CAPITAL FLEES

Boeing Exits Chicago as City Wrestles With Crime, Exodus



Steve Stroth and Julie Johnsson
Thu, May 5, 2022,

(Bloomberg) -- Boeing Co.’s decision to leave Chicago is the latest blow to a U.S. city that already has seen its once-mighty economy battered by Covid-19 and crime.

The planemaker said Thursday that it will shift its headquarters to Arlington, Virginia, from Chicago, a move that would put Boeing near federal government decision-makers in Washington.

Chicago, the nation’s third-most populous city, has seen a rise in crime that prompted its richest resident, Citadel founder Ken Griffin, to say he’s likely to move his $38 billion hedge fund elsewhere. Chicago’s Magnificent Mile and State Street shopping districts, along with many restaurants in the downtown Loop, have yet to recover from the pandemic. Even the National Football League’s Bears franchise is considering an exit to the suburbs.

“Boeing’s decision to leave Illinois is incredibly disappointing -- every level of government in our state has worked to make Chicago and Illinois the perfect home for Boeing’s headquarters for the past 20 years,” U.S. Senator Dick Durbin of Illinois said in a statement Thursday. “We are working together to ensure Boeing leadership both understands how harmful this move will be and does everything possible to protect Illinois’s workers and jobs.”

Chicago remains home for many big companies, including McDonald’s Corp., Aon Plc, Archer-Daniels-Midland Co., Conagra Brands Inc. and R.R. Donnelley & Co. But the city has had other recent departures. United Airlines Holdings Inc. said in December that it will move as many as 1,300 workers from its Willis Tower headquarters to Arlington Heights, a suburb about 30 miles (48 kilometers) away that also is being considered by the Chicago Bears.

Arlington is wealthier, with 2020 per-capita personal income of $100,823, or 169.4% of the national average, compared with Chicago’s Cook County at $69,935, or 117.5%, government data show. Since 2000, compounded annual growth for the Chicago metropolitan area was 2.9%, compared with 4.1% in the Washington, D.C., area.

A recurring complaint about Chicago is crime, which is up 35% so far this year compared to the same period in 2021. Though murders and shooting incidents are down, all other major categories of crime are up, including a 67% jump in thefts.

Boeing says the biggest chunk of its employees remain in Washington state -- more than 55,000 employees out of nearly 142,000. In 2018, the company estimated it had 729 employees in Illinois, where it spent $1 billion on suppliers and vendors, and donated $23.8 million to local charities that year. The company said Thursday it would “maintain a significant presence” in the city.

Boeing moved its headquarters from Seattle to a 36-story building along the Chicago River in 2001, choosing the city over Denver and Dallas as the company sought to expand beyond planemaking and to be more centrally located in the U.S.

Mayor Lori Lightfoot offered assurances that Chicago is a thriving economy that’s attracting new businesses with its diverse workforce and expansive infrastructure-network.

“Chicago is a world-class city and in the last year, 173 corporations relocated or expanded here, and 67 corporations have made that same decision since the start of 2022,” Lightfoot said in a statement on Thursday. “We have a robust pipeline of major corporate relocations and expansions, and we expect more announcements in the coming months.”

Lightfoot also announced that Bally’s Corp. will build a $1.7 billion casino and hotel complex that would generate 3,000 permanent jobs and hundreds of millions in tax revenue.

SOUTH AFRICA
World’s Biggest Hydrogen Trucks Start Work at Anglo American


Antony Sguazzin
Fri, May 6, 2022,

(Bloomberg) -- Anglo American Plc on Friday unveiled the world’s biggest green-hydrogen powered truck at a platinum mine in northeast South Africa where it aims to replace a fleet of 40 diesel-fueled vehicles that each use about a million liters of the fossil fuel a year.

The NuGen project at the Mogalakwena mine, owned by Anglo American subsidiary Anglo American Platinum Ltd., will use power from a 140 megawatt solar plant to supply hydrogen electrolyzers to split water and provide the trucks, which can carry up 315 tons of ore each, with hydrogen fuel. Engie SA has helped Anglo establish the system.

The project, expected to be fully implemented by 2026, is a first step in making eight of the company’s mines carbon neutral by 2030, according to Julian Soles, head of Technology Development, Mining & Sustainability at Anglo American. The company, which mines metals around the world ranging from iron ore and platinum to copper, has set a target of getting all of its operations to that status by 2040.

“People told us three years ago this is not going to happen, this is not a good idea. They are now beginning to take real notice,” Soles said at a presentation in the South African city of Polokwane. “The vision for us is to see this rolled out across our business and the mining industry. It’s Anglo’s choice whether to commercialize this.”

The mining company, which dominated South Africa’s economy for eight decades before moving its headquarters to London in 1999, initially approached a number of equipment manufacturers with the idea of building a hydrogen-powered truck fleet. When it was turned down it took the decision to convert its diesel fleet to use the clean fuel itself.

