HARVARD

 

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

Nuclear security and safety:

  • U.S. National Nuclear Security Administration head Frank Klotz retired Jan. 19. U.S. President Donald Trump intends to nominate Lisa Gordon-Hagerty, a longtime nuclear expert who previously worked at the U.S. Department of Energy, as Klotz’s replacement, but she has yet to go through the often slow-moving confirmation process. (Twitter, 01.19.18, Defense News, 01.11.18)

North Korea’s nuclear and missile programs:

  • Trump complained on Jan. 17 that Russia was helping North Korea to evade international sanctions. “Russia is not helping us at all with North Korea,” Trump told Reuters. “What China is helping us with, Russia is denting. In other words, Russia is making up for some of what China is doing.” (Reuters, 01.17.18)
  • U.S. Secretary of State Rex Tillerson accused Russia on Jan. 17 of not implementing all United Nations sanctions on North Korea over its nuclear weapons program and said Moscow “may be frustrating” some of the steps. Tillerson also offered a sobering assessment about the possibility of war with North Korea, saying advances in that country’s nuclear program meant the situation was “very tenuous.” (Reuters, 01.17.18, Bloomberg, 01.16.18)
  • Russia will abide by all of its international commitments, Kremlin spokesman Dmitry Peskov said Jan. 19 when asked about Moscow’s alleged breach of U.N. sanctions on North Korea. (Reuters, 01.19.18)
  • Russia hit out on Jan. 17 at a U.S.-led effort to increase international pressure on North Korea, saying it was making the situation worse and undermining the United Nations. Twenty nations hosted by the U.S. and Canada in Vancouver agreed Jan. 16 to consider tougher sanctions to press North Korea to give up its nuclear weapons. Russian Foreign Minister Sergei Lavrov said on Jan. 15 Moscow is ready to support direct talks between parties involved in the North Korea missile crisis. (Reuters, 01.17.18, Reuters, 01.15.18)

Iran’s nuclear program and related issues:

  • At the U.N. Security Council on Jan. 18, Russian Foreign Minister Sergei Lavrov warned that if the Iran nuclear agreement with world powers fails, it would send an “alarming” message to the international community. “We will not support what the United States is trying to do, changing the wording of the agreement, incorporating things that will be absolutely unacceptable for Iran,” Lavrov said earlier. (RFE/RL, 01.18.18, The Moscow Times, 01.16.18)
  • China and Russia have voiced concern after U.S. President Donald Trump said he would pull the United States out of the 2015 Iranian nuclear deal unless changes are made. Speaking on Jan. 13, Russian Deputy Foreign Minister Sergei Ryabkov said Moscow was “alarmed” by the latest U.S. steps, adding that Russia believes “the U.S. has already made its internal decision” to withdraw from the agreement with Iran. China on Jan. 13 also reaffirmed its support for the deal. (RFE/RL, 01.13.18)

Military issues, including NATO-Russia relations:

  • The U.S. must prepare to wage a great-power competition with China and Russia as those nations narrow their technological gap with the U.S. military and seek “to shape a world consistent with their authoritarian model,” according to an 11-page unclassified summary of the 2018 National Defense Strategy released Jan. 19. The document highlights Russian actions to undermine democratic processes in Georgia, Crimea and eastern Ukraine, as well as Moscow’s efforts to “shatter” NATO. “Great-power competition—not terrorism—is now the primary focus of U.S. national security,” U.S. Defense Secretary Jim Mattis said in a speech outlining the plan. (Bloomberg, 01.19.18)
  • The Pentagon is planning to develop two new sea-based nuclear weapons to respond to Russia’s and China’s growing military capabilities, according to a sweeping Defense Department review of nuclear strategy. First, it would modify “a small number” of existing long-range ballistic missiles carried by Trident strategic submarines to fit them with smaller-yield nuclear warheads. Secondly, “in the longer term,” it would develop a nuclear-armed sea-launched cruise missile. The new weapons will make it easier to deter threats to European allies, according to a draft of the Pentagon’s Nuclear Posture Review. (AP, 01.13.18, Wall Street Journal, 01.15.18)
    • The newly drafted Nuclear Posture Review sent to U.S. President Donald Trump for approval would permit the use of nuclear weapons to respond to a wide range of devastating but non-nuclear attacks on American infrastructure, including what government officials described as the most crippling kind of cyberattacks. (New York Times, 01.16.18)
    • The draft document confirms the existence of the Status-6 underwater nuclear drone made and operated by Russia, a capability the U.S. Defense Department had not previously publicly acknowledged. (Defense News, 01.12.18)
    • The draft document says the U.S. will adhere to existing arms control agreements, while expressing doubt about prospects for any new such pacts. (AP, 01.13.18)
    • Russia is adopting “military strategies and capabilities that rely on nuclear escalation for their success,” Mattis wrote in an introduction to the newly drafted Nuclear Posture Review. “These developments, coupled with Russia’s invasion of Crimea and nuclear threats against our allies, mark Moscow’s unabashed return to Great Power competition.” (New York Times, 01.16.18)
  • U.S. General Curtis Scaparrotti, NATO’s supreme allied commander in Europe, has warned that the alliance will not be “dominant” in certain areas in five years if it fails to modernize and adapt to the growing threat from Russia. (RFE/RL, 01.17.18)
  • “We characterize Russia as a peer competitor and we obviously follow closely all the development and modernization and taking all the measures that are necessary to be ready for any contingency,” Czech Gen. Petr Pavel, chairman of  NATO’s Military Committee, said. (RFE/RL, 01.17.18)
  • Russia has upgraded every aspect of its military in the last decade and is now becoming Europe’s greatest security threat, Gen. Joe Dunford, the Pentagon’s top general, told NATO officials. (Newsweek, 01.16.18)
  • The Danish government expects to win backing for a substantial increase in defense spending next month to counter Russia’s intensified military activity in eastern and northern Europe. (Reuters, 01.15.18)
  • Britain’s Royal Air Force said on Jan. 15 that it has scrambled two fighter jets to intercept Russian strategic bombers near U.K. airspace. (RFE/RL, 01.16.18)

Missile defense:

  • Asked whether he thought the U.S. needs more missile defense systems, U.S. President Donald Trump said, “Yes, yes I do. We’re ordering more missile defense and we’re ordering more missile offense also.” (Reuters, 01.17.18)
  • Russian Foreign Minister Sergei Lavrov warned Jan. 15 that a U.S.-made Aegis missile-defense system that Japan has decided to acquire could be used for offensive purposes because its missile-launching system is dual-purpose. (Reuters, 01.15.18)

Nuclear arms control:

  • Russia will not join the Treaty on the Prohibition of Nuclear Weapons—the U.N.’s first-ever measure for nuclear disarmament—Russian Foreign Minister Sergei Lavrov told the Security Council on Jan. 18. (Newsweek, 01.18.18)
  • NATO supports the idea of a world without nuclear weapons, but doesn’t believe it can be achieved by imposing a ban through the United Nations convention on nuclear weapons. (AP, 01.14.18)
  • The full unclassified New START data set released by the U.S. State Department shows that the U.S. reduction of nuclear forces to meet the treaty limit was completed by Sept. 1, 2017, more than four months ahead of the Feb. 5, 2018, deadline, according to Hans M. Kristensen of the Federation of American Scientists. (Federation of American Scientists, 01.13.18)
  • Pope Francis said Jan. 15 that he was really afraid about the danger of nuclear war and that the world now stood at “the very limit.” (Reuters, 01.15.18)

Counter-terrorism:

