Russia in Review

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

Nuclear security agenda:

Maj. Gen. Garret Harencak, the U.S. Air Force assistant chief of staff, said: "The threat of nuclear terrorism and nuclear proliferation has increased.” (US Department of Defense, 08.27.14).

Iran nuclear issues:

Russia said Thursday the possibility of lifting sanctions on Iran had emerged thanks to international talks on Tehran's nuclear program and urged all countries involved to show political will to reach a deal. Iranian Foreign Minister Mohammad Javad Zarif said after meeting his Russian counterpart Sergei Lavrov in Moscow on Friday that Tehran hoped to reach a "positive result" in the talks. (Reuters, 08.28.14).

NATO-Russia relations, including transit to and from Afghanistan:

NATO’s General Secretary Anders Fogh Rasmussen said of the alliance’s upcoming summit agenda: "We will adopt what we call a readiness action plan with the aim to be able to act swiftly in this completely new security environment in Europe.” Rasmussen said that the proposal would not infringe on the alliance’s agreements with Russia, which have prevented substantial NATO buildups in the lands that joined the alliance after the collapse of the Soviet Union. (New York Times, 08.28.14).
NATO’s Cardiff summit is likely to come up with a formula, alliance sources said, which would avoid the term "permanent" for the new bases. But the impact will be to have constantly manned NATO facilities east of what used to be the iron curtain. A new high-readiness NATO brigade will be formed, deployable within hours; heavy weapons will be pre-positioned in Poland which could be used later by follow-on forces; and a new command-center will be established. (The Guardian, 08.27.14, The Economist, 08.29.14).
Russian diplomats say they have been excluded from an upcoming summit of NATO member countries in Wales, Kommersant reported Monday, citing an unidentified diplomatic source. The source noted that many of the themes to be discussed at the summit directly affect Russia, and that even "in the current circumstances in Moscow they were not counting on this," Kommersant reported. (Moscow Times, 08.25.14).
Moscow will take into consideration the activity of NATO forces near Russia's borders when drawing up its military planning, Russia's envoy to NATO said. "Obviously, we will take into consideration the configuration and activity of the NATO forces at the Russian borders in our military planning, and will take all that is necessary to reliably provide security and to ensure safety against any threats," envoy Alexander Grushko said. (Reuters, 08.28.14).
Finland and Sweden say they will work more closely with NATO now. Under the terms of the deal, NATO troops will help Nordic nations during emergencies. According to the Finnish government, in the event of "disasters, disruptions and threats to security," NATO will come to its aid. (Foreign Policy, 08.27.14).
"We can only watch from 23 miles up," said a NATO official of the conflict in Ukraine. “If we are two steps behind the Russians, the Ukrainians are 16 steps behind," said a NATO source recently in Kiev. "Their generals just want to blow everything up. But it's not a shooting war, it's an information war." (The Guardian, 08.27.14).

Missile defense:

No significant developments.

Nuclear arms control:

No significant developments.

Counter-terrorism cooperation:

No significant developments.

Cyber security:

The FBI is investigating recent attacks by Russian hackers on the U.S financial system that are seen as possible retaliation for U.S. government sanctions against Russia. The reports quote sources who say Russian hackers targeted JPMorgan Chase and at least one other U.S. bank. (RFE/RL, 08.28.14).

Energy exports from CIS:

The European Union has failed to broker a truce to resolve the long-running natural gas dispute between Russia and Ukraine at high-profile talks Friday, though the Kremlin said gas supply to Europe should be safe this winter. (Wall Street Journal, 08.29.14).
Ukraine has 15.5 billion cubic meters of gas in its facilities. While that still falls short of the 19 BCM that EU officials say would be a more 'comfortable' level ahead of the winter, the country can for the first time get gas imports from Slovakia. "The situation in (Ukraine's) energy sector is difficult. We know of Russia's plans to block (gas) transit even to European Union countries this winter," Ukrainian Prime Minister Arseniy Yatsenyuk said on Wednesday. Yatsenyuk did not say how he knew about the Russian plans. (Reuters, 08.27.14, Wall Street Journal, 08.28.14).
Kazakh Deputy Energy Minister Uzaqbai Qarabalin told journalists in Astana on August 27 that Moscow had given preliminary approval to Kazakhstan's proposal for the construction of a gas pipeline linking Russia to China via Kazakhstan. (RFE/RL, 08.27.14).

