Thailand Competitiveness by Professor Michael E. Porter

 Please see attached file:

http://www.bus.tu.ac.th/usr/wai/xm622/potter/Michael%20Porter%20Live%20in%20Thailand%20-part%202.pdf

Tackling the Underwater Threat: How Ukraine Can Combat Russian Submarines

 Dr Sidharth Kaushal and Dr Kevin Rowland  

7 March 2023 

  

Given that building anti-submarine warfare capabilities along Western lines would require significant time and resources, how can Ukraine best counter the Russian submarine threat?

One of the signal successes of the Ukrainian armed forces has been denying the Russian Black Sea Fleet’s surface vessels the ability to operate in close proximity to Ukrainian shores. The successful attack on the fleet’s flagship, the Moskva, with indigenous Neptune anti-ship cruise missiles and the subsequent Russian defeat at Snake Island denied the fleet the air cover it needs to be able to operate in range of an increasingly credible Ukrainian anti-ship missile threat. As such, it may prove increasingly difficult for Russia to enforce a renewed surface blockade of Ukraine if it decides that inflicting economic harm is important – a likely assumption if the war of attrition continues over the longer term.

That being said, Russia does have other options with which to menace Ukraine’s maritime economy. The risk posed by naval mines represents one vector; another is the use of submarines, which have not featured significantly in the conflict thus far. The Black Sea Fleet’s force of four Project 636 (Kilo) and Project 877 (Improved Kilo) submarines have not been used in a blockading role to date, acting primarily as a launch platform for 3M-14 Kalibr cruise missiles. However, if Russia did decide to use them in this capacity, it would raise new challenges for Ukraine’s sea denial strategy, which thus far has had to contend primarily with the (comparatively) easy task of anti-surface warfare. The skills and capabilities needed for Ukraine to conduct anti-submarine warfare (ASW) along Western lines would be time-consuming and expensive to generate, and are unlikely to be acquired in the foreseeable future, begging the question of how to ‘do’ ASW on a shoestring.

The Relevance of the Black Sea Fleet’s Kilo-Class Submarines

In the immediate term, and for good reason, Ukraine’s priorities are likely to remain primarily land-focused. However, should the conflict reach a point of enduring, frozen stalemate, Russia may shift its military focus to wearing down the Ukrainian economy, which has already seen a 30% reduction in GDP. To an extent, this has been visible in the air and missile campaign witnessed over the winter. Moreover, it would follow a pattern of how belligerents attempt to secure a strategic breakthrough when a tactical battlefield breakthrough seems unlikely – with precedents such as the Iran–Iraq tanker war and the British blockade of Germany during the First World War.

To an extent, one might argue that Moscow does not need military force to inflict a de facto blockade – simply declaring that it has pulled out of the grain deal, for example, would likely cause insurance rates to spike to exorbitant levels. However, two alternative scenarios might be considered.

First, Moscow may wish to drive a spike in insurance costs without paying the diplomatic price for pulling out of the grain deal. A deniable attack could be facilitated by the Kilo-class submarines. The boats can clandestinely lay up to 24 naval mines each during a single sortie. A direct torpedo attack would be more audacious, but it is worth recalling the time it took to attribute North Korea’s sinking of the South Korean vessel Cheonan in 2010 – four months – by which time the initial international outrage had abated. Attacking a vessel carrying a volatile substance such as ammonium nitrite might offer a level of deniability which, however implausible, could preclude unambiguous attribution. To consider the impact of such action, we might consider that in 2019, insurance rates in the Strait of Hormuz rose tenfold after Iran’s limpet mine attacks – even though a convoy system was put in place.

Second, the Black Sea Fleet’s submarines are an important launch platform for Russian cruise missiles such as the 3M-14 Kalibr, which – according to some experts – came close to delivering a death blow to Ukraine’s energy grid this winter. Any effort to maintain Ukraine’s viability in the long term will depend on the ability of its economy to at least partially recover from the impact of war, and open sea lines of communication will be crucial. The Black Sea Fleet’s submarines thus represent a clear and present challenge which the Ukrainian navy will need to resolve.

