Tag: Sanctions

Who blew up Nord Stream?

Press play to listen to this article

Voiced by artificial intelligence.

Nearly six months on from the subsea gas pipeline explosions, which sent geopolitical shockwaves around the world in September, there is still no conclusive answer to the question of who blew up Nord Stream.

Some were quick to place the blame squarely at Russia’s door — citing its record of hybrid warfare and a possible motive of intimidation, in the midst of a bitter economic war with Europe over gas supply.

But half a year has passed without any firm evidence for this — or any other explanation — being produced by the ongoing investigations of authorities in three European countries.

Since the day of the attack, four states — Russia, the U.S., Ukraine and the U.K. — have been publicly blamed for the explosions, with varying degrees of evidence.

Still, some things are known for sure.

As was widely assumed within hours of the blast, the explosions were an act of deliberate sabotage. One of the three investigations, led by Sweden’s Prosecution Authority, confirmed in November that residues of explosives and several “foreign objects” were found at the “crime scene” on the seabed, around 100 meters below the surface of the Baltic Sea, close to the Danish Island of Bornholm.

Now two new media reports — one from the New York Times, the other a joint investigation by German public broadcasters ARD and SWR, plus newspaper Die Zeit — raised the possibility that a pro-Ukrainian group — though not necessarily state-backed — may have been responsible. On Wednesday, the German Prosecutor’s Office confirmed it had searched a ship in January suspected of transporting explosives used in the sabotage, but was still investigating the seized objects, the identities of the perpetrators and their possible motives.

In the information vacuum since September, various theories have surfaced as to the culprit and their motive:

Theory 1: Putin, the energy bully

In the days immediately after the attack, the working assumption of many analysts in the West was that this was a brazen act of intimidation on the part of Vladimir Putin’s Kremlin.

Mykhailo Podolyak, an adviser to Volodymyr Zelenskyy, spelt out the hypothesis via his Twitter feed on September 27 — the day after the explosions were first detected. He branded the incident “nothing more [than] a terrorist attack planned by Russia and act of aggression towards the EU” linked to Moscow’s determination to provoke “pre-winter panic” over gas supplies to Europe.

Polish Prime Minister Mateusz Morawiecki also hinted at Russian involvement. Russia denied responsibility.

The Nord Stream pipes are part-owned by Russia’s Gazprom. The company had by the time of the explosions announced an “indefinite” shutdown of the Nord Stream 1 pipes, citing technical issues which the EU branded “fallacious pretences.” The new Nord Stream 2 pipes, meanwhile, had never been brought into the service. Within days of Gazprom announcing the shutdown in early September, Putin issued a veiled threat that Europe would “freeze” if it stuck to its plan of energy sanctions against Russia.

But why blow up the pipeline, if gas blackmail via shutdowns had already proved effective? Why end the possibility of gas ever flowing again?

Simone Tagliapietra, energy specialist and senior fellow at the Bruegel think tank, said it was possible that — if it was Russia — there may have been internal divisions about any such decision. “At that point, when Putin had basically decided to stop supplying [gas to] Germany, many in Russia may have been against that. This was a source of revenues.” It is possible, Tagliapietra said, that “hardliners” took the decision to end the debate by ending the pipelines.

Blowing up Nord Stream, in this reading of the situation, was a final declaration of Russia’s willingness to cut off Europe’s gas supply indefinitely, while also demonstrating its hybrid warfare capabilities. In October, Putin said that the attack had shown that “any critical infrastructure in transport, energy or communication infrastructure is under threat — regardless of what part of the world it is located” — words viewed by many in the West as a veiled threat of more to come.

Theory 2: The Brits did it

From the beginning, Russian leaders have insinuated that either Ukraine or its Western allies were behind the attack. Kremlin spokesman Dmitry Peskov said two days after the explosions that accusations of Russian culpability were “quite predictable and predictably stupid.” He added that Moscow had no interest in blowing up Nord Stream. “We have lost a route for gas supplies to Europe.”

Then a month on from the blasts, the Russian defense ministry made the very specific allegation that “representatives of the U.K. Navy participated in planning, supporting and executing” the attack. No evidence was given. The same supposed British specialists were also involved in helping Ukraine coordinate a drone attack on Sevastopol in Crimea, Moscow said.

The U.K.’s Ministry of Defence said the “invented” allegations were intended to distract attention from Russia’s recent defeats on the battlefield. In any case, Moscow soon changed its tune.

Theory 3: U.S. black ops

In February, with formal investigations in Germany, Sweden and Denmark still yet to report, an article by the U.S. investigative journalist Seymour Hersh triggered a new wave of speculation. Hersh’s allegation: U.S. forces blew up Nord Stream on direct orders from Joe Biden.

The account — based on a single source said to have “direct knowledge of the operational planning” — alleged that an “obscure deep-diving group in Panama City” was secretly assigned to lay remotely-detonated mines on the pipelines. It suggested Biden’s rationale was to sever once and for all Russia’s gas link to Germany, ensuring that no amount of Kremlin blackmail could deter Berlin from steadfastly supporting Ukraine.

Hersh’s article also drew on Biden’s public remarks when, in February 2022, shortly before Russia’s full-scale invasion, he told reporters that should Russia invade “there will be no longer Nord Stream 2. We will bring an end to it.”

The White House described Hersh’s story as “utterly false and complete fiction.” The article certainly included some dubious claims, not least that NATO Secretary General Jens Stoltenberg has “cooperated with the American intelligence community since the Vietnam War.” Stoltenberg, born in 1959, was 16 years old when the war ended.

Russian leaders, however, seized on the report, citing it as evidence at the U.N. Security Council later in February and calling for an U.N.-led inquiry into the attacks, prompting Germany, Denmark and Sweden to issue a joint statement saying their investigations were ongoing.

Theory 4: The mystery boatmen

The latest clues — following reports on Tuesday from the New York Times and German media — center on a boat, six people with forged passports and the tiny Danish island of Christiansø.

According to these reports, a boat that set sail from the German port of Rostock, later stopping at Christiansø, is at the center of the Nord Stream investigations.

Germany’s federal prosecutor confirmed on Wednesday that a ship suspected of transporting explosives had been searched in January — and some of the 100 or so residents of tiny Christiansø told Denmark’s TV2 that police had visited the island and made inquiries. Residents were invited to come forward with information via a post on the island’s Facebook page.

Both the New York Times and the German media reports suggested that intelligence is pointing to a link to a pro-Ukrainian group, although there is no evidence that any orders came from the Ukrainian government and the identities of the alleged perpetrators are also still unknown.

Podolyak, Zelenskyy’s adviser, tweeted he was enjoying “collecting amusing conspiracy theories” about what happened to Nord Stream, but that Ukraine had “nothing to do” with it and had “no information about pro-Ukraine sabotage groups.”

Meanwhile, Germany’s Defense Minister Boris Pistorius warned against “jumping to conclusions” about the latest reports, adding that it was possible that there may have been a “false flag” operation to blame Ukraine.

The Danish Security and Intelligence Service said only that their investigation was ongoing, while a spokesperson for Sweden’s Prosecution Authority said information would be shared when available — but there was “no timeline” for when the inquiries would be completed.

The mystery continues.

Charlie Cooper

Source link

March 8, 2023
Iran pledges more access for nuclear inspectors, head of UN watchdog says

Iran pledged to re-install monitoring equipment at its nuclear facilities and to assist an investigation into uranium traces detected at undeclared sites, the head of the U.N.’s nuclear agency said Saturday after a visit to Tehran.

Rafael Mariano Grossi, director general of the International Atomic Energy Agency, met with Iranian President Ebrahim Raisi and other top officials in Tehran on Saturday.

“Over the past few months, there was a reduction in some of the monitoring activities” related to cameras and other equipment “which were not operating,” Grossi told reporters upon his return to Vienna. “We have agreed that those will be operating again.”

A joint statement issued on Saturday by the IAEA and Iran’s nuclear agency included assurances that Tehran would address long-standing complaints about access to its disputed nuclear program. But the text went into little detail, and similar promises by Iran have yielded little in the past.

“Iran expressed its readiness to continue its cooperation and provide further information and access to address the outstanding safeguards issues,” according to the joint statement.

“These are not words. This is very concrete,” Grossi said of the assurances he received in Tehran, the Associated Press reported.

The visit to Iran followed a recent report from the IAEA, seen by CNN and other media, that confirmed that uranium particles enriched to 83.7 percent purity, close to the 90 percent needed to make a nuclear bomb, were found at an Iranian nuclear site. The report raised concerns that Tehran was speeding up its enrichment.

Grossi said the Iranians had agreed to increase inspections at that site by 50 percent, the AP reported.

Iran also will allow the re-installation of extra monitoring equipment that had been put in place under the 2015 nuclear deal, but then removed last year as the agreement fell apart, Reuters reported.

The 2015 deal gave Tehran relief from most international sanctions as long as it allowed the U.N. watchdog to monitor its nuclear activities. But it began to unravel after the U.S.’s unilateral withdrawal in 2018 under then-President Donald Trump.

Iran also “will allow the IAEA to implement further appropriate verification and monitoring activities,” according to Saturday’s joint statement. “Modalities will be agreed between the two sides in the course of a technical meeting which will take place soon in Tehran,” it said.

Grossi said there was a “marked improvement” in his dialogue with Iranian officials, according to the AP. “I hope we will be seeing results soon. We will see.”

Jones Hayden

Source link

March 2, 2023
Solemn day as Ukraine marks one year since Russian invasion

Solemn day as Ukraine marks one year since Russian invasion – CBS News

Watch CBS News

President Biden is holding a virtual meeting with G7 leaders and Ukrainian President Volodymyr Zelenskyy, one year since Russia’s invasion of the country. CBS News senior foreign correspondent Charlie D’Agata joins us from Kyiv with more on how Ukraine is marking this day.

Be the first to know

Get browser notifications for breaking news, live events, and exclusive reporting.

Source link

February 24, 2023
Free tea and sausages in the snow: How Putin persuades Russians to cheer the war

Press play to listen to this article

Voiced by artificial intelligence.

MOSCOW — Among the perks offered to those stamping their feet to stay warm outside Moscow’s Luzhniki Stadium there were hot drinks, payouts, free food or a day off from class. Others had simply been told by their employers to attend, independent media reported.

“We’re from the Russian Post,” a young man with dark hair said glumly, burying his face into his coat. Minutes earlier, a woman in a white wooly hat had called out his name from a list and handed him a paper invite in the colors of the Russian tricolor.

“Invite to the festive program ‘Glory to the Defenders of the Fatherland,’” it read.

The mass event at Moscow’s Luzhniki Stadium on Wednesday could hardly be called spontaneous. But it was certainly a crowd-puller.

Тens of thousands were reported to have poured through the metal detectors installed on the grounds of Luzhniki, once the gem of the World Cup Russia hosted in 2018 and a symbol of its international appeal. Now it is a favorite location for staged patriotic rallies.

This event was timed for Defender of the Fatherland Day on February 23, a traditional holiday in Russia which this year acts as an upbeat to the one-year anniversary of Russia’s invasion of Ukraine a day later.

The lineup included a number of pop stars who are regular faces at patriotic events, such as singers Grigory Leps and Oleg Gazmanov, both of whom are on the EU’s sanctions list.

Тhe singer Shaman belted out his ballad “We’ll rise,” dressed in a T-shirt reading: “I am Russian.”

But the real star was President Vladimir Putin who looked visibly pleased after walking on stage to chants of: “Russia! Russia!”

“Right now there is a battle going on our historic lands, for our people … we are proud of them,” he told the crowd. “Today, in defending our interests, our people, our culture, language, territory, all of it, our entire people is the defender of the fatherland.”

Earlier, a group of young children described as being from Mariupol were brought on stage with footage of a destroyed city playing in the background. “I want to thank Uncle Yurya for saving me and hundreds of thousands of others,” one of the girls said before being encouraged to hug а military commander said to have “saved” more than 350 children.

Generally, public messaging has tended to avoid putting too much focus on Ukraine and the war — a term which in Russia is still a criminal offense — and more on a broader and less contentious narrative of patriotism and support for the country’s armed forces.

Тens of thousands were reported to have poured through the metal detectors installed on the grounds of Luzhniki, once the gem of the World Cup Russia hosted in 2018 | Natalia Kolesnikova/AFP via Getty Images

At the stadium, some law enforcement officers, but few visitors, brandished Zs, the letter that has become a symbol of the war. Similarly, across the city, billboards featured veterans and modern-day soldiers and slogans such as “We stand together!” but rarely did they explicitly mention Ukraine.

Access to the concert was strictly controlled. There were no tickets for purchase and only a handful of media were allowed in. Attendants had to sign up beforehand via youth organizations, state companies and educational institutions.

“I was signed up by my university,” a young man dressed in a light gray hooded sweater said. Asked whether it had been mandatory, he nodded and looked away.

He declined to give his name and, fearing reprisals, others were similarly wary to talk. “We don’t speak Russian,” a woman of Central Asian appearance said, after being asked what had brought her there.

“It’s very cold today, and we’re just having a snack, thank you, goodbye,” said another woman in a fur coat, who stood outside with a group eating sausage sandwiches and pickles in the snow.

A similar rally in Luzhniki was held in March last year, when Russia marked the eight-year anniversary of the annexation of Crimea. And another in October on Red Square after a ceremony annexing four more Ukrainian regions, despite them not being fully under Russian control.

In fact, since 2014 the rallies have become a fixed feature of Putin’s leadership.

“After Crimea’s annexation, Putin went from aspiring to the legitimacy of an elected president to that of being an almighty Leader. And if you’re a Leader, you need a crowd to gather around you,” analyst Nikolai Petrov, a consultant at Chatham House think tank, told POLITICO.

But even the most fervent Kremlin supporter would struggle to portray the rallies as spontaneous. In fact, the traditional scenes of rows of similar buses transporting similar-looking people who then wave similar-sized Russian flags are more like North Korea than Woodstock.

However, said Petrov, the Kremlin is unlikely to consider this a weakness. “The Kremlin doesn’t need people to mobilize themselves, even in its support,” he said. “The whole idea of such events is to demonstrate loyalty, not some kind of fanatical love.”

Though the Luzhniki concert was the big showstopper, other festivities are expected across the country in the coming days.

According to the business outlet RBC, the presidential administration has sent out guidelines to regional authorities on suitable activities. Suggestions reportedly included painting military-themed murals, staging flash mobs with people lining up in the form of a star-shaped war medal, and arts and crafts workshops to produce, among other things, knitted socks that could later be sent to soldiers fighting in Ukraine.

The real star of the show was President Vladimir Putin who looked visibly pleased after walking on stage to chants | Natalia Kolesnikova/AFP via Getty Images

Russians who have family or friends involved in the “special military operation” have also been encouraged to record personal video messages and share them online under the hashtag #ourheroes.

In one such video posted on Instagram — a platform that has been banned in Russia as extremist but is still widely used via VPN — a teary-eyed woman from the town of Prokhladny in Kabardino-Balkaria dressed in uniform tells her husband: “You’re our rock, our defender. I wish for you to come back victorious, healthy, unharmed. I love you very much.”

Back at Luzhniki, ahead of the rally, loudspeakers promised attendants free hot tea, porridge and sausages.

Meanwhile, coordinators continued to call out names from their clipboards to groups of middle-aged women in mittens and fur coats and men in dark jackets and hats. “Smirnova, Oxana Pavlovna!” one such organizer yelled. Answering to that name, a woman walked forwards and accepted her entry ticket with little emotion.

After getting their names ticked, a trickle of people headed straight back to the metro, away from the grounds before the celebrations had even started, some of them with the Russian tricolor flags they had been given still in hand.

With another anniversary, the annexation of Crimea, around the corner in March, they are likely to be back soon.

POLITICO Staff

Source link

February 21, 2023
‘Oh my God, it’s really happening’

Press play to listen to this article

Voiced by artificial intelligence.

Kaja Kallas had been dreading the call.

“I woke at 5 o’clock,” the Estonian prime minister recalled recently. The phone was ringing. Her Lithuanian counterpart was on the line.

“Oh my God, it’s really happening,” came the ominous words, according to Kallas. Another call came in. This time it was the Latvian prime minister.

It was February 24, 2022. War had begun on the European continent.

The night before, Kallas had told her Cabinet members to keep their phones on overnight in anticipation of just this moment: Russia was blitzing Ukraine in an attempt to decapitate the government and seize the country. For those in Estonia and its Baltic neighbors, where memories of Soviet occupation linger, the first images of war tapped into a national terror.

“I went to bed hoping that I was not right,” Kallas said.

Across Europe, similar wakeup calls rolled in, as Russian tanks barrelled into Ukraine and missiles pierced the early morning sky. In recent weeks, POLITICO spoke with prime ministers, high-ranking EU and NATO officials, foreign ministers and diplomats — nearly 20 in total — to reflect on the war’s early days as it reaches its ruinous one-year mark on Friday. All described a similar foreboding that morning, a sense that the world had irrevocably changed.

Within a year, the Russian invasion would profoundly reshape Europe, upending traditional foreign policy presumptions, cleaving it from Russian energy and reawakening long-dormant arguments about extending the EU eastward.

But for those centrally involved in the war’s buildup, the events of February 24 are still seared in their memories.

In an interview with POLITICO, Charles Michel — head of the European Council, the EU body comprising all 27 national leaders — recalled how he received a call directly from Kyiv as the attacks began.

“I was woken up by Zelenskyy,” Michel recounted. It was around 3 a.m. The Ukrainian president told Michel: “The aggression had started and that it was a full-scale invasion.”

Michel hit the phones, speaking to prime ministers across the EU throughout the night.

Ursula von der Leyen and Josep Borrell speak to the press on February 24, 2022 | Kenzo Tribouillard/AFP via Getty Images

By 5 a.m., EU foreign policy chief Josep Borrell was in his office. Three hours later, he was standing next to European Commission President Ursula von der Leyen as the duo made the EU’s first major public statement about the dawning war. Von der Leyen then convened the 27 commissioners overseeing EU policy for an emergency meeting.

Elsewhere in Brussels, NATO chief Jens Stoltenberg was on the phone with U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin, who were six hours behind in Washington, D.C. He then raced over to NATO headquarters, where he urgently gathered the military alliance’s decision-making body.

The mood that morning, Stoltenberg recalled in a recent conversation with reporters, was “serious” but “measured and well-organized.”

In Ukraine, missiles had begun raining down in Kyiv, Odesa and Mariupol. Volodymyr Zelenskyy took to social media, confirming in a video that war had begun. He urged Ukrainians to stay calm.

