Russia in Review

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of July 1 - 8, 2011

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

Nuclear security agenda:

The U.N. Security Council plans to meet next week to discuss what to do about Syria’s refusal to cooperate with an investigation of its alleged secret nuclear activities. (AP, 07.04.11).
The world's five recognized nuclear powers last week convened a two-day meeting intended to address verification and other measures sought at the 2010 Nuclear Nonproliferation Treaty review conference, the nations said in a statement. (GSN, 07.05.11).

Iran nuclear issues:

Many of Iran's engineers were trained at Russian nuclear labs in the 1990s, said Susan Voss, a former nuclear engineering analyst with Los Alamos National Laboratory who has worked closely with the U.S. intelligence community. “At least one former nuclear weapons expert in Russia who helped Iran develop a triggering mechanism to set off high explosives in a nuclear weapon," president of ISIS David Albright said. By the end of the Clinton administration, much of the above-board nuclear cooperation provided by Russia and China to Iran had stopped. Ms. Voss said U.S. nuclear cooperation with Iran before 1979 was also important. “We would like to say we are innocent, but we are not that innocent,” she said. (Washington Times, 07.05.11).

NATO-Russia cooperation, including transit to Afghanistan:

The visiting NATO-Russia Council in Sochi on July 4 decided once again to postpone the discussion of American missile defense in Europe. This time the pause will last until the next NATO summit and G-8 meeting in Chicago in May 2012. (RIA Novosti, 07.05.11).
After the session of the Russia-NATO Council in Sochi of July 4, President Dmitry Medvedev said: “I think, in general, we are all inspired by the results that were achieved.” (RIA Novosti, 07.05.11).
Russia-NATO cooperation in the field of European missile defense might be a breakthrough and put the elements of an allied relationship into place, Russian Foreign Minister Sergei Lavrov said. He also said: "Russia and NATO fail to agree on a sectoral approach. Our partners from the Alliance say they have obligations under the Washington Mutual Defense Treaty. These obligations cannot be delegated to anyone. We interpret this as reality.” (Itar-Tass, 07.07.11)
After the session of the Russia-NATO Council in Sochi of July 4, NATO Secretary-General Anders Fogh Rasmussen said Russia and NATO could reach agreement on missile defense by the Alliance's spring 2012 summit. Commenting on guarantees that missile defense is not targeted against Russia, Rasmussen recalled that in 1997 Russia and NATO had signed the Founding Act in which they spelled out bilateral obligations on no-use of arms against each other. Thus, Rasmussen said there is no need to sign any additional documents on this aspect. (Itar-Tass, 07.07.11, Financial Times, 07.06.11.)
The U.S. military is rapidly expanding its aerial and Central Asian supply routes to the war in Afghanistan, fearing that Pakistan could cut off the main means of providing American and NATO forces with fuel, food, and equipment. Today, almost 40 percent of surface cargo arrives in Afghanistan from the north, along a patchwork of Central Asian rail and road routes that the Pentagon calls the Northern Distribution Network. U.S. defense officials also say the northern supply lines would not be possible without the cooperation of Russia. Military planners said they are pushing to raise the northern network’s share to as much as 75 percent by the end of this year. Obama administration officials said they are negotiating expanded agreements with Kazakhstan, Uzbekistan, and other countries that would allow for the delivery of additional supplies to the Afghan war zone. (Washington Post, 07.02.11).
Differences over the war in Libya and missile defense plans are hindering efforts to build a strategic partnership between NATO and Russia, Russia’s foreign minister said Monday. (AP, 07.04.11).
Moscow expects the United States to investigate human rights violations during U.S. operations in Iraq and Afghanistan, Konstantin Dolgov, the Russian Foreign Ministry's special representative for human rights, democracy and the rule of law, announced Tuesday. (Interfax, 07.06.11).

Counter-terrorism cooperation:

No significant developments.

