Defence iQ: How will drones affect infantry tactics?

"How will drones affect infantry tactics?"

Wilder Alejandro Sanchez
Defence iQ
14 March, 2019
Originally published: https://www.defenceiq.com/defence-technology/articles/how-will-drones-affect-infantry-tactics

With unmanned aerial vehicle (UAV) technology developing rapidly, military leaders, analysts as well as defence industries around the world are coming up with new methods to both utilize them and combat them in the field

Indeed, UAV technology presents plenty of beneficial opportunities, but it is important that drones remain-value adding, and efforts are made not to increase the cognitive and physical burden on infantry that will have to carry them, use, and retrieve after a mission.

The US Military Goes Shopping

The US Army has ambitious plans regarding infantry use of drones. For example, in 2018 the US Army awarded a $2.6 million contract to FLIR Systems Inc. of Wilsonville, Oregon, for an undisclosed number of “Black Hornet Personal Reconnaissance System — a miniature helicopter with video cameras [which] enables infantry squads to see enemy units from the air.” The platform weighs about the same as a parakeet, and it can “can shoot live video with either a daylight imager or infrared, has a range of a little less than a mile and can fly for 25 minutes at a speed of 13 mph.” The contract is part of the Soldier Borne Sensor program.

 

Other companies are manufacturing light drones as well. For example, InstantEye Robotics reported in November 2018 that it had “secured a contract with the Defense Logistics Agency (DLA) in support of PMA-263, the Navy and Marine Corps Small Tactical Unmanned Aircraft Systems (SUAS) Program Office, to field 32 InstantEye Mk-3 GEN5-D1 SUAS systems (64 aircraft).” Like the Black Hornet, InstantEye Robotics’ SUAS systems are light, for instance, the one sold to the US Marines has a weight of around 250 grams.

Counter drone systems 

Just as companies are developing lighter and more efficient drones, other companies are developing products to disable them. For example, IXI EW has developed the Drone Killer, which is available either as a rifle or as a system that can be attached to a rifle. Similarly, the Israeli company Smart Shooter has manufactured a fire control system called SMASH 2000 Plus that has a “drone mode.”

RECOMMENDED: The future of drone and counter-drone technology

Military and civilian agencies are trying to figure out how drones will affect the way infantry units operate. The advantages they provide, as well as the threat of enemy drone platforms, are still debated at the squad and battalion level. 

The National Academies of Sciences, Engineering, and Medicine and other agencies published a joint report, titled Counter-Unmanned Aircraft System (CUAS) Capability for Battalion-and-Below Operations, in 2018, which has been widely read and quoted as it discusses precisely this issue. The report touches on issues including how to counter enemy drones, like for example jamming radio frequencies. (One problem is that new drones “can operate without radio frequency command-and-control links by using automated target recognition and tracking, obstacle avoidance, and other capabilities enabled by software.”)

Discussion: The infantryman and UAVs

There are several issues to keep in mind when discussing how UAVs (nano, or small) will fit within the US Army. Let's consider how this will affect a standard infantry squad of 9-14 members.

One obvious issue is weight. If a light infantry unit wants to bring such capabilities to the fight then troops must allocate space and weight to this kit. This will require additional manpower to carry the apparatus, no matter how light it is, which prompts an important question: if a soldier has to carry a  UAV kit (the platform itself, a control system, power supply and so on) then what part of a kit will a soldier leave behind? This is a difficult call for commanders given the various risk mitigation strategies required for successful operations.

The extra weight may impede on the ability to carry our traditional force activities. If we accept the average rifleman will carry around 100lbs of equipment including a rifle, backpack with ammo, rations, water, and body armour. The idea of adding more weight to will not be appealing, particularly for operations that can last multiple days. This is one of the core reasons propelling industry to focus on making drones lighter and smaller.

On the other side of the spectrum, how will forces deal with adversarial drones? There have already been several analyses on this issue, see for example “On Drones and Tactics: How Unmanned Platforms Will Change the Way the Infantry Fights,” by 1st Lt. Walker Mills for the Modern War Institute.

Even more, there have already been incidents in which unnamed aerial vehicles were utilized by insurgents and foreign combatants to strike at US and Coalition forces, and also for the purpose of testing their reactions to these probes.