About “80% of our diesel consumption at our large mines is through the use of large trucks,” Soles said. “What we actually had to build was a full ecosystem. A solar photovoltaic site, an electrolyzer and a refueling system to create a zero emission haulage system.”

Anglo American’s haul truck fleet currently generates 10% to 15% of its so-called Scope 1 emissions, those generated directly from its own activities, Duncan Wanblad, Anglo American’s chief executive officer, said in a statement.

The use of hydrogen doesn’t emit climate-warming gases while diesel does. And with water being split to create the fuel using energy from the sun, there are no carbon emissions from its manufacturing process either.

The trucks are equipped with fuel cells that include platinum in their components. Mogalakwena is the world’s biggest open-pit platinum group metals mine.

“It’s a smart step for Anglo American, but it’s a giant leap for South Africa’ s hydrogen economy,” President Cyril Ramaphosa said in a speech at the mine to launch the NuGen program. “The hydrogen economy is beckoning us.”

Anglo and its global mining peers are under increasing pressure to cut greenhouse-gas emissions and improve their environmental performance. The company last year spun off its South African thermal coal assets, while rivals such as Glencore Plc have pledged to reduce their emissions.

BLOOMBERG

Mexican president slams US on tour of Central America


Thu, May 5, 2022,

GUATEMALA CITY (AP) — Mexican President Andrés Manuel López Obrador started a five-day tour to four Central American countries and Cuba on Thursday by lashing out at the U.S. government.

López Obrador criticized American officials sharply for being quick to send billions to Ukraine, while dragging their feet on development aid to Central America.

On his first stop in neighboring Guatemala, López Obrador demanded U.S. aid to stem the poverty and joblessness that sends tens of thousands of Guatemalans north to the U.S. border. The Mexican leader had been angered that the United States rebuffed his calls to help expand his tree-planting program to Central America.

“They are different things and they shouldn't be compared categorically, but they have already approved $30 billion for the war in Ukraine, while we have been waiting since President Donald Trump, asking they donate $4 billion, and as of today, nothing, absolutely nothing,” López Obrador said.

“Honestly, it seems inexplicable,” he added. “For our part, we are going to continue to respectfully insist on the need for the United States to collaborate.”

López Obrador's pet program, known as “Planting Life,” pays farmers a monthly wage to plant and care for fruit and lumber trees on their farms.

Mexico has asked the U.S. government to help fund the program, something that so far hasn’t happened. Mexico is also touting another program that apprentices young people to companies. Critics say both programs lack accountability.

Mexican Foreign Relations Secretary Marcelo Ebrard wrote in his social media accounts that meetings with Guatemalan President Alejandro Giammattei and other officials focused on development, migration and strengthening bilateral ties.

Ebrard said Mexico was starting the tree program in the Guatemalan province of Chimaltenango.

It is only be the third overseas trip in more than three years for López Obrador, who is fond of saying that the best foreign policy is good domestic policy. The tour is an opportunity for Mexico to reassert itself as a leader in Latin America and will be welcomed by some leaders under pressure from the U.S. government and others for their alleged anti-democratic tendencies.

Both geographically and metaphorically, Mexico finds itself wedged between the United States and the rest of Latin America. López Obrador has deflected criticism dating to the Trump administration that his government is doing Washington’s dirty work in trying to stop migrants before they reach the U.S. border.

López Obrador will be received in Central America, in part, as an emissary of the United States when it comes to migration policy.

The U.S. government has been trying to build consensus ahead of the June Summit of the Americas in Los Angeles to cement a regional approach to managing migration flows. In recent years large numbers of Central Americans, but also Haitians, Cubans, Venezuelans, Colombians and migrants arriving from other continents, have made their way up through the Americas.

The visit is an opportunity for López Obrador to show some independence from the United States. López Obrador has criticized the U.S. economic blockade of Cuba and he said that he told U.S. officials that no country should be excluded from the Summit of the Americas. The Biden administration has signaled that Cuba, Venezuela and Nicaragua would not be invited.

Giammattei, meanwhile, has been under pressure from the U.S. government for backsliding on the country’s fight against corruption — a campaign central to López Obrador’s image in Mexico.

López Obrador will continue on to El Salvador, where President Nayib Bukele has faced international condemnation since imposing a state of emergency after a surge in gang killings at the end of March.

A visit from López Obrador, who prefers a “hugs not bullets” approach to security, is an opportunity to show he’s not being isolated. El Salvador’s security forces have arrested more than 24,000 suspected gang members in just over a month and human rights organizations say there have been many arbitrary arrests.

In Honduras, new President Xiomara Castro has forged a close relationship with the Biden administration. Last month, Honduras extradited former President Juan Orlando Hernández to face drug and weapons charges in the U.S. Castro is desperate to activate the economy and create jobs, so could be open to López Obrador’s proposals if there is money behind it.

