By John Helmer, Moscow

In 1487, when Edmund Duke of Edinburgh, aka the Black Adder, wanted to strike fear into the English royal court, and also the Spaniards, he called his valet to dress him in his Russian codpiece.

Do I need to tell the young girls and boys in charge of war in Washington, DC, just how big the Russian codpiece was back then? Are they so mesmerized by its size today they believe the law is on their side when they try to strike back? If so, girls and boys, you have an unsavoury surprise coming – and I’m not referring to what will happen if the codpiece comes off.
(more…)

by John Helmer - Monday, March 24th, 2014
No Comments »

By John Helmer, Moscow

The assets of Petro Poroshenko, frontrunner in the Ukrainian presidential election called for May 25, are facing growing pressure in Crimea and mainland Russia.

If US and French Government proposals now in discussion in Brussels expand anti-Russian sanctions to strike at the offshore assets of Russian oligarchs, Poroshenko is likely to be targeted for retaliation, and lose the Bogdan auto assembly and sales outlets in Crimea; the Sevmorverf shipyard in Sevastopol; Roshen confectionery plants in Lipetsk; and roughly half the Roshen group’s trading revenues. The Crimean assets are relatively small in value. The Lipetsk assets have been estimated by Roshen to have cost more than $100 million. About $80 million, half the Roshen group’s annual sale revenues, is accounted for by Poroshenko’s exports to Russia.
(more…)

by John Helmer - Thursday, March 20th, 2014
No Comments »

By John Helmer, Moscow

President Barack Obama issued an order yesterday imposing sanctions against seven Russians whom he and his government blame for the crisis in Ukraine. At the bottom of the Obama list at Number 7 is State Duma Deputy Yelena Mizulina (left), chairman of the Committee on Family, Women and Children Affairs. She and the other six Russians are accused in the White House declaration of responsibility for “the deployment of Russian military forces in the Crimea region of Ukraine” and for policies which “undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets.”

The sanctions against Mizulina are explicitly identified in the March 17 order as blocking “all property and interests in property that are in the United States”; barring entry to the US; and banning engagement with US citizens in “any contribution or provision of funds, goods, or services by, to, or for the benefit” of Mizulina.
(more…)

by John Helmer - Tuesday, March 18th, 2014
No Comments »

By John Helmer, Moscow

Alfa Bank, owned by Mikhail Fridman, has issued an unexpected loan repayment demand from Mechel, controlled by Igor Zyuzin (left), for $150 million. That’s chicken-feed in Mechel’s debt pile of almost $10 billion. But with dozens of trade creditors in the arbitrazh courts demanding their invoices be paid; a collapsing share price; and nothing of value left to mortgage or to meet margin calls, Zyuzin is on the edge of bankruptcy. So why has Fridman issued his ultimatum? Since two out of every three dollars Zyuzin owes are under state bank control, Fridman’s notice appears to be a call on the banks, and on the government behind, to get rid of Zyuzin altogether and redistribute Mechel’s steelmaking and coal-mining assets. It isn’t likely Fridman, who abandoned the mining and metal lines of business after the 2008 crisis, is acting alone.

The Alfa Bank demand was issued during a meeting last Thursday, March 13, with government ministers and bankers to discuss Mechel’s financial position. Mechel and Alfa sources confirm that the meeting, chaired by Finance Minister Anton Siluanov, was told that Mechel was in violation of its loan covenants and that Alfa demanded pre-payment within 24 hours.
(more…)

by John Helmer - Tuesday, March 18th, 2014
No Comments »

By John Helmer, Moscow

In most legal codes there is no concept of a legal vacuum, since lawyers, judges and experts on jurisprudence everywhere believe that for every act some law or other must apply. In English and American law, for example, it is inconceivable – to lawyers, judges, politicians and policemen – that the law ceases to have application. It is possible, they admit, that there are situations which are so novel in fact, or so unprecedented, the statutes, regulations, and decided case law haven’t caught up with the realities. But catch up the legislators and judges do. These aren’t vacuums, so much as gaps which are invariably plugged.

