Russia in Review

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

Nuclear security agenda:

The 2015 Energy and Water Development Appropriations Act, as proposed by Congress, provides a total of $34 billion in discretionary funding, which is $50.5 million below the fiscal year 2014 enacted level. “The Administration strongly objects to the language in the bill that would prevent the use of Defense Nuclear Nonproliferation appropriations for contracts with, or Federal assistance to, the Russian Federation,” according to a statement by the White House. “Nonproliferation cooperation with the Russian Federation is in the U.S. national interest and remains an essential element of the global effort to counter the threat of nuclear terrorism,” it says. The White House said that cooperation with Russia includes improving physical protection and “reducing insider threats at vulnerable Russian facilities.” (RIA Novosti, 07.10.14).
Deputy Foreign Minister of the Russian Federation Sergei Ryabkov said: “As for those projects that have not been fully implemented (under the expired Nunn-Lugar program), they also continue. We have no reason to expect, unless, of course, our American colleagues do not think otherwise, that there will be a complete breakdown in that area.” (Kommersant, 07.04.14).
President Obama on Tuesday nominated top White House defense adviser Elizabeth Sherwood-Randall to be deputy secretary of the Energy Department. Sherwood-Randall's nomination to the No. 2 spot at the Department of Energy comes after Daniel Poneman announced he would step down in June after five years at the post. Sherwood-Randall has served as adviser to the president on nuclear weapons and arms control since 2013. (The Hill, 07.08.14).

Iran nuclear issues:

Russia said Thursday that talks between world powers and Iran were "extremely difficult" but that Moscow still hoped a long-term deal to end the standoff over Tehran's nuclear program could be reached by July 20. (Reuters, 07.10.14).
Deputy Foreign Minister of the Russian Federation Sergei Ryabkov said: “In my opinion, there is no reason to fear that the Ukraine situation will become "a bomb" under the negotiations on the Iranian nuclear program. “We think that our colleagues from the United States, as well as member countries of the European Union this process, share belief that all will benefit from an agreement. We honestly and creatively participate in these negotiations. We have no hidden agenda,” he said. (Kommersant, 07.04.14).
U.S. Secretary of State John Kerry will travel to Vienna this weekend to join ongoing world power nuclear talks with Iran, but Russian Foreign Minister Sergei Lavrov will not, according to Moscow's permanent representative to international organizations in Vienna, Vladimir Voronkov. (RFE/RL, 07.11.14).
"Until now the P-5+1 were homogenous, but over the last few days my representatives in the negotiations have seen a certain number of different approaches and I hope they won't remain between some of the P-5+1 and our Russian partners," French Foreign Minister Laurent Fabius said. He did not specify what distinguished Moscow's latest tactics, or the group members whose approaches differed. Separately, an unnamed French diplomatic insider said the "difference is disappearing relatively quickly." (Reuters, GSN, 07.09.14).
Russian regulator Rostechnadzor has agreed to continue and expand its provision of consulting services to its Iranian counterpart for the operation of the Bushehr nuclear power plant. (World Nuclear News, 07.08.14).
State-owned monopoly Russian Railways is in negotiations with Iran to electrify 600 kilometers of railroads in the Islamic Republic at a price of up to $1.4 billion, the company’s deputy president told journalists Tuesday. (The Moscow Times, 07.08.14).

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

The group of NATO ships in the Black Sea has grown to nine vessels, setting a record for recent decades, a Russian military source told RIA Novosti Tuesday. (RIA Novosti, 07.08.14).
With NATO preparing for a critical summit meeting in Wales in early September, NATO secretary general Anders Fogh Rasmussen said the alliance also needed to reshape itself to face the longer-term reality that "Russia doesn't consider NATO a partner; Russia considers NATO an adversary." (New York Times, 07.09.14).
Russia doesn't view NATO as an adversary, Secretary-General Rasmussen is wrong, the Russian mission to NATO has said in response to an interview Anders Fogh Rasmussen gave to Euronews. (RIA Novosti, 08.07.14).
Four would-be NATO members, including the former Soviet republic of Georgia, have been informed that admission to NATO isn't in the cards anytime soon. In Wales, Georgia instead will be given a "substantive package" to help move it closer to NATO, Anders Fogh Rasmussen, the alliance's secretary general, said. (AP, 07.06.14).

