Lanka’s defence deal with Russia threatened by US sanctions, but India goes ahead

Government’s efforts to make military procurements from Russia have hit another serious snag — the sanctions imposed on Russia by the United States.
Among two major deals negotiated with Russia’s Rosboronoexport are the purchase of a Gephard 5.1 Offshore Patrol Vessel (OPV), Armoured Personnel Carriers (BTRs) and Mi 17 helicopters. They were to come from the state own company Rosboronoexport.

However, this company and other Russian companies dealing in military hardware are under sanctions by the US. On August 2, President Donald Trump signed the Countering America’s Adversaries through Sanctions Act of 2017. The sanctions follow the US demand that Russia returns the control of the Crimean peninsula to Ukraine. Yet in Colombo, Some Defence Ministry officials are keen to get the deal through and argue Sri Lanka could obtain exemption from the US since relations are now close. However, diplomatic sources discount this claim.

As reported earlier in the Sunday Times, the Russian Government has extended credit to the tune of US$ 135 million (Rs.20 billion) exclusive of 15 percent of Sri Lanka Government’s contribution. The total ship value including on board spares and ammunition is placed at US$ 158.5 million (Rs.24 billion). This is besides a further Government commitment of US$ 7 million (Rs.1 billion) for training of Navy personnel.

The Government is to pay a four percent interest on the credit extended by the Russian Government. Payment is to be semi-annual in equal instalments within ten years including a grace period of five years.

While Sri Lanka is facing problems, in New Delhi on Friday, Russia and India’s leaders announced a raft of deals worth billions of dollars including for a S-400 surface-to-air missile defence system, as New Delhi walks a tightrope between Moscow and Washington with a wary eye on China. India’s decision to purchase the S-400, flies in the face of the US imposing sanctions on countries buying Russian military hardware, as happened with China last month.

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