What happens if a government or a legislature, acting beyond its authority, gets a court to rule in violation of its constitution? That isn’t a vacuum. It is double-barrelled unlawfulness or illegality. But since the fingers on the trigger didn’t have the authority to pull, the outcome is what the lawyers call a legal nullity. It doesn’t require challenge or appeal. It is void from the start. For examples in international law of what the doctrine of nullity means, read on. For an interpretation of a legal vacuum by the Russian Constitutional Court, click here.
(more…)

by John Helmer - Monday, March 17th, 2014
No Comments »

By John Helmer, Moscow

Majorities of voters in the southern and eastern regions of Ukraine believe there is no candidate running for the presidential election planned for May 25, whom they trust with a vote to represent their interests. With two months still to go, the outcome of the poll is therefore already decided – it will be regarded by southern and eastern Ukrainians as a forced choice; an illegitimate result; and an outcome which cannot be relied on to protect the interests of the southerners and easterners.

According to voter polling by the Kyiv International Institute of Sociology, there are still large blocs of undecided voters or refuseniks in the south and east who may be persuaded to vote. The appointments of the steelmill oligarchs, Sergei Taruta and Igor Kolomoisky, as governors of the Donetsk and Dniepropetrovsk regions has been interpreted as an attempt by officials in Kiev to achieve this with cash and promises of job and pension benefits. But new poll evidence suggests that no amount of money can buy votes for the US-approved candidates — Vitali Klitschko, Petro Poroshenko, or Oleg Tyagnibok. The same can be said for the Russian-approved candidacy of Yulia Tymoshenko.
(more…)

by John Helmer - Thursday, March 13th, 2014
No Comments »

By John Helmer, Moscow

Georhii Rudko, the chairman of the Ukrainian State Commission for Natural Resources, had nothing to do with the choice of the old British War Office as the venue; nor the timing of his speech, one day before the President of Ukraine and the constitutional order of the country were toppled. But Rudko’s presentation on the future for the oil and gas resources of Ukraine was anything but a sideshow.

Rudko was scheduled to speak at a meeting entitled “Black Sea & Caspian 2014 Conference – Unlocking Full Potential”. The date was February 20. The address was 89 Pall Mall, where the War Office was located between 1858 and 1906, just missing the Crimean War (1853-56), but managing the second Opium War against China; the three Basotho wars in southern Africa; several rebellions in India; and the Boer War in South Africa. As war offices go, the score was a grand slam for the British.
(more…)

by John Helmer - Wednesday, March 12th, 2014
No Comments »

By John Helmer, Moscow

Winston Churchill likened his inability to know what happens in Moscow to a case of bulldogs fighting under a rug. Ivan Glasenberg (right), chief executive of GlencoreXstrata, and Oleg Deripaska (left), chief executive of United Company Rusal — secretive though they are — are too fond of each other to fight. What they do under the rug is something else.

So when Glencore announced last week that it is marking its shareholding in United Company Rusal for sale at $394 million, 53% less than the year before, it’s clear that for Glencore the Rusal stake is a pup. Less obvious is it that when Glencore says it is selling Rusal, it means to do what it says.
(more…)

by John Helmer - Monday, March 10th, 2014
No Comments »

By John Helmer, Moscow

On March 4 the Chinese and South African governments announced they are preparing an agreement on nuclear cooperation to allow the Chinese to sell $50 billion worth of their nuclear reactor technology for South Africa’s power generation programme.

There are four catches. One is that a South African report from the ministry responsible for energy planning recommends against investing in nuclear reactors for at least two, and possibly ten more years. The second catch is that the South African Ministry of Finance has refused to allow any funds to be put into current or future budgets for nuclear reactors. The third catch is that the Chinese have depended to date on reactor technology they have bought from France, the US, and Russia which cannot be resold in the international market. Nuclear reactor bids from each of these three countries have already been tabled for the South African nuclear programme, and until last month the most likely contender for selection, according to South African President Jacob Zuma and Ben Martins, the Minister of Energy, was Rosatom of Russia.
(more…)

by John Helmer - Friday, March 7th, 2014
No Comments »

By John Helmer, Moscow

The White House record claims that on the afternoon of Friday, February 21, President Barack Obama initiated a telephone call to President Vladimir Putin. But the US version of what was said claims Obama committed himself to supporting the agreement which President Victor Yanukovich had signed early on the same day with leaders of the Ukrainian opposition, and with the foreign ministers of Germany, Poland and France. “President Obama called Russian President Vladimir Putin”, the White House reported, and apparently agreed “to implement quickly the political agreement reached today in Kyiv”.

The transcript hasn’t been released, not yet. But the Kremlin version doesn’t report that Obama agreed to anything. Instead, Putin reportedly warned Obama against “working with the radical opposition, which has taken the confrontation in Ukraine to a very dangerous point.”
(more…)

by John Helmer - Wednesday, March 5th, 2014
No Comments »