Russia in Review

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

Nuclear security agenda:

A commission of the Russian Strategic Missile Force's command has begun a surprise check of the condition and nuclear security levels of the Yoshkar-Ola formation, the Russian Defense Ministry said. “The check will focus on the formation's preparedness to clean up possible emergencies involving nuclear weapons and the condition of its emergency situations unit," says a report of the Strategic Missile Forces' press service said. (Interfax, 03.04.15).

Iran nuclear issues:

U.S. Secretary of State John Kerry met with Russian Foreign Minister Sergei Lavrov on Monday morning to discuss negotiations over Iran's nuclear program, ongoing violence in Ukraine, and the crisis in Syria. (Wall Street Journal, 03.02.15).

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

NATO and Russia are exchanging heated language reminiscent of Cold War. NATO Deputy Secretary-General Alexander Vershbow said President Vladimir Putin's "aim seems to be to turn Ukraine into a failed state and to suppress and discredit alternative voices in Russia, so as to prevent a Russian 'Maidan,'" referring to the Ukraine uprising which ousted Moscow-ally Viktor Yanukovych last year. In Moscow, Russia's Deputy Defense Minister Anatoly Antonov blasted the West for trying to create "new divisive lines in Europe." (AP, 03.05.15).
A NATO flotilla arrived in the Black Sea on Wednesday to train with ships from the Bulgarian, Romanian and Turkish navies. (Reuters, 03.04.15).

Missile defense:

No significant developments.

Nuclear arms control:

No significant developments.

Counter-terrorism agenda:

The second day of the accused Boston Marathon bomber's criminal trial was dominated by testimony from victims who lost limbs, and witnesses who saw people killed and maimed by the blasts. (Huffington Post, 03.06.15).
The father of Ibragim Todashev, the workout buddy of Boston Marathon bomber Tamerlan Tsarnaev, has filed a lawsuit, seeking $30 million from the FBI for the shooting death of his son. (Boston Globe, 03.03.15).

Cyber security:

Former NSA contractor Edward Snowden, currently enjoying temporary asylum in Russia would like to go home, his lawyer Anatoly Kucherena said. (Interfax, 03.03.15).

Energy exports from CIS:

Russian oil output was broadly unchanged in February, at 10.65 million barrels per day. (Reuters, 03.02.15).
The energy ministers of Russia and Ukraine agreed Monday that a dispute over natural-gas deliveries to some rebel-controlled territories in eastern Ukraine won't affect supplies to the rest of the country and the European Union. Gazprom said on Thursday that it had received a $15 million prepayment from Ukrainian state energy firm Naftogaz following warnings supply could be cut off if no payment was made. (Wall Street Journal, 03.02.15, Reuters, 03. 05.15).
The European Union should share the cost of filling Ukraine's natural-gas storage tanks if it wants to prepare for worst-case scenarios next winter, the country's energy minister said. (Wall Street Journal, 03.06.15).
Bulgaria wants the European Commission to revive plans for the Nabucco pipeline after a Russian project seen as a rival was scrapped. (Reuters, 03.04.15).

Bilateral economic ties:

Russian billionaire Roman Abramovich has invested $5 million in Houston-based Propell Technologies, which has exclusive U.S. rights to a new fracking technology known as plasma-pulse. (Interfax, 03.03.15).
PepsiCo and Coca-Cola Hellenic have announced that they are to halt production at key plants in Russia in connection with the ongoing financial crisis. Alexei Pushkov, the head of the Russian parliament's foreign affairs committee on Thursday suggested that McDonald's and Coca-Cola should leave Russia due to Washington's confrontation with Moscow over Ukraine. (Moscow Times, 03.05.15, RBTH, 03.04.15).

