By Alfred De Zayas, Counterpunch, 2/6/23

Alfred de Zayas is a law professor at the Geneva School of Diplomacy and served as a UN Independent Expert on International Order 2012-18. He is the author of ten books including “Building a Just World Order” Clarity Press, 2021. 

The war in Ukraine did not start on 24 February 2022, but already in February 2014.  The civilian population of the Donbas has endured continued shelling from Ukrainian forces since 2014, notwithstanding the Minsk Agreements.  These attacks on Lugansk and Donetsk significantly increased in January-February 2022, as reported by the OSCE Special Monitoring Mission to Ukraine[1].

Like all wars, this war is a tragedy for all concerned, — not only for Ukrainians and Russians, but also for the continued validity of international law and the primacy of the UN Charter.  Already NATO’s military campaigns in Yugoslavia, Afghanistan and Iraq in the 1990’s and early 2000’s sorely tried the authority and credibility of the United Nations as an Organization.  These military campaigns conducted outside Chapter VII of the UN Charter rendered the United Nations nearly irrelevant, because the Organization was unable to prevent the illegal use of force or mediate peace.  The unilateral actions of a number of states were never subject to accountability, not even the grave war crimes committed in Iraq and Afghanistan, as documented by Julian Assange in the Wikileaks publications. NATO countries grossly violated articles 2(3) and 2(4) of the Charter, absent any Charter justification, since article 51, which stipulates the right of self-defence does not cover pre-emptive military actions.

The so-called “coalition of the willing” perpetrated naked aggression against the people of Iraq in 2003 in a series of criminal acts that constituted a revolt against the UN Charter and international law.  Such military campaigns carried out against the letter and spirit of the UN Charter and hitherto not subject to prosecution by the International Criminal Court have significantly weakened the force of international law and resulted in the emergence of “precedents of permissibility” [2], as I described in a Counterpunch article published on 4 March 2022, in which I clearly condemned the Russian invasion of Ukraine as an egregious violation of Art. 2(4) of the UN Charter.

On the other hand, it is clear that a violation of international law does not change jus cogens or create new international law (ex injuria non oritur jus – no right emerges from a wrong). Impunity only manifests the weakness of the system due to a lack of adequate enforcement mechanisms[3].

On 31 January 2023 Counterpunch published an essay by history Professor Lawrence Wittner entitled “The Ukraine War and International Law”[4].  He correctly condemns the violation of article 2(4) of the UN Charter by Russia and the war crimes that have ensued, for which there must be accountability.   Prof. Wittner refers to “rules of behavior among nations” in connection with war, diplomacy, economy, etc.  Among those rules of behavior are, of course, the “general principles of law” referred to in article 38 of the Statute of the International Court of Justice, notably the principles of good faith and the uniform application of norms.

In his book The Great Delusion[5], Professor John Mearsheimer of the University of Chicago elucidated principles of international order and the necessity to respect agreements (pacta sunt servanda), including oral agreements.  In his article in the Economist on 19 March 2022[6], Mearsheimer explains why the West bears responsibility for the Ukrainian crisis.  Already in 2015 Mearsheimer had signalled the importance of keeping oral agreements, as those given by the United States to Mikhail Gorbachev in 1989-91, to the effect that NATO would not expand eastward[7].  In subsequent lectures Mearsheimer has explained that, whether of not the West considers NATO’s expansion a provocation, what is crucial is how NATO expansion is perceived by those who feel threatened by it.  In this context we must remember that article 2(4) of the UN Charter prohibits not only the use of force but also the threat of the use of force.  Promising to expand NATO to the very borders of Russia and the massive weaponization of Ukraine certainly constitute such a threat, especially bearing in mind the aggressive campaigns by NATO members in Yugoslavia, Afghanistan, Iraq, Syria and Lybia.

For decades Russian Presidents Vladimir Putin and Dmitry Medvedev have been warning the West – notably at the 2007 Munich Security Conference[8] — that NATO eastward expansion constitutes an existential menace to Russia.  Both Presidents advocate a European security architecture that will take into account the national security concerns of all countries, including Russia. Whether Russian fears are objectively justified or not (I think they are) is not the pertinent question, since their apprehension is a factum.  What is crucial is the obligation of all UN member states to settle their differences by peaceful means, i.e. to negotiate in good faith.  That is precisely what the Minsk agreements were all about.  Yet, Ukraine violated the Minsk agreements systematically.  Russia did make a credible effort to negotiate since 2014 in the context of the OSCE and the Normandy Format.  German Chancellor Angela Merkel[9] and French President François Hollande[10] recently confirmed that the Minsk agreements were intended to give Ukraine time to prepare for war.  Thus, essentially, the West entered the agreements in bad faith by deliberately deceiving the Donbas Russians.  In a very real sense, Putin was taken for a ride at Minsk and during the eight years of Normandy Format discussions.  Such behavior reflects a “culture of cheating”[11] and violates well-established principles of international relations amounting to perfidy, in contravention of the UN Charter and general principles of law.  Notwithstanding, In December 2021 the Russians put forward two peaceful proposals in the hope of averting military confrontation.  Although the treaty proposals were moderate and pragmatic, the US and NATO refused to negotiate pursuant to article 2(3) of the Charter and arrogantly rejected them.  If this was not a provocation in contravention of article 2(4) of the UN Charter, I do not know what is.