The Challenge of ASW

There are, however, be a number of issues that will preclude any effort to transpose a Western approach to ASW to Ukraine in the medium term. First, the platforms involved are too expensive and small in number to be gifted. Assets such as the P-8 maritime patrol aircraft or specialist ASW frigates are unlikely to be transferred, and the Ukrainian armed forces would struggle to crew, operate and protect them in any case.

ASW is an inherently skill-intensive task. Training an aviator on a Royal Navy Merlin helicopter, for example, takes at least 11 months before they can be integrated into frontline squadrons, and training pipelines everywhere are well known to be at capacity already. Training times for sonar operators are similarly long. Moreover, this excludes the challenge of integrating personnel into coherent units that can operate in tandem with one another. Though the Ukrainian navy had 11,000 personnel in its service when the war began, the fact that it had lost much of its fleet after 2014 – as well as an understandable focus on events on land – raises questions about the speed at which necessary competencies can be built, or rebuilt, within the force.

Finally, the maintenance of the platforms needed to operate an ASW barrier along Western lines would strain capacity at Ukrainian facilities, particularly if they remain under bombardment.

As such, a solution to the challenge of ASW – at least in the near term – needs to be developed along fundamentally different lines from traditional, Western approaches.

Begin with the End State, Not the Platform

There could, however, be relatively cost-effective solutions to the challenges that Ukraine faces. These could be built on the principle that harassment, rather than sea denial, should be the immediate Ukrainian goal. It is not necessary to destroy Russia’s submarines if they can be prevented from doing operationally useful work.

As a working hypothesis, it is reasonable to assume that Russian sabotage or interdiction of shipping to Ukraine is likely to occur within or close to Ukraine’s exclusive economic zone in the northern Black Sea, both to signal intent and because damaging vessels in a warzone is likely to be less contentious to the international community than sinking them well within international waters. If this is the case, the geography of the northern Black Sea offers partial solutions. The average depth of the area – 200 metres – is less than the 240-metre depth at which the Kilo generally operates, meaning that navigation and operation will be more difficult for submarines. This is not to say that it is impossible, and some parts exceed the average depth. However, submarines operating in the northern Black Sea do so at increased risk of collision, grounding and detection. The passage of submarines can be made even more risky by seeding the areas within which they can operate with remotely activated mines such as the US Hammerhead. Because these mines can be remotely activated, they are compatible with international law, and the fact that they can be programmed to seek specific magnetic anomalies aids against target misidentification. This would force the Kilos to operate in even shallower waters, increasing their risk even further.

Beyond canalising submarines through mines, Ukraine could use uncrewed capabilities to harass them further. For example, UAVs operating dipping sonobuoys and lightweight torpedoes could be utilised in an ASW role – an avenue that multiple navies are pursuing, albeit experimentally. While accurate detection by a UAV thus equipped may not be certain, a responsible submarine commander would have to take evasive action if he or she detected a pinging sonar, potentially disrupting firing solutions, affecting the vessel’s endurance, or even putting it in navigational danger. The perception that a UAV is armed and primed to attack could be exacerbated if some UAVs were equipped with munitions while many more were equipped with decoys that simulated the acoustic profile of an attack. We might think of the impact that the US Navy’s Julie Jezebel sonobuoys – which simulated the noise profile of a depth charge – had on Soviet submariners during the Cuban missile crisis.

Russian submariners’ perceptions of operational risks could also be compounded if Ukraine were to take possession of even a very limited number of ASW helicopters. Finally, the presence of NATO or other intelligence gathering aircraft, including P-8s, over the Black Sea would force Russian commanders to consider the possibility that Ukrainian assets were being cued, which – whether true or not – could be reinforced by conducting UAV flights at times at which the aircraft are present. Ultimately, all of these actions would raise the perceived risk for Russian operators and slow the rate and tempo of their activity.