The president’s agenda in Belize is less clear, but his final stop in Cuba will be the most symbolic. Cuba President Miguel Díaz-Canel visited Mexico for its independence celebrations last year.

López Obrador has largely governed as a nationalist and populist, but he has positioned himself politically as a a devoted leftist.

Japan's Okinawa urges government to reduce China tensions

MARI YAMAGUCHI
Fri, May 6, 2022

TOKYO (AP) — Japan should focus more on peaceful diplomacy with China instead of on military deterrence as tensions rise around Chinese-claimed Taiwan, the governor of the nearby southern Japanese island of Okinawa said Friday. He also urged that the burden on Okinawa of hosting a majority of the American troops in Japan be reduced.

“We are strongly alarmed,” Okinawa Gov. Denny Tamaki said of discussions in parliament about the possibility of a security emergency involving Taiwan, and concerns that Okinawa, 600 kilometers (370 miles) away, could become embroiled in it.

Tamaki was speaking online from the prefectural capital of Naha ahead of the 50th anniversary of Okinawa's return to Japan on May 15, 1972, 20 years after most of Japan regained independence from the U.S. occupation following World War II.

There is concern in Okinawa, with its continuing heavy U.S. military presence, over rising tensions resulting from China’s increasingly assertive military actions in the region and its rivalry with the United States. There is also worry that the Russian invasion of Ukraine might embolden Beijing.

China claims independently governed Taiwan as its own territory, and controlling the island is a key component of Beijing’s political and military thinking. In October, Chinese leader Xi Jinping reiterated that “reunification of the nation must be realized, and will definitely be realized.”

In what Beijing calls a warning to advocates of Taiwanese independence and their foreign allies, China has been staging threatening military exercises and flying fighter planes near Taiwan’s airspace, including on Feb. 24, the day Russia began its invasion of Ukraine.

“Any escalation of problems over the Taiwan Strait and the contingency of Okinawa being a target of attack must never happen or be allowed to happen,” Tamaki said.

The ongoing tension has rekindled fears among Okinawans that they may be sacrificed again by mainland Japan, as in the Battle of Okinawa that killed some 200,000 people, half of them civilians, near the end of World War II.

Japan views China’s military rise as a regional threat and has been shifting its troops to defend southwestern islands including Okinawa and its outer islands, deploying missile defense systems and other facilities, and increasing joint drills with the U.S. military and other regional partners.

On Friday, Chinese Foreign Ministry spokesperson Zhao Lijian said Japan “has been taking advantage of diplomatic activities to make an issue of China, play up regional tensions and hype the so-called China threat," and that Tokyo is “looking for excuses for its military expansion.”

The U.S. has consistently expressed support for ensuring that Taiwan can defend itself, and Chinese military action against the island in the short- to medium-term is generally considered a remote possibility.

Noting that China is Japan's biggest trading partner and that Japan is China's second largest, Tamaki said their close economic ties are indispensable.

“I call for the Japanese government to always maintain calm and peaceful diplomacy and dialogue to improve its relations with China, while working toward easing U.S.-China tension,” he said.

Okinawa at the time of its reversion asked Japan to make it a peaceful island free of military bases. Today, it still hosts a majority of the approximately 50,000 U.S. troops and their military facilities in Japan, and Tamaki said that burden should be shared by all of Japan.

Because of the U.S. bases, Okinawa faces noise, pollution, aircraft accidents and crime related to American troops on a daily basis, Tamaki said.

"That excessive U.S. base burden is still unresolved 50 years after the reversion,” he said. "Okinawa's burden of the U.S. military bases is a key diplomatic and security issue that concerns all Japanese people.”

The biggest sticking point between Okinawa and Tokyo is the central government’s insistence that a U.S. Marine base in a crowded neighborhood, Futenma air station, be relocated within Okinawa instead of moving it elsewhere as demanded by many Okinawan people.

While development projects over the past five decades have helped Okinawa's economy, the average Okinawan's income remains the lowest among Japan's 47 prefectures, Tamaki said.

If land taken by the U.S. military is returned to the prefecture for other use, it would produce three times as much income for Okinawa, Tamaki said.

Bird Flu Outbreak Nears Worst Ever in U.S. With 37 Million Animals Dead




Zijia Song, Elizabeth Elkin and Michael Hirtzer
Fri, May 6, 2022

(Bloomberg) -- A bird flu virus that’s sweeping across the U.S. is rapidly becoming the country’s worst outbreak, having already killed over 37 million chickens and turkeys, with more deaths expected through next month as farmers perform mass culls.