Professor Wittner is right in reminding us of the Budapest Memorandum of 1994 and the 1997 Treaty of Friendship, Cooperation and Partnership, but these instruments have to be placed in legal and historical context, in particular in the context of Western pronouncements since 2008 to bring Ukraine into NATO, an issue that in no way was foreseen in the two instruments above.

Wittner is wrong in his evaluation of the Crimean issue.  I was the UN representative for the elections in Ukraine in March and June 1994 and criss-crossed the country, including Crimea. Without a doubt, the vast majority of the population there and in the Donbass are Russian and feel Russian.  This brings up the issue of the jus cogens right of self-determination of peoples, anchored in articles 1 and 55 of the UN Charter (and in Chapters XI and XII of the Charter) and in Art. 1 common to the International Covenant on Civil and Political Rights and International Covenant on Economic, Social and Cultural Rights.  Wittner seems to forget that the US and EU supported the illegal coup d’état[12] against the democratically elected President of Ukraine, Victor Yanukovich, and immediately started working together with the Putsch-regime in Kiev, instead of insisting in re-establishing law and order as provided for in the Agreement of 20 February 2014[13].  As Professor Stephen Cohen wrote in 2018, Maidan was a “seminal event”[14].

Without the Maidan Putsch and the anti-Russian measures immediately taken by the Putsch-regime, the Crimean and Donbass peoples would not have felt menaced and would not have insisted on their right of self-determination.  Wittner errs when he uses the term “annexation” to refer to the reincorporation of Crimea into Russia.  “Annexation” in international law presupposes an invasion, military occupation contrary to the will of the people.  That is not what happened in Crimea in March 2014.  First there was a referendum to which the UN and OSCE were invited – and never came. Then there was an unilateral declaration of independence by the legitimate Crimean Parliamen, only then was there an official request to be re-incorporated into Russia, a request that went through the due process mill, being first approved by the Duma, then by the Constitutional Court of Russia, and only then signed by Putin.  Had a referendum been held in 1994, when I was in Crimea, the results would surely have been similar.  A referendum today would confirm the will of the Crimeans to be part of Russia, not Ukraine, to which they had been artificially attached by decision of Nikita Khruschev, a Ukrainian himself.  There are no historical or ethnic reasons justifying Crimea’s attachment to the Ukraine. Many international lawyers agree that Crimea exercised its right of self-determination and was not “annexed” by Russia[15].

Wittner is correct in recalling the fact that the General Assembly adopted a Resolution of 27 March 2014 rejecting the “annexation” of Crimea.  But what exactly does that Resolution tell us?  As a former senior lawyer with the Office of the UN High Commissioner for Human Rights and former UN Independent Expert, I must admit that for many decades the United Nations Organization applies double standards and does not live up to the Charter.  Many resolutions and pronouncements by successive Secretary Generals apply international law selectively, à la carte.  What the 2014 GA Resolution demonstrates is that the Organization is largely in the service of Washington and Brussels, partly because of the enormous financial dependency of the UN on the West.  Similarly, the GA Resolution of 2 March 2022 is yet another example of double-standards, bearing in mind that the GA had not adopted any similar resolutions when NATO committed aggression on Yugoslavia in 1999 or when the “coalition of the willing” devastated Iraq in 2003 without any threat or provocation by Saddam Hussein.

Wittner also cites Secretary General Guterres with regard to the “annexation” of Crimea and the Donbass.  As a former senior UN staffer and former rapporteur, it pains me to see how the Organization has been hijacked to support certain untenable positions of Western countries, and how it allows itself to be used in the geopolitical game, instead of remaining true to the Principles and Purposes of the Organization as laid out in the Charter. Where is the “outrage” of the Organization when it comes to the multiple aggressions of the United States against Cuba, Grenada, Nicaragua, Panama, Venezuela, the many coups-d’état directed by the US against governments it does not like, when the Organization keeps silent about the crimes committed by the CIA in Guantanamo, Abu Ghraib and secret detention centres, when the “annexation” of the Syrian Golan Heights by Israel is tacitly accepted.

