Top Russian official accuses West of making money from war; Lithuania to close some Belarus border points

The head of Ukraine’s ground forces said Russian troops are attempting to break through Ukrainian defenses near the city of Kupyansk in the northeast of the country.

“Due to the complication of the situation in the Kupyansk direction, I spent most of the day working in the units that defend the approaches to the city,” Ukrainian Ground Forces Commander Colonel-General Oleksandr Syrskyi said Wednesday, according to news agency Ukrinform.

Kupyansk is in the northeastern Kharkiv region and was occupied by Russian forces following their full-scale invasion last year. Ukrainian forces recaptured the city after a successful counteroffensive later in 2022, however. Now, it has found itself once again near the center of hostilities after Russian forces launched an offensive in the region.

Syrskyi said Russia’s assault detachments, which he said were mainly made up of Russian convicts serving in the armed forces, were “trying to break through the defenses of our troops in various directions, with the aim of blocking, and later capturing, Kupyansk.”

He said “a number of important decisions” had been made “that will ensure the reliability of the defense” but did not elaborate given the sensitivity around Ukraine’s military strategy.

— Holly Ellyatt

Russia’s former President Dmitry Medvedev claimed Wednesday that the West was not interested in talks on a peace settlement in Ukraine, saying instead that it wanted to exploit the conflict to make money for its military-industrial complex.

Medvedev, a prominent Russian hawk and the current deputy chairman of Russia’s Security Council, said “they want to keep the military flywheel going in order to make money for their budgets,” according to comments published by Russian news agency TASS. Medvedev provided no evidence for his claim.

Speaking during a visit to the Army-2023 forum near Moscow, the senior official said Russian soldiers had been “very successful” in destroying Western equipment supplied to Ukraine.

Medvedev said the West periodically resumes “speculations that it is necessary to return to the negotiating table to find some compromises” but said that, in the meantime, the U.S. and European military-industrial complex were making money.

“This is a way for them to make mammoth profits by supplying their equipment to Ukraine. They are making money on this war,” Medvedev claimed.

Ukraine’s allies in the West have given the war-torn country billions of dollars’ worth of military, financial and humanitarian assistance since Russia invaded in Feb. 2022. The U.S. alone has invested more than $44 billion in security assistance for Kyiv while other NATO and EU countries have also provided the country with large aid packages.

Last year, the U.S. made it easier to export military equipment to Ukraine when Congress approved a “Lend-Lease” program for Ukraine, similar to the WWII-era program for U.S. allies, allowing Washington to lend or lease military equipment to Ukraine and other partners. The military aid will have to be paid back at some future point.

— Holly Ellyatt

The Lithuanian government decided to temporarily close two of the country’s six border crossing points with Belarus due to the presence of Russian Wagner Group mercenaries in Belarus. The closures will begin on Friday.

The move comes after Russian Wagner Group mercenaries took refuge in the country following a failed rebellion in June.

“This decision is one of the preventive measures aimed at managing emerging threats to national security and possible provocations at the border. It will enable border officers to redistribute their capacities at the border with Belarus and pay even larger attention to the protection of the state border,” Lithuania’s Interior Minister Agnė Bilotaitė said in a statement on the Lithuanian government’s website. The Šumskas and Tverečius border checkpoints will be closed.

“The aim of temporarily halting operations at these checkpoints is to reduce potential threats along the border with Belarus,” Ramūnas Dilba, the chancellor of the Ministry of Transport and Communications, stated.

“These checkpoints only allow the passage of light vehicles, Tverečius is also handling traffic of empty freight trucks. All checkpoint staff will be redirected to the Medininkai border checkpoint,” the government said, noting that it is the largest and technologically advanced checkpoint, featuring an X-ray inspection system which can play a “significant” role in curbing smuggling activities as well.

— Holly Ellyatt

NATO official Stian Jenssen on Wednesday said comments he made the previous day regarding Ukraine ceding land in order to gain membership to the military alliance were a “mistake.”

Jenssen said during a panel debate in Arendal, Norway: “I think that a solution could be for Ukraine to give up territory, and get NATO membership in return,” Norwegian newspaper VG reported.