As for anti-drone technologies, currently, they vary from weapon-sized devices, which means carrying an extra rifle (e.g. the full-sized version of the Drone Killer), to a smaller system that is attached to a standard rifle such as an M4 (like the Smash 2000 Plus). The question again comes back to the issue of weight.
 

What is worth taking into the field? Can the capability to neutralize enemy drones be accomplished through traditional methods or is anti-drone gear absolutely necessary for combating these devices? Lastly, as a US Army service person with combat experiences explained to the author, “will we even be aware of these devices prior to being engaged, and are they employed in such numbers that we still find it necessary to carry this gear to fend off secondary attacks?”

Moreover, there is the question of how will UAV and anti-UAV technology affect the composition of infantry squads themselves. Will there be a sole “droneman” that carries the unit’s UAVs, as well as anti-UAV gear like a Drone Killer rifle or Smash Plus system? It will be interesting to monitor whether the US Army revisits the composition of an infantry squad in itself to adapt to this new technology.

The US Marine Corps is reportedly testing new squad compositions. “The sizes being considered were 11-, 12-, or 14-man arrangements, and some considered having the squad systems operator carry the M4 carbine to reduce the load, as it is a smaller, lighter weapon,” explained a December 2018 article in the Marine Corps Times, for example.

Lastly, squad leaders will have to decide whether UAVs and anti-UAV technology adds value, especially when considering changes in unit dynamics and the additional burden on the supply chain and logistical tail. The cost of replacing and maintaining these assets may be very high. However, that opens the doors for other up and coming solutions such as additive manufacturing and 3D printing.  

The proliferation of this technology is also something to consider. If these assets become more numerous, the likelihood of them getting lost account or captured is high. What data will be aboard these systems and will how can it be leveraged by adversaries? 

Final Thoughts

Recent analyses are increasingly focusing on understanding how this technology will affect the infantry, as small drones and nano-drones are beginning to be integrated into units. Indeed, the era of UAV military technology is in full swing and we are just beginning to grasp how it will affect the future of warfare, especially in the areas of logistics, medical evacuation, reconnaissance, and offensive support. Under the right condition set, there is no question that small UAVs can be employed to suppress and disrupt small enemy units. 

About the Authors:

Wilder Alejandro Sanchez is an analyst who focuses on geopolitical, military and cybersecurity issues.

The views expressed in this article are those of the authors alone and do not reflect those of any institutions with which the author are associated.

The author would like to thank the US military personnel interviewed for this analysis and who wish to remain anonymous.

International Policy Digest: The AIFC’s International Arbitration Centre: Objectives and Reality

"The AIFC’s International Arbitration Centre: Objectives and Reality"

Wilder Alejandro Sanchez and Lucia Scripcari
International Policy Digest
17 March, 2019
Originally published: https://intpolicydigest.org/2019/03/17/the-aifc-s-international-arbitration-centre-objectives-and-reality/

The Astana International Exchange (AIX), an entity within the Astana International Financial Centre (AIFC), held its first trading session in mid-November, a memorable occasion which included the partial privatization of the state-owned Kazatomprom, the world’s biggest producer of uranium. Similarly, there is another AIFC entity which should be monitored closely for what it could accomplish in the coming years regarding commercial arbitration in Kazakhstan and the rest of Central Asia: the International Arbitration Centre (IAC).

The IAC at a Glance

The International Arbitration Centre aims to present itself to potential clients as a 21st-century international standard arbitration and alternative dispute resolution entity. Hence, it comes as no surprise that its new headquarters will be located in what was once the Expo 2017 centre in Astana. In an interview with the authors, the Registrar and Chief Executive of the IAC, Mr. Christopher Campbell-Holt, explained that the Centre’s brand new headquarters will cover nine thousand square metres of space, with 15 or more meeting rooms, in addition to private conference rooms, as well as state-of-the-art technology including video conferences so that IAC arbitrators and staff can easily communicate with clients around the world.

The AIFC is intended to assist Kazakhstan to become the “hub” for business in Central Asia, in addition to attracting business from European and Asian markets. Any geographical challenge for businesses in dispute from distant markets will be overcome by the IAC’s state-of-the-art technology, including an eJustice Project which was launched in late February 2019. This is “an online portal that enables parties to file cases at the AIFC Court and IAC electronically from anywhere around the world without having to be physically present in Astana. It can assist with the management of full end-to-end electronic processing of legal documents and administration in cases.”

