When Russia will Ready to Join the WTO…*

By Dr. Zura Garakanidze | 20 December 2010

Russia’s persistent interest in Iranian energy projects casts a problematic light over its bid to join the World Trade Organisation.

Moscow is already violating the WTO’s rule on relations with unrecognised separatist states
It also appears ready to invest in Iranian oil and gas, enough to violate Western sanctions regimes
Russian companies’ Armenian subsidiaries are involved in some of these projects

In an interview with Interfax on September 8, William Burns, the US under-Secretary of State for Political Affairs, noted that the US and Russian presidents had decided at their June 24 summit to set September 30 as a target for resolving several outstanding bilateral issues.

“[As] I said before, Russia is making good progress towards those goals,” Burns said. “The United States is doing everything it can to be supportive, so I think it’s possible to preserve and build on [the] momentum that has built up, and I think we are at a moment where Russia’s accession to the World Trade Organisation [WTO] is closer than it has ever been before.”

However, information published by the Russian media makes clear that Russia is violating at least one WTO rule – and may be gearing up to break another.

Separatism and sanctions

First, the WTO prohibits trade with unrecognised separatist states. However, since the 1990s, Russia has enjoyed wide-ranging economic co-operation with Abkhazia and South Ossetia, two regions that have declared independence from Georgia.

Moreover, after invading Georgian territory and occupying South Ossetia and Abkhazia in August 2008, Russia formally recognised the independence of these two regions. It also concluded joint border defence treaties with both of them and has officially recognised customs checkpoints on their common borders.

Secondly, the WTO requires its members to avoid violating sanctions imposed by the organisation’s other member states. This casts a problematic light on Moscow’s dealings with Tehran.

In a gesture of goodwill following the announcement of a “reset” in US-Russian relations, the Kremlin has joined not only with the UN, but also with the US, EU and Japan in endorsing unilateral sanctions against Iran. At the same time, however, some Russian state-owned companies (along with their Armenian proxies) are looking to co-operate with Iran on the type of investment projects targeted by the US and the EU – and therefore by the WTO.