Russia in Review

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

Nuclear security agenda:

The U.S. National Nuclear Security Administration (NNSA) recently provided support to the Belarus Ministry of Emergency Situations to conduct preventive radiological and nuclear detection during the 2014 International Ice Hockey Federation World Championship games in Minsk, Belarus. (NNSA, 06.06.14).
NNSA has recently conducted an International Consequence Management (I-CM) training course in Armenia. The course had 40 participants from 18 ministries and various organizations from throughout Armenia. (NNSA, 06.12.14).

Iran nuclear issues:

Russia said Thursday that it was relatively optimistic after holding bilateral talks with Iran ahead of next week's negotiations between world powers and Tehran over its nuclear program. "We can say that the working out of a deal... is progressing," Russian negotiator, Deputy Foreign Minister Sergei Ryabkov, said. (AFP, 06.12.14).

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

Russia launched military maneuvers in its European exclave, Kaliningrad, on June 10, one day after NATO began its own war games near the Russian border. (RFE/RL, 06.10.14).
The U.S. Air Force on Sunday announced it was deploying two more nuclear-capable bombers to Europe on top of the three aircraft sent over last week. U.S. long-term plans include training drills that will consistently keep about 100 U.S. elite troops on the ground at any one time in NATO states close to Russia. (GSN, 06.09.14, Reuters, 06.11.14).
Russia would consider any further expansion of NATO forces near its borders a "demonstration of hostile intentions" and would take political and military measures to ensure its own security, Deputy Foreign Minister Vladimir Titov said. (Reuters, 06.09.14).
Finland and Sweden have both rejected claims, made by Sergei Markov, senior Russian adviser to Russian President Vladimir Putin, that “Russophobia” is pushing the two non-aligned Nordic states “dangerously closer” to NATO. (Defense News, 06.12.14).

Missile defense:

The organizers of the 10th International Conference on Missile Defense, to be held on June 17-20 in the German city of Mainz, have rejected calls by Russian representatives to participate in it. In response, Russia’s Ministry of Defense has issued a statement expressing its disappointment (RBTH, 06.10.14).
The U.S. Navy’s second of four missile defense destroyers, the USS Ross, is on its way to Rota, Spain, as part of U.S. regional missile defenses in Europe. (Washington Times, 06.11.14).

Nuclear arms control:

Russia’s recent missile developments represent a “material breach” of its obligations under the 1987 Intermediate-Range Nuclear Forces (INF) Treaty, Rep. Mike Rogers, chairman of the House Armed Services subcommittee on strategic forces, said at Wednesday. Washington Times, 06.11.14).
A Congressional Research Service report published o on Saturday highlights a number of factors that could result in a gap in U.S. ability to conduct long-range nuclear strikes by air, among them foreign nations’ development of sophisticated anti-access and area-denial capabilities and reductions in defense spending imposed by the 2011 Budget Control Act. (GSN, 06.09.14).

Counter-terrorism cooperation:

No significant developments.

Cyber security:

Former CIA employee Edward Snowden may apply for extending his temporary asylum in Russia in the near future, Vladimir Volokh, the head of the Russian Federal Migration Service's Public Council, said. (Interfax, 06.12.14).

Energy exports from CIS:

Bulgarian Prime Minister Plamen Oresharski has announced that Bulgaria is suspending work on the disputed Russian-backed South Stream gas pipeline following criticism from the European Union and United States. Bulgaria's decision is an underhanded economic sanction thrust on Russia by the West, Vladimir Chizhov, Russia's envoy to the European Union, said. Serbia says it may have to suspend construction of the South Stream gas pipeline through its territory after Bulgaria’s decision. (RFE/RL, 06.08.14, 06.09.14, the Moscow Times, 06.10.14).
Ukraine is ready to repay $1.9 billion in outstanding debt to Russia for natural gas deliveries if Moscow and Kiev agree on an interim gas price of $326 per 1,000 cubic meters, the head of Ukrainian gas monopoly Naftogaz said Friday. Russian President Vladimir Putin said Kiev has refused a $100 per 1,000 cubic meter discount offer that would bring the price down from $485 to $385. Ukrainian Minister of Energy Yury Prodan told journalists Ukraine believed the temporary price for Russian gas could be the mean price of $268-$385 per 1,000 cubic meters of gas until the issue is resolved in the Stockholm International Arbitration Court. Gazprom said a week ago that Ukraine owed $4.455 billion for gas. Moscow says Kiev must repay the debt by Monday morning. (Wall Street Journal, 06.11.14, Wall Street Journal, 06.13.14, Interfax, 06.11.14).
The IEA's medium-term gas report was out on Tuesday. Gas will be one of China's main weapons as it carries out its declared war on coal pollution, according to the report. That will make China the biggest driver of global gas demand over the next five years and turn it into a key battleground for gas exporters, including Russia and the United States. (FP, 06.10.14).

