Russia in Review

Russia in Review: a digest of useful news from U.S.-Russia Initiative

to Prevent Nuclear Terrorism for February 26 – March 4, 2016.

I. U.S. and Russian priorities for the bilateral agenda.

Nuclear security:

·With the exception of Russia, all of the countries from the 2014 summit are expected to attend the upcoming nuclear security summit. A White House official said that the United States “regret[s]” Moscow’s decision not to participate.” Russia continues to work “constructively with the United States” on projects to remove nuclear materials from other countries and as a member of the GICNT, the official said. (Arms Control Today, March 2016).

·A consensus document on nuclear security that will be released at the upcoming nuclear security summit in Washington will outline further steps to strengthen the global nuclear security architecture and spur progress on tangible nuclear security improvements, a senior White House official said last month. (Arms Control Today, March 2016).

·"We would be glad to have more opportunities to discuss security and stability issues with Russia. By the way, Obama will host the fourth and the final nuclear security summit in April," U.S. Ambassador to Russia John Tefft wrote.(Sputnik, 03.03.16).

·The U.S. Department of Energy’s National Nuclear Security Administration, working in collaboration with the Government of Switzerland, announced that approximately 20 kilograms of separated plutonium have been transported from Switzerland to the United States. (NNSA, 03.03.16).

·If terrorists attacked one or more of America’s nuclear missiles in the northern Great Plains, U.S. military personnel would not be able to respond effectively, because their Vietnam-era helicopters are not up to the task, according to lawmakers, U.S. military leaders and Defense Department documents.(Roll Call, 02.29.16).

·“We can imagine that the terrorists might want to kidnap someone or kidnap his family,” so they can force their target to turn over the radioactive innards of such a device after removing the materials surreptitiously, a spokeswoman for Belgium’s Federal Agency for Nuclear Control said in reference to allegations that Islamic State associates have monitored a senior researcher at a Belgian nuclear center. (Foreign Policy, 02.29.16).

·The Mexican government has issued an alert for a large swath of central Mexico after the theft of an industrial device containing Iridium-192.The device was being transported in a pickup that was stolen early Saturday in the state of Queretaro.(CNN, 03.01.16).

Iran’s nuclear program and related issues:

·No significant developments.

Military issues, including NATO-Russia relations:

·“We still believe that the best way to secure the interests of peoples living on the European continent would be the formation of a common economic and humanitarian space, extending from the Atlantic to the Pacific," Russian Foreign Minister Sergei Lavrov wrote, adding that Russia does not want a confrontation either with the US, or EU or NATO. (Today’s Zaman, 03.03.16).

·"Russia has chosen to be an adversary and poses a long-term existential threat to the United States and our European allies and partners," NATO's military commander General Philip Breedlove said.Breedlove also warned that Russia and Syria have turned the refugee crisis into a "weapon" against the West (RFE/RL, 03.02.16, Reuters, 03.02.16).

·NATO's eastern-flank members are lobbying for a long-term alliance commitment to keep increased military forces in their countries, along with authority for those forces to respond quickly to possible Russian intervention in advance of formal political approval from NATO headquarters in Brussels. (Washington Post, 02.27.16).

·Three B-52 bombers deployed to Europe last week to participate in a series of training exercises in Norway, a move that NATO's military commander General Philip Breedlove called “not normal.” Asked whether the U.S. military had reconsidered its decision to leave the Keflavik air base in Iceland, Breedlove said bases like Keflavik were important for reconnaissance and "we are already renewing some of these conversations." (Reuters, 03.02.16,Washington Post, 03.02.16).

·Gen. Frank Gorenc, head of US Air Forces in Europe, said that “proliferation of the anti-access, aerial-denied environment makes it necessary” to deployfifth-generation aircraft like the F-35 in Europe. However, the general said “I don’t think I’m there yet,” when asked whether he would a permanent base of F-22s in Europe. (Defense News, 03.01.16.)

·Marine Corps Lt. Gen. Vincent Stewart, director of the Defense Intelligence Agency warned Wednesday that he has “great concern” about Russia’s intentions to fly sophisticated surveillance planes over the United States under the 2002 Open Skies Treaty, saying it would give Russia “a significant advantage." (Defense News, 03.02.16).

Missile defense:

·No significant developments.

Nuclear arms control:

·At the beginning of 2016, the U.S. Defense Department maintained a stockpile of an estimated 4,670 nuclear warheads for delivery by more than 800 ballistic missiles and aircraft.(Bulletin of the Atomic Scientists, 2016 Vol. 72, No. 2, 63–73).

·The United States will not participate in a working group on disarmament taking place in Geneva this year, according to the State Department. The working group is scheduled to reconvene during the first two weeks of May and once more during the week of Aug. 22. (Arms Control Today, March 2016).

Counter-terrorism:

·Russia warned on Tuesday of a growing threat of Islamic State and other groups waging chemical warfare in the Middle East and called for global negotiations on a new pact to combat what he called "a grave reality of our time.” (Reuters, 03.01.16).

