© Erik Romanenko/TASS

Top stories from the Russian press on Monday, June 26th, prepared by TASS

Wagner PMC’s failed mutiny and aborted march on Moscow, Brussels’ cautious approach to secondary sanctions on third countries, and the tricky legal consequences of seizing Russian assets in the US. These stories topped Monday’s newspaper headlines across Russia.

Media: Mutiny disarmed: fallout from Wagner PMC’s aborted march on Moscow

An attempted mutiny by the Wagner Private Military Company (PMC) at the end of last week ended just as suddenly as it began: by Sunday night, almost nothing remained to prove it had occurred save for a few broken roads and minor damage to buildings where mutineers were stationed. The volatile situation was settled expeditiously and with minimal losses via talks with the participation of Belarusian President Alexander Lukashenko, who served as mediator in brokering the key truce arrangements, i.e. the Wagner fighters were to return to base and may sign contracts with the Russian Defense Ministry if they so choose, while Wagner founder Evgeny Prigozhin was freed from the threat of criminal prosecution and allowed to depart for Belarus. According to lawmakers in the Russian State Duma, or lower house of parliament, polled by Kommersant, the events of June 23-24 once again demonstrated the need to hasten the enactment of a law regulating the activities of PMCs.

The entire affair represented both a stress test and a test of the maturity of the political system, political scientist Konstantin Kostin, former head of the Russian Presidential Domestic Policy Directorate, told Vedomosti. "All of [the system’s] main elements - political parties, civil society institutions, regional and federal government authorities - were consolidated around the president," he said.

After a certain pause, it will become clear what future awaits Prigozhin, political scientist Mikhail Vinogradov said in a conversation with Vedomosti. The expert noted that, after relocating to Belarus, Prigozhin will cease to be a magnet for "anti-system energy," but the need to explain what went wrong and how will not disappear. A source close to intelligence services noted that, once in Belarus, Prigozhin will be monitored by the local security services and would hardly be able to engage in any kind of political activity. That said, however, his expertise may prove useful for establishing a PMC in Belarus.

Wagner’s march was an unexpected development for the system, but Russian President Vladimir Putin’s address to the nation came as an important signal, political scientist Alexey Makarkin told Vedomosti, making it clear that any form of support for Prigozhin is now absolutely unacceptable. That said, the expert reiterated that the Wagner PMC is also engaged in many off-the-radar-screen activities in other countries.

Vedomosti: Brussels to punish third countries gingerly for skirting anti-Russian sanctions

The European Union is wary of introducing secondary sanctions against individuals from third countries who assist Russia in circumventing the restrictions, an EU diplomatic source told Politico on June 23. According to him, Brussels does not wish to be overzealous in imposing secondary sanctions because too tough a policy could push a number of countries toward closer interaction with China and Russia.

EU legislation provides several options for imposing secondary sanctions, noted Ivan Timofeyev, director general of the Russian International Affairs Council. The amendments introduced as part of the bloc’s 11th package of anti-Russian sanctions stipulate measures against those countries that assist Russia in circumventing restrictions only as "a last resort." That said, there are also grounds for imposing blocking sanctions on individuals who assist Russia in skirting sanctions. The expert added that, to date, no representatives of third countries have been placed on the relevant sanctions list, but the EU does have a mechanism in its arsenal for listing them.

The EU has become a hostage to its own sanctions policy, Sergey Glandin, a partner at the NSP law firm and expert on international law, stated. Brussels’ attempts to block all routes for supplying semiconductors and dual-use or military-use goods to Russia has naturally triggered the emergence of a secondary sanctions mechanism at the legislative level. The amendments contained in the EU’s 11th sanctions package provide for creating a list of countries that have been assisting Russia in circumventing sanctions. According to Glandin, this makes the EU’s position rather shaky. If Brussels decides to include Central Asian countries in this list, this would inevitably serve to sour their attitudes toward the EU. Thus far, this list is blank, but by the very fact of its existence the EU is sending a signal to third countries of the need for stricter controls over legal entities that assist Russia in getting around the sanctions, the expert concluded.

Vedomosti: Potential consequences of seizing Russian property in US under Naftogaz suit

The seizure of Russian assets in the US and other countries as part of executing a court ruling in the lawsuit by Ukraine’s state-owned Naftogaz energy company may lead to retortions, or retaliatory actions against US government or corporate assets that could be taken in Russia, lawyers surveyed by Vedomosti said.

