The money amounting to over 1 billion euros that France has repaid to Moscow for the non-supply of the Mistral-class helicopter carriers is already in Russian bank accounts, a source in the Russian government told Interfax on Aug. 31.
“France has transferred over 1 billion euros for the unsupplied Mistral-class helicopter carriers in accordance with the intergovernmental agreement with Russia. This amount includes the payment for the vessels and compensation for the indirect costs incurred by Moscow in the construction of the helicopter carriers,” the source said.
The source emphasized that “the money is already in the Russian accounts.”
Additionally, under this agreement France will not get the right of ownership of the helicopter carriers until it returns the equipment produced in Russia to Russia, the source said.
Responding to a question as to where the equipment removed from the Mistral-class helicopter carriers will be placed, the source said “it has not been decided yet.” “It will probably be placed in a training center or on new ships, if a decision is made to build our own helicopter carriers like those,” the source said.
“The original treaty on the construction of the two Mistral-class helicopter carriers in France was made on conditions that are enslaving to Russia. Specifically, it provided that Russia was entitled to no more than 20 percent of the value of the contract in the event of force majeure, and France’s unilateral refusal to continue the construction was classed as such a circumstance,” the source said.
The source added that the intergovernmental agreement signed later helped resolve those problems. “As a result of substantive negotiations, these so-called force majeure conditions were eliminated in the intergovernmental agreement. The document helped resolve the issue of non-supply by France of the helicopter carriers ordered by Russia on the basis of this bilateral agreement without going to the arbitration court in Geneva to resolve this problem,” the source said.
Rosoboronexport and France’s DCNS signed a contract to build two Mistral-class helicopter carriers in June 2011. The St. Petersburg-based Baltic Shipyard, a part of the United Shipbuilding Corporation, built the sterns. The STX France Saint Nazaire shipyard attached the sterns to the bows and put the finishing touches to the ships.
The contract for two helicopter carriers was worth 1.2 billion euro. Russia paid 840 million euro to France.
The delivery of the first helicopter carrier, the Vladivostok, to the Russian Navy was due in the middle of November 2014, but the French administration refused to honor its contractual commitments under pressure from NATO allies, primarily the United States, using the escalating tensions in eastern Ukraine as an excuse. The second carrier, the Sevastopol, was supposed to be transferred to Russia in fall 2015.
Western sanctions imposed on Russia imply that military-technological contracts signed in the previous period must be fulfilled.
In early August 2015, Russian President Vladimir Putin and his French counterpart Francois Hollande made a joint decision on the termination of the Mistral contract.
“During their consultations held in a friendly atmosphere, as is traditional in the Russian-French relationship, experts came to a mutually acceptable agreement on reimbursement of the funds paid by Russia under the contract and the return of the shipped Russian equipment and material,” the Kremlin press service reported earlier.
“France has already transferred the said funds and after return of the equipment will acquire the right of ownership and be able to dispose of both the ships. Moscow considers the Mistral issue fully settled,” the Kremlin said.
Russia will receive the sum, which corresponds with its expenses, French Defense Minister Jean-Yves Le Drian said in an interview with the RTL radio station.
