Russia prepares economic blow to Turkey for the downed su-24

Russia prepares economic blow to Turkey for the downed su-24

The decision on Turkey was adopted on the basis of the law on special economic measures and will not conflict with world trade organization rules.

MOSCOW, 26 Nov. Russia in response to the destruction of su-24 aircraft by the Turkish military intends to impose restrictive economic measures against Turkey that may affect the project “Turkish stream”, the construction of nuclear power plants, air and food supply.

On Tuesday in Syria was wrecked Russian bomber su-24. The plane was shot down by a rocket type “air-air” with a Turkish F-16s over Syrian territory and fell in Syria four kilometers from the border with Turkey. The President of Russia Vladimir Putin called it a “stab in the back” by the accomplices of terrorists.

“I want to say about economic stimulus measures. the Government was instructed to develop a system response to an act of aggression in economic and humanitarian spheres”, — said Medvedev, opening a government meeting on Thursday.

The decision on Turkey was adopted on the basis of the law on special economic measures and will not conflict with world trade organization rules. WTO rules allow you to enter all the restrictive measures in trade in goods and services, investments in the event of a threat to national security.

The Prime Minister instructed the government to submit their proposals in response to Turkey in the shortest possible time — within two days. All measures will be consolidated in the decree of the President, and then in the relevant government decree.

Trade and investment

As one of the measures Medvedev proposed to collapse the talks-Russia and Turkey on an agreement on preferences for investment, investment projects of the two countries can also be frozen.

Turkey is one of the key economic partners of the Russian Federation, occupying fifth place for exports and 13th for imports in the structure of Russian foreign trade. Main export goods of the Russian Federation to Turkey is a gas, oil, metals, wheat, coal, oil. Key import products are vegetables and fruit, clothing and other light industry products.

According to the Ministry of economic development, investment cooperation of Russia with Turkey is concentrated in the areas of mobile communication, fuel-energy complex, ferrous metallurgy, atomic energy, automotive and banking.

“I propose to collapse the negotiations on drafting an agreement on preferential treatment to services and investment with Turkey,” said Prime Minister, noting that the measures affected and the number of investment projects with Turkey — they can be frozen or collapsed.

Finance, predamage and tourism

In early October the Minister of economic development Alexei Ulyukayev was expected that the agreement on free trade zone between Russia and Turkey on services and investment will be signed in 2016.

Now the measures of the government of the Russian Federation and Turkey may relate to customs duties and conduct financial transactions. Among the possible measures and suspension of programs of economic cooperation.

“There is such a set of measures: the suspension of the implementation of economic cooperation programmes, and restrictions on financial transactions and restrictions on foreign trade transactions and change of the customs duties of import and export, measures the impact on the tourism sector, for transportation, including transit,” he said.

However, the biggest Russian tour operators have already frozen the sale of permits in Turkey with no official ban of the authorities, while in October, Russia and Turkey were discussed at the Ministerial level of the possibility for Russian tourists pay in rubles for the services in Turkey.

The workers and goods from Turkey are banned

Among the response authorities of the Russian Federation consider the issue of the ban on the activities of the Turkish companies in the country, as well as the introduction of the indefinite embargo on the import of certain foodstuffs from Turkey, Medvedev said. In addition, restrictions can affect the use of the labour force.

“We will focus on the introduction of restrictions and prohibitions on the activities of the economic structures of Turkey in Russia, the limitation and prohibition of the supply of products, including food products, performance of works and rendering of services by Turkish companies, and other restrictive measures”, — explained Medvedev.

After the introduction of Russian food embargo against the EU, the Turkish company has significantly increased its presence in the Russian market, now Russian importers will likely have to seek new suppliers. However, even before the Premier’s speech, on Thursday morning, the Rosselkhoznadzor reported that begins total inspection of fruit and vegetables from Turkey.

Transport and infrastructure

Russia may limit or even prevent all access to ports and airspace of the country of ships and aircraft of Turkey, said the head of Ministry of economic development Alexei Ulyukayev.

Later, the Minister stated that the decision regarding Turkey will bypass and major infrastructure projects.

“The law gives the right to limit the right of use of airspace and airports. That is, of course, can we talk about the restriction as scheduled flights, and Charter,” — said Ulyukayev. But the Russian authorities will carefully analyse the risks to tour operators and air carriers because of restrictive measures against Turkey for possible state support, tried to soften the blow of the Minister.

The project of the gas pipeline “Turkish stream” and the construction of NPP “Akkuyu” also fall under the act on special measures, confirmed the head of the Ministry. “This project is no different from any other project, and just talking about our investment cooperation,” Ulyukayev said.

Shares of “Gazprom” and “Aeroflot” on the Moscow stock exchange immediately responded to the Minister by the fall.

The intergovernmental agreement of Russia and Turkey is the construction of a nuclear power plant in Akkuyu was signed in 2010. The project of the first Turkish NPP includes four VVER. The capacity of each NPP unit will be 1200 MW. The project cost is approximately $ 20 billion.

The project “Turkish stream” involves construction of a pipeline from Russia to Turkey across the Black sea. Construction was scheduled to begin in June, but the project is still under discussion. Russia was waiting for the formation of the government in Turkey, with which negotiations on the intergovernmental agreement. The government was formed on 24 November — the day was shot down by Russian su-24.