Under guidance of the federal government, farms must destroy entire commercial flocks if just one bird tests positive for the virus, to stop the spread. That’s leading to distressing scenes across rural America. In Iowa, millions of animals in vast barns are suffocated in high temperatures or with poisonous foam. In Wisconsin, lines of dump trucks have taken days to collect masses of bird carcasses and pile them in unused fields. Neighbors live with the stench of the decaying birds.

The crisis is hurting egg-laying hens and turkeys the most, with the disease largely being propagated by migrating wild birds that swarm above farms and leave droppings that get tracked into poultry houses. That’s probably how the virus contaminated egg operations in Iowa, which produce liquid and powdered eggs that go into restaurant omelets or boxed cake mixes. Further north under the same migration paths lie Minnesota’s turkey farms, which supply everything from deli meats for submarine sandwiches to whole birds for the holidays.

Prices for such products are soaring to records, adding to the fastest pace of U.S. inflation in four decades. The supply deficits triggered by the flu also come as world food prices reach new highs. From the war in Ukraine to adverse weather for crops, it’s all throwing supply chains into turmoil and compounding the crisis that’s pushed millions of people into hunger since the start of the pandemic.

“Just when you thought it couldn’t get any worse, here comes the bird flu,” said Karyn Rispoli, an egg market reporter at commodity researcher Urner Barry.

Ventilation Shutdown

Wholesale egg prices touched a record $2.90 a dozen in April in government data. Whole turkeys touched an all-time high $1.47 a pound according to Urner Barry.

The last time bird flu hit the U.S. in 2015, it took the lives of about 50 million animals by the end of the season and cost the federal government over $1 billion dollars, as it handles killing and burying of birds. At the time, the industry beefed up its biosecurity around poultry houses, installing sound canons to repel wild birds, or even carwashes so farm trucks wouldn’t bring contamination from one farm to another to avoid a repeat.

This time around, even with that better biosecurity, the industry has failed to prevent the transmission from wild birds, said Michelle Kromm, an executive consultant for the Minnesota Turkey Growers Association. As a precaution, farmers are supposed to go through a laborious process of completely changing their clothing and shoes before entering barns, and making sure all supplies and tools are clean.

Yet weather and migration patterns are making it easier for the virus to win this year. Rare spring snowstorms are originating in the Midwest and travelling up the East Coast, and the cold, wet weather keeps the virus alive for longer, helping it spread. The flu this year is also more lethal than in the past. The deaths this season are already tracking above previous outbreaks at 37 million chickens and turkeys. The U.S.’s flock of egg-laying hens totals more than 300 million birds (chickens raised for meat, known as broilers, haven’t been as affected).

“We all need to maintain really high awareness that the environment is contaminated,” said Beth Thompson, a veterinarian at the Minnesota Board of Animal Health. The weather “needs to warm up and dry out to kill that virus that’s sitting out there.”

Iowa, the U.S.’s center of egg production, has been hit the worst. One farm, Rembrandt Enterprises, destroyed its giant flock of 5.3 million hens starting in late March using a government-approved yet controversial method called ventilation shutdown plus. The technique, which is being widely used to eliminate millions of chickens at a time during this outbreak, involves closing up barns so that temperatures rise and the animals suffocate over hours. Turkeys can be killed by spraying a firefighting foam that suffocates them.

Rembrandt didn’t respond to requests for comment.

Bird flu is also wreaking havoc in Canada, wiping out almost two million fowl. The virus has never been in multiple provinces at the same time.

“We’re worried. We’re worried for sure,” said Lisa Bishop-Spencer, spokeswoman for Chicken Farmers of Canada.

One person involved in culling infected birds in Colorado has contracted the avian flu, according to the Centers for Disease Control and Prevention. The risk of the bird flu spreading to humans remains low, even with this case, the agency said. Flus that spread from animals to humans are a concern because in rare instances, the result can be a pandemic.

Longer Recovery

It won’t be easy to recover from the crisis. In 2015, it took the egg industry over a year to ramp back up, according to Maro Ibarburu-Blanc, a research scientist at Iowa State University’s Egg Industry Center. This time, supplies could be hit for longer because farmers whose operations were affected by the virus may make a transition to cage-free production, which is a long-term trend in the industry, said Mark Jordan, a poultry analyst with LEAP Market Analytics.

Massive outbreaks may continue to plague the U.S. poultry industry as long as bigger bird barns stay in vogue. And the trend is toward bigger.

“We continue to see consolidation of facilities, new facilities continue to be built that are for several million birds,” said John Brunnquell, chief executive officer of Egg Innovations

Any India Curbs on Wheat Exports Would Hurt Its Neighbors Most


Any India Curbs on Wheat Exports Would Hurt Its Neighbors Most

Pratik Parija

Thu, May 5, 2022

(Bloomberg) -- Any restrictions on wheat exports by India will likely hurt neighboring countries like Bangladesh and Sri Lanka most, while some Middle Eastern and Asian markets would also be affected.

