Russia in Review

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

Nuclear security agenda:

No significant developments.

Iran nuclear issues:

Iran and six world powers broke off nuclear negotiations ahead of schedule Friday, but top Russian negotiator Sergey Ryabkov said that while some disputes remain, negotiators were expected to "finish their main work" before the talks resume next week. (AP, 03.20.15).

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

In a documentary titled "Homeward Bound' that was aired on Russian television on Sunday, Russian President Vladimir Putin disclosed that he was prepared to put Russia's nuclear forces on alert to secure Crimea and deter Western intervention and that he was ready for "the worst possible turn of events.” (International Business Times, 03.16.15).
A spokesman for Lithuania’s Ministry of Defense said that 11 Russian military aircraft were spotted by NATO’s Baltic Air Police Mission flying in international airspace near Lithuania without the pre-filed plans for their route as Russian military exercises continued this week. The Ministry also reported the jets had their on board transponders switched off and they did not maintain radio communication. Latvia's military said on Tuesday that a Russian naval ship was on the edge of the country's territorial waters. The ongoing surprise check in the Russian Armed Forces is completely transparent and limited to the territory of Russia, Deputy Defense Minister Anatoly Antonov said on Thursday. (Newsweek, 03.18.15, RBTH, 03.19.15, Moscow Times, 03.17.15).
The head of the Collective Security Treaty Organization of the Commonwealth of Independent States says its military forces could be at the Tajik-Afghan border within three days if a conflict broke out there. (RFE/RL, 03.14.15).

Missile defense:

No significant developments.

Nuclear arms control:

"We have not violated the treaty," a Russian diplomatic source said of the INF treaty. "The upshot is that the U.S. is considering the possibility of breaching the treaty, which has been in force since 1988. How can we treat that? Decent people ought to observe the treaty instead of threatening to violate it," the source said. (Interfax, 03.19.15).

Counter-terrorism agenda:

Russian President Vladimir Putin has signed a decree appointing Oleg Syromolotov a deputy Russian foreign minister on antiterrorism policy. Syromolotov has earlier served at the Russian Federal Security Service and was responsible for security issues during the 2014 Winter Olympics in Sochi (Interfax, 03.19.15).

Cyber security:

Russian cyber-security firm Kaspersky Lab may have ties to Russia's Federal Security Service, according to a report published by Bloomberg Friday. However, Kaspersky's founder, Eugene Kaspersky, on Friday refuted the claims on his blog, claiming that the company had nothing to hide. (Moscow Times, 03.20.15).
Russian man Vadim Polyakov detained in Spain at the request of U.S. law enforcement officials on suspicion of cyber fraud will soon be extradited to the U.S. (Moscow Times, 03.20.15).

Energy exports from CIS:

European Union leaders said Thursday they would move to break down barriers in the bloc's energy market and endorsed stronger regulation of national gas-supply contracts, most notably with Russia. The leaders also said they would work on constructing a so-called energy union. According to diplomats, Donald Tusk and Poland, however, have become isolated in pushing for the European Commission to be given a mandate to reject companies’ gas contracts if Gazprom was seen to overcharge or break EU law. On Friday, the EU hopes to tackle a more acute supply threat, kicking off another round of talks between Russia and Ukraine on gas shipments beyond March. (Wall Street Journal, 03.19.15, Financial Times, 03.20.15).
Azerbaijani President Ilham Aliyev and Georgian President Giorgi Margvelashvili were in Turkey on March 17 to attend a ceremony marking the start of the construction of the Trans-Anatolian Pipeline. (RFE/RL, 03.17.15).

Bilateral economic ties:

U.S. oil and gas major ExxonMobil has asked the Russian government to reimburse taxes worth "several billion rubles" it says it overpaid on a project in the Far East of Russia, the Kommersant daily reported on Wednesday. (Reuters, 03.18.15).
General Motors Co. will indefinitely shutter its Russia assembly plant and significantly scale back its vehicle portfolio there, a strategic shift in response to regulatory pressure, economic uncertainty and a dire outlook for Russian auto sales. The Kremlin said Thursday that it regretted a decision by General Motors' decision. (Wall Street Journal, 03.18.15, Reuters, 03.19.15).