Bilateral economic ties:

Despite signals that a law obliging U.S. payment systems Visa and MasterCard to cough up nearly $3 billion to Russia's Central Bank would be watered down, the bank and the government plan to demand the first payments by Oct. 31, according to proposals by the Central Bank published on its website and a government document cited by Vedomosti. But Visa and MasterCard will be offered a way out — they can slash the size of the payments if they relocate their processing centers to Russia before the deadline hits, according to the proposals. (Moscow Times, 06.11.14).

Other bilateral issues:

On Monday, U.S. military jets intercepted four Russian heavy bombers that flew close to Alaska, a key combatant command has acknowledged. And a spokesperson for the North American Aerospace Defense Command confirmed this week that a fleet of Russian bombers came within 50 miles of California’s Pacific coast. (Russia Today, RFE/RL, 06.12.14).

II. Russia news.

Domestic politics, economy and energy:

Russian President Vladimir Putin says a referendum could be held on restoring the historic name of Stalingrad to the Russian city where the Red Army defeated Nazi forces in a decisive World War II battle. (Wall Street Journal, 06.06.14).
Russia's largest lender Sberbank is planning to issue its first-ever euro-denominated bond if market conditions are favorable. If Sberbank goes ahead with its proposed bond issue, it will follow Alfa Bank, which in early June became the first Russian lender to tap the global bond market in the past three months. (Wall Street Journal, 06.11.14).
The number of households whose wealth exceeds $1 million in Russia has grown by 18.5 percent in 2013, reaching 213,000 last year, the Boston Consulting Group said in a report. The report showed Russia had advanced to fifth place in the world, up from 11th place a year earlier, in the listing of "ultra-high net worth households," whose private wealth exceeds $100 million. Their number reached 536 last year, compared to 328 in 2012. (The Moscow Times, 06.10.14).
According to data from the Higher School of Economics, after a noticeable boom in the second half of the 2000s, the number of expats in Russia has been declining. Currently, in researchers' estimates, there are no more than 40,000 specialists from countries outside the former Soviet Union working in Russia, which is a record low figure for a country with an emerging economy. (RBTH, 06.12.14).

Defense:

No significant developments.

Security, law-enforcement and justice:

The Moscow City Court has sentenced to jail terms ranging from 12 years to life five Chechen men whom a jury found guilty last month of the murder in October 2006 of investigative journalist Anna Politkovskaya. All five pleaded not guilty. (RFE/RL, 06.09.14).
Three suspected militants have been killed in Kabardino-Balkaria in Russia's restive North Caucasus region. The report comes three days after four other suspected militants were killed in Kabardino-Balkaria when a bomb they were transporting in a car exploded during a shootout with police. (RFE/RL, 06.12.14).
Police in Dagestan say they killed a man after a shooting incident along the Buinaksk-Untsukul highway late on June 9. (RFE/RL, 06.10.14).
Russian authorities charged three allies of opposition leader Alexei Navalny with fraud. One ally was put under house arrest after being charged with complicity in an alleged scheme involving the theft of donations totaling more than 10 million rubles for Navalny's mayoral election campaign last year. By ordering house arrest for Konstantin Jankauskas, Moscow's Presnensky Court satisfied a request from the team investigating charges against him and businessmen Nikolai Lyaskin and Vladimir Ashurkin. (Interfax, 06.11.14)
Two Russian students at Britain's Newcastle University have been arrested after a bomb scare on Wednesday sparked the evacuation of a campus building. Bomb experts were called in following reports of "potentially suspicious" items in a student room at a dorm for international students, the Daily Mail reported Wednesday (The Moscow Times, 06.12.14).
Russian prosecutors released a Greenpeace International ship nearly nine months after seizing it following a high-seas protest at the first offshore oil platform in the Arctic, the organization announced Friday. (New York Times, 06.07.14).