  • Russians rate international terrorism as the most critical potential threat to their country (70 percent), followed by Islamic fundamentalism and the possibility of new countries becoming nuclear powers (52 percent each), with less urgent concern about the North Korean nuclear program (37 percent), according to coordinated surveys conducted by the Chicago Council on Global Affairs and the Levada Center in Moscow. The annual 2017 Chicago Council Survey found that equally large majorities of Americans describe international terrorism and North Korea’s nuclear program as critical threats (75 percent each) facing the United States, followed by the possibility of new countries becoming nuclear powers (62 percent). (Chicago Council, 01.15.18)
  • The World Cup soccer tournament to be held in Russia in June and July will be an “attractive target” for Islamic State given Russia’s role in the territorial defeat of the militant group. (Reuters, 01.17.18)
  • Uzbek national Sayfullo Saipov, charged with killing eight people by ramming a truck down a New York City bike path, is willing to plead guilty and accept a life sentence in prison if prosecutors do not seek the death penalty. (RFE/RL, 01.18.18)
  • Uzbekistan’s security services have detained two people for allegedly recruiting members for Syria-based group Al-Tawhid wal-Jihad. (RFE/RL, 01.19.18)

Conflict in Syria:

  • The Trump administration has backed away from its description of a planned security force in northeastern Syria amid escalating threats by Turkey to launch a cross-border assault against the Kurdish group involved. Turkish Foreign Minister Mevlut Cavusoglu said Jan. 18 he has dispatched the Turkish military chief of staff, Hulusi Akar, to Moscow to secure Russian consent. Russia controls the skies over the area that Turkey is preparing to attack and could potentially down Turkish planes. Russia has started moving military observers away from an area in northwestern Syria where Turkey is planning an offensive against Kurdish fighters, a Turkish official told Al Jazeera. Turkish Defense Minister Nurettin Canikli said on Jan. 19 that Turkey has begun a military operation against U.S.-backed Kurdish fighters in Syria’s Afrin region. U.S. Secretary of State Rex Tillerson earlier vowed the U.S. military will stay in Syria for the foreseeable future to counter Islamic State, al-Qaeda and Iran. Iran, Turkey, Syria and Russia have all come out against Washington’s announced plan to back a force of 30,000 mainly Kurdish fighters along Syria’s border with Turkey and Iran. (The Washington Post, 01.19.18, RFE/RL, 01.19.18, Bloomberg, 01.17.18, Reuters, 01.16.18, Al Jazeera, 01.19.18)
  • In a Jan. 17 speech Tillerson called for closer cooperation with Russia to avoid conflict in “de-escalation zones.” Tillerson has also called on Russia to “exert its unique leverage” on the Syrian regime and engage with the U.S. and its European allies to deliver a lasting solution that ousts Syrian President Bashar al-Assad. (Bloomberg, 01.17.18, Financial Times, 01.17.18)
  • U.S. President Donald Trump and European Union leaders should increase pressure on Assad and his allies, Russia and Iran, to return to talks to end Syria’s civil war, Syria’s chief opposition negotiator said Jan. 15. (Reuters, 01.16.18)

Cyber security:

  • The CIA has attributed to Russian military hackers a cyberattack that crippled computers in Ukraine last year, an effort to disrupt Ukraine’s financial system. (The Washington Post, 01.12.18)
  • Three months after U.S. officials asserted that Russian intelligence used popular antivirus company Kaspersky to steal U.S. classified information, there are indications that the alleged espionage is related to a public campaign of highly damaging National Security Agency leaks by a mysterious group called the Shadow Brokers. (Yahoo, 01.13.18)
  • Moscow-based cyber security company Kaspersky Lab said Jan. 19 its revenue increased 8 percent year-on-year in 2017, though sales fell in North America because of allegations about its ties to the Kremlin and a ban on use of the company’s products by U.S. government agencies. Kaspersky’s business with the U.S. federal government makes up less than 1 percent of its U.S. sales. But the ban has rippled far into Kaspersky’s base of commercial and retail customers, causing a 50 percent drop in retail bookings in the second half of 2017 in the U.S. (Reuters, 01.19.18, Boston Globe, 01.18.18)
  • Encrypted messaging service Telegram raised the target for the largest initial coin offering ever to $2 billion, defying a rout in traded cryptocurrencies. (Bloomberg, 01.19.18)

