/ By tjchinafreight ivy / Shipping

A Russian shipyard closes due to sanctions

View of ships and cranes in the Kaliningrad river port, Russia.
View of ships and cranes in the Kaliningrad river port, Russia.

After the start of the Russian-Ukrainian conflict, Russia was subject to severe international sanctions, and the Ukrainian Defense Intelligence Service claimed to have obtained an internal document of the Russian Ministry of Defense, which showed that the JSC Vostochnaya Verf shipyard in Vladivostok, in the Far East, Experiencing financial difficulties. Due to factors such as lack of raw materials, production will be completely suspended from April this year, and employees will be fired.

It is understood that the Oriental Wilf Shipyard was founded in 1952. In order to meet the needs of the former Soviet Pacific Fleet and the Far East Frontier Forces, it built small tonnage ships such as minesweepers, which played an important role in the provision of Russian shipping and military equipment. It was changed to a joint-stock company in 1994. From the 1950s to the 2000s, the shipyard built more than 400 vessels for the navy, border guards and fisheries, and exported more than 30 sets to 8 countries in the world (China, Vietnam, Cuba, Indonesia, Ethiopia, Guinea, Iraq, Yemen) military equipment.

Currently, the Vostochnaya Verf shipyard is part of Russia's United Shipbuilding Corporation (USC). Since January 2020, the shipyard has been the sole contractor for the Russian Ministry of Defense's projects in the Far East and is home to the Free Port of Vladivostok (CPV). The shipyard can build ships with a length of 120 meters, a width of 16 meters, a depth of 25 meters and a displacement of 3,500 tons.

The Ukrainian Defense Intelligence Service said that due to financial difficulties and a lack of imported components and raw materials, Russian shipyards have recently encountered difficulties in the construction and maintenance of warships. The bureau specifically pointed to the JSC Vostochnaya Verf shipyard, which it said had to execute orders worth a total of 35 billion rubles, including the construction of 2 oil tankers, 2 small missile boats, 2 mobile terminals, and various types of maintenance vessels.

Another internal document said the Russian shipbuilding system, including equipment such as navigation systems and communication systems, had to be halted due to a lack of foreign raw materials. The deadliest point is that in addition to being unable to buy goods from Europe due to sanctions, Russia is also unable to import substitutes from domestic and Asian countries. In addition, the gunpowder required for naval artillery was discontinued.

Earlier, the U.S. Treasury Department announced that the move would bar Russia's United Shipbuilding Group from entering the U.S. financial system or dealing with U.S. companies, aimed at crippling Russia's ability to build and service warships.

German Chancellor Olaf Schultz said at a joint press conference with British Prime Minister Boris Johnson on April 8 that sanctions on Russia are effective and will profoundly affect all sectors of the Russian economy, leaving it with little competition force. "

/ By tjchinafreight ivy / Shipping

U.S. imposes sanctions on Russian state-owned shipbuilders

The "Bucha Massacre" has become an important turning point in the Russian-Ukrainian crisis. Recently, the United States launched a new round of sanctions against Russia, targeting large strategic state-owned enterprises. Russia's largest state-owned shipbuilding company, United Shipbuilding Corporation (USC), and its executives have become the latest "victims" on the sanctions list.

Washington, April 8. /TASS/. The U.S. government has imposed sanctions on eight board members and 28 subsidiaries of Russia's United Shipbuilding Corporation.

The U.S. Treasury Department describes USC as "the principal Russian state-owned enterprise (SOE) responsible for the development and construction of Russian Navy warships."

The USC officials who were blacklisted were USC Board of Regents Chair Georgy Poltavchenko and CEO Alexey Rakhmanov. Other blacklisted board members include Andrey Lavrishchev, head of the Federal Service for Maritime Affairs and River Transport, Vitaly Markelov, deputy chairman of the Gazprom Management Board, Vladimir Pospelov, board member of the Russian Federal Military-Industrial Council, and deputy minister of industry and trade, Russian Federation Fisheries Minister Oleg Ryazantsev, Federal Fisheries Director Ilya Shestakov and JSC Rosneft Vice President Andrey Shishkin.

