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RUSSIA SPLITS EUROPE

THE SPHERE OF MILITARY-TECHNICAL COOPERATION TARGETED

KYIV, UKRAINE, 2016


TABLE OF CONTEXTS

3 MILITARY-TECHNICAL COOPERATION BETWEEN RUSSIA AND EU COUNTRIES. MONEY OR MORALITY – WHAT IS MORE IMPORTANT? 4 COLLABORATION WITH A CARD-SHARPER – GUESS WHO IS GOING TO WIN? 7 IS BUSINESS AS USUAL WITH THE AGGRESSOR POSSIBLE? 9 RULE OF SUCCESSION? RUSSIAN-ITALIAN HISTORY TURNS 11 PARIS-MOSCOW: A THORNY PATH OF JUSTIFIED SANCTIONS 15 PARTNERS OR HOSTAGES – UNDER THE KGB’S WATCHFUL EYE 19 GERMANY – RUSSIA: BETWEEN THE HONEY AND THE BEES 22 THE RUSSIAN WEDGE INTO EUROPEAN UNITY

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MILITARY-TECHNICAL COOPERATION BETWEEN RUSSIA AND EU COUNTRIES MONEY OR MORALITY – WHAT IS MORE IMPORTANT?

When Russia started aggression against Ukraine and was punished by the USA and the European Union sanctions imposed against it, the European countries formally cancelled their contacts with Moscow in the military and military-technical spheres. For instance, France terminated a billionworth deal for Mistral-class amphibious assault ships with Russia. Germany and UK announced suspension of supplies of military and dual purpose products and respective technologies to Russia.

Germany, in particular, froze the construction of military training facilities in Russia. Several other EU countries also declared termination of their military contracts with Russia. The British went even further by barring supplies of armament components to third countries which may be used them in products being supplied to Russia. Purely symbolic things like joint exercises and naval visits have also been cancelled. Thus, the Europeans have demonstrated their desire to settle the

«Ukrainian-Russian armed conflict» and «make the aggressor observe the international law». However, in the modern world the economic and financial gains, unfortunately, prevail over morality and political appropriateness. As a result, not all the EU countries observe the announced sanctions and continue to develop collaboration with the aggressor, while others are looking for loopholes trying to beguile the general public.

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COLLABORATION WITH A CARD-SHARPER – GUESS WHO IS GOING TO WIN?

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efore the US and EU applied the economic sanctions, Russia and the European countries actively cooperated in the military-technical sphere, in particular, sharing the advanced technologies, organizing licensed production, producing new weapons and military equipment (WME), as well as exporting them to third countries and modernizing the obsolescent WME. After the sanctions have been introduced, the military-technical collabora-

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tion (MTC) with these countries was slashed but not totally. One of the main reasons for the continuing MTC in certain spheres is the Russian interest in maintaining the relations. The explanation is quite simple: Russia, being dependent on the Western technologies and not less important financial investments and suffering from the sanctions, is unable to complete the large-scale rearmament of its armed forces (AF). Europe, possessing modern technologies and great financial

capabilities, is a very precious object of scrutiny for the Kremlin. The Russian export of hydrocarbons to EU throughout the existence of the modern Russia (since the disintegration of the Soviet Union) had filled up its gold and monetary reserves, enlivening the country’s economy, but was not used for developing modern weapons and military equipment without using the Western technologies. Moscow has still remained dependent in many ways on imported products, including those from Europe. As a


The MAN HX77 8x8 trucks manufactured in Germany were used for the first time by the Russian army during the military exercises Caucasus-2012. Shelter mounted at the rear of the German-made truck HX77 is used as mobile tactical training simulator by RF Army.

matter of fact, by 2020 the Kremlin expects to reduce its dependence on the import in various industries to the level of 50 or 60 %. And this is a best case scenario..., Russia is still dependent in science intensive industries and lags behind in production processes. As an example: in the space exploration sphere the country imports 206 items, 58 of which are only Russianmade analogues. In ship building the share of foreign components of ship instruments reaches 95 %. It was the cooperation with Western companies that made Russian weapons more competitive. At that, the impressive part of production facilities remain obsolete and worn down. The Kremlin clearly understands that without the technical re-equipment of production facilities and investments into innovative technologies, the Russian military industry will hardly be able in the near future to produce new generation

weapons comparable or surpassing by quality the products of their nearest competitors in the armament market, like the USA, France, the UK, Germany and Israel. Therefore, the Russian leaders have been looking for getting access to modern Western technologies despite the sanctions. Besides, the Kremlin is doing its best to keep its positions on armament markets, including the European ones, where it used to be the monopolist. Russia has suffered a lot due to the sanctions imposed to penalize it for defying international treaties. For instance, Russians expected to obtain from their Western partners high tech armaments and military equipment and accessories, which Russian defence industry cannot produce independently. The Russian military made no secret of wanting to get these systems only to use them afterwards against the Europeans. The list of high tech armaments desperately needed by the Russian

military to oppose NATO, includes: UAVs, modern outfit of the soldier of the future, electrochemical generators on fuel cells, air-independent propulsion plants for submarines, naval sonar stations for Navy, mine detection and destruction systems ahead of a ship, thermal imagers and transmissions for armoured vehicles, sniper rifle systems, aircraft suspension optoelectronic containers, wheeled armoured vehicles with heavy duty mine and HE protection and many others. And those are cancelled supplies from France only, not to mention the state-of-the art Mistral-class amphibious assault ships, which Russia wanted to use for implementation of its doctrine of power projection in the outlying regions of the globe. From Italy, the Russians wanted to get the state-of-the-art wheeled armoured vehicles and their production technologies, helicopters and high tech accessories to WME. The purchase contract for 350 latest Italian Iveco LMV “Rys� armoured vehicles was concluded between Russia and Italy in 2011. In Britain, the Russians purchased modern long-range L96 snip-

RUSSIA IS DEPENDENT IN SCIENCE INTENSIVE INDUSTRIES AND LAGS BEHIND IN PRODUCTION PROCESSES. AS AN EXAMPLE: IN THE SPACE EXPLORATION SPHERE THE COUNTRY IMPORTS 206 ITEMS, 58 OF WHICH ARE ONLY RUSSIAN-MADE ANALOGUES. IN SHIP BUILDING THE SHARE OF FOREIGN COMPONENTS OF SHIP INSTRUMENTS REACHES 95 %. IT WAS THE COOPERATION WITH WESTERN COMPANIES THAT MADE RUSSIAN WEAPONS MORE COMPETITIVE DEFENSE EXPRESS / 2016 / 5


HUD3022 collimator sight from Thales was integrated into Russian Su-30SM2 fighters and Su34 strike fighters, as well as export modification of Su-30 fighter family.

