Despite loud Russian celebrations on the occasion of the “return” (and, in fact, occupation) of Crimea, the peninsula has been recognized only formally for eight years at the Russian level.
According to our sources in the Ukrainian secret services, not only international companies but also large Russian ones are afraid of sanctions for the occupation of Crimea, which has led to a complete lack of investment. In particular, due to this, the scientific, technical and production capacities of the once most powerful enterprises on the peninsula are declining.
For example, “Dvoyakirna Bukhta” is a strategic facility for the production, repair, testing and maintenance of military equipment. However, currently the plant does not carry out any production activities due to lack of orders and non-compliance of material and technical base with the requirements for enterprises of the defense-industrial complex of the Russian Federation.
Also, our sources inform about a similar situation at the shipyard “More” – one of the once leading Ukrainian enterprises of the peninsula, which specializes in the construction of military ships with dynamic principles of support.
Currently, the current load of the plant is less than 20% of its potential and is constantly declining due to lack of orders, including from the Ministry of Defence of the Russian Federation. And this despite the fact that now 100% of the company’s shares are illegally owned by the Russian Federation.
At the same time, there is no possibility of attracting commercial orders at the plant “More”, as the plant is on the sanctions lists of Western countries. Individuals also refuse to buy ships from a company located in the occupied Ukrainian territory. The Russian government even tried to find orders for the military plant in the fishing industry. In particular, constant negotiations were held with private entrepreneurs and a resolution of the Government of the Russian Federation as of December 27, 2019 No. 1917 was adopted. It provides for a subsidy to Russian organizations by reimbursing 30% of the cost of a new vessel, provided the order is placed on domestic shipyards, and its further use in fishing for 5 years under the Russian flag. However, the Crimean shipyards remained out of the attention of Russian businessmen.
All this has also led to the fact that the plant, which has the production and technological potential for the simultaneous implementation of several projects, as of July 19, 2021 has arrears of wages in the amount of 44.352 million rubles. The company does not have the funds to repay the existing debt.
Therefore, Crimea has become a kind of ghetto, a subsidized region in which money from the Russian state budget burns, once successful enterprises stand idle and the threat of a humanitarian catastrophe grows every year. This is recognized even by the deputies of the State Duma of Russia.
“Those who have been to Crimea have seen how different it is from mainland Russia. That is, it is a kind of under-Russia, not “Little Russia”, not “New Russia”, namely “under-Russia”, – said the deputy of the State Duma of the Russian Federation Pavel Shperov during his speech before the parliament in 2018. He also acknowledged that there is no all-Russian banking system on the peninsula, Russian mobile operators and insurance companies do not work, and there are problems with real estate registration.
Prior to the occupation, more than 70 banks with both Ukrainian and foreign capital operated in the Crimea. However, after the annexation, Ukrainian banks immediately left the peninsula, and the Russian Central Bank revoked several licenses for Russian banks that remained to operate there.
Since then, 34 Russian banks have started operating in the Crimea at various times. As of 2021, there are only six left and all of them are under international sanctions.
You will not find the largest Russian banking giants at the peninsula – “Sberbank of Russia”, “VTB”, “Gazprombank” and “Alfa-Bank”. Here it is important to understand that these are not just private banks. “Gazprombank” is in fact entirely a state-owned bank, 92% of VTB’s share capital are also under state control, as well as 50% of Sberbank. The leaders of these banks are the closest people to President Putin.
The European Union has imposed sanctions on the above banks since the first days of the occupation. The USA also joined the EU. However, they later decided to impose sanctions on those Russian banks through which there is interference in the internal affairs of other countries. Thus, servicing the Crimean peninsula became the prerogative of smaller banks, whose work was concentrated purely on the domestic market. Federal public and private banks have completely ceased operations due to sanctions.
Because of this, the following situations are very common in the occupied Crimea. Comment of a Crimean resident: “My conversation with Sberbank is based on the same scenario:
– Where are you calling from?