·Retired Lieutenant General Michael Flynn, who was the Defense Intelligence Agency chief from 2012 to 2014 and who advises Donald Trump on foreign policy, believes the United States should work more closely with Russia on global issues such as defeating the Islamic State group. (RFE/RL, 02.27.16).

·Tamerlan Tsarnaev passed the U.S. citizenship test and denied terrorism links months before he and his brother detonated two bombs that killed three people at the Boston Marathon finish line. (AP, 02.29.16).

Cyber security:

·Marine General Joseph Dunford, chairman of the Joint Chiefs of Staff, said Russia has the capability to “potentially cause considerable damage” throughout the U.S. and Europe “to critical network equipment and national infrastructure.” Head of the U.S. National Security Agency Admiral Michael Rogers has warned that hackers will inevitably attack U.S. infrastructure in an attempt to cause a power failure like the one in Ukraine. (Bloomberg, 02.29.16, RFE/RL, 03.02.16).

·German authorities say they have arrested suspects in connection with online forums used to sell weapons, drugs and fake documents. The raids were carried out in cooperation with police in Russia among other countries. (AP, 02.29.16).

Energy exports from CIS:

·Key members of OPEC intend to meet with other producers in Russia on March 20 to renew talks on an agreement to cap oil output. (Bloomberg, 03.03.16).

·President Vladimir Putin says he has obtained a commitment from Russia's largest oil producers that they will freeze production in accordance with a deal reached in February between Moscow and Saudi Arabia to support global oil prices. (RFE/RL, 03.02.16).

·Oil production in Russia fell in February fell by 0.2 percent to 10.885 million barrels a day from January. (Bloomberg, 03.02.16).

·The European Commission on March 3 gave its approval to a deal with Greece for the construction of the 878-kilometer Trans Adriatic Pipeline meant to transport natural gas from Azerbaijan to the European Union.(RFE/RL, 03.02.16).

·Russia’s Novatek OJSC seeks to ship gas to Europe, paying a commission Gazprom in a plan to compete with Norwegian gas in the region. (Bloomberg, 03.02.16).

Bilateral economic ties:

·No significant developments.

Other bilateral issues:

·The Kremlin has expressed "regret" about U.S. President Barack Obama's March 2 decision to extend sanctions imposed in 2014 to punish Moscow for its annexation of Crimea. The sanctions target senior Russian officials, pro-Russian separatists in Ukraine and some Russian companies and banks. (RFE/RL, NYT, 03.03.16).

·U.S. astronaut Scott Kelly and Russian cosmonaut Mikhail Kornienko returned to Earth on March 2 after spending almost a year in space. (RFE/RL, 03.02.16).

·The U.S. Air Force on Monday awarded contracts worth more than $160 million to two separate firms involved in the development of new rocket engines to help end U.S. reliance on Russian-made RD-180 rocket motors. Quickly ending U.S. reliance on RD-180s could add up to $5 billion in costs, according to USAF Secretary Deborah James. (RFE/RL, 03.04.16, Reuters, 03.01.16).

·Russia's Foreign Minister has expressed gratitude to the United States for finding and repatriating 28 historical Russian documents that were illegally taken to the United States during the 1990s. (RFE/RL, 03.04.16).

·Goldman Sachs Group Inc. is likely to withdraw a bid to underwrite a $3 billion Russian bond deal after the U.S. government last week cautioned Wall Street firms against pursuing the business. (Wall Street Journal, 03.03.16).

·Donald Trump said during the 11th GOP candidates' debate: “Wouldn't it be nice if actually we could get along with Russia, we could get along with foreign countries, instead of spending trillions and trillions of dollars? Wouldn't it be nice if we got along with the world, and maybe Russia could help us in our quest to get rid of ISIS?”(Washington Post, 03.04.16).

·John Kasich said during the 11th GOP candidates' debate: “In Russia, we need to tell them we're going to arm the Ukrainians with defensive lethal weapons. And we're going to tell Putin if you attack anybody in Eastern Europe in NATO, you attack Finland and Sweden, which is not in NATO, consider it an attack on us. And he will understand that.” (Washington Post, 03.04.16).

II. Russia news.

Domestic politics, economy and energy:

·Gross domestic product shrank 2.5 percent in January from a year earlier after a 3.5 percent plunge in December, the Economy Ministry said. (Bloomberg, 02.29.16).

·The Russian central bank held $379 billion in foreign exchange and gold as of Feb. 19, up $29 billion from lows touched last April, making Russia the only major emerging market with a gain. (Bloomberg, 02.29.16).

·Official ruble exchange rates against the U.S. dollar and euro strengthened to 72.82 and 79.72 respectively on Friday morning, reaching its highest point since the beginning of January. (Moscow Times, 03.04.16).

·Consumer prices jumped 12.9 percent last year, the biggest calendar-year rise since 2008. (Bloomberg, 02.29.16).

·Russia's manufacturing activity declined in February, the Markit purchasing managers index (PMI) showed on Tuesday. The index's headline figure fell to 49.3 in February from 49.8 in January, staying below the 50 mark that separates expansion from contraction for the third consecutive month. At the same time Russia Services Business Activity Index rose to 50.9 in February from 47.1 in January. (Reuters, 03.01.16, Bloomberg, 03.03.16).