The food ministry said India doesn’t see a case for controlling wheat exports, but cut the estimate for 2021-22 production. Bloomberg reported earlier this week that the country is considering export restrictions after severe heat damaged India’s wheat crop.

While India hasn’t been a large shipper of wheat on the global market, the war in Ukraine and drought in some major growing nations have elevated its importance as one of the few remaining places with ample stockpiles. Major buyers including Egypt have recently approved access for Indian wheat.

Traders have already contracted to export 4 million tons in 2022-23, the food ministry said, adding that Turkey has also given approval to import wheat from India. The South Asian nation in April targeted record shipments of up to 15 million tons this fiscal year, from more than 7 million a year earlier.

‘It’s an almost grotesque situation.’ Nearly 25 million tons of grain are stuck in Ukraine, and the UN says it doesn’t know when it can be accessed


John Moore—Getty Images

Tristan Bove
Fri, May 6, 2022

Ukraine was oe of the world’s largest exporters of grain before the Russian army invaded and halted grain exports, harvesting 11% of the world’s wheat and 17% of its corn. For decades, it’s been referred to as the breadbasket of Europe.

In spite of Russian troops blockading Ukraine’s ports, the country’s harvest has continued, but most crops have been unable to leave Ukraine. Now, millions of tons of grain are sitting idle, and the country’s storage capacity is reaching its limits while the world gets hungrier, according to the UN’s top food agency.

Nearly 25 million tons of grain are currently stuck in Ukraine and unable to leave the country due to obstructed seaports and infrastructural issues, said Josef Schmidhuber, an economist with the Food and Agriculture Organization.

Speaking at a press briefing on Friday, he warned of an “almost grotesque situation” in Ukraine, in which grain is being harvested according to regular schedules, but cannot be taken out of the country.

"[There are] nearly 25 million tonnes of grain that could be exported but that cannot leave the country simply because of lack of infrastructure, the blockade of the ports,” Schmidhuber said.

He clarified that the war has so far not had a significant impact on harvests, but it is becoming harder and harder for global markets to access Ukraine’s food commodities.

Schmidhuber explained that most of Ukraine’s winter crops were planted and harvested in the west of the country, far away from the brunt of the fighting and the war did not impact the recent harvest. He added that around half of the planned summer crops are already in the ground, although it is uncertain how much of it will be reaped.

“A considerable crop could be coming in going forward,” Schmidhuber said, but added that the outlook for grains leaving Ukraine remained uncertain, especially if Black Sea ports remained blocked by Russian forces.

Ukrainian ships have been blocked from leaving Black Sea ports for months, and the director of the UN World Food Programme in Germany announced earlier this week that almost 4.5 million tons of grain are currently sitting in containers in Ukrainian ports, unable to leave because of unsafe or occupied sea routes.

Grain shipments from Ukraine are usually done by sea, according to Schmidhuber, but are now being taken out of the country by rail more and more frequently, something he said can be exceedingly more complicated. Grains leaving Ukraine by train can sometimes need to be unloaded and placed on new carriages due to different railway specifications, such as different widths between rails on a single track.

Ukraine and Russia combined are some of the world’s largest suppliers of key agricultural commodities, including wheat, rapeseed, maize, and sunflower oil, according to the FAO. The disruption of these crucial global supply chains has raised food prices and exacerbated hunger issues in some of the world’s most vulnerable regions.

There are also some reports that Russian troops have been looting Ukrainian grain storages, according to the FAO.

“There is anecdotal evidence that Russian troops have destroyed storage capacity and are looting storage grain that is available,” Schmidhuber said, adding that there are also signs Russian troops have been stealing farm equipment as well, potentially putting the productivity of future harvests at risk.

“Grain is being stolen by Russia and transported by trucks into Russia,” he said.

The uncertainty about what direction the war will take, Ukraine’s limited storage capacity for grain, and evidence that Russian troops have been stealing and damaging harvests and farming equipment, means that global food prices—especially those for cereals and meats, according to the FAO’s latest monthly food price index—are still highly volatile.

In its latest food price index, released on Friday, the FAO announced that global food prices decreased in April after a huge jump last month, but Schmidhuber stressed that it was only a small decline.

The UN said in April that 45 million people worldwide suffer from malnourishment, with up to 20 million more at risk of famine because of the war. Highly vulnerable regions of the world where the war is expected to amplify hunger include countries in the Sahel and West Africa, according to the World Bank.

This story was originally featured on Fortune.com

Belgian brewer starts global roll-out of Ukraine beer for relief effort


Launch of the production of Ukrainian beer in Belgium

Fri, May 6, 2022, 
By Clement Rossignol and Christian Levaux

LEUVEN, Belgium (Reuters) - The world's largest brewer launched production of a popular Ukrainian beer in Belgium on Friday and said all profits made from its global sales would go to humanitarian relief in Ukraine following Russia's invasion.

