Russia in Review

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

Nuclear security agenda:

On Tuesday the U.S. Senate Appropriations Subcommittee on Energy and Water Development approved fiscal year 2016 funding legislation that totals $35.4 billion in discretionary budget authority. The bill would fund NNSA at $12.3 billion, $302 million less than the President’s request. Programs targeted at working with international partners to reduce the risks of nuclear terrorism would remain funded far below the historical levels needed to address global threats, according to U.S. Senator Dianne Feinstein. On Thursday the Senate Committee on Appropriations approved the FY2016 Energy and Water Development Appropriations Bill. The bill allocates $12.3 billion for nuclear security, including $1.7 billion for Defense Nuclear Nonproliferation. (Feinstein.senate.gov, 05.19.15, Appropriations.senate.gov, 05.21.15).
The U.S. House of Representatives’ Armed Services Committee is pushing a bill that would prohibit funding for fixed radiation detectors to catch nuclear smugglers – both for installing new ones and even for maintaining the ones U.S. taxpayers have already paid billions to install. (The Hill, 05.20.15).
U.S. Senate Judiciary Committee Chairman Chuck Grassley has introduced bipartisan legislation, dubbed the Nuclear Terrorism Conventions Implementation and Safety of Maritime Navigation Act of 2015 that amends various provisions of the federal criminal code to implement several important multilateral treaties. (Congressional Documents and Publications, 05.13.15).

Iran nuclear issues:

No significant developments.

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

Russia has closed a transport corridor that had allowed NATO militaries to deliver supplies to Afghanistan through Russian territory, according to a decree signed by Prime Minister Dmitry Medvedev. Moscow's decision to close the transport corridor, which NATO used extensively to supply its decade-long deployment in Afghanistan, was made "in connection with the termination of the provisions of United Nations Security Council Resolution 1386," said the decree, dated May 15. (The Moscow Times, 05.18.15).
NATO’s increasing activity is threatening not only Russia but also its partner states, the head of the Russian Security Council has told his colleagues from the CSTO military bloc. “The United States’ and NATO’s aggressiveness towards Russia is on the increase. They boost their advance potential in the direct vicinity of our borders and this creates threats not only for us, but also for our allies,” Nikolai Patrushev said. (Russia Today, 05.20.15).
NATO Secretary-General Jens Stoltenberg says he has told Russian Foreign Minister Sergei Lavrov that Moscow must end its support for the separatists in eastern Ukraine. Stoltenberg spoke in Brussels on May 19 after holding talks with Lavrov on the sidelines of the annual session of the Council of Europe's Committee of Ministers. (RFE/RL, 05.19.15).
Russia has deployed equipment during the conflict in eastern Ukraine that can be used for nuclear weapons, NATO’s top military commander said. While there’s no “direct evidence” that the Kremlin has made deployments of nuclear arms, U.S. Air Force General Philip Breedlove said on Thursday, “that does not mean that they may not have happened.” Russian Presidential Press Secretary Dmitry Peskov referred to the statement as unfounded allegations. “This statement, like many others … is based on unfounded accusations against Russia as we have pointed out time and again,” he said. (Bloomberg, Russia Today, 05.21.15).
U.S. Air Force General Philip Breedlove said NATO will assess a joint request from the Baltic nations -- Latvia, Lithuania and Estonia -- for more troops to counter increased threats from Russia, with which they share a border. (Bloomberg, 05.21.15).

Missile defense:

The head of Ukraine's National Security Council has said Kyiv is open to placing parts of a missile-defense system on Ukrainian soil to ward off the potential risk of attacks from Russia. The United States or NATO do not have any plans to place ballistic missile defense systems on the territory of Ukraine, US Department of State deputy spokesperson Marie Harf told journalists on Wednesday. “The deployment of missile defense elements in Ukrainian territory would entail the need for Russia to take countermeasures," Kremlin spokesman Dmitry Peskov said. (RFE/RL, 05.20.15, Sputnik, Washington Post, 05.21.15).

