Ukraine: Daily Briefing – March 1, 2018, 5 PM Kyiv time

The General Staff of Ukraine’s Armed Forces reported at 12:30 PM Kyiv time that in the last 24 hours, no Ukrainian soldiers were killed or wounded in action. In the last 24 hours, Russian-terrorist forces opened fire on Ukrainian positions on the Luhansk and Donetsk sectors of the front 5 times in total.

photo – Naftogaz

Naftogaz Ukrainy stated on February 28, “The Stockholm Arbitral Tribunal today found in favour of Naftogaz on most major issues in the dispute with Gazprom. The Tribunal found that Gazprom had defaulted on its obligations regarding volumes to be transited and awarded damages of USD 4.63 billion.

           The award means that Gazprom will have to make payments to Naftogaz in the order of USD 2.56 billion after residual payments for gas delivered in 2014 and 2015 have been settled.

          ‘We are pleased that we won the arbitration case on major accounts. This is an important day for the people of Ukraine and for the future of European gas markets’, says Naftogaz CEO Andriy Kobolyev.

          Naftogaz submitted a monetary claim of USD 15 billion for under-deliveries and underpayments in the present case plus interest while Gazprom submitted a counterclaim for USD 0.05 billion based on the reduced contract price for gas awarded by the same Tribunal in May and December 2017 in the Gas Sales Arbitration. In the latter, the Tribunal rejected Gazprom’s claim for more than USD 56 billion based on take-or-pay provisions which the Tribunal invalidated. For 2018 and 2019, Naftogaz’s minimum annual offtake obligation was reduced from 41.6 bcm to 4 bcm, saving Naftogaz USD 21.2 billion.

          The tribunal in the gas sales arbitration also allowed Naftogaz to pay USD 1.8 billion less for gas supplied at provisional prices in 2014 and 2015, compared to the amount based on the initial contract prices. Naftogaz estimates that based on current prices, the price revision will reduce gas supply costs for 2018 and 2019 by more than USD 0.5 billion.

          The value of the total claims in these two arbitrations makes the dispute the biggest commercial arbitration in history, and consists all together of USD 125 billion when the total claims and counterclaims are summarised.

           ‘The money should be spent on increasing gas production inside Ukraine and on investment in improved energy efficiency at the level of consumers in Ukraine. This will improve security of supply and give Ukrainians affordable energy,’ says Kobolyev.”

Radio Free Europe/Radio Liberty (RFE/RL) reported, “Ukraine’s parliament has approved legislation creating an anticorruption court. […] The bill passed with support of 282 deputies in its first reading on March 1. Ahead of the vote, Verkhovna Rada speaker Andriy Parubiy called on the lawmakers to support the proposed law, saying its text could be amended before the second and final reading. […]

          The IMF has called the establishment of an anticorruption court a ‘benchmark’ of Ukraine’s progress toward Western legal standards, and has said it would help ease the release of loans in the future.”

In an article for Politico, John P. Carlin, former Assistant Attorney General for the Department of Justice’s National Security Division, wrote, “Vladimir Putin’s Russia is engaged in a low-intensity conflict not just against the United States, but against the civilized world, where commerce and prosperity are inextricably intertwined with digitally connected machines.

           Fearing that both democracy and free and fair economies represent an existential threat to his corrupt authoritarian regime, Putin’s Russia is increasingly responsible both for indiscriminate destructive cyberattacks and for harboring cybercriminals who harm the global online economy. It is impossible to confront threats to cybersecurity without addressing the Putin problem. […]

           It’s critical the White House and U.S. government punish Russia. President Barack Obama created a mechanism to sanction states that participated in malicious cyber behavior and then used it, in December 2016, against Russia after its election operations. But more needs to be done-and the United States needs to take the lead. The most effective action is collective action.

          The United States needs to partner with countries around the world to impose devastating economic penalties proportional to the billions of dollars of indiscriminate criminal cyber-enabled activities and for the repeated undermining of internal democratic elections around the world. The partnership of the interconnected world should also consider collectively closing embassies and consulates. […]

          Responsible countries cannot allow this behavior online to continue without response. Failure to act encourages worse and worse behavior-and not just by Putin’s Russia: Other rogue regimes are watching and wondering where the lines are for cyber aggression.

          The United States must demonstrate to Putin that it will take public and proportional action to counter Russia’s malicious behavior online. One of the lessons of America’s battle against terrorism is that we cannot allow terrorists safe havens inside ungoverned or poorly governed countries around the world; we must develop a similar doctrine to ensure the world’s safety online.

          Against Russia, those tools could range from further sanctions to frozen international bank accounts to cyber activity intended to target the infrastructure used by criminals and efforts like the Internet Research Agency.

          It’s time to shut down Putin’s online chaos machine. The world must act-now.” The full article is available here: Russia is a Rogue State. Time to Say So.