Russia in Review

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

Nuclear security agenda:

Police in Moldova confiscated 200 grams of uranium 238 mixed with uranium 235, one kilogram of mercury, and an unidentified solid radioactive material after searches and raids last week in Chisinau and two other Moldovan cities. The materials could be used to make a crude radioactive explosive device, known as a dirty bomb. The confiscated materials, which allegedly were transported to Moldova from Russia by train, reportedly have a black market value of $2 million. (RFE/RL, 12.09.14).
The U.S. Defense Authorization bill allows most nuclear security work with Russia to continue. Instead of setting up roadblocks, it simply includes a “Sense of Congress” stating that nonproliferation activities in Russia should be consistent with the security interests of the United States. (Nuclear Security Matters, 12.05.14).
The U.S. House of Representatives passed the Strengthening Domestic Nuclear Security Act, which would require Homeland Security's Director for Domestic Nuclear Detection to support efforts by various government entities to develop systems that prevent efforts to smuggle nuclear and radiological weapons into the U.S., and that detect such weapons to prevent their use in attacks within the U.S. (The News Press, 12.07.14).
The Moscow branch of Roastom-CICE&T hosted the 3rd International workshop on nuclear security culture organized Rosatom in cooperation with Ministry of foreign affairs of the Russian Federation in partnership with the IAEA. 47 specialists from the countries using Russian nuclear technologies participated in this workshop. (Oreanda, 12.06.14).
Ahead of the Vienna Conference on the Humanitarian Impact of Nuclear Weapons, more than 120 senior military, political and diplomatic figures from across the world wrote in a letter that there should also be better crisis management in “conflict hotspots” and new security measures, warning that stockpiles were “insufficiently secure, making them possible targets for terrorism.” (The Independent, 12.08.14).
The U.S. Department of Energy’s National Nuclear Security Administration joined the governments of Georgia and the United Kingdom in announcing the removal of more than 150 disused radioactive sources from Georgia’s Institute of Radiobiology. (NNSA, 12.05.14).

Iran nuclear issues:

Iran and Russia have not signed a barter agreement to exchange oil for Russian goods, says Iranian oil minister Bijan Namdar Zangeneh. It contradicts statements made by Russia’s Economic Development Minister Aleksey Ulyukayev. (Russia Today, 12.11.14).

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

No significant developments.

Missile defense:

Russia is creating its own equivalents of the U.S. missile defense systems THAAD and GMD and they should be provided to the Russian Armed Forces in the very near future, Pavel Sozinov, general constructor of the concern Almaz-Antei, said on Monday. (Interfax, 12.08.14).

Nuclear arms control:

The Pentagon has developed a range of military options to pressure Russia to correct its violation of the INF treaty, Brian P. McKeon, a senior Pentagon policy official, told a House Armed Services subcommittee. The Pentagon options, Mr. McKeon said, include deploying new defenses against cruise missiles; exploring whether to deploy American ground-launched cruise missiles in Europe, a step that would also be counter to the treaty; and building up other military capabilities. Rose Gottemoeller, the senior State Department official for arms control, told the panel that the administration was also considering ''economic measures.” The pending U.S. national defense authorization bill would require the Obama administration to fully explain Russia’s violation of the INF treaty. Russia has denied that it violated the INF Treaty and accused the United States of its own violations. (RFE/RL, New York Times, 12.11.14, Washington Free Beacon, 12.10.14).
The United States said on Tuesday it is relying less on nuclear weapons as part of its defense planning, but Britain argued against banning such arms now. Both powers, taking part for the first time in an international conference on the humanitarian impact of atomic bombs, spoke in support of pursuing the goal of a world free of such weapons of mass destruction. (Reuters, 12.09.14).
U.S. Undersecretary for Arms Control and International Security Rose Gottemoeller has announced a new “International Partnership for Nuclear Disarmament Verification” initiative. According to Gottemoeller, the initiative will bring together “both nuclear weapon states and non-nuclear weapons states to better understand the technical problems of verifying nuclear disarmament, and to develop solutions.” (Nukes of Hazard, 12.05.14).

Counter-terrorism agenda:

No significant developments.