Wittner poses an important question “what…are we to think about the value of international law”? As a professor of international law and a believer in the UN Charter, I ask the same question.  My 25 Principles of International Order[16] give some answers.   In my 14 reports to the UN Human Rights Council and General Assembly (2012-18) I formulated pragmatic recommendations how to reform the United Nations in order to deliver on the 1945 promise to “to save succeeding generations from the scourge of war”.  I agree with Wittner that it is necessary “to strengthen global governance, thereby providing a firmer foundation for the enforcement of international law”.  But there is a caveat – the Organization must be truly committed to peace, and not only sometimes.  It must not continue to apply international law à la carte, or it will lose all its authority and credibility.

Today what is absolutely necessary is an immediate cease-fire. The United Nations is failing the Charter if it does not make peace its priority and puts the entire system in the service of peace. The mediation proposals of Brazilian President Luiz Inácio Lula[17] must be taken seriously as well as the warnings and proposals by Professors John Mearsheimer[18], Jeffrey Sachs[19] and Richard Falk[20].

[1] https://www.osce.org/special-monitoring-mission-to-ukraine/512683

https://www.osce.org/special-monitoring-mission-to-ukraine-closed

[2] https://www.counterpunch.org/2022/03/04/precedents-of-permissibility/

[3] https://www.counterpunch.org/2022/04/07/no-right-arises-from-a-wrong/

[4] https://www.counterpunch.org/2023/02/01/the-ukraine-war-and-international-law/

[5] Yale University Press, 2018.

[6] https://www.economist.com/by-invitation/2022/03/11/john-mearsheimer-on-why-the-west-is-principally-responsible-for-the-ukrainian-crisis

[7] http://www.mearsheimer.com/wp-content/uploads/2019/06/Why-the-Ukraine-Crisis-Is.pdf

https://www.realclearpolitics.com/video/2023/01/10/john_mearsheimer_on_ukraine_conflict_there_are_no_realistic_options_the_west_is_screwed.html#!

https://duckduckgo.com/?q=john+mearsheimer+youtube+ukraine&atb=v314-1&iax=videos&ia=videos&iai=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DJrMiSQAGOS4

[8] http://en.kremlin.ru/events/president/transcripts/24034

[9] https://english.almayadeen.net/news/politics/merkel:-minsk-agreement-attempted-to-give-ukraine-time

[10] https://global.espreso.tv/minsk-agreements-gave-ukraine-time-to-strengthen-army-and-destroyed-putins-plans-in-2022-francois-hollande

[11] https://www.counterpunch.org/2022/01/28/a-culture-of-cheating-on-the-origins-of-the-crisis-in-ukraine/

[12] https://www.nouvelobs.com/rue89/rue89-le-yeti-voyageur-a-domicile/20140311.RUE9766/le-coup-d-etat-ukrainien-a-bien-ete-pilote-par-les-etats-unis-la-preuve.html

https://www.bbc.com/news/world-europe-26079957

[13] https://www.scoop.co.nz/stories/HL2011/S00116/how-the-western-press-lied-about-the-2014-coup-in-ukraine-pretending-that-it-was-instead-a-real-democratic-revolution.htm

[14] https://www.thenation.com/article/archive/four-years-of-ukraine-and-the-myths-of-maidan/

[15] https://www.faz.net/aktuell/feuilleton/debatten/die-krim-und-das-voelkerrecht-kuehle-ironie-der-geschichte-12884464.htmlhttps://www.rubikon.news/artikel/die-krim-und-das-volkerrecht

https://www.faz.net/aktuell/feuilleton/debatten/die-krim-und-das-voelkerrecht-kuehle-ironie-der-geschichte-12884464.html

https://www.wissensmanufaktur.net/krim-zeitfragen

https://youtube.com/watch?v=Y8OJ07D7gPI%3Ffeature%3Doembed

https://www.foreignaffairs.com/articles/ukraine/2020-04-03/russia-love

[16] https://www.counterpunch.org/2022/11/28/principles-of-international-order/

See Chapter 2 of my book “Building a Just World Order”, Clarity Press, 2021.

[17] https://www.politico.eu/article/ukraine-war-luiz-inacio-lula-da-silva-mercosur-olaf-scholz/amp/

[18] https://www.youtube.com/watch?v=CmqojuijtFg

[19] https://mail.google.com/mail/u/0/?tab=wm#search/mearsheimer/WhctKKXpTdsZMnWHKprjzQLSCBwNkVfcWmKkHxltlbQMdkZgfksnmLmnKDjdVDrHpNTHxLV

[20] https://richardfalk.org/2022/09/14/ukraine-war-statecraft-and-geopolitical-conflict-the-nuclear-danger/

By Fred Weir, Christian Science Monitor, 2/2/23

The sanctions imposed after Russia invaded Ukraine were supposed to prevent it. But Russian audiences have been enjoying “Avatar: The Way of Water,” James Cameron’s new blockbuster film, much as they have most Hollywood movies in recent decades.

