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Brexit: Foreign states may have interfered in Brexit vote, report says

 

MPs are concerned about allegations governments including Russia and China may have interfered with EU

referendum website

Foreign governments such as Russia and China may have been involved in the collapse of a voter

registration website in the run-up to the EU referendum, a committee of MPs has claimed.

A report by the Commons public administration and constitutional affairs committee (PACAC)

said MPs were deeply concerned about the allegations of foreign interference in last year’s Brexit

vote.

The committee does not identify who may have been responsible, but has noted that both Russia

and China use an approach to cyber-attacks based on an understanding of mass psychology and

of how to exploit individuals.

The findings follow repeated claims that Russia has been involved in trying to influence the US

and French presidential elections.

Ministers were forced to extend the deadline to register to vote in the EU referendum after the

collapse of the government’s website on 7 June, 100 minutes before the deadline.

The collapse resulted in concerns that tens of thousands of people could have been

disenfranchised.

At the time, the government said it was the result of an unprecedented spike in demand, with

more than 500,000 people trying to register on the final day.

The report, published on Wednesday, said there were clues that a distributed denial of service

attack (DDOS) using botnets – a network of computers infected with malicious software – was

used to overwhelm the site.

“The crash had indications of being a DDOS ‘attack’. We understand that this is very common and

easy to do with botnets... The key indicants are timing and relative volume rate,” the committee’s

report said.

While the incident had no material effect on the outcome of the referendum, the committee said

it was crucial that lessons were learned for future votes that must extend beyond purely technical

issues.

The report noted: “The US and UK understanding of ‘cyber’ is predominantly technical and

computer network-based.

“For example, Russia and China use a cognitive approach based on understanding of mass

psychology and of how to exploit individuals.

“The implications of this different understanding of cyber-attack, as purely technical or as

reaching beyond the digital to influence public opinion, for the interference in elections and

referendums are clear.

“PACAC is deeply concerned about these allegations about foreign interference,” the report

concluded.

 

Britain is being hit by dozens of cyber-attacks a month, including attempts by Russian state-
sponsored hackers to steal defence and foreign policy secrets, GCHQ’s new security chief, Ciaran

Martin, said in February.

The chancellor, Philip Hammond, said the National Cyber Security Centre, which Martin heads,

had blocked 34,550 “potential attacks” on government departments and members of the public

in the six months to February – about 200 cases a day.

The committee, which is chaired by the senior backbencher Bernard Jenkin, was also highly

critical of the way David Cameron held the referendum to “call the bluff” of his critics and then

resigned when he lost.

It said that in future referendums, the prime minister of the day should be prepared to carry on in

office and to implement the result, whatever the outcome.

“There was no proper planning for a leave vote so the EU referendum opened up much new

controversy and left the prime minister’s credibility destroyed,” it said.

“It should be reasonable to presume that the sitting prime minister and his/her administration

will continue in office and take responsibility for the referendum result in either eventuality.”

According to the report, there were many occasions in the run up to the vote when it appeared

officials were being drawn into “referendum controversy”, damaging the civil service’s reputation

for impartiality.

Pro-Brexit group unveils plan to cut net migration to 50,000 a year

 Political correspondent

A hardline pro-Brexit group backed by more than 20 Conservative MPs has called for net migration to be cut to 50,000 a year, with work visas limited to those earning at least £35,000 a year, a plan criticised by opponents as likely to damage the economy and harm the NHS.

The proposal by Leave Means Leave – whose Tory backers include Owen Paterson, Dominic Raab, John Whittingdale and Gerald Howarth – marks something of a rearguard action by strong Brexit supporters over immigration numbers.

David Davis, the Brexit secretary, has said immigration levels could still rise after Britain leaves the EU, while Theresa May used an interview on the day article 50 as triggered to say she could not guarantee it would be “significantly lower”.

The immigration plan, written by former leadership contender Steven Woolfe, would involve a five-year freeze on all unskilled immigrants, with those allowed in needing to pass a points system and be sponsored for a well-paid job.

