Russia in Review

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

Nuclear security agenda:

Russia plans to boycott the Nuclear Security Summit to be hosted by U.S. President Barack Obama in 2016, American and Russian officials said Wednesday. Moscow was absent from last week's initial summit planning session in Washington but had left it unclear whether Russia planned to attend the summit itself. Russian officials said the summit’s effort, which intended to prevent the spread of nuclear material, was duplicative of existing world organizations like the International Atomic Energy Agency, which should be strengthened instead. “We do not see added value coming out of these meetings,'' said Sergei I. Kislyak, the Russian ambassador to the United States. (New York Times, 11.06.19, AP, 11.04.14).
The White House said on Tuesday it regretted Russia's decision not to attend preparatory meeting last week for the 2016 Nuclear Security Summit. White House spokesman Josh Earnest did not say Moscow planned to boycott the bi-annual summit itself, which returns in 2016 to the United States, where the process was launched by President Barack Obama four years ago. (Reuters, 11.04.14).
Moscow regards leaks in the U.S. media about the non-involvement of Russian representatives in preparations for the Nuclear Security Summit in the United States in 2016 as a counterproductive attempt of pressure. "We are also drawing attention to the fact that the U.S. itself has not yet joined corresponding instruments of international law in this sphere - the Convention on the Physical Protection of Nuclear Material and the 2005 amendment to it and also the International Convention for the Suppression of Acts of Nuclear Terrorism," the Russian Foreign Ministry said. (Interfax, 11.06.14).

Iran nuclear issues:

Iran has tentatively agreed to ship much of its huge stockpile of uranium to Russia if it reaches a broader nuclear deal with the West, potentially a major breakthrough in talks that have until now been deadlocked. Under the proposed agreement, the Russians would convert the uranium into specialized fuel rods for the Bushehr nuclear power plant. A senior National Security Council official said, “it is accurate to say that the Russians have played a very helpful role during these negotiations.” Obama administration’s floating of the proposal for Iran to ship its enriched uranium came as a surprise of several European diplomats close to the talks. Europeans said that this was the first their nations had heard of any such proposal. (NYT, 11.03.14, Bloomberg, 11.06.14).
U.S. President Barack Obama suggested that he was now waiting for a political decision in Tehran about whether Iran's supreme leader, Ayatollah Ali Khamenei, would accept a framework. While Mr. Obama gave no specifics, he appeared to be referring to a plan under which Iran would ship much of its uranium stockpile to Russia, where it would be converted into fuel for the country's single nuclear plant. Iranian officials dismissed the report without fully denying it. (New York Times, 11.06.14).

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

NATO's top military commander said Monday that recent incursions into European airspace by Russian fighters and long-range bombers included larger, more complex formations of aircraft flying more "provocative" routes than usual. (Reuters, 11.04.14).
Stepped-up flights by Russian fighters, long-range bombers and tanker aircraft are aggravating security concerns in Europe and the United States is watching them very closely, the Pentagon said. (Reuters, 11.03.14).
Russia's Permanent Representative to NATO Alexander Grushko said, “Today we see a substantial increase of the allies' military aviation on eastern borders, a heightened activity in the Baltic and Black Seas, military training to repel the so-called ‘aggression from the East’ the transference of heavy military technology from the U.S. to Europe and the involvement of American strategic aviation… NATO must understand … Russia will take all necessary measures to ensure reliable protection against any threats.” (Kommersant/RBTH, 11.06.14).

Missile defense:

The U.S. Navy conducted a successful test of an upgrade to the Aegis missile defense system on November 6, simultaneously destroying two cruise missiles and one ballistic missile off the coast of Hawaii. (RFE/RL, 11.07.14).

Nuclear arms control:

No significant developments.

Counter-terrorism agenda:

Alleged Russian Taliban fighter Irek Ilgiz Hamidullin appeared in a U.S. federal court on November 4, marking the first time a non-American military detainee has been brought to the United States from Afghanistan for trial . (RFE/RL, 11.05.14).

Cyber security:

No significant developments.