·The unemployment in Russia remains at 5.8% or 4.4 mn people for the third month in a row. (Tass, 03.01.16).

·Since the beginning of Russia's economic decline in 2014, only 23 percent of middle class Russians have noticed a deterioration, in their financial situation, with just over 2 percent having lost their jobs, according to a report by the Institute of Sociology of the Russian Academy of Sciences. (Moscow Times, 02.29.16).

·In January 2015 the Russian population naturally shrank by around 25,000, while in January 2016 it shrank by around 27,000. (Forbes, 02.29.16).

·Russian authorities are insisting that the underground explosions that killed 36 people in an Arctic mine over the weekend were the result of natural causes, not negligence or fraud. (RFE/RL, 03.01.16).

·More than 70 percent of Russians would vote for Russian President Vladimir Putin in the next presidential election, a survey by the state-run VTsIOM pollster revealed. (Moscow Times, 03.03.16).

·Vladimir Putin named his human rights commissioner, Ella Pamfilova, among presidential nominees to the Central Election Commission and left the body’s current chairman, Vladimir Churov, off his list. (RFE/RL, 03.03.16).

·25,000 supporters of slain Kremlin critic Boris Nemtsov have marched through Moscow to mark the first anniversary of his killing. (RFE/RL, 02.27.16).

·Kremlin-backed Chechen leader Ramzan Kadyrov has said he is ready to resign. (RFE/RL, 02.27.16).

·Leonid Mikhelson, co-owner of Novatek, has become Russia's richest men with wealth estimated at $14.4 billion, according to the latest rating from Forbes.Mikhelson is one of 70 Russians who made the ranking, 11 fewer than a year earlier, according to Forbes. In Russia the population of individuals with $30 million or more dropped by 5% in 2014, according to a report from real-estate broker Knight Frank. (Reuters, 03.01.16, Wall Street Journal, 03.02.16).

·A total of 3.788 million foreign travel passports were issued in Russia last year, down 49 percent compared to 2014. (Moscow Times, 02.26.16).

Defense and Aerospace:

·Russia is about to test-launch a volley of intercontinental ballistic missiles from nuclear-powered submarines in the Barents Sea, during an exercise to test the combat readiness of its nuclear deterrence forces. (Haaretz, 03.03.16).

·The team of researchers at Tomsk State University in Siberia ran a number of tests to figure out how to blow up 200-metre-wide asteroid with a nuclear weapon without causing the radioactive fragments to fall to Earth. (Independent, 02.29.16).

Security, law-enforcement and justice:

·President Vladimir Putin said Friday that Russia halted the activity of 400 employees of foreign intelligence services in the country in 2015. (Moscow Times, 02.26.16).

·Moscow police arrested a woman who held aloft the severed head of a 4-year-old child authorities said she was hired to care for. Media reports cited witnesses as saying she was heard shouting, “Allahu Akbar. According to Russia media, the woman has been identified as 39-year-old nanny Gyulchekhra Bobokulova, a native of Uzbekistan. Bobokulova later said she was seeking revenge for the deaths of Muslims in Russia's campaign in Syria. (Washington Post, 03.03.16, RFE/RL, 02.29.16).

Foreign affairs and trade:

·Syria:

oA partial cease-fire in Syria showed signs of unraveling Friday amid mounting accusations of government assaults and a lack of promised humanitarian aid deliveries to scores of besieged people. The United States and Russia must make Syria's cessation of hostilities work or else it may become necessary to delay the resumption of peace talks, U.N. Syria envoy Staffan de Mistura told Reuters. He then said that next round of Syria peace talks has been delayed two days to March 9. (Reuters, Wall Street Journal, 03.01.16).

oU.S. Secretary of State John Kerry said the United States and Russia are working together on a mechanism to ensure that any bombing in Syria is aimed only at recognized terrorist groups. Kerry said at a news conference on February 29 that he talked with Russian Foreign Minister Sergei Lavrov and they agreed not to "litigate...in a public fashion" reports of violations of the cessation of hostilities put in place on February 27. (RFE/RL, 03.01.16).

oFrench President Francois Hollande and British Prime Minister David Cameron have jointly urged Moscow and Damascus to "immediately stop attacks” on Syria’s moderate opposition. (RFE/RL, 03.03.16).

oRussia’s Foreign Minister Sergey Lavrov said that those who repeatedly violate the terms of Friday’s cease-fire are exempt and can be attacked. Lavrov’s deputy Mikhail Bogdanov told Reuters on Tuesday that Russia has not violated the cessation of hostilities in Syria, and it has not had any complaints from its contacts in the Syrian opposition. (AP, 03.01.16, Reuters, 03.01.16).

oRussia called on Tuesday for the Syrian-Turkish border to be closed, saying arms were being hidden in humanitarian aid convoys and channeled to fighters of Islamic State and its allies. Russia's Defense Ministry said on Sunday its coordination center in Syria had received information about an attack on the Syrian town of Tel Abyad from Turkish territory using large-caliber artillery, Interfax news agency reported. (Reuters, 02.28.16, Moscow Times, 02.29.16, Reuters, 03.01.16).

oRussian Deputy Prime Minister Dmitry Rogozin has slammed claims by the Supreme Allied Commander of NATO in Europe that Russia is using 'non-precision' weapons in Syria. (Moscow Times, 03.03.16).