Bilateral economic ties:

General Motors Co. is considering whether to delay the expansion of its Russian plant. PSA Peugeot Citroën said it expects the Russian car market to shrink 10% in 2014, a steeper decline than the 5% the company expected in March. Russia's top car maker AvtoVAZ plans to cut production of its Lada cars by 25,000 cars in the three months. (Wall Street Journal, 08.24.14, Reuters, 08.25.14).

Other bilateral issues:

''We are not taking military action to solve the Ukrainian problem,'' Barack Obama said. ''What we're doing is to mobilize the international community to apply pressure on Russia. But I think it is very important to recognize that a military solution to this problem is not going to be forthcoming.'' (New York Times, 08.29.14).
Russian and American diplomats clashed during an emergency meeting of the U.N. Security Council on Thursday, with Samantha Power, the U.S. ambassador to the United Nations, saying that Russia has "outright lied" about its involvement in the conflict. Russian Ambassador Vitaly Churkin countered that Washington should stop interfering and called the Russian soldiers in Ukraine "volunteers." (Washington Post, 08.29.14).
Obama administration officials are preparing for another round of sanctions against Russia with European allies, but they are unsure if the president will take them to the next level, affecting broader swaths of Russia's financial and energy sectors at the risk of harming American and European economic interests. (New York Times, 08.29.14).
The Russian Foreign Ministry on August 27 denied reports of US-Russian governmental secret talks in Finland, saying the meeting involved only representatives from nongovernmental organizations and academic communities and did not involve official state diplomatic contacts. (RFE/RL, 08.28.14).
In Washington, State Department spokeswoman Jen Psaki would not publicly brand Russian actions as an invasion, although other U.S. officials said privately that is the conclusion the United States has made. (Washington Post, 08.29.14).
Jennifer Gaspar, U.S. citizen who worked for NGOs in Russia and is the wife of a prominent St. Petersburg human rights lawyer, has left the country after a court upheld an order to deport her as a threat to national security. (The Moscow Times, 08.27.14).
By Friday a total of 12 McDonald's restaurants in Russia had been shut down by Rospotrebnadzor, Russia's state consumer regulator, over alleged sanitary violations—up from eight on Thursday—and an unprecedented 100 outlets were being inspected, up from several last week, the company said in a statement Friday. Russian authorities are not planning to close the McDonald's chain in the country, Deputy Prime Minister Arkady Dvorkovich said. (Wall Street Journal, 08.29.14, Reuters, 08.24.14).
Boston Marathon bombing suspect Dzhokhar Tsarnaev's sister has been arrested on suspicion of threatening to bomb a New York City woman. (RFE/RL, 08.28.14).

II. Russia news.

Domestic politics, economy and energy:

Eighty-four percent of those polled said they approved of Vladimir Putin's actions, showing a small drop from the 87 percent who expressed support at the beginning of this month, a poll published this week by the independent Levada Center revealed. (Moscow Times, 08.28.14).
At the market opening on Friday, the ruble briefly eased to 37.02 versus the dollar, losing 0.7% on the day. That took the ruble below its previous record of 37 per dollar, which it hit on the first trading day of March. (Wall Street Journal, 08.29.14).
Russia's Ministry of Finance expects an average oil price of $90-95 per barrel in 2015, Deputy Finance Minister Alexei Moiseyev told RIA Novosti on Tuesday. The Ministry of Economic Development earlier predicted an average oil price of $100 per barrel over 2015-2017. (RIA Novosti, 08.26.14).
Russia, one of the world's biggest holders of gold, increased its official reserves by nearly 340,000 troy ounces in July, to 35.5 million ounces, according to data Tuesday from the International Monetary Fund. (Wall Street Journal, 08.25.14).
The Russian government on Monday said it would pump $6.6 billion into state-controlled banks VTB and Rosselkhozbank to help them cope with an economic slump and Western sanctions over Ukraine that cut their access to foreign capital markets. (Moscow Times, 08.25.14).
Russia's farmers need 636 billion rubles ($17.6 billion) of extra state support in 2015 through 2020 to boost output, mainly of pork and poultry, after Russia banned Western food imports, the agriculture minister said Friday. (Reuters, 08.22.14).
Eighty-four percent of Russians support the one-year ban on meat, dairy, fruit and vegetable imports from the U.S., the EU, Norway, Canada and Australia, the poll conducted by the state-run VTsIOM center revealed. (Moscow Times, 08.22.14).
Russia's largest steelmaker, Evraz, returned to net profit of $1 million in the first half of 2014 and said its assets in Ukraine remained unaffected by unrest in the country for now. (Reuters, 08.27.14).
Three of every four Russian university students would prefer to work abroad rather than in Russia, Newsru.com reported Monday, citing a survey conducted by Career.ru. (Moscow Times, 08.25.14).
The average salaries earned by federal officials climbed nearly 33 percent in the first half of the year, bringing the average monthly wage up to 92,000 rubles ($2,500), according to the Federal State Statistics Service. (Moscow Times, 08.24.14).
Vladimir Yakunin, the long-serving president of Russia's biggest employer, Russian Railways, was on Monday appointed to a new three-year term by Prime Minister Dmitry Medvedev, putting to bed months of speculation that he would get the boot. Moscow Times, 08.25.14).
Russia's Justice Ministry has placed the Saint Petersburg branch of the Soldiers' Mothers rights group on a blacklist of NGO's acting as "foreign agents." RFE/RL, 08.29.14).

