07/27/2021, 09.58
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Moscow plans to turn Kuril Islands into tax haven

by Vladimir Rozanskij

Putin wants to stimulate investment in remote areas of the Russian Far East. Tokyo protests, claiming territorial rights over the archipelago. The Kremlin replicates staking its own claim. Decades of negotiations have failed to reach any agreement between the two sides.

Moscow (AsiaNews) - The Kremlin wants to turn the Kurils into a tax haven. This move was unveiled by Prime Minister Mikhail Mišustin, who visited Iturup, one of the islands administered by Russia, but disputed by Japan on July 25.

Mišustin announced the "unprecedented project, which I will discuss with Vladimir Vladimirovič [Putin] to see what can be done." On July 23, the Russian president himself had anticipated Council "a surprise" "to arouse the curiosity of entrepreneurs" regarding the Far Eastern archipelago to the Security.

After World War II, the Kuril Islands remained a disputed territory between the Soviet Union and Japan, which for this reason never signed a peace treaty. Russia considers the island chain as part of the Sakhalin region, while Japan claims sovereignty over the southern islands (Iturup, Kunašir, Šikotan and the small Khabomai group) as territories of the Hokkaido prefecture.

In the 1990s, Russia's first president Boris Yeltsyn had made the Kurils an offshore territory, what Mišustin says today he does not want to repeat: "At that time, free trade zones were made available to private investors, to relieve them of fiscal pressures, without benefiting the territory." In 2019, the then governor of Sakhalin, Valerij Limarenko, had called for zero tax on the islands; incumbent Prime Minister Dmitry Medvedev had deemed it "an interesting proposal."

Through Deputy Foreign Minister Takeo Mori, Japan lodged a protest with the Russian government against Mišustin's visit to Iturup. In response, Russian Deputy Foreign Minister Igor Morgulov summoned Japan's ambassador to Moscow, Toyohisa Kozuki, yesterday. Morgulov conveyed to the Japanese envoy the Kremlin's "firm protest" against Japan's "territorial claims" against Russia.

In their statement, the Russians insistently call on the Japanese not to slide towards damaging bilateral relations. Moscow calls on Tokyo to return to compliance with prior agreements on improving Russo-Japanese relations. It urges the counterpart to work on reaching a new qualitative level through development in all fields of economic and trade cooperation, "identifying common areas of trust in security and international relations."

On the same day, the Russian ambassador in Tokyo, Mikhail Galuzin, expressed to the Japanese Ministry of Foreign Affairs the total opposition of his government to the protest against Mišustin's trip, reaffirming the Russia’s full sovereignty over the Kuril Islands.

In reality, the Russian premier set out from Iturup on a tour with a wide itinerary throughout all of Siberia and the Far East, on Putin's express indication. The aim is to verify the feasibility of an economic plan that can lift the fortunes of Russia's Asian territories, where the economic crisis is heavily felt.

The controversial relationship with Japan is one of the knots to unravel for Moscow's projects, which has decided with this initiative to address the problem directly, given that the many decades of negotiations with Tokyo have so far not yielded the desired results. Mišustin's visit is not a very original move, following the visit of his predecessor Medvedev in 2010: the first time a Russian leader went to the Kurils after the collapse of the Soviet Union. Now he expects the full unravelling of the "Putinian surprise" for Asian Russia.



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