Russia in Review

An update from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of June 24 - July 1, 2011.

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for the week of June 24 – July 1, 2011

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

Nuclear security agenda:

Police in ex-Soviet Moldova have arrested six suspected traffickers in radioactive materials and seized Uranium-235 which can be used to make nuclear weapons, officials said on Wednesday. One of the smugglers told the policeman they could provide one kilogram of uranium, but not the whole quantity at once. Moldovan police said that the group asked to be paid 20 million euros per kilogram of U-235 and also offered to sell plutonium. The Moldovan authorities said that the suspects included four Moldovans, one Russian, and one resident of the separatist region of Transdnistria in eastern Moldova. The gang thought it was negotiating with a North African buyer who turned out to be an undercover security agent. (ProTV, BBC, CNA. 06.30.11, New York Times, AFP, 06.29.11).
Al Qaeda and other terrorist groups are not giving up attempts to obtain access to military nuclear technology, former Russian Interior Minister Anatoly Kulikov said at a presentation of the Joint Threat Assessment on Nuclear Terrorism. For his part, the deputy director of the USA and Canada Institute of the Russian Academy of Sciences, Pavel Zolotarev, said that the elimination of Osama bin Laden has not reduced concerns either in Russia or the USA concerning attempts by terrorists to obtain nuclear materials. (Interfax, 06.27.11.)
World leaders are expected to discuss "practical and concrete" ways to prevent the threat of nuclear terrorism and ensure the safety of atomic energy at next year's global summit on nuclear security in South Korea, Seoul's foreign minister Kim Sung-hwan told the annual Global Initiative to Combat Nuclear Terrorism in Seoul. (PNA/Bernama, 06.27.11).
North Korean leader Kim Jong-il canceled a visit to Russia this week because of worries about security following media reports about the trip, Russia's Kommersant newspaper reported on Thursday. (Reuters, 06.30.11).

Iran nuclear issues:

The sanctions imposed by the United States on a major Iranian port operator and the country's national airline may affect Russian companies and "raise serious questions," the Russian Foreign Ministry said on Friday. (Reuters, 06.24.11).
Washington and its European allies on the Security Council reaffirmed their call for the publication of a panel assessment describing numerous Iranian breaches of U.N. sanctions, though Russia has held up the document's release. Moscow did not address its action to delay the document's release, but Alexander Pankin, Russia's deputy Ambassador to the United Nations, said "unverified and politicized information would not help" the Security Council. (GSN, 06.24.11).
Iranian Foreign Minister Ali-Akbar Salehi said that the Bushehr nuclear power plant will join the national grid in September, the State IRIB TV website reported on Monday. Russian Deputy Foreign Minister Sergei Ryabkov said of Bushehr: “The project has been completed and everything has been ironed out. If this happens in the first days of August, it will fully meet our forecasts and expectations. And if it happens a few days later, there is nothing terrible about that." (AFP, Xinhua, 06.27.11).

NATO-Russia cooperation, including transit to Afghanistan:

Russia said the United States will need to seek approval from the United Nations before it can withdraw all its forces from Afghanistan. The foreign ministry's chief spokesman said Russia “took note” of President Barack Obama's decision to withdraw 33,000 surge troops by the end of next summer. “As for a full drawdown of the international presence in Afghanistan, it should be conducted in accordance with a resolution on the UN Security Council,” foreign ministry spokesman Alexander Lukashevich said. (SkyNews, 06.29.11).
Two thirds (66%) of Russian citizens, mostly young people (84%), do not remember or do not know that a Warsaw Treaty Organization existed and was disbanded 20 years ago, VTsIOM experts said. Asked whether Russia needs a new organization similar to the Warsaw Pact or NATO, half of the respondents answered in the affirmative (51%) and one quarter (23%) said "No." (Interfax, 06.30.11).

Counter-terrorism cooperation:

No significant developments.