Energy exports from CIS:

Russia pumped an average 10.6 million barrels per day (bpd) last month, producing a monthly total of 44.838 million tons. The figure was little changed from September's 10.61 million bpd and a touch under the post-Soviet record high of 10.63 million bpd reached in December. (Reuters, 11.03.14).
The European Commission said Monday it had pushed back a deadline for deciding whether to give Russia more access to the Opal gas pipeline across Germany until the end of January from the end of October. (Reuters, 11.03.14).
Serbia, which owes more than $200 million for gas supplies from Russia, said Friday it had received less gas this week and was set for talks on rescheduling its payments. (Reuters, 11.03.14).
Kyiv says it has paid the first tranche of its debt to Russia's Gazprom, fulfilling the terms of an EU-brokered deal signed last week. Ukraine's state gas company, Naftogaz, said November 4 that it transferred $1.45 billion to Russia’s Gazprom. (RFE/RL, 11.04.14).

Bilateral economic ties:

Visa could lose up to $70 million next year due to a sanctions-inspired law requiring foreign payment systems to relocate their transaction processing to Russia. (The Moscow Times, 10.30.14).
PepsiCo, which employs 30,000 locals, is for now improbably benefiting from a Russian ban on food imports from Europe and the United States. The company has invested about $9 billion in Russia. (New York Times, 11.07.14).
Russia passed a law in September limiting foreign ownership of media properties. As a result, Walt Disney will have to offload its share of the Disney Channel in Russia. And Condé Nast and Hearst need to sell controlling stakes in their Russian glossies by 2016. (New York Times, 11.07.14).

Other bilateral issues:

U.S. President Barack Obama has no plans for formal face-to-face talks with Russian President Vladimir Putin at Asia-Pacific or G20 summits next week but they are expected to have an informal conversation on the sidelines, a senior U.S. official has said. (Reuters, 11.05.14).
Russian news agencies say Foreign Minister Sergei Lavrov and U.S. Secretary of State John Kerry will hold talks in Beijing on November 8 ahead of an Asia-Pacific Economic Community (APEC) summit next week. (RFE/RL, 11.07.14).
Republicans have captured control of the U.S. Senate for the first time in eight years. Ranking member Bob Corker (Republican-Tennessee) is expected to take over Senate’s foreign relations committee. Senator John McCain (Republican-Arizona) is expected to become chairman of the Armed Services Committee. (RFE/RL, 11.05.14).
In Russia lawmakers greeted the Democratic defeat at the Congressional elections with glee and seized on it as a moment to attack Obama. (Washington Post, 11.07.14).
U.S. Ambassador to Russia John Tefft will meet with acting Chairman of the Federation Council International Affairs Committee Vladimir Dzhabarov on Wednesday. This is the first official meeting of Tefft with Russian parliament members since his appointment as the U.S. Ambassador to Russia in July 2014. (Interfax, 11.05.14).
A bipartisan group of U.S. lawmakers has now made a political decision of their own: to step up their campaign to pressure NATO into buying Mistral-class ships, allowing France to reap the financial benefits of the sale without having to worry about further strengthening Vladimir Putin's war machine. The lawmakers first pitched the idea last spring, with no success. “Sensitive to the financial burden that France may incur should it rightly refuse to transfer these warships to Russia, we renew our call that NATO purchase or lease the warships as a common naval asset," the November 4 letter to new NATO Secretary-General Jens Stoltenberg reads. (Foreign Policy, 11.07.14).
Concerns are rising among U.S. businesses in Russia that Washington lawmakers could move to enshrine sanctions on Russia in new legislation, extending their impact and delaying their repeal. The Senate Foreign Relations Committee unanimously passed such a legislative proposal last month and analysts warn the measure is more likely to become law if the Republican party wins a Senate majority at midterm elections on Tuesday or the situation in Ukraine deteriorates. (The Moscow Times, 10.31.14).
Michael McFaul, who finished his tour as President Obama's envoy in Moscow in February, said on Friday he believed that Russian agents were tapping his telephone as well as that of his wife, Donna Norton .(New York Times, 11.01.14).
Russia expects that Russian citizen Vadim Mikerin, the head of TENAM Corporation, a U.S. subsidiary of the Russian nuclear fuel and nuclear fuel cycle technology exporting company Techsnabexport (TENEX), who was recently arrested in the U.S., will be freed pending trial, Russian Foreign Ministry human rights commissioner Konstantin Dolgov said. If found guilty, Mikerin could face 20 years in prison. Rosatom issued a statement in which it said had been informed of Mikerin’s arrest and stated has a zero-tolerance policy on corruption in all of its national and international activities. Rosatom is reported to have fired around 276 officials in three years on corruption-related charges. (Yahoo News, Interfax, Russia Today, 11.05.14, Rosatom 11.06.14).
Swiss-based commodities trader Gunvor Group Thursday denied any allegations of wrongdoing and said it has been “caught in political crossfire” after U.S. prosecutors had launched a money-laundering investigation into the company’s co-founder and member of Russian President Vladimir Putin’s inner circle Gennady Timchenko. Mr. Timchenko said he was unaware of the investigation in a statement released Thursday by his investment vehicle, Volga Group, which added that Mr. Timchenko hasn't been affiliated with Gunvor since selling his stake in March this year. (Wall Street Journal, 11.06.14, 11.07.14).
U.S. authorities are attempting to seize an additional $1.1 million allegedly derived from the tax fraud scheme that was exposed by Russian whistleblower Sergei Magnitsky before his death in a Russian prison. (RFE/RL, 11.05.14).
Convicted Russian arms trafficker Viktor Bout believes he has evidence to justify a new U.S. trial and has hired the law firm of former U.S. Attorney General John Ashcroft to help him pursue his case. (Reuters, 11.03.14).

