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Sale of the fleet of the Murmansk Shipping Company declared invalid

July 12 2022

The Thirteenth Arbitration Court of Appeal upheld the Arbitration Court of the Murmansk Region, which invalidated the auction of six ships and real estate of Murmansk Shipping Company JSC (declared bankrupt).

The ruling of the court of first instance was issued on April 22 following the consideration of the complaint of the Federal Tax Service of Russia.

As the court found, six vessels and MSC real estate were sold at auction in November 2021. The only bidder was Cassiopeia LLC (Moscow), founded less than two months before the auction. The contract was supposed to be concluded at a starting price of 1.771 billion rubles. Previously, the provision on the procedure, terms and conditions for the sale of MSC property was approved by the creditor, Resheniye LLC. At the same time, the creditor and the buyer of the collateral property turned out to be affiliated persons, since they are controlled by Farisia limited (Cyprus). The ultimate beneficiary is a citizen of the Russian Federation Alexei Bogachev (owner of Sistema Bank).

Subsequently, the Arbitration Court of the Murmansk Region, at the request of the Federal Tax Service, prohibited the conclusion of a sales contract with Cassiopeia LLC.

The court found that the procedure for conducting auctions of MSC property included in the register of strategic organizations was violated. As a result, the auction was declared invalid. In addition, the arbitration recognized as illegal the inaction of the bankruptcy trustee of the MSC in terms of failure to take measures to appeal the provision on the sale of the debtor’s collateral property. 

As reported, two ro-ro vessels Kapitan Danilkin and Yury Arshenevsky, bulk carrier Grumant, icebreaker Vladimir Ignatyuk, oil tanker Kotlas and the passenger ship Klavdiya Yelanskaya were put up for auction as part of one lot worth 1 billion 771 million rubles in October 2021. The same lot included the Moryak hotel, a building in Portovy proezd with indoor and outdoor parking in Murmansk, premises in a building in Moscow, several land plots and the right to long-term land lease.

Previously, the lot also included the building of the MSP Museum in the center of Murmansk. However, Legal Space LLC, the organizer of the auction discovered that the building had the status of an object of cultural heritage of the peoples of the Russian Federation and excluded it from the lot.

The monitoring procedure for MSC was introduced in March 2020, for bankruptcy proceedings – in October 2020. This procedure has been extended to 6 October 2022. 

The ICR, with regard to the beneficiary of the MSC, Nikolay Kulikov, is investigating criminal cases under part 2 of article 201 of the Criminal Code of the Russian Federation (abuse of authority that entailed grave consequences) and part 4 of article 159 of the Criminal Code of the Russian Federation (fraud committed on an especially large scale). During searches in September 2019, documents related to the activities of offshore companies, as well as expensive art objects, were seized. From the materials of the Murmansk Regional Court it follows that the amount of damage by four imputed episodes is about 1.27 billion rubles.

MSC, which provided the bulk of Russian-flagged cargo transportation in the Russian sector of the Arctic, began to experience financial difficulties in 2018.


Expert round table “Transport and logistics system of the Far East of the Russian Federation in the realities of 2022: problems and development tasks”

On July 13, an expert round table “Transport and logistics system of the Far East of the Russian Federation in the realities of 2022: problems and development tasks” was held at the Maritime State University. The round table was organized by the Science and Education Center for Marine Transport and Spatial Logistics and Editorial Board of the “Asia-Pacific Journal of Marine Science & Education”. It was attended by leading scholars and professors of MSUN, FEFU, FEMRI, FEB RAS and representatives of the logistics and tourism businesses.

A welcoming address to the participants of the round table was made by Assistant of MSUN Rector for Research Mikhail Kholosha and coordinator of the transport section of the UN Development Program “Greater Tumangan Initiative” (GTI) Sergey Khidirov. This was followed by eight presentations by experts in various fields.