The IAC’s chairman, Barbara Dohmann QC, is an internationally renowned arbitrator and commercial litigator with professional experience at the ICSID, LCIA, the London Metal Exchange (where she is a member of the Arbitration and Arbitration Appeals Panel), the Paris International Chamber of Commerce, and the Hong Kong International Arbitration Centre.

As for the arbitrators themselves, they consist of more than 30 professionals from across the world. Mr. Campbell-Holt explained that this is a multinational team of legal professionals by design, as the IAC wants to send a clear message that its services are available to both a Central Asian and extra-regional clientèle. Thus, it is important that the IAC’s arbitrators have different cultural backgrounds and languages so they will be more in tune with the customs and traditions of the IAC’s clients. Moreover, the multinational composition of the IAC’s arbitrators sends a message to potential clients that this is an arbitration centre that will serve all parties impartially and neutrally independent of the Kazakhstani state.

In addition to the IAC Chairman who is a woman, out of the 28 arbitrators at the IAC, 23 are men and five are women. Mr. Campbell-Holt explained that the arbitrators were chosen because they are all professionals that can offer world-class service, and there are plans to expand this list in the near future. He also highlighted that its staff includes six Kazakhstani citizens, five of whom are female.

A Modern and Efficient Arbitration Centre

It is important to stress that with the establishment of the AIFC’s IAC, Kazakhstan has created a unique centre for dispute resolution in Central Asia, given how this new entity provides a more efficient forum for dispute resolution than anything else the region currently possesses. This is best demonstrated by the fact that the IAC’s arbitration regulations are based, among others, on the United Nations Commission on International Trade Law (UNCITRAL) with some influence from the English Arbitration Act. The combination of these two models creates a predictable legal framework that can provide confidence to parties considering arbitration as to the efficiency of the proceedings, should they choose to utilize the IAC’s services. Moreover, Kazakhstan acceded to the New York Convention on 20 November 1995.

Furthermore, the IAC offers parties flexibility in choosing the rules and procedures which they wish to utilize to resolve their disputes. For example, parties may agree that the IAC will administer their arbitration according to the IAC’s own Arbitration and Mediation Rules (2018). These rules include procedures for the resolution of investment treaty disputes and expedited arbitrations for disputes with amounts of less than $5 million and amounts of lower value at the discretion of the parties, according to Mr. Campbell-Holt.

Additionally, while only a limited number of arbitration rules (such as the ICC, the ICSID, the ICDR, and the SCC Rules) deal with the parties’ need to obtain urgent protective measures before the constitution of the tribunal, the AIFC’s international arbitration rules have adopted rules concerning Interim Relief through Emergency Arbitration, along with other up-to-date rules and procedures.

The enforcement of arbitral awards as well as of interim relief once ratified by the AIFC Court, an independent entity headed by the Rt. Hon. The Lord Woolf CH, a former Lord Chief Justice of England and Wales, and staffed by former English common law judges and lawyers, will be subject to a writ of execution order issued by the Court itself. The decisions of the AIFC Court are to be enforced in the Republic of Kazakhstan in the same way and on the same terms as decisions made by other courts in Kazakhstan. Additionally, the jurisdiction of the Court will extend to civil and commercial matters. Again, this makes the AIFC, as a whole, as something unique to the region, as we are not talking about just an arbitration centre, but a conglomerate of complementary entities that can help each other to resolve disputes impartially and expeditiously at minimum cost.

While it is true that Kazakhstan is a unitary state and its sovereignty extends to its entire territory, an amendment dated March 2017, subsection 3-1, stipulates that a special legal order relating to financial matters (e.g. the AIFC) may be established within the territory of Astana in accordance with constitutional law. The constitutional amendment ensures the highest international standards of legal procedure, thus providing certainty, predictability, and efficiency.

Astana Is Betting (Heavily) on the IAC

The AIFC enjoys significant support from the Kazakhstan government. It is expected that the IAC will in time be very busy given how Astana is focused on attracting international investors – case in point, the aforementioned partial privatization of Kazatomprom and the planned privatization of several subsidiaries of Kazakhstan Engineering. Hence, the diversity and experience of the IAC’s arbitrators will be a critical factor to ensure that potential clients regard this entity as neutral and professional.

