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Western Sanctions Hit Top Russian Firms, Dutch Found Liable for 300 Srebrenica Deaths

Plus, a report tracks the influence of the Albanian ex-PM’s daughter and Kyiv says it stopped an assassination in Donetsk.

by Barbara Frye, Ioana Caloianu, Mane Grigoryan, and Erik N. Nelson 17 July 2014

1. U.S., EU ramp up sanctions against Russian companies


Russian stocks and the ruble fell today and Moscow threatened revenge after the United States and the European Union restricted access to financing for major Russian companies and projects.


The U.S. Treasury’s expanded list of targets of sanctions over Russian intervention in Ukraine includes Rosneft, the country’s largest oil producer; Vnesheconombank, the state-owned development bank; Gazprombank, owned by the namesake Russian energy giant; and natural gas producer Novatek.


The sanctions prohibit providing medium- or long-term financing to entities and individuals on the list, which also includes a KGB colonel, an aide to President Vladimir Putin, the self-proclaimed Donetsk People’s Republic, and some arms makers.


For their part, EU heads of state issued a statement 16 July (pdf) instructing the European Investment Bank to halt funding for new public sector projects in Russia. They have also agreed to start targeting entities in Russia and Ukraine, in a change from their previous strategy of placing individuals under a travel and visa ban. A list of those affected is to be drawn up by the end of July. Joint EU-Russia projects will also be reassessed on a case-by-case basis.


Reuters reports that stock markets in Russia lost a few percentage points early this morning and the ruble dropped “as much as 1 percent against the dollar.”


“By imposing penalties on Russia's largest oil producer Rosneft, its second largest gas producer Novatek and its third largest bank Gazprombank, Washington targeted Putin's allies, many of whom have become wealthy during his tenure,” Reuters wrote in a separate report.


In announcing the expanded sanctions, U.S. President Barack Obama said Russia had not halted “the flow of weapons and fighters” into Ukraine, nor had it urged separatists to release hostages and support a cease-fire, pursued internationally mediated talks, or agreed to “meaningful monitors” on the border.


“What we are expecting is that the Russian leadership will see once again that its actions in Ukraine have consequences, including a weakening Russian economy and increasing diplomatic isolation,” Obama said.


In response, the Russian Foreign Ministry called the stepped-up U.S. sanctions “a primitive attempt to avenge the fact that developments in Ukraine are not following Washington’s scenario,” according to The Moscow Times. The ministry criticized the U.S. government for “not putting enough pressure on Kyiv to stop a military operation intended to end the uprising in the east.” 


2. Court holds Dutch government responsible for some Srebrenica deaths


A district court at The Hague has ordered the Netherlands to compensate the families of more than 300 Bosnian Muslims who were killed in the 1995 Srebrenica massacre after Dutch UN peacekeepers failed to keep a “safe haven” compound protected, the Associated Press reports.


A massive concrete block marks the exit to the UN safe haven that Dutch peacekeepers were guarding. Photo by Michael Bueker/Wikimedia Commons.


Presiding Judge Larissa Alwin said members of the so-called Dutchbat force could have known the refugees would be killed if deported from the Dutch compound, given evidence of war crimes being committed by Bosnian Serbs, but an outnumbered Dutch force allowed Bosnian Serbs to take the victims into custody.


The court has not determined the amount of compensation to be paid to the victims’ families, AP reports.


The court cleared the Dutch of responsibility in the deaths of another 7,700 men and boys at Srebrenica, even though, as the Guardian reported in April 2002, the Dutch government has admitted “that it could have done more to prevent the slaughter of up to 8,000 Bosnian Muslims at Srebrenica.”


Family members of the deceased welcomed the court ruling but objected that the Dutch force had not been held accountable for the other deaths, according to AP.


“How is it possible to divide victims and tell one mother that the Dutch state is responsible for the death of her son on one side of the wire and not for the son on the other side?” said Munira Subasic, president of Mothers in Srebrenica, an association representing women who lost family members in the worst atrocity in Europe since World War II.


The Dutch have argued that immunity from prosecution was important to global peacekeeping operations.


3. ‘Clean hands’ in Albania, but what’s up that sleeve?


For many looking to do business with the government of Albania’s former prime minister, Sali Berisha, his daughter’s law offices were the first stop, according to an investigation by the Balkan Insight.