Anheuser-Busch InBev (AB InBev) has halted production of the Chernigivske lager and other beers at its three breweries in Ukraine because of the war, which began after Russia invaded on Feb. 24.

Ukraine's ambassador to Belgium, Oleg Shamshur, attended the roll-out of the first cans at AB InBev's large brewery in Leuven on Friday and welcomed the launch as a way of showcasing Ukrainian products to the world.

"Maybe even more importantly it would have a symbolic meaning in the sense that people who are drinking Chernigivske will think of Chernihiv, the city which was attacked by the Russians and which resisted the Russian invasion," he told Reuters TV.

The beer originates in Chernihiv, a city in the north of Ukraine that suffered heavy shelling and missile strikes earlier in the war before Russian forces shifted their focus towards eastern and southern Ukraine.

'GOING GLOBAL'

The idea for the relief initiative came from Ukraine's marketing director. The beer is already on sale in Britain.

"This initiative is now going global," AB InBev's European chief Jason Warner "You'll be able to enjoy a Chernigivske in Canada, a Chernigivske in the United States, also in Colombia, Brazil and through Latin America as well as across Europe."

He added that the cans, which bear the blue and yellow colours of the national flag, should be in shops within two to three weeks.

Despite suspending production in Ukraine, AB InBev has said it will continue to pay its 1,812 staff there this year, as well as helping their families with food and accommodation.

The Belgium-based brewer operates in Ukraine in a joint venture with Turkish brewer Anadolu Efes, which has a large presence in Russia.

AB InBev has said it will exit Russia by selling its non-controlling interest in the venture, most likely to partner Efes. It is not clear whether it plans to maintain a presence in Ukraine.

The war in Ukraine has killed thousands of people, displaced more than 11 million and flattened towns and villages.

Russia calls its actions a "special operation" to disarm Ukraine and protect it from fascists. Kyiv and its Western backers say this is a false pretext to wage an unprovoked war of aggression against a sovereign democratic state.

(Writing by Philip Blenkinsop; Editing by Gareth Jones)

How millions of Russians are tearing holes in the Digital Iron Curtain



Anthony Faiola
Fri, May 6, 2022

RIGA, Latvia - When Russian authorities blocked hundreds of Internet sites in March, Konstantin decided to act. The 52-year-old company manager in Moscow tore a hole in the Digital Iron Curtain, which had been erected to control the narrative of the Ukraine war, with a tool that lets him surf blocked sites and eyeball taboo news.

Konstantin turned to a virtual private network, an encrypted digital tunnel more commonly known as a VPN. Since the war began in February, VPNs have been downloaded in Russia by the hundreds of thousands a day - a massive surge in demand that represents a direct challenge to President Vladimir Putin's attempt to seal Russians off from the wider world. By protecting the locations and identities of users, VPNs are now granting millions of Russians access to blocked material.

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Downloading one in his Moscow apartment, Konstantin said, brought back memories of the 1980s in the Soviet Union - when he used a shortwave radio to hear forbidden news of dissident arrests on U.S.-funded Radio Liberty.



"We didn't know what was going on around us, and that's true again now," said Konstantin, who, like other Russian VPN users, spoke on the condition that his last name be withheld for fear of government retribution. "Many people in Russia simply watch TV and eat whatever the government is feeding them. I wanted to find out what was really happening."

Daily downloads in Russia of the 10 most popular VPNs jumped from below 15,000 just before the war to as many as 475,000 in March. As of this week, downloads were continuing at a rate of nearly 300,000 a day, according to data compiled for the Washington Post by the analytics firm Apptopia, which relies on information from apps, publicly available data and an algorithm to come up with estimates.

Russian clients typically download multiple VPNs, but the data suggests millions of new users per month. In early April, Russian telecom operator Yota reported that the number of VPN users was 53.5 times as high as in January, according to the Tass state news service.

The Internet Protection Society, a digital rights group associated with jailed Russian opposition leader Alexei Navalny, launched its own VPN service on March 20 - and reached its limit of 300,000 users within 10 days, according to executive director Mikhail Klimarev. Based on internal surveys, Klimarev estimates that the number of VPN users in Russia has risen to roughly 30% of the country's 100 million Internet users.

To combat Putin, "Ukraine needs Javelin [missiles] and Russians need Internet," Klimarev said.

By accessing banned Ukrainian and Western news sites, Konstantin said, he has come to deeply sympathize with Ukrainian President Volodymyr Zelensky, a former comedian the Russian press has sought to falsely portray as a "drug addict." He was recently compared to Adolf Hitler by Russian Foreign Minister Sergei Lavrov.

"I loved him as an actor, but now I know Zelensky is also brave because I've seen him talk on Ukrainian news sites with my VPN," Konstantin said.

