Russia in Review, Jan. 4-11, 2019

This Week’s Highlights:

  • Work is underway on holding a Russian-U.S. meeting on issues related to the INF Treaty, Russian Foreign Ministry spokeswoman Maria Zakharova said, according to TASS.
  • Moscow-based Kaspersky Lab provided the tip to U.S. law enforcement that led to the August 2016 arrest of a former NSA contractor for allegedly leaking highly sensitive NSA hacking tools, The Washington Post reports.
  • Russian hackers looking to gain access to critical American power infrastructure were able to penetrate the electrical grid by targeting sub-contractors to the system by pretending to be job seekers among other things, according to the Wall Street Journal.
  • According to a new survey by the Pew Research Center, 44 percent of Russians say election tampering is likely to happen to their nation, while 78 percent of Americans say that elections are likely to be tampered with.
  • The Russian central bank halved its dollar reserves to $100 billion and then moved $44 billion each into Chinese renminbi and euros, according to data released this week with a six-month lag, Financial Times reports. Russia’s trade with China reached a record high of the equivalent of $100 billion, according to the Chinese government.
  • Germany will try to protect German and European companies from some potentially "massive collateral damage" if Washington levies further sanctions against Russia, German Foreign Minister Heiko Maas said.
  • 55 percent of Germans think the U.S. is a threat to the country, just one point less than the 56 percent who said the same of Russia, according to a recent survey conducted by Germany's Forsa Institute. A mere 16 percent of Germans expressed concern over China, Newsweek reports.
  • U.S. federal prosecutors have asked witnesses about how at least a dozen Ukrainians gained access to Trump inauguration events and their activities in the U.S., the New York Times reports. Last month, prosecutors were asking about illegal foreign lobbying related to Ukraine and whether foreigners from Ukraine and other countries used straw donors to disguise donations to the inaugural committee, according to the news outlet.

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

Nuclear security and safety:

  • No significant developments.

North Korea’s nuclear and missile programs:

  • No significant developments.

Iran’s nuclear program and related issues:

  • Iran and Russia are preparing to hold joint naval exercises in the Caspian Sea, including rescue and anti-piracy drills. (Reuters, 01.06.19)
  • U.S. Secretary of State Mike Pompeo has announced U.S. plans to hold a global summit next month in Poland that is focused on Iran. Pompeo said the United States was seeking to "expel every last Iranian boot" from Syria. (RFE/RL, 01.11.19)

Military issues, including NATO-Russia relations:

  • Russia on Jan. 11 condemned British plans to open military bases in southeast Asia and the Caribbean and said it stood ready to take retaliatory measures if its own interests or those of its allies were threatened. (Reuters, 01.11.19)

Missile defense:

  • No significant developments.

Nuclear arms control:

  • Work is in progress on holding a Russian-U.S. meeting on issues related to the INF Treaty, Russian Foreign Ministry spokeswoman Maria Zakharova said at a press briefing on Jan. 11. (TASS, 01.11.19)

Counter-terrorism:

  • Six Uzbek and Kyrgyz nationals living in Sweden have gone on trial in Stockholm accused of transferring funds to Islamic State. Three of the Central Asian men are also charged with plotting an attack in Sweden. (RFE/RL, 01.07.19)

Conflict in Syria:

  • U.S. President Donald Trump vowed a "prudent" withdrawal of U.S. troops from Syria, embracing a new, more cautious timeline on Jan. 7 while appearing to deny that he had ever ordered an immediate troop departure in the first place. (The Washington Post, 01.08.19)
    • U.S. Secretary of State Mike Pompeo said on Jan. 10 that the U.S. troop withdrawal from Syria announced by Trump last month will go ahead despite widespread criticism. (RFE/RL, 01.10.19)
    • A U.S. military spokesman says the U.S.-led military coalition in Syria has begun the process of withdrawing troops from the country. (RFE/RL, 01.11.19)
    • U.S. national security adviser John Bolton told Turkish officials in Ankara on Jan. 8 that Turkey's assurance it won't attack the U.S.-backed Kurdish fighters was a "condition" for the withdrawal. Turkish President Recep Tayyip Erdogan accused Bolton of making "a very serious mistake" with the demand. Bolton met in Ankara with senior Turkish officials to clarify questions about U.S. intentions in Syria. Prior to visiting Turkey, Bolton traveled to Israel, which has also been concerned about a U.S. withdrawal. Bolton said on Jan. 11 talks between the U.S. military and its Turkish counterparts on the Kurds and Syria will continue next week. (RFE/RL, 01.08.19, RFE/RL, 01.10.19, Reuters, 01.11.19)
    • Russian President Vladimir Putin and Turkey’s Recep Tayyip Erdogan are planning to meet “soon” to discuss the announced departure of U.S. troops from Syria. (RFE/RL, 01.07.19)
    • Military commanders from Russia and the U.S. held a phone conversation to discuss Syria as U.S. forces prepare to leave the Middle Eastern country. Russia’s General Staff chief Valery Gerasimov also exchanged opinions on the war on terror and other topics during Jan. 11’s discussion with Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff. (Bloomberg, 01.05.19)
    • Russia, Iran and Syrian President Bashar al-Assad mobilized additional units to the Middle Euphrates River Valley in Eastern Syria in late December 2018. These reinforcements—which included elements of the Russian Armed Forces—are postured to cross the Euphrates River and seize valuable oil-rich terrain currently held by the U.S. Anti-ISIS Coalition and allied Syrian Democratic Forces. (Institute for Study of War, 01.07.19)
  • Russian President Vladimir Putin and German Chancellor Angela Merkel have agreed in a telephone call to coordinate efforts to work toward peace in Syria, the Kremlin says. Merkel and Putin also discussed the formation of a constitutional committee for Syria. (RFE/RL, 01.10.19)
  • Russian military police have started patrolling the surroundings of the northern Syrian city of Manbij in the Aleppo governorate, near the border with Syria. (TASS, 01.07.19)
  • The Russian military has reportedly tried to suppress news of a soldier’s death in Syria. Junior Sgt. Andranik Arustamyan died in a mine accident at a checkpoint in eastern Syria on Nov. 2, 2018, the BBC Russia service reported Jan. 9, citing his death certificate. The investigative Novaya Gazeta newspaper first reported the incident in November, writing that six Russian mercenaries were killed in a blast. (The Moscow Times, 01.09.19)
  • Hayat Tahrir al-Sham, a group that evolved from the al Qaeda-affiliated Nusra Front, seized control of nearly all of Idlib and small surrounding areas on Jan. 10, threatening a fragile cease fire. (Wall Street Journal, 01.10.19)
  • A Syrian Kurdish militia says its fighters have captured eight foreign fighters with the Islamic State in eastern Syria, including an American teenager. Among the eight are also a German, a Russian, a national from Ukraine as well as Tajik and Uzbek nationals. (AP, 01.09.19)

Cyber security:

  • Federal prosecutors in August 2016 arrested a former NSA contractor, Harold T. Martin III, accusing him of taking home without permission at least 50 terabytes of data that included highly sensitive hacking tools. But the NSA’s enhanced vigilance was not what led to Martin’s arrest. Rather, earlier that month, Moscow-based Kaspersky Lab notified the NSA that it had received strange Twitter messages from Martin. (The Washington Post, 01.09.19)
  • Russian hackers looking to gain access to critical American power infrastructure were able to penetrate the electrical grid by targeting sub-contractors to the system. Hackers used several methods to infiltrate the grid including planting malware on sites of online publications frequently read by utility engineers to gain access to their computers. Russian cyber operatives pretending to be job seekers sent out fake resumes with tainted attachments. (Wall Street Journal, 01.11.19)
  • Across the 26 countries surveyed by Pew Research Center, nearly half (47 percent) say their country is well prepared to handle a major cyberattack. Some 67 of Russian respondents say their country is ready for a major cyber incident. In the U.S., just over half (53 percent) think their country is prepared to handle a major cyberattack. Also, relatively few Russians say election tampering is likely to happen to their nation (44 percent), while 78 percent of Americans say that elections are likely to be tampered with. (Pew, 01.09.19)

Elections interference:

  • A new U.S. court filing shows that former Trump campaign chairman Paul Manafort shared polling data during the 2016 presidential campaign with Russian-Ukrainian man Konstantin Kilimnik, whom U.S. intelligence suspects of having ties to Russian spy agencies. Manafort is scheduled to be sentenced on Feb. 8 in Virginia and on March 5 in Washington. Trump said Jan. 10 that he knew nothing about Manafort allegedly sharing polling data with Klimnik. (RFE/RL, 01.09.19, The Washington Post, 01.10.19)
  • Lawyers for U.S. President Donald Trump have told special counsel Robert Mueller that he will not answer any more questions in the probe of Russia’s meddling in the 2016 election. (Huffington Post, 01.10.19)
  • Former Trump lawyer Michael Cohen will testify publicly before a House committee Feb. 7 in a hearing that could serve as the opening salvo of a promised Democratic effort to scrutinize Trump, his conflicts of interest and his ties to Russia. (AP, 01.11.19)
  • The Russia investigation is nearing its final stages and is expected to be finished in the coming weeks or months, according to senior law enforcement officials. (New York Times, 01.09.19)
  • Deputy Attorney General Rod Rosenstein has told people close to him that he expects to depart the Justice Department if a new attorney general is confirmed. Rosenstein's departure—whenever it occurs—will likely spark fears about the future of the Mueller probe, though even now Rosenstein is not technically in charge of it. (The Washington Post, 01.09.19)
  • Kremlin spokesman Dmitry Peskov has denied reports of Russian meddling ahead of Israel's April election after state censors suppressed a speech by Israel's domestic intelligence chief accusing a foreign power of planning to hack the vote. (Reuters, 01.09.19)

Energy exports:

  • U.S. sanctions against Nord Stream 2 would be the wrong way to solve a dispute over energy supply, according to German Foreign Minister Heiko Maas. (RFE/RL, 01.11.19)
  • Support in German Chancellor Angela Merkel’s coalition for a major new Russian gas pipeline is slipping. Social Democratic lawmaker Nils Schmid, whose party has been a reliable supporter of the project, said too many decision-makers in Berlin had been slow to factor in Nord Stream 2’s geopolitical significance. (Bloomberg, 01.08.19)

Bilateral economic ties:

  • No significant developments.

Other bilateral issues:

  • NASA administrator Jim Bridenstine has rescinded the invitation for his sanctioned Russian counterpart Dmitry Rogozin to visit the U.S. next month in an effort to “be accommodating” to U.S. senators who had opposed the invite. Rogozin on Jan. 9 said the cancellation of his visit was "an episode of the confrontation between Trump and Congress." (The Moscow Times, 01.07.19, RFE/RL, 01.09.19)
  • A Russian lawyer, whose participation in a 2016 meeting with top officials of U.S. President Donald Trump’s election campaign has given rise to allegations of collusion, has been charged with obstruction of justice in an unrelated case in New York. According to an indictment released on Jan. 8, Natalia Veselnitskaya was accused of submitting deceptive declarations to a judge in a civil proceeding involving a Russian tax-refund fraud scheme. Russia on Jan. 11 demanded an explanation from the U.S. about the charges. (Reuters, 01.11.19, RFE/RL, 01.08.19)
  • The Russian Foreign Ministry said the U.S. detained Russian citizen Dmitry Makarenko in the Northern Mariana Islands on Dec. 29 and had moved him to Florida. Papers filed in U.S. District Court for the Southern District of Florida show Makarenko was accused in June 2017 by federal prosecutors of conspiring with another man to export defense articles including night-vision scopes from the U.S. to Russia without U.S. approval. Russia downplayed the possibility of swapping detained American Paul Whelan held on espionage charges for Makarenko. (Reuters, 01.05.19, The Washington Post, 01.06.19)
  • Paul Whelan, the former U.S. Marine held in Moscow on spying charges, had online contact with more than 20 Russians with military backgrounds, an analysis of social media shows. The Russian Foreign Ministry says Whelan may receive visits from diplomats from the three other countries where he holds citizenship. Russia has also rejected a British suggestion that it might use Whelan as a pawn in a diplomatic game. A lawyer acting for Whelan has filed an appeal with a Moscow court seeking to have his client released on bail. (RFE/RL, 01.07.19, RFE/RL, 01.09.19, Reuters, 01.10.19, Reuters, 01.11.19)
  • U.S. sanctions have cut off imports of foreign components needed to produce Russia's first post-Soviet mainline commercial aircraft MS-21, threatening its production schedule. (Reuters, 01.10.19)
  • The Trump administration on Jan. 10 defended its decision to lift sanctions on companies linked to billionaire Russian oligarch Oleg Deripaska, despite deep concerns from newly empowered House Democrats that the move was an effort by Donald Trump to help Vladimir Putin. In a 90-minute classified briefing with both Democratic and Republican lawmakers, Treasury Secretary Steven Mnuchin explained the administration's decision to lift sanctions on three companies controlled by Deripaska: EN+, Rusal and JSC EuroSibEnergo. (New York Times, 01.10.19)
  • Worried the U.S. may be falling behind rivals in nuclear-power technology, the Energy Department plans to spend $115 million to help develop advanced fuels for next-generation reactors. Russia is the only country capable of producing the higher-enriched uranium the Energy Department's new program would produce. (Wall Street Journal, 01.07.19)
  • Russia has slammed the U.S. for “shameless” interference in cash-strapped Venezuela as the country’s leader kicked off a second presidential term this week. (The Moscow Times, 01.11.19)