Other bilateral issues:

Russian President Vladimir Putin, speaking in a prerecorded documentary about Russia's seizure of Crimea, accused the United States of being "puppeteers" behind what he described as a coup against Viktor Yanukovych -- assertions the United States has dismissed as false. (RFE/RL, 03.15.15).
The Russian Foreign Ministry has said it is puzzled by Washington's claims that the use of Vietnam's Cam Ranh airport by the Russian Air Force may fuel regional tensions, whereas the United States is stepping up its activity in the region. (Interfax, 03.13.15).
Russian Foreign Minister Sergei Lavrov has accused the United States and "aggressive" European Union members of concerted efforts to spoil Russia's planned celebrations to mark the 70th anniversary of the end of World War II. (RFE/RL, 03.17.15).
Relations between the U.S. and Russia have become defined by one word. "Compartmentalization,” said Celeste Wallander, a member of Barack Obama's National Security Council. (CNN, 03.17.15).
The U.S. Air Force plans to release a draft request for proposals next month in its bid to end U.S. reliance on Russian rocket engines, and could award initial study contracts by the end of the 2015 fiscal year, Air Force officials have said. (Reuters, 03.18.15).
U.S. space rocket manufacturer United Launch Alliance is pressuring the U.S. Congress to lift a ban on Russian rocket engines. (Moscow Times, 03.17.15).

II. Russia news.

Domestic politics, economy and energy:

Russian President Vladimir Putin said on Thursday it was still too soon to feel confident about the country's economy, although his ministers said the worst is over. Speaking to a conference of Russian businessmen, Putin said the Central Bank's main interest rate, now at 14 percent, remains high but that the level was warranted by the situation. (Reuters, 03.19.15).
Finance Minister Anton Siluanov said on Thursday that the worst was over for Russia's economy. Gross domestic product fell 1.5 percent in January in annual terms, but Siluanov said there were signs the economy had now entered a period of stabilization. (Reuters, 03.19.15).
Russia has changed this year's budget plans and now expects to spend 3.1 trillion rubles ($49.81 billion) from the country's Reserve Fund, according to Finance Ministry data. (Reuters, 03.16.15).
Russia will offer lenders 20 billion rubles ($320 million) as part of an anti-crisis plan to subsidize mortgage provision as the ruble devaluation and high interest rates cause problems for banks and other credit organizations. (Moscow Times, 03.16.15).
Russia's privatization drive has in five years brought the budget only 21 percent of the sum originally planned, the country's Audit Chamber said in a statement Thursday. (Moscow Times, 03.19.15).
President Vladimir V. Putin reappeared in public on Monday after a curious absence of more than a week, appearing healthy, offering no explanation and commenting wryly that things “would be boring without rumors.” (New York Times, 03.16.15).
President Vladimir Putin said Thursday that some foreign countries were impeding the return of capital to Russia under an amnesty announced last year. (Moscow Times, 03.19.15).
The Russian government has set up a federal commission for developing the Arctic, the Kommersant newspaper reported Tuesday. The commission will coordinate all other bodies involved in the Arctic to evaluate the effectiveness of resource use, make decisions regarding regional development and ensure the realization of priority investment projects, the report said, citing an unnamed government source. (Moscow Times, 03.17.15).
Russian billionaire Mikhail Fridman is preparing to sell North Sea gas fields at the heart of its fierce battle in Britain, bowing to government pressure and choosing to avoid a legal battle he previously threatened. (Reuters, 03.18.15).
Russia's economy shrank 0.7% on the year in the first quarter, Russian news agencies reported Monday, citing the central bank's first deputy chairwoman, Ksenia Yudaeva. (Wall Street Journal, 03.16.15).’
Nissan Motor Co. said Tuesday that it was suspending production at its St. Petersburg plant between March 16 and March 31 due to weak sales in the Russian market. (Reuters, 03.17.15).
Mobile TeleSystems said its net profit fell 91.7% in the fourth quarter to 1.6. billion rubles ($25.88 million). (Wall Street Journal, 03.16.15).
A Moscow court has fined prominent Russian human rights advocacy group, called For Human Rights, for refusal to register as a "foreign agent" under a law Kremlin critics say is putting a chill on civil society. (RFE/RL, 03.18.15).
The number of Russians who wish to permanently leave their country has hit historic lows, a new poll by independent pollster Levada showed Friday, despite an economic crisis. Overall, 83 percent of respondents surveyed said they would "rather not" and "absolutely not" emigrate from Russia, while only 12 percent said they would want to leave the country forever. (Moscow Times, 03.20.15).
The Russian parliament's lower house has rejected a lawmaker's proposal to hold a minute of silence honoring slain opposition politician Boris Nemtsov, a former lawmaker in the State Duma. (RFE/RL, 03.17.15).