Conclusions

There are no perfect immediate-term solutions to the submarine challenge. In the long term, after the war’s conclusion, Ukraine might well consider meeting the goals set out in its 2019 naval strategy, including rebuilding a surface fleet capable of limited sea control in peacetime, as well as prosecuting ASW missions near its shores and other sea denial missions. In the meantime, while the ideal of denying areas to Russian submarines is unlikely to be achieved, Ukraine can impose upon the Kilos and their operators a set of conditions which – though they may not end the submarine threat – will strain both vessels and crews. The immediate goal guiding Ukrainian ASW, then, should be harassment.

The views expressed in this Commentary are the authors’, and do not represent those of RUSI or any other institution.

Read more here.

Lessons Learnt from Recent Court Decisions on Transfer Pricing Cases

 By Kishenjeet Dhillon

There have been a series of breathtaking developments in the country’s transfer pricing sphere lately. Since the start of the year 2021, the government has made changes to the transfer pricing legislation such as the introduction of the Section 113B (penalty for a failure to furnish transfer pricing documentation on a timely basis) and Section 140A(3A) (surcharge of up to 5% on transfer pricing adjustments). Most recently, the Inland Revenue Board (IRB) has expanded the transfer pricing disclosure section in the income tax return form (i.e., Form C) in requiring companies engaged in controlled transactions to declare their functional profile in the Form C. The slew of new measures significantly tightened the transfer pricing regime within Malaysia. 

Amidst the backdrop of these changes, transfer pricing centric litigation is increasing in number as we march into the 15th anniversary since the introduction of Section 140A in 2009. The frequency of litigation is signaling that transfer pricing disputes are becoming more significant. What can be observed is that a transparency gap exists between the IRB’s expectations, the rules and regulations as they currently stand, and the ongoing practice by tax practitioners as well as taxpayers. It is through the courts’ interpretation of transfer pricing legislation that we develop a more matured transfer pricing regime. Whilst we discuss the legal implications of the recent cases, which have been largely decided in favour of the taxpayers, it is perhaps time to take stock of these latest decisions made by the courts and analyse them through practical lens. 

High Court decisions on Sandakan Edible Oils Sdn Bhd’s case and Procter & Gamble Malaysia Sdn Bhd’s case 

The two most recent cases that have been widely discussed are: 

• • SEO case: Ketua Pengarah Dalam Negeri v Sandakan Edible Oils Sdn Bhd decided at the High Court (unpublished) (or SEO Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri (2021) MSTC 10-129 ); and 
• • PGM case: Ketua Pengarah Hasil Dalam Negeri v Procter & Gamble (Malaysia) Sdn Bhd (2022) MLJU 743. 

At the Special Commissioners of Income Tax (“SCIT”) level in the SEO case, the SCIT held that the IRB had failed to support its decision to utilize the median point of a benchmarking analysis, done at the request of the IRB, as a basis for adjustment. The taxpayer had proved that the additional assessments imposed by the IRB were exaggerated or wrong, and such a decision was reaffirmed by the High Court on 17 May 2022. 

As for the PGM case, the taxpayer had defended the appeal filed by the IRB at the High Court which reaffirmed the decision made by the SCIT in a previous judgement. It was made clear in the judgement issued that the taxpayer did not attempt to evade or avoid tax, had sought professional advice concerning its transfer pricing policy and tax matters, and that the main issue of contention was a technical disagreement regarding transfer pricing policy. 

The above cases are regarded as being instrumental to the conversation surrounding transfer pricing and contribute significantly to the ongoing development of the transfer pricing regime within the Malaysian context. The two cases had taken place under unique circumstances but share common outcomes which may serve as the foundation for how taxpayers can assess their own levels of transfer pricing compliance. In addition, both the SEO case and PGM case reaffirm long held positions among tax practitioners that are often challenged by the IRB during the transfer pricing audit phase. 

