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Putin Slams Russian’s Detention in Italy as Hostile Act by U.S.

Putin Slams Russian’s Detention in Italy as Hostile Act by U.S.

(Bloomberg) -- The arrest in Italy of an employee of a unit of Russia’s main defense contractor, Rostec State Corp., has drawn the Kremlin’s ire, with President Vladimir Putin suggesting it was ordered to prevent commercial competition with U.S. companies.

Alexander Korshunov, a manager at United Engine Co., was detained at the request of the U.S., according to Rostec’s press service. United Engine Co. has been subject to U.S. Treasury sanctions since 2015 in response to the Ukraine crisis.

“This is very bad practice that strains our state relations,” Putin said of the arrest at the plenary session of the Eastern Economic Forum in Vladivostok on Thursday. “I have every reason to believe it is often connected to competition,” he said, citing Russia’s efforts to develop a new civilian jet to compete with Boeing’s 737 airliner.

Korshunov was arrested earlier this week in Naples while on vacation with his wife, Vedomosti newspaper reported, citing an unidentified person in the Russian defense industry. He is accused of stealing intellectual property from General Electric Co. to develop a domestic jet engine, Vedomosti said.

‘Unfair Competition’

The Russian Foreign Ministry said diplomats had been given consular access to Korshunov, who it said was detained “on the basis an international warrant issued by the U.S.,” state-run Tass news service reported. The ministry called the case “an example of unfair competition,” according to Tass.

The relationship between Washington and Moscow has remained near a post-Cold War low despite an apparent personal connection between Donald Trump and Putin, who Thursday said he had offered the U.S. president Russia’s most advanced hypersonic missile systems in an effort to revive flagging arms control discussions.

The arrest has “clear echoes” of the Huawei case in Canada, Carnegie Endowment for International Peace analyst Andrew Weiss said on Twitter.

Rostec said in a statement it is providing Korshunov with legal assistance and is using diplomatic channels to secure his release.

--With assistance from Ilya Arkhipov.

To contact the reporter on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net

To contact the editors responsible for this story: Torrey Clark at tclark8@bloomberg.net, Tony Halpin, Andras Gergely

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