Russia in Review

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

Nuclear security:

Kazakhstan and the International Atomic Energy Agency have signed the agreement that establishes the international nuclear fuel bank on the territory of Kazakhstan. “I would like to note that low-enriched uranium is not attractive for terrorists. Still, we are making every effort with the IAEA to adopt measures to prevent terrorists from getting access to the bank in any possible way. Believe me, the Ulba plant has all the necessary safety measures to prevent that,” Kazakhstan’s Foreign Minister Yerlan Idrissov assured. (Tengrinews, 08.27.15).
A nearly completed U.S. government facility intended to treat the radioactive byproducts of nuclear weapons production is riddled with design flaws that could put the entire operation at risk of failure, according to a leaked internal report. A technical review of the treatment plant on the grounds of the former Hanford nuclear site identified hundreds of “design vulnerabilities” and other weaknesses, some serious enough to lead to spills of radioactive material, according to the report. (Washington Post, 08.26.15).

Iran nuclear issues:

No significant developments.

NATO-Russia relations:

NATO says a new training center in Georgia will help the Caucasus country to move closer to membership in the military alliance. NATO Secretary-General Jens Stoltenberg said the center was part of a package of measures to boost Georgia's defense capabilities agreed at a summit last September. The center will provide theoretical and practical training for Georgian soldiers and officers by NATO personnel. (RFE/RL, 08.28.15).
The Russian Foreign Ministry has expressed strong opposition to the opening of a training center run by NATO in neighboring Georgia, describing the measure as provocative. The ministry’s spokeswoman, Maria Zakharova, stated that further enhancement of military ties between the Western military alliance and Tbilisi would undermine security in the region. (PressTV, 08.27.15).
U.S. Defense Secretary Ash Carter dubbed Russia and ISIS on Thursday the two greatest threats to American national security. Carter mentioned “the ugly phenomenon” that is ISIS in his response to a U.S. Marine who asked about the country’s “most significant [national security] challenges.” Then he addressed Russia. “We also have to respond to . . . the behavior of the Russian government under . . . Vladimir Putin, which was signified in Ukraine, which is I think taking Russia in the wrong direction for his own people,” he said. (National Review, 08.28.15).
The United States will deploy F-22 fighter jets to Europe soon to support Eastern European members of the NATO alliance unnerved by Russia's intervention in Ukraine, Air Force Secretary Deborah James said on August 24. (RFE/RL, 08.25.15).
The U.S. Marine Corps Forces said on August 25 that some 160 Marines accompanied the tanks and artillery are traveling to a major military base in eastern Bulgaria, as part of the Black Sea Rotational Force. They will stay initially for three six-month rotations. Marine leaders say the troop movement adds to U.S. and NATO reassurance efforts in Eastern Europe. (RFE/RL, 08.26.15).
Finland is in no position to help defend its Baltic neighbors and fellow EU members Estonia, Latvia and Lithuania should it become necessary, Finnish President Sauli Niinisto said on Tuesday. "Our eastern border (with Russia) is longer than those of all NATO countries together. If a nation of a little over five million people is in charge of its defense on its own, it is enough responsibility to bear," Niinisto said. (Defense News, 08.25.15).
A task force made up of former Russian and Western officials proposed new talks aimed at a new set of agreements between NATO and Moscow to prevent an incident between military forces. A group of former officials, including the former foreign ministers of Poland and Russia, propose a new round of dialogue between NATO and Moscow aimed at establishing rules for navy ships and air-force fleets. (Wall Street Journal, 08.25.15).

Missile defense:

No significant developments.

Nuclear arms control:

No significant developments.

Counter-terrorism:

The United States has asked Uzbekistan to join the multinational coalition fighting the Islamic State group. (RFE/RL, 08.28.15).

Cyber security:

Secretary of Russia's Security Council Nikolai Patrushev has ordered heads of far eastern regions to “take measures” against government officials who use Google, WhatsApp, Yahoo and other online services. (Moscow Times, 08.26.15).
Finland confirmed on Thursday it has detained a Russian citizen, Maxim Senakh, at the request of U.S. federal authorities on computer fraud charges, in a move that Russia calls illegal. (Reuters, 08.27.15).

Energy exports from CIS:

No significant developments.

