Relations with US in ‘lamentable state,’ says Russia, after drone incident

The diplomatic relations between Russia and the United States have plunged into a "lamentable state" amid a row between the two countries over a drone incident, Moscow says.

The Kremlin spokesman Dmitry Peskov told reporters on Wednesday the bilateral relations were in dire straits after the US accused Russia of downing one of its reconnaissance drones over the Black Sea.

The US military on Tuesday said a Russian fighter plane had clipped the propeller of one of its spy drones flying over the Black Sea in international air space, causing the aircraft to crash into the water.

Russia denied that its forces had made any effort to down the drone, and instead suggested that the US aircraft had possibly crashed due to “sharp maneuvering.”

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In related news on Wednesday, two Russian ministries suggested the Kremlin suspend double taxation agreements with hostile countries.

The Russian Finance and Foreign Ministries called for the suspension of double taxation agreements with unfriendly countries until Russia’s rights were restored.

Western countries have slapped a slew of economic punitive measures on Moscow since Russia launched a special military operation in Ukraine in February 2022.

"Since 2022, unilateral economic restrictive measures have been imposed by Western countries against Russia. In particular, in February, the European Union added Russia to the list of non-cooperative tax jurisdictions, the so-called EU black list," the Russian Finance Ministry said in a statement in coordination with the Foreign Ministry.

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The statement said Russia had the right to act reciprocally, calling on President Vladimir Putin to issue a decree to suspend double taxation exemptions with countries which were presently unfriendly.

"The introduction of restrictive measures unilaterally is a violation of international law. Accordingly, Russia has grounds for the introduction of retaliatory measures. In this regard, the Russian Finance Ministry and the Russian Foreign Ministry proposed to the President of the Russian Federation to issue a decree on the suspension of agreements on avoidance of double taxation by all countries that have introduced unilateral economic restrictive measures against Russia," the statement said.

It is proposed to suspend these agreements until the violated rights of Russia are restored, the Finance Ministry stated.

If the proposal of the two ministries is supported, the application of reduced withholding tax rates (tax exemptions) on income covered by double taxation agreements will be suspended from the moment the relevant decree comes into effect.

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