The dynamics of global events has recently accelerated sharply. This was initiated by the COVID-19, or rather, by not always adequate and coordinated actions of international organizations and individual states to fight the pandemic. The economy is more inertial than politics, and the negative effects of endless lockdowns and quarantines have resulted in a global logistical crisis, disruption of supply chains, which destabilized the world economy, caused a sharp increase in energy prices, a failure in the supply of electronic chips, and much more. Economic crisis, in turn, exacerbated security concerns in a number of regions of the world, resulted in the growth of extremism, terrorism and violence (for example, the unprecedented assassination of former Prime Minister Shinzo Abe in Japan), the bankruptcy of entire states (Sri Lanka). Among these trends, the campaign of unprecedented anti-Russian sanctions by the West stands out, which, instead of resolving the conflict situation around Ukraine, lead to an aggravation of the energy crisis and, possibly, to the development of an even more dangerous global food crisis.

The participants of the round table discussed geopolitical challenges and problems of regional security not for the sake of abstract theorizing. In today’s world, everything is interconnected, and a crisis in Europe could ignite dormant hotbeds of conflict in East Asia, where the main centers of world industrial production are located. One does not even want to think about the civilizational consequences of such a scenario.

At the same time experts believe that the situation in our pragmatic and rational region remains stable so far. Despite Japan and South Korea formally joining anti-Russian sanctions, their businesses, which are interested in working with Russian partners, are looking for workarounds and continue cooperation. The prospects of the DPRK coming out of self-isolation and launching mutually beneficial transport and economic projects with its participation have been identified. The volumes of container traffic between the ports of the Russian Far East, India and the ASEAN countries are growing. The participants of the GTI program confirmed their intention to continue joint work on the development of the transport system in Northeast Asia. Therefore, the skeptics who claim that only China is able to save the Russian economy are wrong. In fact, there is no need to “save” something that feels good enough on its own.

During the round table discussions, specific positive examples of creating new logistics routes, real import substitution in the field of transport and port activities were mentioned.

At the same time, experts stated, the reorientation of the Russian transport and logistics system from the Western to the Eastern direction is a very difficult task. It cannot be solved by financial injections alone. We will be overcoming the consequences of the mistakes of the past “well-fed” years for a long time to come, in particular, the dominant position of coal exporters in the transportation market of the Eastern Railway Range and in the seaports of the Far East. At the same time the grain export terminal, which is so much needed today, was never built. It should be noted that in recent months, Russian logisticians have been able to create several cross-border routes for the transportation of grain to NEA, including inland waterways, however, a task of building specialized offshore grain terminal still remains.

Based on the results of the round table, a special thematic issue of the “Asia-Pacific Journal of Marine Science & Education” will be prepared, and, as the participants suggested, practical recommendations will be formulated for improving transport and logistics system in the Russian Far East. The practice of holding scientific and practical events on this topic will be continued this fall, probably in an expanded format.

Science and Education Center for Marine Transport and Spatial Logistics

Flag raised on the new fishing vessels

July 9 2022

On July 8, the ceremony of raising the Russian flag on the new fishing vessels took place. The vessels were built at domestic shipyards under the program for upgrading the production capacities of the fishery complex with government support.

Russian shipyards have not built fishing and crab vessels for almost 40 years. However they have received a massive influx of orders since 2016 against the background of the transition to the auction principle of quota distribution in the fishing industry. As part of the reform, market participants are required to build new vessels in the Russian Federation in order to receive part of the bioresources quotas. 

The largest portfolio of orders was collected by the enterprises of the North-West – Severnaya, Admiralty, and Vyborg shipyards, Kaliningrad Yantar shipbuilding plant and Pella Leningrad Shipbuilding Plant. Far Eastern enterprises also received orders. In particular, the construction of a series of 10 trawlers is being carried out at JSC Admiralty Shipyards, another ten vessels are being built at Severnaya shipyard.

42 vessels out of 97 under construction in Russia for the domestic fishery complex (58 fishing vessels and 39 crab vessels) are being built at the shipyards of the United Shipbuilding Corporation, the press service of the Federal Agency for Fishery reported in early May. 


India and Iran Will Use a Short Transport Corridor to Russia

July 6, 2022

Indian Foreign Minister Vinay Kvatra had a telephone conversation with Iranian Deputy Minister for Political Affairs Ali Bagheri Kani. The conversation was the latest in a series of high-level talks to bring a shorter, sanctions-free route between Russia and India into operation. At the same time, more than a dozen countries of Central Asia and the Caucasus could use this corridor, the Indian newspaper The Tribune reports on its website.

The parties discussed various aspects of bilateral relations, including the successful development in the Chabahar port, as well as international and regional issues, including Afghanistan.

