Archive for August 5th, 2013

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Pick “n” Mix – Russian retaliation at Ukrainian EU plans

August 5, 2013

Sometimes I get questions from readers relating to issues I fail to mention – which is rather nice as it shows that some people actually read this blog and are aware of what I have – or have not – written about.

I have been asked why I have not mentioned the recent Russian ban on Roshen chocolate – one of Ukraine’s biggest confectionery producers, owned by billionaire Petro Poroshenko.  Well the answer to that is almost everybody else has written about it, rightly citing it as yet another veiled warning shot across Ukrainian bows as the Vilnius Summit nears.

Should Ukraine and th EU sign the Association Agreement, whilst Russia may not yet have lost the geopolitical war for Ukraine, it will certainly have suffered a significant defeat per this particular battle.

That however, is about as far as most media commentary goes.

When it comes to why Roshen, the official reasons, Dr Gennady Onishchenko, Russia’s Chief of Sanitation is quoted as stating “Identified irregularities give us reason to raise the issue of banning the imports of all products of this company.   Instructions have been given to customs bodies to ban the importation of confectionery products of Roshen company into this country.   The quality and safety requirements were violated.  There are reasons to speak of systemic violations of this country’s legislation on the protection of consumers’ rights.  The service has recently been increasingly concerned over the quality of confectionery products coming from Ukraine.  In the first place, questions are raised by the products of Roshen.

Naturally that is complete nonsense, just as recent Russian bans on milk and cheese – subsequently lifted – were nonsense too.

But why Roshen?

Poroshenko is certainly no ally of the current government, so is hurting his business going to cause any great concern  to the Party Regions elite and cause them to change course away from the EU?  Prima facie, of course not – and yet not all is as it seems.

What matters here is that Poroshenko is a very, very vocal advocate of Ukraine signing the Association Agreement and DCFTA with the EU – and people listen to him.

The Russian message here is quite simple – Tone down the pro-EU rhetoric and your confectionery will suddenly meet the required standards once again.  For those other vocally pro-EU business persons of public notoriety and influence, should you also fail to tone down your pro-EU rhetoric, what has happened to Poroshenko is very likely to happen to you also – soon.  End of message.

Naturally, should Ukraine and the EU sign the agreement in November, Russian vengeance via such methods is very likely to follow this tactic – repeatedly – and across all business sectors.  A pick “n” mix scattering of temporary but possibly prolonged back-door sanctions.

The question is therefore whether Ukraine is prepared cope with that inevitable consequence?

The Vilnius Summit, whether it leads to a signed agreement or not, is no panacea for Ukraine.  When it comes to the meeting in Lithuania, some Ukrainian thought should be focusing on what happens “the morning after the night before”.

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