Russian sanctions

Russia Faced with Drop in Cargo Traffic and Container Deficit

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Russia is bracing for a sharp decline in cargo flows and a deficit of containers after major international container shipping lines halted operations in the country due to Moscow’s military campaign in Ukraine.

The world’s three largest container shipping lines, Denmark’s Maersk, France’s CMA CGM and Swiss-based MSC, have suspended their bookings to and from Russia after Moscow sent troops into Ukraine on Feb. 24, sparking a flurry of Western sanctions.

The exit of major container shipping companies — which transport most manufactured goods around the world and are essential to international trade — is expected to cause a major decline in shipments if no alternatives to these firms are found soon, according to the head of Delo Group, Russia’s largest container operator.

freshplaza.com

COSCO Continues Trading with Russia, Unlike Other Shipping Companies

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The vast majority of the global container shipping companies have temporarily halted their cargo bookings to and from Russia due to Putin’s invasion of Ukraine. The Chinese ocean carrier COSCO Shipping, however, still offers services in Russia.

COSCO Shipping continues to transfer goods to Russia with its tanker fleet transporting crude oil, which is Russia’s major export commodity to China.

“COSCO is offering economic succour for Russia as it faces a barrage of economic sanctions from various governments,” said Sathiya Jalapathy, business fundamentals analyst at data and analytics company GlobalData.

On the other hand, MSC, which operates in Russia through its subsidiary MSC Rus, stopped accepting cargo bookings to and from Russia, covering the Baltic Sea, the Black Sea, and Far East Russian regions.

In addition, CMA CGM’s Russian subsidiary, with nine offices in the country, including Saint Petersburg, Novosibirsk, Yekaterinburg and Moscow, serving seven Russian ports, has suspended its operations.

Maersk has also halted temporarily its container shipping operations to and from Russia, announcing the suspension of its ocean and inland cargo bookings, while the Danish shipping company intends to sell its 30.75% stake in the Russian port operator Global Ports Investments.

Furthermore, HMM halted cargo bookings on two of its shipping routes to and from Russia, with low demand, with a capacity of 1,700 TEU on each container vessel, on the Busan to Vostochny and Busan to Vladivostok routes. However, the company stated that this stoppage will not have any impact on its performance and that it will fulfill previous bookings.

The Singapore-based Ocean Network Express has also suspended cargo bookings to and from Odessa in Ukraine, and Novorossiysk and Saint Petersburg in Russia, according to Global Data.

Moreover, German Hapag-Lloyd, which operates in the country through offices in Kaliningrad, Moscow, Novorossiysk and Saint Petersburg, has also stopped bookings to and from Russia, Belarus, and Ukraine.

However, essential goods such as medical equipment, food, and humanitarian aid continue to be transported according to the data and analytics company GlobalData.

“The decision by many global shipping companies to halt their services to Russia could put the country in a difficult position as it will struggle to import goods such as motor vehicles and spare parts, industrial machinery and equipment, apparel and electrical machinery,” commented Sathiya Jalapathy.

freshplaza.com

The EU Extends Sanctions on Russia for 6 More Months

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On Thursday, December 10, the European Union’s heads of State and Government renewed the economic sanctions against Russia for its role in the crisis in eastern Ukraine until June 30, 2021.

The EU first introduced the sanctions on July 31, 2014. The sanctions are focused on the finance, energy, and defense sectors, as well as on dual-use, civil, and military products. They also restrict Russia’s access to certain sensitive technologies and services that can be used for oil exploration and production.

The sanctions also limit access to the primary and secondary capital markets of the EU for five major Russian financial entities – Sberbank, VTB Bank, Gazprombank, Vnesheconombank, and Rosseljozbank – which have majority participation of the State, and its subsidiaries that also have a majority State participation and that are established outside the EU.

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Putin Extends Counter-Sanctions Until End of 2021

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Russian President Vladimir Putin signed a decree extending certain special economic measures against countries that have imposed sanctions on the Russian Federation until December 31, 2021. The document was published on Saturday on the official website of legal information.

The government has been instructed to ensure the implementation of the decree and, if necessary, make proposals to change the period of validity of these counter-sanctions.

In March 2014, due to the situation in Ukraine, the European Union and a number of countries, including the United States, Canada, Australia, Japan, Switzerland, New Zealand, Iceland, began to impose sanctions on Russia. In particular, it included sanctions lists of Russian individuals and legal entities. Restrictive measures included a ban on entry, freezing of accounts. In addition, the so-called sectoral sanctions were introduced: the assets of the companies falling under them were not frozen, but restrictions were imposed on medium and long-term lending.

In response, on August 6, 2014, Russian President Vladimir Putin signed a decree, based on which the Russian government imposed a ban on imports of a number of food products from the United States, the European Union, Norway, Australia, and Canada.

After the EU countries extended sanctions against Russia on June 22, 2015, on June 24, Putin extended the food embargo for another year. Subsequently, it was extended three times, most recently on June 24, 2019, until the end of 2020.

In June 2019, Putin extended counter-sanctions until December 31, 2020, and amended the norms of the original decree on counter-sanctions from August 6, 2014, and the decree from October 22, 2018, on counter-sanctions against Ukraine.

www.tass.com