These video updates would soon become a regular feature of Zelenskyy’s wartime leadership. But this first one was especially jarring — a message from a president whose life, whose country, was now at risk.

It would be one of the last times the Ukrainian president, dressed in a dove-gray suit jacket and crisp white shirt, appeared in civilian clothes.

Europe’s 21st-century Munich moment

February 24, 2022 is an indelible memory for those who lived through it. For many, however, it felt inevitable.

Five days before the invasion, Zelenskyy traveled to the Munich Security Conference, an annual powwow of defense and security experts frequented by senior politicians.

It was here that the Ukrainian leader made one final, desperate plea for more weapons and more sanctions, hitting out at Germany for promising helmets and chiding NATO countries for not doing enough.

“What are you waiting for?” he implored in the highly charged atmosphere in the Bayerischer Hof hotel. “We don’t need sanctions after bombardment happens, after we have no borders, no economy. Why would we need those sanctions then?”

The symbolism was rife — Munich, a city forever associated with appeasement following Neville Chamberlain’s ill-fated attempt to swap land for peace with Adolf Hitler in 1938, was now the setting for Zelenskyy’s last appeal to the West.

Zelenskyy, never missing a moment, seized the historical analogy.

Five days before the invasion, Zelenskyy traveled to the Munich Security Conference, where he made one final, desperate plea for more weapons and more sanctions | Pool photo by Ronald Wittek/Getty Images

“Has our world completely forgotten the mistakes of the 20th century?” he asked. “Where does appeasement policy usually lead to?”

But his calls for more arms were ignored, even as countries began ordering their citizens to evacuate and airlines began canceling flights in and out of the country.

A few days later, Zelenskyy’s warnings were coming true. On February 22, Vladimir Putin inched closer to war, recognizing the self-proclaimed Donetsk People’s Republic and Luhansk People’s Republic in eastern Ukraine. It was a decisive moment for the Russian president, paving the way for his all-out assault less than 48 hours later.

The EU responded the next day — its first major action against Moscow’s activities in Ukraine since the escalation of tensions in 2021. Officials unveiled the first in what would be nine sanction packages against Russia (and counting).

In an equally significant move, a reluctant Germany finally pulled the plug on Nord Stream 2, the yet unopened gas pipeline linking Russia to northern Germany — the decision, made after months of pressure, presaged how the Russian invasion would soon upend the way Europeans powered their lives and heated their homes.

Summit showdown

As it happened, EU leaders were already scheduled to meet in Brussels on February 24, the day the invasion began. Charles Michel had summoned the leaders earlier that week to deal with the escalating crisis, and to sign off on the sanctions.

Throughout the afternoon, Brussels was abuzz — TV cameras from around the world had descended on the European quarter. Helicopters circled overhead.

European leaders gathered in Brussels following the invasion | Pool photo by Olivier Hoslet/AFP via Getty Images

Suddenly, the regular European Council meeting of EU leaders, often a forum for technical document drafting as much as political decision-making, had become hugely consequential. With war unfolding, the world was looking at the EU to respond — and lead.

The meeting was scheduled to begin at 8 p.m. As leaders were gathering, news came that Russia had seized the Chernobyl nuclear plant, Moldova had declared a state of emergency and thousands of people were pouring out of Ukraine. Later that night, Zelenskyy announced a general mobilization: every man between the ages of 18 and 60 was being asked to fight.

Many leaders were wearing facemasks, a reminder that another crisis, which now seemed to pale in comparison, was still ever-present.

Just before joining colleagues at the Europa building in Brussels, Emmanuel Macron phoned Putin — the French president’s latest effort to mediate with the Russian leader. Macron had visited Moscow on February 7 but left empty-handed after five hours of discussions. He later said he made the call at Zelenskyy’s request, to ask Putin to stop the war.

“It did not produce any results,” Macron said of the call. “The Russian president has chosen war.”

Arriving at the summit, Latvian Prime Minister Krišjānis Kariņš captured the gravity of the moment. “Europe is experiencing the biggest military invasion since the Second World War,” he said. “Our response has to be united.”

But inside the room, divisions were on full display. How far, leaders wondered, could Europe go in sanctioning Russia, given the potential economic blowback? Countries dug in along fault lines that would become familiar in the succeeding months.

The realities of war soon pierced the academic debates. Zelenskyy’s team had set up a video link as missile strikes encircled the capital city, wanting to get the president talking to his EU counterparts.

One person present in the room recalled the percolating anxiety as the video feed beamed through — the image out of focus, the camera shaky. Then the picture sharpened and Zelenskyy appeared, dressed in a khaki shirt and looking deathly pale. His surroundings were faceless, an unknown room somewhere in Kyiv.

“Everyone was silent, the atmosphere was completely tense,” said the official who requested anonymity to speak freely.

Zelenskyy, shaken and utterly focused, told leaders that they may not see him again — the Kremlin wanted him dead.

Black smoke rises from a military airport in Chuguyev near Kharkiv on February 24, 2022 | Aris Messinis/AFP via Getty Images

“If you, EU leaders and leaders of the free world, do not really help Ukraine today, tomorrow the war will also knock at your door,” he warned, invoking an argument he would return to again and again: that this wasn’t just Ukraine’s war — it was Europe’s war.

Within hours, EU leaders had signed off on their second package of pre-prepared sanctions hitting Russia. But a fractious debate had already begun about what should come next.

The Baltic nations and Poland wanted more — more penalties, more economic punishments. Others were holding back. German Chancellor Olaf Scholz and Italian Prime Minister Mario Draghi aired their reluctance about expelling Russian banks from the global SWIFT payment system. It was needed to pay for Russian gas, after all.

How quickly that would change.

Sanctions were not the only pressing matter. There was a humanitarian crisis unfolding on Europe’s doorstep. The EU had to both get aid into a war zone and prepare for a mass exodus of people fleeing it.

Janez Lenarčič, the EU’s crisis management commissioner, landed in Paris on the day of the invasion, returning from Niger. Officials started making plans to get ambulances, generators and medicine into Ukraine — ultimately comprising 85,000 tons of aid.

“The most complex, biggest and longest-ever operation” of its kind for the EU, he said.

By that weekend, there was also a plan for the refugees escaping Russian bombs. At a rare Sunday meeting, ministers agreed to welcome and distribute the escaping Ukrainians — a feat that has long eluded the EU for other migrants. Days later, they would grant Ukrainians the instant right to live and work in the EU — another first in an extraordinary time. Decisions that normally took years were now flying through in hours.

Looming over everything were Ukraine’s repeated — and increasingly dire — entreaties for more weapons. Europe’s military investments had lapsed in recent decades, and World War II still cast a dark shadow over countries like Germany, where the idea of sending arms to a warzone still felt verboten.

There were also quiet doubts (not to mention intelligence assessments). Would Ukraine even have its own government next week? Why risk war with Russia if it was days away from toppling Kyiv?

“What we didn’t know at that point was that the Ukrainian resistance would be so successful,” a senior NATO diplomat told POLITICO on condition of anonymity. “We were thinking there would be a change of regime [in Kyiv], what do we do?”

That, too, was all about to change.

German Chancellor Olaf Scholz addressed Germany on the night of Russia’s invasion | Pool photo by Hannibal Hanschke/Getty Images

By the weekend, Germany had sloughed off its reluctance, slowly warming to its role as a key military player. The EU, too, dipped its toe into historic waters that weekend, agreeing to help reimburse countries sending weapons to Ukraine — another startling first for a self-proclaimed peace project.

“I remember, saying, ‘OK, now we go for it,’” said Stefano Sannino, secretary-general of the EU’s diplomatic arm.

Ironically, the EU would refund countries using the so-called European Peace Facility — a little-known fund that was suddenly the EU’s main vehicle to support lethal arms going to a warzone.

Over at NATO, the alliance activated its defense plans and sent extra forces to the alliance’s eastern flank. The mission had two tracks, Stoltenberg recounted — “to support Ukraine, but also prevent escalation beyond Ukraine.”

Treading that fine line would become the defining balancing act over the coming year for the Western allies as they blew through one taboo after another.

Who knew what, when

As those dramatic, heady early days fade into history, Europeans are now grappling with what the war means — for their identity, for their sense of security and for the European Union that binds them together.

The invasion has rattled the core tenets underlying the European project, said Ivan Krastev, a prominent political scientist who has long studied Europe’s place in the world.

“For different reasons, many Europeans believed that this is a post-war Continent,” he said.

Post-World War II Europe was built on the assumption that open economic policies, trade between neighbors and mild military power would preserve peace.

“For the Europeans to accept the possibility of the war was basically to accept the limits of our own model,” Krastev argued.

The disbelief has bred self-reflection: Has the war permanently changed the EU? Will a generation that had confined memories of World War II and the Cold War to the past view the next conflict differently?

And, perhaps most acutely, did Europe miss the signs?

Ukrainian refugees gather and rest upon their arrival at the main railway station in Berlin | Odd Andersen/AFP via Getty Images

“The start of that war has changed our lives, that’s for sure,” said Romanian Foreign Minister Bogdan Aurescu. It wasn’t, however, unexpected, he argued. “We are very attentive to what happens in our region,” he said. “The signs were quite clear.”

Aurescu pointed back to April 2021 as the moment he knew: “It was quite clear that Russia was preparing an aggression against Ukraine.”

Not everyone in Europe shared that assessment, though — to the degree that U.S. officials became worried. They started a public and private campaign in 2021 to warn Europe of an imminent invasion as Russia massed its troops on the Ukrainian border.

In November 2021, von der Leyen made her first trip to the White House. She sat down with Joe Biden in the Oval Office, surrounded by a coterie of national security and intelligence officials. Biden had just received a briefing before the gathering on the Russia battalion buildup and wanted to sound the alarm.

“The president was very concerned,” said one European official, speaking on the condition of anonymity to discuss sensitive conversations. “This was a time when no one in Europe was paying any attention, even the intelligence services.”

But others disputed the narrative that Europe was unprepared as America sounded the alarm.

“It’s a question of perspective. You can see the same information, but come to a different conclusion,” said one senior EU official involved in discussions in the runup to the war, while conceding that the U.S. and U.K. — both members of the Five Eyes intelligence alliance — did have better information.

Even if those sounding the alarm proved right, said Pierre Vimont, a former secretary-general of the EU’s diplomatic wing and Macron’s Russia envoy until the war broke out, it was hard to know in advance what, exactly, to plan for.

“What type of military operation would it be?” he recalled people debating. A limited operation in the east? A full occupation? A surgical strike on Kyiv?

Here’s where most landed: Russia’s onslaught was horrifying — its brutality staggering. But the signs had been there. Something was going to happen.

“We knew that the invasion is going to happen, and we had shared intelligence,” Stoltenberg stressed. “Of course, until the planes are flying and the battle tanks are rolling, and the soldiers are marching, you can always change your plans. But the more we approached the 24th of February last year, the more obvious it was.”

Then on the day, he recounted, it was a matter of dutifully enacting the plan: “We were prepared, we knew exactly what to do.”

“You may be shocked by this invasion,” he added, “but you cannot be surprised.”

Clea Caulcutt and Cristina Gallardo contributed reporting.

Suzanne Lynch, Lili Bayer and Jacopo Barigazzi

Source link

February 21, 2023
Inside the deal: How Boris Johnson’s departure paved the way for a grand Brexit bargain

Press play to listen to this article

Voiced by artificial intelligence.

LONDON — It was clear when Boris Johnson was forced from Downing Street that British politics had changed forever.

But few could have predicted that less than six months later, all angry talk of a cross-Channel trade war would be a distant memory, with Britain and the EU striking a remarkable compromise deal over post-Brexit trade rules in Northern Ireland.

Private conversations with more than a dozen U.K. and EU officials, politicians and diplomats reveal how the Brexit world changed completely after Johnson’s departure — and how an “unholy trinity” of little-known civil servants, ensconced in a gloomy basement in Brussels, would mastermind a seismic shift in Britain’s relationship with the Continent.

They were aided by an unlikely sequence of political events in Westminster — not least an improbable change of mood under the combative Liz Truss; and then the jaw-dropping rise to power of the ultra-pragmatic Rishi Sunak. Even the amiable figure of U.K. Foreign Secretary James Cleverly would play his part, glad-handing his way around Europe and smoothing over cracks that had grown ever-wider since 2016.

As Sunak’s Conservative MPs pore over the detail of his historic agreement with Brussels — and await the all-important verdict of the Democratic Unionist Party of Northern Ireland — POLITICO has reconstructed the dramatic six-month shift in Britain’s approach that brought us to the brink of the Brexit deal we see today.

Bye-bye Boris

Johnson’s departure from Downing Street, on September 6, triggered an immediate mood shift in London toward the EU — and some much-needed optimism within the bloc about future cross-Channel relations.

For key figures in EU capitals, Johnson would always be the untrustworthy figure who signed the protocol agreement only to disown it months afterward.

In Paris, relations were especially poisonous, amid reports of Johnson calling the French “turds”; endless spats with the Elysée over post-Brexit fishing rights, sausages and cross-Channel migrants; and Britain’s role in the AUKUS security partnership, which meant the loss of a multi-billion submarine contract for France. Paris’ willingness to engage with Johnson was limited in the extreme.

Truss, despite her own verbal spats with French President Emmanuel Macron — and her famously direct approach to diplomacy — was viewed in a different light. Her success at building close rapport with negotiating partners had worked for her as trade secretary, and once she became prime minister, she wanted to move beyond bilateral squabbles and focus on global challenges, including migration, energy and the war in Ukraine.

“Boris had become ‘Mr. Brexit,’” one former U.K. government adviser said. “He was the one the EU associated with the protocol, and obviously [Truss] didn’t come with the same baggage. She had covered the brief, but she didn’t have the same history. As prime minister, Liz wanted to use her personal relationships to move things on — but that wasn’t the same as a shift in the underlying substance.”

Indeed, Truss was still clear on the need to pass the controversial Northern Ireland Protocol Bill, which would have given U.K. ministers powers to overrule part of the protocol unilaterally, in order to ensure leverage in the talks with the European Commission.

Truss also triggered formal dispute proceedings against Brussels for blocking Britain’s access to the EU’s Horizon Europe research program. And her government maintained Johnson’s refusal to implement checks on goods entering Northern Ireland from Great Britain, causing deep irritation in Brussels.

But despite the noisy backdrop, tentative contact with Brussels quietly resumed in September, with officials on both sides trying to rebuild trust. Truss, however, soon became “very disillusioned by the lack of pragmatism from the EU,” one of her former aides said.

“The negotiations were always about political will, not technical substance — and for whatever reason, the political will to compromise from the Commission was never there when Liz, [ex-negotiator David] Frost, Boris were leading things,” they said.

Former British Prime Minister Liz Truss announces her resignation outside 10 Downing Street in central London on October 20, 2022 | Daniel Leal/AFP via Getty Images

Truss, of course, would not be leading things for long. An extraordinary meltdown of the financial markets precipitated her own resignation in late October, after just six weeks in office. Political instability in Westminster once again threatened to derail progress.

But Sunak’s arrival in No. 10 Downing Street — amid warnings of a looming U.K. recession — gave new impetus to the talks. An EU official said the mood music improved further, and that discussions with London became “much more constructive” as a result.

David Lidington, a former deputy to ex-PM Theresa May who played a key role in previous Brexit negotiations, describes Sunak as a “globalist” rather than an “ultra-nationalist,” who believes Britain ought to have “a sensible, friendly and grown-up relationship” with Brussels outside the EU.

During his time as chancellor, Sunak was seen as a moderating influence on his fellow Brexiteer Cabinet colleagues, several of whom seemed happy to rush gung-ho toward a trade war with the EU.

“Rishi has always thought of the protocol row as a nuisance, an issue he wanted to get dealt with,” the former government adviser first quoted said.

One British official suggested the new prime minister’s reputation for pragmatism gave the U.K. negotiating team “an opportunity to start again.”

Sunak’s slow decision-making and painstaking attention to detail — the subject of much criticism in Whitehall — proved useful in calming EU jitters about the new regime, they added.

“When he came in, it wasn’t just the calming down of the markets. It was everyone across Europe and in the U.S. thinking ‘OK, they’re done going through their crazy stage,’” the same official said. “It’s the time he takes with everything, the general steadiness.”

EU leaders “have watched him closely, they listened to what he said, and they have been prepared to trust him and see how things go,” Lidington noted.

Global backdrop

As months of chaos gave way to calm in London, the West was undergoing a seismic reorganization.

Russia’s large-scale invasion of Ukraine triggered a flurry of coordinated work for EU and U.K. diplomats — including sanctions, military aid, reconstruction talks and anti-inflation packages. A sense began to emerge that it was in both sides’ common interest to get the Northern Ireland protocol row out of the way.

“The war in Ukraine has completely changed the context over the last year,” an EU diplomat said.

A second U.K. official agreed. “Suddenly we realized that the 2 percent of the EU border we’d been arguing about was nothing compared to the massive border on the other side of the EU, which Putin was threatening,” they said. “And suddenly there wasn’t any electoral benefit to keeping this row over Brexit going — either for us or for governments across the EU.”

A quick glance at the electoral calendar made it clear 2023 offered the last opportunity to reach a deal in the near future, with elections looming for both the U.K. and EU parliaments the following year — effectively putting any talks on ice.

“Rishi Sunak would have certainly been advised by his officials that come 2024, the EU is not going to be wanting to take any new significant initiatives,” Lidington said. “And we will be in election mode.”

The upcoming 25th anniversary of the Belfast/Good Friday peace agreement on April 10 heaped further pressure on the U.K. negotiators, amid interest from U.S. President Joe Biden in visiting Europe to mark the occasion.

“The anniversary was definitely playing on people’s minds,” the first U.K. official said. “Does [Sunak] really want to be the prime minister when there’s no government in Northern Ireland on the anniversary of the Belfast/Good Friday Agreement?”

The pressure was ramped up further when Biden specifically raised the protocol in a meeting with Truss at the U.N. General Assembly in New York in late September, after which British officials said they expected the 25th anniversary to act as a “key decision point” on the dispute.

The King and I

Whitehall faced further pressure from another unlikely source — King Charles III, who was immediately planning a state visit to Paris within weeks of ascending the throne in September 2022. Truss had suggested delaying the visit until the protocol row was resolved, according to two European diplomats.

The monarch is now expected to visit Paris and Berlin at the end of March — and although his role is strictly apolitical, few doubt he is taking a keen interest in proceedings. He has raised the protocol in recent conversations with European diplomats, showing a close engagement with the detail.

One former senior diplomat involved in several of the king’s visits said that Charles has long held “a private interest in Ireland, and has wanted to see if there was an appropriately helpful role he could play in improving relations [with the U.K].”