Other bilateral issues:

U.S. President Barack Obama said on Monday that the killing of opposition figure Boris Nemtsov is a sign of a worsening climate in Russia. He also called on Russia's government to perform a “prompt, impartial and transparent" investigation to bring the perpetrators to justice. U.S. Secretary of State John Kerry said opposition figure Boris Nemtsov committed his life to a more democratic Russia, “and to strong relationships between Russia and its neighbors and partners, including the United States." U.S. Assistant Secretary of State Victoria Nuland says Washington expects a thorough investigation. (Reuters, 03.03.15, Wall Street Journal, 02.28.15, Wall Street Journal, 02.28.15, RFE/RL, 03.04.15).
In a statement published on the White House website, U.S. President Barack Obama said he was extending U.S. sanctions imposed on Russia last March and December in light of the continuing "unusual and extraordinary threat to the national security and foreign policy of the United States." (Moscow Times, 03.03.15).
U.S. President Barack Obama and European leaders have warned Russia that they are ready to step up sanctions. The threats came in statements issued on Tuesday after a video conference that brought together Obama and the leaders of Britain, France, Germany and Italy, as well as the head of the European Council. (Reuters, 03.04.15).
Banks controlled by three billionaire friends of Russian President Vladimir Putin have seen about $640 million of assets frozen in the U.S. as retaliation for the Kremlin's actions in Ukraine. (Wall Street Journal, 03.06.15).

II. Russia news.

Domestic politics, economy and energy:

Boris Nemtsov, the charismatic politician and opposition leader, was gunned down late Friday as he and a young woman walked across a bridge in central Moscow a couple of hundred yards from the Kremlin. (LA Times, 03.04.15).
Russian President Vladimir Putin has vowed to "do everything so that the organizations and perpetrators of the vile and cynical" murder of opposition leader Boris Nemtsov are brought to justice. Putin told senior police officials that they should “finally rid Russia of shame and tragedy.” Kremlin spokesman Dmitry Peskov told Russian news agencies: “The president said this brutal killing bears all the hallmarks of a contract murder and is of an exclusively provocative character." (Wall Street Journal, 02.28.15,RFE/RL, 02.28.15, New York Times, 03.05.15).
Thousands of people on Tuesday paid their last respects to Boris Nemtsov, including opposition leaders, widow of former Russian President Boris Yeltsin Naina Yeltsina, , Alfa Bank chairman Pyotr Aven, Onexim Group founder Mikhail Prokhorov, U.S. Ambassador John Teff and former British Prime Minister John Major. Former Soviet leader Mikhail Gorbachev said: “It's an attempt to push the situation into complications, maybe even to destabilizing the situation in the country.” Mikhail Kasyanov, former Russian prime minister, said: “In the 21st century, a leader of the opposition is being demonstratively shot just outside the walls of the Kremlin!" (Moscow Times, 03.03.15, Wall Street Journal, 02.28.15).
Russian President Vladimir Putin signed several decrees reducing the wages of public servants, including the president and the prime minister, by 10 percent in the period between March 1 and December 31. (Interfax, 03.06.15).
More than half of Russians would vote for President Vladimir Putin if a snap presidential election were held, independent Levada Center pollster said. (Moscow Times, 03.05.15).
Russia's ruble strengthened sharply in early trade on Friday as oil prices held above $60 a barrel. At 07:30 GMT, the ruble was about 1 percent stronger against the dollar at 60.19. The dollar-denominated RTS index was up 0.9 percent to 920 points, while its ruble-based peer MICEX traded 0.1 percent lower at 1,759 points. (Reuters, 03.06.15).
Year-to-date, Russian energy sector returns have risen by about 22 percent. No other country comes close. Canada, another oil- and gas-heavy nation, has seen industry equity returns rise by just 1.8 percent this year, while the MSCI USA Index is up only 0.7 percent. (CNBC, 03.02.15).
While Russia-exposed equity exchange-traded funds saw $70billion outflows in January, the decline reversed into a $310billion inflow in February, according to Markit. (Wall Street Journal, 03.05.15).
Russian Finance Minister Anton Siluanov said Wednesday that the country proposes spending 3.7 trillion rubles ($60 billion) from the Reserve Fund this year, leaving only 1.7 trillion rubles by year-end. (Reuters, 03.04.15).
Russia may face net capital outflows of around $30 billion in the first quarter and $90-$100 billion in 2015 as a whole, Finance Minister Anton Siluanov said. (Reuters, 03.02.15).
The average monthly salary across Russia shrank to 31,200 rubles ($500) in January, according to the Economic Development Ministry. The current average represents an 8 percent decrease from the same month last year in ruble terms, and a nearly 50 percent plunge in dollar terms. (Moscow Times, 03.03.15).
Soaring inflation and a reduction in real wages could have Russians spend half of their income on food by the end of this year, according to a survey of Russian retail prices by VTB Capital. (Reuters, 03.02.15).
Vladimir Potanin topped Forbes' annual list of richest Russians, placing 60th out of 1,826 billionaires worldwide with a net worth of $15.4 billion. (Moscow Times, 03.03.15).
The Russian Foreign Ministry is wary about proposals on abrogating the constitutional provision on international law's priority over national law, ministry spokesman Alexander Lukashevich said. Earlier, Russian Investigations Committee head Aleksandr Bastrykin said that the principle of unconditional priority of norms of international law over national laws stipulated by the Russian constitution and other regulatory acts runs contrary to Russia's interests. (Interfax, 03.05.15, BBC, 02.26.15).