·Other countries:

oThe European Union is expected to hold discussions at the end of the first half of the year about whether Russia has fulfilled the Minsk agreement and there will not be an automatic extension of sanctions against Moscow, Hungarian Prime Minister Viktor Orban said on Monday. (Reuters, 02.26.16).

oRussian state gas giant PAO Gazprom has secured a €2 billion loan from Bank of China Ltd., the largest bilateral credit in the Russian company's history. (Wall Street Journal, 03.03.16).

oTrade between Russia and Finland decreased by a third in 2015. (Tass, 03.01.16).

oNorth Korea launched several short-range missiles from its eastern coast Thursday. The action took place one day after the United Nations Security Council approved new sanctions against North Korea. (Voice of America, 03.04.16).

Russia's neighbors:

·Ukraine:

oIt will take Ukraine at least 20 to 25 years to join the European Union and NATO, European Commission President Jean-Claude Juncker said March 3. (RFE/RL, 03.04.16).

oFrench Foreign Minister Jean-Marc Ayrault said that during the four-party talks on the conflict in Eastern Ukraine the parties to the conflict pledged to release all prisoners by April 30, to hold local elections in the Donbas region by June 30, and to refrain from using weapons during training exercises along the disputed front. But Ukraine’s Foreign Minister Pavlo Klimkin said security needed to be guaranteed before elections could be held. And Russian Foreign Minister Sergei Lavrov said there was “no progress” on actually holding elections in Donbas and on Russia’s demand for direct talks between the separatists and the Ukrainian government. (Bloomberg, 03.03.16).

oIn an updated toll, the UN said at least 9, 160 people have been killed and 21,000 injured since the conflict in Eastern Ukraine began in 2014. (RFE/RL, 03.03.16).

oNATO's military commander General Philip Breedlove said Tuesday that NATO has recently observed an increase in violence along the line of contact in Ukraine's eastern Donbas region. (Voice of America, 03.01.16).

oUkraine’s military released footage on March 3 purportedly showing Russia-backed fighters firing Grad multiple-rocket launchers against government army positions outside the separatist stronghold of Donetsk. (RFE/RL, 03.03.16).

oThe United Nations' Office of the High Commissioner for Human Rights called on Kiev to investigate alleged human rights violations during the "civil blockade" of the Crimean peninsula. (Moscow Times, 03.03.16).

oThe European Union will extend sanctions against almost 150 Russian officials and pro-Moscow separatists in Ukraine and continue an asset freeze on 16 people accused of misappropriating Ukrainian state funds under former President Viktor Yanukovych, diplomats said on Wednesday. (Wall Street Journal, 03.03.16).

oUkraine is planning a "substantial enhancement" of its military position around the Black Sea and on the border of Crimea as part of a strategy of regaining the territory that Russia annexed two years ago. (Moscow Times/EurasiaNet, 02.29.16).

oRussia's prosecutor has called for a 23-year prison term for Ukrainian pilot Nadia Savchenko, who has been accused by Russian authorities of involvement in the deaths of two Russian journalists in eastern Ukraine. (RFE/RL, 03.02.16).

oUkraine banned government officials on Tuesday from publicly criticizing the work of state institutions and their colleagues, after damaging disclosures last month that highlighted slow progress in fighting corruption. (Reuters, 03.01.16).

oUkraine's electricity regulator is to increase prices by 25 percent effective March.According to the UN, there is no country in the world more energy intensive than Ukraine. (RFE/RL, 03.01.16).

oA consortium of four German companies has been awarded a contract to improve infrastructure for managing radioactive waste, the rehabilitation of contaminated areas and the decommissioning of nuclear power plants in Ukraine. (World Nuclear News, 03.02.16).

·Other neighbors:

oGeorgian Foreign Minister Mikheil Janelidze says he expects the European Union to liberalize its visa rules for Georgian citizens by the end of June. (RFE/RL, 03.02.16).

oTurkmenistan’s President Gurbanguly Berdymukhammedov has appointed a new national security chief. Dovrangeldy Bairamov has previously headed Turkmenistan's state customs service. (RFE/RL, 03.02.16).

oAn appeals court in Sweden has sentenced an Uzbek citizen to life in prison, increasing his initial sentence of 18 years for an assassination attempt on an imam. (RFE/RL, 03.01.16).

oA Lithuanian court has jailed a former military medical officer after finding him guilty of spying for neighboring Belarus. (RFE/RL, 03.04.16).

Back issues of Russia in Review are available here.If you wish to either unsubscribe from or subscribe to Russia in Review, please e-mail Simon Saradzhyan at simon_saradzhyan@hks.harvard.edu.