Practical considerations and lessons learnt 

Given the above developments, taxpayers can take note of the following practical considerations and lessons learnt in evaluating their current transfer pricing matters and level of compliance. This will enable taxpayers to build a robust defence against any potential transfer pricing dispute that may take place post-audit. 

1. The importance of an appropriate benchmarking analysis 

The first obvious starting point is that of the preparation of an appropriate transfer pricing analysis. The topic of benchmarking analysis and the application of the Transactional Net Margin Method (“TNMM”) is often widely discussed in the tax sphere. However, the SEO and PGM cases bring this issue to the forefront like never before. In both cases, the applicability of the benchmarking analysis performed by the taxpayer was significantly challenged. In the SEO case, the taxpayer and the IRB had agreed on a final set of comparable companies. However, in the PGM case, the IRB disregarded the taxpayer’s analysis entirely despite two levels of benchmarking analyses being presented i.e., one on a regional level and another on a local level. Whilst the benchmarking analyses were challenged by the IRB and rejected, the courts ultimately affirmed the reasonableness of the analysis and sided with the taxpayer. The findings of the High Court noted that the IRB’s own set of comparable companies ought to be rejected as the taxpayer had produced a reliable analysis. The taxpayer had appropriately performed a functional analysis and aligned its selection of comparable companies to that of the taxpayer’s own functional profile. In addition, the taxpayer had prepared a complete transfer pricing documentation with an appropriate methodology for selection – which very much aided the taxpayer in obtaining a favourable outcome. This was in contrast to the IRB’s own lack of analysis – a point highlighted as being fatal and against the IRB’s own transfer pricing guidelines. 

The lessons learned on this point is that, whilst the IRB may challenge the application of the TNMM during an audit, it is vital that taxpayers place an emphasis on the preparation of an appropriate benchmarking analysis that has been performed with a proper basis. An arbitrary selection of comparable companies or a simplistic approach is unlikely to yield a positive outcome in the event of any disputes. In addition, as the benchmarking analysis is often requested during the audit process, as in the SEO case, it is considered good practice for taxpayers to prepare such an analysis. This is especially so if the taxpayer meets the threshold for the preparation of a full transfer pricing documentation under Paragraph 1.3.1. of the Malaysian Transfer Pricing Guidelines or engages in cross-border transactions. The preparation of a benchmarking analysis in this case will act as an additional safeguard to defend the taxpayer’s position in the event of a transfer pricing audit. 

2. Burden of proof is on the taxpayer 

A key outcome of the SEO case is the determination of where the burden of proof lies. The SCIT had cited the case of Macmine Pty Ltd v FCT (1979) 9ATR 38, which noted that “the question in tax appeals is never whether the Commissioner has established, by proof, the particular state of facts upon which he relies in support of his assessment, it is, rather, whether the taxpayer has established the non-existence of the state of facts and, hence, the excessive (sic) of the assessment”. In other words, the burden of proof lies with the taxpayer to show that the facts to support the assessment made, as interpreted by the tax authorities, do not exist. 

To do so effectively, the taxpayer must realise that both quantitative and qualitative information are required to be sufficiently analysed and documented. From a quantitative perspective, the importance of the benchmarking analysis has been highlighted in Item 1 above. Taxpayers also must ensure that evidence such as economic data, transaction data, price movements for commodity-based transactions and financial data are all kept appropriately with respect to related party transactions. This would aid the taxpayer in making the arguments that its transfer prices have been sufficiently analysed and are in line with the arm’s length principle. 

In addition to quantitative data, the taxpayer should place additional attention on qualitative information – which can provide a proper context to the transaction and bring to life the information provided during the audit process. This importance of qualitative information is often overlooked and taxpayers often struggle to maintain such evidence on a year to year basis. 