RUSSIA WAS NOT GETTING READY TO FIGHT GEORGIA OR UKRAINE, IT HAS BEEN PREPARING TO THE WAR WITH THE EU AND NATO, AND IN SOME FIELDS IT HAS BEEN ALREADY FOR A LONG TIME WAGING AN ACTIVE WAR, FOR INSTANCE, – IN INFORMATIONAL, DIPLOMATIC AND ECONOMIC SPHERES. er rifles for special operation units whose targets included – among others – the British subjects. In 2013, the Russians bought from Britain $133 million-worth licences for production of rifles, ammunition, and aircraft and helicopter parts, thus expecting to patch up their technological drawbacks. Besides, in January 2014 Russia started negotiations with Britain with an ultimate goal of concluding a large military-technical cooperation agreement. The Russians hoped to promote their weapons in the British market and to be able to trade in armament components and exchange technical information. The agreement was due to be signed in spring 2014 and the Russians in addition to the benefits mentioned in the contract expected, in case of successful implementation of the agreement, to obtain so badly needed technologies in rocket

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production and electronics fields, where Russian technological backwardness is so evident. London also helped Moscow to maintain security at the Sochi Olympics. The German Rheinmetall company started in 2011 constructing a modern €100 million brigade firing ground in Mulino, which was to be the first of similar facilities to be constructed all over Russia. The same company was to supply Russia with mobile ammunition disposal units (Russia had recently experience a series of explosions in ordnance storage facilities and such spontaneous “disposal” was a real threat to urban residential districts). In the very 2011 Germany started deliveries of Kärcher Futuretech equipment for field camps. There are no modern Russian analogues to the equipment and accessories supplied by European countries. Therefore, the sanc-

tions imposed on Russia for its illegal annexation of the Crimea and the military aggression in the east of Ukraine have significantly delayed the rearmament of Russian armed forces, which secretly were training to fight NATO, notwithstanding Russia’s ostentatious claims to get to it on closer footing at a period till 2014 (including due to unscrupulousness of most of European countries which decided to overlook the lessons of the Russian 2008 aggression against Georgia). All the history of collaboration with the Kremlin proves that sooner or later the time comes when the supplied or jointly produced weapons is turned against the recent partners. Therefore, the Europeans should understand that continuing collaboration with the aggressor, both directly and bypassing the sanctions, they contribute to the increase of financial and military might of a dangerous “partner” who simply uses them to pursue its imperial ambitions. Once the decency mask was dropped, only the blind can fail to notice that Russia was not getting ready to fight Georgia or Ukraine, it has been preparing to the war with the EU and NATO, and in some fields it has been already for a long time waging an active war, for instance, – in informational, diplomatic and economic spheres. So it turns out that collaborating with Russia, Europe itself nurtures the aggressor, who does not even conceal his plans; that is why the attitude of some European countries, which prefer to continue collaboration with the country which defies its international obligations, seems doubtful.


IS BUSINESS AS USUAL WITH THE AGGRESSOR POSSIBLE?

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nlike Russia, where the state power is centralized and usurped by KGB-Mafia clan, the European countries, despite the officially declared unity, have different interests (in terms of their attitude to militarytechnical collaboration with Russia). Some countries due to their mentality are interested in making profits from arms exports and evaluating the volume of the Russian consumer market, seek to revert to “business as usual� relationships. Others being armed with mostly Soviet weapons, look for opportunities to modernize them including by the agency of Russia. The third category

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THE KREMLIN IS TRYING TO IMPLEMENT THE LONG-PROVEN METHODS THAT HAD BEEN TAUGHT IN SPECIAL KGB SCHOOLS, THE OVERWHELMING MAJORITY OF THE CURRENT RUSSIAN LEADERSHIP CAME FROM, I.E. «BRIBERY AND BLACKMAIL» of European countries – because of lack of sufficient financial resources – are tempted by the lower prices of weapons in Russia, while the fourth category is for some or other reasons dependent on Russia, while being full NATO and EU members. Nevertheless, the shock caused by the Kremlin aggression in Ukraine, first in the Crimea and then in the Donbass, has made the political elites

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to startle and think twice about the prospects of collaboration with Russia in the military sphere. But not for long... The Kremlin knows about it and, assessing its capabilities and the nature of relations with several countries of Europe, is trying to implement the long-proven methods that had been taught in special KGB schools, the over-

whelming majority of the current Russian leadership came from, i.e. “bribery and blackmail”. Although not aggressively and clearly manifested, these methods are still used on the sly. Moscow tries to re-establish the close relations with the Europeans. With ones, by providing opportunities to capitalize on export contracts in the interests of third countries; with others, by dumping and offering very tempting, at first glance, prices of their arms and services, as well as providing soft loans to purchase them; with third ones, by making attractive offers of access to their own arms market, with fourth ones, by creating conditions of a difficult choice – either cooperate or lose something. Thereby, the main goal of Putin’s Russia is splitting the present unity of Europe. If some countries start to trade with them, then the others may feel indignant and the conflict will arise within the EU. As a result, the Kremlin will achieve its goal and the unity of Europe will be split. The weak link here is the European, especially, military equipment producers, which had succeeded in collaboration with Russia and invested heavily in the development of joint projects. It is those companies, that had been involved in economic, financial and industrial dealings by Russia, which are now mostly in the risk zone and are the potential lobbyists of re-establishment of cooperation with the Russia of today. As a result, the MTC with the aggressor, who has occupied the Crimea and the Donbass, killed thousands of Ukrainians and made the millions face the choice – either leave their homes or live under occupation – despite the sanctions, is continuing. It should be added, that the European countries themselves do not conceal such collaboration, moreover, sometimes they even proclaim the necessity of returning to the war-time business as usual.