Elections interference:

  • The FBI is investigating whether deputy governor of Russia’s central bank Alexander Torshin, who has close ties to Russian President Vladimir Putin, funneled money through the National Rifle Association to support Donald Trump’s presidential campaign. (Guardian, 01.18.18)
  • Trump’s “opaque” business deals in the former Soviet Union, history of tax disputes and real estate projects abroad were critical areas of research that led to the dossier alleging a compromised relationship between the president and the Kremlin, according to the transcript of a congressional interview by Glenn Simpson of Fusion GPS released Jan. 18. Simpson said that Trump’s financial practices raised allegations of possible business ties to Russian and other organized crime figures. (AP, 01.18.18, Bloomberg, 01.18.18)
  • On about July 4, 2016, Christopher Steele met with his FBI friend in London to share what he had gathered for a June 20 Fusion GPS report, the first chapter of his eventual dossier. In that first report, Steele’s sources claimed that Russia had been “cultivating” Trump for at least five years. Then at an Oct. 1 meeting, the FBI official asked Steele if he had ever heard of George Papadopoulos. Steele hadn’t. (The Washington Post, 01.16.18)
  • Congress is probing the Obama administration’s decision to use research by ex-British spy Christopher Steele to justify, in part, surveillance of Carter Page, a former foreign policy adviser to the Trump campaign. (Wall Street Journal, 01.19.18)
  • Conservative Republicans are pushing to release a memo containing classified information about the federal investigation into Russian meddling in the 2016 campaign. The memo, which purports to show abuse by the Obama administration of the Foreign Intelligence Surveillance Act, has not been publicly revealed, but Trump’s allies in Congress say it is explosive.Twitter accounts reportedly linked to Russian influence operations began promoting the hashtag #ReleaseTheMemo on Jan. 18 and 19, a reference to the document written by Rep. Devin Nunes. The most-shared URL has been a link to WikiLeaks’ submit page. (Los Angeles Times, 01.19.18,Business Insider, 01.19.18)
  • Former White House chief strategist Steve Bannon has been subpoenaed to meet with special counsel Robert Mueller or appear before a grand jury hearing as part of the Russia investigation. Bannon plans to sit down with Mueller later this month. (Bloomberg, 01.16.18)
  • The White House and lawmakers haggled Jan. 18 over what Bannon and other top Trump aides can tell Congress as it investigates possible connections with Russia. On Jan. 16, Bannon spent more than 10 hours meeting behind closed doors with the House Intelligence Committee, with much of the time taken up by negotiations over his testimony as part of the congressional probe into Russian election meddling. Bannon was subpoenaed to return to the House Intelligence Committee on Jan. 18 to face additional questions about his interactions with the president, but documents obtained by The Associated Press show he now has until the week of Jan. 29. Bannon was asked formally by a White House lawyer to cite executive privilege in declining to discuss conversations with key administration officials. (AP, 01.18.18, Bloomberg, 01.17.18, Reuters, 01.16.18, Bloomberg, 01.17.18)
  • Trump’s former campaign manager Corey Lewandowski declined to answer questions Jan. 17 from the House Intelligence Committee about any topic after his departure from the presidential campaign. (Bloomberg, 01.17.18)
  • Former Trump campaign manager Paul Manafort will face trial no sooner than September. In a hearing Jan. 16, prosecutors and defense attorneys sparred over Manafort’s continuing house arrest and a separate lawsuit challenging the appointment of special counsel Robert Mueller. (The Washington Post, 01.16.18)
  • House Republicans leading an inquiry into Russian election meddling have delayed the testimony of Hope Hicks, a close confidante to Trump’s, days after two other Trump associates refused to answer questions. (Wall Street Journal, 01.19.18)
  • House conservatives negotiating with Republican leaders over how to avert a government shutdown brought a fresh demand to the last-minute talks: release classified information they say raises questions about the origins of the FBI’s probe into Trump’s possible connections to Russia. (Bloomberg, 01.18.18)
  • Twitter may notify users whether they were exposed to content generated by a suspected Russian propaganda service. (Reuters, 01.17.18)
  • Facebook is expanding a U.K. investigation into possible interference by Russia ahead of the country’s 2016 election to exit the European Union, after facing pressure from lawmakers who were unsatisfied with an earlier probe by the social media company. (Bloomberg, 01.17.18)
  • “There seems frankly little doubt that the pro-Kremlin disinformation campaign is an orchestrated strategy, delivering the same disinformation stories in as many languages as possible, through as many channels as possible, as often as possible,” EU Security Commissioner Julian King told the European Parliament in Strasbourg on Jan. 17. (RFE/RL, 01.17.18)
  • A new round of U.S. sanctions expected against Moscow is an attempt to influence Russia’s domestic affairs ahead of a presidential election, Deputy Foreign Minister Sergei Ryabkov was quoted as saying. Washington is expected to impose fresh penalties against Russia as soon as early February for its alleged election meddling. (Reuters, 01.13.18)
  • Deutsche Bank reported questionable transactions involving Jared Kushner, or people or businesses near him, to German securities regulators and will forward the info to special counsel Robert Mueller. (Handelsblatt, 01.19.18)