Missile defense:

Russian President Dmitry Medvedev could meet on July 4 in Sochi with top NATO and Russian officials at a meeting set to focus on a disputed alliance plan for establishing a European missile shield, Russian Ambassador to NATO Dmitry Rogozin said. (GSN, 06.30.11).
Russian Ambassador to NATO Dmitry Rogozin said that Moscow and the alliance have until 2018 to find agreement on a prospective U.S.-led missile defense plan in Europe. He said the two sides should show creativity in finding a solution that would satisfy both sides before the year 2018, when Washington would like first interceptor missiles to be based in Poland, close to Russia. (AP, 06.30.11).
Belarus may become the first country to be supplied with the new Russian S-400 anti-aircraft system Triumph. (Interfax, 06.29.11).

Nuclear arms control:

No significant developments.

Energy exports from CIS:

Gazprom CEO Alexei Miller told Thursday’s annual shareholders’ meeting that the gas giant says it plans to boost exports to Europe this year and set a new record high in export earnings. The company expects to export 155-158 billion cubic meters of gas to customers in Europe this year compared to last year’s 139 billion. (AP, 06.30.11).

Access to major markets for exports and imports:

No significant developments.

Other bilateral issues:

U.S. Secretary of State Hillary Clinton said: “In international politics, countries have to work hard to find ways of cooperating, and we have done that on this new START Treaty, on Iran's nuclear threat, on Afghanistan, on counternarcotics, on counterterrorism.” (U.S. Department of State, 06.24.11).
Former senior Russian intelligence officer Alexander Poteyev was convicted in absentia Monday of betraying a ring of 10 Russian spies in the United States. (AP, 06.27.11).
General Electric Co.'s sponsorship of the 2014 Winter Olympic Games in Sochi, Russia, will likely bring "good" infrastructure orders for the company, Chief Executive Jeffrey Immelt said Wednesday. (Wall Street Journal, 06.29.11).
A court in a Moscow suburb has banned works by the founder of the Church of Scientology, officials said Thursday. (AP, 06.30.11).

II. Russia news.

Domestic Politics, Economy and Energy:

Russia's President Dmitry Medvedev on Wednesday ordered the government to prepare for selling its controlling stakes in some key state companies. Medvedev made the call in a budgetary address. He also urged the government to keep a tight lid on spending and accumulate windfall oil revenues in a rainy day fund. Medvedev also said he favors raising taxes on the gas industry to help close the country's budget gap. (AP, Reuters, 06.29.11).
Russian Prime Minister Vladimir Putin warned on Thursday that the March 2012 presidential election campaign would be dirty, but stopped short of saying whether he would seek another stint as Kremlin chief. (Reuters, 06.30.11).
The Russian government's popularity fell to its lowest point since Vladimir Putin became prime minister, a poll showed. Fifty-two percent of those surveyed expressed dissatisfaction with the work of Putin's cabinet. Ratings for Putin's United Russia party also dropped to a record low, although it still managed to score 53 percent, the independent Levada Center poll showed. While President Dmitry Medvedev's ratings slipped three percent to 66 percent, support for Putin remained at highs of almost 70 percent. (Reuters, 06.29.11).
In an indication that Right Cause is emerging as a powerful political force, President Dmitry Medvedev invited the party's new billionaire leader Mikhail Prokhorov to his Gorki residence on Monday and praised his initiatives as "quite revolutionary." (Moscow Times, 06.28.11).
Russian President Dmitry Medvedev proposed a bill on Friday that would make it easier for smaller parties to win parliamentary seats in 2016 elections. (Reuters, 06.24.11).
Russia's government has promised voters more social spending than it can muster without threatening the country's fiscal stability as elections approach, a deputy finance minister warned on Sunday. "If all programmes announced by the government are fulfilled the budget spending could reach 29 percent of GDP," Sergei Shatalov, a deputy to hawkish Finance Minister Alexei Kudrin, told the Russian Economic and Financial forum in Strasbourg. (Reuters, 06.26.11).
Russia's budget deficit this year is expected to be below 0.5 percent of gross domestic product if crude oil prices average $115 a barrel, Finance Minister Alexei Kudrin said. (Wall Street Journal, 06.29.11).
Russia may look to export energy to Germany from a new generation of nuclear plants, Rosatom Deputy Director General Kirill Komarov said. (Reuters, 07.01.11).
In 2011-2012 Rosatom will spend over U.S.$530 million to procure additional equipment to ensure safety at existing nuclear power plants in Russia, Rosatom’s director general Sergei Kiriyenko said at a meeting with Russia’s Prime Minister Vladimir Putin. (Skrin, 06.27.11).
Moscow's two largest exchanges agreed to merge as part of a tie-up aimed at turning the Russian capital into an international financial center by 2020.The deal is valued at $5bn, with shareholders in Micex, the larger of the two exchanges, owning 75 percent of the new combined group and RTS share-holders holding 25 percent. (Financial Times, 06.30.11).
Russian regulators and state-controlled bank VTB Group Friday set a $14.2 billion bailout package for the troubled Bank of Moscow, by far the biggest bank rescue package borne by Russian taxpayers and investors. (Financial Times, 07.01.11).
With the United States considering sanctions on Russian officials implicated in the prison death of lawyer Sergei Magnitsky, the Foreign Ministry has turned to the State Duma with a blacklist of its own. But instead of punishing other countries for human rights abuses against their own citizens, the ministry would blacklist foreigners deemed to have violated the rights of Russian citizens. (Moscow Times, 06.30.11).
A new report on the actions of officials who may have directly or indirectly caused the death of Hermitage Capital Management's lawyer Sergei Magnitsky in prison in 2009 has been released by the Human Rights Council under the President of Russia. The report, to be submitted to President Dmitry Medvedev on July 5, assigns the cause of his death to premeditation and/or the negligence of the doctors, prosecutors, investigators, and law enforcement officials. The section of the report describing the corrupt actions of the Interior Ministry officials who persecuted Magnitsky still needs to be finalized, said Yelena Panfilova, head of Transparency International in Russia. (Moskovskiye Novosti, 06.29.11).
A criminal case against the head of the British hedge fund Hermitage Capital, William Browder, accused of tax evasion, may soon be closed, the Russian Kommersant business daily said on Monday. These changes are believed to be linked with Russian President Dmitry Medvedev's order to look into the case against Sergei Magnitsky, Hermitage Capital's lawyer who had died nine months after being placed in pre-trial detention in 2008. (RIA Novosti, 06.27.11).

Defense:

Russia’s Defense Ministry says the navy has successfully test-fired advanced ballistic missile Bulava from a new-generation nuclear submarine. (AP, 06.28.11).
A regiment of the Teykovo missile force, the first full-manned regiment to be equipped with up-to-date Yars (RS-24) ground-based mobile missiles, has been put on combat duty, Colonel Vadim Koval, spokesman for the Russian Defense Ministry Strategic Missile Forces said. (Interfax, 06.29.11).
The final relocation of the Russian Navy staff from Moscow to St. Petersburg is possible no earlier than in late 2013. (Interfax-AVN, 06.30.11).

Security and law-enforcement:

Pavel Vrublevsky, the head of one of Russia's largest online payment processors was arrested at a Moscow airport on Friday after an inquiry into his company's activity by the Federal Security Service. (Financial Times, 06.25.11).