The telephone conversation came two weeks after the Iranian state shipping company announced that it had successfully completed the first transportation of transit cargo from Russia to India via the International North-South Transport Corridor (INSTC). India is pushing for the Iranian port of Chabahar to be included in the INSTC.

Russian President Vladimir Putin, speaking about the importance of the INSTC corridor, said that Moscow would pay more attention to it, as it could help turn the Caspian Basin into an energy and logistics center.

The newspaper draws attention to the fact that 18+ countries attracted to the INSTC route have never been active supporters of the unilateral sanctions periodically announced by the West.

In June, Iranian Foreign Minister Hossein Amir-Abdollahian visited India and held regional partnership talks that reviewed the progress made at the “Shahid Behesti” Terminal in Chabahar, which will provide sea access for Afghanistan and become a commercial transit hub for the region, including Central Asia.

Notably, a few days later, India abstained from voting against Iran at a board meeting of the International Atomic Energy Agency.

For example, last month a test shipment of 41 tons of laminated wood sheets was sent from St. Petersburg to the Russian port of Astrakhan. From Astrakhan, the cargo was transported to the Iranian Caspian port of Anzali. Then it was taken by road through Iran to Bandar Abbas, from where the cargo was sent to Indian Mumbai. The delivery took 24 days and will probably get faster when the construction of the Trans-Iranian railway is completed.

Usually, cargo from South Asia goes through the Suez Canal to the ports of Rotterdam (Netherlands), Antwerp (Belgium), Piraeus (Greece) and Valencia (Spain). All these seaports are subject to unilateral sanctions imposed by the West, the Indian newspaper notes.


Roundtable on Northeast Asian security and cooperation convened

Asia-Pacific Journal of Marine Science&Education convened roundtable on Northeast Asian security and cooperation on May 5. The roundtable brought together scholars from ADM Nevelskoy Maritime State University (MSUN), Far Eastern Federal University (FEFU), Far Eastern branch of the Russian Academy of Sciences (FEB RAS) and KMI (Korean Maritime Institute). Participants had many questions to discuss, given the global shifts that the region and world have experienced in recent months. The pandemic and the ongoing rivalry between the United States and China have been exacerbated by major changes on the Korean Peninsula, the Ukrainian crisis, open confrontation between the collective West and Russia, and new massive quarantine measures in China that have further aggravated the difficult situation in international logistics.

The Korean Peninsula has traditionally become one of the central topics of discussion. Since the beginning of 2022, several significant events have taken place there. North Korea has put an end to its voluntary moratorium on long-range missile launches. Since January, more than 10 missile test launches have been carried out, including at least three tests of intermediate and intercontinental missiles.

On April 25, a parade was held in Pyongyang to mark the anniversary of the Korean People’s Army. The parade not only demonstrated the country’s progress in nuclear and missile sphere, but also confirmed the obvious failure of the tough international sanctions imposed against the DPRK. Strategic weapons systems similar to those used by the world’s leading nuclear powers, including missiles with a hypersonic warhead, were demonstrated. Increased activity at the Punggye-ri nuclear test site, Sinpo South Shipyard, and at Yongbyon Nuclear Scientific Research Center means that the DPRK can test both SLBMs and low-yield nuclear warheads for its tactical systems, and launch military satellites into orbit.

All this is happening against the backdrop of the transfer of power in ROK to the new president Yoon Seok-youl. Already during the election campaign he voiced his conservative position regarding relations with the DPRK and advocated more intensive cooperation with the United States and Japan. Particularly, he proposed redeployment of U.S. nuclear bombers and submarines to the Korean peninsula as well as resumption of joint military drills with the United States that had been perceived as a threat by the DPRK. All this does not contribute to the normalization of the situation around the Korean Peninsula and in Northeast Asia.

