Russia in Review

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

Nuclear security agenda:

Russia expects to deploy battle robots to protect intercontinental ballistic missile launch sites by 2020, Defense Ministry spokesman Dmitry Andreyev said. Andreyev referred to the robot as a "remote-controlled firing system." Strategic Missile Forces said the silo protector weighs 900 kilograms, wields a 12.7-mm machine gun, can move up to 45 kilometers per hour, fight for up to 10 hours and remain operational in standby mode for up to a week. (MT, 08.18.14).
Twenty-six members of the U.S. Senate are calling on the Obama administration to increase planned spending on programs to secure or reduce global stocks of nuclear weapons materials in the upcoming 2016 White House budget, even as they are challenging an administration decision to significantly shrink these programs in 2015. (The Center for Public Integrity, 08.21.14).
At least 34 sailors are being kicked out of the US Navy for their roles in a cheating ring that operated undetected for at least seven years at a nuclear power training site, and 10 others are under criminal investigation, the admiral in charge of the Navy's nuclear reactors program. (AP, 08.20.14).

Iran nuclear issues:

No significant developments.

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

The NATO summit will stop short of basing substantial combat forces in Eastern Europe to avoid a complete rupture in relations with Russia, German Chancellor Angela Merkel said. Defensive steps triggered by Russia's pressure on non-NATO member Ukraine "don't involve a permanent, sustained stationing of fighting troops, but we can strengthen our cooperation very much in other ways," Merkel told reporters today in Latvia. NATO will abide by a commitment made in 1997 to refrain from the "permanent stationing of substantial combat forces" in Eastern Europe, a senior NATO diplomat told reporters in Brussels today. (Bloomberg, 08.18.14).
Russia does not intend to block U.S. and NATO military transit routes to Afghanistan, President Vladimir Putin said, in spite of the recent spike in tensions with the West. “We should never follow the principle of harming ourselves simply out of spite. We are interested in stability in Afghanistan. So, if some countries, say the NATO states, or the United States are investing resources, including money into this - it is their choice, but it does not run counter to our interests. So why should we stop them? Do you want us to get into war there again?” he said. (Eurasianet.org, 08.18.14).
The White House announced President Obama would be traveling to Estonia next month to meet with the Baltic leaders about Ukraine. The statement made specific mention of the central clause to NATO’s Article V, which says that an attack on one member is considered an attack on all members. (Voice of America, 08.15.14).
A big test will come Sept. 4 and 5, when NATO leaders meet in Wales with Georgia's status an item on the agenda. Some countries worry that granting Georgia a membership plan would provoke Moscow. Instead, NATO leaders are likely to announce in Wales they are increasing their support for Georgia in more-modest ways. (WSJ, 08.22.14).

Missile defense:

No significant developments.

Nuclear arms control:

Russia and the United States may hold consultations concerning the implementation of the 1987 INF Treaty, which bans intermediate-range and shorter-range ballistic and cruise missiles, within a month. "It is not ruled out that such consultations will take place within a month at quite a solid level between the Foreign and Defense Ministries," a Russian diplomatic source said. (RBTH, 08.21.14).

Counter-terrorism cooperation:

No significant developments.

Cyber security:

“We stand for complete sovereignty of information," Communications and Mass Media Minister Nikolai Nikiforov said, going on to trumpet state plans to foster an "entire industry of import-replacing software. “The state will have to increase the number of programmers from 350,000 to 1 million, he said. (MT, 08.20.14).
The U.S. Federal Bureau of Investigation is investigating a report by a U.S. cybersecurity firm that it uncovered some 1.2 billion Internet logins and passwords amassed by a Russian crime ring, the largest known collection of such stolen data. (Reuters, 08.20.14).

Energy exports from CIS:

Russian natural gas exporter said on Thursday that Ukraine's outstanding debt for gas supplies stood at $5.3 billion as of Aug. 1 and called on Kiev to ensure that gas continues to transit without disruption to Europe. (Reuters, 08.21.14).
Ukraine faces a long and cold winter, Prime Minister Yatsenyuk warned on Friday, saying the country needs a further 5 billion cubic meters of Russian gas and may need to import coal due to the impact of the conflict in its industrial eastern regions. (Reuters, 08.22.14).
Bulgaria on Tuesday accused the engineering company in charge of building a section of Gazprom's South Stream pipeline on its territory of violating a moratorium on the project, against explicit government orders. (Reuters, 08.19.14).

