Strengthening ties with Russia

Despite conflicting views on a number of issues, EU Affairs and Trade Minister Ann Linde recognises that both Sweden and Russia share an aim to work towards realising the huge potential in bilateral economic relations.

Writing in Dagens Industri , ahead of her visit to Russia on 12-13 September, the minister points to areas of cooperation between the two countries, including trade, organised crime, culture and student exchange, and underlines the fact that Sweden is the fifth largest direct investor in Russia, discounting tax havens. By way of example, one Swedish company has invested close to SEK 60 billion in Russia since 2001.

Trade between Russia and Sweden amounted to some SEK 48 billion in 2016 and there is potential for Swedish exports to grow. The Russian government’s aim is to invest in energy efficiency and environmental protection, and Linde looks forward to discussing ways to boost cooperation in these, and other, areas with her Russian counterpart.

Swedish banks and firms drawn into Russian Laundromat

In 2014 a group of journalists working with the Organised Crime and Corruption Reporting Project (OCCRP) broke the story of the “Global Laundromat” – an operation whereby money was moved out of Russia between January 2011 and October 2014. Much of the money was moved out of the country via Trasta Kommercbanka in Latvia and Moldindconbank in Moldova, and investigations were subsequently launched in Latvia, Moldova, the UK and Russia.

OCCRP journalists have since gained access to information allowing investigators to track how USD 20.8 billion was moved from Russia. Detectives believe the true figure could be as much as USD 80 billion, or SKr 700 billion, according to The Guardian. As a comparison, Swedish government expenditure in 2017 is expected to be in the region of SKr 970 billion.

According to OCCRP, Sweden’s big four banks as well as Danske Bank and Norwegian DNB, are among the hundreds of banks that have processed the money. OCCRP also says that Ericsson and fastening tool company Isaberg Rapid have received money transfers of USD 1.3 billion and USD 153,000 respectively.

Ericsson says it does not normally comment individual transactions, but this was a single payment for one of its customer contracts. “We don’t know today why the payment was made by a company other than the customer, but in light of the information that has now emerged, we will take a closer look at this payment and see if we have adequate procedures and control mechanisms,” states the company.

Swedish companies exit Russia

A survey by ATL, a trade magazine for farmers, shows that Swedish listed companies have sold 154,000 hectares of arable land and 1.4 million hectares of forest in Russia in the past two years.

In 2014 Triton Agri sold 36,000 hectares of land in Penza and last year a decision was taken to divest some 80,000 hectares. Triton Agri has decided to invest in grain production in Ukraine instead. Asked by DI if the strategy has anything to do with political developments in Russia, a spokesman for the company who wishes to remain nameless says: “This is sensitive. Our business does not benefit from our talking about it”.

Black Earth Farming is also divesting land in Russia, but CFO Erik Danemar says the company has no plans to exit the country. Instead the aim is to ensure that the land holdings in Russia are as productive as possible.

Sweden keen to step up pressure on Putin

Swedish Prime Minister Stefan Löfven will land in Kiev later today for talks with Ukraine’s President Petro Poroshenko and Prime Minister Arseniy Yatseenyuk. He will also meet the leader of the Crimean Tatar community in order to highlight the fact that Sweden does not accept Russia’s annexation of Crimea.

During his day-long visit, Mr Löfven will sign a bilateral agreement to boost reform but much of the Swedish PM’s day will be spent discussing the situation in Eastern Ukraine and what EU member states can do to put pressure on Russia to establish a permanent ceasefire.

Mr Löfven will present the findings of his meeting in Kiev when EU heads of state and government meet next week to discuss Russia and Ukraine. Despite pressure from some members to ease or drop sanctions, the EU is currently united in its stance to maintain sanctions against Russia. Sweden’s stance is that the sanctions should remain in place as long as there are no tangible signs that the situation in Eastern Ukraine is improving. Sweden also believes that member states should be prepared to ratchet up pressure on Russia, with further sanctions.