The situation in the regional and global economy is probably even more pessimistic. Participants noted that the economy was objectively more inertial compared to politics, like wind and waves: a squally wind came up and subsided, but the waves caused by that wind still sink the ships and wash away the coast… International trade, still suffering from supply chain disruptions and the pandemic-driven global downturn, is currently experiencing blow after blow. The events around Ukraine have become a catalyst for the process of redistribution of the global logistics market, and the new lockdowns in China, striking in their scale, have finally unbalanced the system that had been built for decades. So, in April-May, more than 200 million people were simultaneously in full quarantine in China; 344 large merchant ships were waiting off Shanghai as of May 3. China’s “zero-tolerance” policy at a time when the rest of the world has largely forgotten about the pandemic cannot but raise questions about its true goals. At the end of discussion, the participants agreed that contacts between scholars and researchers from the NEA countries should continue regardless of the current political situation, because too much is at stake. It can be destroyed very quickly, but restoration will be long, painful and costly. Our region has long surpassed Europe in terms of economic indicators. Therefore, at least, we should not consider the West a “beacon” of politics, morality and culture and blindly accept its attitudes if they lead to real damage to economy and standard of living of the population of the NEA countries. And as practical steps, in particular, it was proposed to shift the focus to the development of ties between small and medium-sized businesses and the implementation of new projects, including in the field of tourism, environmentally friendly fuel, and agriculture.

Vladivostok Seaport Optimistic with Container Turnover in 2022

April 13 2022   

After the departure of foreign companies, the number of FESCO ship calls increased

PJSC “Vladivostok Commercial Sea Port” (VMTP), part of the FESCO Transportation Group plans to process 757 thousand TEU in 2022, said Mrs. Elena Kazarina, Director of VMTP Commercial Department. According to her, in the I quarter of 2022, the port container turnover grew by 10%.

“We plan to handle the same volume of cargo in TEU as in 2021 (757 thousand TEU – ed. note), there is a drawdown for a certain period of time, but by the end of the year it can be made up. The processing of the ships in the port has increased,” added Mrs. Kazarina.

The total cargo turnover of VMTP in 2021 increased by 16% (in tons) compared to the level of 2020: cargo transshipment amounted to 13.3 million tons, container turnover – 757 thousand TEU (+13%).

PJSC “Far Eastern Shipping Company” is the parent company of the FESCO group, a private transport and logistics company in Russia with assets in the field of port, railway and integrated logistics business. The Group owns VMTP, the railway operator “Transgarant”, and a 50% stake in the fitting platform operator “Russkaya Troika” (a joint venture with “Russian Railways”). FESCO manages about 36 thousand containers. The group’s fleet includes 20 transport vessels.

The main indirect shareholders of FESCO are Mr. Andrey Severilov – 23.8% of shares, Mr. Mikhail Rabinovich – 26.5%, Mr. Ziyavudin Magomedov – 32.5%. About 17% of the shares are owned by other minor shareholders or are in free float.


Logistics companies have found a way to circumvent EU sanctions

April 12 2022

The situation with the introduction of the fifth package of sanctions by the European Union worried logistics companies involved in import-export operations, but the situation is not too catastrophic, since the share of Russian and Belarusian carriers in the market for transportation from Russia to Europe and back was about 30%. Alexei Misailov, Business Development Director of “FM Logistic” in Russia, announced this on April 12 to REGNUM news agency. At the same time, according to him, even this share played a significant role, primarily in export shipments, and now many companies are looking for alternative options for maintaining existing routes.

“Currently, the use of transit countries (for example, Turkey, which, however, is longer and more expensive), is being considered, but the optimal solution seems to be one that would allow changing tractors at the border of Russia, Belarus and Europe. Legislatively, it is still possible and this measure will help to avoid a crisis in road freight traffic between Russia and the European Union,” the expert explained.

According to his estimates, it will take about two weeks to establish such seamless solutions between European, Russian and Belarusian carriers. In this case, the increase in delivery time will not exceed more than one day.

“Against the background of many days (4-5 days) of downtime at the borders awaiting inspection, this looks more than a compromise option. As for the cost of transportation, it can grow by 300-400 euros due to the use of border terminals for re-coupling trailers to new tractors,” Misailov added.

Recall that the EU stopped the passage of vehicles registered in Russia and Belarus from April 8.


Sakhalin plans to build a shipyard in 2022

April 7 2022
The passenger and fishing fleet of the Sakhalin region will be replenished through the construction of a shipyard by the company, which is expected to start operating in 2022, governor of the Sakhalin Region Valery Limarenko told at the forum “Investment potential of the Kuril Islands” in Moscow.