Nuclear arms control:

Mikhail Ulyanov, the Director of the Department for Non-Proliferation and Arms Control at the Russian Foreign Ministry, said that Russia may be forced to increase the size of its nuclear arsenal in response to provocative U.S. actions. The official elaborated on the alleged U.S. provocations, which included: “U.S. missile defense program, the U.S. refusal to negotiate on the ban on weapons in outer space, the U.S. military's Prompt Global Strike (PGS) system, Washington's de facto refusal to ratify the Comprehensive Test Ban Treaty, and the serious imbalance in conventional weapons in Europe.” (National Interest, 05.18.15).
The Obama administration is considering a range of options to respond to Russia’s violation of the Intermediate Nuclear Forces Treaty. Part of the response could involve deploying new U.S. weapons to Eastern Europe. Some of the more aggressive options would include deploying more land-based military hardware to NATO allies for missile defense near the Russian border, to counter the new Russian cruise capability. Expanded targeted sanctions and added patrols near Russian space are less aggressive options on the table. Russia denies violating INF. Mikhail Ulyanov, Director of the Department of Non-Proliferation and Control of Armaments at the Russian Foreign Ministry, said: “Since the signing of the INF Treaty, military technology has made great progress. Russia accuses the U.S. of violating the INF Treaty, in particular in its use of attack unmanned aerial vehicles.” (Kommersant/RBTH, 05.18.15, Bloomberg, 05.20.15).
“Perhaps no one can currently answer the question of whether or not it is possible to sign a new agreement in the sphere of the reduction of strategic offensive weapons. We, at least, do not have this question on our agenda,” Mikhail Ulyanov, Director of the Department of Non-Proliferation and Control of Armaments at the Russian Foreign Ministry, said: (Kommersant/RBTH, 05.18.15).

Counter-terrorism agenda:

Newly declassified documents seized when U.S. forces stormed Osama bin Laden's compound in 2011 indicate that al Qaeda had been planning a series of attacks in Russia but the plots failed because of "bad luck. “We had sent a number of brothers to Britain and Russia and Europe to be prepared and ready to work before the end of the year," the undated memo reads. Attacks in Russia were supposed to focus on either "exploding the gas line or the American embassy" in Moscow, the memo said. (The Moscow Times, 05.21.15)
Iraqi Prime Minister Haidar al-Abadi on Thursday met with President Vladimir Putin who offered Iraq army Russian military aid in its battle against Islamic State militants. Russian Foreign Minister Sergey Lavrov told reporters ahead of Abadi and Putin talks that Moscow will make “all efforts” to strengthen Iraq’s military capability and help the country in pushing back Islamic State from seized territories. (BasNews, 05.22.15).
Qiwi, which manages Russia's largest payment system, said it is not involved in schemes to provide financing to the Islamic State extremist group, the company's press service said. A number of Russian and Kazakhstani news sources have reported that Islamic State fighters from the North Caucasus are collecting funds to finance terrorist activities using the Russian payment system.(Interfax, 05.18.15).
In the Islamic State, where martyrdom is the aspiration of many militants, reports are circulating that “wait lists” to become suicide bombers in Iraq are being manipulated to favor Saudi fighters. The accusation of favoritism comes from Kamil Abu Sultan ad-Daghestani, a pro-Islamic State preacher from Dagestan. Kamil reiterated complaints of nepotism passed on to him by Akhmed Chatayev a senior Chechen militant in charge of the Islamic State’s Yarmouk Battalion in Syria. (Foreign Policy, 05.21.15).
Boston Marathon bomber Dzhokhar Tsarnaev was sentenced to death by lethal injection, but he won't be executed for years — maybe decades — as the appeals process runs its course. The next step is a formal imposition of the sentence. Then, the U.S. Bureau of Prisons will decide where he'll be housed. (AP, 05.17.15).

