Ukraine: Daily Briefing
April 17, 2018, 5 PM Kyiv time
1. Russian Invasion of Ukraine
The General Staff of Ukraine’s Armed Forces reported at 12:30 PM Kyiv time that in the last 24 hours, one Ukrainian soldier was killed and five Ukrainian soldiers were 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 52 times in total, including at least 8 times with heavy weapons – artillery and mortars.
2. Joint Statement by US and UK on malicious cyber activity by the Russian government
In a joint statement on April 16, the governments of the United States and the United Kingdom said, “Today, the U.S. Department of Homeland Security (DHS), Federal Bureau of Investigation (FBI), and the UK’s National Cyber Security Centre (NCSC) released a joint Technical Alert about malicious cyber activity carried out by the Russian Government.
The targets of this malicious cyber activity are primarily government and private-sector organisations, critical infrastructure providers, and the internet service providers (ISPs) supporting these sectors. Specifically, these cyber exploits are directed at network infrastructure devices worldwide such as routers, switches, firewalls, and the Network Intrusion Detection System (NIDS). […]
Russian state-sponsored actors are using compromised routers to conduct spoofing ‘man-in-the-middle’ attacks to support espionage, extract intellectual property, maintain persistent access to victim networks, and potentially lay a foundation for future offensive operations. Multiple sources, including private and public-sector cyber security research organisations and allies, have reported this activity to the U.S. and UK governments.”
Deputy Assistant of the FBI Howard Marshall stated, “The activity highlighted today is part of a repeated pattern of disruptive and harmful malicious cyber action carried out by the Russian government. As long as this type of activity continues, the FBI will be there to investigate, identify and unmask the perpetrators, in this case, the Russian government. The joint Technical Alert released today underscores our commitment to working with our partners, both at home and abroad, to combat malicious cyber activity and hold those responsible accountable. We do not make this attribution lightly and will hold steadfast with our partners.”
3. National Bank of Ukraine transfers 44.6 billion UAH to State Budget in 2018
The National Bank of Ukraine reported, “On 13 April 2018 the Council of the National Bank of Ukraine (the NBU Council) approved the consolidated financial statements of the NBU for 2017 signed the previous week by NBU Governor Yakiv Smolii and Director General of PJSC Deloitte & Touche USC, certified auditor YevhenZanoza.
The NBU’s balance-sheet total reached UAH 1,027 billion by late 2017. In 2017, the NBU’s net income accounted for UAH 65.9 billion. A major source of the regulator’s revenues and earnings came from interest income, mainly returns on Ukrainian securities and loans issued by Ukrainian banks. […]
The NBU incurred interest expenses associated with issuing certificates of deposit and repaying the IMF loans. Over this year substantial impairment allowances were released. Consequently, net interest income following
impairment allowances release accounted for UAH 45.2 billion.
The NBU’s expenses (net of interest expenses and fee and commission paid) were UAH 3.6 billion. These funds were used to print banknotes and mint coins, personnel expenses, provisions for contingent liabilities and also administrative expenses. […]
The remaining UAH 44.6 billion will be paid to the state budget in 2018. The respective schedule for transferring the share of the NBU distributable profit for 2017 to the state budget for 2018 was approved with the Ministry of Finance of Ukraine. Since these funds are allocated to the Ministry of Finance for budgetary spending of the current year, there will be no additional impact on the inflation rate.”
4. Russia’s stranglehold over European gas supplies laid bare by leaked EU documents
The Financial Post reported, “Vladimir Putin’s stranglehold over European gas supplies has been laid bare by explosive EU documents, exposing deliberate violations of EU law and a pattern of political bullying over many years.
The longest investigation in EU history found that the Kremlin-controlled energy giant Gazprom has used its enormous power to pressure vulnerable states in Eastern Europe and fragment the EU’s energy market with coercive pricing policies.
The document leaves no doubt that Germany has been enjoying a sweetheart deal with Gazprom, gaining a competitive advantage in gas costs at the expense of fellow EU economies and leaving front-line states at the mercy of Moscow’s strong-arm tactics.
A leaked document from the European Commission paints an extraordinary picture of predatory behaviour, with Gazprom acting as an enforcement arm of Russian foreign policy. Bulgaria was treated almost like a colony, while Poland was forced to pay exorbitant prices for imported flows of pipeline gas from Siberia.
The stash of files slipped to MEPs imply that Brussels learnt the full truth but is nevertheless turning a blind eye as it prepares to reach an understanding with Moscow, disregarding fundamental principles of EU law.
‘This is a very big deal. What the documents show is that there was systematic abuse of dominant position, and that it was clearly done for political purposes,’ said Prof Alan Riley, an expert on EU energy law at the Atlantic Council, a US think tank. ‘Gazprom was splitting the European energy market at every point. And now the Commission is minded to do a deal that treats the East Europeans as if they were not member states at all.’
The competition commissioner, Margrethe Vestager, has pursued an aggressive campaign against US technology companies such as Google and Apple, openly vilifying the Silicon Valley leaders as a threat to European democracy.
Critics say the double standards over Gazprom suggest that the Commission has succumbed to ‘regulatory capture’ or other forms of pressure, and has become ideologically unhinged. The key report, called a ‘Statement of Objectives,’ is a confidential indictment by the competition directorate. It was drawn up in 2015 after four years of investigation. […]
One of the leaked document reveals the Commission’s view on Gazprom’s offer of a settlement. It said the proposal would allow the company to “continue its pricing policy” and that it did not prevent other abuses from reoccurring. It admitted that acceptance of the offer by the EU would ‘be seen as failure to exercise the EU law enforcement powers,’ yet this appears to be exactly what was being planned.”
The full report from the Financial Post is available here: Leaked document shows Russia has been using gas to politically bully Eastern Europe for years