Bilateral economic ties:

Two Russian-built RD-180 rocket engines have arrived in the U.S. despite fears that tensions between the U.S. and Russia could disrupt the supply of engines needed to launch U.S. satellites into space. (Reuters, 08.20.14)
Investment into Russia from U.S. funds fell from $42 billion at the end of last year to $37 billion at the end of March, according to data provider eVestment. By the end of June it was back up to almost $41 billion. (Foreign Policy, 08.18.14).
General Motors said Thursday it would reduce production at its plant near St. Petersburg, citing a continued slowdown of the Russian auto market. The plant will only work four days in August and four in September, extending to eight in October, a company spokesman said. (Reuters, 08.21.14).
Russian authorities stepped up their pressure on McDonald's Corp. on Thursday, saying that they were inspecting restaurants across the country for alleged sanitary violations one day after they closed down three outlets in Moscow. (WSJ, 08.21.14).
A Russian consumer protection watchdog has threatened stores still stocking Jack Daniel's Tennessee Honey Whiskey with legal action after it claimed to have found benzyl benzoate — a chemical commonly used as an insect repellent – in the U.S.-made liquor. (MT, 08.22.14).

Other bilateral issues:

The new United States Ambassador to Russia, John Tefft, is due to be in Moscow by the middle of September. (RBTH, 08.22.14).
"The tragic events in Ferguson that followed shortly after police gunned down an unarmed 18-year-old Afro-American, Michael Brown, are clear evidence of the high degree of tensions in U.S. society," said Konstantin Dolgov, the Foreign Ministry's commissioner for human rights. (MT, 08.20.14).
A St. Petersburg court ruled Tuesday to deport U.S. citizen Jennifer Gaspar, an independent consultant for NGOs in Russia, after she was deemed a threat to national security in a case critics say is linked to the work of her Russian husband, a prominent human rights lawyer. (The Moscow Times, 09.18.14).

II. Russia news.

Domestic politics, economy and energy:

In response to Western sanctions on Russia's financial sector, Russia's Central Bank is looking for ways to replace SWIFT. ( MT, 08.21.14).
Russia's Central Bank on Monday moved a step closer to its goal of a freely floating ruble exchange rate by widening its trading corridor for the ruble and reducing the interventions it carries out to move the corridor. (Reuters, 08.18.14).
Russia's Finance Ministry said in a statement on Tuesday it was cancelling this week's treasury bond auction due to "unfavorable market conditions." (Reuters, 08.19.14).
Russian Urals crude weakened for an eight straight trading day on Monday due to weak European refining demand, falling well below $100 a barrel for the first time in a year. Russia has balanced its budget at $114 a barrel this year. (Reuters, 08.19.14).
Breaking typical season trends, inflation rose 0.1 percent in the week ending Aug. 18 after two weeks of no inflation at all, pushing up the yearly rate to 7.5 percent, according to data from Rosstat — far overshooting the Central Bank's target. The cost of chicken has risen 2.1 percent since the beginning of August, while pork rose by 0.8 percent, frozen fish by 0.5 percent, cheese by 0.2 percent and apples by 0.2 percent, according to Rosstat. (MT, 08.21.14).
A plan to allow regional governments to introduce a 3 percent sales tax to combat their soaring debt-funded budget deficits could be axed due to resistance inside the government, despite it having President Vladimir Putin's seal of approval. (MT, 08.20.14).
Russian banks have increased the rate on loans to industrial companies by 2 percent due to sector-specific sanctions on government-owned banks imposed by the European Union and the United States. (RBTH, 08.21.14).
Western banks have raised the price of guarantees that Russian banks purchase to ensure settlement of payments via Visa and MasterCard. If a year ago these guarantees cost 2 percent of the sum of a contract, now they cost 3 percent. (MT, 08.18.14).
Russian uranium mining company Khiagda aims to start mining the Istochnoye and Vershinnoye uranium deposits from 2016 and 2017, respectively. (WNN, 08.19.14).
A relative majority of Russians (41 percent) see the August 19, 1991, putsch in the former Soviet Union as a tragedy which had harmful implications for the country and its people. The number has grown 14 percent in the past 20 years, from 27 percent in 1994, the Levada Center pollster said. (Interfax, 08.19.14).
59 percent of Russians cannot name a single nongovernmental organization, though public support for NGOs in Russia has greatly increased over the past decade, a recent poll by state-run pollster VTsIOM shows. (MT, 08.15.14).
Twenty-eight percent of respondents to a recent survey in Russia said anyone who speaks critically about the government to a polling organization would "probably" or "certainly" face state persecution, the Levada Center said in a statement Monday. (MT, 08.19.14).
If the average human lived the lifestyle of a Russian, humanity would need 2 1/2 planets to sustain itself instead of one, the World Wildlife Fund and international think tank Global Footprint Network said Tuesday. (The Moscow Times, 09.18.14).