Missile defense:

No significant developments.

Nuclear arms control:

No significant developments.

Counter-terrorism cooperation:

No significant developments.

Cyber security:

Commercial hackers in Russia are giving way to politically motivated cyber criminals targeting ideological enemies, a new study said Wednesday. The most powerful DDoS attacks on Russian websites in the first six months of 2014 were triggered by the political crisis in Ukraine, digital security company Qrator Labs revealed. February's Olympic Games in Sochi also prompted a spike in DDoS attacks, said the study. (The Moscow Times, 07.09.14).
On Monday, a U.S. judge in Seattle unsealed an indictment against Roman Seleznev, a 30-year-old Russian who, along with co-conspirators, allegedly made $2 million in three months selling credit-card numbers stolen from businesses. Moscow has said the arrest by the United States of Seleznyov amounts to the "kidnapping of a Russian citizen." Seleznyov was arrested on July 5 in the Maldives by the U.S. Secret Service and transported to Guam. Seleznev’s father and State Duma deputy Valery Seleznyov told reporters on July 11 that his son is innocent. He also said his son was left brain-damaged after a 2011 bombing in Morocco and will die without his medication (RFE/RL, 07.08.14, 07.11.14, Wall Street Journal, 07.09.14).
Russia’s parliament has passed a bill requiring all technology companies to store the personal data of their Russian users in the country. (Financial Times, 07.04.14).
Russia is likely to extend fugitive intelligence contractor Edward Snowden's soon-to-expire asylum status next week, an official with the state migration service said Friday. (Wall Street Journal, 07.11.14).

Energy exports from CIS:

Prime Minister Dmitry Medvedev said Thursday that the government plans to spend 320 billion rubles ($9.3 billion) on oil exploration through 2020. (The Moscow Times, 07.10.14).
The price tag for state-run energy giant Gazprom's forthcoming gas pipeline to China is estimated at between $60 billion and $70 billion, Kremlin chief of staff Sergei Ivanov said Wednesday. (The Moscow Times, 07.09.14).
A subsidiary of Chinese state oil giant China National Offshore Oil Corporation, or CNOOC, has signed a deal worth about $1.6 billion to build equipment for a liquefied natural gas project in Siberia, the company announced. (Reuters, 07.10.14).
Europe faces a “significant risk” of gas shortages this winter if there is any disruption to Russian supplies through Ukraine, Christophe de Margerie, chief executive of Total, said. (Financial Times, 07.11.14).
Ukraine's gas bill has risen another $838 million, after Kiev failed to make a payment for 1.7 billion cubic meters of Russian gas supplied in the first half of June. (RT, 07.08/14).
EU Energy Commissioner Gunther Oettinger on Thursday asserted European companies' right to sell Russian gas back to Ukraine. A pipeline that will carry gas into Ukraine from Slovakia will start running at full capacity in September. The Vojany pipeline had been booked to ship 10 billion cubic meters each year until 2019, allowing it to meet about 20 percent of Ukraine's current demand (The Moscow Times, 07.03.14, 07.08.14).
The European Union is pressing the United States to lift its longstanding ban on crude oil exports through a sweeping trade and investment deal, according to a secret document from the negotiations. (Washington Post, 07.08.14).

Bilateral economic ties:

Wall Street bank JPMorgan Chase & Co is reducing equity market staff in Russia as business falls off in areas such as initial public offerings, or IPOs, due to the Ukraine crisis. Russian investment banking fee income fell by about a third to $166 million in the year to June and IPOs were put on hold when the Ukraine crisis sent Moscow's markets into a tailspin. (Reuters, 07.09.14).