RULE OF SUCCESSION? RUSSIAN-ITALIAN HISTORY TURNS

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hen the lessons of history have not been taken into account, it after having made an evolutionary cycle, is repeated, and for poor students it is like a deja vu. Having failed to learn the lesson of the Second World War, which said that keeping bad company may lead to sad outcomes, Italy continues triggering a backflash of collaboration with the aggressor – it seems like the defeat in the WWII has not taught the Italians anything. Italy, despite the direct prohibition of weapons and military equipment supplies, continues delivering their latest armoured vehicles to the Russian Ministry of Defence, which the latter actively deploys for its aggression in Syria. And this is a clear violation of the EU sanctions and, what is more important, the EU Code of Conduct on Arms Exports, which directly prohibits export of arms and military equipment to a country participating in a military conflict. The purchase contract for 350 latest Italian LMV «Rys» («Lynx») armoured vehicles was concluded between Russia and Italy in 2011. 10 vehicles were delivered off the shelf, others started to be assembled from Italian parts at OJSC 172 Central Automobile Repair Plant in Voronezh and at Remdiesel Ltd. in Naberezhnye Chelny. The documents accompanying the implementation of the RussianItalian contract for delivery of Iveco LMV «Rys» clearly show that the work did not stop for a single day. Particularly, in 2014 Italy exported vehicle assembly sets to Russia for 81 vehicles, in 2015 – for 93 vehicles. All in all, the

revised production program for 2015-2016 provides for production of 356 Italian armoured vehicles in Russia. An interesting fact: the ultimate recipient of all vehicles to be produced in 2015-2016 is military unit 48670, Kamensk-Shakhtinsky, Rostov Region (91th central base of motor vehicle reserve). Obviously, in order to be sent to Russian troops occupying the Donbass. By the way, Iveco LMV “Rys” have been already noticed in Syria both as a part of the Russian group and as a part of Syrian government troops. At that, no protests have been heard from Italy on the fact of Russian deliveries of Italian armoured vehicles to the Assad regime. Moreover, the Italian party does not hesitate to trade with one of the main sponsors of the Putin regime and wars in Ukraine and Syria – the oil monopolist “Rosneft”.

In particular, on December 29, 2014 JSC “NK” Rosneft “, State Corporation “Rostekh” and a subsidiary of Italian group Finmeccanica - AgustaWestland S.p.A., signed a tripartite agreement on strategic partnership. Within its framework it was decided to establish a joint venture for the production of AW189 helicopters on the basis of the HeliVert plant near Moscow – a joint venture of “Russian Helicopters” holding company and AgustaWestland S.p.A. The contract conditions for the binding 50-percent level of production localization of AW189 multi-purpose twin-engine helicopters in Russia. In addition, in July 2015, it was reported that “Rosneft” and AgustaWestland S.p.A. signed an agreement for the supply of ten AW189 helicopters to “RNAerokraft” Russian company in 2015-2017 for approximately € 160 million. All in all, up to 2025 HeliVert

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In July 2015, it was reported that «Rosneft» and AgustaWestland S.p.A. signed an agreement for the supply of ten AW189 helicopters to «RN-Aerokraft»

plans to produce and deliver 160 machines of this type to “Rosneft”. The fact that this contract is extremely important for the Russian party was mentioned by Mikhail Leontyev, Rosneft Vice-President for PR. “We need these helicopters, as the domestic machines are not fit for offshore oil exploration. We have a powerful helicopter-building industry in Russia, but some niches have not been filled in yet. And Rosneft cannot wait till Russian designers are able to produce such machines, it will cost Rosneft much. These machines are specifically “tailored” for offshore exploration, and Rosneft has great plans of offshore development, especially in the Arctic. For the Russian economy this technology will give tremendous results!” said he. Surely, it might be said that these helicopters are civil ones and Rosneft, as well as another sponsor of Russian aggression, Gazprom, are not subject to sanctions and trading with them does not violate any law. However, a joint venture means at least the transfer of such important for Russia technologies, and the co-operation with the aggressor raises the question of the moral qualities of European producers.

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Moreover, the same Finmeccanica group, for example, was sponsor the largest in Russia helicopter exhibition HELIRUSSIA-2016, where it will also present AW169 helicopter, a novelty of the salon, as well as a new modification of H135 helicopter, to potential Russian customers. Besides, there is information on the joint Italian-Russian venture (with the participation of «Rosoboronexport») to promote Yak130 combat training aircraft in the international arms markets. Given the above, there’s small wonder that the web site of the Italian Ministry of Defence does not mention a single word of the sanctions or restrictions of MTC between the two countries because of them. According to the information on the site, nowadays «there are numerous industrial partnerships between Italy and Russia in the aviation industry, with signed «technical agreements» between Italian and Russian companies in the sphere of satellite communications, satellite navigation, space industry, electronic warfare and air traffic control. Research and development programs are underway, the most interesting of them

being aircraft engine development, shipbuilding technologies, space flights». Russian officials do not conceal their satisfaction stating that the Italian party is looking forward to a speedy termination of the «pause» and reestablishment of bilateral MTC with Russia. In particular, when taking their words at the face value, while the aggressor organized massacre for Ukrainian troops in the Debaltsevo pocket, the Italian party expressed their desire to reestablish the MTC with Russia as soon as possible. «Italy and Russia are long-standing partners in the sphere of military-technical cooperation and I hope that the pause in our relations (due to sanctions - edit.) will soon end. At least, the Italian party is interested in this», said Denis Manturov, Russian Minister of Industry and Trade at the arms exhibition in Abu Dhabi in late February 2015. On the one hand, these words may be just an element of Russian propaganda, but when in addition we hear the words of Mikhail Leontyev, the situation becomes clear, and not in Italian favour. Thus, commenting the Italians’ interest to cooperation with Russian partners, the Rosneft Vice-President for PR announced the following: «Italians are loyal toward money and its typical for business as a whole. Finmeccanica has never had such a huge order, 150 helicopters, and this is just the beginning...» Given the above, small wonder, that it is from Italy that we hear the most loud voices against the sanctions, just as previously there were voices in support of Hitler – it’s nothing but déjà vu.