Cyber security:

The head of Russia's media watchdog has threatened Google, Facebook and Twitter with fines and bans unless the companies comply with Moscow's demands to block content it deems extremist and to share information about online traffic on individual pages, a news report said. (The Moscow Times, 05.20.15).

Energy exports from CIS:

EU summit supports setting up a southern natural gas corridor linking gas deposits of the Caspian Sea area to EU member-states in bypass of Russia and start of reversed-flow deliveries of gas to Ukraine from Hungary, Poland and Slovakia, the participants said in a final statement on Friday. (Tass, 05.22.15).
The European Union is increasing pressure on Washington to include an energy chapter in a planned trans-Atlantic trade deal that would allow U.S. exports of natural gas and oil and reduce the bloc's dependency on Russia. (Wall Street Journal, 05.17.15).
Russia is not coordinating its oil policy with OPEC, the chief executive of LUKoil, the country's second biggest oil producer, said on Tuesday. (Reuters, 05.19.15).

Bilateral economic ties:

After Western sanctions began shutting down sales of high-tech internet equipment to Russia’s military and security forces, employees at technology giant Cisco Systems Inc. altered sales records and booked deals under a false customer name, according to internal company documents. The intent, according to a confidential source with deep knowledge of Cisco’s Moscow operations, was to dodge the sanctions by masking the true customers behind more innocuous-sounding straw buyers. Top officials at Cisco vehemently denied the allegations. Cisco did not violate sanctions or attempt to do so, they said. (Buzz Feed, 05.20.15).

Other bilateral issues:

Russian Foreign Minister Sergei Lavrov has discussed the situation in Syria and Yemen as well as Ukraine with U.S. Secretary of State John Kerry in a phone call. U.S. Special Envoy for Syria, Daniel Rubinstein, paid a follow-up visit to Moscow and held talks on Monday with Lavrov's deputy Mikhail Bogdanov, Putin's Middle East special envoy. (The Moscow Times, 05.22.15).
Russian Foreign Minister Sergei Lavrov said in reference to U.S. Secretary of State John Kerry’s recent visit to Sochi: “Not only did he not mention Crimea during the press conference; he also did not speak about it with Vladimir Putin or with me. Draw your own conclusions.” (RBTH, 05.20.15).
"The situation in our bilateral relations is generally depressing and we blame Washington for that," Russian Deputy Foreign Minister Sergei Ryabkov said after meeting with U.S. Assistant secretary of State Victoria Nuland in Moscow on May 18. Ryabkov denied the possibility of any geopolitical deals or exchanges with the U.S. in the context of Ukrainian settlement and the solution of the Syrian crisis. Asked if Nuland 's visit was a sign of improving ties, Kremlin spokesman Dmitry Peskov told reporters: "Yes." (Reuters, 05.18.15, Interfax, 05.18.15).
Specialists of the Russian Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing met with U.S. Embassy representatives on May 20 to discuss joint efforts to confine the Ebola virus. (Interfax, 05.21.15).
According to McKinsey & Company, U.S. spent roughly 2.5 percent of our gross domestic product on infrastructure needs between 2002 and 2012. Russia spent nearly twice that much. (Washington Post, 05.20.15).
Hillary Clinton is known to half of Russians, primarily, as the former first U.S. lady (26 percent) and as the U.S. presidential candidate (19 percent), Russia’s VTsIOM pollster said. More than a third of Russians who know about Clinton, disapprove of her (42 percent), 17 percent approve, and 41 percent did not have an opinion about it. (RBTH, 05.21.15).