The proposal was condemned by backers of the Open Britain group, which supports a softer Brexit, who said it would badly damage the economy and harm the NHS.

The Liberal Democrats, meanwhile, said Leave Means Leave seemed intent on “crippling the British economy and wrecking public services by keeping essential workers out of the UK”.

The report by Woolfe, who quit Ukip last year after a physical altercation with fellow Ukip MEP Mike Hookem, does allow scope for some seasonal workers to come to the UK temporarily.

But the plan, to be fully unveiled on Monday, would see a five-year freeze on unskilled people moving to the UK, while working visas for skilled immigrants would only be granted if they meet tough criteria.

This would include an Australian-style points system determining how necessary their skills are and require a job paying at least £35,000 a year, plus an English test, five years of private health insurance and sufficient savings.

Woolfe said that while net migration from students alone is about 70,000 a year, the target was possible by greatly reducing the number of workers coming into Britain. He also told Sky News’s Sophy Ridge on Sunday that the economy would not overly suffer, as he did not believe existing overseas workers would leave, while there would be a focus on training young Britons.

It was, he argued, “a template for this government to achieve what the British people wanted” from Brexit.

Woolfe said: “I believe that we can have highly skilled workers into this country, with a really dominant and important points-based system which has at its core a fair, flexible and forward-thinking philosophy, and the idea that bringing net migration down will work for our county.”

However, Open Britain said the idea would cause skills shortages for businesses and the NHS, and was fundamentally unfair.

Conservative MP Anna Soubry, who backs Open Britain, said: “We have seen encouraging signs from the prime minister that she accepts and understands the reality facing British business – they will continue to need overseas workers for years to come.


“Migrant workers contribute to our economy and to British culture – we should be welcoming them in the traditional spirit of British tolerance. Leave Means Leave clearly don’t understand why British business relies on migrant workers.”

Labour’s Pat McFadden said ministers had been encouraging over planning carefully for the aftermath of Brexit: “They would be better continuing with that path and levelling with the public rather than giving in to the more ideological calls from some in this debate.”

Speaking for the Liberal Democrats, the party’s peer, Brian Paddick, said: “Leave Means Leave are clearly intent on crippling the British economy and wrecking public services by keeping essential workers out of the UK.

“Immigration has had a positive effect on our economy, our public services and our communities. Adopting an isolationist, xenophobic approach will leave us all worse off.”

Theresa May begins to dismantle Brexit roadblocks. UK prime minister accepts possible extension of EU rules after 2019

 by: George Parker in London and Duncan Robinson in Brussels

Theresa May has begun to dismantle roadblocks to a Brexit deal, including accepting the

possible extension of free movement, as the European Parliament agreed (https://www.ft.com/

content/719f36ce­19e2­11e7­bcac­6d03d067f81f) to open the way to a potential “association

agreement” between Britain and the EU.

With Britain’s parliament in recess, the prime minister used a three­ day visit to the Middle East

to soften her stance on Brexit, effectively conceding that the UK may have to carry on playing

by some EU rules after it leaves the bloc in 2019.

Mrs May has accepted that Britain will not be able to sign a trade deal until after it formally

leaves the EU and becomes a “third country”, raising the need for a transition agreement to

bridge the gap between Brexit and the ratification of the deal.

The EU’s draft negotiating guidelines stipulate that if the UK wants to stay part of the single

market during that period it will have to stick to existing rules, which include making budget

payments (https://www.ft.com/content/655f8dbe­1541­11e7­b0c1­37e417ee6c76), allowing the

free movement of people (https://www.ft.com/content/853e78ae­1945­11e7­a53d­df09f373be

87) and accepting the jurisdiction of the European Court.

Asked in Riyadh whether she would rule out free movement in any transition period after

Britain left the EU, Mrs May replied: “You’ve used the phrase transitional phase; I have used

the phrase implementation period.

