Russia to make dollar bond payments in roubles after US blockade - Financial Times

Russia moved one step closer to a potential default on its foreign currency debt on Wednesday after the country’s finance ministry said it was forced to make payments to holders of its dollar-denominated bonds in roubles.

The decision to pay in the Russian currency comes after the US Treasury department blocked US banks from handling dollar payments from Russia, halting $649mn of interest and principal due on Monday. JPMorgan, the so-called correspondent bank responsible for handling the transaction, declined to process the cash after seeking guidance from US authorities, according to a person familiar with the matter.

“Due to the unfriendly actions of the US Treasury . . . the Russian Ministry of Finance was forced to involve a Russian financial institution to make the necessary payments,” the ministry said in a statement on Wednesday. Payments will instead be made to rouble-denominated accounts in Russia and the proceeds can be converted into dollars following the “restoration of the Russian Federation’s access to foreign currency accounts”, it added.

The move reprises an earlier threat by Russia to make debt payments in roubles if western sanctions prevented it from getting dollars to bondholders. Foreign investors have generally viewed such a step as amounting to default, which would be Moscow’s first since the Russian debt crisis in 1998. Rating agency Fitch said last month an attempt to make dollar interest payments in the Russian currency would indicate “that a default or a default-like process has begun”.

“People can argue that they want to pay but they are being prevented from doing so, but I’m not sure that matters,” said Marcelo Assalin, head of emerging markets debt at William Blair. “I think it’s a default if the bondholders are not paid in dollars.”

Prices of Russia’s dollar bonds extended their recent declines. A bond maturing in 2042 traded at 23 cents on the dollar, down from 34 cents on Monday.

However, Kremlin spokesperson Dmitry Peskov reiterated on Wednesday that the freezing of its foreign reserves following Russian president Vladimir Putin’s invasion of Ukraine in February constitutes an attempt to push it to an “artificial default”.

“Russia has all the necessary resources to service its debts,” Peskov said on a conference call with journalists.

“Significant amounts of our reserves are frozen in foreign countries, as you know. So if they continue to be blocked in this way and if transfers from the frozen amounts are then also blocked, then they will be serviced in roubles,” Peskov said.

“In other words, there is no basis for a real default. There are none, not even close.”

Some of Russia’s foreign currency bonds contain terms in their small print allowing payment in roubles if they cannot be made in dollars or euros, but the dollar bond that matured on Monday and a bond maturing in 2042 that was due to pay a coupon on Monday are not among them. Moscow has a 30-day grace period after Monday’s deadline in which to make the payments in order to avoid default.

One holder of Russian dollar bonds said he did not think it would be possible to set up the “type C” account at a Russian bank necessary to receive the rouble payments without contravening sanctions.

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2022-04-06 15:14:04Z
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Italy and Spain lead fresh round of European expulsions of Russian diplomats - Financial Times

The mass expulsion of Russian officials from embassies across Europe accelerated on Tuesday amid outrage over Moscow’s aggression in Ukraine and growing concern about spies masquerading as diplomats.

Italy, Spain, Denmark, Sweden, Estonia and Romania announced the expulsion of a total of 90 Russian diplomats, following similar moves in recent days by Germany, Poland and Slovakia.

The moves took the number of Russian diplomats ejected from the EU since the invasion of Ukraine to at least 311, according to Financial Times calculations. Lithuania on Monday expelled the Russian ambassador to the country in protest at the apparent deaths of Ukrainian civilians at the hands of Russian troops.

The large-scale, co-ordinated expulsions represent a further effort to isolate Russia internationally and will close down more communication channels between Moscow and the EU.

They also mark the biggest spate of expulsions of Russian diplomats since the poisoning in 2018 of former Russian spy Sergei Skripal and his daughter in the UK, after which western countries ejected more than 100 Russian diplomats at London’s urging.

Cumulatively, the number of Russian diplomats now sent home from western countries in recent days far exceeds even the biggest of the tit-for-tat expulsions that were frequent events at the height of the cold war.