According to the statement, the 28 subsidiaries included in the sanctions list include:

1. JSC 33 shipyard, specializing in warship maintenance;
2. JSC Admiralty Shipyards, which builds warships and submarines;
3. The Baltic Shipyard, which builds naval ships;
4. Vyborg Shipyard, participating in the construction of icebreakers;
5. Shipbuilding Plant Severnaya Verf, which builds guided missile cruisers, anti-submarine and torpedo boats, and destroyers;
6. Sredne-Nevsky Shipyard, specializing in the construction of warships;
7. Severnoe Design Bureau, involved in projects related to frigates and destroyers;
8. Nevskoe Design Bureau, which designs warships, including aircraft carriers;
9. Almaz Central Marine Design Bureau, which designs fast missiles and patrol ships;
10. Krasnoye Sormovo Shipyard, which produces military ships, including submarines;
11. Central Design Bureau for Marine Engineering Rubin, which designs submarines and conducts other Russian defense activities;
12. Research Design and Technological Bureau Onega, which provides engineering and design support for Russian Navy submarines;
13. St. Petersburg’s Sea Bureau of Mechanical Engineering Malachite, designed submarines;
14. 10 Ordena Trudovogo Krasnogo Znameni Dockyard, participating in ship repair activities;
15. Baltic Shipbuilding Plant Yantar, engaged in the construction of military ships;
16. Amursky Shipbuilding Plant, engaged in submarine construction and manufacture of weapons and defense products;
17. Ship Repair Center Zvezdochka, engaged in submarine repair and other military activities;
18. Proletarsky Zavod, participated in the completion of strategic orders of the Russian government and the production of submarine products;
19. Khabarovsk Shipbuilding Yard, involved in the construction of ships for the Russian Navy and the Federal Security Service (FSB) of the Russian Federation;
20. Aysberg Central Design Building, engaged in ship design;
21. Kaspiyskaya Energiya Administration Office, responsible for completing strategic work related to USC and the oil and gas industry;
22. Northern Production Association Arktika, engaged in production activities related to military ships;
23. Northern Machine-Building Enterprise, which builds submarines for the Russian Navy;
24. Svetlovsky Enterprise ERA, for activities related to ship automation;
25. Shipbuilding Plant Lotos, a Russian military-industrial complex shipyard;
26. Kronshtadtskyy Morskoy Factory Minoborony Rossii, for the Russian Ministry of Defense;
27. Sudoexport, representing USC to enter the world shipbuilding market;
28. Design Office for Shipbuilding Vympel, which designs special-purpose ships for the Russian Navy and other projects for the Russian Ministry of Defense.

Companies blacklisted by the United States face asset freezes in the United States. U.S. citizens and corporations are prohibited from conducting any business activities with these entities.

On February 24, Russian President Vladimir Putin said in an early morning televised speech that he had launched a special military operation in Ukraine in response to requests from the leaders of the Donbas republics for help. He stressed that Moscow has no intention of occupying Ukrainian territory, and the leader stressed that the sole purpose of the operation was to demilitarize and demilitarize Ukraine.

It is understood that the United Shipbuilding Corporation (USC) is the largest shipbuilding group in Russia. According to the Russian Presidential Decree on March 21, 2007 signed by Putin, the United Shipbuilding Corporation was officially established, and the registration was completed in mid-November 2007. , headquartered in St. Petersburg, the Russian government holds 100% of the company's shares, the group has 50 subsidiaries such as shipyards, ship repair yards and design bureaus.