Berisha100Sali Berisha

The report covers the spectacular success of Argita Malltezi, whose client rosters filled up with major corporations seeking project approvals within months after she hung out a shingle in 2005, the year her father took the reins of government.

A few months after Berisha was elected prime minister on a “clean hands” platform, Malltezi gave up a lucrative job with the UN Interim Mission in Kosovo. She returned to Tirana and started start three law firms in the Albanian capital with friend and Kosovo co-worker, Flutura Kola, according to Balkan Insight.


Evidence marshaled by the Balkan Investigative Reporting Network (BIRN), the news website’s parent, suggests that firms that wanted to do business in Albania needed to first do business with the law firms of Malltezi & Kola, Kola & Associates, or Malltezi & Associates. BIRN’s reporting included an interview with one of Berisha’s well-recognized cronies, Bosnian-British businessmen Damir Fazlic.


Among the documents obtained by BIRN are bank statements seized as part of a money-laundering investigation against Fazlic. The allegations were eventually dropped and Fazlic has denied any wrongdoing.


One of the many bits of evidence revealed in BIRN’s trove indicates that Malltezi and Kola may have pulled in more than 1 million euros ($1.35 million) from selling farmland in the Porto Romano area of Albania to Fazlic. The land was worthless until Berisha included it in a planned energy park, which boosted its value by a factor of eight, according to Balkan Insight.


Fazlic told BIRN his dealings with Malltezi were legal but that her status was insurance that he would “never get racketeered,” as other businessmen had experienced.


Another client, from Pakistan, said he hired Malltezi to help get approval for the construction of a power plant in Albania. Zafar Ansar said he agreed to some unusual fees “knowing she was the daughter of the prime minster [and] would be instrumental in achieving the goal of setting up the power plant without difficulties.”


But Ansar said that when he resisted pressure from Malltezi to buy an unsuitable plot of land for the plant, local authorities rejected the project.  


4. Kyiv claims ‘Russian terrorists’ planned to kill interior minister


Ukraine’s Interior Ministry said it has foiled a plot to assassinate Minister Arseniy Avakov.

Arseniy AvakovArseniy Avakov


The ministry said “Russian terrorists” were planning to kill Avakov during his visit last week to embattled areas in eastern Ukraine, using roadside bombs, an attack on a stop along his route, or a sniper shot.

At a press briefing today, a ministry official pinned the plot to Igor Bezler, a Russian citizen leading a group of separatists the city of Horlivka in the Donetsk region, Interfax Ukraine reports.


In April, Bezler was blamed by the Ukrainian security service for ordering that a Horlivka town council member be “neutralized” before the man was abducted, tortured, and murdered, Reuters reported at the time.


Zorian Shkiriak, an aide to Avakov, said members of two groups had been arrested, but it was not clear if they were linked to the same assassination plot. He said the leader of one of the groups had been killed while resisting arrest.


“Earlier, Ukrainian media reported that there had been an attempt on Avakov's life in the area of the anti-terrorist operation but that the interior minister had not been injured,” according to Interfax Ukraine.


5. Car makers to increase production in Hungary


Hungary is anticipating economic growth as German carmakers Opel and Audi expand their business amid rising demand. The Wall Street Journal’s Emerging Europe blog reports that both firms have announced plans to increase production and that Audi will introduce an additional shift at its plant in the western city of Gyor starting in mid-August.


The auto industry is vital to Hungary’s economy, which is expected to grow by 2.9 percent this year and 2.5 percent in 2015 on the back of exports, The Journal reports. In addition to the Opel and Audi factories, the country is home to Mercedes-Benz and Suzuki plants.


Takarekbank economist Gergely Suppan said the expansion of car plants could boost Hungary’s industrial output by more than 2 percent this year and by as much as 6 percent to 6.5 percent next year, according to The Journal.


Central and Eastern European economies were slow to recover after the 2008 downturn. Hungary returned to economic growth in 2013 after being in recession for more than a year.


The European Commission announced last week that it will investigate whether a 133.3 million euro ($180.5 million) government grant to Audi to expand its plant in Gyor violated EU competition laws. 

Barbara Frye is TOL's managing editor.Ioana Caloianu is a TOL editorial assistant. Mane Grigoryan is a TOL editorial intern. Erik N. Nelson is a TOL contributing editor.

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