Cyber security:

No significant developments.

Energy exports from CIS:

Turkey and Russia have held the first round of talks to build a new pipeline between the two Black Sea neighbors. Turkish Energy Minister Taner Yildiz said final deliberations may last until 2020. (Wall Street Journal, 12.11.14).
Russian oil production could reach between 526 and 528 million tons next year and the country will export according to demand, Deputy Energy Minister Kirill Molodtsov said. (Reuters, 12.11.14).
Russia resumed natural gas flows to Ukraine on Tuesday after halting exports six months ago in a dispute over prices and unpaid debts, Ukraine's gas transport monopoly said. (Reuters, 12.09.14).

Bilateral economic ties:

Abbott Laboratories said late Thursday it completed its $305 million acquisition of Veropharm, a leading Russian pharmaceutical company. (Chicago Tribune, 12.12.14).
Google will shutter its engineering operations in Russia and transfer staff to offices outside the country after Moscow tightened data storage requirements for Internet firms. (Reuters, 12.12.14).

Other bilateral issues:

A $1.1 trillion U.S. spending bill that includes provisions to assist Ukraine and punish Russia for its annexation of Crimea has passed the U.S. House of Representatives. Buried in the 1,600-page bill are provisions authorizing loan guarantees to Ukraine, hurdles for aid to governments that have recognized the annexation of Crimea, and a ban on contracts with Russia's main weapons exporter, Rosoboronexport. (RFE/RL, 12.11.14).
U.S. President Barack Obama on Thursday urged Congress not to pursue new economic sanctions on Russia, saying the move would risk putting the United States out of step with Europe in its response to Moscow's intervention in Ukraine. Russian President Vladimir "Putin does not have good cards, and he has not played them as well as the Western press seems to give him credit for," Obama said. (WP, 12.11.14).
Russian Prime Minister Dmitry Medvedev said the U.S. was behaving "ineptly and unpredictably" and that the West had to move first if it wants to improve relations. “We aren't arguing with anyone. We are always ready and open to continue our relations with Europe, the U.S. and other countries," he said. "The ball is in their court." (Wall Street Journal, 12.11.14).
The Russian "reset" policy slipped into history after US President Barack Obama began his second term, Russian Deputy Foreign Minister Sergei Ryabkov said Monday. "A positive agenda in our relations is possible, but now it completely depends on which course the current [US presidential] administration is to continue and which course the next administration takes," Ryabkov said. "I'm not presently ready to say if there is a new cold war or how long this current period will last,” he said. Ryabkov said he is confident that the true purpose of the U.S. economic sanctions is to create conditions for regime change in Russia. It will take years for Russia to overcome the sanctions placed on the country by the United States, he said. (Sputnik, 12.08.14, Interfax, 12.08.14).
Moscow is shocked by a report made public in the U.S. on torture at secret CIA prisons and believes both the U.S. authorities and the governments of the countries where torture was applied are responsible for human rights violations, Russian Foreign Ministry Commissioner for Human Rights, Democracy, and the Rule of Law Konstantin Dolgov said. (Interfax, 12.10.14).
Russia says that police killings of black Americans and the ensuing protests highlight serious shortcomings in the protection of human rights in the United States. (RFE/RL, 12.05.14).
Russian Foreign Minister Sergei Lavrov has said the United States did not ask Moscow to facilitate contacts with the Assad government in Damascus regarding air strikes against the Islamic State group in Syria. (RFE/RL, 12.09.14).
U.S. federal authorities are considering a request to investigate whether a powerful Russian state media boss, Mikhail Lesin, violated U.S. anti-money-laundering laws when he purchased expensive California real estate. Lesin claimed that his children took out loans to purchase the real estate in question. (RFE/RL, 12.10.14).
A November survey by Levada showed that Russians' opinions about the U.S., the European Union and Ukraine have changed considerably. 18% of respondents (against 43% in January) said their attitude to the U.S. is good, while 74%of respondents (against 44%) said their attitude to the U.S. is bad. 26% of respondents (against 51% in January) said their attitude to the EU is good, while 63%(against 34% in January) said their attitude to the EU is bad. (Interfax, 12.08.14).