II. Russia’s domestic news

Politics, economy and energy:

  • The World Bank has said it expects Russia’s economy to grow by 1.5 percent this year instead of the previously forecast 1.8 percent. The bank estimated growth of 1.6 percent in Russia in 2018, and projects 1.8 percent growth in 2020 and 2021. (The Moscow Times, 01.09.19)
  • Russia’s Central Bank halved its dollar reserves to $100 billion in the second quarter last year, according to data released this week with a six-month lag. Russia then moved $44 billion each into euros and Chinese renminbi, as well as a fresh $21 billion into Japan’s currency. Russia now keeps 32 percent of its $485 billion reserves in euros, as opposed to 22 percent in dollars. Only half of the dollar reserves are U.S.-based. (Financial Times, 01.10.19)
  • Russia’s finance ministry said it is resuming foreign currency purchases on open markets after fears over U.S. sanctions saw it halt them last year to head off a slide in the ruble rate. (Financial Times, 01.11.19)
  • Russian President Vladimir Putin has declared Kaliningrad energy “independent” from neighboring countries as he launched a terminal feeding liquefied natural gas  directly into the Western exclave. (The Moscow Times, 01.09.19)
  • An infant who was found alive by rescuers in the rubble of a collapsed apartment building in the Russian city of Magnitogorsk has regained consciousness. (RFE/RL, 01.07.19)

Defense and aerospace:

  • In December 2017, Sergey Karakayev, the commander of the Russian Strategic Rocket Forces, announced that his service will conduct 12 launches in 2018. The actual number appears to be closer to two. (RussianForces.org, 01.09.19)
  • A new Kalibr-M cruise missile with a range of over 4,500 kilometers is reportedly currently under development for the Russian navy. (TASS, 01.08.19)
  • The Russian Defense Ministry has drafted new rules that would grant the military permission to shoot down hijacked passenger jets. (The Moscow Times, 01.11.19)

Security, law-enforcement and justice:

  • Russia’s Investigative Committee has blamed the deaths of three Russian journalists in the Central African Republic on the media outlet they were working for and that was funded by Mikhail Khodorkovsky. The accusation comes a day after an investigation presented what it claimed was new evidence that Orkhan Dzhemal, Alexander Rastorguyev and Kirill Radchenko fell victim to a targeted attack by men who had links to Wagner PMC. (The Moscow Times, 01.11.19)
  • Pirates allegedly took six Russian sailors hostage off the coast of the West African country of Benin. (RFE/RL, 01.05.19)
  • Two Russian citizens have reportedly been detained in southern Italy on suspicion of smuggling Kurdish migrants. (The Moscow Times, 01.11.19)
  • Authorities in Russia’s Khabarovsk region say they are investigating allegations that several police officers carried the coffin of a local gang leader during his funeral and that employees of the prosecutors’ office also attended the funeral. (RFE/RL, 01.10.19)

III. Foreign affairs, trade and investment

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

  • Russia slapped down Japanese assertions that a deal was in the offing to resolve a decades-old dispute over a chain of islands, accusing Tokyo of distorting agreements struck with Moscow to break the deadlock. (The Moscow Times, 01.10.19)
  • The Central African Republic does not rule out the deployment of full-fledged Russian military bases on top of an existing training facility, the CAR’s defense minister has told Russian media. (The Moscow Times, 01.10.19)
  • New Cypriot anti-money laundering rules are compounding the effects of U.S. sanctions against Russia. The value of bank accounts at Cypriot lenders held by foreign nationals from outside the euro-area—mostly Russian—fell to 7.1 billion euros ($8.1 billion) at the end of November. (Bloomberg, 01.10.19)
  • Foreign Minister Mevlut Cavusoglu says Turkey may buy U.S. Patriot missile systems if conditions are right, but insists such a deal would be impossible if Washington forces Ankara to cancel its agreement to purchase S-400 antiaircraft missiles from Russia. (RFE/RL, 01.10.19)
  • Dozens of Russia’s T-34 tanks are making their way home after being on loan to Laos as Moscow reportedly negotiates a new arms deal with its Southeast Asian ally. (The Moscow Times, 01.09.19)
  • The Kremlin says there is "understanding" on how crucial data on drug use by Russian athletes will be handed over to the World Anti-Doping Agency. Officials from WADA have begun working with Russian experts on the process of obtaining data from Moscow's former anti-doping laboratory. (CBC, 01.09.19, Reuters, 01.10.19)
  • Russia's media regulator says it is investigating whether British broadcaster BBC has broken Russian law by allegedly promoting Islamist extremism. (RFE/RL, 01.10.19)
  • A recent survey conducted by Germany's Forsa Institute for Social Research and Statistical Analysis found that 55 percent of respondents thought the U.S. was a threat to the country, just one point less than the 56 percent who said the same of Russia. Only 27 percent of Germans said that North Korea was a threat, while 24 percent said Turkey and 23 percent named Saudi Arabia. A mere 16 percent expressed concern over an increasingly powerful China. (Newsweek, 01.07.19)

