Banned Iran missile sale costs Russia $1 billion

Banned Iran missile sale costs Russia $1 billion

Russia could pay high price if Tehran successfully sues for compensation.

September 29, 2010 9:01 by Rasha Reslan

Moscow’s refusal to sell Iran high-precision air defence missiles will cost Russia $1 billion in lost revenue, a senior Kremlin-allied lawmaker said on Tuesday.

Russia could pay a still higher price for banning the supply of S-300 missiles if Tehran successfully sues for compensation, Konstantin Kosachyov told Russia Today television.

But Kosachyov, head of the international affairs committee in the lower parliament house, said Russia risked far more costly political damage if it delivered the missiles.

“Any current or possible commercial losses for Russia should not prevail over the political losses or damages if we are not in line with the non-proliferation regime, with our commitments to the Security Council and the United Nations,” he said.

“This is far more important,” Kosachyov said.

President Dmitry Medvedev issued a decree last week prohibiting the sale of S-300 missile systems to Iran, citing restrictions under sanctions the U.N. Security Council imposed on Tehran in June over its nuclear activities.

Moscow supported the sanctions, part of a gradual public shift closer to the tougher stance the United States and European Union have taken toward Iran, which they fear is seeking to develop nuclear weapons.

Kosachyov said that under its current leadership, Iran “is not a comfortable, transparent partner.”

He said Russia’s S-300 contract with Iran was worth “a little less than 1 billion … huge money”. If Iran took Russia to an arbitration court and won, “Russia’s losses may increase.”

The United States and Israel had pressed Moscow not to deliver the S-300s, which they fear Iran could use to protect nuclear facilities in the event of an attack.

Iran has criticised Russia’s decision while saying its defence did not depend on the delivery of the missile systems, Isna news agency reported last week.

Russia supports Western efforts to win proof that Iran’s nuclear program is purely peaceful, but has built Iran’s first atomic power plant and vehemently opposes the use of force against Iran.

(Reporting by Steve Gutterman; Editing by Ruth Pitchford)