II. Russia news.

Domestic politics, economy and energy:

Following a recent staff visit to Russia, the IMF says in a statement that it now predicts a 3.4 percent contraction in Russian GDP this year and says "growth should resume" in 2016. In its World Economic Outlook last month, the organization had predicted a 3.8 percent contraction this year, with GDP down a further 1.1 percent next year. (AP, 05.21.15).
Russian industrial output fell by 4.5 percent in April compared to the same month in 2014, following a 0.6 percent year-on-year fall in March, data published by the Rosstat state statistics service showed Wednesday. (The Moscow Times, 05.20.15).
Russian Finance Minister Anton Siluanov warned on Wednesday the country would face no choice but to rein in public spending over the next few years. Siluanov said that he now expects a deficit of no more than 2.4 percent of GDP in 2016 — double a projection made two months ago — and a balanced budget by 2018 rather than 2017 as previously targeted. This year the deficit is projected at 3.4 percent, slightly below a previous 3.7 percent projection. The ministry proposes cutting 864 billion rubles ($17 billion) from the 2016 budget. (Reuters, 05.21.15,The Moscow Times, 05.19.15).
The central bank bought $200 million on Tuesday, bringing total purchases to nearly $1 billion since last Wednesday. (Wall Street Journal, 05.21.15).
Russia's import substitution program will cost at least 2.5 trillion rubles ($50 billion), Industry and Trade Minister Denis Manturov said. Russia's shipbuilding industry is dependent on foreign suppliers for 70 percent of the electronic equipment installed aboard its ships, despite ongoing government efforts to replace foreign hardware with domestic alternatives. (The Moscow Times, 05.20.15, 05.21.15).
Senior ruling-party politicians are throwing their weight behind a proposal to move Russia's next parliamentary elections up three months to September 2016, a shift that could further disadvantage opposition candidates by relegating the campaign to vacation season. (Wall Street Journal, 05.22.15).
The upper house of the Russian parliament, the Federation Council, has approved a controversial bill that would ban "undesirable" foreign and international non-governmental organizations from operating in Russia. (RIA Novosti, 05.20.15).
About 5,000 Russians emigrated to Israel last year against about 4,000 in 2013, according to Israeli migration data. Yuri Mosha, who runs a consultancy in New York for Russians trying to emigrate to the US, says his business has three times as many clients now as it had a year ago. (FT, 05.20.15).

Defense and Aerospace:

A Russian naval design bureau will unveil a new design for a massive aircraft carrier at an upcoming maritime defense industry show in St. Petersburg amid a major Russian arms buildup, magazine IHS Jane's reported Friday. (The Moscow Times, 05.15.15).
Russian officials have begun investigating the loss of a commercial satellite and a separate glitch on the International Space Station that have sparked safety concerns. (RFE/RL, 05.17.15).

Security, law-enforcement and justice:

Ingushetian leader Yunus-Bek Yevkurov claimed in a recent interview that the North Caucasus insurgency in Ingushetia had been "defeated," and currently numbered just 14 men. Casualty statistics for 2014 complied by the news agency Caucasian Knot indicate that there has indeed been a decline in insurgent activity in Ingushetia, with the total number of casualties falling by more than 60 percent, from 94 to 37. (RFE/RL, 05.19.15).
A Lithuanian intelligence officer has been caught red-handed at the moment he was receiving secret information, the Russian Federal Security Service has reported. (Interfax, 05.20.15).
Aleksandr Perepilichny, a wealthy Russian businessman who died in Britain more than two years ago may have been poisoned using extracts from a deadly plant, a pre-inquest hearing has been told. RFE/RL, 05.19.15).
The State Duma has refused to conduct a parliamentary investigation into the death of Russian opposition leader Boris Nemtsov. (The Moscow Times, 05.18.15).
Russian former real estate tycoon Sergei Polonsky was deported to Russia Sunday after being arrested Friday on charges that he had overstayed his visa in Cambodia. (The Moscow Times, 05.15.15).
Vitaly Lopota, former head of famed Russian space company Energia was charged with abuse of power and placed under house arrest by a Moscow court May 21. (RFE/RL, 05.22.15).