A final factor that will influence the success of the IAC beyond Kazakhstan’s borders has to do with the country’s foreign policy. Astana enjoys good relations with other Central Asian states – including Uzbekistan. Kazakhastani foreign policy will, ideally, contribute to a greater IAC involvement in arbitration cases in neighboring states.

Final Thoughts

The AIFC’s IAC’s goal is straightforward: to become the arbitration system of choice not only for Kazakhstan, but for all of Central Asia, and maybe beyond. We have highlighted the major areas of interest relating to the IAC: it aims to be as flexible as possible in order to adapt to the needs of its clients, this includes the e-filing of cases; the AIFC has adopted English Common Law although the parties may agree to apply any law, civil or common, at the IAC; and it has a multinational list of arbitrators. As this is a new international arbitration centre, potential clients must be reassured that they will receive just and professional treatment.

As the AIFC commences its second year of operations, it will be important to monitor how potential clients look at this new Central Asian financial hub, and the confidence they have on its many entities and interests, including the International Arbitration Centre.

W. Alex Sánchez is an analyst who focuses on international security and geopolitics.

Lucia Scripcari is a Moldovan student finishing her degree in Law at Istanbul Sehir University (Turkey).

The views expressed in this article are those of the authors alone and do not necessarily reflect those of any institutions with which the authors are associated.

Providence: The Upcoming Meeting Between Presidents Trump and Bolsonaro: A Realist Friendship

"The Upcoming Meeting Between Presidents Trump and Bolsonaro: A Realist Friendship"
Wilder Alejandro Sanchez
Providence Magazine
15 March, 2019
Originally published: https://providencemag.com/2019/03/upcoming-meeting-presidents-trump-bolsonaro-realist-friendship/

President Jair Bolsonaro of Brazil will meet with US President Donald Trump on Tuesday, March 19, as part of his trip to Washington, DC. Most generally expect that the two leaders will get along, as the new Brazilian leader has declared himself a fan of the American president. Mutual praising notwithstanding, the great unknown is whether there will be any outcome of substance following their meeting.

An Optimistic Prelude

There are reasons to believe that the meeting will be successful. Apart from Trump tweeting his congratulations when Bolsonaro was elected in October 2018, US Secretary of State Mike Pompeo attended his inauguration in Brasilia, an important sign that both capitals want to reset and improve relations. Bolsonaro has even declared that he would like a US military base to be installed on Brazilian territory to help with border security—he eventually retracted that comment, but it is fair to say he meant it.

As part of the Brazilian delegation, “Super” Minister of the Economy Paulo Guedes will also come to Washington. He is one of the “Chicago Boys” who is pushing for greater trade between the two countries; hence, it will be important to see whom he meets while in the US capital, as this may plant the seeds for greater US investment in the South American state. One prime example of the kind of deal that Guedes would want to see more of is the ongoing merger between Boeing (whose headquarters is in Chicago) and the Brazilian aerospace company EMBRAER, a deal worth $4.2 billion.

Always Venezuela

The White House released a statement on March 8 regarding the upcoming visit. The short press release reads:

The leaders of the Hemisphere’s two largest economies will also discuss opportunities for defense cooperation, pro-growth trade policies, combating transnational crime, and restoring democracy in Venezuela. Finally, they will talk about the major role that the United States and Brazil are playing in the effort to provide humanitarian assistance to Venezuela.

Thus, it is obvious that, while the two heads of state will certainly address various topics, the situation in Venezuela is the Bolivarian elephant in the room. The Bolsonaro administration has maintained a pretty strict policy toward de facto President Nicolas Maduro. For example, Brazil has continued to accept Venezuelan refugees (though there have been, sadly, instances of xenophobia against them), reinforced the border with military units, allowed interim President Juan Guaidó to enter Brazilian territory, and called for Maduro to leave power—Bolsonaro famously declared he will help “reestablish order and democracy” in the neighboring state.

It is in Washington’s interest that Bolsonaro continues to keep pressure on Maduro, though it remains to be seen whether this external pressure will bring about the desired regime change in Caracas, one way or another.

