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19th Nov 2018

Luxembourg PM tells Putin EU sanctions up to him

  • Bettel, Putin, and Rogozin. Meeting attracted homophobic abuse on Twitter (Photo: kremlin.ru)

Luxembourg’s prime minister has told Russia future EU sanctions depend on its actions, but the openly gay leader opted not to make a big fuss on rights.

Xavier Bettel held the talks with Russian PM Dmitry Medvedev and president Vladimir Putin in Sochi, Russia, on Monday and Tuesday.

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“[He] said the sanctions system is a road in two directions”, Bettel’s spokesman, Paul Konsbruck, told EUobserver on Wednesday (7 October).

“The European Council has agreed that if the situation [in Ukraine] deteriorates there’s a possibility of more sanctions. But there must also be a possibility of going in the other direction when the situation improves”.

He added: “We discussed the situation in Syria with Vladimir Putin. The Luxembourg PM said Russia is part of the solution. But he ... said that [Syrian leader] Assad is part of the problem”.

Bettel himself said in Russia: “We have a common enemy and we have a common goal, which is fighting terrorism”.

The EU’s economic sanctions on Russia are due to expire in January if it stops the war in Ukraine.

But EU sources said internal talks on whether they should be extended are "off the radar for now".

For his part, Putin said EU-Russia relations are “not going through very good times”.

But he noted the Grand Duke of Luxembourg will visit Russia in “early” 2016.

He also noted that Luxembourg is the world’s third biggest foreign investor in Russia, with $40 billion of assets. He said Russian investments in the Duchy are worth $12 billion.

Big business

The big numbers come from multinationals such as steel-maker Alceror Mittal and shipbuilder the Jan De Nul Group, which are domiciled in Luxembourg, a tax haven, but which operate in Russia.

They also come from Russian money cycled back to Russia via Luxembourg.

The Duchy is home to Volga Group, a Russian holding firm owned by Putin associate Gennady Timchenko.

It’s also home to Rosneft Finance, a debt-issuing vehicle of Rosneft, Russia’s top oil company, run by another Putin associate, Igor Sechin.

With Rosneft, Sechin, and Volga under EU and US sanctions, Luxembourg is a hotspot in terms of compliance.

But Bettel’s spokesman said that, to the best of his knowledge, it hasn’t frozen the assets of any Russians on EU blacklists.

Luxembourg banks have also laundered Russian mafia money, according to Hermitage Capital, a UK firm, whose lawyer, Sergei Magnitsky, was killed in Russia in 2009 when he exposed a criminal scam.

The Duchy froze €6.5 million of Magnitsky-linked funds.

Disinformation

Meanwhile, Russian state media reported that Bettel and Putin agreed to create a joint investment fund.

The Tass news agency called it a Luxembourg-domiciled “financial platform for operations in [Russian] roubles”.

But Bettel’s spokesman said it’s not true.

“I can fully deny this. It wasn’t an issue in the talks”, Konsbruck told EUobserver.

Putin also portrayed the visit as a type of EU-Russia meeting because Luxembourg holds the EU presidency.

But Konsbruck noted: “This was a bilateral visit. The PM had no EU mandate to go to Sochi”.

Gay rights

Bettel, who married his partner in May, is Europe’s only openly gay leader.

He went to Sochi amid an increasingly hostile climate for gay people in Russia.

The Putin event included Russian deputy PM Dmitry Rogozin, who is known for homophobic jibes on Twitter.

It also attracted abuse. It should be “beneath the dignity” of Putin to “shake hands with pederasts”, a Twitter user called 67NikitaSavinkov said.

Ilga-Europe, a Brussels-based gay rights NGO, said Bettel was in a “unique position” to highlight EU values on non-discrimination.

“We hope the rights of LGBTI people in Europe made it onto the agenda”, it told this website.

Bettel’s spokesman said: ”The prime minister was not there as a representative of an LGBT organisation. The leaders did speak about human rights, but I'm not going to comment further on this”.

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