Bilateral economic ties:

Russia’s Federal Security Service is holding up Schlumberger Ltd.’s acquisition of a 46 percent stake in Eurasia Drilling Co., according to two people with knowledge of the matter. The FSB, is concerned that Schlumberger would have too much influence in Russia’s oil-services market. (Bloomberg, 08.25.15).
Up to 20 McDonald's franchises will be opened by 2016 in Siberia's Kemerovo, Novosibirsk, Tomsk and Altai regions. (Moscow Times, 08.21.15).

Other bilateral issues:

Russian President Vladimir Putin will lead the Russian delegation at the 70th session of the UN General Assembly that will be held in New York City in September. The possibility of bilateral meetings of the Russian and U.S. presidents during the sessions is still being worked on, Russian presidential aide Yury Ushakov told reporters on Aug. 26. (Interfax, 08.26.15, Tass, 08.28.15).
A Russian parliamentary delegation that had planned to attend Inter-Parliamentary Union events in New York next week has canceled the visit because of restrictions on the visa the United States granted to Council Speaker Valentina Matviyenko. The Russian Foreign Ministry condemned the restrictions as "impermissible" and "unacceptable." The U.S. has also annulled Russian Federation Council member Alexander Totoonov's entry visa that was issued to him earlier by the U.S. embassy to Russia. (RFE/RL, 08.27.15, Interfax, 08.26.15).
Russian Foreign Minister Sergei Lavrov says the United States has been sending "signals" that it wants to start repairing ties with Moscow.” "If we receive a proposal to start, even gradually, restoring these channels, mechanisms for dialogue and cooperation that have been frozen by our American partners, I am sure...we will agree to restore these channels," Lavrov said. (RFE/RL, 08.24.15).
The United States has no plans to resume work of the U.S.-Russia Bilateral Presidential Commission in the foreseeable future, Assistant Secretary of State Victoria Nuland said on Wednesday. (Tass, 08.26.15).
Russia intends to demand that the U.S. observe interstate agreements in the event of claims against Russian citizens instead of abducting them, Russian Foreign Minister Sergei Lavrov said. (RBTH, 08.24.15).

II. Russia news.

Domestic politics, economy and energy:

Russia’s gross domestic product will shrink 3.3% this year, Economy Minister Aleksei Ulyukayev was quoted by Russian news agencies as saying, a deeper contraction than the 2.8% dip predicted previously. (Wall Street Journal, 08.25.15).
The introduction of Western sanctions against Russia is responsible for only a 0.5-0.6-percent decline in the country’s GDP, with record low oil prices the real villain, according to an economic study carried out by Central Bank analysts. (RBTH, 08.24.15).
The U.S. dollar has erased its losses against the Russian ruble incurred during the early morning trade on Friday. The U.S. currency's maximum rate rose to RUB 67.3, up by RUB 1.29 from the close on Thursday. The price of crude oil has plunged by about 60% from its 2014 peak. (RosBusinessConsulting, 08.29.15, Wall Street Journal, 08.24.15).
Russians' concern about rising prices has eroded President Vladimir Putin's approval ratings but these remain extremely high, the daily Vedomosti reported on Friday. It cited a poll by the Public Opinion Foundation as showing that 72 percent of Russians would have voted for Putin in August, down from 76 percent in May. (Reuters, 08.28.15).
Russian consultancy SovEcon said has increased its forecast for Russia's 2015 grain crop by 2 million tons to 101 million; its outlook for the wheat crop was raised to 61.3 million tons from 59.5 million. (Reuters, 08.27.15).
The average Russian federal public servant has earned 96,500 rubles ($1,400) per month in the first half of this year, up 4.9 percent from the same period last year. (Moscow Times, 08.23.15).
Russia’s state nuclear corporation Rosatom has announced it will launch another floating nuclear power plant produced in 40 percent less time than the one currently under construction in St. Petersburg. (Bellona, 08.26.15).
According to the president of the Federation of Migrants in Russia, Mohammed Madjumder, the overall number of migrants in Russia has gone down by 20-25 percent this year. (Moscow Times, 08.26.15).