Defense and Aerospace:

Russia’s defense spending rose 33% in 2015 while China raised its official 2015 defense budget 10.1%. (Wall Street Journal, 03.05.15).
Strategic Missile Forces Central Command’s chief, Major-General Andrey Burbin said that rearmament of the Strategic Missile Forces is ongoing as planned and by 2020 up to 98 percent of Russia’s nuclear deterrent forces will be armed with brand new weapons. (Russia Today, 03.02.15).
Russia is building a new aircraft carrier its navy chief confirmed on Monday. Also The Russian navy will receive 50 vessels of various sizes and classes this year, navy Chief Admiral Viktor Chirkov said. Some of the vessels are renovated and modernized from various classes of ships, submarines and smaller combat boats. (Moscow Times, National Interest, 03.02.15).
Russia says its long-range bombers will continue patrolling various parts of the world in the future and may extend the flights into additional regions. (RFE/RL, 03.02.15).
Irish air traffic controllers diverted commercial airliners in mid-flight to avoid possible collisions with two Russian Tu-95 strategic bombers flying across civilian routes last month with their transponders switched off, the Irish Examiner reported. (Moscow Times, 03.04.15).
Russia's Defense Ministry said on Thursday that large-scale military exercises had started in southern Russia and in disputed territories on Russia's borders. The exercises involve over 2,000 anti-aircraft troops and 500 items of weaponry and will last until April 10. (Today’s Zaman, 03.05.15).

Security, law-enforcement and justice:

Investigators say that one of the possibilities they are examining is whether the opposition movement itself arranged opposition leader Boris Nemtsov's killing so that it could rally around a martyr. They also suggested the hypothetical involvement of Islamist extremists, foreign agents or business or personal rivals - all possibilities derided by members of the opposition, who say they have little doubt Nemtsov was killed because he was one of Putin's sharpest critics. (Washington Post, 03.02.15).
Investigators have pictures of two men suspected in the killing of Boris Nemtsov, who are probably from Russia’s southern regions. “There are always suspects,” Alexander Bortnikov, head of the Federal Security Service, told reporters in Moscow on Wednesday. (Bloomberg, 03.04.15).
A day before he was shot dead near the Kremlin last week, Boris Nemtsov and his close aide Olga Shorina were discussing a sensitive investigation he was preparing into Moscow's backing for separatist fighters in eastern Ukraine. (Reuters, 03.05.15).
A pro-Kremlin newspaper has reported that investigators are "focusing on" on the possibility that Russian opposition politician Boris Nemtsov's killing was connected to the conflict in Ukraine. (RFE/RL, 03.03.15).
Anna Durytska, a 23-year-old Ukrainian model who was with Russian opposition politician Boris Nemtsov when he was gunned down near the Kremlin says she did not see the killer because he came from behind. Ukrainian authorities say they have opened a criminal investigation after Durytska said she had received threats. (RFE/RL, 03.02.15, RFE/RL, 03.06.15).
"We are confirming information about the establishment of contacts between [the IS group] and the terrorist underground in the North Caucasus. This information will be taken into account when making future decisions to strengthen Russian security and protect its national interests," Nikolai Patrushev, the head of the Kremlin's Security Council, said. Patrushev's remarks came after a number of factions from the North Caucasus-based militant group the Caucasus Emirate pledged allegiance to IS leader Abu Bakr al-Baghdadi. (RFE/RL, 03.05.15).
Russia's Defense Ministry says it has seen an increase of activity by "Islamic State (IS) units" in countries belonging to the Collective Security Treaty Organization (CSTO). Deputy Defense Minister Anatoly Antonov said the "first units" of the IS have appeared on the southern borders of Russian allies, including Tajikistan. Kyrgyzstan's State Committee for National Security said late last month that members from the IS group had penetrated southern Kyrgyzstan and Uzbekistan. (RFE/RL, 03.05.15).
Russia's Federal Security Service (FSB) has added the Islamic State (IS) group to a unified list of terrorist organizations. (RFE/RL, 02.27.15).
A court in Russia's Bashkortostan region has sentenced Radik Gilvanov, a resident of the republic, to four years and five months in a penal colony for fund-raising for the Islamic State (IS) group. (RFE/RL, 03.02.15).
A court in Moscow has convicted Russian police officer Roman Ushakov from Siberia on charges of spying for the United States and sentenced him to 15 years in prison. (RFE/RL, 03.05.15).
A Moscow court has sanctioned the arrest of Sakhalin region governor Alexander Khoroshavin on suspicion of accepting a $5.6 million bribe. (The Moscow Times, 03.05.15).