By calling the deal the Windsor framework and presenting it at a press conference in front of Windsor Castle, one of the king’s residences, No. 10 lent Monday’s proceedings an unmistakable royal flavor.

The king also welcomed von der Leyen for tea at the castle following the signing of the deal. A Commission spokesperson insisted their meeting was “separate” from the protocol discussion talks. Tory MPs were skeptical.

Cleverly does it

The British politician tasked with improving relations with Brussels was Foreign Secretary Cleverly, appointed by Truss last September. He immediately began exploring ways to rebuild trust with Commission Vice-President and Brexit point-man Maroš Šefčovič, the second U.K. official cited said.

His first hurdle was a perception in Brussels that the British team had sabotaged previous talks by leaking key details to U.K. newspapers and hardline Tory Brexiteers for domestic political gain. As a result, U.K. officials made a conscious effort to keep negotiations tightly sealed, a No. 10 official said.

“The relationship with Maroš improved massively when we agreed not to carry out a running commentary” on the content of the discussions, the second U.K. official added.

This meant keeping key government ministers out of the loop, including Northern Ireland Minister Steve Baker, an arch-Brexiteer who had been brought back onto the frontbench by Truss.

British Foreign Secretary James Cleverly is welcomed by European Commission Vice-President Maroš Šefčovič ahead of a meeting at the EU headquarters in Brussels on February 17, 2023 | Kenzo Tribouillard/AFP via Getty Images

The first U.K. official said Baker would have “felt the pain,” as he had little to offer his erstwhile backbench colleagues looking for guidance while negotiations progressed, “and that was a choice by No. 10.”

Cleverly and Šefčovič “spent longer than people think just trying to build rapport,” the second U.K. official said, with Cleverly explaining the difficulties the protocol was raising in Northern Ireland and Šefčovič insistent that key economic sectors were in fact benefiting from the arrangement.

Cleverly also worked at the bilateral relationship with German Foreign Minister Annalena Baerbock, while Sunak made efforts to improve ties with French President Emmanuel Macron, Lidington noted.

A British diplomat based in Washington said Cleverly had provided “a breath of fresh air” after the “somewhat stiff” manner of his predecessors, Truss and the abrasive Dominic Raab.

By the Conservative party conference in early October, the general mood among EU diplomats in attendance was one of expectation. And the Birmingham jamboree did not disappoint.

Sorry is the hardest word

Baker, who had once described himself as a “Brexit hard man,” stunned Dublin by formally apologizing to the people of Ireland for his past comments, just days before technical talks between the Commission and the U.K. government were due to resume.

“I caused a great deal of inconvenience and pain and difficulty,” he said. “Some of our actions were not very respectful of Ireland’s legitimate interests. I want to put that right.”

The apology was keenly welcomed in Dublin, where Micheál Martin, the Irish prime minister at the time, called it “honest and very, very helpful.”

Irish diplomats based in the U.K. met Baker and other prominent figures from the European Research Group of Tory Euroskeptics at the party conference, where Baker spoke privately of his “humility” and his “resolve” to address the issues, a senior Irish diplomat said.

“Resolve was the keyword,” the envoy said. “If Steve Baker had the resolve to work for a transformation of relationships between Ireland and the U.K., then we thought — there were tough talks to be had — but a sustainable deal was now a possibility.”

There were other signs of rapprochement. Just a few hours after Baker’s earth-shattering apology, Truss confirmed her attendance at the inaugural meeting in Prague of the European Political Community, a new forum proposed by Macron open to both EU and non-EU countries.

Sunak at the wheel

The momentum snowballed under Sunak, who decided within weeks of becoming PM to halt the passage of the Northern Ireland Protocol Bill in the House of Lords, reiterating Britain’s preference for a negotiated settlement. In exchange, the Commission froze a host of infringement proceedings taking aim at the way the U.K. was handling the protocol. This created space for talks to proceed in a more cordial environment.

An EU-U.K. agreement in early January allowed Brussels to start using a live information system detailing goods moving from Great Britain to Northern Ireland, seen as key to unlocking a wider agreement on physical checks under the protocol.

The U.K. also agreed to conduct winter technical negotiations in Brussels, rather than alternating rounds between the EU capital and London, as was the case when Frost served as Britain’s chief negotiator.

Trust continued to build. Suddenly the Commission was open to U.K. solutions such as the “Stormont brake,” a clause giving the Northern Ireland Assembly power of veto over key protocol machinations, which British officials did not believe Brussels would accept when they first pitched them.

The Stormont brake was discussed “relatively early on,” a third U.K. official said. “Then we spent a huge amount of effort making sure nobody knew about it. It was kept the most secret of secret things.”

Yet a second EU diplomat claimed the ideas in the deal were not groundbreaking and could have been struck “years ago” if Britain had a prime minister with enough political will to solve the dispute. “None of the solutions that have been found now is revolutionary,” they said.

An ally of Johnson described the claim he was a block on progress as “total nonsense.”

The ‘unholy trinity’

Away from the media focus, a group of seasoned U.K. officials began to engage with their EU counterparts in earnest. But there was one (not so) new player in town.

Tim Barrow, a former U.K. permanent representative to the EU armed with a peerless contact book, had been an active figure in rebuilding relations with the bloc since Truss appointed him national security adviser. He acquired a more prominent role in the protocol talks after Sunak dispatched him to Brussels in January 2023, hoping EU figures would see him as “almost one of them,” another adviser to Sunak said.

Ensconced in the EU capital, Barrow and his U.K. team of negotiators took over several meeting rooms in the basement of the U.K. embassy, while staffers were ordered to keep quiet about their presence.

Besides his work on Northern Ireland trade, Barrow began to appear in meetings with EU representatives about other key issues creating friction in the EU-U.K. relationship, including discussions on migration alongside U.K. Home Secretary Suella Braverman.

Barrow “positioned himself very well,” the first EU diplomat quoted above said. “He’s very close to the prime minister — everybody in Brussels and London knows he’s got his ear. He’s very knowledgeable while very political.”

But other British officials insist Barrow’s presence was not central to driving through the deal. “He has been a figure, but not the only figure,” the U.K. adviser quoted above said. “It’s been a lot of people, actually, over quite a period of time.”

When it came to the tough, detailed technical negotiations, the burden fell on the shoulders of Mark Davies — the head of the U.K. taskforce praised for his mastery of the protocol detail — and senior civil servant and former director of the Northern Ireland Office, Brendan Threlfall.

The three formed an “unholy trinity,” as described by the first U.K. official, with each one bringing something to the table.

Davies was “a classic civil servant, an unsung hero,” the official said, while Threlfall “has good connections, good understanding” and “Tim has met all the EU interlocutors over the years.”

Sitting across the table, the EU team was led by Richard Szostak, a Londoner born to Polish parents and a determined Commission official with a great CV and an affinity for martial arts. His connection to von der Leyen was her deputy head of cabinet until recently, Stéphanie Riso, a former member of Brussels’ Brexit negotiating team who developed a reputation for competence on both sides of the debate.

Other senior figures at the U.K. Cabinet Office played key roles, including Cabinet Secretary Simon Case and senior official Sue Gray.

The latter — a legendary Whitehall enforcer who adjudicated over Johnson’s “Partygate” scandal — has a longstanding connection to Northern Ireland, famously taking a career break in the late 1980s to run a pub in Newry, where she has family links. More recently, she spent two years overseeing the finance ministry.

Gray has been spotted in Stormont at crunch points over the past six months as Northern Ireland grapples with the pain of the continued absence of an executive.

Some predict Gray could yet play a further role, in courting the Democratic Unionist Party as the agreement moves forward in the weeks ahead.

For U.K. and EU officials, the agreement struck with Brussels represented months of hard work — but for Sunak and his Cabinet colleagues, the hardest yards may yet lie ahead.

This story was updated to clarify two parts of the sourcing.

Cristina Gallardo and Esther Webber

Source link

February 21, 2023
Baltics and Poland push to make sanctioning oligarchs’ associates easier

The Baltic states and Poland want to make it easier to sanction the family members and entourage of Russia’s richest men and women but are facing resistance from Hungary, several EU diplomats told POLITICO.

Under its current rules, the EU can freeze the assets and impose visa bans on “leading businesspersons operating in Russia.” Lithuania, Latvia, Estonia and Poland now want to expand this definition, according to their proposal seen by POLITICO, to include “their immediate family members, or other natural persons, benefitting from them.”

The EU has sanctioned more than 1,400 people in relation to Russia’s activities in Ukraine, many of who are Russian oligarchs. An additional 96 people could be added to the EU’s next sanctions package, draft documents seen by POLITICO indicate. Including oligarchs’ family members and other associates of oligarchs would make it possible to sanctions thousands more people without having to prove that they are directly involved in the war in Ukraine or acting in the economic interest of the Russian state.

This could, for example, apply to the ex-wife of Russian President Vladimir Putin, Lyudmila Ocheretnaya, whose daughters have been sanctioned but has not been herself, and other members of the oligarchs’ entourage.

While some countries had doubts, legal experts are on board, said one of the diplomats.

Yet, in a meeting on Tuesday, at which EU ambassadors discussed the bloc’s next round of sanctions, Hungary resisted such plans, the diplomats said. Budapest argued that this is not part of the 10th sanctions package, said one of the diplomats. Hungary has long been skeptical of including too many names on the list.

Hungary also pushed to strike four people out the already existing sanctions list, two of the diplomats said.

It was not immediately possible to learn the identity of the four individuals.

That request is igniting tensions, and will be likely subject to another heated debate during a meeting of EU ambassadors on Wednesday. During that meeting, they will not only discuss the new package of sanctions against Russia, but also the so-called rollover of the 1,400-plus names already on the list to keep them sanctioned.

That’s because the regime is subject to a six-month review, which has hitherto been more or less a formality. Now, Hungary is using this extension review as leverage by insisting that four specific people have to be struck from the EU’s existing sanctions list before it will agree to the rollover. If Hungary blocks the rollover and refuses to compromise, all 1,400 people would be de-listed, the two diplomats warned.

One of the diplomats didn’t hide his frustration: “It shows Hungary’s disregard for unity and European values that they are willing to risk this in the week where we commemorate one year since the Russian invasion,” he said.

And those aren’t the only measure that Hungary takes issue with. It also is chiefly against sanctioning personnel working in the nuclear sector.

But a Hungarian official poured water on this last point, saying that “the only open issue for Hungary is with the length of the rollover and not with the listings.”

On the oligarchs issue and the proposal of the Baltics and Poland, the same Hungarian official said that this is not part of the 10th package.

As all EU countries have to agree to the proposal, any country could veto the move even if all other 26 EU countries were in favor. Time is running out, with the EU wanting to adopt the 10th sanctions package before the one-year anniversary of Russia’s invasion of Ukraine on Friday.

Leonie Kijewski and Jacopo Barigazzi

Source link

February 21, 2023
Liz Truss: UK should have ‘done more earlier’ to counter Vladimir Putin

LONDON — Former British Prime Minister Liz Truss argued the U.K. should have “done more earlier” to counter Vladimir Putin’s rhetoric before he invaded Ukraine, and said the West depended on Russian oil for too long.

Truss — the U.K.’s shortest-serving prime minister who resigned amid market turmoil last year — was speaking in a House of Commons debate about Ukraine, her first contribution in the chamber as a backbencher since 2012. She has been increasingly vocal on foreign policy since leaving office.

The former prime minister, who as served foreign secretary for Boris Johnson before succeeding him in the top job, recalled receiving a phone call at 3.30 a.m. on the morning of the invasion, and told MPs: “This was devastating news. But as well as being devastating, it was not unexpected.”

Truss praised the “sheer bravery” of Ukrainians defending their country, as well as Ukrainian President Volodymyr Zelenskyy and his Cabinet for not fleeing the country in the aftermath. “I remember being on a video conference that evening with the defense secretary and our counterparts, who weren’t in Poland, who weren’t in the United States,” she said of Ukraine’s top team. “They were in Kyiv and they were defending their country,” she added.

But while Truss argued Western sanctions had imposed an economic toll on Putin’s Russia, said urged reflection. “The reason that Putin took the action he took is because he didn’t believe we would follow through,” she argued, and said the West should “hold ourselves to high standards.”

Ukraine, she said, should have been allowed to join NATO.

“We were complacent about freedom and democracy after the Cold War,” she said. “We were told it was the end of history and that freedom and democracy were guaranteed and that we could carry on living our lives not worrying about what else could happen.”

Truss urged the U.K. to do all it could to help Ukraine win the war as soon as possible, including sending fighter jets, an ongoing matter of debate in Western capitals despite Ukrainian pleas.

And the former U.K. prime minister said the West should “never again” be “complacent in the face of Russian money, Russian oil and gas,” tying any future lifting of sanctions “to reform in Russia.”

Source link

February 20, 2023
China talks ‘peace,’ woos Europe and trashes Biden in Munich

Press play to listen to this article

Voiced by artificial intelligence.

MUNICH — China is trying to drive a fresh wedge between Europe and the United States as Russia’s invasion of Ukraine trudges past its one-year mark.

Such was the motif of China’s newly promoted foreign policy chief Wang Yi when he broke the news at the Munich Security Conference on Saturday that President Xi Jinping would soon present a “peace proposal” to resolve what Beijing calls a conflict — not a war — between Moscow and Kyiv. And he pointedly urged his European audience to get on board and shun the Americans.

In a major speech, Wang appealed specifically to the European leaders gathered in the room.

“We need to think calmly, especially our friends in Europe, about what efforts should be made to stop the warfare; what framework should there be to bring lasting peace to Europe; what role should Europe play to manifest its strategic autonomy,” said Wang, who will continue his Europe tour with a stop in Moscow.

In contrast, Wang launched a vociferous attack on “weak” Washington’s “near-hysterical” reaction to Chinese balloons over U.S. airspace, portraying the country as warmongering.

“Some forces might not want to see peace talks to materialize,” he said, widely interpreted as a reference to the U.S. “They don’t care about the life and death of Ukrainians, [nor] the harms on Europe. They might have strategic goals larger than Ukraine itself. This warfare must not continue.”

Yet at the conference, Europe showed no signs of distancing itself from the U.S. nor pulling back on military support for Ukraine. The once-hesitant German Chancellor Olaf Scholz urged Europe to give Ukraine even more modern tanks. And French President Emmanuel Macron shot down the idea of immediate peace talks with the Kremlin.

And, predictably, there was widespread skepticism that China’s idea of “peace” will match that of Europe.

“China has not been able to condemn the invasion,” NATO Secretary-General Jens Stoltenberg told a group of reporters. Beijing’s peace plan, he added, “is quite vague.” Peace, the NATO chief emphasized, is only possible if Russia respects Ukraine’s sovereignty.

Europe watches with caution

Wang’s overtures illustrate the delicate dance China has been trying to pull off since the war began.

Keen to ensure Russia is not weakened in the long run, Beijing has offered Vladimir Putin much-needed diplomatic support, while steering clear of any direct military assistance that would attract Western sanctions against its economic and trade relations with the world.

Ukrainian Foreign Minister Dmitro Kuleba is expected to hold a bilateral meeting with Wang while in Munich | Johannes Simon/Getty Images

“We will put forward China’s position on the political settlement on the Ukraine crisis, and stay firm on the side of peace and dialogue,” Wang said. “We do not add fuel to the fire, and we are against reaping benefit from this crisis.”

According to Italy’s Foreign Minister Antonio Tajani, who met Wang earlier this week, Xi will make his “peace proposal” on the first anniversary of the war, which is Friday.

Ukrainian Foreign Minister Dmitro Kuleba is expected to hold a bilateral meeting with Wang while in Munich. He said he hoped to have a “frank” conversation with the Beijing envoy.

“We believe that compliance with the principle of territorial integrity is China’s fundamental interest in the international arena,” Kuleba told journalists in Munich. “And that commitment to the observance and protection of this principle is a driving force for China, greater than other arguments offered by Ukraine, the United States, or any other country.”

EU foreign policy chief Josep Borrell met Wang later on Saturday and called on him to “use [China’s] closeness to convince Russia to engage in real peace efforts. Borrell expressed hope that Wang’s visit to Moscow could be used to convince Russia to stop its brutal war,” according to an EU official familiar with the talks, adding the EU chief told Wang Russia conducted “gross violation of the letter and spirit of the U.N. Charter.”

Many in Munich were wary of the upcoming Chinese plan.

German Foreign Minister Annalena Baerbock welcomed China’s effort to use its influence to foster peace but told reporters she had “talked intensively” with Wang during a bilateral meeting on Friday about “what a just peace means: not rewarding the attacker, the aggressor, but standing up for international law and for those who have been attacked.”

“A just peace,” she added, “presupposes that the party that has violated territorial integrity — meaning Russia — withdraws its troops from the occupied country.”

One reason for Europe’s concerns is the Chinese peace plan could undermine an effort at the United Nations to rally support for a resolution condemning Russia’s invasion of Ukraine, which will be on the U.N.’s General Assembly agenda next week, according to three European officials and diplomats.

Taiwan issue stokes up US-China tension

If China was keen to talk about peace in Ukraine, it’s more reluctant to do so in a case closer to home.

When Wolfgang Ischinger, the veteran German diplomat behind the conference, asked Wang if he could reassure the audience Beijing was not planning an imminent military escalation against Taiwan, the Chinese envoy was non-committal.

Nato Secretary-General Jens Stoltenberg said “what is happening in Europe today could happen in east Asia tomorrow” | Johannes Simon/Getty Images

“Let me assure the audience that Taiwan is part of Chinese territory. It has never been a country and it will never be a country in the future,” Wang said.

The worry over Taiwan resonated in a speech from NATO Secretary-General Jens Stoltenberg, who said “what is happening in Europe today could happen in Asia tomorrow.” Reminding the audience of the painful experience of relying on Russia’s energy supply, he said: “We should not make the same mistakes with China and other authoritarian regimes.”

But China’s most forceful attack was reserved for the U.S. Calling its decision to shoot down Chinese and other balloons “absurd” and “near-hysterical,” Wang said: “It does not show the U.S. is strong; on the contrary, it shows it is weak.

Wang also amplified the message in other bilateral meetings, including one with Pakistani Foreign Minister Bilawal Bhutto Zardari. “U.S. bias and ignorance against China has reached a ridiculous level,” he said. “The U.S. … has to stop this kind of absurd nonsense out of domestic political needs.”

It remains unclear if Wang will hold a meeting with U.S. Secretary of State Antony Blinken while in Germany, as has been discussed.

Hans von der Burchard and Lili Bayer reported from Munich, and Stuart Lau reported from Brussels.

