Question: Will the new sanctions imposed against Moscow under the Countering America’s Adversaries Through Sanctions Act passed last year affect Russia’s trade, economic and investment cooperation with other countries? Are the negative consequences being assessed and are steps being planned to minimise them, including within the framework of the WTO?

Alexander Pankin: Although Donald Trump has repeatedly spoken about the need for and his administration’s readiness to normalise political dialogue between our countries and to restore bilateral trade and economic cooperation, Washington’s policy vis-à-vis Russia is not changing. We are constantly witnessing the toughening of US sanctions against us. Government-to-government dialogue on economic problems remains frozen because of the relentless efforts of the anti-Russian lobby in the US and the pressure of sanctions has been stepped up with the enactment, on August 2, 2017, of the Countering America’s Adversaries Through Sanctions Act. The document codifies earlier restrictions imposed against us and provides the basis for new ones targeting mainly the Russian energy, defence industry and financial spheres.

Some of these restrictions have been declared to be exterritorial, i.e. covering physical and legal persons from third countries. This involves some pipeline projects, “substantial” (without getting into specifics of the term) transactions with Russian defence sector enterprises and security agencies. Washington intends to “thoroughly review” and if necessary impose sanctions on the participants in the process of privatisation of our state property as well as those involved in “cyber-transactions in the interests of the Russian authorities.”

It looks as if the US is determined to steadily impede the development of Russia’s mutually beneficial ties with foreign countries and companies while using these unseemly strong-arm competition methods to further its own commercial interests. The introduction of sanctions against our partners from third countries or the mere threat to do so are meant to confront them with a painful choice between giving up cooperation with us or facing excommunication from the American market and the dollar. Unfortunately this may be a real impediment to the implementation of joint projects. Especially since the above-mentioned act has a framework character which means that the parameters of future sanctions as well as the terms of their application are unclear.

It has to be noted that the exterritorial provision of the act has met with a negative reaction in the camp of the US allies. Brussels, as far as we know, has mounted a vigorous lobbying effort in Washington to safeguard European businesses against any possible reprisals for engaging in projects with Russia, in the first place in the field of energy.

Incidentally, the Europeans have previous experience of using the mechanisms of legal non-recognition of American exterritorial legislation. For example, back in 1996 Europe adopted a “blocking statute” declaring null and void the American act imposing a trade embargo against Cuba and sanctions against its “offenders.” 

As regards “assessment of the negative consequences,” the Russian Government of course is working on this actively, planning measures to minimise any potential damage. With the modalities and scale of possible new Washington sanctions still unclear, this is all I can say at this point in time.

Internationally, Russia is using various authoritative forums, including the UN, G20 and the WTO to systemically counteract unilateral sanctions. Thus, at the WTO we consistently highlight the danger of illegitimate economic restrictions as hidden forms of protectionism aimed at gaining unfair trade, competitive and other advantages. Jointly with the Economic Development Ministry which oversees Russia’s participation in the WTO we have used the 11^th WTO Ministerial Conference held in Buenos Aires in December 2017 to stress the destructive character of unilateral economic restrictions for the world economy and multilateral trade system.

Finally, I would like to point out that past experience shows convincingly that the US sanctions policy fails to achieve its goals. The Americans lose more than gain from sanctions, especially in the longer term. At the same time the Russian economy has positive dynamics in spite of the obstacles being set in its way.

Question: Could the US sanctions affect the EAEU and the CSTO, considering that the member countries and their companies risk being subjected to US restrictive measures?

Alexander Pankin: It is our strong belief that unilateral sanctions are a wrongful and illegitimate way of solving international matters. We have consistently been in support of clear and transparent rules in global economy and politics. Moreover, life has shown that such politically motivated sanctions do not succeed. Instead, unnecessary chaos is created on the global market, upsetting the system of economic relations as well as clearly crippling them.

Obviously, the Western sanctions have hit everybody, both Russia and those who introduced these sanctions, as well as the countries with which we closely cooperate, including our partners in post-Soviet integration associations.