It’s the sort of thing that wasn’t supposed to be possible after the West cut economic ties with Russia. Big Western film companies withdrew from the Russian market, and local distributors were stripped of their licenses to show almost all Western movies.

But while the mechanics have changed, the end result is similar. Big movie halls are rented out to another company, often representing itself as a “film club.” That company then sells tickets for a short Russian-made film, but then also shows the more than three-hour-long “Avatar” movie “for free.” Experts describe the quality as top notch, and the showings are widely advertised.

Welcome to the Russian consumer economy a year into the war.

Frustrating U.S. and European sanctions hawks, Russia appears to be weathering the West’s attempts to damage its economy in response to the invasion of Ukraine. And in the most visible sign of its resilience, the Russian consumer market still offers ample supplies of Coca-Cola, iPhones, Western car parts, computers, appliances, designer clothing, and more. Via what are known as “parallel imports,” Russian businesses have been able to use legal and semilegal channels to bring name-brand goods into the country despite Western attempts to deny Russia access to them.

While parallel imports do come with their own set of problems – and don’t stave off potential long-term damage that sanctions could still cause – they have shown the limits of Western sanctions as a blunt instrument against Russia.

“Parallel imports are not an ideal solution, even if they seem to solve the problem,” says Ivan Timofeev, an expert with the Russian International Affairs Council, which is affiliated with the Foreign Ministry. “The goods don’t come with the servicing, the warranties that they used to. They’re more expensive. But, at the same time, a lot of unofficial services have appeared to fill those gaps. So, you wouldn’t think you could get your German or Japanese car fixed anymore. But all sorts of businesses have sprung up where they have the parts – obtained through parallel imports – and expertise to do it. That’s why, when you look at any Moscow street, it’s still crowded with those cars running along as usual.”

“Everything can be done”

The Russian economy looks much the same as it did a year ago, with well-stocked supermarkets, bustling e-commerce, crowded shopping malls, and a lively cafe, restaurant, and nightlife scene. Prices are up, but at around 12%, inflation seems manageable and has been declining in recent months. The ruble is stable, employment is high, and public opinion maintains at least tepid support for the war effort. Even Russian President Vladimir Putin recently noted that he had not expected Russia’s economy to survive the sanctions storm quite so well.

At least so far, Russia appears to be confounding wave after wave of Western sanctions.

Some of that is down to good fortune, such as high energy prices last year (which are now falling) and a bumper grain harvest last fall, and Russia’s ability to find non-Western markets for those vital exports.

Another factor is long-term economic planning aimed at sanctions-proofing the economy since 2014, which explains why Russia’s banking system didn’t skip a beat after the war started, and domestic payment systems like Visa and Mastercard continued working domestically even after the parent companies pulled out of Russia.

Yet another is import substitution – a very controversial subject in Russia – in which state support and some degree of market innovation enable Russian businesses to generate local replacements, which may prove acceptable even if they are somewhat inferior to the sanctioned goods.

But it is parallel imports where the big Western brands get through sanctions. Last year Russia’s Ministry of Trade approved the import of over 100 categories of goods with no need for permission from the companies that produce them.

Russian distributors order goods from companies located in countries that don’t participate in the sanctions regime, such as Turkey, Kazakhstan, or Armenia, which buy the goods and send them on to Russian customers. Circumventing the old supply chains has become a huge business, estimated to be worth around $20 billion in the second half of last year, which somehow retains a semblance of legality.

Sometimes that legality can be stretched thin, as in the case of “Avatar: The Way of Water” playing in “film clubs,” about which big film distributors expressed shock and denied involvement. “This is a violation of the law of the Russian Federation and all international copyright conventions,” Olga Zinyakova, president of Karo, Russia’s leading chain of cinema houses, told journalists. No one has publicly explained how the quality prints of the film arrived in Russia.

But many parallel imports are more transparent. Stanislav Mareshkin is sales director of the Magna Group, a St. Petersburg-based logistics company that has pioneered the rerouting of supply chains from Europe to friendly countries in Russia’s immediate neighborhood. He says business has tripled since last February, when the war started.

“Many companies that used to work directly with suppliers in Europe and America are now unable to interact with them at all,” he says. “Everything is broken and blocked. So, people are looking for new ways. We were able to find alternative routes rather quickly, through Kyrgyzstan, Belarus, Armenia, and other countries. We now offer our customers fast delivery, including customs clearance, legal advice, insurance, and certification. When trucks with Russian and Belarusian license plates were banned in Europe, we figured out how to switch to alternative means of transport. Everything can be done.”

