This Week’s Highlights

• Hackers backed by the Russian state are targeting pharmaceutical companies and academic institutions in the U.K., U.S. and Canada that are conducting COVID-19 vaccine research, British intelligence officials have warned according to the Financial Times. The U.K.’s National Cyber Security Center, together with Canada’s Communications Security Establishment, blamed the attacks on the cyber espionage group APT29, which it alleged was “almost certainly” working for the Kremlin’s intelligence services. The findings have been endorsed by the U.S. National Security Agency, the Financial Times reports. However, after Russian drugmaker R-Pharm signed a deal with AstraZeneca for it to manufacture a COVID-19 vaccine being developed by the British pharmaceuticals giant and Oxford University, the head of Russia's wealth fund said the deal showed that Moscow has no need to steal anything, the New York Times reports.
• The U.S. has threatened to sanction any individual or company helping Russia build the Nord Stream 2 gas pipeline to Germany as the Kremlin moves to complete the last kilometers of the project, according to RFE/RL. “Get out now—or risk the consequences,” U.S. Secretary of State Mike Pompeo said July 15. The State Department essentially removed language that excluded the pipeline from the powerful Countering America's Adversaries Through Sanctions Act passed in 2017.
• Russian President Vladimir Putin has delayed his flagship $360 billion national investment plan by six years as the coronavirus pandemic pitches Russia into recession and leaves a hole in the federal budget, the Financial Times reports. The decision to delay the initiative is the starkest sign yet of the damage the COVID-19 pandemic is wreaking on Russia’s economy. The economy shrank by 9.6 percent year-on-year as the country and Russians’ real disposable income fell 8 percent in year-on-year terms in April-June, which is the most in 20 years, according to Reuters.
• Alexei Kudrin, said if Russia’s GDP falls 5 percent this year as expected, then the national economy would have averaged just 1 percent annual growth over the past decade, RFE/RL reports. Kudrin said Russia needs to increase current spending plans on "human capital" such as health and education by 1 percent of GDP, which implies nearly $20 billion. He also said the nation suffers from poor state administration and high regulatory barriers and needs to reform how government workers are trained and motivated.
• More Ukrainians distrust President Volodymyr Zelenskiy than trust him for the first time since he took office in May 2019, according to the latest poll, bne IntelliNews reports. About 48.6 percent of respondents said they don’t trust Zelensky, compared to 44.2 percent who trust him, according to respondents to the poll by the Western-sponsored Razumkov Center and Kucheriv Democratic Initiatives Fund.
• Putin and members of Russia's Security Council expressed "extreme concern" over the flare-up in fighting between Armenia and Azerbaijan that erupted last week, Kremlin spokesman Dmitry Peskov said, The Moscow Times reports. Putin alongside senior Russian government officials "emphasized an urgent need for the parties to adhere to a ceasefire, and voiced a readiness to mediate efforts," Peskov said. The most recent flare-up in fighting began on July 12, with both sides accusing the other of starting the shelling that has continued sporadically for several days and so far claimed a total of 17 lives, including an Azeri general, bne IntelliNews reports.

 

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

Nuclear security:

• No significant developments.

North Korea’s nuclear and missile programs:

• No significant developments.

Iran and its nuclear program:

• Russian President Vladimir Putin and his Iranian counterpart Hassan Rouhani discussed their countries’ fights against COVID-19 and Iran’s nuclear program. Putin said during the call that the JCPOA deal was “vital for the maintenance of global stability and security,” according to the Kremlin’s statement. For his part, Rouhani affirmed his country’s commitment to the JCPOA and its readiness “for equal and constructive cooperation both with all of its signatories and within the IAEA.” (Middle East Monitor, 07.17.20)
• Last week, Iranian Foreign Minister Mohammad Javad Zarif acknowledged in a parliamentary session that his government is, "with confidence and conviction," in negotiations with China over a 25-year strategic partnership that could involve about $400 billion in Chinese investment through various sectors of the Iranian economy. (The Washington Post, 07.14.20)

New Cold War/saber rattling:

• In interviews, Afghan and American officials and foreign diplomats with years of experience in Kabul say that what began as a diplomatic channel between Russia and the Taliban just under a decade ago has more recently blossomed into a mutually beneficial alliance that has allowed the Kremlin to reassert its influence in the region. The shift coincided with increasing hostility between the United States and Russia over Syria’s civil war and other conflicts, analysts say, as well as Russia’s frustration with rising instability in Afghanistan and the slow pace of the U.S. pullout. (New York Times, 07.13.20)
• American intelligence agencies are investigating whether an April 2019 car bomb was detonated at the behest of a Russian military agency paying bounties to Afghan militia groups for killing American troops. Three U.S. Marines were killed by the bomb which went off  when they were patrolling outside the Bagram Air Base. (New York Times, 07.16.20)
• The Russian Defense Ministry’s newspaper, Krasnaya Zvezda, reported that that as many thirty foreign aircraft had conducted spy missions near its border just within the past week. Russian fighter jets from the air defense were scrambled eight times to intercept the foreign aircraft though no violations of the state border occurred. (The National Interest, 07.14.20)

NATO-Russia relations:

• “I think that would be a [death] sentence on this document,” Russian Deputy Foreign Minister Alexander Grushko said when asked if Russia will quit the Russia-NATO Founding Act if the U.S. redeploys nuclear weapons from Germany to Poland. (Interfax, 07.16.20)
• Russia insists on involving military officials in the NATO-Russia Council's work, as no substantive dialogue is possible otherwise, Grushko said. (Interfax. 07./16.20)
• Responding to Lithuania’s multiple requests for stronger U.S. military presence in the Baltics, the U.S. said on July 16 it will deploy hundreds of American troops to Lithuania for training over the next few years. A battalion-sized unit will come to Lithuania from Poland in a few months, and a company of troops is to be sent directly from the U.S. to Lithuania for training in 2022, according to the official. (bne IntelliNews, 07.16.20)

Missile defense:

• No significant developments.

Nuclear arms control:

• Delegations from the U.S. and Russia were expected to meet this week to discuss arms control and the possibility of coaxing China into negotiating a new, three-way nuclear weapons pact, two senior administration officials said July 13. (AP, 07.15.20)
• Russia will be able to ensure its security even if the New START treaty is not extended, Russian Foreign Minister Sergei Lavrov said July 10. "We know, and we strongly believe that we are guaranteed to ensure our security for the long term even in the absence of this agreement," TASS quoted Lavrov as saying. (Xinhua, 07.11.20)

Counter-terrorism:

• No significant developments.

Conflict in Syria:

• The U.N. Security Council adopted a resolution authored by Belgium and Germany on July 11 to extend the mechanism of transborder humanitarian supplies to Syria through one checkpoint, Bab al-Hawa, on the Syrian-Turkish border. Transborder delivery of humanitarian aid to Syria via just one checkpoint should not raise concerns, Russian Deputy Foreign Minister Sergei Vershinin told the press. (Interfax, 07.13.20)
• Turkish President Recep Tayyip Erdogan and Putin have held telephone calls on a number of pressing issues, including Libya and Syria. The Turkish presidential office added that the two leaders "agreed to strengthen ties between the two countries and maintain determination to achieve peace, security and stability in the region." (TASS, 07.13.20)
• Russia's Defense Ministry said on July 14 that a roadside bomb planted by militants hit a joint Russian-Turkish patrol in Syria, wounding three Russian soldiers, Russian news agencies reported. Several Turkish soldiers were also wounded in the blast, according to reports. The blast occurred in the southern part of the rebel-controlled Idlib region. (RFE/RL,07.14.20, The Moscow Times,07.14.20)
• Two militants’ combat drones were downed near the Russian airbase at Syria’s Hmeimim on July 11, Alexander Shcherbitsky, chief of the Russian Center for Reconciliation, said. (TASS, 07.12.20)
• Russian naval sailors and pilots held joint drills with the Syrian government troops in the Mediterranean Sea to defend strategically important facilities in the province of Tartus from an attack by an enemy’s fast-speed vessels. (TASS, 07.10.20)

Cyber security:

• U.S. President Donald Trump took credit late last week for a cyberattack on Russia’s Internet Research Agency two years ago, citing it as evidence that he has responded strongly to Russian provocations, despite considerable evidence that he has often excused Moscow’s aggressions in cyberspace and on European territory. Trump said “Correct” when asked whether he had launched the attack around the 2018 midterm elections that shut down the Internet Research Agency, a troll farm in St. Petersburg. The move against the Internet Research Agency, though classified, has been widely reported over the past two years. (New York Times, 07.11.20)
• Hackers backed by the Russian state are targeting pharmaceutical companies and academic institutions in the U.K., U.S. and Canada that are conducting COVID-19 vaccine research, British intelligence officials have warned. The U.K.’s National Cyber Security Center, together with Canada’s Communications Security Establishment, blamed the attacks on the cyber espionage group APT29, which it alleged was “almost certainly” working for the Kremlin’s intelligence services. The findings have been endorsed by the U.S. National Security Agency. (Financial Times, 07.16.20)
  • Russian drugmaker R-Pharm has signed a deal with AstraZeneca for it to manufacture a COVID-19 vaccine being developed by the British pharmaceuticals giant and Oxford University, it said on July 17. Following allegations that hackers backed by Russia were trying to steal COVID-19 vaccine and treatment research, the head of Russia's wealth fund said the deal showed that Moscow has no need to steal anything. (New York Times, 07.17.20)
• A jury in San Francisco has convicted Russian citizen Yevgeny Nikulin over a series of hacks and cyberthefts eight years ago that targeted major U.S. social-media companies such as LinkedIn and Dropbox. (RFE/RL, 07.11.20)

Elections interference:  

• Trump has commuted the prison sentence of Roger Stone, a confidante and self-described political “dirty trickster” in a July 10 move that sparked widespread anger from Democrats.  Trump made the controversial move four days before Stone was scheduled to start a 40-month sentence at a prison in Georgia. Stone’s conviction was related to an effort to serve as a backchannel to Julian Assange, the founder of WikiLeaks, which released Democratic documents obtained by hackers during the 2016 race. (Financial Times, 07.10.20)
  • Former special counsel Robert Mueller has broken his silence by defending the prosecution of Stone. In an op-ed in the Washington Post on July 11, Mueller fought back against Trump’s claim that his Russia probe was a politically motivated witch hunt. He emphasized that Stone’s conviction for lying to Congress and engaging in witness tampering to protect Trump still stood. (Financial Times, 07.12.20)
• U.S. Sen. Lindsey Graham, chairman of the Judiciary Committee, said on July 12 that he would call Mueller to testify before his panel about the investigation of Russian interference in the 2016 presidential election and ties to the Trump campaign. (New York Times, 07.13.20)
• A top prosecutor for Mueller has a book coming out this fall about the two-year investigation into the alleged ties between Russia and the 2016 Trump campaign. Random House announced July 13 that Andrew Weissmann's "Where Law Ends: Inside the Mueller Investigation" will be published Sept. 29. (AP, 07.14.20)
• A report on Russian interference in British politics will be published next week, it was confirmed on July 16. The investigation, carried out by parliament’s intelligence and security committee (ISC), was finished in March 2019 and was expected to be published before the election last December. (Financial Times, 07.16.20)
• Britain on July 16 accused "Russian actors" of seeking to disrupt last year's general election by circulating leaked trade documents between London and Washington. The government launched an investigation into the source of the leak, after details of talks with the United States on a possible post-Brexit trade deal were published on social media site Reddit. The main opposition Labour party said the files proved the government would "sell-out" the state-run National Health Service (NHS) to U.S. companies. (The Moscow Times, 07.16.20)

Energy exports from CIS:

• The U.S. has threatened to sanction any individual or company helping Russia build a controversial natural gas pipeline to Germany as the Kremlin moves to complete the last kilometers of the nearly $11 billion project. “Get out now—or risk the consequences,” U.S. Secretary of State Mike Pompeo said July 15 during a press conference announcing the new sanction guidelines for the Nord Stream 2 pipeline. The State Department essentially removed language that excluded the pipeline from the powerful Countering America's Adversaries Through Sanctions Act (CAATSA) passed in 2017. (RFE/RL, 07.15.20)
• OPEC and Russia are primed to start unwinding the record oil supply cuts agreed earlier this year, as they aim to raise production without undermining a recovery in crude prices. The oil cartel and its allies are set to scale back the cuts of 9.7 million barrels a day that took effect in May to 7.7 million barrels per day from August, OPEC delegates said. It would be the first test of their ability to start returning to the market the equivalent of almost 10 percent of global crude output, which was removed this spring after COVID-19 lockdowns and travel bans crushed oil demand. (Financial Times, 07.15.20)
• The Uzbek president said July 16 that the Central Asian country’s gas exports to China had fallen to a third of their previous levels, and stopped completely to Russia due to the coronavirus pandemic. (AFP, 07.16.20)

U.S.-Russian economic ties:

• No significant developments.