Foreign affairs:

The Russian Foreign Ministry on Monday announced that it would do what it could to aid nuclear-armed India in joining an international nuclear export control group. "Russia has reaffirmed its intention to facilitate in every way India's full membership in the [Nuclear Suppliers] Group," the ministry said in a statement published on its website. (GSN, 06.28.11).
India and Russia are to cooperate on four schools that will support nuclear energy applications. The Global Centre for Nuclear Energy Partnership will be based in Hayana, near Delhi, and will run courses on advanced nuclear energy systems, nuclear security, and radiological safety, as well as applications of radioisotopes and radiation technologies. (World Nuclear News, 06.27.11).
Russia will deliver a nuclear submarine to India by the end of the year, Russia's navy chief Admiral Vladimir Vysotsky said. (Reuters, 07.01.11).
Exiled Syrian opposition figures urged Russia on Tuesday to persuade Syria's President Bashar al-Assad to resign, warning that Moscow risked being left behind by history unless it withdrew its support for the leader. Europe and the United States have so far failed to persuade Russia to support condemning Damascus for its crackdown on anti-government protesters. (Reuters, 06.30.11, 06.28.11).
Russian Foreign Minister Sergei Lavrov said on Thursday that arming Libyan rebels was a "crude violation" of a U.N. Security Council resolution that imposed a comprehensive arms embargo on Libya from February. He also said the calls for a world-wide wave of revolutions were irresponsible and harmful to the common interests of humanity. (Russia Today, Reuters, 06.30.11).
Russia is ending a blanket ban on vegetable imports from the European Union put in place over fears of E. coli infection, starting with the Netherlands and Belgium, the nation’s top consumer rights watchdog said Tuesday. (AP, 06.28.11).
Russia will call on Japan to jointly develop oil and natural gas resources near the disputed Kuril island chain north of Japan. (Reuters, 06.30.11).
Russia on Thursday expressed outrage at Romanian President Traian Basescu’s recent remarks in support of a 1941 wartime attack on Soviet troops — an assault that was coordinated with the Nazis. (AP, 06.30.11).

Russia's neighbors:

Kyrgyzstan's parliament set Oct. 30 as the date for a presidential election designed to move the country closer to completing constitutional reforms to create Central Asia's first parliamentary democracy. (Reuters, 07.01.11).
Customs offices on the world's longest continuous land border, between Russia and Kazakhstan, will be closed indefinitely starting Friday as a new international free-trade zone comes to fruition. (Moscow Times, 07.01.11).
Russia cut electricity to Belarus over unpaid bills on Wednesday, raising the pressure on its neighbor’s faltering economy. (AP, 06.29.11).
Armenia and Azerbaijan blamed each other on Saturday for failing to reach an agreement on a framework document that would set the stage for an end to their two decade-old conflict over Nagorno-Karabakh. (Reuters, 06.25.11).
Russian President Dmitry Medvedev is frustrated with the failure of his Armenian and Azerbaijani counterparts to reach a framework agreement on Nagorno-Karabakh and could stop organizing regular talks between them, one of his senior aides reportedly said on Monday. (Azatutyun, 06.27.11).
Azerbaijani President Ilham Aliyev, speaking during the biggest military parade in Baku since the fall of the Soviet Union, promised to boost army spending and gain control of the territories disputed with Armenia. (Reuters, 06.26.11).
U.S. Deputy Assistant Secretary of Defense Celeste Wallander said close defense ties with Russia do not impede Armenia's growing military cooperation with NATO and the United States in particular. (RFE/RL, 06.30.11).
Former Ukrainian Prime Minister Julia Tymoshenko went on trial on Wednesday on charges of abuse of power in a case that has raised Western concerns over President Viktor Yanukovych's commitment to democracy and the rule of law. (Reuters, 06.30.11).
U.S. Secretary of State Hillary Clinton lamented the brutal repression in Belarus and how the government denies its citizens the most basic rights. Without mentioning either country by name, Clinton also expressed concerns about the political motivations behind Ukraine’s legal proceedings against former Prime Minister Julia Tymoshenko, and Russia’s refusal to allow a new opposition party to participate in upcoming elections. (AP, 07.01.11).
Pilot uranium production started on June 26 at Ukraine's Novokonstantinovskoye uranium deposit, bringing a 35-year exploration and development phase to an end. (World Nuclear News, 07.01.11).