Foreign affairs and trade:

Iranian Deputy Foreign Minister Ibrahim Rahimpour said after a meeting of the working group on the Caspian Sea on March 5, "the sides have reached complete agreement" on six provisions of the Convention on the Legal Status of the Caspian Sea. (RFE/RL, 03.05.15).
The European Commission is questioning whether to drop its European Neighborhood Policy and appears open to the possibility of closer cooperation with Russia. (RFE/RL, 03.03.15).
The second of two French-built Mistral-class amphibious assault warships commissioned by the Russian navy will begin sea trials this month. (Moscow Times, 03.03.15).
Matteo Renzi, Italy’s prime minister, pleaded for Russian help to resolve the escalating security crisis in Libya. (FT, 03.05.15).
German Chancellor Angela Merkel’s spokesman said in a statement that the German chancellor is “distraught" over the “malicious murder" of Boris Nemtsov. The statement went on to say that she calls on Russian President Vladimir Putin to make sure that the murder is solved and that the perpetrators are brought to justice. French President François Hollande condemned the “hateful murder.” U.K. Prime Minister David Cameron said: “This despicable act must be fully, rapidly and transparently investigated, and those responsible brought to justice.” Italian Prime Minister Matteo Renzi has laid flowers at the site where Nemtsov was shot dead. (RFE/RL, 03.05.15, Wall Street Journal, 02.28.15).
Russia says it has formally complained to Lithuania that the Baltic country's supply of weapons to Ukraine violated its international arms trade commitments. (RFE/RL, 02.27.15).
Moscow is considering the possibility of importing ingredients from Western countries, to make from them the food on which restrictions have been imposed. (Interfax, 03.02.15).
Officials in Moscow are considering exempting Greek fruits from a Russian food import ban imposed on European Union countries last year in retaliation against Western sanctions in an apparent attempt by the Kremlin to bolster ties with Athens and influence policymaking in Brussels. (Moscow Times, 03.04.15).
The German utility RWE and a Russian-controlled investment company signaled on Sunday that they expected to complete a deal for the oil and gas subsidiary RWE Dea on Monday, despite objections from the British government. (New York Times, 03.02.15).
Russian billionaire Mikhail Fridman has reportedly threatened legal action against the British government over its plans to block his bid to buy twelve oil and gas fields in the North Sea. (RFE/RL, 03.01.15).
The prime minister of Estonia has claimed victory in a parliamentary election overshadowed by fears fueled by Russia's annexation of Ukraine's Crimea region last year. (RFE/RL, 03.02.15).
Russia has begun delivering Antey-2500 air defense missile systems to Egypt under a contract signed earlier. (Interfax, 03.05.15).
Russian Foreign Minister Sergei Lavrov has said that Moscow "sees all the signs of genocide" in the murder of a group of Egyptian Coptic Christians by the Islamic State militant group. (RFE/RL, 03.03.15).
Rusatom Overseas is aiming to sell desalination facilities integrated with large capacity nuclear power plants to Russia's export markets. (World Nuclear News, 03.04.15).
The top French appeals court has upheld the extradition of fugitive Kazakh banker Mukhtar Ablyazov to either Russia or Ukraine. (RFE/RL, 03.04.15).