U.S.-Russian relations in general:

• The U.S. has imposed fresh sanctions on the interests of an influential Russian businessman close to Putin. The State Department announced on July 15 that it sanctioned five companies connected to Yevgeny Prigozhin, as well as three individuals, in the latest bid to stop the financier's "destabilizing global activity." The companies are located in Sudan, Hong Kong and Thailand, the statement said. The U.S. accused PMC Wagner Group, which is reportedly controlled by Prigozhin, of laying landmines in and around Tripoli and imposed sanctions over its alleged cooperation with Sudan's ousted dictator. The Pentagon's Africa Command said it had "verified photographic evidence" that the Wagner Group planted mines "indiscriminately" around Tripoli and toward Sirte east of the capital since mid-June. (RFE/RL, 07.15.20, The Moscow Times, 07.16.20)

 

II. Russia’s domestic policies

Domestic politics, economy and energy:

• Russia confirmed 6,406 new coronavirus infections July 17, bringing the country’s official number of cases to 759,203. Over the past 24 hours 186 people have died, bringing the total toll to 12,123—a rate considerably lower than in many other countries hit hard by the pandemic. (The Moscow Times, 07.17.20) Here’s a link to RFE/RL’s interactive map of the virus’ spread around the world, including in Russia and the rest of post-Soviet Eurasia. For a comparison of the number and rate of change in new cases in the U.S. and Russia, visit this Russia Matters resource.
• Putin has delayed his flagship $360 billion national investment plan by six years as the coronavirus pandemic pitches Russia into recession and leaves a hole in the federal budget. The decision to delay the initiative, billed by the Kremlin as Putin’s primary domestic objective during his current term as president, is the starkest sign yet of the damage the COVID-19 pandemic is wreaking on Russia’s economy and the long-term impact on the country’s budget revenues. (Financial Times, 07.13.20)
• Russians' real disposable income plunged the most in 20 years in the second quarter, while the economy shrank by 9.6 percent year-on-year as the country has been hit by low oil prices and the coronavirus pandemic. Incomes fell 8 percent in year-on-year terms in April-June, the state statistics service Rosstat said on July 17, adding that Russia's industrial output fell 9.4 percent in June compared with a year ago. (Reuters, 07.17.20)
• Alexei Kudrin, who served as Russian finance minister through the 2000s, said if GDP falls 5 percent this year as expected, then the national economy would have averaged just 1 percent annual growth over the past decade. Kudrin said Russia needs to increase current spending plans on "human capital" such as health and education by 1 percent of GDP, which implies nearly $20 billion. He also said the nation suffers from poor state administration and high regulatory barriers and needs to reform how government workers are trained and motivated. (RFE/RL, 07.11.20)
• Gazprom has reported its first quarterly loss in more than four years as the coronavirus pandemic slashes gas demand and prices. A 30 percent fall in the value of the ruble during the first quarter of 2020 sparked by the oil price collapse compounded a slide in both shipments and prices for the gas group that is expected to continue throughout the year. The $1.64 billion loss underscores the deep fiscal pain that the COVID-19 pandemic will have on Russia. (Financial Times, 07.14.20)
• Russia plans to conduct Phase III trials of its experimental coronavirus vaccine in the Middle East as well as at home, Russian Direct Investment Fund head Kirill Dmitriev said. He expects Phase III trials involving several thousand people to begin after a 100-person Phase II trial ends Aug. 3. “Six months from now, we will be in a situation where a few countries will have vaccines, and we believe those countries will be the U.K., Russia, China and the U.S.,” he said “And basically other countries will decide . . . which vaccine to buy . . . and who do you trust?” (The Moscow Times, 07.16.20, Financial Times, 07.17.20)
• Russian scientists said July 13 they hope the world’s first coronavirus vaccine will be distributed to patients as soon as next month after The Sechenov First Moscow State Medical University in Moscow said it completed clinical trials using human volunteers. (The Moscow Times, 07.13.20)
• The Russian Defense Ministry said on July 15 it had developed a "safe" coronavirus vaccine following clinical trials on a group of volunteers. The ministry said 18 people had participated in the research and were discharged without "serious adverse events, health complaints, complications or side effects." (AFP, 07.15.20)
• The mayor of Russia’s Arctic city of Norilsk, Rinat Akhmetchin, claims that Norilsk has 832 coronavirus cases instead of the officially reported 293, a nearly 200 percent difference, as well as a fivefold increase in community-acquired pneumonia where patients don’t get tested for COVID-19. (The Moscow Times, 07.16.20)
