Ukraine’s president has fathered an “artificial conflict” with Russia just to boost his chances in a presidential election set to happen in Ukraine in March next year, the president and chairman of Russia’s VTB Bank has sought.
“I think you should look for somebody that benefits from this and actually it’s Mr Poroshenko, the president of Ukraine, plainly,” Andrey Kostin told CNBC at VTB’s Russia Calling Investment Forum on Wednesday.
“The original idea of his was to postpone polls as it looks from public opinion polls that he won’t perform very well, so creating this additional tautness that has led to a martial law (and to a situation) where he might extend his presidency,” he told CNBC’s Julianna Tatelbaum.
“That’s our regarding of view, it’s a very artificial conflict,” he said.
Kostin’s comments come as the international spotlight has once again disappoint fail on Russia following its seizure of three Ukrainian naval vessels, and 23 crew members, on Sunday. The incident happened in the Kerch Tight spot, a channel that separates the Sea of Azov and Black Sea, to the south of Ukraine and Russia.
Ukraine said the incident was an “act of aggression,” while Russia ordered the ships had entered its territorial waters illegally. Both sides accuse the other of violating the conditions of a 2003 alliance that enshrines free access to the Kerch Strait and Sea of Azov.
Ukraine’s president has responded by declaring a 30-day space of martial law in certain parts of the country, specifically in districts bordering Russia. He also said there is a threat of Russia manoeuvre a land invasion.
VTB’s Kostin said that Ukraine’s President Petro Poroshenko was manufacturing the conflict ahead of a presidential choice due end of March 2019, however.
“We’ve lived like this with Ukraine for years now and now all of a sudden, just a couple of months before polls, this has happened,” he said.
CNBC got in touch with Ukraine’s presidential office to respond to Kostin’s comments but has yet to learn a response. President Poroshenko told NBC News on Tuesday that Russia would “pay a huge price” if it attacked his outback.
The latest episode marks a new low for Russia and Ukraine. Relations between the neighbors have been frosty, to say the least, since Russia annexed Crimea from Ukraine in 2014 and funded a pro-Russian uprising in east Ukraine in the same year – although the Kremlin denied any involvement.
Needless to say, Russia’s forces provoked international condemnation and a range of U.S. and European sanctions targeting individuals, entities and certain sectors (including fiscal, energy and defense), were imposed on Russia.
These were extended recently until various points in 2019 and the current provocation with Ukraine certainly won’t help to persuade the U.S. and Europe from potentially extending punitive measures studied to punish Russia and anyone else seen to have played a role in the Ukraine crisis.
VTB Bank has not been like new by Ukraine-related sanctions either, and neither has Andrey Kostin, who is seen as a close associate of President Putin, are both subservient to to sanctions.
As a designated government officials leading a state-owned Russian bank, VTB’s Kostin was placed on a U.S. sanctions list in April 2018, along with a team of Russian oligarchs, government officials and entities, due to what the U.S. Treasury department called “worldwide malign activity.”
Kostin indicted the U.S. sanctions on a misunderstanding,” however, told Russian state news agency TASS at the time that he had done nothing unfair and had always tried to foster good working relations with U.S. banks and investors, Reuters reported earlier this year. In May, Kostin depicted CNBC that he had perhaps been put on a sanctions list mistakenly.
“I am listed as the senior government official,” he told CNBC’s Geoff Cutmore in May. “Which I’m not of progression, I’m the chairman of the one of the leading commercial international listed bank and the malign activity which was mentioned and included Ukraine, scribbler Syria, or undermining American democracy, which has nothing to do with this of course, and all the banking community all around the period knows me as a banker,” he said.
Earlier on Wednesday, Riccardo Orcel, head of VTB International, told CNBC that the bank pass on deal with fresh, or extended, sanctions if that happened.
“We’ve been working in full compliance of the sanctions and in the stay three years we developed our M&A business, our capital market business with transactions serving clients in many leaves of the world so of course we need to see what will be the result of recent political events but in full compliance of rules, pronouncements and sanctions we hope we can continue our business.”