“A much more dynamic system”

Dr. Timofeev argues that it’s a mistake to look for Soviet-style dysfunctions in Russia’s economy, like empty shop shelves and long line-ups, as some Western observers tend to do.

“Russia today has a market economy, and even state companies have to play by market rules,” he says. “If you perceive the Russian economy as something rigid and static, like the Soviet economy was, then you might expect that it would start to collapse as vital imports are denied. But it’s a much more dynamic system. People have incentives to find solutions, or workarounds, and they often do.”

It also seems likely that the much advertised withdrawal of Western companies from the Russian market may not have been as total as often assumed. The speaker of Russia’s State Duma, Vyacheslav Volodin, said recently that 75% of foreign companies never really left, but rather found creative ways to disguise their continued participation in the Russian market. That appears to be borne out by foreign studies.

In some cases Russian businesses have simply taken over a Western one, and run it pretty much as before. That’s what happened to McDonald’s, whose 847 outlets and vast infrastructure in Russia were taken over by a Siberian entrepreneur and have returned to the market under a new name, Vkusno i Tochka, offering almost exactly the same services at similar prices. Similarly, Starbucks is now Stars Coffee, Baskin-Robbins is now BR and Ice, while KFC is, well, KFC.

In some cases Western companies have paid a high price for leaving. The Canadian mining company Kinross, for example, was forced by Russia’s regulatory agency to sell its lucrative Far Eastern gold mine to a Russian buyer for half the agreed price.

Experts say the damage inflicted by sanctions will show up over time, resulting in demodernization, slowdowns, and loss of productivity.

For example, Russia is mostly self-sufficient in food production, which explains why grocery stores are full of produce. “In the late 1990s we imported about 40% of our food. Now it’s 10%,” says Pyotr Shelishch, chairman of Russia’s independent Consumer Union. “But Russian agriculture faces serious challenges in obtaining seeds, equipment, and spare parts to keep it going. It will be some time before we see if these problems can be overcome.”

Despite present appearances, and the relative success of some stopgap measures, Russia’s effective decoupling from the main engines of the world economy is likely to have lasting negative consequences, says Yevgeny Gontmakher, an economist and former Russian government official.

“The Russian economy, which benefited so much from cooperation with Western companies over the past years, is now going to be on its own,” he says. “They will now have to accept goods at higher cost and lesser quality, and revert to less modern technologies. Overall, we’re looking at a primitivization of the Russian economy.”

By Dmitry Kovalevich, New Cold War, 2/3/23

Dmitriy Kovalevich is the New Cold War’s special correspondent in Ukraine. He writes a monthly update as well as special reports for the NCW website. In this report Dmitriy Kovalevich examines the situation in the Donbass region, the various reports coming from Ukraine officials and the media, and the serious losses among the Ukraine forces in the area. He also sets out the evidence of people being directly conscripted (kidnapped) from the street and taken to the frontlines.

The first month of 2023 in Ukraine was marked by the defeat of Ukrainian troops near Soledar, the ‘meat grinder’ village in the Donbass region, located near the strategic, small city of Artyomovsk (called ‘Bakhmut’ in Ukraine, per-war population 75,000). Ukraine has suffered heavy losses in fighting around the city in January. It is continuing with the capture and forced conscription of young men on the streets of its towns and cities to compensate for its large military losses in Bakhmut.

Fierce fighting has taken place in and around Soledar in the Donetsk region since the middle of last year. The town, whose pre-war population was around 10,000, was practically destroyed in the fighting and became a huge grave for Ukrainian soldiers. It was stormed mainly by Russian units recruited from among prisoner volunteers. Their criminal records were expunged in exchange for six months of military service.

Kyiv recognized the loss of Soledar only two weeks after the fact. It has stopped mentioning the town altogether in its reports. The largest salt mines in Ukraine are located in and around the town. With the loss of the town, even products such as salt are now beginning to be imported to Ukraine, mainly from Poland.

Aleksey Arestovich, an adviser to the office of the Ukrainian president, said in January that many Ukrainian soldiers could not withstand the Russian onslaught against Soledar and fled. According to him, during the entire defense of the city there were “a substantial number” of refuseniks who declared they “cannot fight any longer in this terrible war”. Arestovich said, “We have people who refused to dig trenches, and when they were led into ready-made trenches, they just stood still. Many said the enemy (Russian soldiers) were too close and it was better to move several miles back from the front lines.”

This and other revelations by Arestovich caused a flurry of criticism from Ukrainian nationalists. At the end of January, a missile hit a residential building in Dnieper (Dnipro) city and killed 46 civilians. Arestovich admitted that a Russian missile was hit by a Ukrainian air defense missile and fell on a residential building, causing the injuries. After this confession, the Ukrainian parliament began collecting signatures calling for Arestovich to resign. Within several days, he announced he was resigning, but not before his revelations had once again exposed the falsehoods routinely contained in the official statements of the Ministry of Defense of Ukraine.