Not only does widespread VPN use help millions reach material laying out the true extent of Russian military losses and countering the official portrayal of the war as a fight against fascists, say Russian Internet experts, but it also limits government surveillance of activists.

Russian officials have sought to curtail VPN use. An anti-VPN law in 2017 resulted in the banning of more than a dozen providers for refusing to comply with Russian censorship rules.

In the days before the war, and in the weeks since then, Russian authorities have also ratcheted up pressure on Google, asking the search engine to remove thousands of URLs associated with VPNs, according to the Lumen database, an archive of legal complaints related to Internet content. Google, which did not respond to a request for comment, still includes banned sites in search results.

The Russian government is reluctant to ban VPNs completely. Policing such a ban would pose a technological challenge. In addition, many Russians use VPNs to access nonpolitical entertainment and communication tools - popular distractions from daily hardships.

Last month, when asked by Belarusian TV if he had downloaded a VPN, even Putin spokesman Dmitry Peskov conceded: "Yes, I have. Why not?"

Since the war began on Feb. 24, more than 1,000 Internet sites have been restricted by Russian authorities, including Facebook, Instagram, BBC News, Voice of America and Radio Liberty, according to a survey by the technology site Top10VPN. The last independent Russian media outlets were forced to shut down, and those in exile that are offering critical content - like the popular Meduza - have also been banned.

Today, even calling Putin's "special operation" - as he has forcibly dubbed the invasion - a "war" risks a sentence of up to 15 years in jail. Free speech has effectively disappeared; even teachers who question the invasion are being reported to the authorities by their students.

"People want to see banned content, but I think they're also genuinely scared," said Tonia Samsonova, a London-based Russian media entrepreneur. "No matter your attitude toward the government or the war, every Russian knows that if the government knows too much about you, it's potentially dangerous. So a VPN is so useful even if they aren't critical of Putin."

Katerina Abramova, spokeswoman for Meduza, said online traffic at the site declined only briefly after it was banned by Russian authorities in March. That's because, suddenly, traffic began surging from unlikely countries like the Netherlands - suggesting that Russians were utilizing VPNs that made them appear to be abroad.

"VPNs won't start a broad revolution in Russia," Abramova said. "But it's a way people who are against this war can stay connected to the world."

Natalia, an 83-year-old Muscovite and former computer operator, asked her adult daughter to help her download a VPN on her laptop shortly after the war started. She feared that the government would ban YouTube, preventing her from seeing her favorite program - an online talk show on technology news. The Kremlin has yet to block YouTube, though Russian Internet experts say the probability remains high.

As the war progressed, however, Natalia found herself also looking at banned news sites, including Radio Free Europe, to stay informed, even as friends around her bought "totally" into the government line that Ukrainians were Nazis and Russia was facing an existential threat from the West.

"People now just believe lie after lie. I feel so isolated," she said.

She said, for example, that she's been able to read foreign news stories suggesting there were significant Russian casualties in the sinking last month of the Moskva, the flagship of Russia's Black Sea Fleet. But the Russian press has reported only one official death, with 27 soldiers declared "missing."

"Parents are just getting one answer from the Ministry of Defense - that your son is 'missing,' " she said. "Missing? Don't you really mean dead? But they're not saying that. They're not telling the truth."

Although downloading a VPN is technically easy, usually requiring only a few clicks, purchasing a paid VPN has become complicated in Russia, as Western sanctions have rendered Russian credit and debit cards nearly useless outside the country. That has forced many to resort to free VPNs, which can have spotty service and can sell information about users.

Vytautas Kaziukonis, chief executive of Surfshark - a Lithuania-based VPN that saw a 20-fold increase in Russian users in March - said some of those customers are now paying in cryptocurrencies or through people they know in third countries.

In a country used to hardships, Russians are good at creative workarounds. Elena, a 50-year-old Moscow tour operator, said she has managed to tap into her old Facebook account by repeatedly signing up for free trials with a series of different VPN providers to avoid payment.

"We do what we have to do," Elena said.

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‘Putin’s Superyacht’ Grabbed by Italian Authorities Before It Could Sail Away

Daniel Kreps

ROLLING STONE 
Fri, May 6, 2022,

Superyacht "The Scheherazade" Moored In Italian Marina - Credit: Getty Images

A superyacht believed to be owned by Russian president Vladimir Putin was “frozen” by Italian authorities Friday before the ship could set sail from port.

The $700 million, 459-foot Scheherazade, worth approximately $700 million, had been under investigation since March, when Italian authorities boarded the ship as part of the European Union’s sanctions against Russian oligarchs in response to the invasion of Ukraine.


While Scheherazade’s ownership was under question, anti-corruption journalists working with jailed Russian opposition leader Alexei Navalny long claimed that the ship belonged to Putin; U.S. officials also linked the Scheherazade to Putin, the New York Times reported.