The PGM case provides a clear illustration of its importance. During the audit proceedings, the taxpayer had sought to address the IRB’s queries regarding its transfer pricing practices by providing multiple sources of information. This included a functional analysis done within the transfer pricing documentation, sample marketing and promotional documentation, as well as explanations via letters to the IRB regarding the related party transaction being scrutinised. Specifically, the High Court noted that the taxpayer had offered “…not only documentary evidence but also elaborate explanation…” on the queries raised by the IRB. Therefore, it can be observed that the information presented by the taxpayer, which were aligned to the transfer pricing documentation and corresponding benchmarking analysis prepared, was a key component for consideration by the High Court in affirming the decision made regarding the PGM case in favour of the taxpayer. 

Hence, taxpayers should ensure that the qualitative aspects of their functions, assets and risks as well as the general conduct of their business with respect to related party transactions are well documented. This may include keeping qualitative information relevant to the company’s transfer pricing practices such as product brochures, marketing information, internal memos, meeting agendas or presentation slides. Whilst this list of information is not exhaustive, it should serve as a starting point for in-house tax teams on the part of the taxpayer to begin collating information relevant to the related party transactions documented in the company’s transfer pricing documentation. Such information may prove to be vital in supporting any arguments made by the taxpayer during a transfer pricing dispute with the IRB as well as in future court proceedings. 

3. The need for robust transfer pricing documentation 

Lastly, both the SEO case and PGM case highlight the great need for the preparation of robust transfer pricing documentation. Since 2021, the preparation of transfer pricing documentation for each year of assessment has become more important as any person who makes a default in furnishing contemporaneous transfer pricing documentation in respect of any year of assessment shall be liable to a fine of not less than RM20,000 and not more than RM100,000 (Section 113B of the Income Tax Act 1967). 

The PGM case adds further weight to the importance of the transfer pricing documentation as the preparation of robust documentation was a key factor in the successful outcome for the taxpayer in the case. In particular, the High Court noted that the taxpayer had performed a proper functional analysis, which had properly discerned the respective functions, assets and risks undertaken. In addition, a detailed search criteria to identify the comparable companies was also documented. Besides, the conduct of the taxpayer’s business was in line with the transfer pricing documentation prepared, indicating that the transfer pricing documentation prepared was aligned to the actual substance of the company’s operations. Crucially, the documentation aligned with the transfer pricing guidelines applicable at the time. 

The High Court in the PGM case affirmed the SCIT’s reliance on the transfer pricing documentation as it was prepared in accordance with the relevant guidelines and should be maintained. Whilst there remains a temptation to consider the preparation of transfer pricing documentation as merely a routine exercise, the PGM case highlights the importance of looking at the preparation of the transfer pricing documentation in greater detail. Taxpayers should ensure that any transfer pricing documentation that is being prepared aligns with the substance of the business and accurately documents the functions, assets and risks of the taxpayer with respect to its related party transactions. In addition, a yearly review would result in the contemporaneous nature of the documentation being maintained and may safeguard the taxpayer’s position in the event of any queries being raised by the tax authorities during a tax audit. 

Read more HERE.

Graffiti, flyers, word of mouth: China’s protesters embrace low-tech organizing to escape surveillance

 

First-time protesters battle a powerful surveillance apparatus to express dissent.

By VIOLA ZHOU and MEAGHAN TOBIN

1 DECEMBER 2022

Little A, a university student in Shanghai, wouldn’t have known about the protest if a friend hadn’t told him to bypass the Great Firewall on Nov 27 to read news outside of China’s censored internet. That’s where he saw that people were planning to protest the country’s strict zero-Covid policy after at least ten people died in a fire in Urumqi, Xinjiang, where some of the toughest lockdown measures were in place. To commemorate those who died, the gathering — one of dozens of protests that erupted in major cities across China in the days that followed — took place on Shanghai’s Urumqi Road.