Creating a Special Relationship

At an on-the-record event on the upcoming visit titled “Bolsonaro and Trump: What Lies Ahead for Brazil-US Relations?” held at the Inter-American Dialogue in Washington, DC, the renowned Monica de Bolle, from the Johns Hopkins School of Advanced International Studies, declared that “the bilateral relationship is cordial but never leads anywhere.”

This statement is certainly true as, in spite of generally good relations—moments of tension notwithstanding, like when it was revealed that US intelligence agencies had spied on former Brazilian President Dilma Rousseff’s communications—Brasilia and Washington have never enjoyed a “special relationship” à la Washington-London or Washington-Bogota. The situation in Venezuela has become the catalyst that is bringing the like-minded leaders of Brasilia and Washington together, but it remains to be seen if this is enough to establish a long-lasting close relationship.

Bolsonaro and the Brazilian military would certainly like greater US support toward improving Brazilian border and internal security, namely to combat drug trafficking that crosses Brazilian territory to the ports of Santos, Recife, and Salvador, and from there out to the Atlantic Ocean. The US is improving military cooperation with Brazil, including the bolstering of joint amphibious capabilities through more exercises and the delivery of M109A5+ BR 155 mm howitzers for the Brazilian army. Nevertheless, as Professor Matias Spektor, from the Fundação Getúlio Vargas, explained at the Inter-American Dialogue event, “the visit is not at all about Brazil, it’s about Venezuela… [Trump] is not concerned about the port of Santos; he’s concerned, and understandably, about the situation in Venezuela.” In other words, while the Brazilian military would want to see Bolsonaro secure new defense cooperation agreements to combat drug trafficking in Brazil, Washington is more focused on Venezuela.

Bolsonaro to Meet Washington Conservatives

As a final issue, it is important to note that Bolsonaro will meet with Washington conservatives, including Steven Bannon, according to the renowned Brazilian daily Folha do Sao Paulo.

One of the pillars of support for the Brazilian head of state comes from social Brazilian conservatives, including evangelicals. Hence, it will be interesting to see how the president’s meetings with social conservatives in the US influence his future decisions, particularly regarding foreign policy (e.g., moving the Brazilian embassy in Israel to Jerusalem, as he promised during his presidential campaign).

Final Thoughts

The upcoming meeting between Presidents Trump and Bolsonaro is expected to be cordial and amicable. Only time will tell whether that personal friendship transforms into any mutually beneficial agreements.

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Wilder Alejandro Sanchez is an analyst who focuses on geopolitical, military, and cybersecurity issues.

The views expressed in this article are those of the author alone and do not necessarily reflect those of any institutions with which the author is associated.

Geopolitical Monitor: Battle of the Seats: Developing Nations and International Arbitration Centers

"Battle of the Seats: Developing Nations and International Arbitration Centers"
Wilder Alejandro Sanchez and Lucia Scripcari
Geopolitical Monitor
Opinion
March 6, 2019
Originally published: https://www.geopoliticalmonitor.com/battle-of-the-seats-developing-nations-and-international-arbitration-centers/

In recent months, several governments have announced their intention to establish international arbitration centers. This is a noteworthy trend as these states are predominantly developing nations.

The fact that many developing nations are turning to international arbitration as a way to attract financial investment and increase their country’s pedigree abroad is a significant development that will have repercussions in the arbitration industry.

The New Arbitration Centers…

A quick perusal of recent developments in the realm of arbitration demonstrates that several developing nations are either planning or have recently opened their own arbitration centers. For example, in 2018, the International Arbitration Centre, part of the Astana International Financial Centre, was officially launched. Other arbitration centers located in developing nations include the Mumbai Centre for International Arbitration; and the Saudi Centre for Commercial Arbitration.

As for upcoming centers, there are several initiatives worth mentioning. For example, in mid-January a delegation from the Oman Centre for Commercial Arbitration traveled to Qatar to discuss co-operative ties between Qatar and the Oman Chamber of Commerce and Industry (OCCI), “especially in the areas of commercial arbitration.” Reports detailing Oman’s intention to create an arbitration center appeared around 2015, but it was only established in 2018 via Royal Decree No 26/2018.  Oman is now looking to Qatar, which has its own Qatar International Center for Conciliation and Arbitration, for assistance to get its arbitration center started.