Energy exports:

  • A decision on global oil output cuts could be made in late spring or early summer once it becomes clear how sustainable the current trend in the oil market is, according to Russian Deputy Prime Minister Arkady Dvorkovich. (Reuters, 01.19.18)
  • U.S. oil production could top 11 million barrels a day next year, surpassing both Saudi and Russian output, according to U.S. government forecasts. (The Business Times, 01.18.18)
  • Three weeks after picking up a controversial cargo in the U.K., a liquefied natural gas tanker made a U-turn one day before it was due to deliver it in Boston. The vessel is carrying a cargo from storage tanks at a terminal near London, which earlier received the first fuel from the $27 billion Yamal LNG plant in Russia’s north. (Bloomberg, 01.19.18)
  • The supply of gas from Russia’s Sakhalin-1 project to a pipeline in the country’s Far East has been suspended due to a problem at a compressor station. (Reuters, 01.18.18)

Bilateral economic ties:

  • No significant developments.

Other bilateral issues:

  • In compliance with a law Congress passed last summer, the U.S. Treasury Department is expected to release on Jan. 29 a blacklist of Russian businessmen deemed close politically to Russian President Vladimir Putin. On Jan. 18, four Republican senators, Roger Wicker, Marco Rubio, Cory Gardner and Lindsey Graham, urged the State Department and other agencies to expand the blacklist to include two senior business and government figures—Alisher Usmanov, a metals magnate and onetime investor in Facebook, and Yuri Chaika, Russia’s prosecutor general. Additionally, investors are waiting for a Treasury report due by Jan. 29 analyzing the implications of sanctions on sovereign ruble bonds, a third of which are held by foreigners. (New York Times, 01.18.18,  Bloomberg, 01.17.18)
  • “He can do a lot,” U.S. President Donald Trump said of Putin. “But unfortunately, we don’t have much of a relationship with Russia, and in some cases it’s probable that what China takes back, Russia gives. So, the net result is not as good as it could be.” (Reuters, 01.17.18)
  • The Russian public is far more supportive of combating groups like Islamic State than propping up Syrian President Bashar al-Assad. More Russians support (48 percent) than oppose (36 percent) the use of Russian troops to fight against violent extremist groups in Iraq and Syria, according to coordinated surveys conducted by the Chicago Council on Global Affairs and the Levada Center in Moscow. In contrast, more Russians oppose (49 percent) than support (27 percent) using Russian troops to prevent the overthrow of Assad. (Chicago Council, 01.15.18)
  • Russia’s Foreign Ministry has accused BuzzFeed of being a “tool of American intelligence services” after the news organization published an article about suspicious financial transactions involving Russian diplomats. Buzzfeed reported this week that U.S. officials had flagged hundreds of suspicious Russian Embassy bank transfers over the past decade. (The Moscow Times, 01.19.18)