“If you think about it, once we’ve got the deal, once

we’ve agreed what the new relationship will be for the

future, it will be necessary for there to be a period of

time when businesses and government are adjusting

systems and so forth, depending on the nature of the

deal, a period of time during which that deal will be

implemented.”

Charles Grant, director of the Centre for European

Reform, predicted that Mrs May might next concede a

role for European judges in a transition period, saying

it could be “the next redoubt of Eurosceptic ideology

to fall”.

So far Tory MPs have rallied behind Mrs May. Steve

Baker, a leading Eurosceptic MP, declined to discuss

“hypothetical scenarios”, adding: “We can’t have MPs

tying the prime minister’s hands by drawing new red lines with each twist and turn.”

Meanwhile in Strasbourg European MPs approved a resolution on the start of the Brexit talks

(https://www.ft.com/content/719f36ce­19e2­11e7­bcac­6d03d067f81f), opening the door for a

potential “association agreement” between the UK and the EU.

But, in a sometimes fiery debate, senior politicians laid down tough conditions for trade talks,

saying they could only begin once a divorce was settled.

 

An association agreement would force the UK to work in conjunction with the EU on policies

such as tax evasion, trade and social policy, which may prove controversial for some Brexiters.

Although the resolution is non­binding, the parliament can veto any deal agreed under the EU

treaty’s Article 50 divorce clause.

Former UK Independence party leader Nigel Farage compared the EU­27 — the remaining

members of the bloc — to the mafia, in particular for demanding that the UK pay a €60bn exit

bill. “You think we’re a hostage. We’re not, we’re free to go,” Mr Farage said.

Guy Verhofstadt, the leader of the parliament’s liberal bloc, labelled Brexit “a catfight in the

Conservative party that got out of hand, a loss of time, a waste of energy, stupidity”.

Russian Gas in the Southern Gas Corridor Could Undermine the EU’s Diversification Plans
MONDAY, 27 MARCH 2017
Published in Analytical Articles
By Ilgar Gurbanov

March 27, 2017, the CACI Analyst

Gazprom has officially declared its willingness to use the Trans-Adriatic Pipeline (TAP) as a route to deliver gas to Europe. TAP is an integral part of the Southern Gas Corridor (SGC) which is one of the priority energy projects for the EU to ensure the continent’s security of supply from a non-Russian source. Although technical and legal possibilities exist for Gazprom’s use of TAP’s expanded capacity, the long-term contracts securing the pipeline’s initial capacity for Azerbaijani gas together with EU legislation makes this option less likely. Nevertheless, the possibility of a Russian bid for TAP could hamper the EU’s diversification plans and block future gas supplies from other non-Shah-Deniz sources.

 

 

2000px-Nabucco Gas Pipeline-en 1

BACKGROUND: On January 24, during the European Gas Conference in Vienna, the Deputy CEO of Russia’s Gazprom Alexander Medvedev said the company plans to use the capacity of TAP in order to deliver more than 100 billion cubic meters (bcm) of extra gas annually to Europe. The reason is, according to Medvedev, that the planned capacity of Turkish Stream will not be sufficient to carry all this gas.

Turkish Stream is planned to terminate near the Greek border in the Ipsala district of Turkey, the same planned endpoint as the Trans-Anatolian Pipeline (TANAP) and the access point for TAP. TAP initially envisaged the transportation of 10 bcm/y of Azerbaijani gas from the Shah-Deniz field’s stage-II (SD-II) by hooking up with TANAP at the Turkish-Greek border, and then into Southern Europe across Greece, Albania and via the Adriatic Sea to Italy’s south. Gazprom signed a Memorandum of Understanding (MoU) with Italian Edison and Greece’s DEPA in 2016 on natural gas deliveries across the Black Sea from Russia to Greece and from Greece to Italy via the Interconnector-Turkey-Greece-Italy (ITGI)/Poseidon pipeline as an extension of Turkish Stream. The Poseidon is an undersea extension of ITGI across the Ionian Sea to Italy, and is almost a mirror image of TAP. Since ITGI/Poseidon is still under question, for technical, financial, feasibility and cost efficiency reasons, Russia decided to benefit from TAP in order to overcome these challenges.

