Russian enterprises responded to new US sanctions

The United States imposed new sanctions against a number of Russian military structures "in connection with the violation of the rules on the non-proliferation of weapons of mass destruction." What will mean for them new restrictions on foreign markets?
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Among the Russian legal entities that appear on the new US sanctions list, promulgated by the State Department on May 9, are the 183rd Guards Air Defense Missile Regiment, the Tula Instrument Design Bureau, Shipunova, the training center of anti-aircraft missile forces in Gatchina, the Chief Intelligence Directorate of the General Staff, the division of the 18th Central Research Institute of the Ministry of Defense in Kursk, as well as the research and production concern BARL.

The document, published on the website of the US Federal Register, introduces new restrictions against a number of organizations and individuals not only from Russia but also from China, Turkey, Iran, Egypt, Syria, the UAE and the DPRK in connection with the violation of the rules on the nonproliferation of weapons of mass destruction. In April, US diplomats announced new sanctions against Moscow for supporting the Syrian regime.

RBC figured out what new restrictions mean for Russian entities.

"Unconditionally complicate the work"

A representative of Rostek admitted that the sanctions "certainly make work difficult", but the state corporations do not expect deterioration of its position due to new restrictions.

"The only visible motive [of sanctions] is unfair opposition to us in foreign markets and revenge for our successes," the press service of Rosteka told RBC.

Rostekh enterprises, including the developer of the Pantsir-S1 air defense complex, which came under new sanctions, the KBP them. Shipunova, already "not the first year are under American and European restrictions and successfully adapt to new conditions, which is confirmed by the dynamics of revenues and exports," the state corporation said.

In early April, RIA Novosti news agency quoted a source in the Defense Ministry as saying that in recent years Russia has supplied Syria with up to 40 Pantsir-C1 complexes to protect against air attacks. The interlocutor of the agency stressed that "it is about exports, and not about supplies from the presence of the military department."

What do the new sanctions mean?

US agencies are now prohibited from buying goods, technologies and services from listed structures, transferring them to objects from the list of weapons of the United States. All sales of military supplies, defense services, including design and construction services, which were carried out under the law on the control of arms exports, are also terminated.

The decree suspends the existing ones and prohibits the issuance of new licenses for the transfer of goods, technologies and equipment to these entities whose export is covered by the 1979 Export Control Act or other export control rules. Also, structures under sanctions will not be able to participate in US government cooperation programs; state bodies are prohibited from providing any assistance to them.

These measures will remain in force for two years from the date of entry into force. The document specifies that the head of the US State Department can make exceptions to the application of these measures.

"There are no objective reasons"

American sanctions were unexpected for the commercial company NPK "BARL". A small company, a developer of satellite navigation systems (according to SPARK, annual revenue for 2016 is 338 million rubles), points out on its website among partners such foreign companies as the Maxar Technologies corporation headquartered in California, the European Airbus Defense and Space, French-Italian Thales Alenia Space, Canadian UrtheCast, Chinese Twenty First Century Aerospace Technology and the South Korean Satrec Initiative.

Concern BARL has never engaged in activities related to the development and supply of nuclear weapons, chemical weapons and weapons of mass destruction, RBC said in the press service of the company. "No activity is carried out in the interests of military departments of foreign states of JSC" NPK "BARL". The concluded contracts with foreign partners are not relevant to the development of weapons of military equipment, "her representative said. - There are no objective reasons for imposing sanctions. The motives for the adoption of the document are unknown. "

BARL also stressed that on the official website of the US Treasury at the moment there is no information about the introduction of sanctions against the concern, and the contracts being implemented have all the necessary permits. At the moment, the company could not assess the possible damage from the new US sanctions.

Among the projects of the enterprise, which could attract the attention of the State Department, is the development and creation of a satellite for remote sensing of the Earth, jointly with the Iranian "Bonyan Danesh Sharg". The concern agreed on this with the Iranians together with the Russian corporation "Space monitoring systems, information-control and electromechanical complexes named after AG Iosifyan" (VNIIEM) in 2015. The contract was not announced additionally, the launch of the satellite was planned for the end of 2018.

According to Kommersant sources, the concern could be included in the US sanctions list because of suspicions in the supply of equipment for space vehicles developed by the DPRK.

"Around our companies is formed toxicity"

Representatives of the 183rd Guards Anti-aircraft Missile Regiment, the training center of anti-aircraft missile forces in Gatchina, the Main Intelligence Directorate of the General Staff and the 18th Central Research Institute of the Ministry of Defense in Kursk, abstained from commenting under the new sanctions.

The 11th training center of anti-aircraft missile forces in Gatchina is engaged in the retraining of anti-aircraft specialists. Among other things, they were involved in the simulators of the Pantsir-S and S-300 complexes, which, according to the media, Russia already delivered or intends to supply soon to Syria.

It was with the training of Syrian and Iranian experts in the field of air defense that the introduction of sanctions against the training center and the 183rd Guards air defense missile regiment was linked to the sources of Kommersant.

The Russian Foreign Ministry explained the new sanctions "with a banal desire to reckon with the fiasco of the missile attack against Syria on April 14," when the United States, Great Britain and France struck the Tomahawk missile at Syrian targets. Moscow and Washington differed in assessing the effectiveness of this attack. In the United States, it was stated that all missiles had achieved their targets. In turn, Moscow claimed that part of the missiles did not reach the targets due to technical malfunctions, and a few dozen were shot down by Syrian air defense systems that used mostly Soviet-made complexes.

The editor-in-chief of the magazine Arsenal of the Fatherland, Colonel Viktor Murakhovsky, called the sanctions of May 9 "formal." Their introduction, he also associated with the events of April 14. "Judging by the fact that the list contained an anti-aircraft missile regiment, a training center where specialists from Syria and Iran were trained, as well as a research and production corporation that deals with optical-electronic reconnaissance systems for space vehicles and the 18th Central Research Institute, which also applies to this profile, the contribution of these structures to reflecting the raid of cruise missiles in April was assessed, "Murakhovsky said, suggesting that the list was drafted with the participation of the US Defense Department.

The new sanctions against Russian defense enterprises will primarily affect their foreign partners, Andrei Frolov, editor-in-chief of the magazine Export of Arms, believes. "It is clear that the new sanctions do not fundamentally change the situation, but this all fits within the framework of the American policy of creating a negative image and complicating business [with Russia]. Everything goes to the fact that some kind of toxicity is developing around our companies - that the partners think hard before concluding the deals and weigh the risks a hundred times, "the expert believes.