Missile defense:

The Obama administration is about to make another concession to Russia on missile defense by finalizing an agreement with Turkey to base a radar there that would monitor Iranian missile launches. The TPY-2 radar deal has been under discussion for the past year and goes against a plan by the George W. Bush administration to place radar in one of two former Soviet republics, Georgia or Azerbaijan. Moscow opposed putting the radar in those states, claiming it would threaten Russia's nuclear missile forces. A senior U.S. national security official said the Turkish agreement for the radar is expected to be completed in the next week."It's yet another concession to the Russians," the official said. (Washington Times, 07.06.11).
A Russian diplomat said that on sidelines of the G-8 meeting in Deauville, France, in May U.S. President Barack Obama refused at the last minute to sign with Medvedev a political declaration—that contained an assurance that European missile defense was not against Russia —because the CIA and Pentagon strongly opposed any constraints on missile defense. Medvedev directly asked Obama in Deauville why the two of them were not signing the declaration that was co-drafted by U.S. Under Secretary of State Ellen Tauscher and Deputy Foreign Minister Sergei Ryabkov, but Obama said nothing in response, according to the diplomat. Washington is now ready to return to the declaration, but it is Moscow now that is in no rush to sign it because the last minute cancellation raised suspicions that Washington might be playing “a dishonest game of some sorts.”(Kommersant, 07.05.11).

Nuclear arms control:

No significant developments.

Energy exports from CIS:

No significant developments.

Access to major markets for exports and imports:

No significant developments.

Other bilateral issues:

Russian President Dmitry Medvedev said he hopes to find mutually acceptable solutions with the American side on a number of globally important topics in the course of his contact with U.S. President Barack Obama before the end of the year, including his planned visit to Russia. (Interfax, 07.04.11).
"The reset is working out, we now have a more reliable, more predictable, more consistent partner, and we of course appreciate this," Russian Foreign Minister Sergei Lavrov said. (RIA Novosti, 07.06.11).
Russia and the United States are completing an agreement on the easing of visa regimes between the two countries, Russian Foreign Minister Sergei Lavrov said. (RIA Novosti, 07.06.11).
Issues raised at a meeting between Russian and U.S. lawmakers on Friday included alleged violations of the rights of Russian nationals in the U.S., the chairman of the Russian State Duma's International Affairs Committee, Konstantin Kosachyov, said. (Interfax, 07.01.11).
Council on Foreign Relations senior fellow Stephen Sestanovich told the House of Representatives’ Foreign Affairs Committee: “Congress is, for good reason, uncomfortable about ‘graduating’ Russia from Jackson-Vanik unless the United States continues to have a clearly articulated policy toward human rights and democracy in Russia. It should therefore seriously explore legislation that can take the amendment’s place.” (CFR, 07.07.11).

II. Russia news.

Domestic Politics, Economy and Energy:

President Dmitry Medvedev suggested an economic amnesty at the conference in Nalchik. "Processes taking place within the criminal legislation as such as it has not seen in decades... I do what I can and I can tell you that I've been doing more in this respect than Gorbachev, Yeltsin, and Putin did together," said Medvedev. (RBC Daily, 07.07.11).
Russian President Dmitry Medvedev has admitted the prison death of a Russian lawyer who accused officials of corruption was the result of "criminal actions." Medvedev said the case of Sergei Magnitsky, who died in November 2009 after nearly a year in Russian prisons, was a "sad one." (RFE/RL, 07.06.11).
Officials from the Federal Security Service and the Interior Ministry may be implicated in the death of lawyer Sergei Magnitsky in police custody, a member of the Kremlin's human rights council said. Magnitsky was probably beaten to death in pre-trial detention, the council said in a report published on Wednesday. The report argued that highly placed investigators and prison officials share responsibility for his death in state custody. Among the members of the investigative team working on the case against Mr. Magnitsky, it said, were Interior Ministry officials against whom he had testified in a $230 million fraud case the year before. (RIA Novosti, 07.07.11, Reuters, 07.06.11, New York Times, 07.06.11).
Russia's Investigative Committee on Monday acknowledged for the first time that 37-year-old Sergei Magnitsky died in pre-trial detention because prison authorities denied him medical care, setting the stage for prosecution in a case that has come to epitomize Russia's trouble establishing rule of law. (New York Times, 07.05.11).
Tver lawmakers on Thursday confirmed a new governor to replace the unpopular Dmitry Zelenin, who last fall complained about finding a worm in his salad during a Kremlin meal. In Sakhalin, lawmakers reconfirmed their governor to a second term. (Moscow Times, 07.08.11).
A court officials’ order barring Vladimir Milov and Boris Nemtsov, the two founders of an opposition party, from leaving Russia for six months was overturned by the Federal Security Service. (Moscow Times, 07.07.11).
The government has admitted the impossibility of meeting 2015 with a zero budget. A deficit-free budget requires the oil price at $125 whereas the 2012 budget was actually calculated on the assumption that Urals would cost $93 that year. The Finance Ministry will present a budget that will continue pouring finances into national defense (20.5% more than in 2010), national security and law enforcement (37.2%), and social policy (20.4%). (Kommersant, 07.06.11).
Russia is comfortable with a budget deficit of around 1% of gross domestic product for the next five years, President Dmitry Medvedev’s economic advisor Arkady Dvorkovich said Friday. (Dow Jones, 07.08.11).
According to Russia's state statistics authority, real incomes of the population in the past year, or from May 2010 through May 2011, were down by seven percent. This is the biggest drop in incomes in the 21st century. (Itar-Tass, 07.04.11).
In the first quarter of 2011, real wages fell 2.9 percent, driven by higher inflation than expected. (Financial Times, 07.05.11).
Russia had a good first quarter with foreign investments almost reaching the pre-crisis level. State Statistics Service data published in May (the latest available) show total foreign investment reaching $44.3 billion in the first quarter, up 237 percent year on year. (Moscow Times, 07.05.11).
Concerned by a slow economic recovery and political change in Moscow, Russia's wealthy business leaders are increasingly eyeing assets in Europe, focusing on prime real estate that is viewed as safer even than cash, a recent survey said. Only 12 percent of wealthy Russian businessmen currently keep a substantial amount of their personal assets in rubles, or a third as many as in 2009, according to a study published Thursday by UBS AG and Campden Media. Russians concerned about a slowdown in demand at their businesses are increasingly moving assets to the U.K. and Switzerland. (Wall Street Journal, 07.07.11).
The World Economic Forum's recently released 2010-2011 global competitiveness report indicates Russia's overall position at 63 out of the 139 countries surveyed. (BNE, 07.04.11).
Russian state gas firm OAO Gazprom on Thursday agreed to combine its power assets with privately held IES Holding Ltd., controlled by tycoon Viktor Vekselberg's Renova Group, to create Russia's largest power company. The merger will create an electricity giant estimated to be worth more than $15 billion, with a total capacity of 52 gigawatts—about a quarter of Russia's total power-generating capacity. (Wall Street Journal, 07.07.11).

