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Mistral class amphibious assault ship

France will go ahead with the delivery of the first of two Mistral warships to Russia despite protests by the US and UK, prompted by Moscow's stance in the Ukrainian crisis. British Prime Minister David Cameron said that the order is "unthinkable, calling for tougher sanctions and to halt all arms sales to Russia. The ship is nearly completed and will be presented in October. French President Francois Hollande said 22 July 2014 that the plan to deliver the two Mistral helicopter carriers was made in Paris and will go forward despite calls from the US and UK. The Russians have paid. Should we repay 1.1 billion euros if the boat was not delivered to the purchaser? he asked while speaking to reporters late on Monday the night before EU foreign ministers are to meet in Brussels to discuss tougher sanctions on Russia over the Ukrainian crisis.

"For the time being, a level of sanctions has not been decided on that would prevent this delivery," he said. The contract was signed in 2011, the boat is almost finished and should be delivered in October." However, it is not yet clear whether France will go through with the delivery of the second ship, which is planned for the end of 2015. "Does that mean that the rest of the contract - the second Mistral - can be carried through? That depends on Russia's attitude," Hollande said.

In the wake of the crisis in Ukraine, the United States pressed France as well as Britain and Germany to take a tougher line against Russia and cancel the Mistral contract. But France refuses to link the helicopter carrier deal to the US/EU debate over tougher sanctions against Russia. A French government official travelling with President Francoise Hollande 11 May 2014, who asked not be named, told reporters that the contract was too big to cancel and that if France didnt fulfill the order it would be hit with penalties.

French Foreign Minister Laurent Fabius said on 17 March 2014 that the possibility of cancelling the Mistral deal was among the measures in the framework of the third wave of sanctions against Russia. French President Francois Hollande said on March 7 that France will continue implementing the contract on supplying the two Mistral vessels to Russia. France is complying with the conditions of the agreement signed, the parties are not at a stage of dissolving the contract and it is hoped that this will be avoid, Hollande said.

Russia will demand France repay all damages, if the Mistral deal is broken off, Russian Deputy Defense Minister Yury Borisov told reporters on 20 March 2014. "Of course, Russia will defend its right to the end in accordance with the agreements concluded and will demand repayment of all damages we could sustain in the case that the Mistral contract is broken off," Borisov said in regard to the statement of French officials on the possible cancellation of Mistral helicopter-carrying vessel supplies to Russia as sanctions for Crimea's accession to Russia.

The contract, concluded between Rosoboronexport and French ship-builders, stipulates punitive sanctions for cancelling the deal, Borisov said. "I think that it is too early to voice them. It has not come to this. I hope that France will weigh everything clearly, all pluses and minuses of this contract and makes a right decision," Borisov said. If France breaks off the Mistral deal, this will affect its international reputation first of all, Borisov said. "As you understand, the case is not even this agreement, the case is the reputation of the state, which at a certain time concluded this agreement. This is losing the country's reputation as a partner with the entire international community," he said.

The western countries' sanctions against Russia that the EU and US officials were discussing as part of retaliation for Crimea' accession to Russia may threaten the interests of European business companies. Officials of the French companies DCNS and STX had voiced concern about the likely collapse of the deal to deliver Mistral-class helicopter-carriers to the Russian Federation. Paris may give up the contract for building Mistral-class amphibious assault ships for Russia as part of the western countries' economic sanctions against the Russian Federation, a move that may lay off 600 workers, engaged in the project. The collapse of the deal will also negatively affect the financial soundness of DCNS.

Moscow had already paid 1.2 billion euros to Paris, or more than a half of the contract sum. If breach of contract is also included in the economic sanctions package against Russia, France would have to pay the break fee. The penalty charge payments will make up the very same 1.2 billion euros. According to the Russian news agency, the sum comprises the cost of the contract for two ships and the punitive sanctions for the contractor's failure to perform their obligations.

In case the deal is annulled, the French will not get a significant part of the total contract sum, which is estimated in over one billion euro and which is paid after the contract is executedd. France would have to return to Russia all advance payments on this contract. Russia reserved the right to file a lawsuit regarding France to the international arbitration court in Geneva for not implementing contract obligations. The lawsuit could amount to several billion euro. It is unlikely that dock workers of the STX France company in Saint-Nazaire and unions would be thrilled with such response measures. The company was in a quite difficult financial situation and is surviving, to a large extent, thanks to the Russian order.

Mistral Deal - 2014

By mid-2014 the first of the two ships, the Vladivostok, was due to be delivered by November 2014 and the second, Sevastopol, was to arrive in St. Petersburg for a further fitting with Russian weapons systems in November 2015 and was to join the Pacific fleet in the second half of 2016.

Four hundred Russian sailors arrived 30 June 2014 at the port of Saint-Nazaire, France for training on Russia's first Mistral helicopter carrier, which is being built at a French shipyard. Russia's training vessel, the Smolny, docked in the northwestern France port. Russian naval personnel, divided into two crews of 200 people, will be training on the Vladivostok one of two Mistral class vessels currently under construction in Saint-Nazaire. During the exercises, the sailors will reside aboard the Smolny, which will become their floating barracks. The Russian sailors were to initially arrive in France on June 1, but the Smolny was damaged at Russia's Kronshtadt naval base and had to undergo repairs. After their training is complete, the crew will deliver the Vladivostok to Saint Petersburg, where it will be equipped with the newest Russian weaponry. The handover ceremony of the Vladivostok vessel to the Russian side will take place in October or November.



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