|STATE DEPARTMENT SANCTIONS MAY
BACKFIRE ON AMERICA
MOSCOW. (RIA Novosti military correspondent Viktor Litovkin)
The Washington Post has reported that the U.S. State Department has
approved sanctions against several foreign companies, including three
Russian firms – the state-run arms exporter Rosoboronexport, the Tula-based
instrument-making design bureau, and the Kolomenskoye machine-building
Under the 2005 Iran and Syria Nonproliferation Act, American companies and
individuals are prohibited from trading with or rendering assistance to
the said companies.
Russia has learned about the department’s decision from news agencies.
Rosoboronexport, which has the monopoly right to export arms and military
equipment, described the sanctions as “mala fide competition.”
The Russian Foreign Ministry said they are “an internal problem of the
Russia’s First Deputy Prime Minister and Defense Minister Sergei Ivanov
said: “The three Russian companies have not violated international laws,
rules or obligations assumed by Russia in the non-proliferation of weapons
of mass destruction and missile technology. The U.S. administration seems
to be dissatisfied with the recent growth in the sale of Russian arms and
military equipment, and with the Russian defense orders for the national
Washington is taking revenge on Russia for its energetic efforts to fill
in the vacuum created by the U.S. sanctions, notably in Venezuela.
Rosoboronexport is supplying Kalashnikov guns, Su-30MK Flanker-C fighters
and other arms and military equipment worth $3 billion to Venezuela. It
has military contracts worth $9.7 billion with Syria stipulating the
supplies of antitank and anti-air systems, and is supplying Tor-M1 and
mobile army air defense missile systems to Iran.
The State Department’s sanctions cannot force the Kremlin to terminate
these lucrative deals. Ivanov is right in that the Kremlin,
Rosoboronexport and its partners have not violated any international laws
or rules. They are not supplying arms to conflict zones or selling arms to
warring sides. Moreover, they are trading only with UN-recognized states
and their legitimate governments, rather than with individual firms and
Russia is a sovereign country that has never yielded to pressure,
including in the form of economic sanctions imposed on its defense
companies and arms exporters. Moreover, these sanctions will not affect
its military-technical cooperation with other countries.
Rosoboronexport and the Tula and Kolomenskoye design bureaus have no
contracts with the United States, and U.S. sanctions will not affect their
relations with Syria, Iran, Algeria, Morocco and other countries to which
they export their output.
The first to suffer from the sanctions will be American companies and U.S.
arms modernization plans. The sanctions can boomerang on the U.S.
The Pentagon has more than once offered Rosoboronexport to sign a contract
on the delivery of the Arena Active Protection System (APS), an active
countermeasure system developed at Russia’s Kolomenskoye engineering
design bureau to protect armored fighting vehicles from shaped-charge
It uses a millimeter-wavelength Doppler radar to detect incoming warheads,
then fires a defensive projectile timed to detonate immediately above the
target and spray it with a stream of splinters, thereby neutralizing the
threat. The Arena’s awareness range is 50 meters and destruction range
up to 25 meters.
The United States, other NATO countries and Israel do not have comparable
systems. Discussions of ways to adjust the Arena system to the
Pentagon’s technical standards lasted for months, and the sides
eventually reached the stage of coordinating the price, the amount of
supplies, and the companies that would fill the order. Under U.S. law,
American military hardware must have only American-made spares and
components, but the Pentagon was prepared to waive this “minor”
detail. However, the sanctions imposed on the Kolomenskoye bureau can
prevent the deal, but who stands to lose more?
There is one more sphere of international economic cooperation that can be
hit by the sanctions.
Nearly all arms contracts between Rosoboronexport and foreign states are
signed in dollars, with the payments mostly made through the Bank of New
York. U.S. Congress has decided that banking secrets must be disclosed to
facilitate the fight against international terrorism, which allows
Washington to learn all the details of Russian arms contracts.
This has prompted Russian exporters to ponder conversion to the euro.
European banks have so far remained immune to pressure from the U.S.
administration and have not allowed the CIA to read their confidential
Converting from the dollar to the euro in international contract
settlement is a relatively complicated process, because it has to suit all
the sides involved. However, Russia has signed several such contracts,
which means that Russian accounts with the Bank of New York will soon
become much smaller.