SHARE
COPY LINK

RUSSIA

Ukraine crisis: Putin hits Spain with sanctions

Russia on Wednesday announced sanctions targeting food exports from the European Union and the US, in a move the EU has described as "clearly politically motivated", and one which could cost Spain hundreds of millions of euros.

Ukraine crisis: Putin hits Spain with sanctions
Russian President Vladimir Putin. Photo: Alexey Druzhin/Ria Novosti/AFP

Russian President Vladimir Putin on Wednesday announced counter-sanctions against Western nations with a year-long import ban on a variety of agricultural products and foodstuffs.

The move targets all countries that have taken punitive measures against Moscow, meaning Spain will be affected.

According to the Kremlin, food products will be directly targeted by the ban. The Kremlin’s statement said that Putin's executive decree "either bans or limits… the import into the Russian Federation of certain kinds of agricultural products, raw materials and food originating from countries that have decided to adopt economic sanctions against Russian entities and (or) individuals".
 
Russia will reportedly publish a full list of banned products by Thursday evening but sources have reported that the list will include all fruits and vegetables produced in the 28 EU nations. According to Reuters, Russian PM Dmitry Medvedev said meat, fish and dairy would also be banned.
 
Spain stands to lose hundreds of millions of euros under the sanctions regime.
 
The country exported €581 million ($775 million) in foodstuffs to Russia in 2013, according to preliminary figures supplied to The Local by Spain's economy ministry.
 
This included €312 million in fruit and vegetable exports, €112 million in meat exports and €13 million in exports of fish products.  
 
The sanctions are the first official reprisal by Putin in response to the crisis in Ukraine. The EU and US have accused Moscow of destabilizing the situation in the country by supporting separatists in Donetsk and Lugansk.
 
The EU on Friday said it regretted "the announcement by the Russian Federation of measures which will target imports of food and agricultural products."
 
"We underline that the European Union's restrictive measures are directly linked with the illegal annexation of Crimea and destabilization of Ukraine," said the EU in a statement.
 
The 28-member bloc said it was committed to the de-escalation of the situation in Ukraine. 
 
Spain was backing the EU's position on this matter, a spokesperson for the country's foreign ministry told The Local.   
 
Spanish trade with Russia has boomed in recent years. 

According to figures from the Spain's Embassy in Russia, bilateral trade with Russia was worth €11 billion ($14.7 million) in 2013.

That was 37 percent up on 2010 figures, and 18 percent up on the number in 2012.

Russian sanctions could hurt this strong relationship and could have a knock-on effect on Russian tourism in Spain.      

Some 1,581,785 Russian tourists visited Spain in 2013, up 31.6 percent on 2012, according to figures from Spain's official tourism research centre Frontur.

Russian tourists also boosted spending by the greatest margin, boosting expenditure by 29 percent to €2.35 billion in 2013, accounting for four percent of total tourism spend, figures from the country's Industry, Energy and Tourism ministry show.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

RUSSIA

Spanish court probes Russian tycoon’s purchase of supermarket chain Dia

Spain's top criminal court said Thursday it has opened an investigation into whether Russian tycoon Mikhail Fridman artificially depressed the share price of supermarket chain Dia before buying the firm.

Spanish court probes Russian tycoon's purchase of supermarket chain Dia
File photo of a Dia supermarket. Photo: AFP

The Kremlin-friendly oligarch appeared in court in Madrid on Monday as part of a separate similar case in which judges are investigating allegations he acted to bring down the value of another Spanish takeover target, digital entertainment firm Zed Worldwide.   

He denied all charges in that case in a statement released after he was questioned in court.

An investigating judge with the National Court “has begun investigating a complaint” against Fridman and his Luxembourg-based investment company LetterOne “in connection with its acquisition of Dia”, according to a document from the court published Thursday.   

In May, LetterOne secured majority control of the struggling supermarket chain via a hostile takeover following a bitter dispute with its previous management as the firm's share price slumped.

The judge is investigating allegations made in an anonymous complaint that LetterOne “maintained a heightened financial tension to lower the share price, until it managed to buy the company,” the court document said.

Spain's Supreme Court had in September given the National Court a mandate to investigate this case which it said could constitute the crime of “market manipulation” and could have had “serious repercussions on… the national economy” given the size of Dia's supermarket network in the country, the document added.

It cited a police report alleging that Fridman acted in a “coordinated and concerted way” through a network of “criminal associates… to create a situation of conflict… and lack of liquidity in the short term” so as to lower Dia's price and buy the firm.   

In a statement, LetterOne called these allegations “totally false and defamatory”.

“The reality is Dia suffered from mismanagement and accounting irregularities were discovered, which negatively affected all shareholders, including LetterOne,” it added.

LetterOne said it was “committed” to investing 1.6 billion euros to protect jobs, suppliers and keep stores open.

Through LetterOne, Fridman also controls interests in telecoms, banking, oil and healthcare.   

The tycoon, who is reportedly close to the Kremlin and was listed by Forbes this year as London's richest resident, is also one of the founders of Alfa Bank, Russia's largest privately-held lender.

READ MORE: From Russia with love: Tycoon buys out ailing Spanish supermarket

SHOW COMMENTS