By John Helmer, Moscow
At the start of April President Vladimir Putin believed he could postpone Russia’s strategic and battlefield responses to the state of war which the US is escalating. He was to be disappointed.
On April 6, the US Treasury announced it is putting the state aluminium monopoly United Company Rusal out of business, not only in the US but worldwide. Not since July 26, 1941, when President Franklin Roosevelt froze Japanese assets in the US and prohibited all US trade with Japan, especially metals and oil, as well as all US dollar transactions, has the American state attempted such a thing against a rival Great Power. Roosevelt calculated it was one deterrent step short of US war with Japan. Everybody understands now that miscalculation led to Japan’s decision to make its preemptive strike against the US Navy at Pearl Harbor, five months later.
There is another, earlier precedent for the US Treasury’s act of war against Russia. That was on November 21, 1806, when Napoleon issued his Berlin Decree. That forbade the export of British goods to Europe or other states controlled by the French military, or the imports of goods on which Britain depended from its empire. Too weak to defeat the British Navy or invade the British islands, Napoleon opted for economic sanctions, retaliating for the trade blockade imposed by the British Navy around the French coastline, starting in May of that year. “It being right,” Napoleon had declared as the justification for his blockade, “to oppose to an enemy the same arms she makes use of, to combat as she does, when all ideas of justice and every liberal sentiment (the result of civilization among men) are discarded.” The British had extended war beyond military operations, Napoleon added in his decree: “it cannot be extended to any private property whatever, nor to persons who are not military, and until the right of blockade be restrained to fortified places, actually invested by competent forces.” The Continental Blockade, thus launched, lasted until Napoleon’s first abdication in April 1814.
On the fourteenth of this month the US launched its assault on Syria, agreeing in advance with the Russian General Staff to avoid Russian forces and Russian-defended targets. That attack was a military failure. But with continuing Israeli operations from the air against Syrian, Iranian and Russian targets, Putin has been requested by the General Staff and Defence Minister Sergei Shoigu to authorize the deployment of Russian S-300 missile defences to deter and destroy fresh attacks. Putin has been delaying this decision.
Then on April 25 US forces broke into the Russian consulate at Seattle. This was the second such attack by the US on Russian diplomatic territory in the US; the earlier one was on September 2, 2017, when the Russian consulate in San Francisco and simultaneously, Russian trade mission offices in Washington and New York.
The Russian Foreign Ministry called the US actions “illegal invasion”, and violations of the Vienna Convention, but not acts of war.
In the past four weeks Putin has called his Security Council into session just twice. The first was on April 6, to discuss, according to the Kremlin communique, border control plans. The second Council meeting took place on April 19, which the Kremlin reported as discussing “the recent Western airstrikes…[and] measures to prevent floods and wildfires.”
Putin took several important decisions besides, but he did it out of sight at the Novo-Ogaryovo dacha, and for his own reasons kept them secret.
On Rusal it is now clear the President told his current spokesman, Dmitry Peskov, to call the attack on the company “illegal”, but not an act of war. Putin refused to agree to nationalization of Rusal when he met with one of the advocates of this option, the leader of Russia’s trade unions, Mikhail Shmakov.
At Novo-Ogaryovo on April 13, the President met with Mikhail Shmakov, Chairman of the Russian Federation of Independent Trade Unions. Source: http://en.kremlin.ru/events/president/news/57251
Instead, without revealing his contacts with Oleg Deripaska, Putin decided to delegate to him the initiative for responding to the April 6 sanctions. This was also confirmed with Finance Minister Anton Siluanov, whom Putin called to the dacha on April 17, along with the Kremlin economic adviser, the minister for economic development, and the chairman of the Central Bank.
