Russia strikes airbase in heavy new bombardment; SA Reserve Bank sounds alarm on threat of sanctions

Russia strikes airbase in heavy new bombardment; SA Reserve Bank sounds alarm on threat of sanctions
Policemen inspect the debris of a shot-down rocket after a Russian attack on Kyiv, Ukraine, on 29 May 2023. (Photo: EPA-EFE / Stepan Franko)

A Russian bombardment hit an airbase in western Ukraine, damaging five aircraft and the runway in the second massive rocket and drone attack in as many days.

Ukraine shot down more than 37 cruise Russian missiles and 30 drones overnight, the General Staff of the Armed Forces said, and more explosions were heard across the nation’s capital on Monday morning. Russia fired the missiles from strategic bombers far behind its border near the Caspian Sea, while the Iranian-made drones were launched from the north and south.

Authorities said information on casualties from the strike on the airbase in the Khmelnytskyi region “was being clarified.” The new barrage, which followed similar strikes early on Sunday, targeted other regions across Ukraine including Odesa, Mykolayiv and Lviv, authorities said. Russia is “trying to exhaust our air defences,” Serhiy Popko, head of the Kyiv city military administration, said on Telegram.

Latest developments

Russia hits Ukraine airbase, Kyiv downs ballistic missiles 

Russia hit an airbase in western Ukraine, damaging five aircraft and the runway, and targeted the nation’s capital with ballistic missiles in the second massive rocket and drone attack in as many days.

Rescue teams worked to extinguish a fire at the airbase in the Khmelnytskyi region, where a fuel dump and military storage were hit along with the aircraft and runway, the regional governor’s office said on Telegram.

Air defence forces in Kyiv shot down 11 Iskander ballistic missiles on Monday morning, spokesperson Yuriy Ihnat said on television, an exhibit of Ukraine’s improved capabilities to fend off air strikes. It was the 16th attack on the capital since 1 May.

Russia has ramped up air strikes on military facilities and infrastructure across the country this month, as Ukraine prepares a counteroffensive to try to take back territory occupied by the invading forces.

Russia is “trying to exhaust our air defences,” Serhiy Popko, head of the Kyiv city military administration, said on Telegram.

As air sirens blared in Kyiv and local television showed screaming schoolchildren running for bomb shelters, Ukrainian authorities said more Russian rockets were raining down elsewhere across the country.

Debris from intercepted missiles fell on five locations in Kyiv without causing major damage, authorities said. One person was hospitalised.

The ballistic attack on Kyiv followed an overnight barrage in which Ukrainian forces shot down more than 37 cruise missiles and 30 drones, according to Kyiv’s General Staff of the Armed Forces.

Russia said it had struck airfields, aircraft, radio surveillance and command posts, according to a report from the RIA Novosti news service that couldn’t immediately be verified.

The morning drone and missile strikes targeted regions from Mykolayiv in central Ukraine to Lviv in the west. A strike in the Kharkiv region wounded four women and two children, regional governor Oleh Synehubov said on Telegram.




South African Reserve Bank sounds alarm on threat of sanctions

South Africa’s central bank has warned of dire consequences should the country face censure due to its stance on Russia’s invasion of Ukraine

At worst, secondary or indirect sanctions could be imposed on the country and lead to a sudden halt to capital inflows and increased outflows, the bank said in its latest financial stability review published on Monday. It cautioned that South Africa’s financial system would be unable to function if its ability to make international payments in dollars was impeded.

More than 90% of South Africa’s international payments are currently processed through the Society for Worldwide Interbank Financial Telecommunication (Swift) system, Herco Steyn, the lead author of the report told reporters. “Should South Africa be banned from Swift as a result of secondary sanctions, these payments will not be possible,” he said.

South Africa has adopted what it says is a non-aligned stance toward the war in Ukraine and it has abstained from several United Nations votes condemning Russia’s actions. Its neutrality was called into question this month when US Ambassador Reuben Brigety accused Pretoria of supplying weapons to Russia.