II. Russia news.

Domestic politics, economy and energy:

Russia's role in Ukraine's ongoing civil strife has secured President Vladimir Putin's position atop Forbes magazine's list of the world's most powerful people for the second year straight. (The Moscow Times, 11.06.14).
The ruble headed for its worst week in 11 years. The currency stood at 46.8450 per dollar on Friday in Moscow. The ruble fell 8.1 percent this week, the most since at least 2003. The ruble’s decline makes its year-to-date loss nearly 30% against the U.S. currency and follows the central bank’s announcement that it would reduce intervention designed to ease pressure on it. The bank said Wednesday that it would limit its daily interventions to $350 million. (Bloomberg, 11.07.14, Wall Street Journal, 11.06.14).
The Russian central bank’s data showed Thursday that Russia’s hard currency reserves, still the world’s fourth-largest, dropped to $428.6 by the end of October, its lowest since 2009. (Wall Street Journal, 11.06.14).
In October, consumer prices rose 8.3% in Russia on the year after increasing 8% in September and 7.6% in August—above the central bank’s initial ceiling of 6.5%. (Wall Street Journal, 11.05.14).
Transaero and Utair, the second and third players on the Russian market respectively, have appealed to the government for support in the wake of the Western sanctions and the credit crunch. (RBTH, 11.03.14).
President Vladimir Putin has awarded a posthumous Order of Honor to Christophe de Margerie, chief executive of France's Total oil company, killed when a business jet collided with a snowplow during takeoff at a Moscow airport in October. (Reuters, 11.03.14).
Shipping services that support Russia's attempts to extract oil from remote parts of the Arctic will run into difficulties as banks scale back energy financing due to Western sanctions, increasing transport costs for the frontier sector. (Reuters, 11.06.14).
Based on the results of the first nine months of the year, Russia is on course to record a natural population growth rate of about 0.5 per 1,000 in 2014, its best since 1991. (Forbes, 11.03.14).
Russian scientists are developing a new technology that could reprocess spent nuclear fuel into a solid form. According to official information, nearly 20,000 tons of this waste has already accumulated in Russia. (RBTH, 11.03.14).

