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Sanctions on Technology Imports Leave Russia Playing Catch Up

Published: August 4, 2014 (Issue # 1822)



  • The latest round of sanctions will hamper development of key technologies in Russia both for military and civil use.
    Photo: Wikimedia Commons

The impact of the EU's latest and harshest sanctions on Russia will be felt most keenly in the country's economic sectors that are largely dependent on state-of-the-art Western technology, ranging from the extraction of hydrocarbons to civil aircraft production, analysts said.

The European Union late last week officially approved new measures aimed at pressuring Russia into changing its approach to the crisis in Ukraine. The sanctions target Russian state-owned banks, which will have trouble attracting long-term financing abroad, and ban EU exports of military products and dual-use technology to Russia. EU deliveries of equipment and technology for oil exploration in the Arctic and shale oil projects in Russia have also been blocked.

Of the various measures imposed by the EU, the most significant are the restrictions on Russian imports of equipment and technology related to the oil industry, said David Cadier, a fellow at International Strategy and Diplomacy at the Department of International Relations of the London School of Economics and Political Science.

"This restriction is probably one of the most important for Russia as it might prevent it from exploiting some resources, in the Arctic for instance," Cadier said Friday. "By contrast, the freeze on five Russian banks from the European capital market is unlikely to have a major effect in the short term as Russia has sufficient reserves."

Most of the state-owned banks have already shrugged off the sanctions, saying they have enough capital of their own to continue operating without any disruptions. Also, Russia's Central Bank has said it will support the banks should the need arise.

The ban on EU exports of oil technology and equipment, Cadier said, is significant because of what it reveals about the crisis in Ukraine and about the state of EU-Russia relations in a broader sense.

"Contrary to the ban on military equipment for instance, these sanctions are not directly linked to the [military situation in Ukraine] that prompted them, but constitute a wider attempt to put pressure on Russia. This indicates that the level of antagonism between the EU and Russia has moved to a new level," Cadier said.

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ALL ABOUT TOWN

Friday, Oct. 24


SPIBA’s ongoing “Breakfast with the Director” series continues today, featuring Tomas Hajek, Managing Director of the Northwest Division at Danone Russia. Hajek will be discussing collaborations between businesses from different cultures. The meeting is at 9 a.m. at the Domina Prestige St. Petersburg hotel and all who wish to attend must confirm their participation by Oct. 23.


Get your gong on at “Sounds of the Universe,” a concert at the city planetarium this evening incorporating six different gongs to create relaxing songs that will transport you upwards into the stratosphere. Tickets are 700 rubles ($17).



Saturday, Oct. 25


AVA Expo, the eighth edition of the event revolving around all things pop culture, returns to Lenexpo this weekend. Geeks, nerds, dweebs and dorks will have their chance to talk science fiction and explore a variety of international pop culture. Tickets for the event can be purchased on their website at avaexpo.ru.



Sunday, Oct. 26


Zenit St. Petersburg returns home for the first time in nearly a month as they host Mordovia Saransk in a Russian Premier League game. Currently at the top of the league thanks to their undefeated start to the season, the northern club hopes to extend the gap between them and second-place CSKA Moscow and win the title for the first time in three years. Tickets are available at the stadium box office or on the club’s website.



Monday, Oct. 27


Today marks the end of the art exhibit “Neophobia” at the Erarta Museum. Artists Alexey Semichov and Andrei Kuzmin took a neo-modernist approach to represent the array of fears that are ever-present throughout our lives. Tickets are 200 rubles ($4.90).



Tuesday, Oct. 28


The Domina Prestige St. Petersburg hotel plays host to SPIBA’s Marketing and Communications Committee’s round table discussion on “Government Relations Practices in Russia” this morning. The discussion starts at 9:30 a.m. and participation must be confirmed by Oct. 24.



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