Plus Pinchuk and Martynenko. The Kremlin is preparing a hook not only for Akhmetov

During autumn of 2018, Moscow may approve the black list of Ukrainian companies and individuals, that will be subject to restrictive measures. The reduction of the negative impact on the Russian economy in addition to already imposed sanctions against Russia is the official reason for the appearance of such a list. In fact, the Damocles sword of sanctions will be the most powerful instrument of influence on Ukrainian oligarchs, whose business depends on Russia. And by a long stretch of the imagination the owner of the Kremlin can seriously affect the economy of Ukraine. The only problem is that the blow to most of the possible pain points of the Ukrainian economy can be no less painful for Russia itself.

How can Russia respond?

Sources in the Russian government, to which the Russian media refer, say that the actions of the Russian Federation are allegedly a mirror response to similar steps made by Ukraine. Today 1748 individuals and 756 legal entities are included in the sanctions list of Kyiv. Restrictive measures established a limitation of air communication between the two countries, the operation of the Russian banks and payment systems, social networks and television channels, certain IT companies in Ukraine and some non-entry persons involved in the Russian aggression against Ukraine. In addition, Kyiv refused to purchase the Russian gas.

The palette of the Russian sanctions against Ukraine can be much more diverse. On the one hand, the recently adopted in the Russian Federation law "About measures to influence unfriendly actions of the US and other foreign countries" stipulates not too large package of possible steps. For example, the cooperation of the Russian companies with unfriendly foreign states and organizations in various sectors may be terminated or suspended and a limit or restriction of products and raw materials import from such countries can be introduced. A similar ban can be imposed on the export of raw materials from the Russian Federation by organizations that are under the jurisdiction of unfriendly foreign countries. On the other hand, the other sanctions can be imposed by the owner of the Kremlin thanks to a small legislative clause about the possibility of introducing "other measures of influence" in accordance with the President's decision. In fact Putin personally will accept the final decision to "punish or pardon", as it is said in his decree of June 4, according to which the measures of influence against foreign countries and their organizations, officials and citizens will be introduced by the government upon the President's decision.

Fuel is offside

In theory, any sanctions, particularly, are intended to weaken the economy of the enemy state and thus, to force it to make concessions. Following this theory, Russia in the first place would have to limit the supply of the most popular Russian goods to Ukraine.

Nuclear reactors are at the third place in the structure of the Russian imports. Their share accounts for 4.4% of all supplies from Russia according to the results of five months of this year. However, such a decision would hurt the Russian nuclear monopolist in the first instance. After all, Ukraine is still the largest foreign buyer of Rosatom's fuel. Although every year our demand of the Russian supplies is declining steadily. And this damages the income of Rosatom a lot.

Prior to Russia's military aggression, the Ukrainian market accounted for about 25% of Russia's total nuclear fuel exports, and the Russian company valued the annual supply of $ 600 million. Unlike other foreign economic operators, this level was supported even in 2015 ($ 610 million). This accounted for up to half of the export revenue of the Rosatom unit - TVEL Corporation.

However, in 2016 Ukraine decided to diversify its supplies and receive five out of 15 shipments of fuel from the US Westinghouse, which previously accounted for only 7% of Ukraine's nuclear fuel imports. As a result, by the end of 2016 TVEL received only $ 451 million, which is less than 30% of the total revenue.

Already by the end of last year, Westinghouse accounted for 40% of all nuclear fuel shipments to Ukraine. And currently the share of the American company can increase up to 55%. As a result, Rosatom will lose at least $ 300 million. Recently, some Russian experts have not ruled out that Rosatom could sue Energoatom for non- fulfillment of its long-term contracts. In particular, under this contract in the same year 2016, the Russian company was to provide 12 out of 15 operating units of the Ukrainian NPPs. Therefore, it is unlikely that Putin himself will contribute to further decline in income of one of the key companies. Moreover, this step will only accelerate the further expansion of Ukraine's cooperation with Westinghouse.

The introduction of restrictive measures for the supply of petroleum products will be inefficient as well. They amounted up to 20.6% in the structure of the Russian imports to Ukraine in January-May 2018. Last year, one third of all imported diesel fuel and autogas was delivered from Russia. However, if the ban on the import of these goods from Russia is imposed, they will be delivered to Ukraine through other countries, for example, Belarus, which accounts for more than 40% of all fuel supplies to the Ukrainian market now. This, however, can complicate the logistics, and as a result, diesel fuel and autogas can rise in price. But the Russian sanctions will not be able to provoke a deficit of these goods on the Ukrainian market. Moreover, Ukraine can also increase imports of oil products, for example, from Lithuania and Turkmenistan.