II. Russia’s domestic news

Politics, economy and energy:

  • Russia’s economy unexpectedly contracted by 0.3 percent in November, hit by a drop in industrial production. (Reuters, 01.15.18)
  • Rising global oil prices, which hit a three-year peak last week above $70 a barrel, are brightening Russia’s once gloomy outlook. Goldman Sachs has forecast economic growth of 3.3 percent for 2018, well above even the government’s own estimates. Inflation has dropped to 2 percent, a level once unimaginable for Russia. Russia is on the verge of earning more rubles per barrel of oil than at any point in its history, even though crude prices are still languishing at less than half their peak level in dollar terms, set in 2008. (New York Times, 01.18.18, Financial Times, 01.18.18)
  • The countries of the former USSR harvested 18 percent of the global wheat crop in 2017, the most since 1980, according to U.S. Department of Agriculture data. Russia is projected to become the biggest shipper by volume this year, overtaking the U.S. (Bloomberg, 01.18.18)
  • Russia’s finance ministry plans to borrow less this year than in 2017 due to a smaller budget deficit and higher oil revenues, Russian Finance Minister Anton Siluanov said. (Reuters, 01.17.18)
  • Russia should create a better investment climate and ease forex legislation in response to Western sanctions, Siluanov said. (Reuters, 01.17.18)
  • Russia’s new government after its March presidential election should invest more in education and healthcare to help spur economic growth, World Bank CEO Kristalina Georgieva said. (Reuters, 01.16.18)
  • At the start of 2017, half the banks in Russia’s top 10 by assets were privately owned—no mean feat when the state sector makes up 70 percent of gross domestic product. One year later, only Alfa-Bank, one of Russia’s oldest, has escaped rescue. (Financial Times, 01.15.17)
  • Russia’s largest lender Sberbank said on Jan. 15 its net profit rose 35 percent to 674.12 billion rubles ($11.94 billion) in 2017 under Russian accounting standards as the bank issued a record amount of loans. (Reuters, 01.15.18)
  • Russia’s health minister has said that Russians consume 80 percent less alcohol than they did five years ago, amid a decrease in smoking levels and an increase in the number of people who play sports. (The Moscow Times, 01.16.18)
  • Russian President Vladimir Putin is scheduled to make his annual state-of-the-nation speech to the legislature on Feb. 6, laying out plans for the fourth term he’s expected to win easily in March. (Bloomberg, 01.18.18)
  • The Kremlin is discussing a proposal to turn on the fiscal taps in what would be the biggest domestic spending spree since Putin last ran for re-election in 2012. Kremlin economic aide Andrey Belousov said expenditures on health, education and infrastructure could be raised by 1.5-2 percent of gross domestic product. (Bloomberg, 01.15.18)
  • In a survey by state-controlled VTsIOM 70 percent of Russians said they would “definitely take part” in the upcoming presidential election, while 11 percent said they would “likely take part.” A total of 73.2 percent of respondents said they would vote for Putin. Russia’s only major independent pollster, the Levada Center, said it had stopped publishing polls about the election because it feared the authorities might shut it down for perceived meddling. (The Moscow Times, 01.18.18, Reuters, 01.16.18)
  • Russia’s Constitutional Court has refused to review a complaint from opposition leader Alexei Navalny over a ban on him running in the March presidential election, citing legal problems with it. Additionally, Russia’s Justice Ministry is seeking to close down the Fifth Season of the Year Foundation that is the bulwark of Navalny’s presidential election campaign. (RFE/RL, 01.15.18, Reuters, 01.19.18)
  • Presidential election disturbances will receive a tough response from Russia’s National Guard, its senior security officer has warned. (The Moscow Times, 01.19.18)
  • Human Rights Watch called 2017 a “dark year” for the opposition, sexual minorities and free speech activists in Russia in its report published Jan. 18. (The Moscow Times, 01.18.18)
  • Chechen leader Ramzan Kadyrov has warned that human rights activists will not be able to pursue their activities in his region, days after the arrest of a local activist and an arson attack against the Memorial human rights NGO’s office in Ingushetia. Memorial says police in Grozny again searched its regional office in the city on Jan. 19. (RFE/RL, 01.19.18, The Moscow Times, 01.18.18)
  • Authorities in Chechnya reportedly launched a brutal crackdown against drug suspects last August on Kadyrov’s orders. (The Moscow Times, 01.16.18)
  • A court on Jan. 16 extended the house arrest of Kirill Serebrennikov, the artistic director of the Gogol Center, whose case has raised alarms about repression of artistic freedom in Russia. (New York Times, 01.16.18)
  • Andrei Rudomakha, the coordinator of the Environmental Watch on North Caucasus group, may have been beaten late last month for documenting the illegal construction of a mansion linked to Russian Prime Minister Dmitry Medvedev, the investigative Novaya Gazeta newspaper reported Jan. 14. (The Moscow Times, 01.15.18)
  • The non-state-run Dozhd TV news channel is being investigated for slander over a film linking Russian businessman Ilya Traber, suspected of mafia connections, to Putin. (The Moscow Times, 01.17.18)
  • Russian legislators have said they are preparing retaliatory sanctions against international officials responsible for Russia’s ban from the Olympics, to be introduced after February’s Winter Games. (The Moscow Times, 01.15.18)
  • Putin said that Communism is “very similar” to Christianity while comparing Lenin’s mausoleum to saints’ relics. (The Moscow Times, 01.15.18)