– Well, unfortunately there is no possibility to call back to our toll-free number from abroad.
– Why from abroad?
– Unfortunately, we do not provide services in a foreign country.
I often have such a dialogue”.
According to the residents of Crimea themselves, in order to get a card from the same Sberbank, they need to go to “neighboring Russia”. Only there they can get Visa and MasterCard. But then there is another problem – from the territory of the Crimea, they can not pay with Russian cards in international companies such as Amazon or Ebay, pay for services in Playmarket, Netflix and others. To do this, Crimeans are forced to look for intermediaries in Russia, who are willing to provide them with money transfer services for an additional fee.
Business and state companies
A similar situation with big business. Russian federal companies have not entered the Crimean market. Kremlin is trying to compensate for the deficit of private investment with budget infusions – for example, the Federal Target Program for Crimea provides for the allocation of 1 trillion rubles. However, most of these funds cannot be realized due to the lack of contractors willing to perform the work.
Until 2014, the Russian group of companies X5 Retail Group operated on the peninsula. After the occupation, they closed their shops and have not returned for 8 years. The company refuses to voice its official position on Crimea.
The same is applied to the state-owned Gazprom – the corporation did not enter the Crimean market. Back in November 2014, the chairman of the Russian State Duma Committee on Energy, Ivan Grachev, stated that Gazprom was not going to enter Crimea due to Western sanctions. In 2017, representatives of the corporation admitted that they feared sanctions and, in particular, that they could create risks for the completion of export gas pipelines. Therefore, in this issue as well, Russia exchanged the legitimization of Crimea before the world for a more important geopolitical project – the completion of Nord Stream – 2.
For the eighth year in a row, the state company “Post of Russia” has also refused to operate in Crimea. In 2014, the Russian government specifically created a double, the Company “Post of Crimea”. As it turned out, the “Post of Russia” even cooperates with the “Post of Crimea” only through private entrepreneurs. All in order to prevent direct interaction between the “Post of Russia” and the peninsula, and thus to avoid sanctions. Back in 2018, the head of the design solutions department for the development of the “Post of Russia” network stated that the company was not going to enter the Crimean territory occupied by Russia.
Also in May 2018, Khachatur Pombukhchan, General Director of “Magnit”, Russia’s largest grocery store chain, told reporters that the company had no plans to open branches in the Crimea. In July of the same year, this information was confirmed by his successor Olga Naumova.
In 2018, a bill on financial and criminal sanctions for Russian companies for enforcing Western sanctions was even introduced in the State Duma, which was also supported by the Russian government. However, large Russian companies began to criticize the bill, and the Russian Union of Industrialists and Entrepreneurs issued a statement pointing to “the inadmissibility of the bill because it will worsen the business climate”. So it had to be postponed, as did attempts to force Russian business to recognize Crimea as Russian on the eighth year of the occupation.
In 2018, the Russian government approved a list of data that banks and other Russian companies can hide from the public. This is applied to information, for example, about management, assets and ownership structure. Such services are actively used by the Crimean construction company “Consol-Stroy”, included in the US sanctions list and which is 100% owned by the Joint Stock Company “Sharkhinsky Quarry”. At the same time, information about the owners is unknown, so it is impossible to impose sanctions directly on them. Access to public information is restricted in relation to companies operating in the Crimea and Sevastopol.
The Russian authorities decided to return to the issue of Russian business in Crimea in February 2021. Then the government proposed to create a “special administrative district” (SAD) on the peninsula, and the Ministry of Economic Development of the Russian Federation developed a bill on the introduction of a special regime in the annexed territories of Crimea and Sevastopol. Its main goal should be to ensure the confidentiality of investors from other regions of Russia. That is, if the bill is passed, the Kremlin admits that Russian companies refuse to officially recognize the peninsula as Russian, so the existence of Crimea on the economic map of the Russian Federation is easier to just hide. The bill is currently being considered by the government.