Commenting on Medvedev’s statement, the TAP consortium’s Head of Communications Lisa Givert said that TAP’s commitment to transporting 10 bcm/y of SD-II gas was underpinned by a 25-year agreement. The pipeline has been designed with an option to expand up to 20 bcm/y when extra gas volumes come on stream with the construction of additional compressor stations along the route, TAP confirmed. Ulrike Andres, commercial and external affairs director of TAP, said Azerbaijan is the most likely gas source for TAP’s phase-II, however, “there is a minor capacity available on the secondary market for short-term transportation [...] should there be demand from shippers.” The TAP Consortium can offer its expanded capacity, in line with EU legislation, to any shipper through open seasons auctions as long as they comply with the participation requirements, Andres noted. According to Spain’s Enagas (a TAP shareholder), TAP can provide capacity to any third gas-shipper requesting transportation capacity in the pipeline on the secondary market during open season in compliance with the regulatory framework. Italy’s Snam (also a TAP shareholder) said that “Gazprom’s joining TAP will double its capacity. TAP’s capacity can be increased up to 20 bcm with a small investment, which will be cheaper than Poseidon’s expansion.” 

IMPLICATIONS: Theoretically, Russia can export gas via pipeline from the endpoint of Turkish Stream to Europe, without breaching the EU's Third Energy Package (TEP) rules and without Gazprom's presence in the TAP Consortium. The European Commission's regulation have left 50 percent of TAP's final/expansion capacity open to third party access (TPA). When TAP's capacity is expanded from the initial 10 bcm/y up to 20 bcm/y, Russia can in accordance with this regulation request the Consortium to construct additional entry/exit points for compressors in Greece and can reserve space in the pipeline by requesting TPA to transport its gas at the second stage of gas delivery. Moreover, BP in 2016 signed a MoU with Rosneft to purchase 7-20 bcm/y of Russian gas. The volume is largely equal to potential Azerbaijani gas supplies (10-20 bcm/y) to Europe in 2020, from the Shah-Deniz project in which BP is development operator. Therefore, if Russia does not own the infrastructure but simply sells its gas from the Turkey-Greece border, its actions will not contravene TEP rules. Russia's Gazprom, with its current gas potential, will be in a position to supply additional gas for TAP's enlarged capacity, earlier than any other potential gas supplier given regional instability in the Middle East and a blurred perspective of Mediterranean, Turkmen and Iranian gas for Europe.

However, the Shah-Deniz Consortium has already secured 100 percent of TAP's initial capacity of 10 bcm/y for Azerbaijani gas with a 25-year-contract and with the assurance of the EU's TPA exemption for the first stage of gas delivery. Thus, Russian gas cannot be transported via TAP for at least the next 25 years due to long-term contracts together with relevant EU legislation, unless significant market or geopolitical changes take place during this period or extra gas demand and shortage emerge in the market to motivate TAP's expansion. Moreover, TAP's expansion would enable Gazprom to deliver a maximum of 10 bcm/y, whereas Turkish Stream's second string was supposed to pump 15.75 bcm/y. Therefore, TAP's potential expanded capacity would not be sufficient to deliver Gazprom's planned volume of gas to Europe. Although SOCAR did not consider Gazprom a rival in the TAP project, the injection of Russian gas into TAP could nevertheless create a rivalry between Russian and Azerbaijani gas in terms of volume and market share. Russian gas could block the prospects for additional volumes of Azerbaijani gas expected to come from new gas fields in TAP's stage II.