Defense and aerospace:

  • Russia has deployed a new unit armed with the advanced S-400 air-defense system in Crimea. (RFE/RL, 01.13.18)
  • Moscow is creating a bank that the Kremlin will use to finance its defense industry in a maneuver that will help it avoid new U.S. sanctions. Russia’s Promsvyazbank, bailed out by the central bank late last year, will be recapitalized and headed by Petr Fradkov. Fradkov has no experience running a bank, but was previously a deputy chief executive at state-run VEB, an unlicensed development lender, when the Kremlin ran up $18 billion in foreign debt by using it as a slush fund for pet projects. (Reuters, 01.19.18, Financial Times, 01.19.18)

Security, law-enforcement and justice:

  • More than a dozen schoolchildren and at least one teacher were injured in a reported knife attack in the Russian city of Perm. (The Moscow Times, 01.15.18)
  • Russian officials say a teenager armed with an ax has attacked fellow students at a school in southern Siberia, wounding five children and a teacher. (AP, 01.19.18)

III. Foreign affairs, trade and investment

Russia’s general foreign policy and relations with “far abroad” countries:

  • Russia has offered to host direct talks between the government of Afghanistan and the Taliban. Moscow advocates engagement because the militant group is not considered to have ambitions beyond Afghanistan, in contrast to ISIS. (Financial Times, 01.17.18)
  • Russian President Vladimir Putin’s televised New Year’s address attracted 34 percent more viewers in Latvia than the Latvian president’s New Year’s address, according to Russia’s RBC news agency. (Russia Matters, 01.16.18)
  • Sweden is preparing to send a brochure to 4.7 million households warning them for the first time in more than half a century of what they should do in the event of a war. Its publication comes as debate intensifies in Sweden about defense and security issues, the threat from Russia and whether the country should join NATO. (Financial Times, 01.17.18)

China:

  • Russia has started delivering its S-400 surface-to-air missile system to China under the terms of a contract signed in 2014. (Reuters, 01.18.18)
  • Great Wall Industry, the Chinese space launch company, is negotiating with Russia’s leading rocket engine manufacturer, NPO Energomash, to procure sensitive engine technology. Energomash’s RD-180 is three times more powerful than China’s most advanced engine, the YF-100, used in the newest generation of Long March rockets. (Financial Times, 01.17.18)
  • Plans to sell a 10 percent stake of Russia’s largest gold miner Polyus to a consortium led by China’s Fosun International has been dropped after one of the agreement’s conditions was not met. The decision, made jointly by the companies, was due in part to the arrest of Russian tycoon Suleiman Kerimov, as this cast uncertainty over Polyus’s prospects and sent the company’s share price down. (Reuters, 01.15.18)