Nathalie Tocci, director of the Istituto Affari Internazionali in Rome, called the expulsions “late in coming” and a critical move in a confrontation with a rival using sophisticated disinformation campaigns.

“These were not just diplomats but they were there with a mission or a purpose that had to do with filtering into all the nooks and crannies of the fragilities of our systems,” Tocci said.

“It is not about spying in the sense of finding out confidential, classified information — that is just the tip of the iceberg,” she said. “It is all-pervasive work both in the public and private sphere that is aimed at creating and legitimising a particular kind of narrative.”

The latest action against the Russian diplomats came as EU finance ministers met in Luxembourg to discuss imposing even harsher sanctions on Moscow following the apparent killing of Ukrainian civilians by its troops in the Kyiv suburbs.

Volodymyr Zelensky, Ukraine’s president, addressed the UN Security Council about the alleged atrocities on Tuesday.

Dmytro Kuleba, Ukraine’s foreign minister, said he had spoken to António Guterres, UN secretary-general, and urged him to make use of mechanisms “to collect evidence and hold Russian war criminals to account”.

Luigi Di Maio, Italy’s foreign minister, said during an official trip to Berlin that Rome had branded 30 Russian diplomats as unwelcome.

“This decision . . . was made necessary by reasons linked to our national security,” the official Italian news agency ANSA quoted Di Maio as saying. He added that the expulsions were spurred by “the current crisis situation caused by the unjustified attack on Ukraine by the Russian Federation”.

Denmark separately announced that it was expelling 15 Russian diplomats, with Jeppe Kofod, foreign minister, calling them “a threat to our national security”.

“It’s in our mutual interest to maintain diplomatic ties, but we will not accept Russian espionage on Danish soil,” Kofod wrote on Twitter.

Sweden also announced the expulsion of three Russian diplomats from the country. A senior Swedish security official said last year: “We know that every third Russian diplomat works under what we call ‘diplomatic cover’ and actually works for one of Russia’s intelligence services.”

Estonia and Latvia both said they were closing two Russian consulates each as of April 30, and expelling 14 and 13 staff, respectively.

Russian diplomats turned away from their postings in recent days include 40 from Germany on Monday, 45 from Poland and 35 from Slovakia.

The Kremlin said on Tuesday that the expulsion of Russian diplomats narrowed the scope for diplomatic communication during already unprecedented times, Russian news agencies cited spokesman Dmitry Peskov as saying. He described the decisions as “a short-sighted move”.

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2022-04-05 17:38:50Z
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Brussels prepares ban on Russian coal imports and transport operators - Financial Times

Brussels said it was ready to launch a new package of sanctions on Russia that will include a ban on coal imports from the country, a block on transactions with four of its lenders and the closure of its ports to Russian vessels.

Ursula von der Leyen, the European Commission president, said she would also propose to ban Russian and Belarusian road transport operators from the EU. “This ban will drastically limit the options for the Russian industry to obtain key goods,” she said.

The new penalties will be discussed by EU ambassadors this week with a view to obtaining a unanimous agreement among the 27 member states.

Pressure for the new sanctions has increased following claims that Russian forces committed atrocities against civilians around Kyiv, the Ukrainian capital. Russia has dismissed the claims as fabrications.

Von der Leyen said the penalties will include a “full transaction ban” on four Russian banks including VTB, adding that these would now be “totally cut off from the markets”.

Among the other measures in the sanctions package — the EU’s fifth since Russia’s invasion of Ukraine on February 24 — are targeted export bans worth €10bn in areas including quantum computers and advanced semiconductors. There will also be specific new bans, worth €5.5bn, on products including wood, cement, seafood and liquor.

The package follows growing calls for the EU to directly target the Russian energy sector, given its contribution to the country’s economy and public revenues.

Among the ideas that are also under discussion are restrictions on oil imports, although these are not expected to be included in this week’s sanctions package.