This article was updated to include details of the meeting between Wang and Borrell.

CORRECTION: Jens Stoltenberg’s reference to Asia has been updated.

Stuart Lau , Hans von der Burchard and Lili Bayer

Source link

February 16, 2023
Zelenskyy in surprise London visit to meet Sunak and King Charles

Press play to listen to this article

Voiced by artificial intelligence.

LONDON — Ukrainian President Volodymyr Zelenskyy is in London to meet the U.K. prime minister and King Charles III as Britain announces new training programs for fighter pilots and marines.

Zelenskyy’s surprise trip includes a visit to see Ukrainian troops being trained by the British armed forces and an address to the U.K. parliament. He will be granted an audience with the British monarch at Buckingham Palace Wednesday afternoon.

This is Zelenskyy’s second trip overseas since Russia invaded Ukraine in February 2022. The Ukrainian leader had also been expected to visit EU leaders in Brussels later this week, but that stop has been cast in doubt after the plans leaked on Monday.

In a statement Wednesday, Prime Minister Rishi Sunak announced the U.K. will now train pilots on the operation of NATO-standard fighter jets as well as marines. This comes in addition to an expansion of U.K. training Ukrainian recruits from 10,000 to 20,000 soldiers this year.

The new training programs show Britain’s commitment “to stand shoulder-to-shoulder with Ukraine for years to come,” Sunak said.

During their talks, Sunak is expected to offer the Ukrainian president longer-range weapons and his backing for Zelenskyy’s plans to work toward peace, No. 10 Downing Street said.

“President Zelenskyy’s visit to the U.K. is a testament to his country’s courage, determination and fight, and a testament to the unbreakable friendship between our two countries,” Sunak added.

The U.K. will also announce further sanctions Wednesday in response to Russia’s continued bombardment of Ukraine, the prime minister’s office said.

Cristina Gallardo

Source link

February 8, 2023
Xinjiang governor cancels EU visit amid Uyghur abuse blowback

BRUSSELS — The governor of the Xinjiang region in China has canceled his controversial trip to Paris and Brussels, three people with knowledge of his plan told POLITICO.

The cancelation of Erkin Tuniyaz’s tour followed widespread concerns from lawmakers and activists that Europe would be rolling out the red carpet for the man in charge of the Chinese region where extreme measures against the Uyghur Muslim community amounted to what the U.N. calls potential crimes against humanity.

News of the trip being called off was relayed to people invited to his reception parties planned by Chinese diplomats in France and Belgium. “Due to scheduling reasons … [the event] is postponed,” according to an email sent to the EU guests in Brussels, the text of which was seen by POLITICO.

The one sent to invitees in Paris cited “an important domestic agenda.” Those sharing the information with POLITICO did so on condition of anonymity because they were not authorized to comment on the Xinjiang governor’s trip publicly.

An emailed inquiry from POLITICO to the Chinese embassy in London, where Tuniyaz was supposed to begin his tour on Monday, was not answered. It remains unclear whether he will still go to London.

POLITICO reported on his planned trip to Brussels last week following a report by the Guardian on his London visit. It later emerged that he was also scheduled to go to Paris.

Critics questioned the British Foreign Office and the EU foreign policy arm for an initial plan to invite Tuniyaz for meetings during his trip. Some threatened legal action against him while he’s on European soil. The EU later defended its decision, saying they turned down Beijing’s requests to meet more senior EU officials.

The Chinese foreign ministry didn’t confirm Tuniyaz’s initial trip plan.

On the other hand, it announced that the Chinese foreign policy chief, Wang Yi, will be visiting Russia and four EU countries: France, Germany, Italy and Hungary. He’s also expected to speak at the Munich Security Conference. This will be Wang’s first trip to Europe since his promotion from foreign minister to the Communist Party Politburo late last year.

In the meantime the EU is expected to relaunch the human rights dialogue with China later this month, the first time since Beijing imposed sanctions on European diplomats, lawmakers and scholars in 2020, according to an EU official on foreign policy.

Stuart Lau

Source link

February 8, 2023
The delayed impact of the EU’s wartime sanctions on Russia

Press play to listen to this article

Voiced by artificial intelligence.

The EU was quick to hit Russia with sanctions after Vladimir Putin launched the invasion of Ukraine — but it took time and an escalation of measures before Moscow started to feel any real damage.

Since the war started in late February last year, November was the first month when the value of EU imports from Russia was lower than in the same month of 2021. Until then, the bloc had been sending more cash than before the conflict — every month, for nine months. More recent data is not yet available.

The main reason behind this? Energy dependency on Russia and skyrocketing energy prices. But that’s not the whole story: Some EU countries were much quicker than others to reduce trade flows with Moscow — and some were still increasing them at the end of last year.

Here is a full breakdown of how the war has changed EU trade with Russia, in figures and charts:

Arnau Busquets Guardia and Charlie Cooper

Source link

February 6, 2023
After the Failure Of Their Stablecoin Experiment, Iran And Russia Will Inevitably Adopt Bitcoin

This is an opinion editorial by Q Ghaemi, a stocks and bitcoin analyst and author of the Qweekly Update newsletter.

Earlier this month, reports surfaced that the Central Bank of Iran is working with the Russian Association Of The Crypto Industry And Blockchain to create a stablecoin that will be backed by gold to settle trade. This is not the first foray into the crypto universe for either country, nor will it be the last. But this venture will come to nothing, ultimately bringing both countries one step closer to adopting Bitcoin.

Iran’s Foray Into Cryptocurrencies Favor Bitcoin

In August 2022, a headline came and went and most did not hear about it, and those who did gave it little thought: “Iran Approves Use Of Cryptocurrency For Imports To Bust Sanctions.” Ignoring the fact that the source for this headline was a Saudi-funded media outlet with the likely goal of destabilizing and delegitimizing Iran, it is important to recognize that Iran successfully completed a trade in August with an estimated value of $10 million, which can be assumed to have been conducted in bitcoin.

Based on daily volume, there are about 20 possible cryptocurrencies that could have been used to complete this transaction, however, if we take these cryptocurrencies by daily volume and agree that none with a daily volume less than $1 billion could have possibly been used (anything greater than 1% of daily volume would move the price too significantly: 1% of $1 billion is $10 million) we are left with seven possible cryptocurrencies: Ripple (XRP), Solana (SOL), USDC, Ethereum (ETH), Binance (BNB), Tether (USDT) and Bitcoin (BTC).

We can quickly eliminate USDC, Solana and Ripple because they are all run by U.S. corporations and, due to sanction laws (see: Tornado Cash), they would be forced to prevent Iran from using their platform (also it is safe to assume that the Iranian government chose to avoid U.S. companies for simplicity’s sake). Tether can also be thrown out given its link to the U.S. dollar. I will also throw out Ethereum because Iranians are too cheap to pay those gas fees. This leaves us with two options: BNB and Bitcoin. Personal bias aside, no one is settling international trade with BNB without Binance CEO Changpeng Zhao (CZ) taking some sort of a victory lap. Bitcoin wins.

Iran also previously banned Bitcoin mining operations due to stress on Tehran’s power grid. It has since returned all of the mining equipment and, as noted above, made the claim that $10 million in international trade was completed using cryptocurrency. Suffice to say, Iran has begun to see the potential of Bitcoin.

Russian Foray Into Cryptocurrencies Demonstrates Need For Unsanctioned Exchange

Russia has also begun to dip its toes in the broader cryptocurrency space. After the U.S. government responded to the invasion of Ukraine with sanctions, Russia was forced to explore alternatives to completing international trade. President Vladimir Putin’s response was to forgo the over $500 billion in its reserves and mandate that every buyer of Russian natural gas pay in Russian rubles. The ruble responded very positively to this news (see the chart below with a red arrow pointing to when U.S. sanctions began and a green arrow pointing to when the ruble became the only payment for Russian natural gas).

Source

Russia then slowly began to reverse its 2020 position on cryptocurrencies. Late last year, Russia announced that it will allow international settlement in cryptocurrencies without any restrictions, a huge reversal from its previous stance. These moves prove that Russia sees the potential for cryptocurrencies as a medium of exchange.

Sanctions Make The Bond Stronger

Both countries have been on the receiving end of U.S./Western sanctions but have found ways to navigate around them to remain in power. The lesson that both of these countries have learned is to trust no one, especially in the world of finances. Putin profusely announced that by freezing Russia’s dollar holdings, it “practically defaulted,” signaling that even the mighty dollar may not be as mighty as the U.S. wants you to believe.

Iran is also no stranger to the empty promises of the West: after negotiating and agreeing to a nuclear deal in 2015, President Donald Trump came in and tore up the old agreement. While this may be common practice in some (shady) business ventures, this is an insult in Persian culture. Every indication that a new nuclear deal will be signed by Iran was laughable: why would Iran assume the next deal would be upheld after this president left office? Needless to say, the Iranian government has very little trust of foreign governments.

“The enemy of my enemy is my friend” plus “keep your friends close but your enemies closer” equals Iran/Russia relations.

In 2023, it almost makes sense to Westerners that Russia and Iran would work together. Both countries are deemed villains by many Western countries, and strict sanctions prevent them both from selling their resources to the world. Both have stockpiles of oil and gas that the world desperately needs. And yet, their history is far from harmonious.

Until the 1920s, both the U.K. and Russia fought over control of the resources of Iran. The Qajar dynasty would bend the knee and give anything foreign powers requested in exchange for wealth and riches for its family. This all changed after the 1921 coup brought an end to the Qajar dynasty and brought to power Reza Shah.

Reza Shah refused to give concessions to foreign powers and focused on growing Iran. The Soviet Union came to be one year later, which caused the USSR to focus on domestic growth as well. As Iran began to grow in importance to the West (chiefly to the U.K. and the U.S.), Reza Shah and his son (the last Shah of Iran, Mohammad Reza Shah), would use the West’s fear of communism to their advantage. If Iran would not get what it wanted from its Western trade partners, it would go make a small deal with the USSR to remind them who was in charge.

Despite the once contentious history between these two nations, it seems like they have found a common ground: perception as an enemy of the West.

Why The New Stablecoin Will Fail

I made a lofty claim that the stablecoin experiment between Iran and Russia will fail and cause them to adopt Bitcoin. How will it fail? There is no trust: there never was and there never will be.

Trust can be eroded while the network is being formed. While many Russian and Iranian leaders may believe that their countries’ top engineers can craft a product that is able to circumvent any adversarial attacks, what is to stop the other country from giving themselves backdoor access? What is stopping someone from creating a way to double spend tokens? Now, this is all conjecture: I am presenting just a handful of potential flaws in this system — how many more can you think of?

The largest question is regarding the gold reserves backing the stablecoin: Where will the gold be stored and who will verify that the amount of gold listed is still there? Given the lack of trust, neither country can be expected to blindly accept that the other is holding the amount of gold it claims to be (see “The Bitcoin Standard” for more on this topic), and sanctions prevent a reputable third party from getting involved (although China could fit into the puzzle in some way here).

As this very large and very important hurdle is met, another question will continue to loom: Why? Why do we need to do any of this when there is a cryptocurrency out there with enough liquidity to suffice their needs and that requires no trust in either party?

Both Iran and Russia have banned residents from using Bitcoin, but they have also reversed some of their positions over time. It is safe to say that both governments are still in the process of understanding the power and scope of what cryptocurrencies have to offer. It is also worth noting that, should this joint effort be successful, it will not be the first gold-backed cryptocurrency.

Conclusion

Both countries are still in the information-gathering stage and, if by some miracle, a researcher stumbles across this article, let me spell it out plain and simple: History has proven that when given the opportunity to control money, the people in charge will manipulate the money for their benefit.

There is a reason the Roman Empire fell and that we don’t use guilders or pounds as global currencies. Instead of bringing this temptation into the equation, adopting a trustless form of money that cannot be manipulated or inflated is the only solution. Bitcoin is the inevitable money you are looking for. Whether you get there before your enemies is up to you.

This is a guest post by Q Ghaemi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Q Ghaemi

Source link

January 24, 2023
Russian diamonds lose their sparkle in Europe

Press play to listen to this article

Voiced by artificial intelligence.

In the European bubble in Brussels, diamonds aren’t anyone’s best friend anymore.

The Belgian government’s reluctance to ban imports of Russian diamonds, which would hurt the city of Antwerp, a global hub for the precious stones, has outraged Ukraine and its supporters within the EU.

Ukraine has been pushing to stop the import of Russian rough diamonds because the trade enriches Alrosa, a partially state-owned Russian enterprise.

While such a crackdown wouldn’t inflict the same damage on Vladimir Putin’s economy as a prohibition on all fossil fuels, for example, the continuing flow of Russian diamonds has become a symbol of Western countries putting their national interests above those of Ukraine.

New plans for a fresh round of sanctions against Putin have now reignited the debate over the morality of Europe’s trade in diamonds from Russia.

Belgium is fed up with being scapegoated. According to Prime Minister Alexander De Croo, Putin’s ability to sell diamonds to all western markets now needs to be shut off.

“Russian diamonds are blood diamonds,” De Croo said in a statement to POLITICO. “The revenue for Russia from diamonds can only stop if the access of Russian diamonds to Western markets is no longer possible. On forging that solid front, Belgium is working with its partners.”

The West’s economic war against Russia has already had an impact. Partly because of U.S. sanctions, the Russian diamond trade in Antwerp has already been severely hit. But those rough Russian diamonds are diverted to other diamond markets, and often find their way back to the West, cut and polished.

That’s why Belgium is working with partners to introduce a “watertight” traceability system for diamonds, a Belgian official said. If it works, this could hurt Moscow more than if Washington or Brussels are flying solo.

“Europe and North America together represent 70 percent of the world market for natural diamonds,” the official said. “Based on this market power, we can ensure the necessary transparency in the global diamond sector and structurally ban blood diamonds from the global market. The war in Ukraine provides for a strong momentum.”

Sanctions at last?

Belgium’s offensive comes just when its position on sanctioning Russian diamonds is under renewed attack — not just from other EU countries and Belgian opposition parties, but also within De Croo’s own government.

According to Belgian Prime Minister Alexander De Croo, Putin’s ability to sell diamonds to all western markets now needs to be shut off | Laurie Dieffembacq/Belga Mag/AFP via Getty Images

The EU is preparing a new round of sanctions against Russia ahead of the first anniversary of Putin’s invasion of Ukraine on February 24. Countries such as Poland and Lithuania are again urging the EU to include diamonds. However, one EU diplomat said the discussion is now more an “intra-Belgian fight than a European one.”

De Croo leads a coalition of seven ideologically diverse parties. The greens and socialists within his government are pushing him to actively lobby for hitting diamonds in the next EU sanctions round.

In particular, Vooruit, the Dutch-speaking socialist party, is making a renewed push. Belgian MP Vicky Reynaert will be introducing a new resolution in the Belgian Parliament proposing an import ban.

“It’s becoming impossible to explain that Belgium is not open to blocking Russian diamonds,” Reynaert said. “We want Belgium to actively engage with the European Commission to take action.” Belgian socialist MEP Kathleen Van Brempt is pushing the same idea at the European level.

But the initiative from the socialists isn’t likely to deliver an import ban, or even import quotas, four officials from other Belgian political parties said. De Croo is now set on an international solution instead. No one expects the socialists to destabilize De Croo’s fragile Belgian coalition government over the issue of diamonds.

Even if all seven parties in the Belgian government did agree to hit Russian diamonds, there would be another key obstacle.

In the complicated Belgian political system, the regional governments would have a say as well. The government of the northern region of Flanders is against an import ban. That government is led by the Flemish nationalists, whose party president, Bart De Wever, is also the mayor of Antwerp. “Nothing will change their minds on this,” one of the Belgian officials said of the nationalists’ position.

Blood diamonds

Belgium hopes that by building an international coalition to trace Russia’s “blood diamonds” it will finally stop being seen as a roadblock to action.

The industry agrees. “Sanctions are not the solution,” said Tom Neys of the Antwerp World Diamond Centre. “An international framework of complete transparency, with the same standards of compliance as Antwerp, can be that solution,” he said.

Such a transatlantic plan would have a huge impact, according to Hans Merket, a researcher with the International Peace Information Service, a human rights nonprofit organization. “That would have much more effect than the current U.S. sanctions, which are being circumvented,” said Merket.

But the devil will be in the details. Will Belgium succeed in building a transatlantic coalition? Are consumers willing to pay more for their diamonds, or does it still risk diverting the goods to other markets where traders are less diligent?

One of the Belgian officials was doubtful of Belgium’s chances of success. If the international alliance falters, Belgium and the EU should consider moving ahead on their own to convince the rest of the world to act. “But let’s give De Croo a shot at this,” the official said.

Barbara Moens

Source link

January 24, 2023
Who’s not coming to Davos

Press play to listen to this article

Voiced by artificial intelligence.

DAVOS, Switzerland — The World Economic Forum’s annual conclave in the Swiss Alps is the greatest intersection of wealth and political power on the global calendar, but this year the balance is shifting.

Each January, forum organizers became used to announcing another record-setting list of national leaders, global officials and royalty making their way to the exclusive gathering.

WEF would attract even globalization’s strongest skeptics: from U.S. President Donald Trump to former Brazilian President Jair Bolsonaro and climate campaigner Greta Thunberg.

While there are 52 heads of state of government heading to Davos this year, top-tier leaders are missing. U.S. President Joe Biden and his Chinese and Russian counterparts Xi Jinping and Vladimir Putin are all giving it a miss.

French President Emmanuel Macron, who promised to Make the Planet Great Again, is also skipping the talkfest, along with new British Prime Minister Rishi Sunak and re-elected Brazilian President Luiz Inácio Lula da Silva.

Instead, it’s a European-heavy guest list: German Chancellor Olaf Scholz is the only leader from a G7 country, sharing top billing with European Commission President Ursula von der Leyen, another German.

Even within European royal ranks, the forum this year is attracting the likes of Queen Maxima of the Netherlands — a U.N. financial inclusion envoy — rather than environmental campaigners such as King Charles and Prince William.

Some of the most prominent tech companies are dialing back their participation amid rounds of heavy layoffs.

And the biggest party hosts in town — Russian oligarchs — remain forced out by sanctions levied since Putin’s invasion of Ukraine in February 2022.

Ukrainian President Volodymyr Zelenskyy has unrivaled star wattage among the Davos crowd — but even a video appearance from him this year will be treated as below par, given how many of them he now does.

It’s the C-Suite, stupid!

With the global political elite mostly absent, WEF is this year choosing to focus on rising CEO numbers.