Foreign affairs and trade:

Expressing alarm over the conflict in Iraq on Thursday, Russia said it had long predicted that American and British ''adventurism'' there would end badly. ‘We warned long ago that the adventurism the Americans and the British started there would not end well,'' said Sergey V. Lavrov, the Russian foreign minister, according to the Interfax news agency. (New York Times, 06.13.14).
Rosatom has been pre-selected to work with the Argentine government to develop nuclear energy. (Breitbart News Network ‎, 06.11.14).
Russia's largest lender Sberbank has agreed to provide a loan of €870 million ($1.18 billion) to Slovenske Elektrarne, some of which Slovakia's largest power company will have to spend on Russian nuclear exports. (Wall Street Journal, 06.10.14).
MegaFon, the Russian telecoms operator, has acquired $600 million worth of equipment and maintenance services from China’s Huawei Technologies. (Financial Times, 06.09.14).
Russian Finance Minister Anton Siluanov has confirmed the formation of an international rating agency to compete with the “Big Three”. The new player is to be a joint venture between Russian, Chinese and U.S. agencies. (Interfax, 06.09.14).
Russian companies are preparing to switch contracts to renminbi and other Asian currencies amid fears that western sanctions may freeze them out of the US dollar market, according to two top bankers. (Financial Times, 06.09.14).
The European Union and Russia are set to resume talks on the impact of the EU's trade deal with Ukraine next week. Russia has long opposed the EU-Ukraine Association Agreement, saying it will hurt trade ties between Russia and Ukraine and lead to a large influx of EU imports. Russian Foreign Minister Sergei Lavrov said again Tuesday that Ukraine's economic ties with Russia would be negatively affected by the agreement. (Wall Street Journal, 06.11.14).
The European Union and Russia are sparring over new EU air-cargo security rules that take effect July 1 and could potentially ground airfreight between the two markets. (Wall Street Journal, 06.13.14).

Russia's neighbors:

Petro Poroshenko was sworn in as president of Ukraine on Saturday. After the inauguration, he said he didn't exclude starting round-table talks with "different sides of the conflict" on his peace proposals. He also renewed his call for militants in the pro-Russia eastern part of the country to lay down their weapons to end the fight. On Tuesday Poroshenko ordered security officials to create a safe corridor for civilians in eastern regions. Poroshenko also took part on Sunday in a three-member “working group discussion” on a proposed peace plan with Mikhail Zurabov, Russia’s ambassador to Ukraine, and a representative of the Organization for Security and Co-operation in Europe. The talks so far are simply about the format of possible negotiations, according to Ukraine’s acting foreign minister (BBC, 06.07.14, Washington Post, 06.11.14, 06.12.14, Financial Times, 06.08.14).
Ukraine on Thursday accused Russia of allowing tanks and heavy artillery to roll across the border, effectively holding Moscow accountable for arming separatists in its breakaway eastern regions. The comments by Arsen Avakov, Ukraine’s interior minister, were the first clear admission by a senior Ukrainian official that the country no longer controlled swaths of its eastern border as it fights an insurgency in the Donetsk and Lugansk provinces it has accused Russia of supporting. Ukrainian President Petro Poroshenko has denounced as "unacceptable" reports of tanks rolling into eastern Ukraine across the Russian border. However, Moscow denied that tanks had crossed the border from Russia. “It is another fake,” said the country’s foreign affairs ministry. (Financial Times, Moscow Times, Wall Street Journal, 06.13.14).
The Ukrainian Ministry of Health said 257 people have died in the country's southeast in the two months since the government launched a military offensive against pro-Russia separatists in the predominantly Russian-speaking border region. Fatalities since April 15 total 220 in the Donetsk region and 37 in Luhansk. (Wall Street Journal, 06.12.14).
The Ukrainian government said on Friday its forces have regained control of the rebel-held port city of Mariupol. On Monday the government announced that it was deploying police officers to the east and would fire those who refuse to go. (Washington Post, 06.10.14, RFE/RL, 06.13.14).
Ukraine's newly-installed President Petro Poroshenko is expected soon to name a new foreign minister — possibly Valery Chaly, who has been in charge of foreign policy issues in his campaign. He has the right also to name a defense minister . (Reuters, 06.08.14).
Ukraine's gross domestic product is expected to contract 5% to 7% in 2014. Experts warn those projections could worsen, should the pro-Russia rebellion grow and further cripple output in the Donetsk and Luhansk regions. Together those regions account for nearly 16% of Ukraine's gross domestic product. (Wall Street Journal, 06.09.14).
A Russian man who has emerged as leader of a faction of separatists in eastern Ukraine has appointed a new "people's mayor," following the detention of the town's previous head Vyacheslav Ponomaryov on suspicion of misspending funds. (The Moscow Times, 06.13.14).
Russian President Vladimir Putin has called on Ukrainian President-elect Petro Poroshenko to display goodwill and statesmanlike wisdom and immediately stop the military operation in the southeastern part of Ukraine. (Interfax, 06.06.14).
Speaking after the negotiations, held with his German and Polish counterparts in St. Petersburg, Foreign Minister Sergey V. Lavrov of Russia said he was confident that any decision by the Ukrainian government to halt its military activities in the east would be met with a similar cease-fire by the rebels. Mr. Lavrov also welcomed a proposal by Ukraine's president, Petro Poroshenko, to open a humanitarian corridor for civilians to leave conflict areas. (New York Times, 06.11.14).
Russia plans to submit a draft resolution to the U.N. Security Council to put pressure on Ukraine to implement an OSCE "road map" to peace, Foreign Minister Sergei Lavrov said. (Reuters 06.12.14).
Russia's top diplomat on Wednesday acknowledged for the first time an official relationship with pro-Russian separatists in eastern Ukraine. Russian Foreign Minister Sergei Lavrov said that after Ukrainian leaders declined Moscow's request in late May to allow Russian humanitarian aid into eastern Ukraine, Russia started to send it in anyway via the pro-Russian separatist forces. (Washington Post, 06.12.14).
The secretary-general of the Organization for Security and Cooperation in Europe visited a camp in Russia for refugees from the conflict in Ukraine's east and called for the fighting to stop. (AP, 06.12.14).
The chairman of the Organization for Security and Cooperation in Europe called Tuesday for the release of eight monitors in Ukraine who haven't been heard from since late May, saying their detention was "unacceptable." (Wall Street Journal, 06.10.14)
Ukraine's security service has released two Russian television journalists who were held over the weekend for supposedly conducting "surveillance" of a Ukrainian border checkpoint, their employer said. (The Moscow Times, 06.09.14).
Washington pledged $48 million to Ukraine, $8 million to Moldova and $5 million to Georgia after U.S. Vice President Joe Biden met the presidents of the three countries. (RFE/RL, 06.07.14, Reuters, 06.08.14).
On Monday Human Rights Watch urged Ukrainian authorities to review their counterinsurgency operations in eastern Ukraine, and said that both the Kiev government and insurgents “have obligations under international law to avoid harm to local residents”. (Financial Times. 06.10.14).
The UN General Assembly has passed a Georgian-sponsored resolution reiterating the right of return of all displaced persons and refugees to breakaway Abkhazia and South Ossetia. (RFE/RL, 06.06.14).
Georgia's Defense Ministry says that 350 U.S. Marines from the Black Sea rotational force stationed in the Romanian city of Constance and 550 Georgian troops are taking part in the maneuvers -- dubbed Agile Spirit-2014 -- that started on June 9. (RFE/RL, 06.09.14).
The Russian Investigative Committee may issue an international arrest warrant for former Georgian President Mikheil Saakashvili over his policies in the breakaway region of South Ossetia, a spokesman said. (The Moscow Times, 06.09.14).
A court in Georgia has sentenced to 12 years in prison a man wanted by Moscow for allegedly killing a Russian diplomat and his wife in Georgia's breakaway region of Abkhazia. (RFE/RL, 06.11.14).
The European Union said Thursday that it would finance projects worth about $68 million in Moldova. (New York Times, 06.13.14).
European Commission President Jose Manuel Barroso is expected to arrive in Azerbaijan's capital, Baku, on June 13 as he concludes a regional tour. Barroso previously visited Moldova and Georgia on his four-day trip. (RFE/RL, 06.13.14).
Following the Islamic State of Iraq and al-Shams' (ISIS) capture of Mosul, pictures of Omar al-Shishani, an Isis Emir, have emerged on social media inspecting stolen US-supplied Humvees. The photos of al-Shishani, a Georgian-born ethnic Chechen, suggest that he was the mastermind of the siege as the commander of the northern sector of ISIS in Syria and Iraq. (IBT, 06.11.14).
Afghan media reports say that police in the northern province of Kunduz have detained two Taliban fighters from neighboring Tajikistan. (RFE/RL, 06.09.14).
In a new report, Freedom House says Russia is playing a "pivotal role" in a continuing decline in democracy among the countries of the post-Soviet sphere (RFE/RL, 06.11.14).

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