II. Russia news.

Domestic politics, economy and energy:

Prime Minister Dmitry Medvedev urged Russians to remain calm despite rising prices and the ruble's recent plunge, in the Kremlin's most direct attempt at public reassurance after months of glossing over the country's growing economic pain. (Wall Street Journal, 12.11.14).
The Bank of Russia raised interest rates for the fifth time this year. The hike in the bank’s key rate of 100 basis points to 10.5%, smaller than many analysts forecast, wasn’t enough to stem the slide of the ruble. (Wall Street Journal, 12.11.14).
The Russian ruble fell below 57 to the dollar in trading on December 12, continuing a slide that has cut its value nearly in half this year. (RFE/RL, 12.12.14).
Alexander Bastrykin, the head of Russia’s Investigative Committee, called for harsh punishment of “currency speculators”, whom the authorities are blaming for the sharp weakening of the ruble, as the flagging currency falls to all-time lows. (Wall Street Journal, 12.11.14).
Russia's Central Bank has raised its capital flight forecast for next year from $99 billion to a whopping $120 billion "in all scenarios," the regulator's head Elvira Nabiullina said. This would be more than twice Russia's current account surplus, which the Central Bank expects to reach $56 billion next year. (Moscow Times, 12.11.14).
The Economy Ministry forecast real disposable income will fall 2.8% in 2015. That would be the first such drop in Mr. Putin's 15 years as Russia's leader. (Wall Street Journal, 12.11.14).
The Russian budget is on track to lose 331 billion rubles ($6 billion) next year as the economy veers toward recession, Russia's Audit Chamber head Tatyana Golikova said. (Moscow Times, 12.09.14).
The World Bank said Friday that it expected the Russian economy to contract by 0.7%next year in its new baseline scenario before growing by 0.3% in 2016. (Reuters, 12.09.14).
The third reactor at Russia's Rostov nuclear power plant was brought to the minimum controlled power level yesterday, moving it a step closer to starting commercial operation. (World Nuclear News, 12.08.14).

Defense:

The Russian Armed Forces will have a new service, the Aerospace Forces, an informed source in the Defense Ministry said. “The Aerospace Forces will incorporate air defense forces and aviation which are currently attached to the Air Force and information and attack means and forces currently belonging to the Aerospace Defense Forces," the source said.(Interfax, 12.10.14).
The U.S. will have the capability to unleash a barrage of up to 7,000 cruise missiles at nuclear defense objects in Russia by 2016, a Russian air defense constructor said Monday. About 5,000 of those will be launched from submarines, Pavel Sozinov, chief designer at the Almaz-Antey arms maker, was cited by Interfax as saying. "A mass cruise missile strike in the first phase [of a conflict] is the dominant threat in the modern world," Sozinov said. (Moscow Times, 12.08.14).

Security, law-enforcement and justice:

The Islamic State (IS) group has become a de facto "terrorist international," the director of Russia's Federal Security Service (FSB) has said. Aleksandr Bortnikov said that IS had absorbed militants from around the world, significantly increasing its capacity. (RFE/RL, 12.10.14).
While praising the Russian security services for thwarting eight domestic terrorist attacks in 2014, the director of Russia's Federal Security Service admitted that the "North Caucasus bandit underground" had remained active. As a measure to combat domestic terror in the Russian Federation, FSB chief Bortnikov called for the prevention of the spread of terrorist ideology among young people. (RFE/RL, 12.10.14).
Russian authorities say security forces have killed at least four militants in the restive North Caucasus republic of Kabardino-Balkaria. The militants were killed in an exchange of fire early on December 11 at a home in the provincial capital, Nalchik. (RFE/RL, 12.11.14).
The pro-Moscow leader of Chechnya has announced new punishments for terrorism that target the families of those committing terrorist acts. "If a gunman in Chechnya kills a policeman or someone else, the gunman's family will be immediately evicted from Chechnya without the right to return, and their home will be razed down to the basement,” Ramzan Kadyrov said. (RFE/RL, 12.05.14).
Days after Chechen leader Ramzan Kadyrov called for the homes of Islamic militants' families to be razed to the ground following a large-scale attack on Grozny, unidentified individuals in masks descended on a small village with ties to the militants and set four homes on fire. (Moscow Times, 12.10.14).
National Anti-Corruption Committee head Kirill Kabanov said that one in three Russian officials still accepts bribes. (Moscow Times, 12.09.14).