Defense and Aerospace:

Russian President Vladimir Putin personally directed his nation’s capture of Ukraine’s Crimean Peninsula, he said in a documentary aired Sunday. Putin said that Russia had flooded the Black Sea peninsula with special forces officers in the days after President Viktor Yanukovych fled Kiev in February 2014, and Putin said that the success of the precision operation surprised even him. (Washington Post, 03.15.15).
Russia's defense minister says President Vladimir Putin has ordered the navy's Northern Fleet and paratrooper units to go on full alert as part of snap military exercises in the Arctic. Tu-95 and Tu-22M3 strategic bombers, capable of carrying nuclear bombs, were being sent to Crimea as part of military exercises taking place around Russia. And Iskander missiles would be sent to the Kaliningrad region. (RFE/RL, 03.16.15, RFE/RL, 03.18.15).

Security, law-enforcement and justice:

Russian President Vladimir Putin was furious when he learned of the killing of Boris Nemtsov, which occurred on a bridge near the Kremlin, four people familiar with the matter said. Putin, who took charge of the probe and then disappeared from public view for a week, became even more alarmed when investigators said they’d traced a hit list of other critics to Chechnya, another person said. (Bloomberg, 03.19.15).
Defendants in the murder of politician Boris Nemtsov have refused to cooperate with the police, a source familiar with the situation told Interfax. A source close to the investigative group told Interfax on Monday that the accusations brought against the detainees had been changed from a crime motivated by greed or mercenary reasons to a political or religious hate crime. (Interfax, 03.17.15).
Adam Osmayev, a Chechen commander of a Ukrainian volunteer battalion has denied any involvement in the murder of Russian opposition figure Boris Nemtsov. (RFE/RL, 03.15.15).
The head of the Russian presidential human rights council says he has not been allowed to visit detained suspects in the killing of opposition politician Boris Nemtsov. (RFE/RL, 03.16.15).
Dmitry Kovtun, one of two Russians accused of poisoning former KGB spy Alexander Litvinenko with a radioactive isotope in London in 2006 is willing to give evidence by video link to a public inquiry, a lawyer for the inquiry said Thursday. (Reuters, 03.20.15).
A Moscow court has sanctioned the arrest of Alexander Gorshkolepov, the deputy head of the Russian defense ministry’s property relations department, who is suspected of having accepted millions of rubles in bribes, the Interfax news agency reported Tuesday. (Moscow Times, 03.17.15).
A leading social-media account affiliated with the Caucasus Emirate's affiliate in Syria has called on its supporters to warn their friends and family against the militant group Islamic State (IS)."You must warn all the brothers and sisters, husbands and wives with whom you are acquainted against the Islamic State organization," the account wrote on March 13. (RFE/RL, 03.13.15).
A man accused of buying food for a militant in Russia's Chechnya region faces trial on charges of acting as an accomplice to armed outlaws. (RFE/RL, 03.19.15).