Jenssen is chief of staff to NATO Secretary General Jens Stoltenberg.

The statement appeared to be criticized by Ukrainian presidential advisor Mykhailo Podolyak on social media, who called the idea of giving up territory “ridiculous.”

Jenssen told VG in a follow-up interview Wednesday: “My statement about this was part of a larger discussion about possible future scenarios in Ukraine, and I shouldn’t have said it that way. It was a mistake.”

When contacted for a response, a NATO press officer directed CNBC to the new VG article.

Jenssen also said the most important thing was to continue to support Ukraine as it continues its counteroffensive.

“Many have commented that it is going a little slower than they had hoped. I would still like to add a seed of optimism to this, as I also said in the Arendal debate. One must remember that at the outbreak of war there was a concern that Ukraine could collapse within weeks and days,” he told VG.

“It has not happened at all. They have shown a heroic effort against the superior power. The topic now is how much territory Ukraine is able to take back,” he said.

— Jenni Reid

The chief executive of Danish brewing giant Carlsberg said he was “shocked” by the seizure of its Russian subsidiary Baltika Breweries by the state in July.

“In June, we were pleased to announce the sale of the Russian business. However, shortly afterwards, we were shocked that a presidential decree had temporarily transferred management of the business to a Russian federal agency,” Cees ‘t Hart said in a statement as part of the company’s first-half results.

“We’re assessing the situation and the legal consequences of this highly unexpected move and will seek to protect our assets and the value of the business.”

A presidential decree also seized the Russian subsidiary of French food producer Danone. It was the first time it had taken hold of western subsidiaries since the seizure of Finnish and German energy companies Fortum and Uniper in April. The Kremlin has previously suggested that this was retaliation for Western seizures of Russian assets.

Dmitry Birichevsky, director of the Russian Foreign Ministry’s department for economic cooperation, dismissed “speculation” that more companies’ assets would be nationalized by Russia.

“I would like to emphasize that companies that are still interested in conscientiously continuing their work in our country and comply with Russian legislation are not in danger,” he said last week in an interview with state news agency RIA.

— Jenni Reid, Elliot Smith

Ukraine said Wednesday a cargo ship was using a temporary corridor for cargo ships exiting and entering Ukrainian ports on the Black Sea amid continued uncertainty over Russia’s response to such vessels.

The ship was named as the Joseph Schulte, traveling under the Hong Kong flag.

“The first vessel is moving along the temporary corridor established for civilian vessels to/from the Black Sea seaports,” Ukrainian Minister of Infrastructure Oleksandr Kubrakov said on Telegram, according to a Google translation.

Ukraine’s navy announced the corridor on Aug. 10. Russia in July pulled out of the Black Sea Grain Initiative, which had facilitated the export of Ukrainian agricultural goods through the war, sparking concerns over global food supply.

Cargo ships have been stuck in various ports since Russia’s full-scale invasion of Ukraine in February 2022.

Russia said in July it would consider all Ukraine-bound ships as potential carriers of military equipment. Tensions heightened on Sunday when Moscow said one of its warships had fired warning shots at a cargo vessel in the Black Sea, a move Ukraine called “provocative.”

— Jenni Reid

British intelligence believes Russia has “almost certainly” started to deploy domestically made one-way attack drones based on Iranian Shahed designs, it said in a briefing Wednesday.

Britain’s Ministry of Defense said Russia has been importing Iranian-made Uncrewed Aerial Vehicles (OWA-UAVs) since September 2022.

“Indigenous manufacturing will likely allow Russia to establish a more reliable supply of OWA-UAVs. The performance of these weapons has been variable and Ukraine has proved effective in neutralising the majority of incoming OWA-UAVs,” it said in a statement.

The ministry added Russia is likely aiming for self-sufficiency but that it’s still shipping components and weapons from Iran.

— Jenni Reid

Mykhailo Podolyak, advisor to Ukrainian President Volodymyr Zelenskyy, described any suggestion Ukraine could cede territory in exchange for NATO membership as “ridiculous.”