Also in November 2018, Uzbekistan announced the creation of the Tashkent International Arbitration Center (TIAC), which will operate under the country’s Chamber of Commerce and Industry. Meanwhile, in late January 2019, during an international conference on arbitration, the minister of financial services, trade & industry and immigration in The Bahamas, Brent Symonette, reiterated the commitment of this Caribbean nation to become an international arbitration hub. Even more, the governments of Singapore and the People’s Republic of China agreed in late January “to set up an international panel of mediators, to better handle disputes that may arise from projects under the multi-billion dollar Belt and Road Initiative.”

Moreover, other developing states could establish their own arbitration centers in the near future. For example, a February 12 op-ed published on Africa.com, titled “Africa: Mining The Value Of Alternative Dispute Resolution,” argues that:

The African continent is building itself into a hub for international commercial arbitration, with South Africa, as well as Rwanda and Mauritius leading the charge. Not only is the continent garnering expertise in international arbitrations; but, from a cost perspective, counsel costs and the general expense of arbitrating are also far more reasonable when compared to other seats in countries such as London or Paris.

We may soon add even more nations to the growing list of international arbitration centers, many of which may be based in Africa.

… Will Have to Struggle Against other Centers

At this point, it is important to stress that commercial arbitration is an industry, and there are plenty of other arbitration centers around the world.  The most well-known arbitration centers include the International Chamber of Commerce, headquartered in France; the International Centre for Settlement of Investment Disputes, of which the proceedings usually take place in Washington DC;  Sweden’s Arbitration Institute of the Stockholm Chamber of Commerce; and the Hong Kong International Arbitration Centre.

In other words, any new player will have to compete for clients with more established and reputable arbitration entities.

Potential New Seats Are Confident

The aforementioned list demonstrates that commercial arbitration centers are en vogue right now. A successful arbitration center can help a country’s image grow in the international arena, not to mention help protect the country’s business interests. Moreover, arbitration centers are ideal for local economies, as they imply greater usage of airports, hotels, and other facilities as arbitrators and clients travel to said centers for their cases.

Part of the challenge for any new arbitration center to be successful is that it has to appear attractive to potential clients, hence local governments have to “sell” the image of their nation. For example, the aforementioned Bahamian Minister Symonette, argued why The Bahamas would be a great location for an arbitration center:

Our accessibility by air transport to several major continents; our infrastructure by way of hotels and convention centers; our advanced technology; a long standing commitment to the rule of law; stable government; our trained judiciary and let us not forget an experienced and skilled cadre of professional lawyers, accountants, trust officers and insurance specialists to name a few. These attributes should not be taken lightly as they give The Bahamas a competitive advantage over many competitors.

There are reasons for these governments to be confident about their possible success as some arbitration centers in developing regions are doing quite well. For example, the Kigali International Arbitration Centre is an African success story, and according to the Rwandan daily The New Times, in early 2019 the center registered its 100th case.

Similarly, Kazakhstan has high hopes for the AIFC, which is a conglomerate of different financial entities, aimed at attracting global investors to the Central Asian state. Apart from the previously mentioned Arbitration Centre, the AIFC includes the Astana International Exchange; the AIFC Court, which “provides a common law court system for the first time in Eurasia;” and other administrative agencies.

Analysis

While Kigali can be regarded as a success story, we would be neglectful if we did not mention some of the challenges that new international arbitration centers will face as they try to make a name for themselves.

One obvious challenge is convincing legal professionals that they should, in turn, convince their clients to utilize a new arbitration center rather than a more well-known institution, like the ICC. After all, nobody wants to be the “guinea pig” of a new arbitration center.

One positive aspect of the AIFC’s IAC is that it is its own entity, independent from the Kazakhstani judicial system and other government agencies. This, combined with its army of arbitrators, will hopefully encourage clients to turn to it due to its impartiality. On the other hand, the TIAC, for example, will operate under the Chamber of Commerce and Industry of Uzbekistan, meaning that potential clients may perceive it to be inherently biased in favor of the Uzbek government. The perception of impartiality of arbitrators and the system as a whole is a critical pillar necessary for any arbitration center to flourish.

An additional issue to keep in mind is the effect that these new entities will have on international arbitration as a whole. How will these new centers affect commercial arbitration as we know it? How will the increase of “supply” affect the “demand”? Future analyses about commercial arbitration should pay attention to this issue.