Russia in Review: a digest of useful news from U.S.-Russia Initiative

to Prevent Nuclear Terrorism for February 26 – March 4, 2016.

I. U.S. and Russian priorities for the bilateral agenda.

Nuclear security:

• With the exception of Russia, all of the countries from the 2014 summit are expected to attend the upcoming nuclear security summit. A White House official said that the United States “regret[s]” Moscow’s decision not to participate.” Russia continues to work “constructively with the United States” on projects to remove nuclear materials from other countries and as a member of the GICNT, the official said. (Arms Control Today, March 2016).
• A consensus document on nuclear security that will be released at the upcoming nuclear security summit in Washington will outline further steps to strengthen the global nuclear security architecture and spur progress on tangible nuclear security improvements, a senior White House official said last month. (Arms Control Today, March 2016).
• "We would be glad to have more opportunities to discuss security and stability issues with Russia. By the way, Obama will host the fourth and the final nuclear security summit in April," U.S. Ambassador to Russia John Tefft wrote.(Sputnik, 03.03.16).
• The U.S. Department of Energy’s National Nuclear Security Administration, working in collaboration with the Government of Switzerland, announced that approximately 20 kilograms of separated plutonium have been transported from Switzerland to the United States. (NNSA, 03.03.16).
• If terrorists attacked one or more of America’s nuclear missiles in the northern Great Plains, U.S. military personnel would not be able to respond effectively, because their Vietnam-era helicopters are not up to the task, according to lawmakers, U.S. military leaders and Defense Department documents.(Roll Call, 02.29.16).
• “We can imagine that the terrorists might want to kidnap someone or kidnap his family,” so they can force their target to turn over the radioactive innards of such a device after removing the materials surreptitiously, a spokeswoman for Belgium’s Federal Agency for Nuclear Control said in reference to allegations that Islamic State associates have monitored a senior researcher at a Belgian nuclear center. (Foreign Policy, 02.29.16).
• The Mexican government has issued an alert for a large swath of central Mexico after the theft of an industrial device containing Iridium-192.  The device was being transported in a pickup that was stolen early Saturday in the state of Queretaro.(CNN, 03.01.16).

Iran’s nuclear program and related issues:

• No significant developments.

Military issues, including NATO-Russia relations:

• “We still believe that the best way to secure the interests of peoples living on the European continent would be the formation of a common economic and humanitarian space, extending from the Atlantic to the Pacific," Russian Foreign Minister Sergei Lavrov wrote, adding that Russia does not want a confrontation either with the US, or EU or NATO. (Today’s Zaman, 03.03.16).
• "Russia has chosen to be an adversary and poses a long-term existential threat to the United States and our European allies and partners," NATO's military commander General Philip Breedlove said. Breedlove also warned that Russia and Syria have turned the refugee crisis into a "weapon" against the West (RFE/RL, 03.02.16, Reuters, 03.02.16).
• NATO's eastern-flank members are lobbying for a long-term alliance commitment to keep increased military forces in their countries, along with authority for those forces to respond quickly to possible Russian intervention in advance of formal political approval from NATO headquarters in Brussels. (Washington Post, 02.27.16).
• Three B-52 bombers deployed to Europe last week to participate in a series of training exercises in Norway, a move that NATO's military commander General Philip Breedlove called “not normal.” Asked whether the U.S. military had reconsidered its decision to leave the Keflavik air base in Iceland, Breedlove said bases like Keflavik were important for reconnaissance and "we are already renewing some of these conversations." (Reuters, 03.02.16,Washington Post, 03.02.16).
• Gen. Frank Gorenc, head of US Air Forces in Europe, said that “proliferation of the anti-access, aerial-denied environment makes it necessary” to deploy  fifth-generation aircraft like the F-35 in Europe. However, the general said  “I don’t think I’m there yet,” when asked whether he would a permanent base of F-22s in Europe. (Defense News, 03.01.16.)
• Marine Corps Lt. Gen. Vincent Stewart, director of the Defense Intelligence Agency warned Wednesday that he has “great concern” about Russia’s intentions to fly sophisticated surveillance planes over the United States under the 2002 Open Skies Treaty, saying it would give Russia “a significant advantage." (Defense News, 03.02.16).

Missile defense:

• No significant developments.

Nuclear arms control:

• At the beginning of 2016, the U.S. Defense Department maintained a stockpile of an estimated 4,670 nuclear warheads for delivery by more than 800 ballistic missiles and aircraft.( Bulletin of the Atomic Scientists, 2016 Vol. 72, No. 2, 63–73).
• The United States will not participate in a working group on disarmament taking place in Geneva this year, according to the State Department. The working group is scheduled to reconvene during the first two weeks of May and once more during the week of Aug. 22. (Arms Control Today, March 2016).