PARIS-MOSCOW:

A THORNY PATH OF JUSTIFIED SANCTIONS The history of contemporary relations between France and Russia demonstrates a mutually beneficial character of cooperation due to, first of all, availability of advanced technologies and desire to sell its products in global markets with one party (French industrialists get 40 % of their income from export sales), and huge financial capabilities, an impressive domestic consumer market and consumers of their products in the world market, for the other party.

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efore the conflict in Ukraine began, Paris was one of the most important partners for Moscow in Europe in the sphere of MTC being the main source of modern military technologies. Thus, the French company Thales took a significant part in providing state-of-the-art equipment to Russian military. Avionics parts of this company (HUD3022 collimator sight, as well as SMD55S multi-functional full-colour liquid crystal displays) were integrated into Russian Su-30SM2 fighters and Su-34 strike fighters, as well as export modification of Su-30 fighter family, which were supplied to India, Malaysia, China, Algeria, Indonesia, Vietnam and Venezuela. The French Damocles targeting pods and NAVFLIR forwardlooking infra-red day/night vision and target designators were installed on Su-30MKM multi-purpose fighters exported to Malaysian Air Force. The joint venture established on the basis of JSC “Volzhsky Optical and Mechanical Plant” (VOMZ), a part of Schwabe holding and

IN ORDER TO SOLVE THE PROBLEM OF MTC RESTRICTIONS WITH FRANCE, RUSSIAN PRODUCERS ARE TRYING TO PROMOTE DIRECT PURCHASE BY INDIA OF FRENCH SPARE PARTS FOR SU-30MKI FIGHTERS AND T-90S TANKS. FOR THE SAME REASON A JOINT RUSSIAN-ALGERIAN VENTURE WAS FOUNDED IN LATE 2014 IN ALGERIA, TO ASSEMBLE T-90S TANKS Thales Optronics, produced Catherine FC thermal imaging devices, which were further used to develop “Essa”, “Plisa” and “Sosna-U” sighting systems produced for the Russian armoured vehicles, including T-72B3 tanks and export versions of

T-90S (exported to India, Algeria and Azerbaijan). And since 2012 Russia was able to produce 3rd-generation of Catherine XP cameras based on QWIP matrix technology. Thales company also supplied Topsight helmet-mounted sight

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Avionics parts of French company Thales were integrated into Russian Su-30SM2 fighters and Su-34 strike fighters, as well as export modification of Su-30 fighter family, which were supplied to India, Malaysia, China, Algeria, Indonesia, Vietnam and Venezuela.

system for MiG-29K carrier-based fighter pilots, the aircraft being the mainstay of INS Vikramaditya aircraft carrier air group (the former Russian Admiral Gorshkov cruiser). Besides, the French industrial conglomerate SAFRAN continues to be active in Russia, taking the leading position in the Russian market, offering joint solutions in partnership with Russian airspace industry companies, as well as defence and security industrial enterprises. In addition to supply CFM56 and LEAP engines for Russian civil airlines and participation in the designing and production of SaM146 engine developed by Snecma and NPO “Saturn” companies for Sukhoi Superjet 100 regional aircraft, one of the companies of the group is involved also in military projects. Thus, at the end of 2011, Sagem company together with Russian OJSC “Rosoboronexport” and CJSC “Inertial Technologies of Technocomplex” established a joint venture “RS Alliance” in order to develop, manufacture and service laser inertial navigation systems in Russia. The new company developed “Linsey-100RS” system for use in helicopters and aircraft including fifth-generation fighters and the Russian Ka-52 helicopter, as well as for foreign customers. By 2020, “RS Alliance” planned to take 70-75 % of the market of military airborne navigation systems produced by Russia. The annual turnover of the joint venture was to be €25 to 30 million. One of the most striking examples of MTC between the two countries was the signing in 2011 of an intergovernmental contract for construction of four “Mistral” type amphibious assault ships (AAS) for

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The MBT T-90S tanks for Algeria are equipped with the thermal imaging sights for gunners «Sosna-U», where Thales company could supply components.

the Russian Navy. In the same year the French shipbuilding company DCNS and Russian OJSC “Rosoboronexport” signed a contract for the construction of two “Mistral”


BY SUPPLYING EQUIPMENT FOR THIRD COUNTRIES, FRANCE DOES NOT PROVIDE ARMAMENTS FOR RUSSIA AND FORMALLY DOES NOT VIOLATE THE SANCTIONS, HOWEVER, THERE IS NO GUARANTEE THAT THE FRENCH PRODUCTS WILL NOT «ACCIDENTALLY» APPEAR IN RUSSIA.... ships for the Russian Navy – by 2014 and 2015 respectively. The contract value amounted to approximately €1.2 billion and implied, in part, the transfer of modern technologies to Russia. However, because of the Russian aggression against Ukraine, the contract was cancelled in 2014 and the ships were sold to Egypt in 2015. Nevertheless, the significance of the military political and technical cooperation of the two countries should not be overestimated. Thus, in 2004-2013 Russia was only the tenth largest importer of WME from France, outrun even by Singapore. In spite of that, both the French and Russians have much to lose. The

restrictions imposed by the EU as a result of aggression against Ukraine demanding the suspension of joint projects with Russia, strongly influenced the development of bilateral relations. It was the collaboration with the French Thales and SAFRAN conglomerate, that made Russian weapons and equipment more competitive and modern. This fact is very well known both in Moscow and in Paris. The shock of the French caused by the aggressive actions of the Kremlin in Ukraine quickly receded to the background, to be replaced it again by the desire to resume cooperation including in the military sphere. And Russia