Naftogaz and five more group companies have filed a motion in the US District Court for the District of Columbia to execute a court ruling on the recovery of $5 bln from Russia as compensation for damages and lost property in Crimea, the energy company said on June 23.

Oles Gruzdev, a lawyer with Forward Legal, noted that the court may execute the recovery of property not only against gold currency reserves but also the assets of Russian state companies.

However, such a step as ignoring sovereign state immunity would have serious adverse repercussions related to what are known as retortions, he noted. "The retortions are response restrictions with the following logic: if, for example, the US seizes the property of Russia and Russian companies in the US, then Russia has the right to seize the property of the US [government] and American companies in Russia," Gruzdev explained. According to him, such an approach could be extended to all foreign jurisdictions that theoretically might depart from the principle of sovereign state immunity, i.e. the EU, the UK, Australia, etc.

"It is precisely the issue of retortions that so far has been holding the Western states back from allowing the seizure of Russian assets located on their territory," the lawyer added.

Izvestia: Russian State Duma set to introduce criminal liability for Russophobia

Russian lawmakers plan to introduce criminal liability for manifestations of Russophobia and the State Duma, the lower house of parliament, has already begun seeking legal norms to do so, State Duma Deputy Speaker Irina Yarovaya told Izvestia. According to her, the first results will be presented in the near future. Predominantly, the penalty will be directed against foreign officials imposing this ideology on the citizens of their countries. Additionally, Yarovaya intends to petition the Russian Foreign Ministry to request that it establish offices abroad to render free legal aid to Russian nationals affected by Russophobia. However, lawyers and social activists caution the authorities against potential excesses or redundancies in the legal norms of the Russian Criminal Code.

Anna Lapenko, director of the Studmolodezh foundation for youth and student initiatives, pointed out that Russian students abroad also regularly encounter Russophobia over their cultural, ethnic or religious affiliation. "We think it necessary to legislatively enshrine the notion of Russophobia as actions directed at igniting hatred against an individual or a group of individuals over their cultural, ethnic, religious or other affiliation with Russia, as well as inducing a person to reject their historical, cultural or other ties with Russia, and at discrediting the Russian government, perpetrated publicly in Russia or abroad, including with the use of mass media outlets or information and telecommunication networks, including the Internet," she told Izvestia.

The All-Russia People’s Front also took notice of the situation. Moreover, Vladimir Taranenko, head of the organization’s youth wing, stressed that, currently, this phenomenon is observed not only in the West but also domestically. According to him, there are certain so-called "good Russians," who actively display a hostile attitude toward their own compatriots. They broadcast their hatred on the Internet, spread fake news items and openly display disrespect for our culture and religious and spiritual values, the social activist concluded.

Kommersant: Price tag goes up for Arctic LNG 2 project

Data made available to Kommersant shows that the cost of Novatek’s Arctic LNG 2 project has increased approximately to $25 bln from the initially planned $21.3 bln. Growing expenses were triggered by the switch to using electric drives on the project’s second and third lines and increasing electric power needs. The increased costs will be covered by stockholders’ investments, but probably without the participation of France’s TotalEnergies, which announced that it was halting investments in Russian projects. According to analysts, the increased cost of the Arctic LNG 2 project is not critical because, in terms of costs per unit, the project is still proving to be less expensive than the Yamal LNG project, which is currently in operation.

Independent expert Alexander Sobko said that the growth of the project’s cost is moderate, and is "not unique or critical." For example, a situation where initial estimates were exceeded was typical of many Australian LNG projects. "What’s more important is whether the project remains profitable after rising costs. With Arctic LNG 2, it is sufficient to say that even after the expected growth of investments, the volume of capital costs per power unit is still lower than for the quite successful Yamal LNG [project]," he noted.

That said, with Arctic LNG 2, uncertainty remains due to TotalEnergies’ announcement last year that it was discontinuing its financing of the project, having invested $2.5 bln up to that time, Sobko pointed out. "It is not clear how this collision will be resolved both at the current stage, with the potential need to seek compensation for this financing amid growing general capital costs, and in the future," the expert said. "That is, how TotalEnergies will receive LNG volumes allotted to it if it hasn’t fully financed its obligations," he explained.