Counter-terrorism:

• Russia warned on Tuesday of a growing threat of Islamic State and other groups waging chemical warfare in the Middle East and called for global negotiations on a new pact to combat what he called "a grave reality of our time.” (Reuters, 03.01.16).
• Retired Lieutenant General Michael Flynn, who was the Defense Intelligence Agency chief from 2012 to 2014 and who advises Donald Trump on foreign policy, believes the United States should work more closely with Russia on global issues such as defeating the Islamic State group. (RFE/RL, 02.27.16).
• Tamerlan Tsarnaev passed the U.S. citizenship test and denied terrorism links months before he and his brother detonated two bombs that killed three people at the Boston Marathon finish line. (AP, 02.29.16).

Cyber security:

• Marine General Joseph Dunford, chairman of the Joint Chiefs of Staff, said Russia has the capability to “potentially cause considerable damage” throughout the U.S. and Europe “to critical network equipment and national infrastructure.” Head of the U.S. National Security Agency Admiral Michael Rogers has warned that hackers will inevitably attack U.S. infrastructure in an attempt to cause a power failure like the one in Ukraine.  (Bloomberg, 02.29.16, RFE/RL, 03.02.16).
• German authorities say they have arrested suspects in connection with online forums used to sell weapons, drugs and fake documents. The raids were carried out in cooperation with police in Russia among other countries. (AP, 02.29.16).

Energy exports from CIS:

• Key members of OPEC intend to meet with other producers in Russia on March 20 to renew talks on an agreement to cap oil output. (Bloomberg, 03.03.16).
• President Vladimir Putin says he has obtained a commitment from Russia's largest oil producers that they will freeze production in accordance with a deal reached in February between Moscow and Saudi Arabia to support global oil prices. (RFE/RL, 03.02.16).
• Oil production in Russia fell in February fell by 0.2 percent to 10.885 million barrels a day from January. (Bloomberg, 03.02.16).
• The European Commission on March 3 gave its approval to a deal with Greece for the construction of the 878-kilometer Trans Adriatic Pipeline meant to transport natural gas from Azerbaijan to the European Union.(RFE/RL, 03.02.16).
• Russia’s Novatek OJSC seeks to ship gas to Europe, paying a commission Gazprom in a plan to compete with Norwegian gas in the region. (Bloomberg, 03.02.16).

Bilateral economic ties:

• No significant developments.

Other bilateral issues:

• The Kremlin has expressed "regret" about U.S. President Barack Obama's March 2 decision to extend sanctions imposed in 2014 to punish Moscow for its annexation of Crimea. The sanctions target senior Russian officials, pro-Russian separatists in Ukraine and some Russian companies and banks. (RFE/RL, NYT,  03.03.16).
• U.S. astronaut Scott Kelly and Russian cosmonaut Mikhail Kornienko returned to Earth on March 2 after spending almost a year in space. (RFE/RL, 03.02.16).
• The U.S. Air Force on Monday awarded contracts worth more than $160 million to two separate firms involved in the development of new rocket engines to help end U.S. reliance on Russian-made RD-180 rocket motors. Quickly ending U.S. reliance on RD-180s could add up to $5 billion in costs, according to USAF Secretary Deborah James. (RFE/RL, 03.04.16, Reuters, 03.01.16).
• Russia's Foreign Minister has expressed gratitude to the United States for finding and repatriating 28 historical Russian documents that were illegally taken to the United States during the 1990s. (RFE/RL, 03.04.16).
• Goldman Sachs Group Inc. is likely to withdraw a bid to underwrite a $3 billion Russian bond deal after the U.S. government last week cautioned Wall Street firms against pursuing the business. (Wall Street Journal, 03.03.16).
• Donald Trump said during the 11th GOP candidates' debate: “Wouldn't it be nice if actually we could get along with Russia, we could get along with foreign countries, instead of spending trillions and trillions of dollars? Wouldn't it be nice if we got along with the world, and maybe Russia could help us in our quest to get rid of ISIS?”(Washington Post, 03.04.16).
• John Kasich said during the 11th GOP candidates' debate: “In Russia, we need to tell them we're going to arm the Ukrainians with defensive lethal weapons. And we're going to tell Putin if you attack anybody in Eastern Europe in NATO, you attack Finland and Sweden, which is not in NATO, consider it an attack on us. And he will understand that.” (Washington Post, 03.04.16).

II. Russia news.

Domestic politics, economy and energy:

• Gross domestic product shrank 2.5 percent in January from a year earlier after a 3.5 percent plunge in December, the Economy Ministry said. (Bloomberg, 02.29.16).
• The Russian central bank held $379 billion in foreign exchange and gold as of Feb. 19, up $29 billion from lows touched last April, making Russia the only major emerging market with a gain. (Bloomberg, 02.29.16).
• Official ruble exchange rates against the U.S. dollar and euro strengthened to 72.82 and 79.72 respectively on Friday morning, reaching its highest point since the beginning of January. (Moscow Times, 03.04.16).
• Consumer prices jumped 12.9 percent last year, the biggest calendar-year rise since 2008. (Bloomberg, 02.29.16).
• Russia's manufacturing activity declined in February, the Markit purchasing managers index (PMI) showed on Tuesday. The index's headline figure fell to 49.3 in February from 49.8 in January, staying below the 50 mark that separates expansion from contraction for the third consecutive month. At the same time Russia Services Business Activity Index rose to 50.9 in February from 47.1 in January. (Reuters, 03.01.16, Bloomberg, 03.03.16).
• The unemployment in Russia remains at 5.8% or 4.4 mn people for the third month in a row. (Tass, 03.01.16).
• Since the beginning of Russia's economic decline in 2014, only 23 percent of middle class Russians have noticed a deterioration, in their financial situation, with just over 2 percent having lost their jobs, according to a report by the Institute of Sociology of the Russian Academy of Sciences. (Moscow Times, 02.29.16).
• In January 2015 the Russian population naturally shrank by around 25,000, while in January 2016 it shrank by around 27,000. (Forbes, 02.29.16).
• Russian authorities are insisting that the underground explosions that killed 36 people in an Arctic mine over the weekend were the result of natural causes, not negligence or fraud. (RFE/RL, 03.01.16).
• More than 70 percent of Russians would vote for Russian President Vladimir Putin in the next presidential election, a survey by the state-run VTsIOM pollster revealed. (Moscow Times, 03.03.16).
• Vladimir Putin named his human rights commissioner, Ella Pamfilova, among presidential nominees to the Central Election Commission and left the body’s current chairman, Vladimir Churov, off his list. (RFE/RL, 03.03.16).
• 25,000 supporters of slain Kremlin critic Boris Nemtsov have marched through Moscow to mark the first anniversary of his killing. (RFE/RL, 02.27.16).
• Kremlin-backed Chechen leader Ramzan Kadyrov has said he is ready to resign. (RFE/RL, 02.27.16).
• Leonid Mikhelson, co-owner of Novatek, has become Russia's richest men with wealth estimated at $14.4 billion, according to the latest rating from Forbes.  Mikhelson is one of 70 Russians who made the ranking, 11 fewer than a year earlier, according to Forbes. In Russia the population of individuals with $30 million or more dropped by 5% in 2014, according to a report from real-estate broker Knight Frank. (Reuters, 03.01.16, Wall Street Journal, 03.02.16).
• A total of 3.788 million foreign travel passports were issued in Russia last year, down 49 percent compared to 2014. (Moscow Times, 02.26.16).

Defense and Aerospace:

• Russia is about to test-launch a volley of intercontinental ballistic missiles from nuclear-powered submarines in the Barents Sea, during an exercise to test the combat readiness of its nuclear deterrence forces. (Haaretz, 03.03.16).
• The team of researchers at Tomsk State University in Siberia ran a number of tests to figure out how to blow up 200-metre-wide asteroid with a nuclear weapon without causing the radioactive fragments to fall to Earth. (Independent, 02.29.16).

Security, law-enforcement and justice:

• President Vladimir Putin said Friday that Russia halted the activity of 400 employees of foreign intelligence services in the country in 2015. (Moscow Times, 02.26.16).
• Moscow police arrested a woman who held aloft the severed head of a 4-year-old child authorities said she was hired to care for. Media reports cited witnesses as saying she was heard shouting, “Allahu Akbar. According to Russia media, the woman has been identified as 39-year-old nanny Gyulchekhra Bobokulova, a native of Uzbekistan. Bobokulova later said she was seeking revenge for the deaths of Muslims in Russia's campaign in Syria. (Washington Post, 03.03.16, RFE/RL, 02.29.16).

Foreign affairs and trade:

• Syria:
  • A partial cease-fire in Syria showed signs of unraveling Friday amid mounting accusations of government assaults and a lack of promised humanitarian aid deliveries to scores of besieged people. The United States and Russia must make Syria's cessation of hostilities work or else it may become necessary to delay the resumption of peace talks, U.N. Syria envoy Staffan de Mistura told Reuters.  He then said that next round of Syria peace talks has been delayed two days to March 9.  (Reuters, Wall Street Journal, 03.01.16).
  • U.S. Secretary of State John Kerry said the United States and Russia are working together on a mechanism to ensure that any bombing in Syria is aimed only at recognized terrorist groups. Kerry said at a news conference on February 29 that he talked with Russian Foreign Minister Sergei Lavrov and they agreed not to "litigate...in a public fashion" reports of violations of the cessation of hostilities put in place on February 27. (RFE/RL, 03.01.16).
  • French President Francois Hollande and British Prime Minister David Cameron have jointly urged Moscow and Damascus to "immediately stop attacks” on Syria’s moderate opposition. (RFE/RL, 03.03.16).
  • Russia’s Foreign Minister Sergey Lavrov said that those who repeatedly violate the terms of Friday’s cease-fire are exempt and can be attacked. Lavrov’s deputy Mikhail Bogdanov told Reuters on Tuesday that Russia has not violated the cessation of hostilities in Syria, and it has not had any complaints from its contacts in the Syrian opposition. (AP, 03.01.16, Reuters, 03.01.16).
  • Russia called on Tuesday for the Syrian-Turkish border to be closed, saying arms were being hidden in humanitarian aid convoys and channeled to fighters of Islamic State and its allies. Russia's Defense Ministry said on Sunday its coordination center in Syria had received information about an attack on the Syrian town of Tel Abyad from Turkish territory using large-caliber artillery, Interfax news agency reported. (Reuters, 02.28.16, Moscow Times, 02.29.16, Reuters, 03.01.16).
  • Russian Deputy Prime Minister Dmitry Rogozin has slammed claims by the Supreme Allied Commander of NATO in Europe that Russia is using 'non-precision' weapons in Syria. (Moscow Times, 03.03.16).
• Other countries:
  • The European Union is expected to hold discussions at the end of the first half of the year about whether Russia has fulfilled the Minsk agreement and there will not be an automatic extension of sanctions against Moscow, Hungarian Prime Minister Viktor Orban said on Monday. (Reuters, 02.26.16).
  • Russian state gas giant PAO Gazprom has secured a €2 billion loan from Bank of China Ltd., the largest bilateral credit in the Russian company's history. (Wall Street Journal, 03.03.16).
  • Trade between Russia and Finland decreased by a third in 2015. (Tass, 03.01.16).
  • North Korea launched several short-range missiles from its eastern coast Thursday. The action took place one day after the United Nations Security Council approved new sanctions against North Korea.  (Voice of America, 03.04.16).