The majority of Russian exports to the EU are hydrocarbons, Valdis Dombrovskis, commission executive vice-president, said separately following a meeting of EU finance ministers in Luxembourg on Tuesday.

“If we really want to affect Russia’s economy, that is where we need to look, and that is exactly what is subject to discussions concerning this fifth package,” he said.

Bruno Le Maire, the finance minister of France, which holds the EU rotating presidency, confirmed that member states were ready to include the broader energy sector in sanctions under a timeline that is yet to be set out.

“Facing Russian aggression we have to be more unified than ever — and all member states reiterated their willingness to expand import restrictions and step up efforts against Russia, and we discussed extending the list of individuals under sanction and companies as well,” he said.

Work on a possible oil ban includes examining a phasing out of imports coupled with a release of strategic oil reserves.

Other options could include imposing tariffs on Russian oil or channelling some payments into an escrow account to be used to help pay for Ukrainian reconstruction.

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2022-04-05 13:41:16Z
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EU to Propose Banning Russian Coal Imports After Atrocities - Bloomberg

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1. EU to Propose Banning Russian Coal Imports After Atrocities  Bloomberg
2. Live Brussels to ban Russian coal imports - live updates  The Telegraph
3. EU to propose fresh sanctions including ban on Russian coal  The Guardian
4. French minister predicts EU will hit Russian oil and coal within days as officials weigh sanctions  POLITICO Europe
5. EU Commission proposes banning Russian coal imports, ships from entering EU ports  Reuters.com
6. View Full coverage on Google News

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2022-04-05 09:55:45Z
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North Korea will target South Korea if provoked, Kim Jong Un's sister Kim Yo Jong warns - Sky News

North Korea has warned that it will use nuclear weapons to strike South Korea if it was to launch an attack first.

The comments by Kim Yo Jong, the powerful sister of leader Kim Jong Un, come after South Korea's defence minister said his country's military has missiles that could "accurately and quickly hit any target" in North Korea.

Ms Kim, a senior government official, said it was a "very big mistake" for Suh Wook to make the remarks, according to KCNA, a state news agency.

Pyongyang opposes war, which would leave the peninsula in ruins, and does not view South Korea as its principal enemy, she said on Tuesday.

Image: Suh Wook said South Korea could strike any target in the North

Read more:
Kim Jong Un's sister brands South Korean defence minister a 'scum-like guy' over missile remarks

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"But if South Korea, for any reason - whether or not it is blinded by misjudgement - opts for such military action as
the 'preemptive strike' touted by [Mr Suh], the situation will change," Ms Kim added.

"In that case, South Korea itself will become a target."

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Both countries have increased displays of military strength this year, with North Korea test-firing a range of powerful missiles.

Officials in South Korea and the US also fear the North may be preparing the resume nuclear weapon tests for the first time since 2017.

On Sunday, North Korean officials condemned Mr Suh's comments Suh and warned that Pyongyang would destroy major targets in Seoul, the South's capital, if the country was to take any "dangerous military action".

Comments may be aimed at incoming president

Image: Analysts suggest Pyongyang could be attempting to reset relations before Yoon Suk-yeol takes office

It is thought Ms Kim's comments may be aimed at Yoon Suk-yeol, South Korea's incoming president, who has called for a more muscular defence against North Korean threats.

Rachel Minyoung Lee, an analyst with the US-based 38 North project, said: "North Korea has thus far refrained from criticising Yoon at an authoritative level, but it certainly seems to be laying the groundwork for it."

The statements suggest Pyongyang is preparing its people for a possible shift in Korean relations once Yoon takes office in May, she added.

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2022-04-05 06:02:27Z
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Australian landslide kills British father and son - with two family members in critical condition - Sky News

Tragedy has struck a British family holidaying in Australia after a father and his nine-year-old son were killed by a landslide while hiking and the mother and another son were critically injured.