When Little A left a nearby subway station at 8 p.m., the 22-year-old encountered a crowd already hundreds-strong, along with more than a dozen police vehicles. In addition to calling for an end to the zero-Covid policy, the protesters chanted slogans demanding democracy and rule of law, and sang the socialist anthem “The Internationale.” Little A, who spoke to Rest of World under a pseudonym to discuss his first-ever protest freely, said, “It was something I wouldn’t have imagined before. It was the first time I said ‘No’ while standing with everyone else.” 

The protests that have taken place over the past week constitute the country’s biggest wave of civil disobedience in decades. But organizing in China isn’t as simple as posting an event announcement to an online forum or a rallying cry on social media. Protesters told Rest of World they worry that sharing information online could lead to having their accounts shut down, or even being detained. 

Instead, they’re increasingly turning to workarounds — many completely offline — in order to spread the word: from holding blank pieces of paper in public to scrawling graffiti in bathroom stalls on university campuses. And with older people less likely to use digital tools like VPNs, some protestors say they have simply resorted to spreading their message through word of mouth. 

The current wave of dissent started gaining momentum in October, when a lone person on a highway bridge in Beijing hung banners calling for an end to the coronavirus restrictions and for President Xi Jinping to step down. The protestor’s acts emboldened a small group of young Chinese to disseminate his message by writing his slogans on public bathroom walls, among the only public places unlikely to be under surveillance. Protestors also pinned leaflets on campus bulletin boards, and shared images of the protest between Apple devices through AirDrop. 

After the Urumqi fire, protesters emerged in multiple cities, alerting each other to gather with a combination of coded WeChat messages, VPNs, and some guesswork. On Sunday evening in Shanghai, Little A only realized he was joining a protest when he found himself in the crowd facing the police. “It was so unexpected,” he said. “Before the night, I had never thought I would dare chant these slogans and disobey the police.” 

Read more here.

Employment Act to apply to all employees from 1 January 2023, some sections subject to increased salary threshold of RM4,000/month

 [Note: When this article was first published on 16 August 2022, the amendments to the Employment Act were scheduled to come into force on 1 September 2022. In late August 2022, the government announced that the implementation date would be deferred to 1 January 2023. This article has been edited to reflect the new implementation date, with any new text in red.]

When the Employment (Amendment) Act 2022 (“the Amendment Act”) was gazetted earlier this year, there was much confusion regarding what the scope of the Employment Act (“EA”) would be once the Amendment Act came into force. This confusion was fuelled by the government not amending the First Schedule at the same time the Amendment Act was passed, and also repeatedly stating that the EA’s scope would be expanded so that all employees regardless of salary would be entitled to the EA benefits and protections, with many industry experts sharing the view that such a blanket expansion would be impractical for many reasons.

With the gazetting of the Employment (Amendment of First Schedule) Order 2022 (“First Schedule Amendment Order”) on 15 August 2022, there finally is clarity on the scope of the EA from 1 September 2022 1 January 2023.

EA salary threshold increased from RM2,000 to RM4,000

Prior to the new amendments, the vast majority of the EA only applied to employees earning up to RM2,000/month, or to specified groups of employees irrespective of wages (e.g. those engaged in or supervising manual labour, and several other groups). The existing EA set out specific provisions to enable non-EA employees to also be included in the sections of the EA regarding maternity protection (Part IX) and sexual harassment (Part XVA).

Following the First Schedule Amendment Order which will come into force on 1 September 2022 1 January 2023, the way the EA scope is defined has been reversed. While it previously only applied to employees earning up to RM2,000/month with some specific sections applying to all employees, it will now apply to all employees irrespective of wages, with some specific sections not applying to employees earning more than RM4,000/month. Here are the details:

1. The EA will now apply to “any person who has entered into a contract of service”.
2. However, the sections of the EA in relation to overtime payments and termination benefits will not apply to employees whose wages exceed RM4,000/month (the full list of excluded EA provisions is listed below).
3. The list of EA provisions which do not apply to domestic employees (previously known as domestic servants) has also been expanded.