In the context of unfair competition due to the pressure of the sanctions on behalf of the United States and its allies, Russia will go about even more actively promoting measures to encourage import substitution, expand the EAEU’s trade and total export potential within the EAEU, develop new process flows and so forth, in order to reduce the vulnerability caused by unfriendly actions of third countries.

Question: Is Russia discussing these matters and possible collective measures to curb the consequences of the US sanctions, with its EAEU and CSTO partners?

Alexander Pankin: Yes, our integration associations discuss the US sanctions in terms of their exterritorial effect and possible consequences. Our partners, especially in the Eurasian Economic Union, are obviously concerned with this problem. And it is natural, since our economies are closely connected.

It is too soon to speak about any specific collective response. Overall, we are responding with consistent development of our integration project according to our long-term plans and the priorities of Russia’s chairmanship of the EAEU in 2018 outlined by the Russian President.

Question: The oldest association in the post-Soviet space is shrinking; it has actually lost two of its members. Is there a chance that the CIS could grow stronger and expand, given the new compact, dynamic and field-oriented associations that are emerging? Is it possible that Abkhazia and South Ossetia join in?

Alexander Pankin: First of all, I would like to point out that the Commonwealth of Independent States is not only the oldest, but also the largest integration association in the post-Soviet space.

I cannot agree that the CIS is shrinking and losing its members. At present there is no real alternative to it in terms of the number of members and the diversity of interaction forms and areas. New areas of interstate cooperation are emerging, such as innovation, information technology, green economy, etc. Integration is a vibrant and developing process.

The organisation’s activity is based on versatility, voluntary involvement, equality, mutually beneficial partnership, flexibility and respect for each other’s interests. The CIS includes countries that in spite of their declared neutrality are actively developing their involvement in the association, while those that abstain from political interaction continue working in specific agencies that are of interest to them.

Even Georgia, which has left the Commonwealth, remains a party to a series of economic agreements reached within the CIS and also takes part in the activity of some field councils (related to transport and tax investigation). Therefore, it all depends on practical and pragmatic interests. If, in spite of these interests, political reasons prevail, it affects first of all these countries that leave the Commonwealth or refuse to cooperate within the association.

As for the expansion of the CIS, its Charter provides for this. Any country that shares the organisation’s goals and principles can become a member. As of today, the expansion is not on the agenda, but if any country is interested in joining, all participating countries will make a decision on this matter on the basis of consensus.

Question: The CIS was initially conceived according to the EU model. Is this still the case or has Brexit aroused doubts about whether it is in fact so successful, and if the EU can be used any more as an example?

Alexander Pankin: In my opinion, it would be somewhat incorrect to say that the CIS was conceived along the lines of the EU model. Certainly, the experience of other interstate integration associations, including the EU, was taken into account during the establishment of the CIS. However, these two associations were established in line with diametrically opposite goals. The European Union was established for the purpose of in-depth cooperation between states. And the CIS primarily aimed to ensure a “civilised divorce” between post-Soviet republics after the breakup of the Soviet Union and to preserve the longtime experience of their mutual political, economic, cultural and humanitarian as well as other cooperation.

During large scale geopolitical changes linked with the breakup of the USSR, the CIS played a positive role and helped our nations to preserve close friendly ties and to build a new model of regional cooperation. After apparently accomplishing its historical mission, the CIS did not lose its popularity, but on the contrary, enhanced its relevance as a platform for diverse cooperation between its participants that now encompasses virtually all areas. Today, the CIS is a flexible versatile platform for maintaining proactive political dialogue and diverse cooperation. Member states independently determine the extent of their involvement in various fields of cooperation on the basis of their national interests. It is precisely these fundamental principles that help maintain a stable interest in expanding cooperation within the CIS.

A solid socioeconomic foundation and painstaking development of integration, rather than the ambitious nature of declared goals is a key factor when it comes to any integration structure’s viability. If we draw any parallels with the EU, we’ll see that problems now confronting the European Union, such as Brexit, are largely linked with the fact that the time-serving political considerations of some countries prevail to the detriment of fundamental interests of other EU members.

Question: Does the youngest association in the post-Soviet space – the Eurasian Economic Union (EAEU) – have potential for expansion? Who will join it next? With what countries are free trade agreements ready or about to be signed?