“That means deliberately choosing the defeat of democracy, encouraging a global criminal, preserving the Russian regime, destroying international law, and passing the war on to other generations,” Podolyak wrote on X, formerly known as Twitter.

It follows a report in the Norwegian newspaper Verdens Gang that NATO chief of staff Stian Jenssen said in a Tuesday panel discussion: “I think that a solution could be for Ukraine to give up territory, and get NATO membership in return.”

CNBC did not attend the panel event and has reached out to Jenssen for comment.

— Jenni Reid

Russian drone attacks on a Ukrainian port on the Danube river caused a fire and damaged warehouses and granaries, Odesa regional governor Oleh Kiper said in a Telegram post, according to a Google translation.

There were no deaths or injuries, Kiper said, later adding anti-aircraft defense systems had destroyed 11 attack drones.

Images posted by Kiper show grain spilled onto the ground and structural damage. CNBC has not independently verified the report or images.

Danube ports have become the primary export route for Ukrainian grain since Russia pulled out of the Black Sea Grain Initiative in July.

— Jenni Reid

Ukrainian forces have recaptured the eastern village of Urozhaine in the partially occupied Donetsk region, Deputy Defense Minister Hanna Maliar said in a Telegram post.

“Urozhaine liberated. Our defenders are entrenched on the outskirts,” Maliar said, according to a Reuters translation. CNBC has not independently verified the report.

Earlier in the week, Russian officials admitted that Ukraine had gained a foothold in the strategically important settlement, the Kyiv Post reported.

Ukraine continues to push forward with its counteroffensive in occupied areas, though gains have been limited.

Maliar said Tuesday forces continued to push toward Melitopol and Berdyansk in the southeast.

The Russian army said Tuesday it launched a “concentrated strike” with long-range air- and sea-based weapons against “key enterprises” of the Ukrainian military.

“The goal of the attack has been reached. All the assigned targets have been neutralised. Ukraine’s military-industrial complex has suffered significant damage,” it said in a statement, according to a Google translation. CNBC has not independently verified the report.

Russia said Ukrainian soldiers continued to push against its forces in Zaporizhzhia, Kupyansk, Donetsk, Krasny Liman, and South Donetsk.

— Jenni Reid

Ukraine is to strengthen its defenses in northeastern regions that border Russia and Belarus by funding new fortifications and military infrastructure, Prime Minister Denys Shmyhal said on Tuesday.

“At the request of Kharkiv and Chernihiv … we are allocating 911.5 million hryvnias ($24.7 million) for Kharkiv and 363 million ($9.8 million) for Chernihiv to build military engineering and fortification structures,” Shmyhal said on Telegram, according to a translation by Reuters.

Chernihiv, which borders both Russia and its ally Belarus, was partially occupied when Russia invaded Ukraine in early 2022 but was later liberated, while a large part of Kharkiv in northeastern Ukraine was liberated last year, although it is nearer to intense fighting on the eastern frontline.

The move to fortify northern areas comes as Ukraine continues to watch Belarus closely for any signs it will actively join Russian forces fighting in Ukraine.

Minsk has so far given logistical support to Russia, allowing part of its invasion to be launched from its territory, as well as sheltering Russian mercenary fighters following a failed mutiny.

– Holly Ellyatt

Russia’s central bank on Tuesday raised its key interest rate to 12% from 8.5%, the bank said in a statement on its website.

The bank called an extraordinary meeting for Tuesday amid pressure from Moscow to halt a rapid depreciation of the country’s ruble currency.

“Inflationary pressure is building up,” the bank said in a statement.

“The decision is aimed at limiting price stability risks,” it added.

The ruble slumped near 102 to the dollar on Monday as anxiety around the state of the economy and the impact of Western sanctions weighed heavily on the beleaguered currency.

President Vladimir Putin’s economic advisor, Maxim Oreshkin, on Monday blamed the plunging currency and the acceleration of inflation on “loose monetary policy.”

The bank last made an emergency rate hike in late February 2022 with a rate raise to 20%.

— Karen Gilchrist