President may gain authority to suspend debt payment to states imposed sanctions on Russia
MOSCOW, April 14 (RAPSI) - Parliament member Vyacheslav Tetekin (Communist Party) has submitted a bill to the State Duma that would grant the President with authority to suspend international agreements with foreign states and international organizations that have imposed sanctions on Russia, according to the lower house’s online database.
The bill covers, among other things, international agreements on external obligations. If passed, the legislation would take effect on June 1, 2015.
Several countries and international organizations have imposed sanctions on Russia that effect its national interests. Tetekin considers US and EU bans on access to long-term and medium-term loans for Russian companies and banks as the most critical element. Many loan agreements, he recalls, contain special terms, covenants, that “in case of extreme decline of the lendee’s and/or its country of jurisdiction’s (i.e., Russia’s) financial status, the creditor can demand repayment of the entire debt.”
Tetekin is concerned that “this is what will happen or has already happened” with a number of Russian banks and companies. He assumes that over 2016, “all of our reserves might be depleted due to faster capital drain and foreign debt costs.” Subsequently, the lawmaker believes, global creditors will take over ownership of our banks and companies due to outstanding debt.
Western sanctions include embargo on dual use goods and complex technology, which “is a serious violation of international law and requires response measures,” Tetekin says. He believes it is fair to suspend agreements with the states and organizations involved in the sanctions.