Furthermore, Russia's participation will be a strong blow to the political investments of the EU and U.S. throughout the implementation process of the project, envisaging to reduce Europe's gas dependence on Gazprom. According to Amos Hochstein, the U.S. special envoy for energy affairs, the SGC is important for Europe when the continent's economic and political security is threatened by energy monopolies. In support of the SCG, the new U.S. Ambassador to Greece, Geoffrey Pyatt, stressed the necessity of protecting those "projects against other proposed schemes which threaten the future of Europe's energy security" and "would exacerbate European dependency on Russian gas".

TEP rules have previously prevented Gazprom's energy expansion and monopoly on gas transportation in Europe. They also foiled the construction of South Stream under anti-trust rules banning suppliers from owning pipelines without offering other third suppliers access. Yet, after Russia mended its ties with Turkey for the implementation of Turkish Stream, Russia now seeks to use TEP rules in its favour to pre-empt TAP's future deliveries beyond 10 bcm. Therefore, the EU's energy legislation, which once played against Gazprom, now might leave the union with no option to prevent the company's access the TAP's future capacity. This indeed threatens to derail Brussels' plans to reduce Europe's dependence on Russian gas. However, there is currently little the EU can do to block Gazprom's potential bid for using TAP's expanded capacity, as this might violate the EU's position on open market rules.

CONCLUSIONS: Given the uncertainty of Turkish Stream's second string, as well as the ITGI/Poseidon pipeline, Gazprom also plans to use the additional capacity of TAP, since the planned capacity of Turkish Stream will not be sufficient to bring extra amounts of Russian gas to Europe. However, the injection of Russian gas into TAP could fuel rivalry between Russian and Azerbaijani gas in terms of future market shares. Russian gas could block additional volumes from new gas fields in Azerbaijan (as well as alternative sources from Turkmenistan, Iran, Iraq, and the Mediterranean). This can downgrade the importance of the SGC in the context of the EU's diversification plans, undermine the security pillar of European energy policy and enlarge Gazprom's existing market share. However, the contractual commitments to SGC, the EU's legislative instruments and technical ambiguities make Gazprom's access to TAP less likely for near future. The EU can at most, along with the endeavours of the energy companies involved in TAP, extend the initial exemption from TPA for the consortium in order to keep Gazprom out.

AUTHOR’S BIO:  Ilgar Gurbanov is a Research Fellow in the Centre for Strategic Studies (Azerbaijan).

 

Brexit sticking points: thorny issues diplomats must address

 

Friday 31 March 2017 

The initial reaction to Theresa May’s request to leave the EU has echoes of Charles de Gaulle’s

famously dismissive “non!” when Britain tried to join.

There will be no special deal for the City of London, no parallel talks on trade (at least until

divorce terms are agreed) and no privileged access to EU markets if Britain tries to become an

offshore tax haven.

Twice as long as May’s letter on Wednesday, the European council’s draft negotiating guidelines

contain some of the same perceived threats that muddied the waters when she invoked article 50.

Where the British worried their neighbours by seeming to link security cooperation to the

successful conclusion of trade talks, the EU has introduced the future of Gibraltar into the mix –

apparently at the behest of the Spanish government.

But not everything is getting more heated. Just as May’s letter was intended to improve the

atmosphere, there are chinks of light in the emerging EU position. Britain will not have to wait to

leave before it can talk about trade, it just needs to show progress on agreeing the divorce

settlement.

Since both sides agree that some financial payment is required, there is less danger of things

falling apart before talks start. What remains is a clutch of meatier challenges likely to consume

negotiators for the next few months.

Business uncertainty

At the heart of the tension remains Britain’s desire to replicate the benefits of single market

membership without accepting the core principle of free movement of people. Though the EU

embraces for the first time May’s desire for “an ambitious free trade agreement”, it is adamant

this must be accompanied by some harmonisation of social and tax rules to make sure Britain

does not become the offshore pillager feared by De Gaulle and others.

There is a more practical short-term challenge for British business, which is that it is not likely to

know where it will end up along this spectrum: somewhere close to full membership but with lots

of regulation or a low-cost pirate with no preferential market access at all?