The Future of Arbitration: Technology and Cryptocurrencies

The Shenzhen Court of International Arbitration in China has ruled that “bitcoin is not a legal currency” but that “does not prevent it from being protected by law as a property.” In fact, several hotels in major Chinese now accept cryptocurrencies, case in point the Ethereum Hotel, which offers discounts to those that pay their bills using the Ether cryptocurrency.

This ruling clearly demonstrates that state regulation should be a priority and, thankfully several governments have drafted bills to regulate cryptocurrencies. For instance, the government of India has announced that a draft legislation on crypto regulation is in its the final stages. Meanwhile, the government in Kiev announced its intention to legalize cryptocurrencies and draft relevant regulations, an initiative led by the ministry of economy. As for the Russian Federation, it has already enacted bills on this matter, and, according to reports, at least 51 cryptocurrency ATMs operate in compliance with the current regulations in Russia.

However, bills and regulations are not enough to fully guarantee the protection of property rights. A relevant dispute settlement mechanism is necessary for that. This is the reason why the Russian Industrialist Union has launched an Arbitration Body for Crypto Disputes. Similarly, Uzbekistan’s aforementioned TIAC will be a platform to settle disagreements over investments, intellectual property and, interestingly, crypto-related technologies.

Resolving the disputes arising from cryptocurrencies not only require arbitrators and laws, but also a technical knowledge regarding how a virtual currency, like Bitcoin, exists, how much it is worth, and how can it be tracked.

Contrary to litigation, where parties cannot select a judge of their preference, arbitration is an alternative dispute settlement mechanism that allows parties to appoint an arbitrator that is a specialist in subject of the dispute. As Redfern and Hunter correctly suggested “it is, above all, the quality of the arbitral tribunal that makes or breaks the process” (Law and Practice of International Commercial Arbitration, 4th Ed, 2004). Appointing authorities is a critical component of the arbitration process, in order to be represented in the most professional and efficient way possible, parties must be sure that their case is heard by highly specialized arbitrators. Moreover, as it is not necessary to be represented by lawyers, parties may be represented by themselves or by financial technology specialists.

While this analysis has focused on new arbitration centers in developing nations, the rise of cryptocurrencies will also have an effect on how arbitration is conducted. Hence governments, parties, as well as current and future arbitration centers must think of how cryptocurrencies will affect future contracts.

Final Thoughts

Nations like Kazakhstan, The Bahamas, Qatar and Uzbekistan are in the process of setting up their own international arbitration centers, or have recently created them. This is an interesting strategy as these countries seek greater international recognition, and other benefits that come from having a respected arbitration center within their territory; the center in Kigali stands as an example of a successful arbitration center in a developing nation. Nevertheless, the arbitration industry is fairly well-established by now, and these new entities will have to complete against the ICC or ICSID.

Commercial arbitration is an evolving industry, it will be important to monitor how new centers and the rise of cryptocurrencies affect it in the near and long term.

About the authors: Wilder Alejandro Sanchez is an analyst based in Washington DC who focuses on geopolitical, military and cyber security issues. Lucia Scripcari is a Moldovan student finishing her degree in law at Istanbul Sehir University (Turkey).

The views expressed in this article are those of the authors alone and do not necessarily reflect those of Geopoliticalmonitor.com or any institutions with which the authors are associated.

Geopolitical Monitor: Moldova’s February Elections and Regional Geopolitics

"Moldova’s February Elections and Regional Geopolitics"

Wilder Alejandro Sanchez
Geopolitical Monitor
Opinion
1 March, 2019
Originally published: https://www.geopoliticalmonitor.com/moldovas-february-elections-and-regional-geopolitics/

The Republic of Moldova held parliamentary elections on February 24 with the goal of electing a new government that will, ideally, not be either corrupt or incompetent. Moreover, given the country’s geographical location, between Romania and Ukraine in southeastern Europe, these elections are important as Western governments and the Russian Federation aim at strengthening their influence in Chisinau.

The elections provided no clear winner, which means that both domestically and geopolitically, Moldova remains in limbo.

The Elections

Moldova is a parliamentary representative democracy; the president is head of state, and the prime minister is head of government. Several prime ministers over the past decade, including the incumbent Pavel Filip, have maintained a pro-Europe stance. Examples of pro-European initiatives include Moldova joining “the European Union’s Eastern Partnership in 2009 [while] the EU-Moldova Association Agreement entered into force on 1 July 2016.” On the other hand, President Igor Dodon is openly pro-Russian, as exemplified by his regular trips to Moscow. In 2018, the country obtained observer status in the Eurasian Economic Union, which President Dodon praised.