Other bilateral issues:

Russian President Vladimir Putin has told Barack Obama in an Independence Day message that he hopes their countries can improve relations. In a statement published on the Kremlin website Friday, Putin said that "regardless of difficulties and disagreements" he hoped that Russia and the U.S. could "successfully develop relations on pragmatic and equal grounds." (Wall Street Journal, 07.04.14).
Deputy Foreign Minister of the Russian Federation Sergei Ryabkov described U.S. sanctions as “new offensive kind of weaponry.”(Kommersant, 07.04.14).
Russian Foreign Ministry has given its approval to American diplomat John Tefft’s appointment as the new ambassador to Russia. The U.S. Embassy in Moscow has been without an ambassador since February. Senate confirmation is required for the post. (RBTH, 07.10.14, Washington Post, 07.11.14).
Democratic and Republican senators exasperated with the Obama administration's response to Russia's aggression in Ukraine threatened on Wednesday that Congress will act unilaterally on new sanctions. Victoria Nuland, the assistant secretary for European and Eurasian Affairs, defended the administration's policies. She said that the administration was "ready to impose more costs, including targeted sector-specific sanctions very soon if Russia does not decisively change course and break its support for separatists". (Financial Times, 07.10.14, AP, 07.09.14).
According to a Pew Global Attitudes poll released on Wednesday, eighty percent of Americans said they had little or no confidence that Russian President Vladimir Putin would do the right thing with his foreign policy, as did a majority of adults in every European country surveyed. In Russia, though, 83 percent said they trusted their leader's handling of world affairs, up from 69 percent two years ago. (New York Times, 07.10.14).
Vladislav Miftakhov, 18, Russian teenager living in the U.S. could face up to 10 years in jail after pleading guilty to a charge of building bombs. (The Moscow Times, 07.11.14).

II. Russia news.

Domestic politics, economy and energy:

Russia's economy grew by 1.2 percent in annual terms in the second quarter and by 1.1 percent in the first half of the year, Economic Development Minister Alexei Ulyukayev said. (The Moscow Times, 07.07.14).
Economic growth is expected to reach 2 percent next year and more than 3 percent by 2017, while 60 percent of government spending will go toward the social sphere over the next three years, Prime Minister Dmitry Medvedev said Thursday. (Moscow Times, 07.03.14).
According to an assessment by the Central Bank of Russia, the net export of capital by banks and companies from the Russian Federation in the first half of 2014 was 74.6bn dollars. That is 120 per cent higher than in the first half of 2013. (Interfax, 07.11.14).
The Association of European Businesses in Russia sharply cut its 2014 forecast for new car and light commercial vehicle sales in Russia after June sales fell 17.3% over a year earlier. (Wall Street Journal, 07.08.14).
Sberbank, Russia's largest bank, has received a 200 billion ruble ($5.8 billion) loan from the Central Bank at a time when the government is trying to give domestic banks more capacity to lend to help to reverse an economic slowdown. (Reuters, 07.08.14).
The MNI Indicators poll showed Monday that Russia’s consumer sentiment rose for the first time in five months in June but expectations for the next 12 months slumped to the lowest level on record. (Wall Street Journal, 07.07.14).
The State Duma passed in a final reading Friday legislation that imposes prison sentences for repeated violations at public rallies. (Moscow Times, 07.04.14).
A ruling party MP claims to be preparing a bill that, once approved, would bar all Russians with relatives living in foreign nations from taking any official posts, or even being employed by state agencies. (Russia Today, 07.11.14).

Defense:

Russia’s Defense Ministry plans to complete the rearmament of Strategic Missile Forces within six years. (Itar-Tass, 08.04.145).
Russia has successfully test-launched a long-range interceptor missile which will be brought into service of a promising air defense missile system S-500. (Itar-Tass, 07.07.14).
The Oko-1 ballistic missile early detection system is to be superseded by a new unified outer space system capable of tracking tactical missiles as well as ballistic ones. (RBTH, 07.04.14).
Russia launched the Angara rocket, its first new design of space rocket since the Soviet era, on Wednesday from the northern military space port of Plesetsk, aiming to break its reliance on foreign suppliers and the launching pad it leases from Kazakhstan. (New York Times, 07.10.14).

Security, law-enforcement and justice:

Two more suspected militants have been killed in an ongoing special counterterrorism operation in Russia's North Caucasus Republic of Dagestan. (RFE/RL, 07.08.14).
The former mayor of the Dagestani capital, Makhachkala, has been sentenced to 10 years in a maximum-security jail. Russia’s North Caucasus Regional Military Court found Said Amirov guilty of planning a terrorist act and illegal weapons possession on July 9 and sentenced him the same day. (RFE/RL, 07.09.14).
The prosecutor asked the Moscow City Court on July 7 to sentence two Russian opposition activists -- Sergei Udaltsov and Leonid Razvozzhayev -- to eight years in jail each. (RFE/RL, 07.07.14).
A court in Kazan, the capital of Russia's Republic of Tatarstan, has sentenced five defendants in a high-profile case involving the sinking of an overcrowded tourist boat in 2011. (RFE/RL, 07.07.14).

