation to the PACE session hall without having fulfilled the conditions of the resolutions that the very assembly approved.”

Analysts also note Russia's steady string of successes in eroding the EU sanctions regime, which will come up for review for extension in December.

"The Russians are actively lobbying Western legislatures and executive bodies at all levels to remove the sanctions, which is their top geopolitical priority at the moment," wrote Zenon Zawada of the Concorde Capital brokerage in Kyiv. "So far they have been successful in the Netherlands, which rejected the Ukraine-EU Association Agreement, and are particularly active in France. The US presidential elections will prove pivotal in this matter. If Donald Trump is elected in November, we see the tide turning in favour of Russia.”

Others say the sanctions issue can still turn sharply against Russia.

"[Russian] assumptions that Western sanctions resolve would inevitably tail off post the US elections, and into the EU council meeting in December 2016, the next key date for sanctions rollovers, seem not to be playing out," commented Nomura International strategist Tim Ash. "The German and UK positions remain strong, France seems 'pliable' to the latter two and the US position, while a Hillary [Clinton] presidency would suggest perhaps even a more hawkish US line."