Just under 1.5 million Moldovan citizens voted on February 24, which is only 49% of the total number of voters, or about 200,000 fewer votes compared to 2014. The elections left no clear winner: the pro-Russia Socialist Party (PSRM) won 35 out of 101 seats, well short of a majority. On the other hand, the pro-European Democratic party obtained 30 seats. Meanwhile a new bloc, whose pledge was to fight corruption, the ACUM DA PAS, obtained 26 seats. Due to space issues we will not address the country’s  controversial new electoral law or widespread reports of voting irregularities.

Hence, Moldova will have a “deeply divided parliament without a clear majority that could have trouble agreeing on a new government.” Snap elections may be called again for later this year if no government is formed. The landlocked nation’s challenges have been well-analyzed over the past years, such as the infamous theft of around USD$1 billion from local banks, political corruption, and other issues.

At a February 22 event titled “Russia Abroad,” held at the Center for Strategic and International Studies, a think tank in Washington DC,  Professor Anna Ohanyan of Stonehill College discussed Russia’s attempts at capitalizing on the divides and fractures within post-Soviet and other nations to increase Moscow’s influence. In response to a question by the author of this commentary, Professor Ohanyan explained that when it comes to Moldova’s elections “it probably matters less as to who comes to power but as to whether the institutions and elections remain clean.” The professor also added that the Transnistrian people will have to decide as to whether they “might see value in staying with Moldova or if Moldova becomes so fully integrated regionally that Transnistria [Moldova’s separatist region] negotiates a deal so it can dip into both sides.”

It will be interesting to monitor if the 24 February elections affect in any way Chisinau-Tiraspol relations.

Moldova in The New Great Game

The future of Moldova will have repercussions on regional geopolitics as well, including from a defense point of view. Let us briefly summarize recent developments:

Apart from the association agreement with the European Union, “a civilian NATO Liaison Office in Chisinau was established in December 2017 [in Moldova] to promote practical cooperation and facilitate support for the country’s reforms.” Moldovan troops have also regularly participated in multinational maneuvers, such as Rapid Trident 2017 and Platinum Eagle. Moreover, the US military is reportedly planning to establish a presence at the Buboaca training base, and, according to Jane’s Defence Weekly, US military aircraft have been spotted by open-source networks to be flying out of Constanta airport, Romania, and over Transnistria and the Transnistria-Ukraine border.

Meanwhile, Russia continues to maintain a military presence in Transnistria in the form of the Operative Group of Russian Troops (OGRT) and via peacekeepers. Moreover, Russian troops regularly carry out exercises with the separatist regime’s local forces. Also, President Dodon has stated his support for Russian peacekeepers in the country, stating “we confirmed the importance of keeping the peacekeeping mission there as a factor of stability in the Security Zone,” TASS news agency reported in late December 2018.

In other words, both Washington/Europe and Moscow have a presence and interest in the future of Moldova as it will affect geopolitics in southeastern Europe.

At this point, it is necessary to mention that Moldova’s constitution stresses the country’s neutrality, hence Chisinau cannot join military blocs like NATO and, given the fractured state of Moldovan politics, it is highly unlikely that the constitution could be modified in order to achieve NATO membership in any case.

Final Thoughts

Ideally, the February 24 elections would have ended in a clear winner, and this would have provided an idea of what we could expect regarding Moldova’s foreign policy in the near future. Unfortunately, the controversial and inconclusive result means that the status quo will remain. In theory the Socialist Party could assemble a coalition which, combined with President Dodon, would orient the country’s foreign policy in favor of Moscow; however, we will have to wait and see if indeed a government is formed.

Moldova has plenty of internal political and economic challenges. Its geographical location, right in the middle of this new Cold War, will not help it attain political stability or meaningful socio-economic development anytime soon.

Wilder Alejandro Sanchez is an analyst who focuses on geopolitical, military, and cybersecurity issues.

The views expressed in this article are those of the author alone and do not necessarily reflect those of Geopoliticalmonitor.com or any institutions with which the author is associated.