Among 2,700 participants in official WEF sessions, “we’re likely to surpass the old record from 2020 with 600 global CEOs — including 1,500 C-suite level overall,” said WEF’s head of digital and marketing George Schmitt, who added that 80 of the CEOs are first-timers in Davos.

Those who claim Davos is dead are yet to be proven right, but WEF’s critics now spread beyond the activist world who have long disparaged the juxtaposition of private jet opulence with hand-wringing panels about global poverty.

WEF would attract even globalization’s strongest skeptics: from U.S. President Donald Trump to former Brazilian President Jair Bolsonaro and climate campaigner Greta Thunberg | Jim Watson/AFP via Getty Images

The U.S. delegation includes cabinet members such as climate envoy John Kerry, who will camp out in Davos for most of the week, but others such as Treasury Secretary Janet Yellen are skipping.

It’s not that Yellen has better things to do at home: She’s embarking on an 11-day trip with stops in Senegal, Zambia and South Africa, with no time for Davos.

Nobel Peace Prize winner Beatrice Fihn, who campaigns to eliminate nuclear weapons, said she “genuinely had forgotten that Davos is still happening.”

“The format seems slightly dated now. The private jets and oligarch parties are no longer in step with modern biz [business] life,” said Scott Colvin, a Davos veteran who is now public affairs director at Aviva. “The events around COP [the U.N.’s annual climate summit] now feel a bigger deal, given their focus on a specific global policy objective,” he added.

WEF is a victim of its own success and stuck in a demographic bind.

The forum’s operating model requires it to provide a place for the world’s most powerful and influential people to talk.

In 2020 Bloomberg calculated 119 billionaires joined the party, with a combined net worth of more than $500 billion.

WEF’s efforts to bring the uber-elite together is a stark annual reminder that they don’t look like the rest of us.

The best ratio of female participants in WEF’s 52-year history of in-person gatherings was 24 percent, in 2020.

Despite years of exhortations and incentives for members to bring more female colleagues, the number often hovers in the range of 18 percent to 20 percent. A WEF spokesperson said that 42 percent of speakers this year will be women.

WEF aims for global reach — but often lands in the middle of the Atlantic instead.

This year Europe is supplying the most political leaders, while the U.S. corporate delegation will once again massively outweigh the others. The 700 Americans participating this year outnumber the Chinese delegation roughly 20 to 1.

Ryan Heath

Source link

January 12, 2023
As Financial Surveillance Intensified In 2022, Bitcoin Is Needed By Individuals And Nations Alike

This is an opinion editorial by Kudzai Kutukwa, a financial inclusion advocate who was recognized by Fast Company magazine as one of South Africa’s top-20 young entrepreneurs under 30.

“Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, and every date has been altered. And the process is continuing day by day and minute by minute. History has stopped. Nothing exists except an endless present in which the Party is always right.”

–George Orwell, “1984”

At the outbreak of the first world war, Great Britain had the world’s most sophisticated undersea telegraph cable system, which wrapped around the entire world. On August 5, 1914, a day after the British had declared war on the Germans, a British ship, the Alert, set sail from the port of Dover with a mission of cutting off all of Germany’s communications with the world by sabotaging the Germans’ undersea cables and the mission was accomplished successfully.

A day before the Alert set sail, on August 4, a man was deployed to the cable station at Porthcurno in Cornwall and the cables carrying traffic across the Atlantic came ashore on the beach. The job title of this man was “censor” and numerous other censors were deployed across the empire, from Hong Kong to Malta to Singapore. Once the censors were in position, a worldwide system of intercepting communications known as “censorship” was born. Its main aim was to prevent the communication of strategic intelligence between the enemy and their agents. In other words, the goal had evolved from just crippling the Germans’ ability to communicate, to also gathering intelligence.

Over 50,000 messages per day were handled by the network of 180 censors at U.K. offices. By leveraging their dominance over the international telegraph infrastructure, the British created the first global communications surveillance system that stretched from Cape Town to Cairo and from Gibraltar to Zanzibar. This became one of the choke points that led to the defeat of the Germans.

While the phenomenon of censorship is by no means a new one, as highlighted by the historical account above, the fact still stands that it’s a weapon that has been deployed throughout history to silence opposing views, cripple independent thought and ultimately subjugate “enemies of the state” or entire nations.

2022 was in many ways what I would personally call the year of the “censor.” As I look back and reflect on 2022, it seems to me that incidents of censorship are now the rule and not the exception thanks to the rise of cancel culture on social media and various independent media voices offering diverse views on controversial topics that, in some cases, contradict the “official narrative.” Honest and open debate is stifled when these views get censored, resulting in further polarization.

Furthermore the convergence of digital platforms and banking has led to the rise of another, more dangerous and pervasive form of censorship: financial censorship. This is a more malicious form of censorship that isn’t just about hindering or intercepting communications, but is characterized by cutting off one’s access to basic financial services, restricting who one can trade with and hindering the ability to transact freely. This includes but isn’t limited to shutting down the bank accounts of political opponents, being blacklisted and deplatformed by payment processors and economic sanctions. What started out as a tool to stop criminals and other bad actors from financing their nefarious activities has now morphed into a weapon for silencing critics, oppressing dissenters and harassing whistleblowers, as well as indirectly controlling the spending habits of people.

Given Bitcoin’s censorship resistance, it too was also subjected to numerous attacks in this past year as the censors clearly understand that it’s an alternative monetary system that they cannot stop, control or influence.

In a world where the definitions of what constitutes “acceptable speech or appropriate behavior” are constantly moving targets, who knows when you may end up having your bank accounts frozen for having a different perspective or for something you posted on social media ten years ago? Will independent thought result in financial retaliation? In this essay I will highlight a few of the key incidents of financial censorship that occurred in 2022 which were basically free Bitcoin marketing campaigns, and more importantly, discuss how Bitcoin is the perfect shield going forward.

The Freedom Convoy

“The greatest danger to the State is independent intellectual criticism.”

–Murray N. Rothbard

The increased levels of collusion between the State, bankers and big tech against individuals and organizations that hold legal but dissenting views is perhaps the most obfuscated and dangerous form of financial censorship.

The Freedom Convoy protests that kicked off on January 22 by Canadian truckers who were protesting against COVID-19 vaccine mandates clearly demonstrated how third-party payment platforms and banks can collude with the State to financially cut off individuals without due process. Through the crowdfunding site GoFundMe the truckers managed to raise approximately $7.9 million in donations. GoFundMe then withheld and later refunded the donations to the donors citing a violation of their terms of service against the promotion of violence.

Not long after that, Prime Minister Trudeau invoked the Emergencies Act, which allowed the government to freeze the bank accounts, suspend insurance policies and withhold other financial services from the protestors and their donors.

During a press conference on the February 14, after the invocation of the Emergencies Act, Deputy Prime Minister Chrystia Freeland made the following remarks:

“The government is issuing an order with immediate effect, under the Emergencies Act, authorizing Canadian financial institutions to temporarily cease providing financial services where the institution suspects that an account is being used to further the illegal blockades and occupations. This order covers both personal and corporate accounts…As of today, a bank or other financial service provider will be able to immediately freeze or suspend an account without a court order. In doing so, they will be protected against civil liability for actions taken in good faith. Federal government institutions will have a new broad authority to share relevant information with banks and other financial service providers to ensure that we can all work together to put a stop to the funding of these illegal blockades.”

The Canadian government chose to shut down the protests by nuking the protestors’ financial infrastructure. Financial services providers were given the green light to do so without due process and were given legal cover by the state for any blowback that could result from enforcing this decree. Furthermore, the government intends to extend these measures and make them permanent.

Whether one agrees with the truckers or not, it is very obvious that using financial censorship to resolve domestic dissent is a terrible precedent to set.

On the flip side the weaknesses of State-controlled money were exposed in full view for all to see. This incident was the best Bitcoin commercial ever made, as it simultaneously showed the weaknesses of centralized financial platforms while proving the utility of a decentralized currency like bitcoin.

At the stroke of a pen, thousands of people were denied access to their own money and it was all “perfectly legal.” The message was clear; reliance on a centralized financial system that is biased is very risky. By applying pressure on this one choke point, the expression of other freedoms is also curtailed, whether it’s freedom of expression or freedom of movement as they all contingent on one’s ability to transact. One of the truckers described how his personal and business accounts were shut down. The business in question wasn’t connected in any way with trucking, politics, protests or the Freedom Convoy, but its bank account was still shut down by the Canadian government and this has completely crippled the owner’s ability to make a living.

Following the action taken by GoFundMe, a Bitcoin fundraising campaign dubbed “Honk Honk Hodl” was started on Twitter with the intention of raising 21 bitcoin (worth approximately $1,100,000 at the time) for the truckers and they successfully raised more than 14 bitcoin. In response to this, the government extended the ban to include bitcoin and other cryptocurrency donations and pressured cryptocurrency exchanges to freeze the accounts of anyone involved in funding the truckers as well as to share their personal information with the State. The Ontario Superior Court of Justice ordered self-custody wallet provider Nunchuk to disclose user information and freeze Bitcoin wallets of its users in accordance with the government decree. The official response from Nunchuk was as follows:

Source

Once again, Bitcoin’s censorship resistance passed the test, and Nunchuk’s response not only highlights the importance of owning money that cannot be seized or censored, but of self custody as well.

Not to be outdone, the Iranian regime took a page out of the Canadian government’s playbook of using financial censorship as a weapon to crush dissent amongst its citizens when they issued a decree that will enable the state to freeze the bank accounts of women that will not wear a hijab. Protests have been going on in Iran since September 17, when Mahsa Amini, an Iranian woman, was arrested by the morality police for not wearing a hijab and later died under dubious circumstances at a Tehran hospital. The case for Bitcoin, a censorship resistant form of money, has never been stronger.

It’s against this background that I am convinced that central bank digital currencies (CBDCs) are a threat to individual liberty and financial sovereignty as they endow the state with the ability to financially censor anyone, for any reason at the push of a button, without due process. In a CBDC world, a protest such as the Freedom Convoy would probably not have happened. This is why it’s a matter of great concern that nine out of 10 of the world’s central banks are currently actively working on launching their own CBDCs. Furthermore, according to a report released by the Bank for International Settlements in May this year, “the growth of cryptoassets and stablecoins’ is the main reason that the majority of these central banks are actively pursuing CBDCs.

In other words, the censors’ top priority is to neuter Bitcoin and stablecoins since they neither want to lose their power to print money ad infinitum nor to loosen their grip on the scepter of financial censorship.

This explains why the Nigerian central bank issued an edict on December 6, that capped ATM withdrawals at a maximum of $45 a day and $225 a week in a bid to coerce more people to use the eNaira, the country’s CBDC. After experiencing similar financial censorship to the truckers in 2020 during the anti-police brutality “End Sars” protests, Nigerians are definitely not keen on signing up for CBDC induced digital serfdom. As a result adoption of the eNaira has been dismal to say the least, with only 0.5% of the country’s 217 million citizens having used it since its launch in October 2021. The Nigerian central bank’s draconian measures to promote the eNaira by declaring war on cash will just serve to strengthen Bitcoin’s appeal and adoption is likely going to keep rising. Having said that, I wouldn’t be surprised to see in the coming year more measures of this sort being implemented by central banks as they “promote” their CBDCs.

Censorship-Resistant Design

“When we can secure the most important functionality of a financial network by computer science rather than by the traditional accountants, regulators, investigators, police, and lawyers, we go from a system that is manual, local, and of inconsistent security to one that is automated, global, and much more secure.”

–Nick Szabo

Bitcoin is a global, fully-decentralized, trustless, permissionless, non-sovereign and censorship-resistant form of money. It exists beyond the control of the State or any corporation and functions perfectly without the need for coordination by any centralized third parties. Of the many attributes of Bitcoin, censorship resistance remains one of the most unappreciated yet very important in this age of pervasive surveillance and financial censorship.

Censorship resistance is the ability of a currency to be stored and transacted, unhindered and unencumbered. Censorship-resistant money is immune to confiscation, freezing or interception by any third party. Anyone can access Bitcoin because it’s permissionless and, as it scales, it becomes more decentralized and therefore harder to censor.

Valid transactions that are processed on the Bitcoin network are uncensorable and no third party can block them or blacklist a wallet address. Users are protected from asset seizures by the state or freezing by private corporations — in short, it is neutral money that is governed by rules and not rulers. If WikiLeaks had been receiving donations via Bitcoin from day one, the financial blockade it experienced would have meant nothing.

The Bitcoin architecture is by design built to be censorship resistant as this ensures that no arbitrary changes to its monetary policy or to the protocol itself can be made unilaterally, thus guaranteeing the stability and integrity of the network. Without this attribute in place, what would be the guarantee that the maximum supply cap of 21 million bitcoin will not be increased unilaterally in future?

As Parker Lewis aptly puts it, “Censorship resistance reinforces scarcity and scarcity reinforces censorship resistance.” Bitcoin’s absolute scarcity is the foundation for every financial incentive that makes the Bitcoin network functional and valuable; thus, without censorship resistance built in, the entire system is compromised.

Contrast this with the current fiat system and its various payment rails that have terms of service that can be changed at the drop of a hat by a committee or due to pressure from social justice warriors as well as the State. An example that comes to mind would be PayPal’s deplatforming of alternative media sites, Consortium News and Mint Publishing, for publishing stories that were critical of the “official narrative” with regards to Western support of Ukraine. PayPal didn’t stop there, in September of this year, it also simultaneously shut down the accounts of the Free Speech Union and “UsforThemUK” (a parents group opposed to locking down schools during the pandemic) due to the “nature of its activities.” This was done with no prior warning, or clear explanation and it was unable to withdraw the thousands of pounds’ worth of donations that were still in its account.

Other organizations that were added to PayPal’s blacklist this year include: The Daily Sceptic; the U.K. Medical Freedom Alliance; Law Or Fiction, a website that educates citizens on their rights and how they have been affected by the British government’s response to COVID-19; and Moms For Liberty, to name just a few. These organizations will soon realize that the solution to the predicament of financial censorship is the adoption of a Bitcoin standard, where no entity, no matter how powerful, can censor their transactions.

Source

The Rise Of Financial Restrictions

“Liberty once lost, is lost forever.”

–John Adams

On August 8, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash (TC), an Ethereum smart contract mixer, and added it to the Specially Designated Nationals (SDN) List. According to OFAC, TC was allegedly used to launder cryptocurrency worth $455 million that was hacked by the North Korean government-backed hacker organization the Lazarus group. According to the Financial Times, a senior, unnamed Treasury official commenting on the sanction of TC said:

“‘We do believe that this action will send a really critical message to the private sector about the risks associated with mixers writ large,’ adding that it was ‘designed to inhibit Tornado Cash or any sort of reconstituted versions of it to continue to operate. Today’s action is the second action by Treasury against a mixer, but it will not be our last.’”

This is clearly a warning that the State intends to continue tightening the screws on financial privacy tools and will not hesitate to blacklist any insufficiently-decentralized protocols. This action by OFAC of sanctioning an open-source protocol sets a precedent that indirectly outlaws financial privacy. This further breeds uncertainty within the open-source community, as developers may be prosecuted for writing code, should it be deployed by criminals later on.

As if on cue, four days after TC was sanctioned, one of TC’s contributing developers, Alex Pertsev, was arrested by Dutch authorities on allegations of money laundering. Apart from being a contributor to TC’s code, no concrete evidence has been disclosed yet that ties Pertsev to the laundered funds, nor have any official charges against him been made, yet he remains in pre-trial detention.

Following a recent hearing, he was remanded in custody until February 20, 2023, pending investigation as the court deemed him to be a flight risk. It remains to be seen how this case will turn out, but as one of the biggest crypto-related cases to reach a court of law, the outcome of it will set a precedent within the EU that could negatively affect the Bitcoin ecosystem in the region, particularly where financial privacy is concerned. This is the slippery slope that we find ourselves on, where the slow creep against financial privacy is another tactic that censors are using to protect their powers.

Source

OFAC’s tentacles have also extended to Ethereum, which is gradually getting more centralized and less censorship resistant due to OFAC compliance as MEV-boost relays become more and more dominant. Following the long awaited merge upgrade in September that transitioned Ethereum to a proof-of-stake (PoS) consensus mechanism, data by Santiment indicates that 46.15% of Ethereum’s PoS nodes are controlled by just two addresses that belong to Coinbase and Lido. MEV-boost relays are also centralized entities that function as a bridge between block producers and block builders, giving all Ethereum PoS validators the option to outsource block production to third parties. As a result of this centralization, OFAC-compliant blocks came into existence, where it’s possible to censor certain transactions; like those from blacklisted TC addresses and any other sanctioned wallet addresses as designated by OFAC.

To put things in perspective, as of December 19, 2022, the production of OFAC-compliant blocks on a daily basis stands at 72%, up from 51% in October. While the possibility exists for sanctioned transactions to make it onto the Ethereum blockchain as things currently stand, this will become a rarity as more validators (and relays) will likely opt to exclude those transactions.

In case you weren’t paying attention, this is one of the biggest reasons why calls for Bitcoin to “change the code” and transition to PoS keep getting louder. The censors know that Bitcoin as it exists today is censorship resistant, largely due to proof of work, and in a bid to seize control of it at a protocol level, the attacks to force such a change are going to intensify in the years to come.

Source

In an op-ed piece titled, “Get Ready For The ‘No-Buy’ List,” David Sacks, the founding COO of PayPal, wrote:

“Kicking people off social media deprives them of the right to speak in our increasingly online world. Locking them out of the financial economy is worse: It deprives them of the right to make a living. We have seen how cancel culture can obliterate one’s ability to earn an income, but now the canceled may find themselves without a way to pay for goods and services. Previously, canceled employees who would never again have the opportunity to work for a Fortune 500 company at least had the option to go into business for themselves. But if they cannot purchase equipment, pay employees, or receive payment from clients and customers, that door closes on them, too.”

This observation is 100% accurate and mirrors the Chinese social credit system, which is a harbinger of a soon-to-be-global trend, especially as the wave of stakeholder capitalism sweeping the private sector intensifies.

The term “stakeholder capitalism” is a euphemism for fascism and is used to control private companies through “woke” economic metrics like environmental, social and governance (ESG) scores. Adherence to woke capitalism is then indirectly forced upon the customers of the companies in question, with dissent being punished by denial of services or even financial penalties. PayPal once again surfaces as a textbook example of this. In September, it announced a policy through which it intended to fine users $2,500 for sharing “misinformation” online. Last time I checked, PayPal was neither a content moderation platform nor a social media company.