Alexander Pankin: The EAEU is becoming increasingly more attractive every year. It is becoming a centre of economic appeal in the region, and we are open to mutually beneficial and equitable cooperation. In developing relations with third countries, the EAEU adheres to a flexible approach and resorts to different formats of cooperation. Every state has the right to assess the benefits from its potential joining the integration processes in Eurasia, choose a convenient format of cooperation and independently regulate the speed of integration. We admit that not everything is problem-free in this respect, but the main goal is to understand these problems and eliminate them methodically, taking into the account the interests and specific features of all EAEU members.

At present, experts are working on the regulation on the status of an observer state, which will allow the EAEU to formalise relations with those countries that are interested in establishing special ties with it. This status will allow interested countries to better understand the EAEU’s work on forming common standards, requirements and rules, which is important for steadily building trade and economic relations during the gradual transfer of supranational competences to the Eurasian Economic Commission (EEC). This does not oblige any country to join the EAEU in the future but amounts to certain adaptation.

As for trade and economic cooperation with third countries, the EAEU already has a free trade area agreement with the Socialist Republic of Vietnam, which has been valid since October 2016. This agreement tangibly consolidates trade and economic ties of its participants.  The participants in the first meeting of the Joint Committee under this agreement, which was held in Moscow in June 2017, noted a 28 percent increase in the EAEU’s trade with Vietnam over the relevant period of the previous year, in just seven months since the agreement’s entry into force. Russia has substantially enhanced its opportunities to increase supplies of domestic goods and services to Vietnam. The protocol on industrial assembly of Russian vehicles on Vietnamese territory is being carried out (it became valid on October 5, 2016).

We consider one of the priorities of Eurasian economic integration to be the idea of linking the EAEU with the Silk Road Economic Belt (SREB), and the signing of a trade and economic cooperation agreement between the EAEU and China, the talks on which were completed last October.

This document is non-preferential and does not provide for the liberalisation of trade in goods. At the same time, it lays a good foundation for productive cooperation between the EAEU member countries and China in different industries, customs administration, competition, technical regulation, intellectual property rights protection, e-trade, state purchases, steps to protect domestic markets and sanitary and phyto-sanitary measures.

We hope that the EAEU’s alignment with the SREB and its trade and economic agreement with China will become the backbone of a new integration track – Greater Eurasian partnership with the participation of EAEU, SCO and ASEAN countries.

Free trade area talks are underway with Singapore, Iran and Israel and will start with India and Egypt in the near future.

Question: What role does Russia assign to the CSTO in the wake of ISIS expanding its activities in Afghanistan? Are there discussions of the possibility of using the CSTO Collective Rapid Response Forces in case ISIS attempts to cross into Central Asia?

Alexander Pankin: Unfortunately, you are absolutely right about expanded ISIS activity in Afghanistan. We are very concerned by attempts of this terrorist group that is outlawed in Russia to take root in northern Afghanistan, which borders directly on the CSTO area of responsibility.

The Organisation is doing much to improve its counterterrorism policies. The Working Group on Afghanistan under the CSTO Foreign Ministers Council meets on a regular basis. The heads of the member states of the Organisation have adopted a number of important documents in this sphere.

In September 2017, in New York, during the meeting on the sidelines of the 72^nd session of the UN General Assembly, the CSTO Foreign Ministers adopted, in this regard, a joint statement, “On the Situation in Afghanistan and the Threat of International Terrorist and Extremist Organisations Expanding their Presence in the Northern Provinces of that Country”. This matter was also reflected in the main political document of the recent CSTO summit in Minsk – the anniversary Declaration of the Heads of the Member States.

Strengthening the external borders of the CSTO area of responsibility, including from the perspective of deterring the terrorist threat, which is manifested most clearly in Central Asia, is, without any exaggeration, the Organisation's key priority. Over the past few years, the CSTO has adopted a number of important anti-terrorism decisions.