A 15-year-old girl from the same family survived and walked away from the scene - with the support of emergency services staff - in a remote part of the Blue Mountains in New South Wales, officers added.

She was later treated for shock.

The boy and his 49-year-old father died on the Wentworth Falls hiking track, west of Sydney on Monday, New South Wales police said.

The family's 50-year-old mother and a second son, who is 14, were treated at the scene by critical care paramedics before being airlifted out of the valley by a rescue helicopter, New South Wales ambulance spokesman Stewart Clarke told reporters.

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After being assessed, they would be taken to "the most appropriate hospital," Mr Clarke added, with surgery a possibility.

He called the situation "heartbreaking", adding that the patients had "significant head and abdominal injuries" and had to be sedated and intubated to help them breathe before being winched to safety.

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The five were holidaying in Australia, police said, some of the four million tourists drawn to the Blue Mountains National Park each year.

Weeks of wet weather in Sydney preceded the landslip, leaving the area "extremely dangerous and unstable" for rescuers, Mr Clarke said.

Detective Superintendent John Nelson, from the Blue Mountains area command, called it "a tragic scene", adding that rescuers were "working under quite arduous conditions.

"A girl is walking out at the moment, who is obviously clearly [and] extremely distressed," he said.

Officers would try to speak to her to find out what happened, he said.

Weather conditions were reasonable, he said, adding that he understood the hiking trail was open at the time.

Emergency services were called to Wentworth Pass around 1.40pm, after being contacted by someone who was "in or near the group", Mr Clarke said.

Police helicopters, local officers and a specialist rescue team were deployed to the remote location in dense bushland, about a 90-minute walk from the car park.

The injured pair were winched out about 6pm, Mr Clarke said.

"[It is] exceptionally confronting and heartbreaking, especially when you start involving children," he said.

Ambulance chaplains and police support officers also attended "to support our people", Mr Clarke added.

The British Consulate is assisting.

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2022-04-04 18:11:15Z
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Ukraine war: Zelenskyy accuses Russia of 'genocide' as Western leaders condemn 'despicable' civilian killings - Sky News

Ukrainian President Volodymyr Zelenskyy has called the Russian military "killers, executioners, rapists, marauders who call themselves an army" in his latest address.

This story is out of date - go here to read the latest version

He went on to accuse them of carrying out "a genocide" as reports emerged of hundreds of bodies found in Ukrainian towns before they were liberated, including Bucha near Kyiv.

Mr Zelenskyy said: "To talk about the discoveries in Bucha and our other cities from where the occupiers were expelled. Hundreds of people killed, tortured, executed civilians. Bodies on the streets. Booby-trapped area. Even the bodies of the dead are booby-trapped. Widespread aftermath of looting.

"Concentrated evil has visited our land. The killers, executioners, rapists, marauders who call themselves an army - and who deserve only death after what they've done."

Follow live updates on the war in Ukraine

Image: Bucha is a city near Kyiv, where Russia has scaled back military operations

Images emerged on Sunday of Ukrainian civilians lying on the streets of Bucha with witnesses saying the victims were killed by Russian forces without any apparent provocation.

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Bucha's mayor, Anatoly Fedoruk, said more than 300 residents had been killed.

Sky News verified and confirmed the location of two videos showing bodies on the streets of Bucha, including one where at least seven bodies are seen on the road and on the pavement, while satellite images from Maxar appear to show a mass grave in the town on 31 March.

Ukrainian prosecutors investigating possible war crimes by Russia said they have found 410 bodies in towns near Kyiv and 140 of them had been examined.

Some of the victims had their hands tied and were shot in the back of the head, Ukrainian authorities said.

Key developments:

• Russian forces accused of genocide and war crimes in Bucha;
• Ukraine's top prosecutor says 410 bodies found in towns near Kyiv;
• Moscow denies its forces killed civilians in Bucha;
• Ukraine's military says Russian units have withdrawn from areas in the country's north;
• Kyiv says its forces have taken full control of town of Pripyat just outside decommissioned Chernobyl nuclear power plant.