At Novo-Ogaryovo on April 17, Putin met with presidential economic adviser Andrei Belousov (2nd left), Finance Minister Anton Siluanov (1stleft) , Economic Development Minister Maxim Oreshkin (2nd from right) and Central Bank Governor Elvira Nabiullina (right). Source: http://en.kremlin.ru/events/president/news/57269
Siluanov was told to meet US Treasury Secretary Stephen Mnuchin in Washington and see what shareholding arrangement the US Government will accept for Deripaska and his shareholding associates in the Yeltsin family to keep control of Rusal; and at the same time release Rusal itself from the global trade embargo. For details of their negotiation on April 20, read this. For the shareholdings of the Yeltsin family in Deripaska’s stake, look at this. What has been concealed of the Rusal shareholding arrangements and beneficiaries can be followed in this backfile.
Siluanov returned from Washington and reported back to Deripaska. On April 26 Deripaska filed an application to the Office of Foreign Assets Control (OFAC) at the Treasury for extension of the time to reorganize; Mnuchin had already announcedthis three days earlier, on April 23. Mnuchin had told Siluanov the target of the sanction was not Rusal, but its “entanglement with Oleg Deripaska”, as the Treasury press release called it. They have yet to agree on what Mnuchin will accept as disentanglement.
Deripaska then announced through EN+ that he has “agreed in principle [sic]… to reduce his shareholding in the Company to below 50%. In addition, in conjunction with efforts to engage with OFAC as described above, Mr. Deripaska has agreed… that he will resign from the Board and consent to the appointment of certain new Directors such that the Board will comprise a majority of new independent [sic] directors.”
Deripaska persuaded the Financial Times to headline the move: “Deripaska agrees to relinquish control of sanction-hit Rusal”. Noone in Moscow, including the President, believes this.
Silently, Putin has decided to protect Deripaska; not to call the US attack on Rusal an act of war; and to test the Americans with an offer of a limited armistice. International bankers close to Russian business believe it is a Russian illusion that an armistice with the US can be anything but temporary; pursuing it is a miscalculation of US intentions, the sources add. They warn that new attacks will come. “The oligarchs,” the sources say, “will be put out of business by the Americans unless they choose – either return to Russia and face a very different future from the one they have enjoyed until now; or leave Russia, join the American side; lose what they own in Russia to the state. There is no middle position. That’s what the US economic strategy means. There’s no modern precedent for an attack like this. Putin isn’t prepared.”
By deciding against nationalization of Rusal, one of the international sources claims, Putin has retreated from the Napoleon precedent on the economic front. In Syria, military sources in Moscow believe, Putin has opted for one step short of extending Russian missile defence beyond the Russian air and naval bases to cover the territory now controlled by the Bashar al-Assad government.
This was discussed by Putin with General Staff chief Valery Gerasimov and Defence Minister Sergei Shoigu on April 20. The Russian military, they told the President, want the go-ahead to deploy S-300 missile batteries to cover Syrian and Iranian forces against US and Israeli attack from the air. They believe Israeli threats to attack the S-300 batteries as soon as they are operational are a bluff which Russia must call if Russia’s positions in Syria, and Iran itself, are not to come under subsequent attack from the American-Israeli combination. Testing the threat in Syria, they argue, is the less threatening, less costly option than encouraging the Americans and Israelis to prepare their offensive against Iran. Putin won’t agree.
At Novo-Ogaryovo on April 20, Putin greets General Valery Gerasimov. Source: http://en.kremlin.ru/events/president/news/57311
To respond to Putin’s reluctance, the General Staff and the Defence Ministry have devised a step short of the S-300, but with potentially enough defensive power to intercept or deter American and Israeli air attacks. This is the deployment of more Russian electronic warfare systems with the capacity to jam the surveillance, targeting, fire control and command signals on which the attackers rely. It is the Samson Haircut option – deprive the giant of control of his firepower, blind him.
A publication on April 26 in Vzglyad, the Moscow online analytical website, reveals with open sources, including American ones, how this option would work. This is an unofficial translation into English.
Source: https://vz.ru/politics/2018/4/26/919811.html