Even the self-proclaimed president of Belarus, Alexander Lukashenko, has said in recent statements that he can recognize Crimea as Russian only after “when the last oligarch in Russia recognizes Crimea and starts supplying products there”.
The Crimean people themselves not just confirmed Lukashenko’s words. They also acknowledged that most government agencies, the same banks and gas companies – consider the peninsula toxic, are afraid to deal with it and simply ignore it. They also noted that Lukashenko understands the weaknesses of the Russian government.
There are 8 federal mobile operators in Russia, united by one thing – for them, as for all other Russian business, Crimea also does not exist. They work with the peninsula in roaming mode. The description of any tariff invariably contains the wording: “The tariff is valid throughout Russia, except for the Crimea and Sevastopol”. Mobile coverage maps look very revealing on the websites of operators: in the European part of Russia, the coverage limit of any operator reaches exactly to the Kerch Strait.
Due to the large territory, in Russia there is a concept of national roaming between different regions. However, on July 01, 2019, a law came into force that abolished roaming within the borders of the Russian Federation. Operators were prohibited from charging higher fees to subscribers located within the country. However, Crimea remained an exception. Calls to Russia can still be made only in roaming. Federal mobile operators consider it part of a foreign state.
For example, the mobile operator “TinkoffMobile”. To set your tariff here, you need to perform the following steps: “Set up conditions in the mobile application: go to the “Roaming” section and enter “Crimea” in the list of countries:
And the largest mobile operator in Russia, MTS, does not mark Crimea as part of the Russian Federation on its maps. On the peninsula, the operator also operates in roaming mode.
Blocking football and watching the Olympic Games on Channel One
Western sanctions affect not only Russian business. Throughout the annexation, the Russian occupation authorities have never opened official fan zones on the peninsula for World Cup fans. It is forced to comply with FIFA’s ban, and therefore, even here, to agree with the statement that Crimea is not Russian.
The same is applied to UEFA’s ban on the participation of Crimean football clubs in the Russian championship and European Cups. From January 01, 2015, Crimean football players cannot take part in competitions higher than the local one. UEFA’s decision was supported by the Russian Football Union, which excluded all three Crimean football clubs from national competitions. It is an impossible task for the Kremlin to integrate Crimean teams into the general Russian football system.
Crimeans also did not have access to the official online broadcast of the 2020 Olympic Games, which was conducted by the Russian state “Channel One”. Due to the demands of the International Olympic Committee, even the state TV channel was forced to block the signal for the Crimean peninsula and once again recognize that Crimea is not Russian territory.
If everything is clear with Russian business and the fear of sanctions, then the situation with the Russian church is completely different.
The Russian Orthodox Church (ROC) plays a key role in the system of disseminating Kremlin narratives. It is used as a soft power to promote the “Russian world” and sometimes to destabilize the situation and political pressure on other countries.
That is why the occupation of Crimea was important for Russia and in the confessional context. After all, on the territory of the Crimea are the ruins of ancient Chersonese – a city that is considered one of the possible places of baptism of Prince Volodymyr the Great. So domination of Chersonesos is very sacred to the Russian Church, as it continues to promote the myth of Russia as the “cradle of Orthodoxy” – the successor to Kievan Rus.
However, territorial annexation of the peninsula by Russia has not yet been consolidated by the church.
Immediately after the so-called referendum in March 2014, a solemn reception took place in the St. George’s Hall of the Kremlin in Moscow. All the political and spiritual elites of Russia gathered there, and Putin proclaimed his famous “Crimean speech”. Despite the presence of leaders of all religious denominations in Russia, Patriarch Kirill, the head of the Russian Orthodox Church, was not present at the event.
Interestingly, during the 8 years of annexation, Patriarch Kirill has never visited the “cradle of Orthodoxy” – Crimea. He was never present at the pompous celebrations of the Day of the Baptism of Kievan Rus, which were held on the peninsula.