Akhmetov will be hooked for coal and metal

The Kremlin can play with the possible introduction of restrictive measures with the help of coal, which accounts for 26% of the total structure of the Russian imports on our market. According to the SFS, for seven months of 2018 Ukraine purchased anthracite coal from Russia for $ 1.1 billion. Russian supplies accounted for 62% of the total amount of imported coal in the country.

Ukraine is gradually reducing the consumption of the Russian anthracite. According to the State External Inform Service, last year the share of the Russian anthracite in our market was 78.6%. However, it is impossible to get rid of this dependence at once. To secure itself against possible threat of the Russian supplies breakdown, Ukraine has already begun to transfer its CHPP from anthracite to a gas group coal. But conversion of all CHPP will take up to a year and half as well as considerable financial investments. While the process is not over, we need a strategic stock of anthracite. An anthracite reserve of 1 million tons should be created according to the governmental plan as to the preparation for the heating season 2018-2019 in Ukraine. Although, as things stand on August 21, coal reserves in Ukraine are lower by 13.6% than last year according to the Ministry of Energy report. Ukraine can provide alternative supplies of the American and South African coal, which is more expensive than the Russian. But if we have to conclude contracts urgently in the conditions of limiting the Russian supplies, the price may increase by another 10-15%.

However, economically, Russia itself is not interested in limiting the supply of coal to Ukraine. This will automatically increase the cost of maintaining the terrorist organizations of Donetsk People's Republic and Luhansk People's Republic, where coal is supplied to Ukraine via Russia now. But the possibility of imposing coal sanctions can be an effective instrument of pressure - by blackmailing the supply cutoff, the Kremlin will try to push Rinat Akhmetov to play in the Russian game before the elections, whose DTEK power holding company is the largest in all areas related to thermal generation. In 2017, the company imported 2.07 million tons of coal, and its affiliated company (the mine management Obukhovskoye, which produces anthracite in the Rostov region of the Russian Federation (Eastern Donbass)) was the largest supplier. In addition, according to BusinessCensor, Akhmetov's Holding has delivered 826,000 tons of coal for Luhansk TPP, which is part of DTEK Vostokenergo, from its mines in Russia. If the Russians suspend export of coal to Ukraine, it will hit both the thermal generation and the metallurgy of our country.

Possible blockade of the Sea of Azov, including the Mariupol port, which is a path for a large volume of export products of Akhmetov's metallurgical enterprises, can be an additional and equally painful argument of the Kremlin in the negotiations with him.

Who will get to Putin's black list?

According to the Russian "Kommersant", the sanctions can affect several hundred individuals and legal entities. Nothing prevents the Kremlin from taking the path of restricting import of the most sensitive types of goods of bilateral trade for Ukraine. The largest proportion of all exports to Russia (14%) is artificial corundum. The largest supplier of this product is Zaporozhye Abrasive Plant, which is part of the influence sphere of Nikolai Martynenko, one of the sponsors of the National Front. Now Zaporozhye products are bought by Zlatoustovskiy Abrasive Plant CJSC and Belgorodskiy Abrasive Plant OJSC. However, these enterprises can be reoriented, for example to Chinese suppliers.

The threat of imposing sanctions can hang over the Interpipe corporation, which is associated with Victor Pinchuk. Pipeline supplies account for 2.6% of all Ukrainian export to Russia. At the same time, Interpipe's products were repeatedly investigated for the anti-dumping in Russia. It is possible that the Russian pipe makers will try to get rid of the competitor - now they are pushing the introduction of restrictive measures against him.

"Kommersant" newspaper, referring to its sources in the Russian government, says that sanctions can primarily affect the Ukrainian fertilizer companies, as the sanctions of Ukraine affected Russian "Fosagro" and "Evrocheem". Although, this step will be illogical. After all, the supplies of the Ukrainian the fertilizers to Russia and the EEU are negligible - about $ 1 million in 2017, while exports from Russia to the Ukraine amounted to 870,000 tons of nitrogen fertilizers for $ 206 million last year, mixed fertilizers - 2 million tons for $ 520 million (level of phosphorus and potassium fertilizers it is extremely insignificant).

However, such information can be quite truthful. After all, most likely, the initial version of the sanctions list will include companies and individuals, who will not suffer any special inconveniences.