Defense:

Yuri Solomonov, chief designer of Russia’s intercontinental ballistic missiles said his plant will fail to meet production goals this year because of the Defense Ministry’s failure to sign weapons contracts on time. Russian President Dmitry Medvedev quickly ordered Defense Minister Anatoly Serdyukov to look into the matter. (AP, 07.06.11).
The Russian Defense Ministry sees designer Yury Solomonov’s claims that the state defense order may fall through in 2011 over delays in signing contracts, as an attempt to compel the state contractor to accept military products at overstated prices, and will initiate dismissals of such leaders, Defense Minister Anatoly Serdyukov said. (Interfax-AVN, 07.07.11).
The Russian Defense Ministry will draft contracts with defense plants beforehand starting from 2012. It is also ready to pay 100 percent in advance for defense orders, Defense Minister Anatoly Serdyukov said on Thursday. (Interfax-AVN, 07.07.11).
Russia plans to deploy two army brigades in the north to defend its interests in the Arctic regions, where governments citing climate change have made competing claims over natural resources. (Wall Street Journal, 07.02.11).
The military police will be formed in Russia before the end of this year, Defense Minister Anatoly Serdyukov said. Gen. Sergei Surovikin, former head of the General Staff Main Operative Department, is a possible candidate for the military police chief. (Interfax-AVN, 07.07.11).
Russian President Dmitry Medvedev on Thursday appointed Mikhail Mokretsov Russia’s Deputy Defence Minister. (Itar-Tass, 07.07.11)
A number of top Russian generals have tendered their resignation to the Defense Minister over the ongoing military reforms in country, a media report has said. Over differences with the Chief of General Staff, Army General Nikolai Makarov, several key officials including his deputy, Chief of Main Directorate of Operations Lt Gen Andrei Tretyak, Chief of the Main Staff of the Land Forces, Lt Gen Sergei Skokov, Chief of General Staff's Radio-electronic Warfare Directorate, Maj Gen Oleg Ivanov have put down their papers before Defense Minister Anatoly Serdyukov, 'Nezavisimaya Gazeta' reported. The Defense Ministry denied that the reason for resignations was a political one. (PTI, 07.05.11, Interfax, 07.06.11).
The timeline for testing the Bulava new sea-base strategic missile system will be cut due to multiple launches. Russia on Friday declared Bulava ready to be manufactured in bulk following a successful test of the weapon on Tuesday. (Interfax-AVN, 07.06.11, GSN, 07.01.11).
Personnel of Russian army’s mountain brigades will undergo training in Switzerland, Defense Minister Anatoly Serdyukov said. (Gazeta.ru, 07.08.11).