Thales’s role in avionics for Russian players has gained momentum since 2005, when it was selected as tier one supplier and system integrator for the Sukhoi Superjet 100 (SSJ100) aircraft.

has actively promoted this feeling, pursuing an aggressive lobbyist policy in France using the whole arsenal of means and KGB techniques to achieve its goals. So, in order to solve the problem of MTC restrictions with France, Russian producers are trying to promote direct purchase by India of French spare parts for Su-30MKI fighters and T-90S tanks. For the same reason a joint Russian-Algerian venture was founded in late 2014 in Algeria to assemble 200 T-90S tanks. At that, Thales company, according to some reports, has agreed to supply components for them only if they are assembled in Algeria. Besides, the option of using Belorussian loophole both by Russians and the French in order to carry out export contracts to supply armoured vehicles should not be ruled out. OJSC “Peleng” (Minsk, Belarus) in close cooperation with the French company Thales, which has lasted for over 10 years, produces thermal imaging sights for gunners

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“Essa” (for T-90S), “Plisa” (for T80U), “Essa-72” (for T-72), “Vesna-K” (for BMP-3) and “Sosna-U”. These devices have already been installed on the vehicles of foreign customers (India, Algeria, Cyprus and other countries). And nothing prevents from doing it now... Indeed, by supplying equipment for third parties, France does not provide armaments for Russia and formally does not violate the sanctions, however, first, there is no guarantee that “Thales” products will not “accidentally” appear in Russia..., second, by allowing Moscow to carry out export contracts, Paris enables replenishing the Russian financial resources and supporting its defence industries. The story with the purchase of Mistral amphibious assault ships to Egypt looks like a false-bottomed deal. On the one hand, it seeks to delegate part of efforts of protecting the south-eastern borders of the EU and active peacemaking in the region of Egypt, on the other hand, it looks like a tricky manoeuvre that involves further resale of the ships to Russia. After all, Cairo does not support sanc-

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tions against Russia. Most likely, the Kremlin using Cairo puts across a fictitious scheme of purchasing the Mistrals with the support of Paris. Against this background, the request of Egypt to Russia to sell them control and communication systems, as well as Ka-52K helicopters for the Mistrals, as well as the purchase of these two ships, probably with the help of a credit line provided by Russia, seems quite a logical action. Indeed, Egypt has little use for these rather expensive and difficult to operate helicopter carriers. As a result, Russian specialists will help equip the ships with Russian weapon systems. Consequently, in a year or two Egypt will offer to sell the “second-hand” ships to Russia. As a result of this scam, the Kremlin could acquire sufficient advanced capabilities in the high seas and become an even greater threat not only for Ukraine but for Europe itself. The fact that the French have nothing against returning to the old cooperation patterns and developing new ones, despite the aggressive actions of the Kremlin, is

proved, for instance, by the fact that Yaroslavl radio factory (RF) plans in 2016 to sign a contract with Thales Alenia Space to manufacture satellite components. The contract may be signed just in June and will enhance the production of devices to be used both in Russia and in the whole world. However, every expert is aware that in Russia even civil satellites can be used for a wide range of assignments including military ones. Thales management, as well as the official Paris, cannot be unaware of that. The peaceful space for Russia has always been a fiction... According to Paris, “sanctions did not affect Moscow’s position in the Ukrainian crisis and the restrictions imposed on Russia deteriorate relations with Russian business and the people and is altogether detrimental for European producers”. In other words, following the French logics, if anyone committed murder or robbery and the sentence of imprisonment did not affect him, then we had better let him go in peace, forget the past and continue cooperation with him?


PARTNERS OR HOSTAGES ‑

UNDER THE KGB’S WATCHFUL EYE

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hile the case with France or Italy is more or less clear: there is just business and «historical ties» and nothing personal there, but the case with Greece and Hungary is a vivid fact of KGB hostage countries, to which its favourite proven tactics has been applied for decades: bribery and blackmail. In particular, in the early 2016 the Russian media announced the Hungarian Ministry of Defence intention to purchase from Russia about 30 Mi-8/17 multipurpose helicopters at $ 400 million approximately. What makes Budapest take the risk of buying military equipment from Russia in violation of the EU sanctions? There are both objective and subjective reasons for that. For example, no one doubts that the Hungarian army does need helicopters, because at present it does not have a single combat-ready helicopter. Not a single one. For this matter, Hungary does not fulfil its obligations to establish a helicopter wing in the interests of NATO and is being criticized for it within the framework of the Alliance. There is also no doubt that the lack of multi-purpose helicopters prevents from the further development of the Hungarian Special Operations Forces despite the fact that the government declares the priority of this armed forces component. In spite of this, the Hungarian government has already demonstrated inconsistency in the implementation of the helicopter project,

HUNGARY DOES NOT FULFILL ITS OBLIGATIONS TO ESTABLISH A HELICOPTER WING IN THE INTERESTS OF NATO AND IS BEING CRITICIZED FOR IT WITHIN THE FRAMEWORK OF THE ALLIANCE. AND THE KREMLIN KNOWS IT. THAT IS WHY RUSSIAN MEDIA SUDDENLY ANNOUNCED THE HUNGARIAN MINISTRY OF DEFENCE INTENTION TO PURCHASE FROM RUSSIA ABOUT 30 MI-8/17 HELICOPTERS. pulling the wool over the US and European manufacturers’ eyes. By mid-2015, the Hungarian government announced positive plans for procurement of new helicopters at about $ 600 million and named two preferable companies – Augusta

Westland and Sikorsky. However, in the middle of 2015 the government abruptly cancelled the plans to purchase new helicopters because of the lack of necessary funds. The Western partners of Hungary were far from pleased with that.

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In the early 2016 the Russian media announced the Hungarian Ministry of Defence intention to purchase from Russia about 30 Mi-8/17 multi-purpose helicopters at $ 400 million approximately.