Foreign affairs and trade:

The UN Security Council on May 19 strongly condemned what it called a "terrorist attack" on the Russian Embassy in Syria's capital. (RFE/RL, 05.20.15).
Russian Foreign Minister Sergei Lavrov has said the crisis in Macedonia has been orchestrated from the outside. He said these events were connected to Macedonian Prime Minister Nikola Gruevski’s refusal to join the sanctions against Russia over the Ukraine conflict. (RFE/RL, 05.20.15).
German Chancellor Angela Merkel said Thursday that there would not be any Group of Eight meetings with Russia as long as it fails to comply with basic common values of democracy and states based on rules of law. (Reuters, 05.21.15)
A German expert who was taking part in a seminar organized by a Russian anti-torture NGO has been ordered to leave Russia for violating migration rules. Two more foreign experts are apparently set to face a court ruling over their participation in the event run by the Nizhny Novgorod-based Committee Against Torture. (The Moscow Times, 05.21.15).
Norilsk Nickel is in advanced talks with Chinese companies in the hope of securing financing for a large new copper mine, in a demonstration of how Russian groups are increasingly looking east for funds. (FT, 05.19.15).
Russian tycoon Mikhail Fridman's LetterOne Group has named former Swedish Foreign Minister Carl Bildt, a vocal critic of Russian President Vladimir Putin, as an adviser to its board. (RFE/RL, 05.15.15).
Moscow is interested in promoting confidence-building measures on the Korean Peninsula and the phased reunification of the Korean nation, State Duma Speaker Sergei Naryshkin said in Seoul. (Interfax, 05.19.15).
Vietnam has invested $968 million in Russia in the first four months of this year. (Interfax, 05.20.15).
Tokyo has signaled it would like Vladimir Putin to finally resolve a territorial dispute and sign a peace treaty 70 years after the end of World War II. Japanese Foreign Minister Fumio Kishida said he plans to visit Moscow, as preparations for Vladimir Putin’s visit to Japan gain momentum. (Interfax, 05.21.15, Russia Today, 05.20.15).
Sweden's military says its fighter jets intercepted two Russian bombers flying in international air space over the Baltic Sea close to the Swedish border on May 21. (RFE/RL, 05.22.15).

Russia's neighbors:

Leaders of the European Union and six former Soviet republics concluded a summit in Riga on Friday by issuing a joint declaration on maintaining their "Eastern Partnership.” The text included a complex reference to Moscow's annexation of Crimea last year that satisfied Ukraine as well as Armenia and Belarus, which supported Russia in a U.N. vote on the issue. European Council President Donald Tusk said ahead of the summit that Georgia, Moldova, and Ukraine have the right to aspire to EU membership but that he will not deliver an “empty promise” about the prospects of such integration. (Reuters, 05.22.15, RFE/RL, 05.19.15).
The European Union says Russia has dropped its demands for a further delay in a landmark EU-Ukraine trade deal and accepts that it will now begin next year. "The reference that the [trade agreement] enter into force on January 1, 2016, was not contested by the Russian delegation," Trade Commissioner Cecilia Malmstroem said. (RFE/RL, 05.18.15).
The International Republican Institute has released the results of a 17,000 respondent poll it commissioned earlier this spring on Ukrainians' attitudes. 57% of respondents to the poll would choose to join the European Union (versus 13% who want to join the Russia-led customs union) while 47% would vote yes in a referendum about joining NATO (versus 29% who would vote no). On NATO membership the percentage of "nos" ranged from 51% in Odessa to 4% in Lviv. (Forbes, 05.20.15).
Three Ukrainian servicemen have been killed and 12 wounded in the latest clashes between government forces and Russian-backed separatists, further eroding a three-month-old ceasefire, Kiev's military said on Friday. One worker has been killed and two wounded in eastern Ukraine in heavy shelling. Earlier three Ukrainian servicemen have been killed and 17 wounded, a Ukrainian military spokesman said on Sunday. (Reuters, 05.17.15, The Moscow Times, 05.22.15,RFE/RL, 05.22.15).
Kremlin spokesman Dmitry Peskov said on Friday that Russia is "taking the necessary steps" to free two of its nationals captured by Ukrainian forces in the east of the country. European mediators in the Ukrainian crisis say the two had confessed to being members of the Russian armed forces sent in to back up pro-Moscow separatist fighters. However, Russia’s Defense Ministry had issued a statement earlier in the week saying the two had resigned their positions in the military in December. (Wall Street Journal, RFE/RL, 05.22.15).
Amnesty International says both warring sides in eastern Ukraine are almost daily perpetrating war crimes, including torture and summary killings of prisoners. (RFE/RL, 05.22.15).
Buried over 600 pages deep into the 2016 U.S. military budget, which was approved by the House of Representatives last week, is a small section authorizing $200 million in military aid to Ukraine's beleaguered armed forces. (The Moscow Times, 05.21.15).
The Ukrainian Verkhovnaya Rada has terminated five agreements between the Ukrainian and Russian governments concerning military cooperation between the two countries. (RBTH, 05.21.15).
Russian Foreign Minister Sergei Lavrov said: “Read the text of the Minsk agreements: Control of the border must be established at the very end of this process. They leave aside the fact that Kiev is obliged to introduce a law on special status and instead turn everything upside down by saying that this is not special status, but occupation.” (RBTH, 05.20.15).
Ukraine's cash-starved government has asked parliament to approve a law granting the cabinet "the right, if necessary, to stop payments to foreign debt holders." Russia will seek redress in international courts if Ukraine does not respect the terms of its foreign debt repayments, Russian Finance Minister Anton Siluanov said an executive at BlackRock Inc., one of the largest holders of Ukrainian government debt, said bondholders negotiating the country's debt restructuring should consider taking losses on their investments. (Wall Street Journal, 05.21.15, Interfax, 05.20.15, RFE/RL, 05.18.15).
The separatist conflict in eastern Ukraine drove the country's exports to Russia down 61.3% to $1 billion in the first quarter of 2015 compared with last year, while exports to the EU slipped one-third to $3.3 billion. Gross domestic product shrank 17.6% in the first quarter, with industrial output down by more than one-fifth, the agency said. (Wall Street Journal, 05.17.15).
A recent Ukrainian law condemning the Communist and Nazi regimes poses a threat to freedom of expression and free media, the European security and human rights watchdog has said. (Russia Today, 05.18.15).
Canada will allocate CAD 38.5 million to Ukraine for the state border management, for support of small- and mid-sized business, and for nuclear security. (Ukrainian News, 05.21.15).
Economic growth in the eight ex-Soviet states will slow to an average 3.2 percent this year from 5.3 percent in 2014, the International Monetary Fund said in a new regional outlook. (Moscow Times, 05.19.15).
Belarus' economy fell 2 percent in the first three months of the year. (The Moscow Times, 05.19.15).
Kyrgyzstan's president has signed a law ratifying treaties on his country's accession to the Eurasian Economic Union, the final step required by his country to join Russia, Kazakhstan, Belarus, and Armenia in the trade grouping. (RFE/RL, 05.21.15).
Kyrgyzstan parliamentary committee on foreign affairs on May 19 in the second reading the draft law on accession to the Convention on the Physical Protection of Nuclear Material. (Central Asia News, 05.19.15).
Georgia's president said Tuesday that Russia is poised to use its armed forces to expand further into former Soviet states. (AP, 05.19.15).
Retired Russian general Anatoly Khrulyov who was wounded in Moscow's war against Georgia in 2008 has been appointed to head the military in the breakaway Georgian region of Abkhazia. (RFE/RL, 05.18.15).
A recent opinion poll carried out by the Institute for Public Policy found that only 32 percent of those surveyed in Moldova would support joining the European Union while 50 percent said they would prefer to join a customs union promoted by Russia. (New York Times, 05.21.15).

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