The purpose of establishing the USC by the Russian government is to consolidate and develop the Russian defense industry and safeguard the national maritime security and defense system. While developing, producing, constructing, repairing and maintaining warship and submarine projects, vigorously develop the civilian shipbuilding industry and develop the world maritime market. The USC is completely controlled by the government, and its 11 members of the board of directors are elected by the Government of the Russian Federation to exercise power on behalf of the state for a 12-month term.

Western countries have imposed new sanctions on Russia due to the Russian-Ukrainian conflict. According to the Russian President's Press Secretary Peskov, the Western sanctions are very strong, but Russia is prepared for this in advance. He added that this requires analysis and coordination across ministries to develop a response that is in Russia's interests.

Russian President Vladimir Putin said the policy of containing and weakening Russia is a long-term strategy of the West, and sanctions have dealt a heavy blow to economies around the world. He pointed out that the main goal of the West is to make the lives of millions worse, and by freezing Russia's foreign exchange reserves, the United States and the European Union have effectively declared a default on Russian debt. He added that current events would end the West's global dominance of politics and economics.
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/ By tjchinafreight ivy / International

Fifth round of EU sanctions on Russia

At the same time, the export of semiconductors, automobiles and transport equipment to Russia is banned, with a total export value of about 10 billion euros per year.
On April 5, local time, the European Commission issued a statement on its official website saying that the chairman of the European Commission, Ursula von der Leyen, proposed to impose a fifth round of sanctions on Russia.

According to the statement, the fifth round of EU sanctions against Russia includes the following six aspects:

1. An annual import ban worth 4 billion euros will be imposed on coal from Russia. That would cut into another important source of income for Russia.

2. A complete ban on transactions by four major Russian banks, including VTB, Russia’s second largest bank. These four banks, we are now completely cut off from the market, account for 23% of the Russian banking market share. This will further weaken Russia's financial system.

3. Prohibit Russian ships and Aeroflot ships from entering EU ports. Certain exemptions will cover necessities such as agricultural and food products, humanitarian aid, and energy. In addition, we will propose a ban on road transport operators in Russia and Belarus. The ban would greatly limit the options for Russian industry to obtain critical commodities.

4. Further export ban worth 10 billion euros in vulnerable regions of Russia. This includes, for example, quantum computers and advanced semiconductors, but also sensitive machinery and transport equipment.

5. A specific new import ban, worth 5.5 billion euros, to cut off the flow of capital to Russia and its oligarchs, from wood to cement, from seafood to wine.

6. Some very targeted measures have been taken, such as the EU's blanket ban on Russian companies from participating in public procurement in member states, or the exclusion of all financial support for Russian public institutions, both European and national. Because European taxes should not go to Russia in any form.

"We are also working on other sanctions, including sanctions on oil imports from Russia," added Von der Leyen, explaining that a fifth round of sanctions would further put financial pressure on Russia.

As of now, the effective date of the fifth round of sanctions has not been announced. According to EU rules, the European Commission's proposal must be unanimously agreed by the 27 member states before it can come into effect.

German Foreign Minister Annalena Baerbock said recently that Germany, as a member of the European Union, has agreed to completely end its dependence on Russia's fossil fuels, starting with coal, followed by oil and gas.

However, the Confederation of German Industry has previously said that giving up imports of natural gas and oil from Russia in the short term will cause huge damage to German industrial companies.

The president of the association, Ruswarm, said that the energy embargo will harm Germany and the European Union more than it will affect Russia. German industry, supply chains and security of supply will all face "extremely serious" consequences.

He further said: "Energy imports from Russia cannot be replaced overnight. One-third of the oil and more than half of the natural gas that Germany uses now comes from Russia."

It is understood that any sanctions on coal will seriously affect the trade volume of bulk carriers as the energy crisis engulfs Europe. At the same time, Europe relies heavily on Russia's oil and gas resources in the fields of transportation and energy.

Relevant data show that Russia is an important importer of EU natural gas, oil and coal. In 2021, 40% of the EU's natural gas imports, 25% of its oil imports and 45% of its coal consumption will come from Russia.