Foreign affairs and trade:

Indian Prime Minister Narendra Modi told President Vladimir Putin on Thursday that Russia will remain India's top defense supplier. The two sides signed billions of dollars of deals in nuclear power, oil and defense. In the biggest, state-owned Rosatom will build 12 nuclear reactors in India, oil major Rosneft signed a 10-year crude supply deal with Essar Oil and India agreed to assemble 400 Russian multi-role helicopters a year. The two leaders presided over the signing of a "vision" document setting out a roadmap for cooperation in the sphere of nuclear power. Putin said Russia could eventually supply India with 20 nuclear reactors. As recently as July, India's Prime Minister, Narendra Modi, told Putin: “Ask any child in India who is India's best friend internationally, and they will tell you that it is Russia.” (New York Times, Moscow Times, 12.11.14).
Russia will go ahead with the financing of a nuclear power project agreed in Hungary, despite economic hardships, officials in Budapest said on Tuesday after Hungary’s nuclear power plant operator signed contracts with Russia’s Rosatom for two new reactors. (Wall Street Journal, 12.09.14).
Russians differ on whether Russia is currently in international isolation: 47% of the respondents surveyed by the Levada Center said they believe Russia is now in international isolation and 45% believe it is not. (Interfax, 12.08.14).
Military cargo found in a Russian aircraft that got widespread media attention over the weekend after being seized by Nigerian authorities belongs to a French peacekeeping mission, the Russian Embassy in Nigeria claimed Sunday. (Moscow Times, 12.07.14).
Russia and Thailand agreed the Russian Federation will open an information center in the kingdom in 2015-2016 to support development of nuclear sciences and energy, Russia's Trade Representative in Thailand Oleg Maslennikov said. (Invest.com, 12.05.14).
Poland's defense minister on Thursday complained of "unprecedented" activity by Russia's navy and air force in the Baltic Sea region in recent days. (AP, 12.11.14).
Russia would accept either money or the delivery of two Mistral helicopter carriers to resolve a dispute with France, Kremlin foreign policy aide Yury Ushakov said Monday. (Reuters, 12.08.14).
The Finnish parliament today voted in favor of Fennovoima's supplement to the decision in principle regarding the construction of a new nuclear power plant in Pyhäjoki, Finland. Rusatom Overseas is in final negotiations with the main suppliers for the project and contracts are due to be signed by the end of the current year, Fennovoima said. (WNN, 12.05.14).

Russia's neighbors:

