Press digest: Reactions to new restrictions on Turkish businesses

Russian government adopted a decree restricting the operations of companies controlled by Turkish nationals.

Russian government adopted a decree restricting the operations of companies controlled by Turkish nationals.

Konstantin Chabalov / RIA Novosti
RBTH presents a selection of views from leading Russian media on international events, featuring reports on the expansion of sanctions against Turkey, predictions as to what could develop in Syria in 2016 and a story detailing the legal fight for compensation for the relatives of victims of the A321 crash over Egypt.

Russia expands anti-Turkish sanctions

At the end of 2015, the Russian government adopted a decree restricting the operations of companies controlled by Turkish nationals. The Vedomosti business daily considers what the ban on Turkish nationals engaging in the tourist and hospitality business in Russia could lead to.

The news of anti-Turkish sanctions caused a brief panic in many sectors, however, businesses promptly found loopholes for bypassing the sanctions and replacing Turkish products and services.

For example, by offering the lowest price, China was able to sign the largest number of contracts for the supply of tangerines, followed by Morocco and Egypt. In addition, a representative of the Allbiz trading platform explains, fruits and vegetables are now being supplied from countries that were previously absent from this market in Russia, such as Pakistan, Argentina, South Africa and Peru.

Some Russian businesses are giving up cooperation with Turkish partners of their own accord.

“We are considering the option of shutting down our Turkish operations completely and are assessing the risks,” says Aslan Ktsoev, the managing director of Sovinteravtoservis, a dealership selling heavy Ford trucks that are made at the Ford Otosan plant in Turkey. “Theoretically, we are ready for it; we have analyzed this issue and our actions.”

The current situation has prompted Ford to step up efforts to establish the assembly of trucks in Russia, at the Avtotor plant, a source close to the company told Vedomosti.

According to BCG Partners, in the worst-case scenario the crisis in relations with Russia will cost Turkey $3 billion in lost revenues in the tourist sector, $3 billion in lost exports and $6 billion in losses from the curtailment of other trade relations.

With Assad or without

The RBK daily business newspaper is considering three scenarios for how the situation in Syria may develop in 2016.

The best-case scenario would be the implementation of the agreements reached by the International Syria Support Group in November 2015 in Vienna and affirmed by a UN Security Council resolution in December, which for the first time was supported both by the U.S. and Russia.

Under these agreements, in January 2016 Bashar al-Assad’s government and the moderate opposition should begin talks on reaching a ceasefire and developing a mechanism for forming an interim government. That interim government would then, with support of Russia and the U.S.-led coalition, defeat the Islamic State. Within 18 months Syria should hold elections under international control and in compliance with a new constitution.

According to another more “realistic” scenario, ISIS will not be defeated in 2016. According to experts, this is mainly because the coalition between Moscow and Tehran, while having declared a common goal of fighting the Islamic State, are in fact pursuing different tasks, primarily that of strengthening their own influence in the region.

“I see no transition option whereby Assad and the senior leadership [of Syria] will depart,” says Peter Bartu, a researcher from the University of California, Berkeley. “It would have a negative effect on the fight against ISIS, while the transition of power, even if it starts, will be a bloody one.” Furthermore, Bartu considers the proposed schedule for adopting the new constitution, forming a government and holding elections to be unrealistic.

Under this scenario, armed confrontation between the Assad regime and the opposition will proceed, while Russia will continue providing air force support to government troops.

Under this final and pessimistic scenario, the situation will deteriorate if no agreement between Saudi Arabia, Iran and Turkey can be reached at least at the tactical level and if the conflict between Moscow and Ankara deepens. Analysts from Stratfor, a global intelligence company, conclude that Russian and Turkish interests in Syria will clash, resulting in an inevitable escalation of the conflict. Overall, their experts predict that Turkey will increase its influence in the region.

OwnerofA321 aircraftblownupoverEgyptfaceslawsuitinU.S.

Relatives of the victims of the Russian A321 Airbus that exploded over the Sinai Peninsula have prepared a class action lawsuit to be filed with a New York court against the American company International Lease Finance Corporation (ILFC) and their insurer reports the Izvestia daily broadsheet. The ILFC, which owned the A321 aircraft, had been leasing it out to the Russian Kogalymavia airline for three years.

In Russia the interests of approximately 100 relatives of the passengers killed on that flight are being represented by lawyer Igor Trunov.

“We have prepared the papers to demand compensation for the victims’ relatives from the owner of the aircraft, the American company ILFC,” Trunov said. “We shall also sue the company that insured ILFC’s liabilities.”

The suit will be filed with a court in New York, where the insurer is registered. The case is not covered by Russian law, which is why lawyers have already been hired in the U.S. to work on the case. They are expected to arrive in Russia in the coming days. The lawsuits will seek compensation varying from $300,000 to $1.5 million.

Experts believe that the plaintiffs have the right to demand compensation from the owner of the aircraft despite the fact that technically it had nothing to do with the tragedy. However, the prospects of the lawsuit will depend on the terms of the leasing agreement between Kogalymavia and ILFC.

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