Russia's refusal to deliver S-300 surface-to-air missile systems to Iran means Tehran could turn to China as its main arms supplier, depriving Moscow of a serious source of revenue, a Russian daily suggested on Wednesday.
Moscow said in mid-June it would freeze the delivery of S-300 air-defense systems following a new round of UN sanctions imposed on Tehran on June 9. Security Council Resolution 1929 imposed a fourth set of sanctions on Iran over its nuclear program, including tougher financial controls and an expanded arms embargo.
According to Nezavisimaya Gazeta, Russia's losses will amount to the value of the contract plus penalties for breach of contract.
The S-300 contract is worth some $800 million, while Russian experts estimate the penalty for breach of contract at $400 million.
Furthermore, Iran could refuse to buy any more military products from Russia, leading to an estimated loss of $300 million to $500 million a year.
In another indication of a trend that should be worrying to Moscow, experts pointed to Iran's decision to effectively end cooperation with Russia in the civil aviation sector.
Earlier in June, Iran banned its airlines from using Russian-built Tu-154 airliners on domestic and international routes. In addition, there have been reports of the imminent deportation of Russian pilots because the Islamic Republic already has "enough qualified flight personnel."
Iranian Defense Minister Ahmad Vahidi warned on June 22 that Russia would be responsible for the consequences of its failure to deliver S-300 surface-to-air missile systems to Iran.
Russia initially said the delivery of S-300 systems to Iran would not be affected by the new UN sanctions since they are not included in the UN Register of Conventional Arms, but experts from the Federal Service for Military and Technical Cooperation concluded the missiles did come under the new set of sanctions.
A Kremlin source echoed that opinion on June 11, while Foreign Minister Sergei Lavrov said it was up to the president to make the final decision.
Moscow signed a contract on supplying Iran with at least five S-300 systems in December 2005, but nothing has been delivered. The United States and Israel have urged Russia not to fulfill the contract.
The advanced version of the S-300 missile system, called S-300PMU1, has a range of over 150 kilometers (over 100 miles) and can intercept ballistic missiles and aircraft at low and high altitudes, making it effective in warding off airstrikes.
MOSCOW, June 30 (RIA Novosti)
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- firstname.lastname@example.orgCan Russia be fined for non delivery based on international sanctions22:02, 23/09/2010Have the Iranian paid for the $800 million dollar S300 missile system?
If so this puts the Russian Government in an unfortunate position. The money paid to the military defense contractors would have to be paid back for none delivery. Unless there is a contract clause that stipulates that Iran must meet certain international regulations with regards to its nuclear program.
If the S300 missile system has not been paid for by the Iranians it is less of a problem. However the Russian defense companies are still out $800 million in expected revenue.
It would be interesting to know if NATO or the United States has compensated Russia for not being able to sell these S300 missile systems to Iran along with other military hardware.
I understand why these weapons cannot be delivered to Iran based on the decree that is part of measures Russia is taking to comply with UN Security Council Resolution 1929 of June 9, 2010.
This shows Russia's resolve to be a strong member of NATO.
This will be a set back to Iran who was hoping to have a strong missile defense against a possible US / NATO attack to disable its nuclear ambitions.
This sudden change in defensive capability may change Iran's stance on its nuclear ambitions and encourage a more diplomatic adherence to NATO requests. We will see.
Perhaps Russia can use this to their advantage to encourage some NATO countries to purchase some of their new 5th generation MiG-35 fighter jets. I know that Canada is looking for some new aerospace jobs and perhaps in exchange for purchasing a set quantity of MiG-35 fighter jets, some MiG-35 manufacturing aerospace jobs can be created in Canada?
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