For its part, Russia said the missile shot down over Dnieper was aimed at military installations and repeated that it does not target civilians in Ukraine.

The battle for Soledar also showed the eroding motivation of military personnel in Ukraine. Many of those being forcibly mobilized are showing no desire to fight. In mid-January, the Ukrainian media published a video in which Sgt. Igor Bondarenko, deputy platoon commander of the 60th brigade, berates his subordinate Ukrainian soldiers who had taken refuge in a residential building and were unwilling to fight. The video was filmed for the purpose of reporting to a higher command, which demands that military recruits be driven into battle by all necessary means.

The German magazine Der Spiegel, referring to German intelligence information, reported at the end of January that in and around Bakhmut alone, Ukraine was seeing hundreds of its soldiers killed every day. The Ukrainian Telegram channel ‘XUA-photo of the war’ has broadcast terrible film footage demonstrating the extent of deaths among the Armed Forces of Ukraine in the area. It comments, “Of course, the full scale of this tragedy needs to be documented in the future. On the front lines of Bakhmut-Soledar, the Ukrainian military command has displayed complete failure. There are huge numbers of deaths among the manpower of the Armed Forces of Ukraine.”

In order to try and hold Soledar and Bakhmut, Kyiv transferred military units from other directions. As a result, at the end of January, Russian troops went on the offensive in the Zaporozhye direction, crushing the first line of defense of the Armed Forces of Ukraine and capturing many prisoners of war.

The Russian army, as before, uses the tactics of long-range artillery followed by assault groups entering the destroyed positions. If significant pockets of resistance still remain, retreats followed by more artillery strikes take place. As Russian military correspondent German Kulikovsky writes on Telegram, “We do not take high losses in our offensives, or even in our defensive postures. This explains, by the way, the slow pace of our offensives. Surely, old-school generals are sad that it is not possible to send 10,000 soldiers out in dashing attacks and then, having lost some 30% or whatever, report success to the top-command. For today’s good divisional commanders, everything is completely different. They take care of people, actively using military deceptions, as needed.”

This is actually what is taking place today at front-line positions. Russian forces advance in relatively small assault groups on clearly selected targets – Soledar, Bakhmut, Maryinka, Avdeevka, Kremennaya. At the same time, missile strikes against the energy infrastructure of Ukraine are taking place, increasing the cost and the complications for the U.S. and European allies of Ukraine engaged in combat.

At the same time, the Russian Armed Forces have reserves concentrated in all sectors of the front, ready to stop a large offensive of the Armed Forces of Ukraine if such can be organized at all. If this scenario holds, then the Armed Forces of Ukraine will continue to be squeezed out of the Donetsk republic while a shift to Zaporozhye region takes place. The main idea here is to achieve psychological exhaustion of Ukrainian forces and its Western allies and implant an understanding that a prolonged war will only cause greater costs to Ukraine and produce a peace on much worse terms than Ukraine might otherwise be able to negotiate.

Most of the Zaporozhye region is already under Russian control, but the city of Zaporozhye (population 750,000, fifth largest in Ukraine) as well as a large stretch of the east bank of the Dnieper River remain under Ukrainian control.

Pentagon chief Lloyd Austin told a meeting of NATO-country war ministers at the U.S. Air Force base in Ramstein, Germany at the end of January that a crucial moment in the fighting in Ukraine had arrived and Russia was gathering strength.

Almost the same thing was said by NATO Secretary General Stoltenburg at the meeting of global elites several days earlier in Davos, Switzerland. “This is a pivotal moment in the war and there is need for a significant increase in support for Ukraine. If we want a negotiated peaceful solution tomorrow, we need to provide more weapons today,” he said.

Russian military experts are once again noticing that Western media and politicians are constantly talking about “crucial moments” and “imminent turning points” in Ukraine. Russians note with some surprise that not only Ukraine’s opponents but also their supporters in the West are constantly talking about ‘turning points’ being reached. Ukrainian politicians are also using this language, though in their case, they hope that all their previous words about impending victories over Russia are quietly forgotten. Past ‘turning points’ were talked about in March, April, May, September and December of 2022…

Russian analysts conclude that the dependence of Western politicians on the media relaying of messaging and on classical, capitalist economic belief is turning them into something resembling stock market players or actors in a Hollywood blockbuster film, obsessed with big and conclusive endings. For these analysts, the preoccupation with ‘tipping points’ suggests that a prolonged conflict and the long-term costs of supplying and maintaining weapons to Ukraine from NATO countries will not last long. They see the West actively pressuring Kyiv to send more military recruits to the slaughter in order to achieve a ‘tipping point’ as quickly as possible. In contrast, Russian tactics involved orderly entries or exits from selected territories designed to wear down the Ukrainian army and economy while maintaining main forces in reserve in case of a major conflict with NATO in the future.