China:

  • Trade volume between China and Russia exceeded $100 billion by mid-December 2018, a record high, the Chinese Ministry of Commerce announced Jan. 10. China remains Russia’s largest trade partner, while Russia is China’s tenth largest trade partner. (The Nation, 01.10.19)

Ukraine:

  • Russia may hand over 24 Ukrainian navy sailors seized off the coast of Crimea as part of a prisoner swap deal with Ukraine later this year, the pro-Kremlin Izvestia newspaper cited a highly-placed Russian diplomatic source as saying on Jan. 11.  U.S. President Donald Trump has earlier conditioned his next meeting with Russian counterpart Vladimir Putin on the release of the sailors and their ships. (Reuters, 01.11.19, Russia Matters, 01.11.19)
    • The Ukrainian authorities have appealed to the European Court of Human Rights regarding the detention and arrest of 24 Ukrainian sailors following the incident near the Kerch Strait. (Interfax, 01.08.19)
    • The EU has reiterated its call on Moscow to release all Ukrainian citizens “illegally detained” both in Russia and in Crimea. (RFE/RL, 01.10.19)
  • U.S. federal prosecutors have asked witnesses about how at least a dozen Ukrainian political and business figures gained access to the Donald Trump inauguration events, whom they met with while they were in the U.S. and what they discussed. As recently as last month, prosecutors were asking witnesses about illegal foreign lobbying related to Ukraine. Another subject of questions has been whether foreigners from Ukraine and other countries used straw donors to disguise donations to the inaugural committee. (New York Times, 01.10.19)
  • The spiritual head of Orthodox Christians worldwide formally granted independence to the Ukrainian church on Jan. 5, marking a historic split from Russia, which Ukrainian leaders see as vital to the country's security. (Reuters, 01.05.19)

Russia’s other post-Soviet neighbors:

  • “Today there is too much talk about the unification of [Belarus and Russia] … I believe these questions are exceedingly stupid and far-fetched for the purpose of discussion in our society,” Alexander Lukashenko, Belarus’s strongman leader, said on Jan. 10. Lukashenko has also warned Russia that it could lose its ally if Moscow fails to offer Minsk compensation for higher oil prices. Belarus has also lifted a long-standing limit on the number of U.S. diplomats allowed in the country. (Financial Times, 01.10.19, RFE/RL, 01.10.19, RFE/RL, 01.11.19)
  • Kazakhstan says dozens of its citizens, including children, have been evacuated from Syria after being held "hostage" in the country. (RFE/RL, 01.09.19)
  • Kazakhstan's Foreign Ministry says China is allowing more than 2,000 ethnic Kazakhs to renounce their Chinese citizenship and leave the country. (RFE/RL, 01.09.19)
  • Some 300 activists have gathered in the center of the Kyrgyz capital to protest against what they called the increasing number of Chinese migrants in Kyrgyzstan. (RFE/RL, 01.07.19)
  • Kyrgyzstan's former prime minister Sapar Isakov, who was arrested in 2018 on corruption charges linked to the modernization of a Bishkek power plant, is facing additional charges in another corruption case. (RFE/RL, 01.11.19)
  • Uzbek President Shavkat Mirziyoev has issued a decree which, among other measures, allows unmarried couples to share rooms in hotels across the former Soviet republic. (RFE/RL, 01.07.19)
  • Rosatom expects a site to be selected for Uzbekistan's first nuclear power plant by the end of March and a construction contract to be signed by the end of this year. (World Nuclear News, 01.08.19)

IV. Quoteworthy

  • No significant developments.