Prior to the occupation, Crimea was under the jurisdiction of the Ukrainian Orthodox Church of the Moscow Patriarchate – it is through the structures of the Moscow Patriarchate that the Russian Church, in fact, exerts influence on other countries, including the post-Soviet space.
But even after the occupation of the Crimean peninsula, the ROC left Crimea under the jurisdiction of its branch of the UOC-MP. The situation in the winter of 2017 attracts special attention. The Crimean eparchy of the Ukrainian Orthodox Church of the Moscow Patriarchate has asked to transfer 24 objects of the Chersonesos Tavriya State Historical and Archaeological Museum-Reserve to its use. It is interesting that even then Patriarch Kirill did not support this appeal. Although during similar cases in Russia – supported unequivocally. This applies, for example, to the transfer of the ROC St. Isaac’s Cathedral in St. Petersburg and the Rublev Museum in Moscow. At that time he even made written appeals to “Federal Property Management Agency”. However, the patriarch “knew nothing” about the situation with Chersonesos, as his press service reported.
The initiative of the Crimean Diocese put the ROC and UOC-MP in a very awkward position. After all, the activity of the Ukrainian Orthodox Church is regulated by the laws of Ukraine, and if it violates them, it may lead to the termination of its activity on the territory of Ukraine. According to all laws, Crimea is the territory of Ukraine, and therefore only the government of the Autonomous Republic of Crimea has the right to transfer the desired objects of the Chersonesos Tavriya Museum to the Kyiv Eparchy. It was dissolved by the Verkhovna Rada of Ukraine in 2014. Therefore, Patriarch Kirill, the ROC and the UOC-MP had to simply withdraw from this process in order not to violate Ukrainian legislation. Prior to the receipt of the Tomos by the Orthodox Church of Ukraine, 40% of the entire church infrastructure of the ROC was located on Ukrainian territory. And it seems that the loss of such a scale was too high a price to pay for the recognition of Crimea as Russian. Therefore, the Crimean dioceses (church districts) still remain in the structure of the Ukrainian Orthodox Church of the Moscow Patriarchate.
2016: Crimea is marked as the territory of the Ukrainian Church of the Moscow Patriarchate.
2019: Crimea still remains the territory of Ukraine
Russia continues to fight anyone who disagrees with the annexation of the Crimean peninsula. Hundreds of Crimeans are being held in Russian prisons on trumped-up charges and are losing their health day after day. At the same time, Russia’s attempts to fight on international platforms due to the presence of Crimea on Ukraine’s maps and an aggressive disinformation campaign about Crimea’s historical affiliation with Russia look ridiculous. Because the truth is obvious – the Kremlin is afraid to deal with Crimea.
In recent years, Russia has been pushing the world that anti-Russian sanctions are not working. It does this on its own through its dissemination channels, as well as through its agents and lobbyists in almost every country involved in the sanctions policy decision-making process.
You can count for a long time the figures on Russia’s economic losses from sanctions, as well as try to prove their effectiveness. At the same time, one thing is clear: sanctions actually work. And the measurement of their effect goes far beyond one economic plane.
The fact that Russia itself does not recognize Crimea as Russian is the clearest evidence of that. And this could become a brick in the process of future deoccupation of the peninsula. However, it is necessary to maintain and expand sanctions further so that Russia has fewer and fewer levers in Crimea. We know that “unpunished evil is growing”, so the international community must continue to fight for common values: freedom, democracy and the rule of law. Only this struggle will guarantee international security and the sustainability of social development. That is how, together with the entire civilized community, we will be able to achieve justice and return Crimea to Ukraine.
Ukraine, in turn, invites all our partners to do this together – through the Crimean platform, which is scheduled to launch on August 23, through the sites of international organizations and institutions.
Authors: Solomiya Khoma