Another aspect pressing the Hungarian government: Russia is extremely annoyed by the inconsistency of the Hungarian government, due to problems with the implementation of the project for the construction of a nuclear power plant in Hungary. Despite the fact that the Hungarian President Viktor Orban has already appropriated a part of Russian funds intended for the project and personally promised to Putin that the project will be implemented without any problems, the EU now claims that the contract is contrary to EU legislation and is blocking its execution. As a result, Orban has problems with both NATO, and the EU, and Russia. Although, actually, the Hungarian president feels a real threat from Putin, who has incriminating evidence against him including the information on business interests of Orban’s entourage in Russia and can easily push the Hungarian Prime Minister to the wall. Among other things, the Russian president, in his KGB manner, has already hinted to Orban about possible problems in the future, as he published the information about the Hungarian delegation’s visit to Moscow in the opposition press. A kind of signal to his Hungarian partner, that the Kremlin may provide money both to the ruling party and the opposition. It is because of this zugzwang that Orban tries to prove his loyalty to Putin. The purchase of helicopters can be a good compensation. Because there are considerable political implications in the helicopter deal, and it is very appreciated by Putin. Although it is possible that this helicopter deal, which will most

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likely be also blocked by the EU, is yet another Orban’s attempt to gain time. If the current trends in the economic situation development in Russia continue and hopes of the majority of civilized countries come true and Putin’s regime collapses, then Viktor Orban has a chance to get away without fulfilling obligations to the Kremlin and avoiding penalties from the EU. For his part, Putin will try to hook the Hungarian prime minister with another hook and force him to sign the helicopter deal. After all, if Hungary really buys Russian helicopters, it will be a success for the Kremlin both politically (destruction of the EU sanction regime and demonstration of conducting business as usual with European countries, in spite of the occupation of Ukrainian territories), and economically. Hungary has no money to purchase the helicopters, and it is unlikely to appear. Russia may provide a loan to Orban to buy Russian helicopters and drag him into another financial trap. And, of course, the Russian propaganda will declare about intensification of “corrosion of Euro-Atlantic solidarity” and “strengthening allied relations between Russia and Hungary”, which is Putin’s main strategic goal.

Another example of strong positions of KGB in an EU member state and the way the Europeans are seeking to resolve the RussianUkrainian armed conflict and “force the aggressor to observe the international law” is presented by Greece. In mid-January 2016, the Parliament of this country ratified the agreement with Russia on the supply of military products. This document is a conceptual one and defines the order and the general conditions of supply and protection of intellectual property. It says that the military equipment and any information supplied to the Greek party under this agreement, shall be used exclusively for the needs of the armed forces of the Hellenic Republic, cannot be re-exported, resold or transferred to third parties without the written consent of Russia. The agreement is concluded for five years from the date of its entry into force and shall be automatically extended for subsequent periods of five years unless either party notifies its intention to terminate it. It should be noted that the Agreement was signed back on December 3, 2013, but its ratification was delayed due to the change of government in Greece. But when sincere “friends of Pu-


tin” came to power in the country, the ratification of the Agreement was merely a matter of time. In order to better understand how an EU and NATO member country can so freely trade with the aggressor, who made the Alliance launch a major campaign of enhancing their own defence capabilities and rearmament, we should familiarize ourselves with the Greek decision-makers who today define the political course of the country. The ruling party now, the left-wing populist party SYRIZA, was founded as a coalition of

left-wing and radical left-wing parties. In due time, its leader and now Prime Minister Alexis Tsipras, during his official visit to Moscow on the invitation of the Russian government, criticized the Western policy towards Ukraine, and expressed support for the separatist referendums, which were held on its occupied territories. In addition, he also termed Ukraine as “neo-Nazi” and urged the EU not to recognize the Ukrainian authorities. The same opinion regarding Ukraine is held by the Greek De-

AS FOR ITS VICTIMS, GREECE AND HUNGARY, HAD THEY NOT BEEN THE MEMBERS OF BOTH THE EU AND NATO, THEIR DESIRE TO GET INTO THE RUSSIAN TRAP COULD AT LEAST BE UNDERSTANDABLE. HOWEVER, NOW THEY ARE MEMBERS OF BOTH THESE ORGANIZATIONS AND THEIR ACTIONS CAUSE MUCH HARM TO EACH OF THEM.

fence Minister Panos Kammenos, who at the same time is the leader of the right-wing, national-conservative, populist and Eurosceptic party “Independent Greeks”, which has formed a ruling coalition with the aforementioned “SYRIZA”. In particular, in an interview with the Russian Gazeta.ru, he stated the following: “The Greek population in the Crimea was assaulted by the fascist government of Ukraine and the Russian forces present there served as the protection of Greek families.” Another representative of the Greek government, Nikos Kotzias, a former member of the Greek Communist Party, and now the current Minister of Foreign Affairs in the cabinet of Tsipras, is known for his contacts with Russia’s leading fascist ideologist Alexander Dugin. A Rus-

Greece managed to arm itself with Russian ships and S-300 air defence missiles. It seems that the Greeks want to buy more Russian weapons.

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«The Greek population in the Crimea was assaulted by the fascist government of Ukraine and the Russian forces present there served as the protection of Greek families.» - Greek Defence Minister Panos Kammenos, in an interview with the Russian Gazeta.ru

sian expert on European extremely right-wing movements, Anton Shekhovtsov, now staying in Vienna, recently wrote: “In 2013, Nikos Kotzias invited Dugin to speak at the University of Piraeus on the topic” International Politics and the Eurasian vision”. In his lecture, Dugin indirectly suggested that instead of leaving the EU and joining the Russian-led Eurasian Union, Greece should remain in the EU in order to promote pro-Russian vision of international politics”. The above facts are very important, since they clearly demonstrate what Greece is actually doing nowadays, in particular buying weapons from the aggressor, and who promotes such a policy. It should be added that Greece managed to arm itself with Russian ships and S-300 air defence missiles. It seems that the Greeks want to buy more Russian weapons. And, perhaps, like Hungarians they will do it with Putin’s money as they do not have much of their own, and the EU will not provide a single Euro for this, but can also deal them a good smacking. If speaking of Russia, there is nothing strange in such its actions, since if the President and his entourage, who hold key positions in the country, came from KGB and have long been practising such methods in the domestic policy, the country’s foreign policy cannot but be the same. And it makes little difference whether it is the diplomatic relations, or cooperation in the energy sector, or, as in this case, the MTC. As for its victims, Greece and Hungary, had they not been the members of both the EU and

