Letter From the Editors

While the Russian government might never officially call its “special operation” in Ukraine a war, the news in this issue makes unambiguously clear that the country has now fully shifted to war footing.

The first indication is that Russia is claiming near completion of the special operation’s most concrete and limited goal: reunification of Donetsk and Lugansk Provinces under the separatist DPR/LPR governments. The LPR reached its old regional borders first, “having cleared nationalists from the town of Popasnaya,” in the words of the Russian Defense Ministry.

The special operation’s other two goals, “demilitarization and denazification,” entail a conflict far beyond the Donetsk Basin. Defense Minister Shoigu, in the same speech in which he announced Russian control over Mariupol (except for the Azovstal steel works), declared that any NATO supply transports on Ukrainian territory “will be considered by us a legitimate target.” Russian planes and missiles have already been striking depots where arms and materiel are stored.

“Denazification,” a goal stated in terms meant to deter criticism, carries its own foreign policy hazards. Foreign Minister Lavrov, in attempting to justify the goal, appeared to compare Zelensky to Hitler, who “also had Jewish blood.” When Lavrov’s Israeli counterpart called the statement “unforgivable and outrageous,” the Russian foreign ministry doubled down, condemning Israel’s support for “the neo-Nazi regime in Kiev.” But if the entire Ukrainian government, including its Jewish president, are Nazis, then it follows that Russia’s goal of “denazification” cannot be completed by a limited operation but only by an existential war. Kiev, for its part, certainly views this war as existential. In a string of interviews, Ukrainian Foreign Minister Kuleba made it clear that Ukraine’s war aim is to restore the country’s 2013 borders and impose reparations on Russia.

Even without the specter of reparations, the Russian economy has already moved into war mode and thrown aside certain established rules of the peacetime market. Factories in the Russian heartland may not be vulnerable to bombs and missiles, but, as Professor Natalya Zubarevich tells Argumenty i fakty, they will face widescale shutdowns and layoffs because of Western sanctions.

Russian countersanctions, in turn, are now moving beyond their traditional symbolic levels. Putin has signed a decree prohibiting all business dealings, including those mandated by active contracts, with any person, entity or government on the sanctions list.

The new countersanctions policy is already coming with side effects. Music and videos from unfriendly countries are now subject to licensing to ensure compliance with Russian regulations. According to Russia’s Internet Video Association, “given the scale, this amounts to legalizing piracy.”

In a logical next step in this economic trench war, Duma state-building committee chairman Pavel Krasheninnikov has put forward a bill that eliminates liability for breach of contract if sanctions have made fulfilling it “impracticable.” The Finance Ministry has panned the bill, saying that it “will surely result in extensive abuse and destabilize contractual obligations in Russia,” so the Duma will probably wait for amendments from the cabinet before considering it further.

The economists who discussed the issue with Vedomosti believe a modified version of the bill is likely to pass. With all of the difficulties caused by sanctions, the courts will be full of breach of contract cases anyway. At least this way, instead of imposing penalties, the courts would help parties renegotiate their terms to reflect the changed circumstances. “Force majeure cases are pretty common in court practice all over the world,” Vedomosti quotes the Chamber of Commerce and Industry’s Yelena Dybova.

Indeed, a major contract should have a force majeure clause, because there are circumstances that make it impossible to continue business as usual. But then, for the Kremlin to push this bill through would give the game away: Force majeure doesn’t apply to “special operations”; it applies to wars.