Three years ago, in Dushanbe, at a session of the CSTO Collective Security Council, as they discussed the situation in Central Asia and the threats coming from Afghanistan, the leaders of the CSTO countries emphasised the importance of fine-tuning the collective response mechanisms. Tajikistan received confirmation of the support and readiness on the part of Russia and all other CSTO members to provide the necessary assistance in case the situation is aggravated. A special role is assigned to the CSTO Collective Rapid Response Forces (CRRF), which were created in 2009 and include about 20,000 service members. They include military contingents and special operations formations of all member states of the Organisation. The troops are in a state of constant combat readiness.

A surprise inspection of the CRRF’s combat readiness was conducted in Tajikistan in 2015. It focused on interaction of forces under a scenario of repelling terrorist aggression from bases in neighbouring Afghanistan. The exercise, Combat Brotherhood-2017, was organised under a single plan in Russia, Armenia, Kazakhstan, and Tajikistan. Its final stage, as in 2015, focused on neutralising possible aggression on the part of ISIS militants. Russian strategic aircraft, Iskander missile systems, as well as psychological and information warfare units were used for the first time during these exercises. As you can see, the capacity of the CSTO to counter possible attempts of the terrorist groups, including ISIS, to cross our borders, is fairly significant.

Russia's military presence in Tajikistan – the 201^st Russian military base –  remains an important element in ensuring security and stability in Central Asia. President Vladimir Putin noted that in the event of a critical situation and with a corresponding request from our allies, we will, in accordance with Article 4 of the Collective Security Treaty, be ready to use all our capabilities to repel terrorist threats.

Question: How do Russia and other CSTO member states see the increase in the US and NATO military contingent in Afghanistan, as well as the US weapons and military equipment supplies to the Afghan army? Are Russia and the CSTO ready, in general, to build cooperation with NATO and the US in the fight against terrorism and drug trafficking in Afghanistan?

Alexander Pankin: As for Afghanistan, it is important to understand that the main threat is not the increase of the US and NATO military contingent there, but the increase in the scale of terrorism and drug threats emanating from that country. In 2017, opium production in Afghanistan increased by 88 per cent, from 4,800 tonnes to a record 9,000 tonnes; the chain of labs is expanding. As you can see, the problem has not been solved despite the long-term Western presence, but grew more acute if anything. It needs to be eliminated, which is only possible through joint efforts.

The CSTO is actively involved in international anti-terrorism and anti-drug cooperation. Close cooperation has been established with the CIS Anti-Terrorism Centre, the SCO RATS and the CIS Coordination Service of the Council of Commanders-in-Chief of Frontier Troops, including information sharing on the situation in the CSTO regions bordering on Afghanistan. We are developing intensive cooperation with relevant units of international organisations, primarily the UN and the OSCE. Unfortunately, the US and NATO are reluctant to engage in any practical interaction with the CSTO. This raises many questions about the sincerity of Western leaders when they say they are prepared to make every effort to curb transnational challenges and threats.

The CSTO countries’ strategic goal is to move towards a world free of drugs, in accordance with the UN anti-drug conventions. In particular, the Declaration of the CSTO Heads of State on the 25^th anniversary of the Collective Security Treaty underlines the importance of rallying the efforts of the international community based on an integrated and balanced approach to resolving this problem, eliminating global drug production, creating an effective system of fighting illegal trafficking of new synthetic drugs and other psychotropic substances.

To stabilise the drug situation in the region, the CSTO has been regularly conducting anti-drug Operation Channel since 2003. In its annual reports, the UN International Narcotics Control Board has repeatedly noted that Operation Channel is the largest and most effective effort in stopping drug trafficking from Afghanistan. Stakeholders, relevant international agencies and NATO member states were involved in it in various years.

In 2017, as a result of coordinated actions by the CSTO member states’ law enforcement agencies, about 22 tonnes of drugs were seized and removed from illegal circulation; more than 11,500 criminal cases were opened, and illegal activities of 36 criminal groups were documented. Along with the CSTO member states, the competent bodies of Afghanistan, Iran, Lithuania and Poland, representatives of the OSCE, CARICC and Interpol, took part in Operation Channel-Western Barrier in 2017. This once again confirms the CSTO’s openness to cooperation with the international community in eliminating this evil.