Russia's neighbors:

• Ukraine:
  • It will take Ukraine at least 20 to 25 years to join the European Union and NATO, European Commission President Jean-Claude Juncker said March 3. (RFE/RL, 03.04.16).
  • French Foreign Minister Jean-Marc Ayrault said that during the four-party talks on the conflict in Eastern Ukraine the parties to the conflict pledged to release all prisoners by April 30, to hold local elections in the Donbas region by June 30, and to refrain from using weapons during training exercises along the disputed front. But Ukraine’s Foreign Minister Pavlo Klimkin said security needed to be guaranteed before elections could be held. And Russian Foreign Minister Sergei Lavrov said there was “no progress” on actually holding elections in Donbas and on Russia’s demand for direct talks between the separatists and the Ukrainian government. (Bloomberg, 03.03.16).
  • In an updated toll, the UN said at least 9, 160 people have been killed and 21,000 injured since the conflict in Eastern Ukraine began in 2014. (RFE/RL, 03.03.16).
  • NATO's military commander General Philip Breedlove said Tuesday that NATO has recently observed an increase in violence along the line of contact in Ukraine's eastern Donbas region. (Voice of America, 03.01.16).
  • Ukraine’s military released footage on March 3 purportedly showing Russia-backed fighters firing Grad multiple-rocket launchers against government army positions outside the separatist stronghold of Donetsk. (RFE/RL, 03.03.16).
  • The United Nations' Office of the High Commissioner for Human Rights called on Kiev to investigate alleged human rights violations during the "civil blockade" of the Crimean peninsula.  (Moscow Times, 03.03.16).
  • The European Union will extend sanctions against almost 150 Russian officials and pro-Moscow separatists in Ukraine and continue an asset freeze on 16 people accused of misappropriating Ukrainian state funds under former President Viktor Yanukovych, diplomats said on Wednesday. (Wall Street Journal, 03.03.16).
  • Ukraine is planning a "substantial enhancement" of its military position around the Black Sea and on the border of Crimea as part of a strategy of regaining the territory that Russia annexed two years ago. (Moscow Times/EurasiaNet, 02.29.16).
  • Russia's prosecutor has called for a 23-year prison term for Ukrainian pilot Nadia Savchenko, who has been accused by Russian authorities of involvement in the deaths of two Russian journalists in eastern Ukraine. (RFE/RL, 03.02.16).
  • Ukraine banned government officials on Tuesday from publicly criticizing the work of state institutions and their colleagues, after damaging disclosures last month that highlighted slow progress in fighting corruption. (Reuters, 03.01.16).
  • Ukraine's electricity regulator is to increase prices by 25 percent effective March.  According to the UN, there is no country in the world more energy intensive than Ukraine. (RFE/RL, 03.01.16).
  • A consortium of four German companies has been awarded a contract to improve infrastructure for managing radioactive waste, the rehabilitation of contaminated areas and the decommissioning of nuclear power plants in Ukraine. (World Nuclear News, 03.02.16).
• Other neighbors:
  • Georgian Foreign Minister Mikheil Janelidze says he expects the European Union to liberalize its visa rules for Georgian citizens by the end of June. (RFE/RL, 03.02.16).
  • Turkmenistan’s President Gurbanguly Berdymukhammedov has appointed a new national security chief. Dovrangeldy Bairamov has previously headed Turkmenistan's state customs service. (RFE/RL, 03.02.16).
  • An appeals court in Sweden has sentenced an Uzbek citizen to life in prison, increasing his initial sentence of 18 years for an assassination attempt on an imam. (RFE/RL, 03.01.16).
  • A Lithuanian court has jailed a former military medical officer after finding him guilty of spying for neighboring Belarus. (RFE/RL, 03.04.16).

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