Defense:

Despite slowing economic growth, threats posed by former Cold War enemies mean that Russia's ongoing 20 trillion ruble ($500 billion) military rearmament program will continue as planned, President Vladimir Putin told senior military officials at a promotion ceremony on Friday. (Moscow Times, 11.04.14).
Russia has over 72 hours tested its entire nuclear triad. (Barents Observer, 11.01.14).
Russia has test-fired a Sineva intercontinental ballistic missile from a submarine in the Barents Sea as part of tests on the reliability of the navy's strategic forces. (RFE/RL, 11.05.14).

Security, law-enforcement and justice:

The head of Russia’s Federal Security Service, Aleksandr Bortnikov, named the Islamic State as a primary threat at the meeting of the heads of special services of the CIS states on Wednesday. Bortnikov said that IS terrorists receive combat training and experience in Iraq and Syria and then return to their home countries, including the CIS nations, as instructors, recruiters and experts in the terrorist underground. He added that the Taliban and other radical groups in Afghanistan and Pakistan were ready to adopt these methods and this carried additional threats to the CIS countries. (Russia Today, 11.05.14).
The Islamic State (IS) group's Al Hayat media wing has released a video message by an apparently ethnic Russian militant. While the presence of Russian-speaking militants mostly from the North Caucasus, and from former Soviet republics such as Uzbekistan, Kazakhstan, and Tajikistan, is well-known, there have been very few reported cases of militants identifying as ethnic Russians fighting in Syria. (RFE/RL, 11.03.14).
Russian police have detained members of a gang accused of killing people on roads in the Moscow region. There are unconfirmed reports that the criminals might be closely connected to the Islamic State (IS) group via Central Asia. "The gang members called themselves a jamaat. This is what radical Islamists call themselves. The gang members killed people because they were non-Muslims. This is how they understood their mission," Rossiyskaya Gazeta reported. (Interfax, RFE/RL, 11.07.14).
Russian criminal investigative divisions detected 883 ethnic gangs last year and over 600 of them were neutralized. This year alone 1,000 persons have been prosecuted on those grounds. (RBTH, 11.07.14).
Acclaimed theater actor and opposition activist Alexei Devotchenko has been found dead in a pool of blood at his apartment in northeastern Moscow, news reports said. (The Moscow Times, 11.06.14).
A Russian pilot has been freed by the Afghan Taliban after more than a year in captivity. (The Moscow Times, 11.04.14).

Foreign affairs and trade:

Russian President Vladimir Putin has blamed politics, in part, for a decline in world oil prices. Putin said "a political component is always present in oil prices." "At some moments of crisis, it starts to feel like it is the politics that prevails in the pricing of energy resources,” Putin said. (RFE/RL, 11.07.14).
Moscow and Beijing have agreed many of the aspects of a second gas pipeline to China, the so-called western route. It’s in additional to the eastern route which has already broken ground after a $400 billion deal was clinched in May. “We have reached an understanding in principle concerning the opening of the western route,” the Russian President told media ahead of his visit on November 9-11 to the Asia Pacific Economic Conference (APEC). “We have already agreed on many technical and commercial aspects of this project laying a good basis for reaching final arrangements,” the Russian President added. (RT, 11.06.14).
The turnover of ruble-yuan currency trades on the Moscow Stock Exchange rose 80 percent month-on-month in October to a historical high of 83.5 billion rubles ($1.8 billion), the bourse said in a statement. (The Moscow Times, 11.06.14).
Russian President Vladimir Putin said: “Strengthening ties with the PRC is a foreign policy priority of Russia. Today, our relations have reached the highest level of comprehensive equitable trust-based partnership and strategic interaction in their entire history.” (Kremlin.ru, 11.06.14).
Russian President Vladimir Putin said, “Obviously, the Trans-Pacific Partnership is just another U.S. attempt to build an architecture of regional economic cooperation that the USA would benefit from. At the same time, I believe that the absence of two major regional players such as Russia and China in its composition will not promote the establishment of effective trade and economic cooperation. .” (Kremlin.ru, 11.06.14).
Russia has signed $7.5 billion worth of new arms export contracts this year, President Vladimir Putin said. (The Moscow Times, 11.05.14).
France may decide to delay the delivery of the first of two Mistral-class warships to the Russian navy by three months, a source familiar with the countries' military cooperation said. (The Moscow Times, 11.06.14).
The United States is mounting a diplomatic offensive to stop Hungary selling a stake in a Croatian energy firm to Russia, part of what Western powers see as Budapest's dangerous drift into Moscow's orbit. (Reuters, 11.03.14).
Western countries are at the gates of a new cold war with Russia sparked by the Ukraine crisis and a continuing failure to grasp the depth and seriousness of Vladimir Putin’s grievances with the US and EU, the Finnish president, Sauli Niinisto, has warned. (Guardian,11.05.14).
Citing cases of anthrax in German beef, Russia's state food safety watchdog on Wednesday banned imports of a range of beef products from ten European countries. (Moscow Times, 11.05.14).
Polish President Bronislaw Komorowski has signed into law a new national defense strategy that addresses an "intensifying policy of confrontation" by Russia and threats to regional security from the conflict in Ukraine. (RFE/RL, 11.06.14).
Russian president Vladimir Putin said that historians attempt to “hush up” the 1938 Munich Agreement, in which Britain and France agreed to Adolf Hitler’s occupation of Czechoslovakia. Referring to the 1939 Molotov-Ribbentrop Pact, which Moscow had made with Hitler, Putin said, “Serious research must show that those were the foreign policy methods then. The Soviet Union signed a non-aggression treaty with Germany. People say: 'Ach, that's bad.' But what's bad about that if the Soviet Union didn't want to fight, what's bad about it?” (Independent, 11.07.14).
Russian President Vladimir Putin says cooperation with Peru can help Moscow "get involved" in "interesting and promising processes in Latin America." Putin spoke at a meeting with Peruvian President Ollanta Humala during the first official visit ever by a Peruvian leader to Russia. (RFE/RL, 11.07.14).

Russia's neighbors:

More than 4,000 people have been killed in the conflict in Ukraine, according to UN. (Reuters, 11.03.14).
Ukraine accused Russia on Friday of sending military equipment and troops to pro-Russian separatists in eastern Ukraine. Col. Andriy Lysenko, a Ukrainian military spokesman, said 32 tanks, 16 artillery launchers and 30 trucks carrying munitions and personnel had come into the Luhansk region from Russia. He did not provide specific evidence to back up his claims. (Washington Post, 11.07.14).
Ukraine's military claimed via Facebook on Friday to have killed up to 200 separatist fighters who they said were firing on the army around the Donetsk airport, a scene of some of the most intense fighting in the region. The charges came a day after Andrei Purgin, the deputy prime minister of the self-proclaimed Donetsk People's Republic, claimed that Ukraine's army had launched an "all-out war" on separatist militias. (Washington Post, 11.07.14).
Ukrainian President, Petro Poroshenko, has ordered reinforcements to protect southern and eastern areas of the country from possible attacks by Russian-backed separatists. Speaking at a meeting of the Ukrainian National Security and Defense Council on November 4, Poroshenko said the units are to protect the Mariupol, Berdyansk, Kharkiv, the north of Luhansk, and Dnipropetrovsk regions. (RFE/RL, 11.04.14).
Russian President Vladimir Putin has held talks with top security chiefs over a "deterioration of the situation" in eastern Ukraine after pro-Russian rebels there accused Kiev of launching a new offensive in violation of a cease-fire. Putin has earlier expressed concern on Wednesday that a two-month old cease-fire had failed to end what he called civil war in eastern Ukraine. "Despite the Minsk agreements [on a cease-fire], firing on peaceful cities continues and civilians are still dying," he said. (Reuters, 11.05.14, 11.07.14).
Hundreds of Russian troops are still training and equipping separatists in Ukraine, NATO’s top military commander has said. Gen. Philip M. Breedlove said: ‘‘I am concerned that the conditions are there that could create a frozen conflict.’’ ‘‘The Ukraine-Russia border is wide open,’’ he added. ‘‘It is completely porous. Russian equipment, resupply, training flows back and forth freely.’’ (New York Times, 11.05.14).
Incumbent PM Aleksandr Zakharchenko has won in Sunday's elections in the self-proclaimed Donetsk People's Republic in eastern Ukraine, taking some 75 percent of the votes. In Lugansk, 63 percent have voted for the current leader Igor Plotnitsky. (Russia Today, 11.03.14).
Ukraine's President, Petro Poroshenko, denounced the vote on Sunday night as a "farce (conducted) under the barrels of tanks and machine guns." Poroshenko said the law, which granted special status to the separatist regions and provided for local elections there in December, would likely be repealed. However, he also said he would propose another law to define the boundaries of the separatist regions and decentralize power in what seemed to be a further tacit admission that the central government has lost control in the region. (Wall Street Journal, 11.04.14, Reuters, 11.03.14).
Yuri Ushakov, President Vladimir Putin's foreign policy aide, reiterated Russia's "respect" for the elections held by pro-Russian separatists in eastern Ukraine but said Moscow has deliberately stopped short of saying it "recognizes" the votes. (RFE/RL, 11.07.14).
German Chancellor, Angela Merkel, and the new European Commission president said there was no prospect in sight of scaling back sanctions on Russia, maintaining a tough stance after Moscow embraced the results of a separatist election in eastern Ukraine. (Wall Street Journal, 11.06.14).
Arseniy P. Yatsenyuk, the Prime Minister, said payments totaling $2.6 billion, mostly for public sector wages and pensions, would be withheld from separatist-controlled areas of Donetsk and Luhansk Provinces. (Wall Street Journal, 11.06.14).
Ukrainian President, Petro Poroshenko, threw his support behind Arseniy Yatsenyuk for a new term as prime minister. (Reuters, 10.31.14).
Ukraine's National Bank has banned credit and deposit transactions in Russian rubles on Ukrainian territory. (The Moscow Times, 11.05.14).
Russia has blocked a United Nations Security Council statement accusing Ukrainian separatists of breaching a peace agreement with Kiev. (The Moscow Times, 11.04.14).
A convoy of the Russian Emergency Situations' Ministry has delivered relief aid to Luhansk, deputy chief of the ministry's National Center for Crisis Management Oleg Voronov told reporters Sunday morning. (Interfax, 11.02.14).
Construction of the central used fuel storage facility has started at the Chernobyl nuclear power plant. (World Nuclear News, 11.04.14).
Energoatom has signed a memorandum on the creation of a "transparent and efficient public procurement system" in Ukraine by turning its existing approach into an electronic trading format. (World Nuclear News, 11.05.14).
Georgian Foreign Minister, Maia Panjikidze, has resigned a day after Defense Minister Irakli Alasania was sacked, revealing growing rifts in the ruling coalition two years after it rose to power. Georgian Parliament Speaker, David Usupashvili, says the exit of three pro-Western figures from the government may slow Georgia's integration with NATO and the European Union but will not alter its foreign-policy course. (RFE/RL, 11.06.14, 11.05.14).
The European Union has pledged to provide between 140 million and 170 million Euros to Armenia for private-sector, public administration, and justice reforms over the next three years. (RFE/RL, 11.04.14).
In Armenia several government structures would be merged into a new Interior Ministry. Also Emergency Situations and Local Government ministries will be merged and a new ministry will be set up to deal with economic integration. (RFE/RL, 11.07.14).
The International Monetary Fund predicts economic growth in the Caucasus and Central Asia will slow by an average of one percentage point this year due to the slowdown in Russia. (RFE/RL, 11.04.14).
A Chinese province has agreed to invest $800 million in Tajikistan's agricultural sector. (RFE/RL, 11.07.14).
Four Tajik nationals detained in Egypt in September have been charged with having links to the militant group Islamic State. (RFE/RL, 11.05.14).
Turkish President Recep Tayyip Erdogan is in the Turkmen capital, Ashgabat, for a two-day visit. (RFE/RL, 11.07.14).
Belarusian President, Aleksandr Lukashenka, has announced the replacement of several government officials and industry leaders in the country. (RFE/RL, 11.07.14).

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