Ukraine:

  • Ukraine’s parliament on Jan. 18 passed a bill to reintegrate the country’s eastern territories that are currently controlled by Russia-backed separatists, even supporting taking them back by military force if necessary. The bill, passed after raucous debate, contains no reference to the Minsk 2 peace agreement. Russian lawmakers warned that the bill effectively kills Minsk 2. The bill labels Russia an “aggressor” and the separatist-held parts of the Donetsk and Luhansk provinces as “temporarily occupied territories.” The bill backs a ban on trade and a transport blockade of the east that Ukraine introduced last year. (AP, 01.18.18, RFE/RL, 01.17.18)
  • Ukraine’s military said on Jan. 17 two of its soldiers were killed and five wounded after an explosive device damaged a military vehicle in the eastern part of the country. (RFE/RL, 01.17.18)
  • Fighting in Ukraine that erupted in 2014 escalated the spread of HIV throughout the country as millions of infected people were uprooted by violence, a study published Jan. 15 found. Ukraine has among the highest HIV rates in Europe, with an estimated 220,000 infected in a country of about 45 million. (Reuters, 01.15.17)
  • Amid the backdrop of Russia’s ongoing proxy war in Donbass, Chinese infrastructure investments in Ukraine collectively dwarf the total value of the long-awaited U.S. weapons deal. The projects include a $500 million loan from China’s CCEC trading firm to finance affordable housing for, among others, Ukrainian war veterans and people displaced by the conflict. (Newsweek, 01.16.18)
  • Russia is ready to return to Ukraine the armaments from Crimea, although this military equipment is in dismal condition, Russian President Vladimir Putin said. (TASS, 01.11.18)
  • The European Union on Jan. 19 called for the release of Ukrainian citizens being held “illegally” in Crimea. (RFE/RL, 01.19.18)
  • Belarus on Jan. 19 mocked Kazakhstan’s suggestion that it could serve as a new venue for Ukraine peace talks previously hosted by Minsk. (AP, 01.19.18)

Russia’s other post-Soviet neighbors:

  • U.S. President Donald Trump hosted Kazakh President Nursultan Nazarbayev at the White House Jan. 16, praising the relationship between the two nations. Trump  thanked Kazakhstan, which last month became the chair of the U.N. Security Council, for “providing crucial support” to U.S. forces in Afghanistan and for backing U.S. efforts to roll back North Korea’s nuclear-weapons program. (Wall Street Journal, 01.16.18)
  • Company records, court filings and interviews in Kazakhstan and London suggest millions of dollars from Aktyubinsk Chromium Chemicals Plant in Kazakhstan wound their way to the U.S. and to a development company with which Donald Trump partnered to build a controversial Trump SoHo hotel-condominium complex in Manhattan. There’s no suggestion that the Kazakh money ties Trump to Putin. (Bloomberg, 01.11.18)
  • Kazakhstan’s decision to become a nuclear-free state after gaining independence from the Soviet Union should serve as a guiding example for other countries, Nazarbayev said at a U.N. Security Council meeting urging North Korea to do the same. (Nikkei, 01.19.18)
  • Uzbek Foreign Minister Abdulaziz Kamilov has met in Washington with top U.S. officials including White House national security adviser H.R. McMaster. (RFE/RL, 01.18.18)
  • A bus fire in Kazakhstan killed 52 people Jan. 18 in a vast snow-covered steppe. (AP, 01.18.18)
  • All four steam generators have been installed at unit two of the nuclear power plant under construction in Belarus’ Ostrovets. (World Nuclear News,01.16/18)
  • Armenian President Serzh Sarkisian has named former Prime Minister Armen Sarkisian as the ruling Republican party’s nominee for the next president. (RFE/RL, 01.19.18)
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