Against the backdrop of its serious losses, military conscription has intensified throughout Ukraine. Sometimes, it resembles the straightforward kidnapping of men of military age. Military commissars are increasingly trying to hand out summonses in the most unlikely and inappropriate places (albeit fully permitted legally), such as entrances to shops, in parking lots or at gas stations. Sometimes they resort to roadblocks.

In Odessa, there have been cases of people being directly conscripted (kidnapped) from the street. A subscriber of the ‘Typical Odessa’ channel on Telegram reported, “This morning, my friend, near the railway station, was put into a car and taken to the military registration and enlistment office, without even being presented a written summons. He passed a medical examination at half past six in the evening and was then told he is being sent to Nikolaev. Apparently, this is a new tactic. Authorities realize that no one is reacting to military summonses, and so they have begun to take people and deliver them right to the frontline.”

Other subscribers from Odessa comment that men are brought to the military enlistment offices by ambulances and ‘Nova Poshta’ (delivery service) vehicles. Military commissars often go about their work in civilian clothes. Not everyone surrenders without a fight. “Near Kulikovo field (a neighborhood in central Odessa) in the courtyard of a nine-story building, two unknown people put up serious physical resistance to two “messengers of death” (as military conscription officers are called), as a result of which the young civilian men prevailed and the losing ‘military’ side lost their package of documents and money,” writes ‘Typical Odessa’.

The director of the Institute for the Study of the Consequences of Military Actions in Ukraine, Russian political scientist Kirill Molchanov, calls Ukraine a “kamikaze state”. He emphasizes that there exists another Ukraine, which is represented by refugees and residents in the south of Ukraine who are attending protest rallies organized by the wives and mothers of servicemen. According to him, these are the people who voted for Zelensky in 2019 because of his promise to end the nationalist dictatorship and the war in Donbass of his predecessor, Petro Poroshenko. (Poroshenko was elected in May 2014 as the suppression of opposition to the coup of February 2014 was already well advanced.) Molchanov argues that, “In order to get away from the Western-imposed role of Ukraine as a kamikaze state, a platform is needed to find consensus and develop a common vision for Ukrainians who disagree with Kyiv’s current course.”

The former commander of Polish Land Forces, reserve Colonel-General Waldemar Skrzypczak, gave an interview on January 16 to the pro-government Polish outlet wPolityce on the prospects for ending the armed conflict on the territory of Ukraine. According to the Polish general, the president of the Russian Federation is convinced that if Russia succeeds in expelling Ukrainian forces from the Donbass region, Ukraine will not be able to survive economically and will revert to being an exclusively agrarian country. “Unfortunately, Russia will get its way, because now it is increasing its advantage. The key to its success will be what it is doing now – preparing for a full-scale war in which Russia will have the advantage of several times superiority over the Ukrainian army. The Russians will achieve this, and, unfortunately for Ukraine, there is no point in disputing this,” said the general.

According to the Polish military, the West is not able to help Ukraine enough to create a military potential superior to Russia’s. Skrzypczak believes that Russia can only be strangled politically and economically. “Where are we going? Are we betting that all Ukrainians will die in this war?” he asked rhetorically. He answered himself in the affirmative, calling for the mobilization of those Ukrainians residing in Western countries who managed to escape military service in Ukraine. When asked by a journalist that Ukrainians in the West probably do not want to fight, the general replied that their opinions do not matter. “Ah, so now we are going to ask them if they want to be soldiers or not? It is necessary to mobilize, draft into the army – and that’s all,” said the Polish general.

The real reasons for such interest in the fact that “all Ukrainians die in this war” was unequivocally explained by Canadian finance minister Chrystia Freeland at a gathering of the richest people of the world in Davos, Switzerland. Her maternal grandfather edited a pro-Nazi, Ukrainian newspaper out of Vienna during the Nazi German occupation of Ukraine. According to her, Ukrainians are fighting for the interests of Western countries, and the defeat of the Russian Federation will lead to a boost in the global economy.

Boosting the world economy for the benefit of the super-rich gathered or represented in Davos will mean, first of all, an increase in their personal profits and, secondly, the acquisition of the resources of the Russian Federation through a new military crusade. After all, even the head of the IMF told the assembled faithful in Davos in January that the conflict in Ukraine is global, not regional. For the sake of this, hundreds of Ukrainians are dying every day in and around Bakhmut, and such losses are being replaced by forceful kidnappings on the streets of Ukraine.

Link here.