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ANOTHER EXAMPLE OF STRONG POSITIONS OF KGB IN AN EU MEMBER STATE AND THE WAY THE EUROPEANS ARE SEEKING TO RESOLVE THE RUSSIAN-UKRAINIAN ARMED CONFLICT AND «FORCE THE AGGRESSOR TO OBSERVE THE INTERNATIONAL LAW» IS PRESENTED BY GREECE. IN MID-JANUARY 2016, THE PARLIAMENT OF THIS COUNTRY RATIFIED THE AGREEMENT WITH RUSSIA ON THE SUPPLY OF MILITARY PRODUCTS. NATO, their desire to get into the Russian trap could at least be understandable. However, now they are members of both these organizations and their actions cause much harm to each of them. On the one hand, these countries should fulfil NATO requirements to improve their defence capabilities (which, in particular, were stated during the February meeting of NATO defence ministers), however, they do not have the money for the expensive weapons produced by their partners in the

Alliance. On the other hand, being aware of such problems, Russia invites them to take to their weapon needle, and thereby drives a wedge into the NATO collective security system. Because, if there may not be a significant problem with Russian small arms or the above mentioned helicopters, with S-300 systems, however, at least two questions arise: can the Greek S-300 be fully integrated into the unified NATO air defence system and can these S-300, if necessary, be aimed at Russian missiles and other air targets?


GERMANY – RUSSIA: BETWEEN THE HONEY AND THE BEES Relations between Germany and Russia are quite ambiguous. Although the military-technical cooperation between the two countries was not on such a large scale as, for example, between Russia and France, Germany has traditionally been an important trade and economic partner of Russia. In March 2014, Berlin unilaterally suspended the military-technical cooperation with Russia. German Ministry of Economy considered any form of military-technical cooperation unacceptable because of the Russian annexation of the Crimea. In accordance with this resolution, the German military industrial group “Rheinmetall” was forced to suspend the construction of the military training facility in Mulino, Nizhny Novgorod region, commissioned by the Defence Ministry of Russia. The contract between the Ministry of Defence of Russia and Rheinmetall was concluded in November 2011. The deal amounted to about € 100 million. Under the contract, up to 30 thousand soldiers could be trained yearly in the center 500 sq. km in area. The partner of the German company was the Russian Oboronservice. The construction was to be completed at the end of 2014. Since April 1, 2016 the German authorities in the wake of the US and Britain excluded Russia from the list of countries with access to import dual-purpose products from Germany. The Federal Agency of Economy and Export Control stopped issuing export permits to Russia even for engineering products, machine tools and components in particular, which

GERMANY CONTINUES TO BE ONE OF THE KEY INVESTMENT PARTNERS OF RUSSIA. THE ACCUMULATED VOLUME OF GERMAN INVESTMENTS EXCEEDS $ 12.4 BILLION. 5600 ENTERPRISES OPERATE WITH GERMAN CAPITAL (80 TO 100 % SHARES OF GERMAN CAPITAL), THEIR TOTAL TURNOVER EXCEEDS $ 50 BILLION. A THIRD OF THE COMPANIES ENGAGE IN PRODUCTION, MINING AND PROCESSING INDUSTRIES. AT THE SAME TIME, THERE ARE 1500 REGISTERED COMPANIES WITH RUSSIAN CAPITAL IN GERMANY, WHICH ARE OPERATING AT FULL SCALE. DEFENSE EXPRESS / 2016 / 19


can be used for weapons production. Germany was the largest supplier of machines and equipment to Russia, which accounted for about 60 % of the value of German exports to the Russian Federation. However, despite the sanctions against Russia, which did bring significant results, the Russian Federation remains an important trade and economic partner and an investee of Germany. In particular, this is due to the fairly strong traditional economic ties between the two countries. And the major commodity in Germany’s trade with Russia is energy – 51.4 % of the total turnover and 87.6 % of imports. Although, according to the Federal Customs Service of Russia the volume of Russian-German trade in 2015 decreased by 34.7 % compared to the same period of 2014, it still makes an impressive $ 45.8 billion. Russian export to Germany is $ 25.4 billion, decreasing in the year by 31.7 %, while the import is $ 20.4 billion (38 % drop). According to Russian sources, Germany continues to be one of the key investment partners of Russia. The accumulated volume of German investments exceeds $ 12.4 billion. 5600 enterprises operate with German capital (80 to 100 % shares of German capital),

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The contract between the Ministry of Defence of Russia and Rheinmetall was concluded in November 2011. Under the contract, up to 30 thousand soldiers could be trained yearly in the center 500 sq. km in area. The partner of the German company was the Russian Oboronservice. The construction was to be completed at the end of 2014.


their total turnover exceeds $ 50 billion. A third of the companies engage in production, mining and processing industries. At the same time, there are 1500 registered companies with Russian capital in Germany, which are operating at full scale. Currently, more than 170 agreements and arrangements of various kind between the regions of Russia and the German federal lands are implemented at the interregional level. 23 subjects of the Russian Federation and 14 German federal lands have partnership relations in the form of interregional agreements. German companies are represented in 80 out of 83 Russian regions. Regions where the activity of German companies is the most prominent are Kaluga,

A variety of Russian research and educational structures are the partners of these and other German organizations. In terms of the activity level of their participation in the scientific and technical cooperation with Germany, as well as in view of their affiliation and importance for the Russian-German scientific and technological cooperation they can be divided into six groups: Russian Academy of Sciences structures; other Russian academies and major research funds; universities and higher education institutions; departmental research institutions; research and development centres in the formerly closed cities and science cities; small private research structures. All this is a powerful lobbying base in Germany for lifting of

the sanctions long-term contacts have been lost and European businesses in Russia are replaced by Asian companies and investors. At the same time, Dmitriev said that “German business is willing to invest heavily in Russia, but it needs positive signals from political elites.” On the one hand, one can understand the German businesses incurring substantial losses due to the sanctions against Russia because of its aggression against Ukraine. On the other hand, the Germans should not forget that any cooperation with the aggressor leads to an increase of the number of innocent victims of its unbridled imperial ambitions that, sooner or later, can affect prosperous burghers, like it happened to hundreds