Russia's neighbors:

The United Nations said on Monday that a sharp escalation in recent fighting in eastern Ukraine had left more than 800 people dead and over 3,400 wounded from mid-January to the middle of last month. (New York Times, 03.03.15).
The United Nations said on Monday that an influx of troops and heavy weapons from Russia had intensified the conflict in eastern Ukraine. (New York Times, 03.02.15).
The number of internally displaced persons has exceeded 1 million in Ukraine, says a new UN report. (Interfax, 03.03.15).
Ukraine's military said a total of 5 of its servicemen were killed and 11 wounded in Eastern Ukraine on Tuesday, Wednesday and Thursday. (RFE/RL, 03.02.15,RFE/RL, 03.05.15, Reuters, 03.04.15).
The death of a Ukrainian news photographer in shelling over the weekend provided more evidence of the risks facing journalists in Ukraine, where 10 have died since the start of the year. (New York Times, 03.02.15).
A senior special-police officer loyal to Kyiv has been injured along with his wife in a car-bomb blast in the eastern city of Kharkiv. (RFE/RL, 03.06.15).
International observers said Wednesday that fighting between government forces and Russia-backed militants continued to subside but that they haven't been able to verify the withdrawal of heavy weapons from the front lines. (Wall Street Journal, 03.05.15).
A new report by the OSCE monitors in southeastern Ukraine will acknowledge the end of a hot phase of the conflict in Donbass, says Russia's permanent representative at the OSCE Andrei Kelin. (Interfax, 02.27.15).
The death toll from a suspected methane gas explosion at a mine in a rebel-held region of Ukraine has climbed to 32, officials said Thursday. (Wall Street Journal, 03.05.15).
The Ukrainian parliament has voted in favor of a bill to boost the size of the military by one-third, to 250,000 soldiers. (RFE/RL, 03.05.15).
The Ukrainian government said GDP could fall by as much as 11.9 percent this year in a "worst-case scenario" and that year-end inflation could accelerate to 42.8 percent. (RFE/RL, 03.05.15).
Ukraine’s central bank (NBU) pushed lending key rate to 30% on Tuesday in an attempt to stabilize Ukraine’s beleaguered currency and hold its financial system together until promised international loans arrive later this month. Piotr Matys of Rabobank said the move reflects the NBU’s “desperation.” (Wall Street Journal, 03.03.15, Wall Street Journal, 03.05.15).
Ukraine's economy is starting to disintegrate, creating a risk of hundreds of thousands of immigrants flowing into Poland, Polish Deputy Prime Minister Janusz Piechocinski said. (Reuters, 03.03.15).
The central bank said Monday that the Hryvnia’s sharp devaluation meant Ukraine's sovereign and sub-sovereign debt stood at 71.5% of gross domestic product as of the end of last year. That effectively confirmed that Kiev is violating terms of a $3 billion Eurobond it sold to Russia. (Wall Street Journal, 03.03.15).
Finance ministers from countries in the Group of Seven leading economies expressed optimism that Ukraine's bailout and reform deal with Western creditors will get the green light from the International Monetary Fund next week. Kiev hopes to receive up to $11 billion this year to boost its international reserves. (Wall Street Journal, 03.03.15, Wall Street Journal, 03.04.15).
Russia's Foreign Ministry on Thursday called the arrival of U.S. military trainers in western Ukraine a “provocation” and warned Ukrainians that they should rethink the consequences of hosting Western forces. But on Tuesday, U.S. Army Europe commander Lt. Gen. Ben Hodges told reporters in Berlin that Washington has placed the training mission on hold as it looks for signs that the agreement, reached in Minsk February, is being honored. A decision on whether to proceed with the training would be needed within days to continue with the original plan to start by mid-March, Hodges said. (Stars and Stripes, 03.05.15, LA Times, 03.05.15).