According to the head of the region, the passenger and transport fleet, taking into account the implementation of shipbuilding projects, is sufficient for the needs of the region. This year the region received two ships that make regular transportation to the Kuril Islands. The construction of two more ships for the transport of trains on the Vanino-Kholmsk line is also expected.

In addition, the head of the Sakhalin Region added, that foundation stone for a shipyard is being laid this year together with Yumateks Rosatom. New shipyard will build tourist and coastal fishing vessels.


ExxonMobil freezes Far East LNG project

April 4 2022
ExxonMobil has frozen the Far Eastern LNG project in the port of De-Kastri, Governor of the Khabarovsk Territory Mikhail Degtyarev said on the air of the Komsomolskaya Pravda radio station.
As reported earlier, Exxon Neftegaz Limited (ENL, subsidiary of ExxonMobil, operator of the Sakhalin-1 project) launched a tender campaign in February 2022 to select contractors for the Far East LNG project. The company announced the search for contractors to assess the quality of building materials, as well as the search for manufacturers of reinforced concrete products.
The construction of an LNG plant with a capacity of 6.2 million tons per year in the area of the village of De-Kastri in the Khabarovsk Territory is planned to monetize gas reserves on the Sakhalin shelf as part of the Sakhalin-1 consortium.
The cost of the Far East LNG project, according to the Ministry of Energy, is estimated at $4.2 billion. The launch is scheduled for 2027-2028.
On March 2, ExxonMobil announced its withdrawal from the Sakhalin-1 project, refusing to invest in Russia “in response to recent events.” The Sakhalin-1 project involves ExxonMobil – with a share of 30%, SODECO (Japan) – 30%, Rosneft – 20%, ONGC (India) – 20%. The total reserves of the project fields are estimated at 307 million tons of oil and 485 billion cubic meters of natural gas.

Extraordinary Antarctica heatwave, 70 degrees above normal, would likely set a world record

By Caitlin Kaiser and Angela Fritz, CNN

March 28 2022

Scientists were shocked this month when a research station in Antarctica reported extraordinarily warm weather.

The temperature at Concordia Research station atop Dome C on the Antarctic Plateau — typically known as the coldest place on Earth — surged to an astounding 11.3 degrees Fahrenheit (minus-11.5 Celsius) on March 18.

The normal high temperature for the day is around minus-56 Fahrenheit (minus-49 Celsius), which puts the March 18 reading at close to 70 degrees Fahrenheit (around 38 Celsius) warmer than normal.

If the World Meteorological Organization actually tracked this particular metric, scientists say it would likely set a world record.

While 11 degrees Fahrenheit is not warm by any stretch, it is unheard of for this part of Antarctica, and 70 degrees above average is similarly astounding.

It would be as if the high temperature in Washington, DC, on Monday — normally 61 degrees — was an unthinkable 131 degrees. In reality, the warmest it’s ever been there on March 28 was 85 degrees.

The coldest place on Earth?

Concordia’s temperature was a record for the highest temperature not only in the month of March, but an “absolute record” for any month, according to Etienne Kapikian, a meteorologist at Meteo-France, the French meteorology service.

And it wasn’t the only location to set record high temperatures that day.

Vostok, the Russian research base famous for logging the coldest temperature in the world, reported a high temperature of zero degrees Fahrenheit — 63 degrees warmer than the average for the day. The temperature shattered the station’s previous record for March by almost 27 degrees.

With more than 60 years of data, this record “is unheard of in the history of climatology,” according to a Meteo-France analysis.

The extreme warmth in Antarctica raises concerns about long-term effects on the ice, particularly if it persists. An ice shelf in Antarctica nearly the size of Los Angeles disintegrated within days of extraordinary warmth on the continent.

Commentary. One gets the impression that humanity today prefers to deal with momentary problems – the rights of the LGBT community, endless sanctions, “pandemics” (“we will all die!”), “cold” and “hot” conflicts, etc. The fight against global climate change has also become, in fact, another field of economic and political confrontation, in which technologically advanced countries seek to further increase their lead and bind the resources of third world economies to themselves, making them feel “guilty” for environmental pollution.

In fact, we do not really know how our small planet works, what happens in its core, on the ocean floor and in the atmosphere. Such anomalies as described in the article are quite possibly a reminder to all of us from the Creator: stop doing stupid things, move forward, develop knowledge.Otherwise, it will be too late…