Spitzbergen Becomes Unlikely Arctic Russian Sanctions Battleground

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The Russian village of Barentsberg, Spitzbergen

By Chris Devonshire-Ellis

The remote Arctic island of Spitzbergen (Svalbard) has hit the headlines after Norway, which administers the islands under a 1920 Paris Treaty, has prohibited supplies reaching Russian nationals based there. Spitzbergen is the closest permanently inhabited place to the North Pole. I visited the islands in 2019.

The archipelago was granted to Norway under treaty following extensive periods of territorial claims from Russia, Sweden, and Norway. The treaty allows for Norwegian sovereignty but under certain conditions, including providing support for all communities living there. Spitzbergen has an unusual status in that while support is provided from Oslo, any nationality has the right to live in Spitzbergen – all service staff in the few hotels, as well as taxi drivers, are often from Asia and do not require visas. Other attractions are zero taxes, making the islands an attractive place in unusual ways – huge amounts of valuable wines are stored by many of the restaurants and available at far less costs than would be the case in Europe.

Two predominantly Russian settlements have existed since the 1930s. The largest of them is Barentsburg, a coal mining community where about 500 people live. Another is Pyramiden, where about 50 Arctic scientific researchers live. There is a Russian Consulate in Longyearbyen, the effective, yet tiny capital city with a population of about 2,000.

Norway has banned the transport of supplies for Russians in Spitzbergen following the EU’s directives. Russia’s position is that this is inappropriate given Spitzbergen’s unique sovereign situation, which under terms of the 1920 treaty commit Norway to making supplies. It also effectively breaches the Arctic Treaty, of which both Norway and Russia are signatories, part of which commits signatories to mutual assistance in the far north. Finally, it is dangerous, winter in Spitzbergen is harsh, and temperatures can plummet to -30 and below. Pyramiden is often cut off at this time for months.

Spitzbergen, although remote, is globally important. Through scientific work originally performed by Russian and Swedish scientists originally in the 1890’s, the ‘shape’ of the world was calculated, and work still continues on this research, among other subjects, today. The shape of the world is important as it allows accurate measurements to be made which are vital in the positioning of equipment such as GPS satelittes.

Sergei Gushchin, the Consul General of Russia in Spitzbergen, has commented that “The Norwegian Foreign Ministry has so far refused only a specific carrier, and not the Russian embassy. There is discrimination, since only the Russian carrier was denied transportation. Oslo does not offer and did not offer anything, we provided for ourselves. This route allowed the easier access to our communities by road and have functioned for decades. Russia delivered everything necessary, Norwegian private companies participated in the transportation, but Norway has not participated in any way at the state level. But preparations are underway for the winter season – we need spare parts, technical equipment, the operation of a thermal wind station – it needs spare parts that are stuck. It was all delivered flawlessly. If the anti-Russian sanctions continue on Spitzbergen, the situation will worsen and in winter conditions it will be a disaster. It is not clear why Norway, as an Arctic country, violates the principle of Arctic solidarity.”

The Consul General also gave details on how deliveries to Svalbard were previously carried out. According to him, part of the cargo that was imported from Russia was sent in containers to the Spitzbergen port through the land Russian-Norwegian border. After that, they were loaded onto Norwegian ships and sent to Barentsburg two or three times a month.

Gushchin also noted that it is possible to deliver goods to the island by sea from Arkhangelsk and Murmansk in Russia. However, it is unclear whether unloading and transport operations will be carried out by Norwegian companies on arrival. At present, Norway, which is not part of the EU, has declined to comment.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact us at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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