Foreign affairs and trade:

"At the same time, I find no sense, and the Chinese side, I must admit, also finds no sense in creating a new military alliance or union, or something like that. Our relations, including in the sphere of defense, are not directed against anyone," said chief of Kremlin staff Sergei Ivanov. (Voice of Russia, 07.10.14).
President Vladimir Putin said Wednesday: "We will never pursue isolationism. We will always be part of the international community.” (Reuters, 07.09.14).
Russian President Vladimir Putin has arrived in Cuba at the start of a six-day tour of Latin America. Putin aide Yuri Ushakov told reporters in Moscow on July 10 that the Russian president intends to sign a law writing off 90 percent of Cuba's $35 billion debt to Russia (RFE/RL, 07.10.14, 07.11.14).
The overall portfolio of export orders for Russian armaments and military hardware has grown to practically $50 billion, Russian President Vladimir Putin said. (Interfax, 07.07.14).
After Argentina’s defeat in the US courts in its decade-long dispute with hedge funds, President Cristina Fernández will turn to the leaders of China and Russia for support when they visit Buenos Aires this month. (Financial Times, 07.10.14).

Russia's neighbors:

It is not the right time to speak about a change in the non-aligned status of Ukraine, Presidential Administration deputy head Valeriy Chaly said. (Interfax, 07.08.14).
French President Francois Hollande and German Chancellor Angela Merkel urged Vladimir Putin by telephone to "exert all necessary pressure on the separatists to bring them to negotiate effectively," an Elysee Palace statement said. In its version of the three-way telephone call, the Kremlin said the three leaders had agreed on the need for a "swift renewal" of the cease-fire and another round of peace talks involving the "contact group" and separatist leaders. (Reuters, 07.10.14).
Russia hopes that a three-party ministerial meeting to discuss Ukraine's association with the European Union will produce a positive outcome, Russian Economic Development Minister Alexei Ulyukayev said Friday. Ulyukayev, Ukrainian Foreign Minister Pavlo Klymkin and European Commissioner for Trade Karel De Gucht will meet for three-party talks and bilateral meetings later in the day. (RIA Novosti, 07.11.14).
Russia agrees to international monitoring of its border with Ukraine, Russian Foreign Ministry's spokesman, Alexander Lukashevich, said Thursday. (RIA Novosti, 07.10.14).
The Ukrainian Ministry of Health said Thursday that 478 civilians have been killed in the conflict zones and 1,392 had been wounded since the fighting began in April. (Wall Street Journal, 07.10.14).
Fresh off its retaking of the large cities of Slovyansk and Kramatorsk, Ukrainian Defense Minister Valeriy Heletey said on July 6 that Ukrainian forces were also in control of Artyomovsk and Druzhkovka, previously held by the rebels. Ukrainian forces regained control of rebel-held town of Siversk in the east on Thursday. (Wall Street Journal, 07.10.14, RFE/RL, 07.06.14).
One rebel leader played down the loss of Slavyansk as a military expedient and said the hundreds of fighters who were able to move from the town to the regional capital Donetsk were preparing a command structure to defend that city and hit back. (Reuters, 07.08.14).
Ukraine warned on Thursday that its "all-out" assault on pro-Russian insurgents may last another month and rejected calls for a ceasefire as it pushed tanks within striking distance of the rebels' two remaining strongholds. Petro Poroshenko named Vasyl Grytsak to head the "anti-terrorist center", making him operational chief in the drive to crush the rebels. (Reuters, 07.08.14, AFP, 07.10.14).
An adviser to Ukrainian Interior Minister Arsen Avakov said on Friday separatist rebels in the east may have killed as many as 30 government soldiers in a rocket attack. Three Ukrainian soldiers have been killed and 27 wounded in clashes with pro-Russian separatist rebels in the east of the country, the military said on Thursday. In the three-month conflict against separatists more than 200 government troops have been killed in the Russian-speaking eastern regions in which. (RFE/RL, 07.11.14, Reuters, 07.10.14).