Image: A woman points to a makeshift grave of a man killed by Russian forces, according to residents, and buried outside a building in Bucha. Pic AP

Ukrainian officials laid the blame for the killings squarely at the feet of Russian troops, with Mr Zelenskky calling them evidence of "a genocide".

But Russia's Defence Ministry rejected the accusations of atrocities against civilians in Bucha and other suburbs of Kyiv, claiming they were a "provocation".

Western officials have condemned the reports and vowed to work with Ukraine and the International Criminal Court to "ensure those responsible are convicted".

Human Rights Watch said on Sunday that it has documented "apparent war crimes" committed by Russian forces against civilians in Ukraine.

It said it had found "several cases" of war violations in Chernihiv, Kharkiv and Kyiv, including cases of "rape, murder and other violent acts against people in the Russian forces' custody".

Image: Satellite images of the Ukrainian town of Bucha show a trench about 45ft long dug into the grounds of a church

Russian forces are continuing to "consolidate and reorganise" as they refocus their offensive into the Donbas region in Ukraine's east, where they are being joined by Wagner mercenaries, according to the UK's Ministry of Defence.

UN Security Council to meet on Tuesday

Mr Zelenskyy has called on former German Chancellor Angela Merkel and former French president Nicolas Sarkozy to visit Bucha and "see what the policy of concessions to Russia has led to in 14 years".

The United Nations Security Council is expected to meet on Tuesday to discuss the situation in Ukraine, where, according to Mr Zelenskyy, Russia's alleged war crimes will be discussed.

Image: Ukrainian President Volodymyr Zelenskyy speaks from Kyiv

Meanwhile, the South Asian news agency ANI reported that Russia's first deputy envoy to the UN, Dmitry Polyansky, requested a meeting with the council on Monday.

Mr Polyansky called for the meeting after the "blatant provocation by Ukrainian radicals in Bucha" and said Moscow will expose "the Ukrainian instigators and their Western patrons".

PM calls on tougher NATO response

Prime Minister Boris Johnson has condemned Russia's "despicable attacks" on civilians, adding the UK is "stepping up" its sanctions and military support.

He will also seek to galvanise a tougher response from Western allies, including NATO members, against Russia.

On its 73rd anniversary on Monday, Mr Johnson will hail NATO as the "greatest security alliance in the history of the world" - adding that it has a responsibility to support the Ukrainian people as they fight for freedom with "every fibre of their being".

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0:24

Bucha killings are 'genocide'

Representatives from the Polish and German governments will visit and meet Mr Johnson at Downing Street this week to discuss NATO and how to support Ukraine.

Meanwhile, the European Council's President Charles Michel said the European Union is preparing further sanctions following the actions of Russian forces in Bucha.

Shocked by haunting images of atrocities committed by Russian army in Kyiv liberated region #BuchaMassacre

EU is assisting #Ukraine & NGO’s in gathering of necessary evidence for pursuit in international courts.

Further EU sanctions & support are on their way.

Слава Україні!

— Charles Michel (@eucopresident) April 3, 2022

"Shocked by haunting images of atrocities committed by the Russian army in Kyiv liberated region," Mr Michel said on Twitter on Sunday. "Further EU sanctions & support are on their way. EU is assisting Ukraine & NGOs in gathering of the necessary evidence for pursuit in international courts."

During his latest address, Mr Zelenskyy alluded to the sanctions, saying "there will be a new package" of sanctions against Russia but said "that's not enough" and "more conclusions are needed".

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Mr Zelenskyy also appeared in a video message at Sunday's Grammy Awards, contrasting the lives of those attending the award ceremony in Las Vegas with the lives of musicians in his battered homeland.

"Our musicians wear body armour instead of tuxedos. They sing to the wounded in hospitals, even to those who can't hear them," he said. "But the music will break through anyway."

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2022-04-04 08:40:27Z
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