President Petro Poroshenko said Friday that no Ukrainian soldiers were killed or wounded overnight in the east for the first time since Kiev’s conflict with pro-Russia separatist rebels began, reflecting new optimism that seven months of violence may be calming. Fighting has decreased significantly since government and rebel officials agreed to a 24-hour “day of silence” on Tuesday, part of an effort to make a faltering cease-fire signed in September stick. (Wall Street Journal, 12.12.14).
In Moscow, Russian Foreign Minister Sergei Lavrov said that "a chance to establish peace in Ukraine has emerged" and called for a new round of the "Contact Group" talks. (RFE/RL, 12.12.14).
Ukraine’s parliament on Thursday approved the new government's economic program of tough reforms aimed at securing the $27 billion so far promised by Western backers including the International Monetary Fund and the World Bank. But Yatsenyuk said international lenders needed to put more money on the table. “In order to survive, in order to prevent a default, we need an international donor conference, the adoption of a Ukrainian recovery plan at this conference and the help of our Western partners," Yatsenyuk told parliament. He specifically referred to a Financial Times report that the IMF, visiting Kiev this week for talks on its existing $17 billion bailout package, had identified a $15 billion shortfall in the program. (Reuters, 12.11.14).
French President Francois Hollande met with President Vladimir Putin during an impromptu visit to Moscow on Saturday. "I very much hope that in the near future we will have a final cease-fire agreement" in east Ukraine, Putin said in televised remarks after meeting with Hollande. Without a fully implemented truce, he said, "it is difficult to picture Ukraine as a territorially integral country, and Russia, as is well-known, supports the territorial integrity of Ukraine." In his own remarks televised after the meeting, Hollande said "de-escalation of the Ukrainian crisis is possible," if the cease-fire agreement, agreed by both sides in Minsk in September, is fully implemented. (Moscow Times, 12.07.14).
The U.S. and European Union are discussing plans for several billion dollars in additional assistance for Kiev that could be delivered in the next few months, officials said. That would be in addition to the previously agreed $17 billion from the International Monetary Fund. (Wall Street Journal, 12.12.14).
The Group of Seven nations are looking at a fresh financial package for Ukraine which could amount to some $4 billion, according to several officials familiar with the discussions. (Wall Street Journal, 12.05.14).
The Canadian government signed an agreement with Kiev that could see Canada training parts of the Ukrainian military, in a move that was struck outside of NATO and broadens Ottawa’s involvement in the conflict in Ukraine. (Wall Street Journal, 12.08.14).
Kyiv and Washington should step up cooperation in the military-technological field, and some projects could be implemented already now, says U.S. Under Secretary of State for Arms Control and International Security Rose Gottemoeller, who met with Ukrainian deputy presidential chief of staff Valery Chaly in Kyiv on Friday. Chaly and Gottemoeller also discussed bilateral cooperation on nonproliferation, export control, and nuclear security. (Interfax, 12.08.14).
Geoff Pyatt, U.S. ambassador to Ukraine Monday refused to rule out sending weapons to the Ukrainian army, but insisted that the crisis in Ukraine would be solved with diplomacy, not armies. Pyatt also kept open the door for Ukraine to join NATO. “The question of Ukraine’s NATO membership is not to be decided in Washington, not in Berlin, not in Brussels, certainly not in Moscow,” Pyatt said. “It’s a question for the Ukrainian people to decide.” (Foreign Policy, 12.08.14).
German Chancellor Angela Merkel has accused Russia of interfering in the domestic affairs of Eastern European states seeking closer ties with the European Union. (RFE/RL, 12.07.14).
Japan has expanded sanctions against Russia and two separatist Ukrainian regions ahead of a visit by Russian President Vladimir Putin to Tokyo next year. The new sanctions list targets 26 individuals and 14 organizations, the majority of which are tied to the leaders of Ukraine's Donetsk and Luhansk people's republics. (Moscow Times, 12.09.14).
Sanctions imposed by the European Union on former Ukrainian President Viktor Yanukovych and some close associates over alleged corruption are facing legal problems that look set to force the bloc to drop at least some of the targets, according to EU officials and diplomats. (Wall Street Journal, 12.12.14).
Ukrainian President Petro Poroshenko said Ukraine's non-bloc status was a matter which the parliament should consider urgently, the Ukrainian parliament website reported on Monday. The document suggests excluding the word "non-bloc" from Ukraine's law "On Fundamental Principles of Ukraine's Internal and Foreign Policy" and replacing it with a provision that sets the goal of Ukraine's NATO membership. The Ukrainian parliament is also due to debate a bill on the nation's exit from CIS on Monday. (Sputnik, Tass, 12.08.14).
