Reports. In-depth reports on the risk factors and threat implications of economic and financial statecraft.

Slovak-Russian business connections have ramped up considerably over recent years, with Russian imports into Slovakia growing at an annual rate of some 10% between 2009 and 2013. Moreover, since the signing of an economic and technical cooperation agreement in 2005 (that ultimately turned into the Inter-governmental Commission on Economic, Scientific and Technical Cooperation), Slovak exports to Russia have grown by some 906%.

The current landscape with regard to Russian influence and control over certain economic nodes and critical infrastructure has been shaped, in part, by a problematic period in the country following the fall of the Soviet Union, where key assets were privatized into the hands of friends and former officials in a process known as help yourselfisation. Many of these individuals were former members of the Communist regime and former agents of the countrys foreign and domestic intelligence services. Additionally, with regard to Slovakias relatively weak energy security regime and complete dependence on Gazprom for its natural gas supplies, certain officials have been persuaded that energy security means closer relations with the countrys primary supplier, notably Russia, rather than developing diverse sources of supply.

There is a significant constituency in Slovakia, however, that appreciates the danger in aligning too closely with Russia, particularly if such an alignment comes at the expense of closer relations with the EU and NATO. Presently, the country has a somewhat divided leadership. Although the President, Andrej Kiska, has come down decidedly in favor of the West and staunchly backs the need for sanctions and penalties to hold Moscow accountable for its recent transgressions in Ukraine, the countrys Prime Minister, Robert Fico, has expressed different views that extend into the economic and financial threat domain. This has resulted in a welcome reception to Russian companies operating in the region and closer relations with Moscow in the energy sector.

Excerpted Deals Transactions:

• Slovakia has pursued several natural gas interconnector projects in order to diversify its sources of supply. These efforts are worthy of attention, due to the escape they provide from the countrys current dependency level on Russia, which is 100%. These include: a project to link Slovakia with the North-South Gas Corridor project that will link the country to the LNG terminal in Swinoujscie, Poland and to the Adria LNG terminal in Croatia; a gas link already in place with Hungary; and the development of an interconnection with Poland that is expected to come online in 2020.

• Slovakia has been evaluating a project to upgrade the existing Jaslovsk Bohunice nuclear power plant and Rosatom has actively investigated joining this effort; specifically, by purchasing the 49% stake in the project currently held by the Czech Republics CEZ (which is seeking to exit the project). The latest reports indicate this project is on hold. Slovakia has a dependency on nuclear power generation that is in the top 5 of all EU member states)

• Enel is seeking to sell its 66% ownership stake in Slovakias biggest utility company, Slovenske Elektrarne. When Rosatom sought to purchase this stake in 2014, they were undermined, reportedly, by EU intervention out of concern over the resulting enhanced dependency on Russia in the countrys energy mix. Among the prospective buyers, however, are other companies over which Russia holds sway and influence.

• Slovakias major natural gas company, Slovak Gas Company (SPP) includes as part of its family tree and ownership structure several non-transparent entities, including EP Holdings and J&T Group, that also have management and control responsibilities over the industrys critical functions.

• According to reports, Slovakias defense industry is among the most dependent on military equipment and spare parts from Russia. This may have been exacerbated in 2010, when PM Fico signed a contract with Moscow agreeing that Slovak companies would have to gain the consent of Russia for any modernization of its Russian weaponry.