Today brought another interesting twist in Russia’s efforts to mitigate the economic damage being inflicted by the global sanctions imposed on Vladimir Putin and his nation. A new law was hurriedly passed and signed by Putin, giving permission to Russian airlines to confiscate leased airliners left stranded at Russian airports and “re-register” them as Russian planes to be used for domestic flights. Most of the planes in question were left without any obvious travel destinations after much of the world closed off its airspace to flights by Russian-registered aircraft. Under more normal circumstances, such a seizure would set up a protracted court battle over the ownership of the planes, but there isn’t much “normalcy” to be seen in the world these days. It’s also rather unclear what sort of advantage Putin thinks this might give him since all he’s going to do is further anger the governments of the countries that are already sanctioning him and keeping the Aeroflot fleet mostly grounded. (NY Post)
Russia on Monday passed a law allowing the country’s airlines to re-register planes that had been leased from abroad in an attempt to bypass Western sanctions.
The bill, signed by Russian President Vladimir Putin, is intended to support domestic flights in Russia and “to ensure the uninterrupted functioning of activities in the field of civil aviation.”
Western sanctions imposed after Russia’s invasion of Ukraine gave plane leasing firms until March 28 to repossess aircraft from the country.
This isn’t a small number of jets we’re talking about here. The AP report indicates that there are 515 leased jets from other countries currently stranded in Russia. That many jets, particularly including some full-size passenger aircraft, will add up to billions of dollars in economic losses.
This is looking more and more like an escalation of the “economic warfare” that is replacing military action across much of the world. But much like the poor performance of the Russian army in Ukraine thus far, this is yet another front in the war where Putin is simply outgunned. It’s true that the economic blockade arrayed against Russia is roiling world markets and causing economic pains in other nations, but that’s nothing compared to the implosion already taking place in Russia’s domestic economic situation. And Putin doesn’t have much else left to seize or otherwise cut off to the rest of the world.
I remain concerned that these tactics could come back to bite us in more ways than one. The obvious worry that we discussed here previously is that the same sort of tactics could be employed against the United States and our allies by some other block of adversarial nations in the future. But we’re seeing something even more fundamentally and dangerously disruptive here. Remember that all of the nations on Earth, both friend and foe alike, operate in a massive, interconnected global marketplace unlike any previously seen in the history of the world.
But all of that commerce relies on one unspoken rule of the road. The system only works as long as all of the international actors involved respect the property rights of the others, both in terms of individuals, corporate holdings, and governmental property. Disputes over these sorts of assets tend to be worked out either through diplomacy or in the courts. But the moment governments begin simply seizing massive amounts of property without any form of due process, be it this fleet of airliners or the super-yachts of Russian oligarchs, the rules go out the window. International commerce simply isn’t viable unless you can trust the person on the other side of the table to deal with you on a fair basis.
Vladimir Putin has certainly managed to change the world virtually overnight. In one way, he has shored up a huge segment of the nations on this planet in unified opposition to Russian aggression. But he’s also opened the door to a completely new set of rules that may eventually bring our shared international infrastructure grinding to a halt.
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