By Elliot Smith, CNBC, 1/31/23

After Russian troops invaded Ukraine in February 2022, companies across the G-7 major economies and the European Union announced plans to cease business operations in Russia.

Yet by the end of the year, very few had fully delivered on that promise, according to new research from Switzerland’s University of St. Gallen.

The report published earlier this month documented a total of 2,405 subsidiaries owned by 1,404 EU and G-7 companies that were active in Russia at the time of the first military incursion into Ukraine.

By November 2022, fewer than 9% of that pool of companies had divested at least one subsidiary in Russia, and the research team noted that these divestment rates barely changed over the fourth quarter of 2022.

“Confirmed exits by EU and G7 firms that had equity stakes in Russia account for 6.5% of total profit before tax of all the EU and G7 firms with active commercial operations in Russia, 8.6% of tangible fixed assets, 8.6% of total assets, 10.4% of operating revenue, and 15.3% of total employees,” professors Simon Evenett and Niccolo Pisani wrote.

“These findings mean that, on average, exiting firms tended to have lower profitability and larger workforces than the firms that remain in Russia.”

More U.S. firms were confirmed to have exited Russia than those based in the EU and Japan, Evenett and Pisani noted, but the report still found that fewer than 18% of U.S. subsidiaries operating in Russia were completely divested by the end of 2022, compared with 15% of Japanese firms and just 8.3% of EU firms.

Of the EU and G-7 companies remaining in Russia, the research found that 19.5% were German, 12.4% were American owned and 7% were Japanese multinationals.

“These findings call into question the willingness of Western firms to decouple from economies their governments now deem to be geopolitical rivals,” Evenett and Pisani wrote.

“The study’s findings are a reality check on the narrative that national security concerns and geopolitics is leading to a fundamental unwinding of globalisation.”

Pressure to exit will build

Europe’s status as a laggard in the push for Russian divestment was also highlighted by Barclays in a note on Jan. 20.

The British lender’s European consumer staples analysts said that while most of the companies they cover had pledged to exit Russia, partly in response to ESG-related pressure from stakeholders and the threat of sanctions, few have managed to do so yet. Various companies told Barclays that there was a host of challenges to fully divest.

“In addition to the lack of clarity over what assets there might be worth, the list of potential buyers is short, and the list of potential buyers who are sanction exempt is even shorter,” Barclays analysts noted.

“There have also been suggestions that the assets (including intellectual property) of companies that leave Russia will be nationalised.”

Barclays suggested that with no end to the conflict in sight, the disconnect between pledges and outcomes will need to be resolved, and will force companies into some tough decisions.

“If exiting Russia at anything approaching a fair valuation is highly challenging (if not outright impossible), then the choice facing companies is whether to exit at an unfair valuation (or indeed for nothing at all), or remain in Russia,” the analysts said.

“Few commentators seem to think a near term end to the conflict is likely, and we suspect pressure to make good on pledges to exit may build as time goes on.”

They added that companies that have paused advertising and reduced product assortments but still intend to stay in Russia will be increasingly challenged by wider stakeholders and tightening sanctions.

In particular, Barclays named CCH, Henkel, PMI, JDE Peet’s and Carlsberg as having the largest sales exposure to Russia within the European consumer staples sector.

Henkel has repeatedly stated its intention to exit Russia and been transparent with the investment community on the likely impact, since around 5% of sales and 10% of EBIT (earnings before interest and tax) are derived from Russia. Barclays’ Henkel forecasts assume no contribution from Russia for full-year 2023 and beyond.

“While country level EBIT data is hard to come by, we assume that given that most companies have stopped advertising in Russia, it is currently disproportionately profitable,” Barclays said.

“Henkel has been explicit about the likely impact to earnings of a Russia exit (5% sales, 10% EPS) and this should be well known to investors, but we suspect that Russia deconsolidation may be a source of margin mix headwind elsewhere in Staples.”

Of the 29 consumer staples firms the unit covers, 15 have committed to exiting Russia, but Barclays analysts are only aware of six that have actually done so.

Henkel, CCH, Carlsberg, JDE Peet’s and PMI did not respond to CNBC’s request for comment.

‘Writing off isn’t selling off’

A new report from a U.K. think tank last week highlighted that some of the world’s biggest companies have announced their planned exists by writing off assets rather than selling them, thereby making “announcements of accounting entries instead of making Russian exits.”

“Many people think that when something is written off it has been lost. A write-down or write-off just means the owner has put a lower or zero value on an asset at that point in time. It is a paper value that can be revised at any moment at the whim of the owner,” said Mark Dixon, a London-based mergers and acquisitions consultant who founded the Moral Ratings Agency think tank in February following the Russian invasion.

“If the company drags its heels long enough and doesn’t leave Russia, it can write up the value whenever the world situation changes.”