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Russian ban on food items from NATO countries and stopping Ukrainian airliners will impact greater than expected

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Russia now strikes back: Russian ban on food items from NATO countries and stopping Ukrainian airliners will impact much greater than expected

Russian ban on food items from NATO countries and stopping Ukrainian airliners will impact much greater than expected By Agha Iqrar Haroon

Russia now strikes back to sanctions imposed on her by European Union and United States.

Russian government by using Federal Law of “On Special Economic Measures” has imposed sanctions to import food items (edibles) from all countries of European Union, Australia, Canada and United States and also bans Ukrainian airlines to use transit facilities for Georgia, Azerbaijan, Armenia and Turkey. Russia is also considering banning transit flights for European and American airlines flying to the Asia-Pacific region. In simple words, Russia announced sanctions on NATO countries on the same day when Secretary General NATO Rasmussen is arriving Kiev to support Ukrainian government for building up its military against Russia. According to Capital Economics Limited, Russia imported a total of $25 billion of products on the banned list last year including $9.5 billion of which came from countries now blacklisted. Moscow has offered Argentina, Brazil, Iran, Israel, Morocco, Paraguay, Turkey, Uruguay and Central Asian states fill the gap for exporting their food items to Russia. 

All sanctions and strict steps are taken by using Federal Law “On special economic measures” of Russia. This was adopted by the State Duma, the Federation Council and was approved and signed by the President of Russia in December 2006. The law aims to create a legal framework for the use of temporary special economic measures in the event of an international emergency situation requiring immediate response to an internationally wrongful act or hostile act of a foreign state that threaten the interests and security of the Russian Federation.

Airlines industry of Ukraine is already fragile and Kiev airport is giving a deserted look as major international airliners have decided to suspend flights to Kiev after MH17 disaster. Malaysia Airlines flight MH17 on July 17 was shot down/crashed over Eastern Ukraine where rebels are fighting with Kiev government after announcing independence from Ukraine through a referendum.

Ukrainian tourism industry will feel much impact of this ban over using Russian air space for transit flights to in Georgia, Azerbaijan, Armenia and Turkey while tourism industries of Georgia, Azerbaijan, Armenia and Turkey will also feel impact. Russian tourists have already stopped travelling to Kiev after Russo-Ukraine tension. Transit ban over Ukrainian is an indicator to NATO countries that Russia can ban using its airspace for commercial flights to and from NATO countries and even to Far East. A majority of European airlines are using Russian airspace for destinations in Far East.

Central Asia is virtually cut off from Kiev due to suspension of flights to and from Kiev to Central Asia. Central Asian tourism will face a drastic low in case Russia bans NATO countries airlines to fly over its airspace because all airlines coming to Central Asia from Europe are using Russian airspace. However this development will support Central Asian airliners as Uzbek air and Air Astana have capacity. However smaller countries of Central Asia like Kyrgyzstan and Tajikistan will face serious drop in  in-coming tourism as both countries have no capacity to fly to Europe for bulk passengers.

Meanwhile, ban on food items from NATO countries will have an impact over eating habits of young Russian generation that is found of using foreign made items from chew gum to Coca Cola. Ban is not clear that weather American and European food chains like Mc Donald and other top rating food providers will continue to allow to work or they will stop selling food because 90% of their raw material is imported from USA and European countries.

According to details, Russia bans edible products from Australia, Canada, the EU, the US and Norway as Russian Prime Minister Dmitry Medvedev has signed a decree on the full ban for imports of beef, pork, poultry meat, fish, cheese, milk, vegetables and fruit from Australia, Canada, the European Union countries, United States and Norway.

“Russia is introducing a full embargo on import of beef, pork, fruit and vegetable produce, poultry, fish, cheese, milk and dairy products from the European Union, United States, Australia, Canada and Norway,” he told a government meeting. The ban will go into effect immediately and last for one year.

Meanwhile Russian authorities are also indicating that a tax can be leveled on Russian citizens traveling overseas on vacation.

The deputy head of the Federation Council Committee on Budget and Financial Markets, Nikolay Zhuravlev indicated on Thursday that out-bound tourists visiting USA and European countries can be asked for a tax.

According to Nikolay Zhuravlev, sanction can be imposed on US and EU made cars and consumer goods. “In addition, restrictions may relate to consulting services and franchising. Also should support domestic tourism through increased fees for traveling to foreign vacation”, he indicated. He confirmed that Moscow imposed measures are a response to the EU sanctions.

Asad Haroon
A netpreneur, blogger and above all; A Human 🙂 Asad tweets from @aghaasadharoon and can also be approached on Google+

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