This is the full list of EA provisions which will not apply to employees earning more than RM4,000/month:

• Subsection 60(3): Overtime for work on rest days.
• Subsection 60A(3): Overtime for work outside of normal working hours.
• Subsection 60C(2A): Shift work allowance.
• Subsection 60D(3): Overtime and allowance for work on public holidays.
• Subsection 60D(4): Overtime for work on holidays on half working days.
• Subsection 60J: Termination, lay-off, and retirement benefits.

What employers need to do

All employers will need to review their existing employment contracts and policies to ensure that they comply with the EA. It should be noted that Section 7 of the EA states that any terms or conditions which are less favourable to an employee than those provided under the EA will be void and of no effect. This includes contracts which were entered into before 1 September 2022 1 January 2023.

(For a more comprehensive look at the changes under the Amendment Act, read my earlier article: “Malaysia Employment Act amendments: 7 key changes for employers to note”)

Read more at: https://themalaysianlawyer.com/

Getting to Know the Russian Battalion Tactical Group

 Lester W Grau and Charles K Bartles

14 April 2022

• 
  
  
  Much has been written on Russia’s battalion tactical groups in recent weeks. It is thus of value to revisit their origins and capabilities, and the roles they were set up to play.

 

Introduction

Success in modern conventional warfare is determined by a combination of effort, environment and – to an extent – luck. However, the most important determinants of victory are the actions of combined arms units. Only these units, in cooperation with other branches of arms and other military services, can perform the full spectrum of defensive and offensive tasks. The execution of these tasks depends upon the enemy’s composition, position and probable course of action; the position and condition of one’s own subordinate, attached and supporting units; the conditions of the area on which the assigned tasks will occur; and weather. Traditionally, Russia’s lowest echelons capable of performing combined arms tasks were the regiment or brigade, but experimentation in the 1980s led to a semi-permanent combined arms formation at the battalion level, the Battalion Tactical Group (BTG).

Russia’s 2022 invasion of Ukraine has made the term ‘Battalion Tactical Group’ commonplace beyond the expert community, from the mass media to YouTube and a plethora of blog sites. Though understanding of the invasion is still in its infancy, this article intends to shed some light on what a BTG is, and how it is used in a Russian military context.

At the time of writing, details are still sketchy, but based upon media reports and a few captured Russian maps, it appears that Russia has conducted a partial mobilisation, deploying only partial divisions/regiments, brigades, and independent BTGs. Larger formations have apparently deployed only with their BTGs, leaving their other manoeuvre battalions in garrisons. Although the Russians appear to be having difficulties, this structural change was likely envisioned from the beginning of the operation, as the scale of the conflict is unsuitable for the sole use of independent BTGs. The BTG was ideal for earlier fighting in support of separatist ethnic Russian elements in Donetsk and Luhansk; however, large-scale combat requires large-scale combined arms operations and battalions fighting as part of larger entities.

The brigade/regiment may now be the primary unit of manoeuvre, but some independent BTGs likely remain in play. They are either being spun off a parent regiment/brigade for a particular mission (such as forward detachments, advance guards, raiding detachments, flank guards, or urban assault detachments) or may be entirely independent. It is likely that some BTGs will be subordinated to regiments/brigades that they are not otherwise affiliated with, and possibly to different branches, including the naval infantry and airborne troops (VDV), if expedient.

History of the Battalion Tactical Group

The BTG is not a new feature in Russian military thought. The Russian Civil War (1917–1923) included raiding groups, forward detachments, rear guards, advance guards and other mobile battalions comprised of horse cavalry, machinegun detachments mounted on horse-drawn carts, horse-drawn artillery, and occasional tanks or armoured cars. Their focus was on speed, manoeuvre, the ability to mass fires and forces, and the interaction of these forces to achieve a combined combat power greater than the component parts. During the Second World War, the Soviets fought primarily with separate infantry, armour and artillery units that occasionally fought as combined arms units, but usually integrated shortly before the battle. Artillery and artillerymen were always present in infantry battalions in the form of mortars, direct-fire cannon and antitank rifles.

