Russia creating coordination center to facilitate work of military industry under Western sanctions
The Russian Federation has established an ad-hoc agency to “ensure sustainable development” of the industrial-defense complex and stable production of a state defense order “under the expected strengthening of unlawful sanctions by the United States,” Russian Deputy Prime Minister Dmitry Rogozin said.
According to Rogozin, the headquarters was formed based on the Military-Industrial Commission (VPK) established in 2014 “to implement state policy in the industrial defense and to oversee the distribution of military and technical products for the country’s defense and state security.”
The commission is chaired by the President of Russia, Vladimir Putin, whereas Rogozin is a Deputy Chairman and head of the main collegial body. The new headquarters is headed by Oleg Bochkarev, Rogozin’s deputy and the Deputy President of the League of Assistance to Defense Enterprises.
In October 2017, the U.S. Department of State released a list of 39 Russian defense companies and reconnaissance agencies that were banned from any “considerable transactions” starting in late January 2018, not only with American companies but also with companies based in other countries. A company that is caught engaging in dealings with a Russian military entity named on the list will incur sanctions that range from limiting the company’s borrowing ability to barring the entry of the company’s top management to the United States.
In late December, the Press Secretary for the Russian President, Dmitry Peskov, announced that the state was developing a plan to resist the possible toughening of sanctions, but Peskov did not offer more details for fear state information being leaked.
Chairperson of Rostec, an industrial concern that was named to the sanction list by the Department of State, Sergey Chemezov, called the sanctions an “example of unfair competition” and an attempt to wipe out Russian weapons, which “are cheaper while matching its American or European rivals in quality,” from international arms markets.
Asked when he forecasts the sanctions to be lifted, Chemezov said he did not expect to outlive them.
In early January 2018, first Deputy Chairman of the Alfa-bank Board of Directors, Oleg Sysuev, said the bank notified Russian defense companies that it would no longer be able to service them due to the western sanctions.
Commenting on the statement of the bank’s official, Rogozin said Alfa-bank had not had permission to provide banking services to industrial defense companies in the first place.