Approximately 600 supporters of a dismissed regional council head broke into a session of the regional council in Vinnytsia, central Ukraine, on Dec. 6, police said. After disrupting the regional council session, the protesters went to the Interior Ministry's regional directorate and demanded that Vinnytsia region governor Anatoly Oliynyk be dismissed. (Stratfor, 12.06.14).
Ukraine's government has allowed state energy company Ukrinterenergo to import electricity from Russia to cover current power shortages caused by a lack of coal, the Ukrainian Energy Ministry said. (Reuters, 12.08.14).
Kiev is ready to start the decentralization of power, Ukrainian President Petro Poroshenko said Sunday. (Sputnik, 12.07.14).
Chanting "Allahu Akbar" (God is great), dozens of armed men in camouflage uniforms from Russia's republic of Chechnya train in snow in a camp in the rebel-held east Ukraine. They say their "Death" unit fighting Ukrainian forces has 300 people, mostly former state security troops in the mainly Muslim region where Moscow waged two wars against Islamic insurgents and which is now run by a Kremlin-backed strongman. (Reuters, 12.10.14)
Westinghouse Electric Company has rejected as incorrect claims in some media reports that a problem with a nuclear power reactor in Ukraine ten days ago was linked to its nuclear fuel. (World Nuclear News, 12.08.14).
Ukraine's Kharkov Institute of Physics and Technology has completed the construction of a nuclear research facility called Neutron Source that will be used to treat cancer. (World Nuclear News, 12.08.14).
Uzbekistan urged Russia on Wednesday to help protect Central Asia against what it said would be a rising threat from militant Islam as U.S. forces draw down their numbers in Afghanistan. “Various elements among the representatives of Islamic State are already slipping into Afghanistan from Iraq and Syria. All this requires the adoption of appropriate preventative measures," President Islam Karimov said at a news briefing with visiting Russian President Vladimir Putin alongside. (Reuters, 12.11.14).
Russia and Uzbekistan have signed an agreement on the regulation of mutual financial obligations after Russian President Vladimir Putin met in Tashkent with Uzbek President Islam Karimov. Russian Finance Minister Anton Siluanov said earlier that Russia would agree to write off most of Uzbekistan's $890 million debt to Moscow. (RFE/RL, 12.10.14).
Kazakhstan and China are in talks to establish the joint fabrication of fuel assemblies for nuclear power plants, Nurlan Kapparov, president of Kazatomprom, said. (WNN, 12.08.14).
A Kazakh citizen prosecutors say fought alongside pro-Russian separatists in eastern Ukraine is being tried on charges of intentional and illegal participation in a military conflict abroad. (RFE/RL, 12.12.14).
Russia's lower house of Parliament voted unanimously on Wednesday to approve a treaty allowing Armenia to join a trade bloc of former Soviet states that President Vladimir V. Putin has championed as an alternative to the European Union. (New York Times, 12.11.14).
Since December 1, the Georgian lari has lost 6.3% of its value to the U.S. dollar, hitting its lowest point to the greenback in some 10 years. The Armenian national currency, the dram, has also fallen from 435.26 to one U.S. dollar on December 1, to 447.86 on December 5. (RFE/RL, 12.05.14).
German Foreign Minister Frank-Walter Steinmeier has reiterated that his country does not recognize last month's treaty between Russia and Georgia's breakaway region of Abkhazia. Tbilisi is urging the international community to condemn a treaty that has increased Russia's control over Abkhazia. (RFE/RL, 12.08.14, 12.11.14).
The de facto leader of Georgia's breakaway South Ossetia region says a planned treaty with Moscow could call for the separatist province region to become part of Russia. (RFE/RL, 12.11.14).
On Thursday, the Azerbaijan government released a 60-page manifesto, written by the presidential chief of staff, Ramiz Mehdiyev, in which he complained of modern ''colonialism'' by the United States. (New York Times, 12.06.14).
A court in Baku on Friday ordered the jailing of prominent journalist who has long drawn the ire of the Azerbaijan government by reporting on the business dealings of President Ilham Aliyev's family, as well as on accusations of human rights abuses, including the persecution of opposition figures and other activists. The reporter, Khadija Ismayilova, works for Radio Free Europe/Radio Liberty. (New York Times, 12.06.14).
Belarusian President Alyaksandr Lukashenka has blamed Moscow for a trade dispute that is straining ties between the traditional allies at a time when Russia's economy is struggling under the weight of low oil prices and Western sanctions. Russia and Belarus have been at odds over trade since late November, after Russia banned imports of meat and milk from Belarus, claiming it found traces of harmful substances. (RFE/RL, 12.11.14).
The co-workers of Belarusian journalist and military expert Alyaksandr Alesin who has been missing for several days say he is in a pretrial detention center in Minsk. (RFE/RL, 12.08.14).

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