Following a social media backlash against this proposed policy, PayPal then issued a statement citing that the policy was put out erroneously and as a result would not be implemented. Well, three weeks after backtracking on this policy, PayPal re-introduced the $2,500 fine in its newly-updated policy. The $2,500 fine was quietly added to its terms of service after the social media driven furor against it had disappeared. As if that’s not enough, PayPal added a clause that allows it to “freeze” all the money in your accounts for up to six months, “if reasonably needed to protect against the risk of liability or if you have violated our Acceptable Use Policy.”

What we are witnessing is the gradual roll out of a Chinese Communist Party style social credit system. Take this as an early warning, especially in this era where “software is eating the world” and everything from banking to shopping has migrated to digital platforms.

Source

Escaping Sanctions

“Whoever controls the volume of money in any country is absolute master of all industry and commerce.”

–James A. Garfield

Financial censorship is not exclusive to individuals and organizations but it is also extended to countries in the form of sanctions. They are also preferred as an acceptable alternative to military conflict since they are an avenue for non-kinetic power projection and are thus weapons of economic warfare.

The goal of economic sanctions is to impoverish and sicken the civilians of the sanctioned nation with the intention of pressuring the government of the sanctioned country into compliance in its hopes of avoiding civil unrest. Unfortunately, this hardly happens and as a result it’s the ordinary citizens that bear the brunt of sanctions and not the targeted politicians.

Economic sanctions are enabled by the centralized nature of the financial infrastructure of the fiat monetary system which is mainly controlled by the U.S. and the EU. One of the economic warfare tools in their arsenal is the SWIFT network. SWIFT is an international bank messaging system which has been operational since the 1970s that enables the transmission of almost $5 trillion globally every day. This system enables financial institutions to send and receive information about financial transactions in a secure, standardized environment.

Since the dollar is the global reserve currency, SWIFT facilitates the international dollar system. Although SWIFT is headquartered in Belgium, dollar dominance gives the U.S. a great deal of leverage over other countries. As a result of this dominance, the U.S. is able to use SWIFT as a financial weapon against nation states like Russia and Iran that violate “the rules based order.” Deplatforming or removing a country from SWIFT is basically cutting it off economically from trading with the rest of the world.

In stark contrast to this, Bitcoin is a fully-decentralized digital currency and peer-to-peer payments system that is not under the control of any nation state. According to a report titled, “The Treasury 2021 Sanctions Review” by the U.S. Treasury Department, between 2001 and 2021 the number of sanctions that were imposed by the U.S. Treasury had increased by a whopping 933%! In a world of increasing weaponization of the dollar and centralized financial infrastructure, nation state adoption of Bitcoin is a matter of national security.

In his article titled, “Why India Should Buy Bitcoin,” Balaji Srinivasan made the following remark:

“It is this property (referring to Bitcoin’s decentralization) that makes Bitcoin so precious for safeguarding Indian national security. A network that cannot be shut down by any state is a network that India and its diaspora can rely upon in times of conflict. For the same reason that Germany recently repatriated 3,378 tons of gold from the United States, India should prioritize national support for digital gold as a financial rail of last resort in a situation like the 2008 financial crisis or the 2020 COVID crash…Remember also that India has had a multi-millennia long love affair with gold, and is the world’s largest importer of gold. Gold was never a threat to India; gold has always been an asset for India. And Bitcoin is valuable for all the same reasons gold is valuable. It’s an internationally accepted store of value, it’s highly scarce, and it’s a so-called bearer instrument that can’t be seized with a keypress.”

I would also add that Bitcoin adoption at the nation state level is a shield against being deplatformed from financial payment rails like SWIFT. Sanctions have downstream ripple effects that negatively affect everyone tied to a particular country, industry or company that would have been sanctioned. Bitcoin’s censorship resistance shields the citizens of a sanctioned country from the crippling effects of sanctions, and insulates an entire nation’s economy from being unjustifiably attacked. By leveraging off of Bitcoin’s decentralization and censorship resistance people living in sanctioned countries are able to use it in lieu of the dollar for trade and an alternative payments rail to SWIFT.

In late February, the EU along with the U.S., Australia, Canada and Japan agreed to disconnect some Russian banks from the SWIFT network as part of restrictive measures meant to prevent the Russian central bank from circumventing sanctions that had been imposed on Russia as a result of its “military operation” in Ukraine. In a bid to pile more pressure on Russia to cease its “military operation,” Western powers seized Russia’s $640 billion worth of foreign currency reserves.

The implications of this unprecedented move are much bigger than the deplatforming from SWIFT but in my opinion this was the death knell for the risk-free status of U.S. treasuries, which central banks around the world hold. Not only is the entire premise of holding reserves nullified but this action has also proven that a sovereign country’s reserves can be confiscated at the drop of a hat. What had previously been regarded as safe and risk-free assets became risk free no more as non-existent credit risk was replaced by very real confiscation risk. What good are reserves that you can’t access when you need them?

To quote a remark from an article in the Wall Street Journal:

“Barring gold, these assets (i.e. forex reserves) are someone else’s liability—someone who can just decide they are worth nothing…If currency balances were to become worthless computer entries and didn’t guarantee buying essential stuff, Moscow would be rational to stop accumulating them and stockpile physical wealth in oil barrels, rather than sell them to the West.”

The financial censorship of Russia may seem justified today, but is there any guarantee that the weaponization of the financial system will not be abused in future? Every country that doesn’t want to become vulnerable to “denial-of-service attacks” will need to hold bitcoin in its treasury as a matter of national security. This also includes countries that aren’t sanctioned as they still need to diversify and limit their geopolitical risk in a vastly-polarized world. The same also holds true for individual citizens as they are the collateral damage when economic warfare is unleashed on their countries.

A nation cannot be truly sovereign if its financial destiny is controlled by another nation. The risk of being deplatformed from the current dollar-based fiat monetary system either via SWIFT, the IMF or private companies like PayPal continues to grow each day, both for nation states and individuals alike. While the IMF or SWIFT aren’t institutions that deal directly with the public, they do have great influence on the financial well being of a country. Great consideration needs to be made when deciding which assets to acquire in order to maintain individual sovereignty and defend your freedom to transact in the face of an attack. Bitcoin is currently the only financial asset that can be used as a defense against financial censorship at an individual level as well as at a nation state level.

Had the Russian central bank’s reserves been in bitcoin, no nation would have had the ability to arbitrarily freeze or seize them. On the flip side, this event may be the dollar system’s Waterloo and could lead to rapid de-dollarization by countries seeking to reduce their vulnerability to the U.S.’s control.

Attacks On Bitcoin Will Increase In 2023

“A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.”

–Satoshi Nakamoto

In conclusion, as the curtain comes down on 2022, it’s clear from the few examples that we explored in this essay that financial censorship is a huge problem of great concern given its increased usage with no signs of slowing down.

Financial censorship will continue to be one of the most-preferred levers that the state, big tech and bankers will use to silence critics as well as to force compliance with authoritarian policies. As the relationship between the state and “private sector” players gets cozier with regards to financial censorship, our society will continue its slow creep toward a dystopian digital feudalistic future.

The censors are not ignoring Bitcoin anymore and are taking active steps to capture it and/or restrict its usage as much as possible. Senator Warren’s Digital Asset Anti-Money Laundering bill along with the EU’s Markets In Crypto Assets law (MiCA) are two examples of ongoing attempts at regulatory capture, where the low-hanging fruit of fiat on/off ramps are the initial targets. Given everything that transpired this year, it would be naive to expect the state and its private sector allies to abandon their plans to destroy Bitcoin in the coming year.

That said, there is plenty of light at the end of the tunnel. With each attack that the State throws at Bitcoin, the network gets more resilient and stronger. Every attempt at banning Bitcoin, or destroying it, or financially censoring dissenters will have the opposite effect of further substantiating the reason for Bitcoin’s existence. These “free marketing campaigns” will drive home the importance of decentralization and censorship resistance in a more effective way.

The centralized nature of the fiat monetary system and its dependency on trusted third parties is both its strength (as this is how financial censorship is enforced) and its Achilles heel (as this is what Bitcoin dematerialized). In the coming year, as more people get canceled financially, it’s incumbent upon us to build more user-friendly tools that enhance financial privacy, develop Bitcoin circular economies and more Bitcoin-focused educational content. Reducing the Bitcoin learning curve, coupled with enhanced financial privacy and thriving Bitcoin circular economies, will be a great bulwark against attacks from the censors.

In a February 1995 email, Wei Dai, the cryptographer who invented B-Money, which was referenced in the Bitcoin white paper, perfectly captured the spirit of the above solution when he wrote the following:

“There has never been a government that didn’t sooner or later try to reduce the freedom of its subjects and gain more control over them, and there probably never will be one. Therefore, instead of trying to convince our current government not to try, we’ll develop the technology that will make it impossible for the government to succeed. Efforts to influence the government (e.g., lobbying and propaganda) are important only in so far as to delay its attempted crackdown long enough for the technology to mature and come into wide use. But even if you do not believe the above is true, think about it this way: If you have a certain amount of time to spend on advancing the cause of greater personal privacy, can you do it better by using the time to learn about cryptography and develop the tools to protect privacy, or by convincing your government not to invade your privacy?”

Bitcoin’s censorship resistance presents a viable option to both individuals and countries alike to withstand financial deplatforming and maintain sovereignty as well as neutrality in a highly-polarized and cancel-culture driven world. Despite the prevailing bear market, Bitcoin’s censorship resistance remains unchanged. Having a Bitcoin “insurance fund” is the most prudent thing one can do.

As Satoshi Nakamoto wrote, “It might make sense just to get some in case it catches on.”

This is a guest post by Kudzai Kutukwa. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Kudzai Kutukwa

Source link

December 26, 2022
Nuclear fusion: The one relationship Russia and the West just can’t break

Press play to listen to this article

Voiced by artificial intelligence.

SAINT-PAUL-LEZ-DURANCE, France — Russia’s brutal invasion of Ukraine has ripped apart Moscow’s ties with the EU and the U.S. on everything from energy to trade to travel — but there’s one partnership they can’t escape.

Tucked away in a quiet sun-soaked corner of southern France, the International Thermonuclear Experimental Reactor (ITER) — an effort to harness the power of nuclear fusion to unleash vast amounts of clean energy — continues to purr along with the participation of Russian scientists and Russian technology.

Earlier this month, scientists at ITER hailed a major breakthrough announced by the National Ignition Facility (NIF) at Lawrence Livermore National Laboratory in California, which said it had overcome a major barrier — producing more energy from a fusion experiment than was put in.

The 35-nation ITER — born out of U.S. President Ronald Reagan’s and Soviet leader Mikhail Gorbachev’s 1985 meeting after decades of Cold War tensions — has no way of removing a member gone rogue; there’s no path to kicking Russia out of the experiment without torpedoing the entire scheme.

The €44 billion project aims to test nuclear fusion — a process occurring in the center of stars — as a viable source of carbon-free energy that’s minimally radioactive. By injecting hot plasma that reaches 150 million degrees Celsius into a device and confining it with magnetic fields, hydrogen nuclei fuse into a helium nucleus and additional neutrons, releasing huge amounts of energy.

The EU shoulders around half of ITER’s costs and manages its participation through the bloc’s Barcelona-based Fusion 4 Europe (F4E) agency; India, Japan, China, Russia, South Korea and the U.S. each have a roughly 9 percent share.

As an active participant in ITER, Russia still has around 50 staff, including engineers, working onsite.

Flags of participant nations fly outside the ITER complex | Photo by Victor Jack/POLITICO

Immediately after Moscow launched its full-scale assault on Ukraine in February, the project was left in a tight spot, especially as Russian government representatives form part of the high-level decision-making board, the ITER Council, alongside their European and American counterparts.

“It’s a difficult balance between condemning a member and facing the consequences for the project,” said ITER Communication Officer Sabina Griffith, who adds that there were initially intensive discussions about how to respond. Staff even briefly discussed putting a banner on the project’s website condemning the war, before scrapping the idea.

Even if “the organization itself is apolitical … many people were questioning” what to do after the invasion began, according to ITER’s chief engineer Alain Bécoulet, who added that there was “a lot of sadness” among the staff.

“The political situation so far is stable, [with] all members … declaring that they want to continue to work together,” he said, adding that the first ITER Council meeting after the invasion in June was “very constructive.”

ITER Council members again “reaffirmed their strong belief in the value of the ITER mission” when they met at the site for their latest gathering in October.

The experiment — over budget and over deadline — has already had its fair share of controversies. France’s nuclear safety authority in January suspended the assembly of the fusion reactor over safety concerns. F4E has been plagued by accusations of a high-pressure and overwork culture that critics have linked to at least one suicide.

Vladimir Tronza | Photo by Victor Jack/POLITICO

Unlike Geneva-based particle physics laboratory CERN — a collaborative research center that suspended its ties with Russia after the war began — ITER is an international agreement like the U.N., making it hard to suspend Moscow, said Bécoulet.

That’s because up to 90 percent of the funding comes not in the form of cash but “in-kind” contributions of equipment, with participant countries each manufacturing a one-of-a-kind bespoke piece of the overall reactor that is then put together like a giant puzzle.

While the set-up was designed to create specialized fusion expertise across the world and stimulate domestic manufacturing, it now means that if one member doesn’t deliver a part, the entire project could collapse, wasting billions.

Even if they wanted to, countries couldn’t formally kick Russia out of the project, as there’s no clause in ITER’s constitution that would allow them to do so — instead, every other country would have to pull out.

Going nuclear

But that doesn’t mean the project hasn’t been impacted by Russia’s war.

For one, Western sanctions and Moscow’s counter-sanctions have made it a minefield to procure Russian-made parts, according to Bécoulet.

“It turns out 2022 is one very important year in terms of Russian deliveries” for the project, he said, with Moscow producing crucial parts including busbars — aluminum bars feeding the reactor with a huge electric current — and a 200-ton ring-shaped magnet that shapes the plasma and keeps it suspended in the reactor, called a poloidal field coil.

Transporting the busbars by truck and the field coil — which is on its way from St. Petersburg to Marseille — by ship required “more paperwork, more justification to explain to the various European countries that no, we are not subject to sanctions — we have derogations,” he said. The “painful” process delayed deliveries by up to two months, he added.

It also left Russian staff in the lurch, including Moscow-born assembly engineer Vladimir Tronza, who’s worked onsite since 2016.

“In the beginning, everyone was like, ‘What’s going to happen? Should we look for another job? Should we pack and go back?’” he said, adding that Russian staff members were initially concerned that Moscow would exit the project.

But Tronza said he hasn’t heard of Russian staff going home, with the “majority not interested to go back” given many have settled in southeastern France.

“Collaboration is important — it’s important to keep the ties and … talk,” he said, adding that the project is “a global good.”

Victor Jack

Source link

December 19, 2022
The Turkish connection: How Erdoğan’s confidant helped Iran finance terror

Press play to listen to this article

Voiced by artificial intelligence.

On March 22 of 2021, several of the world’s most dangerous men descended on Beirut’s historic seaside Summerland Hotel — not to swim in the Mediterranean or explore the sumptuous resort’s “Le Beach Pop Up,” but to talk Turkey.

The meeting was a secret one, between a delegation of senior Iranian military and government officials and a business group from Turkey led by a confidant of President Recep Tayyip Erdoğan. Both sides were keen to deepen their partnership smuggling Iranian oil to buyers in China and Russia to raise funds for Tehran’s terror proxies, according to Western diplomats.

A little more than a year after the meeting, all of the key attendees would find their names on U.S. sanctions lists, with one important exception: Turkish businessman Sıtkı Ayan, a friend of President Recep Tayyip Erdoğan — the two men attended the same high school — and the man at the center of it all.

The collaboration between a member of the Turkish president’s inner circle and Iran’s power elite is detailed in hundreds of pages of documents, including business contracts and bank transfers, reviewed by POLITICO, many of which have also been posted on WikiIran, an opposition website.

The U.S. sanctioned Ayan and his company late Thursday following the publication of this article, reversing months of inaction in the face of reams of evidence detailing the Turk’s dealings with the Iranians, including signed contracts and bank transfers. The U.S.’s reluctance to sanction Ayan, diplomats say, was driven by his close association with Erdoğan, a key American ally in the Middle East and beyond.

“Ayan’s companies have established international sales contracts for Iranian oil with foreign purchasers, arranged shipments of oil, and helped launder the proceeds, obscuring the oil’s Iranian origin and the [Quds Force’s] interest in the sales,” the U.S. Treasury, which oversees the implementation of American sanctions, said in a statement.

Neither Ayan’s nor Erdoğan’s offices responded to multiple requests for comment.

The case offers a window into the complicated dynamic between Iran, Turkey and the unique and influential role Erdoğan plays in the region as he oscillates from self-interested powerbroker to would-be mediator between the West, Russia and the Middle East, creating dependencies that often leave the United States and other allies with little choice but to let him have his way.

At a time when there’s a war in Ukraine and instability in the broader Middle East, Turkey’s relationship with Iran is also a reminder that the Turkish leader isn’t shy about using his leverage when and where he sees fit.

The Beirut gathering attracted a rogue’s gallery of Iranian officials — including Rostam Ghasemi, a former oil minister and senior commander in Iran’s Islamic Revolutionary Guard Corps (IRGC), and Behnam Shahriyari, a gun runner for the Quds Force, the guards’ affiliate that trains and finances Iran’s terror proxies in the Middle East.

Yet the key figure was Ayan, a bespectacled Turkish businessman. The Iranians were keen to deepen their burgeoning cooperation with Ayan, the chairman of Istanbul-based ASB Group, a globe-spanning energy conglomerate that buys, sells and transports oil, gas, electricity and much more.

With the help of ASB, Tehran’s regime has circumvented U.S. sanctions to funnel about $1 billion to its terror proxies since 2020, according to Western diplomats and documents detailing his company’s dealings reviewed by POLITICO. The primary beneficiary of the oil sales is the Quds Force, which uses the money to pay mercenaries and fund groups such as Lebanon’s Hezbollah, which has been designated as a terrorist organization by both the U.S. and EU, the diplomats said.

“Sitki Ayan serves currently as the head of Quds Force’s largest financial network in Turkey and possibly the entire world,” one of the officials said.

Shared background

What makes Ayan’s entanglement with the Quds Force even more surprising, however, is his close relationship to Erdoğan.

Erdoğan and Ayan hail from the same background. They both attended Istanbul’s İmam Hatip religious high school and developed a relationship that would prove beneficial for both men as they navigated their careers in politics and business, respectively. It was Ayan, for example, who helped his old friend conceal his ownership of the “Agdash,” a $25 million oil tanker Erdoğan and his family received as a gift from a wealthy benefactor in 2008, according to confidential Maltese financial records uncovered by European Investigative Collaborations, a reporting consortium, in 2017.