A subsequent report by Italian newspaper La Stampa connected the Scheherazade through shell companies to Russian oligarch Eduard Yurievich Khudainatov, former president of Russian oil company Rosneft, though his “ownership” is believed to obfuscate the real owner of the ship.

(Forbes notes that Khudainatov — who does not face EU sanctions — is also accused of being a “proxy” owner of the Amadea, a superyacht owned by sanctioned Russian oligarch Suleiman Kerimov.)

The investigation into the Scheherazade — dry-docked at the Marina di Carrara since September for maintenance — hastened in recent days as it appeared the ship was preparing to imminently set sail, which would have removed it from the jurisdiction of EU sanctions. Before that could happen, however, the Italian Minister of Economy and Finance announced a “freezing decree” of the Scheherazade before it could leave the dock.

In announcing the freeze, the Minister of Economy and Finance Daniele Franco said their investigation found “the presence of significant economic and business links of the beneficial owner of the boat Scheherazade with prominent elements of the Russian government.”

If Putin did in fact own the Scheherazade, he didn’t have much time to enjoy it: Forbes reports that the ship was built in 2020, and that some of its perks included an on-ship movie theater, beauty salon, spa and helicopter pad.

The Scheherazade is the latest superyacht targeted in the ongoing sanctions against Russian oligarchs, following the seizure of Russian billionaire Alisher Usmanov’s custom-built 512-foot yacht Dilbar as well as the Amore Vero, a superyacht belonging to Igor Sechin, the Russian oil oligarch dubbed “Darth Vader.”

More from Rolling Stone

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French Authorities Seize Superyacht Belonging to Russia's 'Darth Vader' Oligarch

Documents found by Fiji on superyacht implicate its Russian owner - FBI

Thu, May 5, 2022
By Kirsty Needham

SYDNEY (Reuters) -Fiji authorities searching a yacht they seized on behalf of the United States as it presses Russia over the invasion of Ukraine have found documents implicating its suspected owner, Russian oligarch Suleiman Kerimov, in breaking U.S. law, the FBI said.

The Amadea arrived in Fiji on April 13, after an 18-day voyage from Mexico, and has since been the focus of a U.S. bid to seize it as part of U.S. sanctions against Russia.

Fiji police and FBI agents seized the Amadea at a wharf on Thursday, two days after a Fiji court granted a U.S. warrant that linked it to money laundering.

Fiji's High Court on Friday refused a stay application by the vessel's registered owner, Millemarin Investments, to stop U.S. authorities removing it from Fiji, Fiji's public prosecutor said in a statement.

The $300 million superyacht had been handed over to U.S. authorities, it said.

The FBI said in an affidavit attached to the U.S. seizure warrant that Fiji authorities had found documents on the Amadea showing breaches of U.S. law because Kerimov was sanctioned by the United States in 2018.

"There is probable cause to believe that Kerimov and those acting on his behalf and for his benefit caused U.S. dollar transactions for the operation and maintenance of the Amadea to be sent through U.S. financial institutions, after a time which Kerimov was designated by the Treasury Department," the FBI said.

The vessel had running costs of $25 million to $30 million, it said.

Lawyers for its registered owner, Cayman Islands company Millemarin Investments, have denied it is owned by Kerimov. The vessel's lawyer, Feizal Haniff, declined to comment to Reuters on Friday.

The U.S. alleges Kerimov has beneficially owned the Amadea since August 2021 but evidence for this claim was redacted in the warrant.

The FBI said the Amadea had tried to avoid being seized "almost immediately" after Russian troops entered Ukraine.

"Amadea turned off its automated information systems (AIS) on February 24, 2022, almost immediately after the start of the Russian invasion of Ukraine," the FBI said.

Russia calls its actions in Ukraine a "special operation" to disarm Ukraine and protect it from fascists. Ukraine and the West say the fascist allegation is baseless and that the war is an unprovoked act of aggression.

The vessel's paperwork showed the next destination would be the Philippines but the FBI believed it was headed to the Russian Pacific port of Vladivostok.

Many Russian oligarchs have attempted to move their yachts to Russia to escape U.S. sanctions since March, the FBI said.

The U.S. Justice Department's Taskforce KleptoCapture has focused on seizing yachts and other luxury assets to put the finances of Russian oligarchs under strain in a bid to pressure Russian President Vladimir Putin over the war in Ukraine.

FBI Director Christopher Wray, commenting on the seizure of the Amadea in Fiji, said in a statement: "The FBI, along with our international partners, will continue to seek out those individuals who contribute to the advancement of Russia's malign activities and ensure they are brought to justice, regardless of where, or how, they attempt to hide."

(Reporting by Kirsty Needham;Editing by Robert Birsel)