Medvedev instructed to study the documents to appeal in the court because of the Ukrainian debt

Medvedev instructed to study the documents to appeal in the court because of the Ukrainian debt

GORKI, December 21. Prime Minister Dmitry Medvedev instructed the government to develop documents for going to court due to the failure of Ukraine to pay Russia the debt at $3 billion. Such assignment the Prime Minister gave at the meeting with Deputy Prime Ministers.

“That they will not pay, there is no doubt”

“In this case we need to use protection, what was said at the meeting with the President recently to return the debt. Would like to see members of the government, Sergey Eduardovich (Prikhodko), You, and other colleagues, the Ministry of Finance prepared all necessary solutions in order to address the jurisdictional body that has been elected on the basis of our agreement with Ukraine to settle the dispute. Will need to hire lawyers and start the procedure with due persistence and care”, – said Medvedev.

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“That they (the Ukrainian government) will not pay, there is no doubt. The policy pursued by the government of Ukraine, we are aware of. In fact, it is the manipulation and the breach of international obligations. This should be upfront about it,” – said Medvedev.

Medvedev announced that he had signed a decree on the introduction of the most favoured nation (MFN) instead of the Treaty on free trade zone with Ukraine, as well as the use of counter-sanctions against this country from 2016.

Moscow expects payment

Last Friday, the Ukrainian government imposed a moratorium on the debts, thus effectively declaring a default. In Russia’s view, the moratorium did not affect the obligations of Ukraine on debt repayment and the Russian Federation still expects they will be executed in full. If payments not received on Monday, Russia 31 December would appeal to the international court.

In December 2013, Russian President Vladimir Putin and Ukrainian President Viktor Yanukovych have agreed that Moscow will give Kiev a loan of $15 billion through the placement of Ukrainian securities. Under this program, bonds for $3 billion were placed on the Irish stock exchange on 20 December 2013 and bought by Russia at the expense of the national welfare Fund (NWF).

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Siluanov: the announcement by Ukraine of a moratorium does not negate its obligations to pay debt

The period of performance of obligations on repayment of $3 billion and the payment of the coupon ($75 million – approx. ed.) came the 20th of December, Sunday. The first payment must be made on the next working day i.e. on Monday, 21 December, Minister of Finance of the Russian Federation Anton Siluanov.

According to the Minister, the announcement by Ukraine of a moratorium does not negate its obligations to pay a debt.”Obligations remain in force, and the Russian Federation expects that they will be executed in full” – said Siluanov. The Minister also expressed regret that Ukraine has decided to default instead to negotiate the essence of the proposals announced by the President of Russia on the “G20 summit” in Antalya in November this year.

Vladimir Putin at the G20 summit in Turkey reported that Moscow offered to the over payment on the debt of Ukraine for the years 2016-2018 $1 billion a year. The head of state stressed that Russia does not agree to restructure the Ukrainian debt, and offered the best conditions, as requested by the IMF.

The moratorium

In anticipation of the maturity of the Russian debt Ukraine has officially announced its refusal to do so.

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Yatsenyuk: Ukraine has imposed a moratorium on the payment of a debt of Russia

The Ukrainian government imposed a moratorium on debt repayment in $3 billion to Russia and a moratorium on debt payments to $507 million Ukrainian companies Yuzhnoye and “Ukravtodor” to Russian banks, including Sberbank. First entered into force on 20 December, the second – from December 30. The decision to introduce the moratorium, the Prime Minister of Ukraine Arseniy Yatsenyuk said that Russia refused to sign the agreement on debt restructuring and to accept the proposals of Ukraine.

Ukraine and the imposition of the moratorium delayed the process to pay the debt, contesting the status of the loan and equating it with commercial loans subject to restructuring. The position of the Ukrainian authorities don’t even have influenced the decision of the International monetary Fund (IMF), the Board of Directors, which last week recognized the status of Ukraine’s debt to Russia is sovereign, which means that the liability to pay a debt incurred by the government-borrower.

On the verge of default and litigation

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A dispute about $3 billion: debt Kiev before Moscow in questions and answers

Statement of Ukraine to introduce a moratorium on the payment of Russian debt actually means its default. As told journalists the President’s press Secretary Dmitry Peskov: “in fact, the default, one might say, officially recognized by the Ukrainian side – it was the Declaration of a moratorium on payment of sovereign debt. This is the default situation recognition”. According to him, for the repayment of a debt of Ukraine to Russia there are now “virtually the only judicial perspective”.

The fact of non-payment is recognized upon expiration of 10 days after the date of payment of the obligations on external debt, i.e. on 20 December. The Finance Ministry could appeal to the international court at the Ukrainian debt from 31 December, said Deputy Finance Minister Sergei Storchak. As explained by the Deputy Minister, this is the first date, when Russia, being fully in the legal field, (to demand for repayment of the loan).

The reaction of Russian politicians to Kyiv’s introduction of a moratorium on debt repayment Russia