In Donetsk, the insurgents have been digging in for a siege, blowing up bridges and mining roads into the city. The Kiev government has said it is trying to surround the city of around 1 million but hasn't yet moved in to fight. Around 100,000 residents have left since the fighting began in April, the city's mayor has said, but it remains a difficult battlefield for Ukraine's troops, few of whom have urban fighting experience. (Wall Street Journal, 07.10.14).
A state of emergency has been declared in six Russian areas as refugees continue to arrive en masse from Ukraine's conflict-ridden east, an emergency ministry official said Thursday. (The Moscow Times, 07.10.14).
Assistant Secretary of Defense Derek Chollet said: “Embedded U.S. civilian advisors in the Ukrainian Defense Ministry will help the government build a national security strategy that provides a cohesive vision for the Ukrainian armed forces, border guards, National Guard, and other security institutions.” (US Defense Department, 07.09.14).
U.S. President Barack Obama and French President Francois Hollande have decided that Europe should impose further costs on Russia if Moscow does not immediately take steps to de-escalate tensions in eastern Ukraine, the White House said. (Reuters, 07.08.14).
European Union governments agreed in principle on Monday to place sanctions on additional people connected with the violence in Ukraine. The EU has agreed to add 11 new names to the list likely to take effect on Saturday, an EU diplomat said Wednesday. Officials said the new people targeted may be pro-Russia separatists in Ukraine rather than Russian officials. (Wall Street Journal, 07.08.14, Reuters, 08.10.14)
Russia on Thursday condemned a European Union plan to extend the list of persons, including Russians, targeted with asset freezes and travel bans over the Ukraine crisis as an unfriendly move that would hinder ties with the 28-nation bloc. (Reuters, 07.10.14).
Russia should think of ways to retaliate if the West imposes sectoral sanctions on it, Russian Deputy Finance Minister Sergei Storchak said on Tuesday. (Wall Street Journal, 07.08.14).
The Russian border checkpoint 'Donetsk' has been shelled from Ukrainian territory, Vasily Malayev, a spokesman for the Russian Federal Security Service (FSB) said. (Interfax, 07.06.14).
The Russian Foreign Ministry has reported the suspension of the handover of weapons and other military hardware left in Crimea to the Ukrainian armed forces (Interfax, 07.06.14).
A Moscow court arrested Ukraine's interior minister in absentia Wednesday, the Investigative Committee said in a statement. (Reuters, 07.09.14).
A Russian court ordered an extension until the end of August of the detention of a Ukrainian air force pilot charged in Russia with being an accessory in the June deaths of two Russian journalists. Russian officials say she was arrested after crossing into Russia as a refugee but was carrying no documents. Ukrainian officials say she was abducted from her base and forcibly taken to Russia. (Wall Street Journal, 07.10.14).
Russia has barred Refat Chubarov, a leading member of Crimea's Tatar community, from entering the peninsula for five years. (RFE/RL, 07.07.14).
The head of Ukraine's self-proclaimed Luhansk People's Republic appointed Marat Bashirov, prominent Russian lobbyist with ties to Moscow's elite to act as chairman of its council of ministers Friday. (Moscow Times, 07.04.14).
The speaker of Georgia's parliament says the legislature will ratify the country's Association Agreement with the European Union on July 18. (RFE/RL, 07.09.14).
Eduard Shevardnadze, the former Georgian president and Soviet foreign minister, died on July 7 at the age of 86. (RFE/RL, 07.07.14).
The Russian Defense Ministry has signed a contract to give Belarus four S-300 air defense systems, which are worth hundreds of millions of dollars, free of charge. (The Moscow Times, 07.10.14).
Turkish Foreign Minister Ahmet Davutoglu has begun a three-day official visit to Uzbekistan, the first at the foreign minister level in 13 years. (RFE/RL, 07.11.14).
A 22-year hiatus in uranium exploration in Tajikistan may be coming to an end. Dzhumazoda Murod Hall, head of the country's geology administration, told local media on 8 July the government plans to approve a decade-long study of rare earth deposits starting next year. (WNN, 07.10.14).

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