In 2014, Ayan’s name made headlines across Turkey after the release of secretly recorded calls, purportedly between the Turkish president and his son Bilal Erdoğan, including one in which the elder Erdoğan said they should demand more money from a “Mr. Sıtkı” than the $10 million they’d been offered. The Turkish leader dismissed the call as an “immoral montage,” implying it was fake, but the recording helped trigger a wave of protests, scrutiny of his ties to Ayan and even calls for his resignation.

At the time, Ayan was still hopeful that a €1 billion contract he’d signed with Iran in 2010 to build a 660-kilometer-long pipeline to transport Iranian gas across Turkey to Europe would come to fruition (It was ultimately thwarted by U.S. sanctions).

While it’s not clear whether Erdoğan was aware of the extent of his friend Ayan’s engagement with the Iranians, Western diplomats say it’s difficult to believe he could not have been, considering the nature of his business dealings and the involvement of high ranking Iranians.

Given the two men’s history — Ayan is also close to the president’s brother, Mustafa Erdoğan — Western diplomats say they do not believe that Ayan would be pursuing his ongoing business with Iran without the tacit knowledge and approval from Erdoğan.

A lawyer for ASB and Ayan declined to comment. The Turkish government did not reply to requests for comment.

Unlikely bedfellows

At first glance, the regional rivalry and religious feuds between Turkey and Iran would make them unlikely bedfellows, especially considering Turkey’s alliance with the U.S. as a member of NATO. The two are also on opposite sides of a number of armed conflicts in the region from Libya to the South Caucasus. Yet as neighbors with deep historic and ethnic ties, the two countries also have many shared interests, from combating Kurdish separatism to keeping Saudi Arabia in check.

Turkey and Iran are also economically intertwined. Turkey is one of Iran’s largest trading partners, for example, and relies on Iranian energy imports. Turkey is also the top tourist destination for Iranians, many of whom also own property in the country.

Highlighting the importance of those ties, Erdoğan traveled to Tehran in July to meet with Iranian President Ebrahim Raisi. The two countries planned to quadruple their bilateral trade to $30 billion, Erdoğan said, adding that the goal could be achieved “with the resolute march of the two countries.” (The Turkish leader also underscored the need to combat “terrorist organizations,” but referred only to Kurdish separatists and the Gülen movement.)

The fluid relationship between Iran and Turkey aligns with a broader dynamic in the region, which is more akin to medieval Europe with shifting alliances, says Behnam Ben Taleblu, an analyst at the Washington-based think tank Foundation for Defense of Democracies. As Washington devotes less attention to the Middle East and big countries such as Saudi Arabia increasingly assert themselves, opportunism has increasingly become the norm.

“The folly here is to see the relationship between Turkey and Iran as one of permanence,” Taleblu said. “It’s a story of change. Sometimes they have shared interests and sometimes they’re on other sides.”

Indeed, Turkey has helped its neighbor circumvent the sanctions pressures it has faced in the past, acting effectively as “a valve to help the Islamic Republic breathe,” Taleblu said.

‘Maximum pressure’

Though Ayan’s engagement with Iran stretches back more than a decade, his recent cooperation with the IRGC and Quds was triggered by then U.S. President Donald Trump’s decision in 2018 to withdraw the United States from a nuclear accord with Tehran, which afforded the regime relief from most international sanctions as long as it allowed the United Nations to monitor its nuclear activities.

Washington’s move meant that Iran again faced the brunt of U.S. sanctions, and its already-flagging economy came under even more pressure. The regime faced particular difficulty in accessing the foreign currency it needed to fund foreign operations.

On its face, the solution sounded simple: Allocate them oil instead. Oil can be sold for hard cash and Iran has plenty of it. The difficulty was setting up a system that could circumvent Trump’s “maximum pressure” sanctions regime.

To work around that challenge, Ghasemi, the former oil minister, set up an operation dubbed Pour Ja’afari tasked with selling oil for Quds Force and the IRGC to China, which was in theory happy to buy Iranian oil at a discount.

Getting it there was going to be a problem, however. American sanctions don’t just make it difficult for Iran to find anyone to ship the oil; the reluctance of foreign banks to get anywhere near Iranian transactions, much less those involving illicit oil, meant that the deals would have to go deep underground.

The oil would have to be blended to disguise its provenance; documents forged; and, most important, a mechanism developed to get revenue from the sales to the intended recipient.

That’s where ASB came in. With operations in more than a dozen countries, Ayan’s conglomerate offered the perfect cover.

Destinations: China and Russia

It’s not clear why Ayan agreed to collaborate with Ghasemi and Quds, but according to a “strictly confidential” memo of understanding signed by both Ayan and Ghasemi on November 19, 2020, and seen by POLITICO, he did. (Ghasemi died on Thursday after a “long struggle with illness,” according to Iranian media reports.)

“The parties have agreed to cooperate for the purpose of establishing a shipping operation to transport RG’s crude oil from the ports of North Dubai to China,” reads the document, which uses each man’s initials after first reference. “North Dubai” is code for Iran, said a Western official who has reviewed the documents and determined them to be authentic.

Under the agreement ASB subsidiaries Baslam Nakliyat and Baslam Petrol, which ship oil around the world, were tasked with leasing tankers to send the oil to China.

“Baslam Petrol and/or Baslam Nakliyat shall endeavor to arrange two suitable VLCC tankers to transport various types of crude oil from any port of North Dubai to the nominated discharge port(s) in China,” the agreement says under the heading “Option 1” (“VLCC” stands for very large crude-oil carriers, i.e. tankers that can carry more than 2 million barrels of oil.).

Ghasemi also had discretion to exercise “Option 2,” which required ASB to hire two tankers to ship the oil to Malaysia, where it would be transferred to different tankers, presumably to better disguise the oil’s origin, before final delivery to China.

The Chinese buyer of the oil was a company controlled by the country’s military called Haokun Energy, according to the documents. In late 2020, ASB and Haokun signed agreement for the delivery of Iranian oil worth about $2 billion a year. Of that, about $500 million was earmarked for Quds Force, the diplomats said.

To mask the true nature of the deals, ASB helped route them through a complicated network of international front companies and banks from India to Russia and UAE. It sometimes used its own bank in Istanbul, Vakıf Katılım Bankası, which transferred at least $80 million to accounts controlled by Shahriyari, the Quds Force commander, according to the Western diplomats and bank records viewed by POLITICO. There is no indication that Vakıf knew the money was going to the Quds Force. A representative for Vakıf Katılım Bankası did not respond to multiple requests for comment.

Many of the transfers were denominated in dollars or euros, meaning that they were settled by European banks, such as Frankfurt-based Commerzbank, or J.P. Morgan in the U.S. There’s no evidence that the Western banks involved were aware of the Iranian connection to the deals, which would constitute a violation of U.S. sanctions.

In addition to its business with China, Tehran set up a second pillar for its illicit oil trade with Russian partners who act as brokers for the Iranian crude. Here too, Ayan’s ASB served as the legitimate face of the operation, using its subsidiaries and banks to help unload Iran’s oil and filter back the profits to Quds Force and the IRGC through a network of front companies.

While broadly similar to the Chinese network, the Russia channel, led by a separate Tehran-based office called Resistance Economy, also relied on barter for payment. Staples such as wheat, sugar and sunflower seed oil, are exempt from U.S. sanctions. That made it easier for Russian buyers to camouflage their oil payments, which generally account for half the total bill, as humanitarian aid or other goods that don’t run afoul of the sanctions regime.

The arrangement means Iranian outfits like Quds Force get the foreign currency they need, while also giving the regime better access to foodstuffs and other goods that are in short supply.

Ultimately the cash ended up in accounts in Turkey or UAE, where it could be withdrawn by Quds Force operatives and distributed to the likes of Hezbollah or Yemen’s Ansarallah.

Doubling down

By the time Ayan met with Ghasemi and Shahriyari in Beirut in March 2021, the partnership had been so successful that Tehran wanted to double down.

Just a day after the gathering in Beirut, the National Iranian Oil Company (NIOC) and ConceptoScreen, a Lebanon-based company controlled by Hezbollah, signed a new deal with Haokun to send oil to China, according to the documents viewed by POLITICO.

The early success of the arrangement, however, appears to have bred complacency. In an early March 2021 amendment to a previous contract signed between the three, the references to oil from “North Dubai” were replaced with “Iranian light crude oil.”

Several months later, on August 25, Ayan signed a “Sale and Purchase Services Provider Agreement” with Azim Monzavi, Ghasemi’s successor as head of the Pour Ja’afari operation. The contract, signed by both Monzavi and Ayan, makes clear the Turkish company’s obligation to sell Iranian oil “in its own name” in return for a “service fee.”

The force majeure clause (commonly included in contracts to account for events beyond a party’s control, such as a hurricane, that would prevent them from fulfilling their obligation) concludes: “It is fully understood that sanction is not included.”

The arrangement held for less than a year.

On May 25, the U.S. Treasury slapped sanctions on several individuals involved in what it called an “international oil smuggling and money laundering network,” including Monzavi (Ghasemi was already on the sanctions list). A number of the companies in the scheme were also designated, including China’s Haokun and ConceptoScreen of Lebanon as well as several actors and companies working through Russia.

“We will not hesitate to target those who provide a critical lifeline of financial support and access to the international financial system for the Quds Force or Hezbollah,” said Brian E. Nelson, under secretary of the Treasury for terrorism and financial intelligence. “The United States will continue to strictly enforce sanctions on Iran’s illicit oil trade. Anyone purchasing oil from Iran faces the prospect of U.S. sanctions.”

Despite several further rounds of sanctions since May against others involved in Iran’s underground oil business, the one name conspicuously not on the list — until this article was published — was Sıtkı Ayan.

Turkish leverage

The reality is, the U.S. needs Turkish support on multiple fronts, especially in the Black Sea amid the war in Ukraine. Turkey is also blocking the NATO membership applications of Sweden and Finland, demanding concessions from both countries, including the lifting of a Finnish arms embargo against Ankara. What’s more, when provoked, Erdoğan has shown his willingness to strike back, by sending refugees across the border into Greece, for example.

Even so, Washington appears to have determined that Ayan had no intention of halting his dealings, despite the recent crackdown on his business partners.

In late August, he struck a deal on behalf of NIOC, the Iranian oil company, to sell up to four million barrels of crude per month to China’s Qingdao Deming Petrochemical Co. Ltd.

The contract, arranged by middlemen registered in the Marshall Islands, is stamped “Strictly Private & Confidential” in red letters. While it is vague on the provenance of the oil (“Omani light or Abu-Dhabi light or Fujairah light”), the seller betrays its true origin: “NIOC designated company.”

Resistance Economy, the Quds Force smuggling operation focused on Russian brokers, also remained active.

Complicating matters further for the U.S., the Iranians have proved nimble in handling complications in Ayan’s network.

After Greek authorities detained one of the Russian-owned tankers Resistance Economy relies on for its oil trade in April at the request of the U.S., for example, Quds Force responded by sending commandos to hijack two Greek tankers in the Gulf in May and then sailing them to Iran.

In November, Greece agreed release the Russian tanker, known as Lana and flying an Iranian flag, along with the Iranian crude onboard in order to free its own ships. Last Friday, the Lana sailed into the Syrian port of Banias and unloaded its payload of more than 700,000 barrels of Iranian crude.

The episode may help explain why Ayan continued his business with Quds Force amid the intensifying U.S. pressure.

“It’s lucrative and almost risk-free,” one of the diplomats said before Treasury sanctioned Ayan and ASB.

Almost.

UPDATED: This article was updated after the U.S. sanctioned Ayan and his company late Thursday following its publication.



POLITICO Staff

Source link

December 8, 2022
The West’s last war-time taboo: Ukraine joining NATO

Press play to listen to this article

Voiced by artificial intelligence.

For many officials, it’s a topic they won’t touch. When pressed, politicians give memorized, terse and robotic answers.

The verboten subject? Ukraine’s potential NATO membership.

It’s an issue so potentially combustible that many NATO allies try to avoid even talking about it. When Ukraine in September requested an accelerated process to join the military alliance, NATO publicly reiterated its open-door policy but didn’t give a concrete response. And last week, when NATO foreign ministers met, their final statement simply pointed to a vague 2008 pledge that Ukraine would someday join the club.

Not mentioned: Ukraine’s recent request, any concrete steps toward membership or any timeline.

The reasons are manifold. NATO is fractured over how, when (and in a few cases even if) Ukraine should join. Big capitals also don’t want to provoke the Kremlin further, aware of Vladimir Putin’s hyper-sensitivity to NATO’s eastward expansion. And most notably, NATO membership would legally require allies to come to Ukraine’s aid in case of attack — a prospect many won’t broach.

The result is that while Europe and the U.S. have plowed through one taboo after another since Russia invaded Ukraine in February — funneling mountains of lethal military equipment to Kyiv, slapping once unthinkable sanctions on Moscow, defecting from Russian energy — the prospect of Ukraine joining NATO remains the third rail of international politics.

Touching the issue can leave you burned.

French President Emmanuel Macron sparked an outcry over the weekend when he said the West must consider security guarantees for Russia if it returns to the negotiating table — a gesture that enraged Kyiv and appeared to go against NATO’s open-door policy. And behind the scenes, Ukrainian officials themselves faced annoyed colleagues after making their public plea for swift membership.

“Some very good friends of Ukraine are more afraid of a positive reply to Ukraine’s bid for membership in NATO than of providing Ukraine with the most sophisticated weapons,” said Dmytro Kuleba, Ukraine’s foreign minister.

“There are still many psychological barriers that we have to overcome,” he told POLITICO in a recent interview. “The idea of membership is one of them.”

‘De facto’ ally

Ukraine’s leadership has argued that for all intents and purposes, it is already a member of the Western military alliance — and thus deserves a quick path to formal NATO membership.

“We are de facto allies,” Ukrainian President Volodymyr Zelenskyy declared when announcing his country’s bid to join NATO | Alexey Furman/Getty Images

“We are de facto allies,” Ukrainian President Volodymyr Zelenskyy declared in September when announcing his country’s bid to join NATO “under an accelerated procedure.”

“De facto, we have already completed our path to NATO. De facto, we have already proven interoperability with the alliance’s standards,” he added. “Ukraine is applying to make it de jure.”

The Ukrainian leader’s statement caught many of Kyiv’s closest partners by surprise — and left several grumbling.

The overture threatened to derail a plan the alliance’s most influential capitals had essentially settled on: Weapons now, membership talk later. It was an approach, they felt, that would deprive Moscow of a pretext to pull NATO directly into the conflict.

In their statement last week, ministers pledged to step up political and practical help for Ukraine while avoiding concrete plans for Kyiv’s future status.

Ultimately, however, few allies question Ukraine’s long-term membership prospects — at least in theory. The divisions are more over how and when the question of Kyiv’s membership should be addressed.

A number of Eastern allies are arguing for a closer political relationship between Ukraine and NATO, and they want a more concrete plan that sets the stage for membership.

“My thinking is that it is basically unavoidable,” said Lithuanian Foreign Minister Gabrielius Landsbergis, “that NATO will have to have a way to accept Ukraine.”

On the other end of the spectrum, France’s Macron wants to take Moscow’s perspective into account.

“One of the essential points we must address — as President [Vladimir] Putin has always said — is the fear that NATO comes right up to its doors, and the deployment of weapons that could threaten Russia,” Macron told French television channel TF1 in an interview released Saturday.

Most other allies essentially evade the subject — not rejecting Ukraine’s NATO dreams but repeating a carefully crafted line about focusing on the current war.

Here’s NATO Secretary-General Jens Stoltenberg’s version, offered last week: “The most immediate and urgent task is to ensure that Ukraine prevails as a sovereign, independent democratic nation in Europe.”

“The most immediate and urgent task is to ensure that Ukraine prevails as a sovereign, independent democratic nation in Europe,” said NATO Secretary-General Jens Stoltenberg | Armend Nimani/AFP via Getty

And here’s Dutch Foreign Minister Wopke Hoekstra’s take from the same week: “The task here is to make sure that the main thing continues to be the main thing — and that is helping out Ukraine on the battlefield.”

U.S. NATO Ambassador Julianne Smith echoed the point in an interview: “The focus right now is practical support to Ukraine.”

Analysts say the fault line lies between primarily Western European capitals such as Berlin and Paris — which see membership as an ultra-sensitive issue to be avoided at the moment — and some Eastern capitals that see Ukrainian accession as a goal the alliance can begin working toward.

Since the war began, that divide has only become more “exacerbated,” said Ben Schreer, executive director for Europe at the International Institute for Strategic Studies. “Some countries simply don’t want to even have a conversation about this because they feel it might further harden Russian responses.”

Another path

Ukrainian officials do recognize that NATO membership is not imminent, but they still want a gesture from the alliance.

“The ideal scenario would, of course, be a very simple sentence from NATO: ‘OK, we receive your application, we begin the process of considering it.’ That would already be a major milestone achievement,” said Kuleba, Ukraine’s foreign minister, ahead of last week’s meeting.

Smith, the U.S. ambassador, said the Ukrainians are aware they need to do more before they could become members.

Ukraine formally adopted a constitutional amendment in 2019 committing to pursue NATO membership. But even though the country has pursued some reforms over the past few years, experts and partner governments say there’s more Ukraine must do to integrate Kyiv into Western institutions.

“There’s more work to be done, I don’t think that’s a mystery,” said Smith, adding: “I think they’d be the first to tell you that.”

As an interim solution, Kyiv has presented what it calls a pragmatic proposal for Western countries to help protect Ukraine.

“Russia was able to start this war precisely because Ukraine remained in the gray zone — between the Euro-Atlantic world and the Russian imperialism,” Zelenskyy said when presenting a 10-point peace plan in November.

The West’s “psychological barriers” need to be “overcome by changing the optics” Ukrainian Foreign Minister Dmytro Kuleba said | Mads Claus Rasmussen/Ritzau Scanpix/AFP via Getty Images

“So, how can we prevent repetition of Russia’s such aggression against us? We need effective security assurances,” he said, calling for an international conference to sign off on the so-called Kyiv Security Compact, a new set of security guarantees for Ukraine.

But it remains unclear whether Ukraine’s Western partners would be willing to make any legally binding guarantees — or if anything short of NATO’s Article 5 collective defense clause would prove a sufficient deterrent down the line.

“Some of those countries,” said IISS’ Schreer, “would be very reluctant.” Any written security guarantee, he noted, “from their perspective would probably invite strong Russian response, but it also would make them at this point of time part of this conflict.”