Speaker of the U.S. House of Representatives John A. Boehner released a letter to U.S. President Barack Obama signed by a bipartisan group of lawmakers that said: “We urge you to quickly approve additional efforts to support Ukraine’s efforts to defend its sovereign territory, including through the transfer of lethal, defensive weapons systems to the Ukrainian military.” (New York Times, 03.05.15).
One concern both U.S. Defense Secretary Ashton Carter and Joint Chiefs Chairman Gen. Martin Dempsey agreed was a priority was Russia. On Tuesday, Dempsey joined Carter’s long-standing request for the White House to consider sending lethal assistance to Ukraine to help fight Russian separatists. (FP, 03.05.15).
"Anything we did as countries in terms of military support for Ukraine is likely to be matched and then doubled and tripled and quadrupled by Russia," U.S. Deputy Secretary of State Antony Blinken said in Berlin. (Bloomberg, 03.056.15).
"If Russia wants to take Ukraine, it's going to take it," said Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff. (Washington Post, 03.04.15).
NATO Deputy Secretary-General Alexander Vershbow said that Russia's involvement in eastern Ukraine is beginning to lose support among Russians, "especially as Russian leaders are less and less able to conceal the fact that Russian soldiers are fighting -- and dying -- in large numbers" in the conflict. Moscow has flatly denied the presence of any of its troops in eastern Ukraine. (RFE/RL, 03.05.15).
The U.S. is providing spy-satellite imagery to Ukraine to help in its fight against Russia-backed rebels, but with a catch: The images are significantly degraded to avoid provoking Russia or compromising U.S. secrets. (Wall Street Journal, 02.28.15).
The U.S. military estimates some 12,000 Russian soldiers are supporting pro-Moscow separatists in eastern Ukraine. U.S. Army Europe Commander Ben Hodges said the Russian forces are made up of military advisers, weapons operators and combat troops. Russia denies aiding rebels. (RFE/RL, 03.03.15).
Assistant Secretary of State Victoria Nuland said that since the crisis in Ukraine began, the United States provided almost $355 million in foreign assistance to Kiev. The U.S. President’s budget includes an FY16 request of $513.5 million – almost six times more than our FY14 request – to build on these efforts, she said. (State Department, 03.04.15).
The European Union's foreign policy chief on Friday came out against a bipartisan call in the United States to provide lethal, defensive weapons to Ukraine in its fight against Russian-backed separatists. (AP, 03.06.15).
Former Georgian President Mikheil Saakashvili has called on the United States to provide Ukraine with lethal military weapons. (RFE/RL, 03.04.15).
Ukrainians of Czech descent have started leaving eastern Ukraine for the Czech Republic. (RFE/RL, 02.28.15).
A lawyer for Oleksiy Honcharenko, a Ukrainian lawmaker who was detained in Moscow on March 1, says that a court hearing for his client has been canceled and he will return to Ukraine as soon as possible. (RFE/RL, 03.01.15).
The European Union has removed four Ukrainians from a sanctions list due to lack of evidence. The EU list, announced in March 2014, had targeted 22 Ukrainian officials suspected of embezzling state funds and illegally transferring the funds outside Ukraine. The EU has frozen their assets held in the 28-nation bloc. The four men, whose names didn't appear in the updated list on March 6, are: Oleksiy Azarov, Andriy Portnov, Ihor Kalinin, and Oleksandr Yakymenko. (RFE/RL, 03.06.15).
The two Uzbeks and one Kazakh who were arrested in Brooklyn for allegedly making plans to join Islamic State found their way to the extremist group only after they immigrated to the United States. (Bloomberg, 02.27.15).
Afghan officials say Russian-speaking Central Asians were among dozens of militants killed in southern Afghanistan on March 4. (RFE/RL, 03.05.15).
Fugitive Tajik opposition politician and businessman Umarali Quvatov has been killed in Turkey, associates and officials said. (RFE/RL, 03.06.15).
Azerbaijan's Ministry for National Security said on March 4 that six men had been arrested during a counterterrorism operation. (RFE/RL, 03.04.15).

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