Defense and Aerospace:

The Russian-led Collective Security Treaty Organization began a six-day military exercise near the border of Estonia on August 23. (RFE/RL, 08.23.15).
Russian air, ground, and missile forces are conducting exercises in the western reaches of the country. The Russian Defense Ministry said 10 regiments equipped with Yars and Topol mobile ICBM launchers were on "combat patrol routes" in the country's western and central military districts. (RFE/RL, 08.25.15).
Russia has launched military exercises in the Arctic as it seeks to bolster claims to the region's energy and mineral resources. (Defense News, 08.24.15).
Russia's Defense Ministry broadcasting channel, Zvezda-TV, reports that Moscow has plans to start building new early warning radar stations in Azerbaijan and near the Arctic Circle. (RFE/RL, 08.17.15).
Russian Strategic Missile Forces successfully test fired a single-warhead Topol intercontinental ballistic missile from the Kapustin Yar test range in the Astrakhan Region. The warhead hit a designated target at the Sari-Shagon test range in Kazakhstan. (Russia Today, 08.23.15).
Russia’s Defense Ministry has cut the number of Sukhoi T-50 stealth fighters it will buy in its initial order from as many as 100 to 12, an official close to the defense industry said. (Wall Street Journal, 08.27.15).

Security, law-enforcement and justice:

The North Caucasus District Military Court based in Rostov-on-Don sentenced former Makhachkala Mayor Said Amirov to life in a special security penitentiary. Amirov was charged with organizing the killing of an Investigative Committee investigator and an armed attack on a shopping mall in Kaspiisk. (Interfax, 08.27.15).
Russian military court sentenced a Ukrainian filmmaker, Oleg Sentsov, to 20 years in a prison camp. Mr. Sentsov, 39, was found guilty of creating a terrorist group, carrying out two terrorist acts and plotting another that involved blowing up a statue of Lenin in Simferopol. Mr. Sentsov pleaded not guilty to all charges. President Petro O. Poroshenko of Ukraine expressed his support for Mr. Sentsov in a Twitter post. (New York Times, 08.26.15).
Estonian internal security officer Eston Kohver, sentenced by a Russian court to 15 years in prison for espionage, cooperated with the Federal Security Service immediately after being detained, his former lawyer Mark Feigin said. (Moscow Times, 08.24.15).
Former Russian lawmaker Mikhail Glushchenko has been sentenced to 17 years in jail for his role in organizing the high-profile killing in 1998 of lawmaker Galina Starovoitova. (RFE/RL, 08.28.15).
The Samara Oktyabrsky District Court has put British subject Richard Philipp Bochius, 32, under a two-month arrest on counts of possessing hashish. Bochius said he would be able to work for Samara State Technical University and support his family while under house arrest. (Interfax, 08.28.15).
Most Russians said they were negative about the quick release of Yevgenia Vasilyeva, former Defense Ministry property manager who was granted parole on Tuesday after spending only a month in penal colony, a survey revealed on Thursday. (Moscow Times, 08.27.15).
Moscow police have laid off 7,000 employees in compliance with Vladimir Putin's order last month to cut 10 percent of the Interior Ministry payroll. (Moscow Times, 08.25.15).

Foreign affairs and trade:

Russian President Vladimir Putin will visit China on September 2-3 at the invitation of Chinese President Xi Jinping. Putin will attend celebrations dedicated to the 70th anniversary of the victory of Chinese people over Japan and the 70th anniversary of victory in WWII. The Russian and Chinese leaders also plan to hold negotiations on energy and other issues, and sign more than 20 bilateral documents. (RFE/RL, 08.27.15).
Russia’s contract for supplying China with Sukhoi Su-35 fighter jets is at an approval stage, the first deputy director general of Russia’s arms exporter, Rosoboronexport, said on Monday. (Tass, 08.24.15).
Russia's annual trade turnover with China won't reach the planned goal of $100 billion this year due to the economic crisis, Russia's Ambassador to China Andrei Denisov said. Trade turnover between Russia and China fell by 30 percent in the first half of the year, compared to the same period last year and reached slightly more than $31 billion, Denisov said. (Moscow Times 08.27.15).
Japan has protested a visit by Russian Prime Minister Dmitry Medvedev to one of four Pacific islands it also claims and which have strained relations between the two countries since the end of World War II. Russian Deputy Prime Minister Dmitry Rogozin responded to Japanese protests over Medvedev's visit by suggesting Sunday that those offended in Tokyo commit ritualistic suicide rather than go on “making noise.” (RFE/RL, 08.22.15, Moscow Times, 08.24.15).
Russia's largest air show, the International Aviation and Space Salon wrapped up its business program on Thursday. MAKS this year featured about 600 Russian companies and more than 150 foreign firms representing around 30 countries. The highest profile visitors were the Saudi and Jordanian kings, Egyptian President Abdul Fattah al-Sisi, as well as Chinese and Iranian military delegations. (Moscow Times, 08.27.15).
The Rosoboronexport book of orders exceeds $40 billion, including $18 billion orders for military aircraft, Rosoboronexport General Director Anatoly Isaikin told reporters on August 25. (Interfax, 08.25.15).
Europe's largest aerospace company signed an agreement at the MAKS air show with satellite manufacturer Russian Space Systems to launch a production line for satellite hardware. (Moscow Times, 08.26.15).
Two Russian space companies have signed a cooperation agreement with an Iranian corporation, clearing the way for the creation of an Iranian satellite observation system. (Russia Today, 08.25.15).
Paris has refunded Moscow €900 million for two Mistral helicopter carriers put on hold by President Francois Holland, a source in the Federal Service for Military and Technical Cooperation. (Russia Today, 08.27.15).
Egyptian President Abdel Fattah el-Sissi has met with Russian President Vladimir Putin during his second visit to Moscow in three months. The Kremlin said the meeting focused on the situation in the Middle East and North Africa, along with "prospects for a Palestinian-Israeli resolution and efforts to combat international terrorism." According to Russian media reports, the Egyptian leader was also expected to sign a deal for the Russian state nuclear company Rosatom to build Egypt's first nuclear power plant in the northern district of El-Dabaa. (RFE/RL, 08.26.15).
King Abdullah of Jordan told Russian President Vladimir Putin on Tuesday Moscow had a vital role to play bringing together rival sides in Syria to seek a solution to a war that has killed a quarter of a million people. (Reuters, 08.25.15).
Michael Ratney, newly appointed U.S. special envoy for Syria will travel to Moscow, Geneva, and Riyadh this week in an attempt to find a political solution to the four-year old Syrian conflict, officials said August 26. (RFE/RL, 08.27.15).
Russia has restricted the sale of some U.S. and European-brand laundry detergents, soaps and cleaning products, opening what may be the newest front in Moscow's response to Western sanctions. The Russian home-care products sector was worth $2.7 billion in 2014. (Wall Street Journal, 08.26.15).
The EU wants to unleash crack teams of media and public relations professionals from offices in Brussels to counter what it considers biased Russian media reports. The strategic unit will be fully operational by the end of September and will be part of the European External Action Service. (Breitbart News, 08.28.15).
Estonia says it plans to build a fence along part of its eastern border with Russia to safeguard its security and protect the EU's passport-free Schengen Area. (RFE/RL, 08.27.15).
Dutch officials investigating the downing of Malaysia Airlines Flight MH17 said on Thursday they would release the final report into last year's crash over eastern Ukraine that killed 298 people onboard the Boeing 777 jetliner on October 13. Russian Foreign Minister Sergei Lavrov has accused the Netherlands of concealing from Russia findings from the investigation into the downing of MH17. (Moscow Times, 08.24.15, Wall Street Journal, 08.27.15).

Russia's neighbors:

Ukraine and its main creditors on Thursday agreed on a plan to restructure $18 billion of the country’s foreign debt in a rare deal between bond funds and a wobbly, emerging-market government. If the agreement goes into effect, it would write off 20 percent of the country’s foreign debt. (NYT, 08.27.15).
Russia will demand full repayment from Ukraine of a $3 billion Eurobond that comes due in December, Russian Finance Minister Anton Siluanov said. "We insist on a full repayment in December of this year of $3 billion, including interest payments." (Reuters, 08.27.15).
The World Bank’s Board of Executive Directors has approved a US$500 million IBRD loan to finance the Second Multi-Sector Development Policy Operation in Ukraine. (World Bank, 08.25.15).
Ukrainian officials say they expect to get $3.4 billion of International Monetary Fund financing over the next four months. (Bloomberg, 08.27.15).
Ukraine's central bank lowered its key interest rate to 27% from 30%, citing reduced inflation risks. (Wall Street Journal, 08.27.15).
The final decision by EU on whether to grant Ukraine visa-free travel status is due before the end of the year. (Wall Street Journal, 08.27.15).
The warring sides in the conflict in eastern Ukraine have agreed to strive for an end to all truce violations from September 1. (RFE/RL, 08.27.15).
Over 1 million people have moved to Russia from southeast Ukraine since the beginning of the armed conflict and about 600,000 of them decided never to return home, the head of the Federal Migration Service says. (Russia Today, 08.28.15).
German Chancellor Angela Merkel and French President François Hollande called Monday for an immediate ceasefire in Ukraine and fresh talks with Russia. The two leaders, who met in Berlin with Ukrainian President Petro Poroshenko at Poroshenko’s request. “The Minsk accords must be the basis for a move toward peace in Ukraine,” Merkel told journalists. (Politico.eu, 08.24.15).
“There will not be a Minsk 3. We have a whole range of points which have been negotiated and they must be put in place," Ukrainian President Petro Poroshenko said at a news conference after meeting European Commission President Jean-Claude Juncker. (Wall Street Journal, 08.27.15).
Ukrainian President Petro Poroshenko called on all political forces in the country on Sunday to rally behind his plans for constitutional change aimed at ending a separatist conflict in the east and defeating what he termed the “Russian aggressor.” Moscow denies it is providing men or arms to separatists in Ukraine. (Reuters, 08.23.15).
Ukrainian President Petro Poroshenko said some 2,100 Ukrainian soldiers had been killed in the conflict in Eastern Ukraine. (BBC, 08.24.15).
“Russian military command has completed the creation of a powerful ground force in Donbas based on two army corps which are prepared for active offensive operations," Ukrainian National Security and Defense Council Secretary Oleksandr Turchynov said. In his words, the two corps total up to 35,000 troops. (Interfax, 08.27.15).
Russian-language website Delovaya Zhizn has caused a stir with a report asserting that more than 2,000 Russian soldiers have been killed in the conflict in eastern Ukraine, according to RFE/RL. A person who responded to messages sent to Delovaya Zhizn's e-mail address identified himself as Anatoly Kravchenko, said that the website had received the casualty figures from relatives of dead servicemen as well as "insider information" from the Russian Defense Ministry, but declined to identify any specific sources, RFE/RL reported. According to Russia’s Vzglyad news portal, however, Delovaya Zhizn, which only aggregates news, has been hacked to display false information about casualties. (Belfer Center, 08.28.15).
Azerbaijan stated on August 24 that five Armenian soldiers had been killed and eight wounded along the contact line. Meanwhile, Nagorno-Karabakh said on August 24 that Azerbaijani forces had shelled the breakaway region's positions over the weekend, adding that four Azerbaijani soldiers were killed (RFE/RL, 08.24.15).
Beijing on Tuesday revealed the guest list for its much-touted Sept. 3 World War II parade. Belarus, Cuba, Egypt, Kazakhstan, Kyrgyzstan, Mexico, Mongolia, Pakistan, Serbia, Tajikistan and Russia will send the largest contingents of about 75 troops each. (Wall Street Journal, 08.27.15).
Kyrgyz President Almazbek Atambaev has canceled a trip to the United States that was planned for late September. (RFE/RL, 08.28.15).
Kyrgyzstan inaugurated a Chinese-financed power line on August 28 that President Almazbek Atambaev called "a historic event. “The 450-kilometer Datka-Kemin power line is expected to save Kyrgyzstan millions in transit fees, as its electricity will no longer pass through neighboring Uzbekistan and Kazakhstan. (RFE/RL, 08.28.15).
Belarus’s ruble has lost more than 33 percent this year, according to data compiled by Bloomberg, making it the worst performer of more than 155 currencies the system tracks. (Bloomberg, 08.24.15).
Belarussian President Aleksander Lukashenko has pardoned six jailed opposition figures, including Nikolai Statkevich who was imprisoned after running against him for the presidency in 2010. (Reuters, 08.23.15).
Turkmen President Gurbanguly Berdymukhammedov has fired the country's energy minister for shortcomings in his work. (RFE/RL, 08.23.15).

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