Security and law-enforcement:

At least nine people have been killed in the past two days in gunfights between police and militants in Russia's predominantly Muslim North Caucasus, law enforcement officials said on Thursday. (Reuters, 07.07.11).
Svetlana Gannushkina, a widely respected Russian rights defender, warned in a meeting Tuesday with Russia’s president that brutal tactics in fighting militants in the volatile North Caucasus region has helped swell the rebels’ ranks. (Reuters, 07.05.11).

Foreign affairs:

Muammar Gaddafi is sounding out the possibility of handing over power, a Russian newspaper said on Tuesday, but the Libyan government denied it was in talks about the veteran leader stepping down. (Reuters, 07.05.11).
Russia stepped up its efforts on Monday to negotiate a resolution to the war in Libya, with officials here receiving the president of South Africa, who has offered his services as a mediator, and the secretary general of NATO. At the same time, the Russian president of the World Chess Federation, who is acting as Moscow's informal go-between with Libya's embattled leader, Col. Muammar el-Qaddafi, made his second trip to Tripoli. (New York Times, 07.05.11).
NATO's ground operation in Libya will threaten the country's territorial integrity and may lead to unpredictable consequences for the whole region, Russian Deputy Foreign Minister Mikhail Bogdanov said. (Interfax, 07.05.11).
Foreign Minister Sergei Lavrov has said there cannot be a quick outcome in Libya and that will lead to many casualties on both sides. (RIA Novosti, 07.07.11).
France's foreign minister, who held talks in Moscow last week, said there were signs that Russia was beginning to question its Syrian stance after seeing President Bashar al-Assad continue a bloody crackdown on protesters. (Reuters, 07.07.11).
"Consultations on the framework of new talks on the control over conventional armed forces in Europe have ended up in impasse. The main reason for this is that some countries are trying to use the interest of countries in restoring the viability of this security instrument to resolve political problems that are far from the sphere of disarmament," Deputy Foreign Minister Aleksandr Grushko told Interfax in an interview. (Interfax, 07.04.11
Nabil Shaath, head of a Palestinian delegation that met Tuesday with Russian Foreign Minister Sergei Lavrov, said “our plan to go to the United Nations will get support from Russia.” (AP, 07.05.11).
Russia said on Wednesday it would formally submit an application to the United Nations next year in the hope of redrawing the map of the Arctic, giving itself a bigger share of the resource-rich territory. (Reuters, 07.06.11).
Russian Prime Minister Vladimir Putin is inviting both the Prince of Wales and Crone Prince Haakon of Norway to Arkhangelsk to the opening of the 2nd International Arctic Forum in September. Among the honored international guests is also Tarja Halonen, the President of Finland. (Barents Sea Observer, 07.06.11).
The decision by the Netherlands Parliament to impose sanctions against Russian officials over the Magnitsky case is unacceptable, the Russian Foreign Ministry said in a commentary issued on Tuesday. (Interfax, 07.06.11).
Russia said on Thursday that a European Parliament resolution which called on Moscow to guarantee free elections and lift curbs on the main opposition party amounted to interference in its internal affairs. (Reuters, 07.07.11).

Russia's neighbors:

Ukrainian President Viktor Yanukovich on Friday denied accusations of orchestrating the criminal prosecution of his political rival, former prime minister Yulia Tymoshenko. Tymoshenko, who narrowly lost to Yanukovich in the 2010 presidential election, faces up to 10 years in prison on abuse-of-power charges while in office and is the target of several other pending criminal cases. (Reuters, 07.08.11).
Ukraine's state security service SBU said on Tuesday it had launched a criminal case linked to the affairs of an energy company once run by former Prime Minister Yulia Tymoshenko. (Reuters, 07.05.11).
Russia has restored electricity supplies to Belarus after a four-day cutoff due to unpaid bills. (Reuters, 07.02.11).
Russia's foreign minister shuttled between Armenia and Azerbaijan on Friday in a bid to revive the ailing peace process over the disputed Nagorny Karabakh region after key talks last month failed. Foreign Minister Sergei Lavrov brought what he said were new proposals after the summit in Russia ended without agreeing on a road-map document setting out "basic principles" for future talks on the Karabakh conflict, amid fears of renewed war. (AFP, 07.08.11).