Geopolitics

Russians Pressed To Take Summer Vacations In Crimea

Summertime fun in Crimea
Summertime fun in Crimea
Elizabeta Surnacheva

MOSCOW — Upon getting the news that the United States and European Union wouldn’t issue travel visas to certain senior officials as part of the continuing sanctions in response to Russia’s annexation of Crimea, no one in Moscow complained out loud.

Indeed, several prominent officials publicly declared that they would vacation in Russia, even if privately they wrung their hands over ruined plans for family vacations overseas. Then the government announced that it would not allow members of the armed forces to leave the country, and the image of government employees collectively opting for a “staycation” this summer got even stronger.

On April 10th, the Russian Foreign Ministry issued a warning to Russian citizens, noting that the sanctions might increase the likelihood that Russian citizens would be detained by American law enforcement if they travel to the United States. The Foreign Ministry issued a general recommendation that Russian citizens avoid international travel this summer.

In truth, according to Kommersant's sources in the government, much of the responsibility for federal employees’ staying in Russia this summer lies at least partially with those employees themselves. Mostly for political reasons, many prefer not to go abroad, both out of solidarity with their sanctioned colleagues and to avoid spending money in “unfriendly” countries.

News of both Crimea’s annexation and the first list of sanctioned individuals, which included 11 Duma deputies and 8 senators, prompted euphoria in the Duma (Russian parliament). The Duma adopted - by a vote of 353 to 97 - a decree extending the "sanctions" to all of members of the Duma.

Members of the United Russia party bragged, both in public and in private, about the several weeks they were planning to spend in Crimea over the summer. They also announced the creation of an advertising campaign, “We’re going to Crimea! Who is with us?” One of the project’s features was supposed to be a website with photos of the Duma members on holiday in Crimea.

Neither the site nor the ad campaign materialized. Enthusiasm waned, and the party leadership decided against a ban on certain vacation destinations for its members not already on the list of sanctioned officials.

The truth is, most Russian Duma members will, in fact, have to spend their holidays at home. That’s not because of the sanctions, however - it’s because there are elections slated in many regions this fall, and deputies and senators are returning to their home regions to campaign instead of going on holiday.

“I’m on Canada’s sanctions list, and I’m certainly not going to Canada,” explained Mikhail Margelov, the Chairman of the Foreign Affairs Committee of the Federation Council of Russia.

Campaign trail

But Margelov also noted that there are gubernatorial elections in Pskov Oblast on September 14: "I’m going to give up my vacation to work on Andrei Turchak’s campaign," he said, adding that there hadn’t been any recommendations, orders or advice given to Duma members regarding where to spend vacations.

There are also electoral campaigns underway in Crimea, and it’s also possible that current Duma members will take a working vacation to Crimea, using their time on the peninsula to work with the local government.

Elected officials at all levels around the country spoke of “solidarity” with their blacklisted colleagues. Even before May, the government ministers and vice-premiers discussing, “their increased responsibility to spend less time in unfriendly countries,” one source said. It’s not a direct ban, just a collective decision to stand with their blacklisted colleagues.

This means that employees of state-owned companies and regional administrations will have to accept the responsibility for filling up Crimea’s resorts. Vladimir Putin already said, in April, that employees of state-owned companies shouldn’t vacation in Europe. But according to our sources, employees of sanctioned companies have been explicitly told that they should not travel to Europe or the U.S.

In May, the Federal Tourism Agency sent state-owned firms and other major companies offers for discounted trips to Crimea’s resorts. It was one way that the Agency is planning to fill up the tourism infrastructure in Crimea. Some companies, including Gazprom and Transneft, had already made arrangements for employee trips to Crimea before the official recommendation.

But official recommendations have not been enough to convince all of Russia’s major companies that their employees would be best off spending their vacation in Crimea: One is reportedly spending millions to send the families of employees on vacation in Turkey, Spain, Greece and Croatia.

Regional administrations are picking up some of the slack, spending record sums to send children, including orphans, as well as disabled adults, to Crimea’s resorts.

In all, however, the government’s attempts to fill up Crimea’s resorts with the employees of state-owned companies and their families have been successful. State-owned companies are major employers, and their workers have salaries that are higher than average, meaning they have more money to spend while in Crimea. So even if there are less than the usual six million tourists this summer in Crimea, the tourists who do come will have more money to spend, and perhaps Crimea can make up for the difference by raising prices.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