The row “could further exacerbate declining domestic financial market depth and liquidity and further erode investor confidence and sentiment if considered alongside the Financial Action Task Force greylisting and the country’s inability to arrest the growing prevalence of load shedding,” Steyn said.

Even if the nation isn’t sanctioned, the threat alone could mean the country’s financial institutions are subjected to more intensive scrutiny by their foreign counterparts, said Nicola Brink, the head of the central bank’s financial stability department.

US chides Poland over law to probe opposition before ballot

The US has criticised a new law that allows Poland’s ruling party to probe opposition leader Donald Tusk just months before a tightly contested election.

Ambassador Mark Brzezinski raised concerns about the legislation on Monday hours after President Andrzej Duda approved the creation of a special parliamentary panel to investigate Russia’s influence in Poland between 2007 and 2022.

The legislation grants the committee unprecedented powers, including the ability to effectively prevent officials from pursuing public office, bypassing the regular court system. Critics said the new panel aims to discredit and potentially bar key opposition politicians from taking part in October’s elections and marks further erosion of democratic standards by this government.

“The US government shares concerns about laws that could appear to allow for preempting voters’ ability to vote for the candidates of their choice outside of a clearly defined process in independent courts,” Brzezinski told private broadcaster TVN24.

Nato forces intervene in Kosovo after attack from local Serbs 

Nato-led peacekeepers beefed up their presence in northern Kosovo, where local Serb protesters clashed with police and the international force days after an uptick in violence.

Peacekeepers on Monday had to use stun grenades to repel Serb protesters after they threw rocks and stun grenades at the soldiers in the northern town of Zvecan, according to Koha Ditore, a local newspaper in Kosovo.

Earlier in the day, Kosovo’s mostly ethnic-Albanian police forces used pepper spray in response to tear gas hurled by hundreds of ethnic-Serb demonstrators who tried to block access of officials to municipal buildings in Serb-dominated towns.

The escalation of violence — the worst this year — erupted as Serb protesters tried to block newly elected ethnic-Albanian mayors from reaching their offices. The clashes have raised fears that a conflict could reignite between the Balkan neighbours.

Gas price plunge brings relief to Europe after energy panic 

European gas prices have plunged to the lowest since mid-2021, when Russia was just beginning to squeeze supplies before its invasion of Ukraine, helping to reverse a surge in inflation and bring relief to consumers.

The slump — gas futures are down by two-thirds already this year – hasn’t just eased the pressure on household budgets. It also undermines one of the biggest bargaining chips held by President Vladimir Putin — the ability to squeeze the region’s gas supplies.

With some traders predicting short-term prices could even go negative at times this summer, the picture couldn’t be more different from May last year. Back then, futures were quadruple what they are now and countries were forced to revive coal generation to keep the lights on after Russia slashed gas supplies.




Seize, not just freeze, Russian assets? Why that’s hard 

A few weeks after Russia invaded Ukraine in February 2022, the then UK Transport Minister Grant Shapps used TikTok to show off a 192-foot blue superyacht, the Phi, owned by a wealthy Russian businessman that the British government had just impounded at a London dock.

It was a vivid display of Western sanctions designed to squeeze Russia’s economy and Russians’ wealth. One thing Shapps couldn’t do was step on board. That’s because, by law, the UK hadn’t seized the vessel, just frozen its ownership status to ensure the owner couldn’t use it either. The same situation applies to hundreds of billions of dollars worth of sanctioned Russian property, which, if seized and sold by Western governments, could help pay for the reconstruction of Ukraine.

1. What’s the difference between freezing and seizing?

Freezing an asset means it can’t be used, moved or sold, but its legal ownership doesn’t change. Seizing an asset — be it a vehicle tied to drug dealing or a superyacht enjoyed by a sanctioned oligarch — transfers ownership to the seizing authority, which can use or sell the asset.

2. What Russian assets have been frozen?

Soon after Russia invaded Ukraine, the US and its allies froze an estimated $300-billion in Russian central bank assets that were being held in non-Russian financial institutions. Sanctions imposed on prominent Russian individuals have frozen an additional estimated $58-billion in assets, including homes, yachts and private aircraft.

