Russia starts preparing for lifting sanctions - Reuters
Photo: Russia is preparing to lift sanctions (Getty Images)
Russia is asking companies to suggest which sanctions Moscow should try to lift in talks with Washington. Restrictions on dollar payments are the most painful, Reuters reports.
Two sources in Russian industry said that the Ministry of Industry and Trade is asking companies to indicate which sanctions should be urgently lifted.
One person said that the Ministry is circulating a form for companies to fill out, asking which sanctions have had the greatest impact on their business and identifying the most sensitive restrictions.
The people interviewed by Reuters said that payment issues were the most burdensome, although three sources also emphasized energy sanctions, particularly restrictions on Russia's oil tanker fleet.
Access to the dollar
Major Russian banks were banned from using the SWIFT global payment network shortly after Russia invaded Ukraine in February 2022. Without access to the dollar and euro markets, Russian companies were forced to seek workarounds in other currencies and through third countries.
According to three sources, the lifting of these restrictions and sanctions on banks will be a huge boost for Russia, although one of them noted that it is unrealistic to hope for such a favorable outcome soon.
Andrei Melashchenko, an analyst at Renaissance Capital, suggested that it is likely that Europe will not follow any of the US steps. The lifting of US sanctions will not lead to the automatic lifting of European sanctions or the full restoration of the payment infrastructure, he said.
According to the two sources, the most likely outcome in the short term is a reduction in the use of secondary sanctions targeting companies in third countries, which would allow Russia to circumvent restrictions.
The lack of clarity as to whether secondary sanctions will be applied has resulted in few banks in China being willing to risk possible retaliation, leading to delays in payments and increasingly complex procedures to prevent delays.
Source said that workarounds are expensive and slow, and they can get equipment and technology through China or the Emirates, but he doesn't know how to pay for it.
Another individual said his business suffered when China tightened payments last August. For Russian businesses in general, billions of dollars in revenue cannot be settled for goods already delivered, this individual said.
Relaxing enforcement of secondary sanctions, which are largely dependent on the United States, could improve acceptance of Russian Mir payment cards, an alternative to Visa and Mastercard.
Other sanctions
A source in the industrial sector said that finding ice-class tankers is another major problem caused by payment issues.
Another source said that the sanctions imposed at the end of the Joe Biden administration's term and targeting Russian shadow fleet vessels, major oil exploration companies, and networks trading Russian oil have proved to be very painful.
Most of the approximately $300 billion of Russia's sovereign assets frozen by the West are located in Europe, whose leaders are taking a tougher stance against Moscow than the United States.
US Secretary of State Marco Rubio said that the issue of European sanctions will be on the table, not to mention what will happen to the frozen assets. He adds the Europeans will have to make some decision on what they are going to do with these sanctions.
US President Donald Trump has threatened to tighten sanctions against Moscow if it refuses to negotiate. However, sanctions may be eased if Moscow agrees to a ceasefire.
According to Reuters, Russia has presented the US with a list of demands for an agreement to end the war against Ukraine and reset relations with Washington.