During the Cold War, the Soviets realised that combined arms units were more effective than integrating branch units just before the fight. There were problems integrating them in garrison and training. Branch units occupied their own barracks. Tanks, personnel carriers and artillery required different maintenance parts and services. Branch weapons qualification required different ranges and facilities. Branch proficiency was necessary before putting different branch soldiers together in exercises or combat. So the Soviet Army trained for branch skills, but when it went on field exercises, it fought combined. The results were not always inspiring. Commanders struggled to integrate their branch forces with those of other branches – though units that trained together on a sustained basis performed better.

Over time, divisions and regiments became fairly proficient in combined arms combat, but the nature of the battlefield was changing. Modern weapons forced units to spread out in order to survive. The future battlefield would be fragmented, with gaps between units, open flanks and combat not only at the front line, but also throughout the battlespace. The concept of the front line itself was being challenged. It thus became obvious that the battalion was a prime component of future war and battalions had to fight combined to win. The problem was how to combine branches into battalions and fight effectively. What was the optimum mix of tanks, mounted infantry, artillery, engineers, air defence and other branches? How could they be trained simultaneously and effectively in branch and combined arms skills?

Throughout the Cold War, the Soviets tried different combinations of forces in an effort to create an optimum Combined Arms Battalion, or Battalion Tactical Group in the Russian parlance. It had to be lethal, yet not too large, capable of acting independently for a period of days, and able to fight combined effectively. From the 1960s to the end of the 1980s, the Soviet Motorised Rifle Battalion and Tank Battalion went through several Table of Organisation and Equipment (TO&E) changes to try to improve their combined arms lethality. During the same period, they conducted hundreds of exercises using different mixes of tanks, motorised rifle, air defence, engineers and combat support forces, looking for the optimum solution. Clearly, the Soviets were trying to determine the optimum TO&E structure, training and employment of BTGs.

After the collapse of the USSR, the impetus to develop the BTG was strengthened by Russia’s experience during the Chechen campaigns and related counterterrorism activities. During this period, the 58th Combined Arms Army manoeuvre regiments formed BTGs based on motorised rifle battalions that were reinforced with tanks; artillery; air defence; reconnaissance; engineering; chemical, biological, radiological and nuclear defence; communications; maintenance; and logistics units. These BTGs were 100% equipped and manned, with mostly contract personnel, and were on a six-month readiness cycle until their personnel were rotated out. Many characteristics of today’s BTG can be directly traced to this time.

Battalion Tactical Groups in Today’s Russia

Today, the BTG is a semi-permanent task force found in the manoeuvre (motorised rifle and tank) regiments and brigades of the Russian Ground Forces, Naval Infantry and VDV. BTGs are task-organised motorised rifle or tank battalion-plus-sized combat entities that can perform semi-independent combined arms combat missions. They are capable of conducting deep raids, envelopments and flanking manoeuvres. In the Russian system, the lowest echelon of combined arms command has traditionally been the manoeuvre regiment or brigade. Thus, the Russians do not use terms like ‘Regimental Tactical Group’ when referring to their manoeuvre formations, as these formations are inherently combined arms in nature. The term ‘Battalion Tactical Group’ is a special delineation of function which notes that this formation is combined arms in nature.

By current Russian General Staff directive, each regiment and brigade is supposed to have two designated BTGs. But units in the Southern Military District reportedly have three BTGs per regiment/brigade. In terms of composition, a BTG consists of a motorised rifle battalion or tank battalion with varying combat support attachments. These attachments can vary, as they depend upon the equipment organic to the battalion and the tasks it is likely to be assigned. The most common BTG variant is based on a motorised rifle battalion with an attached tank company, self-propelled howitzer battalion, air defence platoon, engineer squad, and logistic support.

Figure 1: Example of a Battalion Tactical Group (circa 2014–2015)

 

Read more here.

•