Tuesday, June 24, 2014

Russia: Ruling Caucas Proposes Bill That Would Ban Usage of US Consulting Services by State

According to San Francisco-based http://www.allvoices.com, Yevgenly Fyodorov of the ruling United Russia caucus is drafting a bill that would ban Russian state-owned enterprises from using the services of US consulting firms or their subsidiaries.

Fyodorov claims that the provisions would protect Russian enterprises from direct foreign influence and manipulation. 

Fyodorov had earlier suggested that US auditing firms should be banned from auditing state-owned corporations. 

In an interview with the newspaper, Izvestia, Fyodorov said:

“The Russian economy is only growing 0.5% a year because foreign consultants are lobbying on behalf of their own nations. A few days ago we discussed the Central Bank’s report and the deputy chairman directly stated that the mass bankruptcy of Russian banks were a direct result of foreign consultations.”

Fyodorov's position is very similar to that of the Chinese who last month demanded that Chinese state-owned enterprises cut any ties with US consulting firms. 

The fear is that the firms could be spying for the US government. Fyodorov's proposal emerged shortly after the US charged five Chinese military officers with cyber-espionage.  

COMMENT: Enhanced technology aside, Fyodorov's proposal seems to border slightly on paranoia, yet it is useful to know that such a proposal seems to be undergoing serious consideration in Russia.

Many of Russia's intentions need to be corroborated in order to develop a counter strategy. 

Russia is also forging ahead with development of its own microchip. Russia will soon be ready to replace the technology used in foreign payment systems such as Visa and MasterCard with its own chip created for use in Sberbank's Universal Electronic Card. 

The chip is being developed by Payment Technologies, owned by Igor Godowsky, who has been developing Russian payment cards since 1994. 

Prime minister Medvedev said that using Russian technology would help counter electronic data security. 

In a related development, Russia will present a complaint to the World Trade Organization concerning recent Western economic sanctions. PM Medvedev said that the sanctions were politically motivated and may violate WTO rules.

A World Bank report notes that both Russia and the EU will suffer if sanctions were to be extended, with energy markets being adversely impacted the most. 

If Russia loses its EU energy market this could potentially slash Russian revenue by a staggering 10% of gdp.