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    France Transfers Compensation for Mistral Non-Delivery in 'Utmost Secrecy'

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    Deal Cancelled: What Will Paris Do With Russia's Mistrals? (57)
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    Paris transferred over 1.1 billion euros ($1.2 billion) to a Russian bank as compensation for terminating the deal to deliver two Mistral-class helicopter carriers to the Russian Navy "in utmost secrecy," the Kommersant newspaper reported, citing an unnamed source.

    According to the daily, the money transfer was conducted in secrecy due to Moscow's concerns over the Yukos case. In 2014, the Permanent Court of Arbitration in The Hague awarded three companies representing former co-owners of the defunct oil giant $50 billion in compensation from the Russian government. As a result some European countries seized Russian state assets.

    The source told the newspaper that the compensation for the Mistral non-delivery could also be seized under the PCA ruling.

    The Sevastopol mistral warship is on its way for its first sea trials, on March 16, 2015 off Saint-Nazaire.
    © AFP 2019 / GEORGES GOBET
    The Sevastopol mistral warship is on its way for its first sea trials, on March 16, 2015 off Saint-Nazaire.

    The 1.1 billion-euro compensation covers the advance payment of $860 million which Moscow transferred to Paris, as well as the dismantling and unloading of Russian equipment from the two warships, dubbed Sevastopol and Vladivostok. After that, the helicopter carriers will be at France's full disposal.

    Kommersant added that a team of Russian experts will visit the shipyard site in Saint-Nazaire where the Mistrals are docked to recover control and communications systems. As soon as this is done, Moscow will transfer the end-user certificates for the stern sections built in Russia. France will be able to sell the warships to a third party afterwards.

    A number of countries are rumored to be interested in purchasing the Mistrals, including China and India. Not a single nation has made an open bid for the warships built specifically for Russia so far. Should a third party opt to by the two helicopter carriers, refitting them could cost millions. Meanwhile, the two ships are costing French taxpayers up to $5.5 million in maintenance per month.

    Russian sailors stand in formation in front of the Mistral-class helicopter carrier Vladivostok at the STX Les Chantiers de l'Atlantique shipyard site in Saint-Nazaire
    © REUTERS / Stephane Mahe
    Russian sailors stand in formation in front of the Mistral-class helicopter carrier Vladivostok at the STX Les Chantiers de l'Atlantique shipyard site in Saint-Nazaire

    In 2011, Russia and France inked a deal for the delivery of two Mistral-class helicopter carriers. The deliveries were put on hold in late 2014 over Moscow's alleged involvement in the Ukrainian civil war. The Kremlin has repeatedly said Russia is not a party to the deadly conflict and pushed for peace in the war-torn nation.

    On Wednesday, Russian President Vladimir Putin and French President Francois Hollande confirmed that they had arrived at a decision to terminate the deal. Moscow considers the issue to be fully settled, according to a statement issued by the Kremlin.

    Topic:
    Deal Cancelled: What Will Paris Do With Russia's Mistrals? (57)

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    Tags:
    France, transfer, money, compensation, amphibious assault ship, helicopter carrier, Mistral, Yukos, Russia
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