Defense:

Russian President Vladimir Putin said Russia was far from being drawn into a full-scale, regional conflict. "We neither want, nor are we going to" get involved in such a war, he said. Nevertheless, he said, Russia plans to keep developing its nuclear and defense arsenal to "feel safe, but not to threaten anyone in particular." (Washington Post, 08.29.14).
Around 7,000 servicemen from China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan are participating in military exercises that Russian and Chinese media say are the largest ever held by the Shanghai Cooperation Organization (SCO). (RFE/RL, 08.25.14).

Security, law-enforcement and justice:

Military chiefs from the Shanghai Cooperation Organization (SCO) have agreed to improve joint antiterrorism operations. The chiefs of general staffs of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan met in Beijing on August 28. (RFE/RL, 08.28.14).
Police in Russia's North Caucasus Republic of Dagestan have killed two suspected militants in a shootout. (RFE/RL, 08.26.14).
An investigative journalist in the Russian city of Saratov has been severely beaten by unknown assailants. (RFE/RL, 08.27.14).

Foreign affairs and trade:

European leaders will discuss on Saturday stepping up economic sanctions against Russia, after recent reports have indicated a growing presence of Russian troops in Ukraine and a worsening of the conflict, German Chancellor Angela Merkel said on Thursday. (Wall Street Journal, 08.28.14).
The U.K. will press European Union leaders to consider blocking Russian access to the SWIFT banking transaction system under an expansion of sanctions over the conflict in Ukraine, a British government official said. (Bloomberg, 08.29.14).
The Swiss government detailed Wednesday further measures designed to prevent the country from being used by Russia to bypass sanctions imposed earlier this year by the European Union over the crisis in Ukraine. (Wall Street Journal, 08.27.14).
Hungarian Prime Minister Viktor Orban, who said Europe had "shot itself in the foot" by imposing sanctions on Russia, told diplomats on Monday that he would seek support from other EU countries for a push to improve relations with Moscow. (Reuters, 08.25.14).
Russia has urged 10 Asian countries to boost their agricultural exports to Russia amid a Kremlin ban on products from many Western countries. (RFE/RL, 08.28.14).
Norway’s Statoil ASA has warned that western countries' sanctions against Russia will slow down the process of getting the go-ahead for some of its joint ventures with Russian oil group OAO Rosneft. (Wall Street Journal, 08.25.14).
The German government has approved the sale of the utility RWE’s oil and natural gas subsidiary, RWE Dea, to the LetterOne Group, an investment owned by the Russian billionaires Mikhail Fridman and German Khan, for 5.1 billion euros, or roughly $7 billion. (New York Times, 08.23.14).
Serbia said on Friday it would not subsidize exports to Russia, after the European Union urged the Balkan country — a candidate for accession to the bloc — not to exploit the Kremlin's ban on Western food imports. (Reuters, 08.22.14).
Japanese diplomats have expressed disappointment with Russia's decision to blacklist officials in retaliation for Tokyo's sanctions against Russia. (Moscow Times, 08.25.14).
Russian Foreign Minister Sergei Lavrov on Monday urged Western and Arab governments to overcome their distaste for Syrian President Bashar al-Assad and engage with him to fight Islamic State insurgents. (Reuters, 08.26.14).
A South Korean newspaper reports that a high-ranking North Korean official who managed leader Kim Jong Un's personal finances has defected to Russia. (RFE/RL, 08.29.14).