Defense:

Russia's Strategic Missile Forces, or RVSN, the branch of the military that manages Russia's vast nuclear arsenal, will grow by 8,500 troops in line with the Kremlin's massive defense rearmament program, a military spokesman said Tuesday. (The Moscow Times, 09.18.14).
A Russian Defense Ministry spokesman said Russian forces are testing long-range antiaircraft missiles from the Ashuluk air base in the southern Astrakhan region. The spokesman said there would be about 20 launches of S-300 and S-400 surface-to-air missiles on August 20 with about 800 Russian troops involved. (RFE/RL, 08.20.14).
By the end of August 2014, Russian Federal Directorate for the Safe Storage and Destruction of Chemical Weapon had disposed of more than 82 percent of Russia's existing stockpiles of chemical weapons. (RBTH, 08.22.14).
Russian army helicopters have landed in northern China to take part in multinational anti-terrorism drills, underscoring continuing close ties between Beijing and Moscow despite tensions with the West over Ukraine. (AP, 08.18.14).

Security, law-enforcement and justice:

A Moscow judge has sentenced three Russians to prison over violence at a 2012 protest in Moscow against President Vladimir Putin. (MT, 08.18.14.).

Foreign affairs and trade:

Russia may tighten retaliatory sanctions against Western nations to include a ban on imports of cars, if the United States and the European Union impose additional sanctions on Moscow. Russian Prime Minister Dmitry Medvedev said on Monday he hopes Russian sanctions will not remain in force for a long time. (Itar-Tass, 08.18.14, MT, 08.20.14).
The Russian authorities have started looking for new food suppliers. The government's primary expectations are to secure supplies from Belarus, Kazakhstan, China, Switzerland, and Latin America as well as to establish more production inside Russia. (RBTH, 08.18.14).
Russia' food sanitation watchdog has found evidence that exporters are attempting to ship imports of banned European fruit and tomatoes to Russia through Belarus, the agency's chief said, threatening to restrict imports from Belarus if it does not block the back-door channel. Belarus, aiming to boost food exports to neighboring Russia, has canceled a ban on live cattle from the EU. (Reuters, 08.20.14. MT, 08.19.14).
Russia's food ban could eventually cost Europe 6.7 billion euros ($8.9 billion) and result in 130,000 job losses, analysts at Dutch bank ING. (The Moscow Times, 08.20.14).
Russia's top crude oil producer Rosneft said on Friday it had agreed to acquire shares in Norway's North Atlantic Drilling Limited via an asset swap and investments into the company's share capital. (Reuters, 08.22.14).
E.ON Russia, the Russian subsidiary of German energy major E.On, said Thursday its first-half net income fell 15 percent year-on-year, as an economic slump in Russia exacerbated by Western sanctions takes its toll. ( MT, 08.21.14).
The European Union has criticized the recent convictions and sentencing of six activists involved in the antigovernment Bolotnaya protests in Moscow in May 2012. (RFE/RL, 08.21.14).
EU farmers will get financial help of up to 125 million euros ($167 million) to help them cope with the impact of Russia's ban on most Western food imports. (Reuters, 08.18.14).
Prime Minister Aleksandar Vucic says Serbia will not impose sanctions against Russia. (RFE/RL, 08.22.14).
The used fuel assemblies that were damaged during a chemical cleaning process at Hungary's Paks nuclear power plant in 2003 have been transported to Russia for processing. (WNN, 08.20.14).
The United States is trying to persuade China to impose sanctions against Russia over the ongoing conflict in Ukraine, Washington's sanctions point man has said. (Reuters, 08.22.14).
Russians accounted for 4.1% of London's central luxury home market in the first half of 2014, just one percentage point below the five-year average, data from real-estate broker Knight Frank show. (WSJ, 08.19.14).

Russia's neighbors:

After a nearly 10-day standoff, at least 145 trucks of a Russian humanitarian convoy crossed into Ukraine on Friday without the permission of Ukrainian authorities. "We consider this a direct invasion by Russia of Ukraine," Ukrainian Security Service chief Valentyn Nalyvaychenko said in a separate statement to journalists. The Russian Foreign Ministry issued a long statement in Moscow saying in essence that it had authorized the border crossing because it was fed up with stalling by the government in Kiev. A Russian customs official said Russian and Ukrainian customs officers had jointly completed customs formalities for 34 of the vehicles. The ICRC tweeted on August 21 that Ukrainian border guards had started inspections of some of the Russian trucks. (NYT, WP, RFE/RL, 08.22.14).
Ukraine's armed forces say they have caused heavy casualties among pro-Russian separatist forces, although their overall advance quelling the rebel resistance remains haphazard and faltering. The Ukrainian forces’ attack in the town of Ilovaisk left 19 fighters from pro-Kiev volunteer battalions dead. The losses added more pressure on Kiev to seek a compromise at peace talks next week in the Belarusian capital of Minsk, where Ukrainian President Petro Poroshenko and Russian leader Vladimir Putin are scheduled to meet face-to-face for the first time in two months. “Ukraine is seeking peace," Mr. Poroshenko said. Though he did not mention Putin by name, Poroshenko was quoted by his website as saying that the Ukrainian side "would call for the [rebel] fighters to be withdrawn from Ukraine. “I am sure we will succeed in this," he said. (MT, AP, WSJ, 08.21.14-08.22.14).
Ukrainian leaders understand that the crisis in Donetsk and Lugansk regions cannot be settled only by force, Ukrainian President Pyotr Poroshenko said at a meeting with Jeffrey Feltman, the visiting U.N. Under-Secretary-General. “I think we have a chance to switch to a real road map towards a peaceful process,'' Valery Chaly, the deputy head of Ukraine's presidential administration, said at a news conference in Kiev. ''We all realize that these issues can only be solved at the highest level, at the level of president, especially in the case of Russia,'' Mr. Chaly said. (Tass, NYT, 08.20.14).
Chancellor Angela Merkel of Germany has accepted an invitation from the Ukrainian president to travel to Kiev this weekend, her office announced on Tuesday. (WSJ, 08.19.14).
German Foreign Minister Frank-Walter Steinmeier has said after a Sunday meeting with his counterparts from Ukraine, Russia and France that they would report back to leaders in their capitals "We are not able to report on positive results on reaching a ceasefire and on (a start to) the political process (to resolve the conflict)," Sergei Lavrov told journalists after the meeting of the foreign ministers of Germany, Ukraine, Russia and France. (Reuters, 08.18.14).
According to UN, the number of fatalities in eastern Ukraine has doubled from 1,129 on July 26 to 2,086 over the past two weeks. (National Interest, 08.19.14).
Fifteen bodies have so far been recovered from the site of Monday's rocket strike on a refugee convoy of buses and cars in eastern Ukraine, a military spokesman said on Tuesday. (Reuters, 08.19.14).
The UN refugee agency says over 400,000 people have fled their homes due to the fighting in eastern Ukraine. (EU Times, 08.21.14).
Up to 100,000 Ukrainian citizens have applied for refugee status or temporary asylum in Russia since the conflict broke out in Ukraine's southeastern regions in April. (Interfax, 08.21.14).
Air accident investigators probing the downing of Malaysia Airlines Flight 17 said Wednesday they will try to return to the crash site if the security situation in eastern Ukraine were to improve again. The remains of 20 Malaysian passengers and crew of Flight 17 arrived in Kuala Lumpur on Friday. (WSJ, 08.20.14-08.22.14).
Russia's ambassador to the UN, Vitaly Churkin, has demanded Kiev give international investigators access to audio recordings from Flight MH17, continuing to blame Ukrainian officials for the Malaysia Airlines crash that killed hundreds in July. (MT, 08.19.14).
Underscoring the country’s need for funds, Ukrainian Finance Minister Oleksandr Shlapak called for the International Monetary Fund to advance the last of three credit installments totaling $3.6 billion that Kiev is expecting to receive this year. (WSJ, 08.20.14).
On Thursday, Ukraine’s Economy Minister Pavlo Sheremeta said he had submitted his resignation because he was unhappy with the pace of reforms and the appointment of a trade representative without his approval. (WSJ, 08.21.14).
Ukraine will lose 15 percent of its grain crop in the violence-hit regions of the country's east. (MT, 08.19.14).
Commenting on a statement by Donetsk separatist premier Alexander Zakharchenko that his force had received reinforcements from Russia, Kremlin spokesman Dmitry Peskov said that "we have said repeatedly that no [military] equipment is being supplied there." (MT, 08.18.14).
The last cubic meter of concrete needed for the foundation of the New Safe Confinement at Chernobyl has been poured. (WNN, 08.18.14).
On August 24, voters in Georgia's breakaway Republic of Abkhazia will elect a new president to succeed Aleksandr Ankvab. (RFE/RL, 08.21.14).
Uzbek President Islam Karimov concluded a two-day visit to China on August 20 following talks with Chinese President Xi Jinping. The two leaders on August 19 reportedly approved a five-year development plan for bilateral relations and signed a joint declaration. (RFE/RL, 08.20.14).
UN human rights experts have condemned the increased prosecution of human rights activists in Azerbaijan and urged Baku to "reverse the trend of repression." (RFE/RL, 08.19.14).
An agreement to cooperate in the peaceful uses of nuclear energy signed by Canada and Kazakhstan in November has come into force. (WNN, 08.15.14).
CIS citizens sent home $25 billion from Russia last year. Just over $4 billion was sent in the first quarter of 2014. (Reuters, 08.20.14).

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