ON THE ONE HAND, ONE CAN UNDERSTAND THE GERMAN BUSINESSES INCURRING SUBSTANTIAL LOSSES DUE TO THE SANCTIONS AGAINST RUSSIA BECAUSE OF ITS AGGRESSION AGAINST UKRAINE. ON THE OTHER HAND, THE GERMANS SHOULD NOT FORGET THAT ANY COOPERATION WITH THE AGGRESSOR LEADS TO AN INCREASE OF THE NUMBER OF INNOCENT VICTIMS OF ITS UNBRIDLED IMPERIAL AMBITIONS THAT, SOONER OR LATER, CAN AFFECT PROSPEROUS BURGHERS. Tver, Moscow Regions, the Republic of Bashkortostan, Nizhny Novgorod Region, the Republic of Tatarstan, St. Petersburg and Leningrad Region. Among German research institutions actively cooperating with Russia, the following organizations are worth mentioning: Deutsche Forschungsgemeinschaft; Arbeitsgemeinschaft industrieller Forschungsvereinigungen, “Otto von Guericke”; Alexander von Humboldt Foundation; Fraunhofer Society; Helmholtz Association of German Research Centres, Max Planck Society for the Advancement of Science; Robert-Bosch-Stiftung; Leibniz Association.

sanctions and a returning to business as usual with Russia. That is why more and more voices are heard recently in Germany in support of lifting of sanctions against the aggressor (at least so they say in Russia). So, as a result of a meeting with German businessmen in Stuttgart, Kirill Dmitriev, chief executive officer of the Russian Direct Investment Fund announced: “The German business hopes for easing of sanctions against Russia already in June and looks forward to their complete abolition by the end of the current year.” According to him, representatives of German companies expressed concerns about the fact that because of

of innocent MH17 flight victims. Although it must be stated that after the accident with Malaysian Boeing-777 liner, the mood of a large part of the German business circles took a significant turn that led to an unconditional support for tougher sanctions against Russia, in spite of their negative impact on the German economy. Therefore, one can expect prudence from German political elites and businesses, so that their contribution can be decisive to finally resolve the issue with the excessive ambitions of a dying empire and to help build a new Russia not dangerous for Europe.

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THE RUSSIAN WEDGE INTO EUROPEAN UNITY

The analysis shows that each European country has its own unique incentives for cooperation with Russia and they have their own historical reasons. In general, the history of relations between Russia and the European countries, which for the last ten years abounded with examples of fruitful and mutually beneficial military-technical cooperation, encourages the parties to seek ways to resume joint activities. And to a greater extent it is Russia that is craving for this. Beside the fact, that thanks to such cooperation Russia wants to obtain so desperately needed technologies and components, without which it cannot compete with the same NATO, Moscow

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Russia are dealings with invaders and murderers bringing death and sufferings, should be kept in mind by the Europeans, especially by the priests of the temple called the EU.

CONCLUSIONS

BRUSSELS SHOULD CLEARLY UNDERSTAND THAT THE MAIN GOAL OF PUTIN ON THE EUROPEAN CONTINENT IS THE DISINTEGRATION OF THE EUROPEAN UNION AND GRADUAL SUBJUGATION OF ITS MEMBERS ONE BY ONE IRRESPECTIVE OF THE FATE OF UKRAINE. is also focused on undermining the enemy from within. As to the EU, the above examples of continuing cooperation with the aggressor are a kind of wedge that is driven in by Russia into already undermined and rather fragile European unity, which, in turn, is a threat to the existence of a united Europe. Brussels should clearly understand that the main goal of Putin on the European continent is the disintegration of the European Union and gradual subjugation of its members one by one irrespective of the fate of Ukraine. It makes a big difference for Russia what will be status of Italy, Germany and France as its trading partners – as the EU members or as independent subjects. Because, when there is no EU, no supranational institutions can prevent from Russian trade (and

any other) aggression against European countries. Therefore, any, even the smallest success of Russia in bypassing and countering European sanctions (a fact is enough, the Russian propaganda will do the job and inflate it to the required size), it is a not just a wedge into European unity, but at the same time another nail into the coffin of the EU. In spite of this, unfortunately, some politicians in Europe, because of fear and short-sightedness, reassure themselves that by paying off the aggressor with Ukraine, they can solve all the currently existing problems, and will continue trading including weapons, like before. However, as the history has repeatedly demonstrated, appeasing an aggressor and sacrificing others to this end eventually turns against “sacrificers” themselves. This, and the fact that dealings with

Russia has destroyed the decades-long global and regional security system and is moving toward further confrontation with the whole world. Due to the existing and ongoing militarization of the region, aggravation of tension in the Black Sea basin and a number of risky Russian provocations aimed at compelling the Western world to recognize the Russian superpower are to be expected. While the European countries do not see Russia as an aggressor, but as a potential partner in various forms of cooperation (MTC, struggle against terrorism, etc.), the Kremlin continues its aggression in Ukraine, adding daily new victims to the thousands already killed and wounded and millions of internally displaced citizens of Ukraine. In order to prevent the destructive actions of Russia, a strengthening of economic and technological sanctions needs to be considered, as well as the formation of a powerful anti-Putin coalition with an effective internal control system. The latter should be a preventer for a number of countries, which try to bypass the sanctions in order to trade in critical products with Russia. Of particular importance is the idea of blocking supplies of high-precision machine tools, high-tech products to Russia, which will render impossible the Kremlin’s programs of building new generation fighters, bombers and military transporters, and new high-precision missiles. It must be realized that by capturing and militarising the Crimea, by the aggression and support for separatists in the Donbass, Moscow threatens not so much Ukraine but the European NATO countries.

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