Not only will the all-important trade talks have to wait until the divorce settlement has been

broadly agreed, but even then things will only be at a framework level. As the devil is always in

the detail, both sides envisage transitional arrangements that will provide temporary continuity

for business after March 2019 while the detail is thrashed out.

But talks about transition will be third on the agenda, meaning British business may need to wait

for talks about talks, talks about divorce and talks about talking about trade before they even find

out how long their spell in purgatory will be. Many may decide to jump before waiting to find out.

Domestic timing

It is a political imperative for the prime minister to be able to face the electorate in 2020 saying

the UK has left the EU and she has delivered on her self-imposed commitment to make sure

Brexit did indeed mean Brexit.

But the EU’s approach to the talks makes it increasingly clear that it will not be in her gift to claim

she has met that objective, unless the UK walks out with no deal.

The EU looks as if it intends for the UK to be half in and half out by 2020. The compressed

timetable, the EU’s chosen sequencing, the complexity of the negotiations, and EU insistence that

the EU body of law will apply in any transition makes a clean break in April 2019 harder to

achieve.

May still hopes to have an agreement on the divorce, and the future trading relationship, agreed

within two years, which is the agreed timetable for the two sides to reach a deal before one or

other could, if they wished, pull the plug on the talks.

Before then, she will need to win a vote in the Commons on a half complete deal probably in

autumn 2018 and hope subsequently that all EU institutions and the member states back the

deal.

The status of EU law in the UK will be critical to May’s claim the UK has left. The draft guidelines

do not insist in a transition that the European court of justice (ECJ) be the only arbiter of disputes

between the UK as a non-member and the EU. But they state that “should a time-limited

prolongation of union acquis [the relevant body of EU law] be considered, this would require

existing union regulatory, budgetary, supervisory and enforcement instruments and structures to

apply”. This would mean EU law, and budget contributions would continue to hold sway in the

UK.

The draft says any pending ECJ cases, and any cases arising from a dispute during the UK’s

membership of the EU, would still be justiciable by the ECJ. May can present this as merely as a

phase implementing the departure, but it is likely to look a lot messier than that.

Imperial entanglements

Disentangling the remnants of the British empire including Gibraltar, Cyprus, Ireland and some of

the overseas territories have emerged as the surprise stumbling blocks to an agreement in the

draft guidelines.

The Irish government will feel the diplomatic shoe leather worn out trying to alert fellow EU

members to the special status of the Irish border with Northern Ireland appears to have paid off.

The draft guidelines say: “Flexible and imaginative solutions will be required, including with the

aim of avoiding a hard border, while respecting the integrity of the Union legal order.”

There is also a reference to the UK sovereign base in Cyprus, including the “compatibility of the

bilateral agreement between Cyprus and the UK with EU law”. Any deal will have to address the

citizenship rights of those working in the base, though that looks surmountable. The guidelines

are silent on the overseas territories but that may yet change.

The surprise is Gibraltar, where Spain has lobbied in effect to get a veto on the deal. “No

agreement between the EU and the UK may apply to the territory of Gibraltar without the

agreement between Spain and UK.” The wording puts pressure on Gibraltar to barter its

sovereignty in exchange for access to the single market. Britain should not have been blindsided

by the issue. It had been the subject of an EU Lords committee report and bilateral discussions,

but officials were surprised by the starkness of the wording.

Divorce haggling

Theresa May has been urged to take action to protect the citizens of

Gibraltar. 

Topics

Progress on all of the above is also contingent on progress on the key exit demands set out by the

EU.

The first two of these – a reciprocal deal on citizens’ rights and a “imaginative” solution to the

Irish border question – are complex enough, but at least both sides agree on the desired end

result. Haggling over money is likely to prove much more of a zero-sum game.

A worrying development from the British perspective is the EU is demanding it should cover “all

legal and budgetary commitments as well as liabilities, including contingent liabilities”. Many of

the spending commitments are far in the future and currently unfunded but, under this vision of

Britain’s debt, the bill could get very high very quickly.