Foreign affairs and trade:

European Union leaders agreed on Thursday to keep sanctions on Russia in place until the end of this year at the earliest. The sanctions, imposed because of Russia's alleged military intervention in Ukraine, are now linked to "complete implementation" of a ceasefire deal. (BBC, 03.19.15).
Russia is “very unhappy” with the European economic sanctions being linked to the full implementation of a peace deal agreed in Minsk last month, Konstantin Kosachev, chairman of the foreign affairs committee in the Russian parliament, said on Friday. (WSJ, 03.20.15).
While Britain has revoked many licenses for arms exports to Russia, including those for sniper rifles and body armor, a parliamentary report said export deals worth more than 168 million pounds were still outstanding. (Reuters, 03.20.15).
EU officials said a dozen public relations and communications experts would start work by the end of March in Brussels with a brief to counter what the EU says is deliberate misinformation coordinated by the Kremlin over Moscow's role and aims in Ukraine and elsewhere in Europe. (Reuters, 03.20.15).
Russian President Vladimir Putin has a visit planned to China in September. A Russian government delegation had been invited to a parade in China on Sept. 3 to mark 70 years since the end of the World War Two. Putin on Thursday met with Li Zhanshu, head of the General Office of the Communist Party of China on Thursday. (Moscow Times, 03.20.15, CCTV, 03.19.15).
The leaders of more than 30 countries have already confirmed that they will attend May 9 celebrations in Moscow marking the 70th anniversary of the victory over Nazi Germany in World War II. (Interfax, 03.17.15).
The Stockholm International Peace Research Institute (SIPRI) said in its annual report on March 16 that the United States made 31 percent of all exports of conventional weapons in 2014, followed by Russia at 27 percent of the world's total. The report says Russian exports increased by 37 percent between 2005-2009 and 2010-14. (RFE/RL, 03.16.15).
The chief analyst of Sweden’s SAPO's counterintelligence agency, Wilhelm Unge, said in Stockholm on March 18 that and as many as one-third of Russia's diplomatic staff in Sweden were spies. Unge said SAPO had stopped several attempts last year by Russia to obtain Swedish technology for its military forces. (RFE/RL, 03.18.15).

Russia's neighbors:

Russia said Tuesday that it would not hand back Crimea to Ukraine, despite warnings by the U.S. and European Union that they will not drop sanctions over the Black Sea peninsula's annexation a year ago. (Reuters, 03.17.15).
Chinese Premier Li Keqiang said on March 15 that his government respects the territorial integrity and sovereignty of Ukraine, but would not be drawn on whether China considers Crimea to be part of Ukraine or Russia. (RFE/RL, 03.15.15).
Ukraine’s Verkhovnaya Rada approved legislation on March 17 setting the boundaries of territory to be granted "special status" in Eastern Ukraine entailing a measure of autonomy but stipulated that it should come into force only after elections are held under Ukrainian law. Russia and rebels said the stipulation endangers the whole agreement. Russian Foreign Minister Sergei Lavrov says that Ukrainian legislation is a "glaring violation" of a European-brokered peace deal signed last month in Minsk. (RFE/RL, 03.16.15, RFE/RL, 03.18.15).
U.S. Vice President Joe Biden and Ukrainian President Petro Poroshenko have agreed that the future of sanctions against Russia must be linked to the full implementation of a peace agreement reached last month in Minsk. (RFE/RL, 03.19.15).
Lt. Gen. Ben Hodges, top U.S. Army commander in Europe, conceded that arming Ukraine could help its fragile pro-Western government on the battlefield, at least in the short term. But he said that wouldn’t be enough to fundamentally ensure that Ukraine doesn’t lose more territory to Russia. (Foreign Policy, 03.17.15).
U.S. will begin training Ukraine’s National Guard in April, U.S. Army Europe Commander Ben Hodges said. Some 290 U.S. Army paratroopers will travel to western Ukraine next month to train three battalions of Ukrainian national guard troops. (RFE/RL, 03.20.15, Tass, 03.17.15).
Russia on Thursday warned that the presence of Western military instructors in Ukraine could put the peace process at risk. (DPA, 03.19.15).
Ukrainian military pilot Nadia Savchenko says she has resumed her hunger strike in a Russian jail and is prepared to die if she is not released. (RFE/RL, 03.17.15).
Heavy machine-gun and light artillery fire pounded a district of Donetsk on Monday and pro-Russian rebels said there has been no lull in the fighting since a February cease-fire. (Reuters, 03.17.15).
Ukraine's government told bondholders it is seeking to pay back less money than it owes, taking an early step toward what is expected to be a bruising restructuring of as much as $20 billion of debt. Ukraine’s $2.6 billion of notes due July 2017 fell to a record 39.3 cents on the dollar on Thursday, signaling that creditors face steep write-downs in the restructuring. The country’s biggest foreign bondholders are Russia and Templeton. Russia said it wants $3 billion of Ukraine’s notes it owns to be repaid in full. (Bloomberg, 03.20.15, Wall Street Journal, 03.13.15).
Moscow is repeating its calls for "unbiased and transparent" investigation into downing of a passenger jet in eastern Ukraine in July following two media reports that added to evidence suggesting Russian-backed rebels shot it down. (RFE/RL, 03.20.15).
Internet data from the UK’s Atomic Weapons Establishment and other sensitive information was being sent through Ukraine, by mistake, all last week. (Independent, 03.16.15).
Between 2009 and 2013, the Clinton Foundation received at least $8.6 million from the Victor Pinchuk Foundation, according to that foundation, which is based in Kiev, Ukraine. (Wall Street Journal, 03.19.15).
Russian President Vladimir Putin says it is time to start talks on the formation of a currency union between Russia, Belarus, and Kazakhstan. (RFE/RL, 03.20.15).
Russia signed a treaty with the breakaway Georgian region of South Ossetia on Wednesday that seals almost full integration. The European Union warned that the move could threaten regional security. Georgia has warned it could be a prelude to full annexation of the territory. The separatist leader of the breakaway Georgian region of South Ossetia says the territory wants to join Russia but will not do so in the near future. (Wall Street Journal, 03.19.15, RFE/RL, 03.19.15).
Turkish President Recep Tayyip Erdogan complained about Armenia’s position on the 1915 Armenian genocide in the Ottoman Empire in a phone call with his Russian counterpart Vladimir Putin late on Tuesday. It was thus not clear whether Erdogan objected to Putin’s decision to take part in the April 24 ceremonies in Yerevan that will mark the centenary of the Armenian genocide. (RFE/RL, 03.18.15).
Officials in the disputed territory of Nagorno-Karabakh accuse Azerbaijan of attacks that have left three ethnic Armenian soldiers dead. (RFE/RL, 03.20.15).
Armenian President Serzh Sarkisian says he supports constitutional reforms that would change the system of government to a parliamentary form of government. (RFE/RL, 03.14.15).
Tajik President Emomali Rahmon has appointed his eldest son, Rustam Emomali, to head the Central Asian nation's anticorruption agency. (RFE/RL, 03.16.15).
The United States has finalized a review of its strategy for Central Asia. People familiar with the matter said they expect conclusions of the review to be made public in the coming weeks. (RFE/RL, 03.20.15).
EU foreign-policy chief Federica Mogherini has nominated a new EU special envoy to Central Asia. The nominee is Peter Burian, a senior official in the Slovak Foreign Ministry. (RFE/RL, 03.16.15).
EU leaders at the upcoming Riga gathering in May are unlikely to offer a closer relationship between Brussels and some of its eastern neighbors, outside of the already negotiated association agreements. (RFE/RL, 03.20.15).

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