3. How much of that has been seized?

Relatively little. Yachts tied to Russian billionaires Suleiman Kerimov and Viktor Vekselberg were seized in Fiji and Spain, respectively, in 2022 by local law enforcement acting on requests from US authorities. The US Office of Foreign Assets Control designated Kerimov as part of a group of oligarchs who profited from Russian government corruption. Velsekberg’s $99-million yacht, called Tango, was linked to suspected bank fraud, money laundering and sanctions violations.

The US has also seized homes belonging to Kerimov, Vekselberg and another Russian billionaire, Oleg Deripaska, bringing the total value seized to an estimated $635-million, according to Forbes. The amounts represent only a fraction of their estimated wealth. Vekselberg, for example, was worth $7.1-billion as of 26 May, according to the Bloomberg Billionaires Index.

4. Why haven’t more sanctioned Russian assets been seized?

Respect for private property is a pillar of the laws that govern modern societies and international relations. Many countries allow for the seizure of assets that are shown to be the proceeds of crime, with a high bar for proving that in court. Investigators tasked with building a case often get lost in a maze of shell companies and offshore trusts that oligarchs use to obscure their control of trophy assets. What’s more, using sanctions as cover for asset seizures is problematic because they are designed to be a temporary measure to force a desired outcome. Even governments that simply freeze assets can face legal complications: The owner of the Russian yacht featured in the UK onetime transport minister’s TikTok video sued the UK’s Department of Transport to lift the freeze and sought damages.

5. Why isn’t freezing enough?

For one thing, it doesn’t always put the assets beyond the reach of their owners. Britain’s government highlighted 230 sanctions breaches involving the continued use or movement of frozen assets, and it’s yet to announce a single charge against anyone — let alone a financial penalty. Also, governments can end up on the financial hook for the upkeep of frozen assets, particularly yachts. British taxpayers have been footing the bill for maintenance of the yacht docked in London, for instance. And only by taking ownership of assets could Ukraine’s allies sell them to help rebuild Ukraine’s shattered infrastructure — an effort expected to cost hundreds of billions of dollars.

6. What’s the status of efforts to sell seized assets to help Ukraine?

  • In mid-2022, Canada’s government gave itself the power to seize the assets of people or entities that are under sanction. In the first attempted use of the law, the government in December said it would seek $26-million from Granite Capital Holdings, a firm owned by sanctioned Putin ally Roman Abramovich, and that the money would be used “for the reconstruction of Ukraine and compensation to victims of the Putin regime’s illegal and unjustifiable invasion. Legal proceedings in that matter have yet to begin.
  • The US Congress late in 2022 approved a measure allowing the seizure of Russian-held assets to benefit Ukraine, though only in certain prescribed cases. Attorney-General Merrick Garland, in February, authorised the first such seizure, involving $5.4-million taken from a Denver-based bank account of sanctioned Russian oligarch Konstantin Malofeev.
  • The EU has discussed adding evasion of sanctions to the list of crimes, such as money laundering and corruption, that can trigger the seizure of assets of sanctioned people or entities.
  • The UK has sought legal advice on seizing assets without breaching international rules. One suggestion from a think tank is to use ideas from other jurisdictions where there’s a lower standard of proof. Italy’s anti-mafia code, for instance, allows authorities to designate an owner as a “danger to society” to help them seize assets belonging to mafia members.
  • German Chancellor Olaf Scholz has emerged as a sceptic, saying seizing assets is legally problematic and wouldn’t raise much money anyway.

7. Is there precedent for seizing frozen assets?

After the 2003 invasion of Iraq and the ousting of leader Saddam Hussein, US President George W Bush ordered the seizure of $1.7-billion of Iraqi funds held in US banks, some of which went to pay the salaries of Iraqi government employees. In 1996, the US seized Cuban funds and used them later to help compensate the families of three Americans killed when their planes were shot down by Cuba’s armed forces. DM


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