Russia's neighbors:

The United Nations said on Friday that casualties in the fighting between Ukrainian government forces and pro-Russian rebels had doubled in the past month, with an average of 36 people killed every day. Separatists in Ukraine and Ukraine government forces are guilty of a wide array of human rights abuses, including torture, a leaked UN report says. (Reuters, 08.27.14, New York Times, 08.29.14).
Russian President Vladimir Putin denied Friday that the Kremlin had sent troops and tanks into eastern Ukraine and countered threats of increased Western sanctions with the advice that it is "best not to mess with us." Ukraine accused Russia on Thursday of mounting an invasion in the southeast of the country in support of pro-Moscow separatist rebels. Ukraine's security and defense council said the border town of Novoazovsk and other parts of Ukraine's south-east had fallen under the control of Russian forces who together with rebels were staging a counter-offensive. (Reuters, 08.28.14, LA Times, 08.29.14).
Russian President Vladimir Putin on Friday hailed pro-Moscow separatists in eastern Ukraine as "insurgents" battling an army that he likened to Nazi invaders during World War II. "I'm calling on insurgents to open a humanitarian corridor for Ukrainian troops who were surrounded in order to avoid senseless deaths," Putin said in remarks addressed to "Novorossiya," or New Russia. (Washington Post, 08.29.14).
A leader of separatist forces in eastern Ukraine, Alexander Zakharchenko, said on Friday he had agreed to open a humanitarian corridor for encircled Ukraine troops, answering a request from President Vladimir Putin. (Reuters, 08.29.14).
On Thursday, NATO released a number of satellite images from Digital Globe that purport to show Russian artillery, vehicles and troops inside Ukraine. Moscow sees no sense in commenting on what NATO calls satellite shots of Russian troops in Ukraine, Russia’s Defense Ministry spokesman Maj. Gen. Igor Konashenkov said Thursday. "You know, it has become ridiculous. It makes no sense to seriously comment on this," he added. (RIA Novosti, Washington Post, 08.28.14).
President Petro Poroshenko dissolved Ukraine's parliament on Monday and announced an election on Oct. 26. (Reuters, 08.26.14).
Russian President Vladimir Putin said Ukrainian President Petro Poroshenko had agreed to a swap of prisoners that would include sending 10 captured Russian paratroopers back to Russia. On Tuesday, Putin and Poroshenko met in the Belarusian capital of Minsk for their first ever one-on-one meeting. But there was no indication of a swift resolution to the fighting. (AP, 08.27.14, Washington Post, 08.29.14).
Russia says employees of its embassy in Ukrainian capital are being held by Kyiv authorities on weapons charges and is demanding their immediate release. (RFE/RL, 08.29.14).
The secretary-general of the North Atlantic Treaty Organization said Friday that NATO would "fully respect" any potential decision by Ukraine to try to join the alliance. His comment came in response to an announcement by Ukrainian Prime Minister Arseniy Yatsenyuk that the government would ask parliament to set the country on a path toward NATO membership, a move certain to anger Russia. But German Chancellor Angela Merkel on Sunday reiterated that Ukrainian membership in NATO isn't on the agenda. (Wall Street Journal, 08.24.14, RFE/RL, 08.29.14, Wall Street Journal, 08.29.14).
Russia wants to propose amendments to the EU-Ukraine association agreement between Ukraine and the European Union. Russia wants Ukraine's duties on European goods to be lowered more gradually than prescribed under the current deal. Russia is also concerned that the EU's tougher technical regulations could block Russian goods' access to Ukraine altogether. And Russia wants assurances that Russian and European phytosanitary requirements would either be unified or mutually recognized within Ukraine. (Moscow Times, 08.28.14).
Ukraine's president announced plans Sunday to boost his country's defense spending by an estimated 50 percent. Ukrainians celebrated their first Independence Day since war broke out with dueling celebrations Sunday: patriotic songs and parades in the west and a prisoner-of-war march in the rebel-controlled east. (AP, Washington Post, 08.24.14).
Russia hopes to send a second convoy of humanitarian aid to east Ukraine sometime
A ceremony has been held to mark the start of construction of Ukraine's central used fuel storage facility, which is being built near resettled villages in the Chernobyl Exclusion Zone. (WNN, 08.27.14).
U.S. Vice President Joe Biden has told Georgian Prime Minister Irakli Garibashvili that he supports his country's desire to join NATO. Georgia's aspirations to join the Western alliance are a sore point with Russia. (RFE/RL, 08.25.14).
Georgia's Russian-backed breakaway province of Abkhazia elected opposition leader Raul Khadzhimba as president on Sunday, the head of the region's election commission said. (Reuters, 08.25.14).
An Iranian military official says that an alleged Israeli drone shot down close to the Natanz nuclear facility was launched from a former Soviet republic to the north of Iran. In Baku, officials have denied a report alleging that the drone was launched from Azerbaijan’s territory. (RFE/RL, 08.27.14).

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