A Ukrainian victory, of course, could shift the calculus.

“If Ukraine is stuck in a stalemate, then NATO membership isn’t gonna happen,” said Max Bergmann, director of the Europe program at the Center for Strategic and International Studies. “But if it retakes its territory and accepts its borders — whatever those borders may be, whether it includes Crimea or does not, because that’s the fundamental question for Ukraine — then I think things can move very quickly.”

Asked if he is frustrated with Western partners, Kuleba was blunt.

“I know them too well to be frustrated with them — they are good friends,” he said. “It would be close to impossible for us to sustain the Russian pressure and to prevail on the battleground without them.”

But, the foreign minister added, the West’s “psychological barriers” need to be “overcome by changing the optics.”

Kyiv’s partners, he said, “have to begin to see Ukraine’s membership as an opportunity — and not as a threat.”

Lili Bayer

Source link

December 5, 2022
License to kill: How Europe lets Iran and Russia get away with murder

Press play to listen to this article

Voiced by artificial intelligence.

BERLIN — On a balmy September evening last year, an Azeri man carrying a Russian passport crossed the border from northern Cyprus into southern Cyprus. He traveled light: a pistol, a handful of bullets and a silencer.

It was going to be the perfect hit job.

Then, just as the man was about to step into a rental car and carry out his mission — which prosecutors say was to gun down five Jewish businessmen, including an Israeli billionaire — the police surrounded him.

The failed attack was just one of at least a dozen in Europe in recent years, some successful, others not, that have involved what security officials call “soft” targets, involving murder, abduction, or both. The operations were broadly similar in conception, typically relying on local hired guns. The most significant connection, intelligence officials say, is that the attacks were commissioned by the same contractor: the Islamic Republic of Iran.

In Cyprus, authorities believe Iran, which blames Israel for a series of assassinations of nuclear specialists working on the Iranian nuclear program, was trying to signal that it could strike back where Israel least expects it.

“This is a regime that bases its rule on intimidation and violence and espouses violence as a legitimate measure,” David Barnea, the head of Israel’s Mossad intelligence agency, said in rare public remarks in September, describing what he said was a recent uptick in violent plots. “It is not spontaneous. It is planned, systematic, state terrorism — strategic terrorism.”

He left out one important detail: It’s working.

That success has come in large part because Europe — the staging ground for most Iranian operations in recent years — has been afraid to make Tehran pay. Since 2015, Iran has carried out about a dozen operations in Europe, killing at least three people and abducting several others, security officials say.

“The Europeans have not just been soft on the Islamic Republic, they’ve been cooperating with them, working with them, legitimizing the killers,” Masih Alinejad, the Iranian-American author and women’s rights activist said, highlighting the continuing willingness of European heads of state to meet with Iran’s leaders.

Alinejad, one of the most outspoken critics of the regime, understands better than most just how far Iran’s leadership is willing to go after narrowly escaping both a kidnapping and assassination attempt.

“If the Islamic Republic doesn’t receive any punishment, is there any reason for them to stop taking hostages or kidnapping or killing?” she said, and then answered: “No.”

Method of first resort

Assassination has been the sharpest instrument in the policy toolbox ever since Brutus and his co-conspirators stabbed Julius Caesar repeatedly. Over the millennia, it’s also proved risky, often triggering disastrous unintended consequences (see the Roman Empire after Caesar’s killing or Europe after the assassination of Archduke Franz Ferdinand in Sarajevo).

And yet, for both rogue states like Iran, Russia and North Korea, and democracies such as the United States and Israel — the attraction of solving a problem by removing it often proves irresistible.

Even so, there’s a fundamental difference between the two spheres: In the West, assassination remains a last resort (think Osama bin Laden); in authoritarian states, it’s the first (who can forget the 2017 assassination by nerve agent of Kim Jong-nam, the playboy half-brother of North Korean dictator Kim Jong-un, upon his arrival in Kuala Lumpur?). For rogue states, even if the murder plots are thwarted, the regimes still win by instilling fear in their enemies’ hearts and minds.

That helps explain the recent frequency. Over the course of a few months last year, Iran undertook a flurry of attacks from Latin America to Africa. In Colombia, police arrested two men in Bogotá on suspicion they were plotting to assassinate a group of Americans and a former Israeli intelligence officer for $100,000; a similar scene played out in Africa, as authorities in Tanzania, Ghana and Senegal arrested five men on suspicion they were planning attacks on Israeli targets, including tourists on safari; in February of this year, Turkish police disrupted an intricate Iranian plot to kill a 75-year-old Turkish-Israeli who owns a local aerospace company; and in November, authorities in Georgia said they foiled a plan hatched by Iran’s Quds Force to murder a 62-year-old Israeli-Georgian businessman in Tbilisi.

Whether such operations succeed or not, the countries behind them can be sure of one thing: They won’t be made to pay for trying. Over the years, the Russian and Iranian regimes have eliminated countless dissidents, traitors and assorted other enemies (real and perceived) on the streets of Paris, Berlin and even Washington, often in broad daylight. Others have been quietly abducted and sent home, where they faced sham trials and were then hanged for treason.

While there’s no shortage of criticism in the West in the wake of these crimes, there are rarely real consequences. That’s especially true in Europe, where leaders have looked the other way in the face of a variety of abuses in the hopes of reviving a deal to rein in Tehran’s nuclear weapons program and renewing business ties.

Unlike the U.S. and Israel, which have taken a hard line on Iran ever since the mullahs came to power in 1979, Europe has been more open to the regime. Many EU officials make no secret of their ennui with America’s hard-line stance vis-à-vis Iran.

“Iran wants to wipe out Israel, nothing new about that,” the EU foreign policy chief Josep Borrell told POLITICO in 2019 when he was still Spanish foreign minister. “You have to live with it.”

History of assassinations

There’s also nothing new about Iran’s love of assassination.

Indeed, many scholars trace the word “assassin” to Hasan-i Sabbah, a 12th-century Persian missionary who founded the “Order of Assassins,” a brutal force known for quietly eliminating adversaries.

Hasan’s spirit lived on in the Ayatollah Ruhollah Khomeini, the hardline cleric who led Iran’s Islamic revolution and took power in 1979. One of his first victims as supreme leader was Shahriar Shafiq, a former captain in the Iranian navy and the nephew of the country’s exiled shah. He was shot twice in the head in December 1979 by a masked gunman outside his mother’s home on Rue Pergolèse in Paris’ fashionable 16th arrondissement.

In the years that followed, Iranian death squads took out members and supporters of the shah and other opponents across Europe, from France to Sweden, Germany, Switzerland and Austria. In most instances, the culprits were never caught. Not that the authorities really needed to look.

In 1989, for example, Abdul Rahman Ghassemlou, a leader of Iran’s Kurdish minority who supported autonomy for his people, was gunned down along with two associates by Iranian assassins in an apartment in Vienna.

The gunmen took refuge in the Iranian embassy. They were allowed to leave Austria after Iran’s ambassador to Vienna hinted to the government that Austrians in his country might be in danger if the killers were arrested. One of the men alleged to have participated in the Vienna operation would later become one of his country’s most prominent figures: Mahmoud Ahmadinejad, Iran’s president from 2005 until 2013.

Not even the bad publicity surrounding that case tempered the regime’s killing spree. In the years that followed, the body count only increased. Some of the murders were intentionally gruesome in order to send a clear message.

Fereydoun Farrokhzad, for example, a dissident Iranian popstar who found exile in Germany, was killed in his home in Bonn in 1992. The killers cut off his genitals, his tongue and beheaded him.

His slaying was just one of dozens in what came to be known as Iran’s “chain murders,” a decade-long killing spree in which the government targeted artists and dissidents at home and abroad. Public outcry over the murder of a trio of prominent writers in 1998, including a husband and wife, forced the regime hard-liners behind the killings to retreat. But only for a time.

Illustration by Joan Wong for POLITICO

Then, as now, the dictatorship’s rationale for such killings has been to protect itself.

“The highest priority of the Iranian regime is internal stability,” a Western intelligence source said. “The regime views its opponents inside and outside Iran as a significant threat to this stability.”

Much of that paranoia is rooted in the Islamic Republic’s own history. Before returning to Iran in 1979, Khomeini spent nearly 15 years in exile, including in Paris, an experience that etched the power of exile into the Islamic Republic’s mythology. In other words, if Khomeini managed to lead a revolution from abroad, the regime’s enemies could too.

Bargaining chips

Given Europe’s proximity to Iran, the presence of many Iranian exiles there and the often-magnanimous view of some EU governments toward Tehran, Europe is a natural staging ground for the Islamic Republic’s terror.

The regime’s intelligence service, known as MOIS, has built operational networks across the Continent trained to abduct and murder through a variety of means, Western intelligence officials say.

As anti-regime protests have erupted in Iran with increasing regularity since 2009, the pace of foreign operations aimed at eliminating those the regime accuses of stoking the unrest has increased.

While several of the smaller-scale assassinations — such as the 2015 hit in the Netherlands on Iranian exile Mohammad-Reza Kolahi — have succeeded, Tehran’s more ambitious operations have gone awry.

The most prominent example involved a 2018 plot to blow up the annual Paris meeting of the National Council of Resistance of Iran, an alliance of exile groups seeking to oust the regime. Among those attending the gathering, which attracted tens of thousands, was Rudy Giuliani, the former New York mayor and then-U.S. President Donald Trump’s lawyer.

Following a tip from American intelligence, European authorities foiled the plot, arresting six, including a Vienna-based Iranian diplomat who delivered a detonation device and bombmaking equipment to an Iranian couple tasked with carrying out an attack on the rally. Authorities observed the handover at a Pizza Hut in Luxembourg and subsequently arrested the diplomat, Assadollah Assadi, on the German autobahn as he sped back to Vienna, where he enjoyed diplomatic immunity.

Assadi was convicted on terror charges in Belgium last year and sentenced to 20 years is prison. He may not even serve two.

The diplomat’s conviction marked the first time an Iranian operative had been held accountable for his actions by a European court since the Islamic revolution. But Belgium’s courage didn’t last long.

In February, Iran arrested Belgian aid worker Olivier Vandecasteele on trumped-up espionage charges and placed him into solitary confinement at the infamous Evin prison in Tehran. Vandecasteele headed the Iran office of the Norwegian Refugee Council, an aid group.

Following reports that Vandecasteele’s health was deteriorating and tearful public pleas from his family, the Belgian government — ignoring warnings from Washington and other governments that it was inviting further kidnappings — relented and laid the groundwork for an exchange to trade Assadi for Vandecasteele. The swap could happen any day.

“Right now, French, Swedish, German, U.K., U.S., Belgian citizens, all innocents, are in Iranian prisons,” said Alinejad, the Iranian women’s rights campaigner.

“They are being used like bargaining chips,” she said. “It works.”

Amateur hour

Even so, the messiness surrounding the Assadi case might explain why most of Iran’s recent operations have been carried out by small-time criminals who usually have no idea who they’re working for. The crew in last year’s Cyprus attack, for example, included several Pakistani delivery boys. While that gives Iran plausible deniability if the perpetrators get caught, it also increases the likelihood that the operations will fail.

“It’s very amateur, but an amateur can be difficult to trace,” one intelligence official said. “They’re also dispensable. They get caught, no one cares.”

Iranian intelligence has had more success in luring dissidents away from Europe to friendly third countries where they are arrested and then sent back to Iran. That’s what happened to Ruhollah Zam, a journalist critical of the regime who had been living in Paris. The circumstances surrounding his abduction remain murky, but what is known is that someone convinced him to travel to Iraq in 2019, where he was arrested and extradited to Iran. He was convicted for agitating against the regime and hanged in December of 2020.

One could be forgiven for thinking that negotiations between Iran and world powers over renewing its dormant nuclear accord (which offered Tehran sanctions relief in return for supervision of its nuclear program) would have tamed its covert killing program. In fact, the opposite occurred.

In July of 2021, U.S. authorities exposed a plot by Iranian operatives to kidnap Alinejad from her home in Brooklyn as part of an elaborate plan that involved taking her by speedboat to a tanker in New York Harbor before spiriting her off to Venezuela, an Iranian ally, and then on to the Islamic Republic.

A year later, police disrupted what the FBI believed was an attempt to assassinate Alinejad, arresting a man with an assault rifle and more than 60 rounds of ammunition who had knocked on her door.

American authorities also say Tehran planned to avenge the assassination of General Qassem Soleimani, the head of its feared paramilitary Quds Force who was the target of a U.S. drone strike in 2020, by seeking to kill former National Security Adviser John Bolton and Mike Pompeo, the former Secretary of State, among other officials.

Through it all, neither the U.S. nor Europe gave up hope for a nuclear deal.

“From the point of view of the Iranians, this is proof that it is possible to separate and maintain a civilized discourse on the nuclear agreement with a deceptive Western appearance, on the one hand, and on the other hand, to plan terrorist acts against senior American officials and citizens,” Barnea, the Mossad chief said. “This artificial separation will continue for as long as the world allows it to.”

Kremlin’s killings

Some hope the growing outrage in Western societies over Iran’s crackdown on peaceful protestors could be the spark that convinces Europe to get tough on Iran. But Europe’s handling of its other favorite rogue actor — Russia — suggests otherwise.

Long before Russia’s annexation of Crimea, much less its all-out war against Ukraine, Moscow, similar to Iran, undertook an aggressive campaign against its enemies abroad and made little effort to hide it.

The most prominent victim was Alexander Litvinenko. A former KGB officer like Vladimir Putin, Litvinenko had defected to the U.K., where he joined other exiles opposed to Putin. In 2006, he was poisoned in London by Russian intelligence with polonium-210, a radioactive isotope that investigators concluded was mixed into his tea. The daring operation signaled Moscow’s return to the Soviet-era practice of artful assassination.

Litvinenko died a painful death within weeks, but not before he blamed Putin for killing him, calling the Russian president “barbaric.”

“You may succeed in silencing me, but that silence comes at a price,” Litvinenko said from his deathbed.

In the end, however, the only one who really paid a price was Litvinenko. Putin continued as before and despite deep tensions in the U.K.’s relationship with Russia over the assassination, it did nothing to halt the transformation of the British capital into what has come to be known as “Londongrad,” a playground and second home for Russia’s Kremlin-backed oligarchs, who critics say use the British financial and legal systems to hide and launder their money.

Litvinenko’s killing was remarkable both for its brutality and audacity. If Putin was willing to take out an enemy on British soil with a radioactive element, what else was he capable of?

It didn’t take long to find out. In the months and years that followed, the bodies started to pile up. Critical journalists, political opponents and irksome oligarchs in the prime of life began dropping like flies.

Europe didn’t blink.

Angela Merkel, then German chancellor, visited Putin in his vacation residence in Sochi just weeks after the murders of Litvinenko and investigative journalist Anna Politkovskaya and said … nothing.

Even after there was no denying Putin’s campaign to eradicate anyone who challenged him, European leaders kept coming in the hope of deepening economic ties.

Neither the assassination of prominent Putin critic Boris Nemtsov just steps away from the Kremlin in 2015, nor the poisoning of a KGB defector and his daughter in the U.K. in 2018 and of opposition leader Alexei Navalny in 2020 with nerve agents disabused European leaders of the notion that Putin was someone they could do business with and, more importantly, control.

‘Anything can happen’

Just how comfortable Russia felt about using Europe as a killing field became clear in the summer of 2019. Around noon on a sunny August day, a Russian assassin approached Zelimkhan Khangoshvili, a Chechen with Georgian nationality, and shot him twice in the head with a 9mm pistol. The murder took place in a park located just a few hundred meters from Germany’s interior ministry and several witnesses saw the killer flee. He was nabbed within minutes as he was changing his clothes and trying to dispose of his weapon and bike in a nearby canal.

It later emerged that Khangoshvili, a Chechen fighter who had sought asylum in Germany, was on a Russian kill list. Russian authorities considered him a terrorist and accused him of participating in a 2010 attack on the Moscow subway that killed nearly 40 people.

In December of 2019, Putin denied involvement in Khangoshvili’s killing. Sort of. Sitting next to French President Emmanuel Macron, Merkel and Ukrainian President Volodymyr Zelenskyy following a round of talks aimed at resolving the conflict in Ukraine, the Russian referred to him as a “very barbaric man with blood on his hands.”

“I don’t know what happened to him,” Putin said. “Those are opaque criminal structures where anything can happen.”

Early on October 19 of last year, Berlin police discovered a dead man on the sidewalk outside the Russian embassy. He was identified as Kirill Zhalo, a junior diplomat at the embassy. He was also the son of General Major Alexey Zhalo, the deputy head of a covert division in Russia’s FSB security service in Moscow that ordered Khangoshvili’s killing. Western intelligence officials believe that Kirill Zhalo, who arrived in Berlin just weeks before the hit on the Chechen, was involved in the operation and was held responsible for its exposure.

The Russian embassy called his death “a tragic accident,” suggesting he had committed suicide by jumping out of a window. Russia refused to allow German authorities to perform an autopsy (such permission is required under diplomatic protocols) and sent his body back to Moscow.

Less than two months later, the Russian hitman who killed Khangoshvili, was convicted of murder and sentenced to life in prison. Russia recently tried to negotiate his release, floating the possibility of exchanging American basketball player Brittney Griner and another U.S. citizen they have in custody. Washington rejected the idea.

The war in Ukraine offers profound lessons about the inherent risks of coddling dictators.

Though Germany, with its thirst for Russian gas, is often criticized in that regard, it was far from alone in Europe. Europe’s insistence on giving Putin the benefit of the doubt over the years in the face of his crimes convinced him that he would face few consequences in the West for his invasion of Ukraine. That’s turned out to be wrong; but who could blame the Russian leader for thinking it?

Iran presents Europe with an opportunity to learn from that history and confront Tehran before it’s too late. But there are few signs it’s prepared to really get tough. EU officials say they are “considering” following Washington’s lead and designating the Islamic Revolutionary Guard Corps, a vast military organization that also controls much of the Iran’s economy, as a terror organization. Last week, German Foreign Minister Annalena Baerbock spearheaded an effort at the United Nations to launch a formal investigation into Iran’s brutal crackdown against the ongoing protests in the country.

Yet even as the regime in Tehran snuffs out enemies and races to fulfil its goal of building both nuclear weapons and missiles that can reach any point on the Continent, some EU leaders appear blind to the wider context as they pursue the elusive renewal of the nuclear accord.

“It is still there,” Borrell said recently of the deal he has taken a leading role in trying to resurrect. “It has nothing to do with other issues, which certainly concern us.”

In other words, let the killing continue.

Matthew Karnitschnig

Source link

November 30, 2022