• Health demographer Aleksei Raksha, employed by the state statistics agency Rosstat, spoke out publicly: The low death toll wasn't due to a superior state response, he said in May, it was due to how coronavirus statistics were being counted. He was then fired from his job, he said. (RFE/RL, 07.13.20)
• Russia is among dozens of countries that have violated women’s rights during childbirth amid restrictions imposed because of the coronavirus pandemic, the Open Democracy advocacy group said July 16. (The Moscow Times, 07.16.20)
• Russia will no longer require foreigners without coronavirus to self-isolate for 14 days after arrival. Russia has also started negotiations with other countries to resume international flights. (The Moscow Times, 07.16.20, The Moscow Times, 07.14.20)
• Investigators of the Federal Security Service have formally charged an aide to the chief of Russia's Roskosmos space agency, journalist Ivan Safronov, with high treason. Safronov's lawyer Ivan Pavlov said his client was indicted on July 13, adding that he reiterated his previous not guilty plea. (RFE/RL, 07.13.20)
  • The Moscow City Court has upheld the two-month pretrial detention of Safronov. Safronov's lawyer, Ivan Pavlov, told MBKh Media news that the FSB for the first time provided him with case materials that contain what investigators called classified information. (RFE/RL, 07.16.20)
  • Moscow police on July 13 detained about 20 supporters of Safronov near the Lefortovo detention center in the Russian capital, where Safronov is being held. Human rights organizations have issued statements demanding Safronov’s release and expressing concerns over the intensifying crackdown on dissent in Russia. (RFE/RL, 07.13.20)
  • In a video published to social media July 13, Kremlin pool reporters from both state-run and independent outlets defended Safronov as a professional and questioned the treason charges. (The Moscow Times, 07.13.20)
  • Czech citizen Martin Larys, who had numerous meetings with Safronov, is an employee of Czech intelligence services, a source in the intelligence community told TASS July 16. Earlier, Proekt Media reported about the multiple meetings between the two. (TASS, 07.16.20)
• Russian journalist Svetlana Prokopyeva has won a prestigious media award, just days after a Russian court found her guilty of “justifying terrorism” in a controversial case widely criticized as an attack on freedom of speech. The New York-based Committee to Protect Journalists announced on July 13 that Prokopyeva was one of its 2020 International Press Freedom awardees. (RFE/RL, 07.13.20)
• Protesters marched in Russia's Far Eastern city of Khabarovsk over the arrest of a regional governor, in a display of defiance days after Putin won a referendum that could prolong his power for years to come. Sergei Furgal, who in 2018 defeated a Kremlin-backed candidate in the race for governor, was detained and flown to Moscow, where he is being held for two months pending trial for his alleged involvement in the murders of several businessmen some 15 years ago. (Wall Street Journal, 07.12.20)
• Russian opposition politician Alexei Navalny has been summoned for questioning in a criminal case launched over comments he made on social media. The Investigative Committee said in mid-June that Navalny had been accused of libeling a World War II veteran who featured in a video clip with other Russians to express support for proposed constitutional reforms. Russian police on July 17 carried out a new raid on Navalny’s offices. (RFE/RL, 07.14.20, AFP, 07.17.20)
• Russia's lower chamber of parliament, the State Duma, has approved the first reading of an expanded extremism bill aimed at further quelling opposition activists and politicians as well as anyone questioning Moscow’s forcible seizure of the Crimean Peninsula. (RFE/RL, 07.14.20)
• Following the recent approval of a constitutional amendment that bans same-sex marriages in Russia, a group of lawmakers has proposed legislation that would prevent people who have changed their gender from getting married or adopting children. (RFE/RL, 07.15.20)
• Russian authorities said they’ve carried out more than 100 raids in the homes of dozens of Jehovah’s Witnesses in the Voronezh region. (The Moscow Times, 07.14.20)
• Sergei Prostakov, the editor-in-chief of the MBKh Media news website, announced his resignation July 13 amid the latest spate of sexual harassment allegations to hit Russia's independent media sector. (The Moscow Times, 07.14.20)
• Russian police detained over 140 people including a high-profile Moscow deputy after Kremlin critics protested July 15 against changes to the constitution. (The Moscow Times, 07.15.20)
• Russian metals giant Norilsk Nickel said around 45 tons of aviation fuel has spilled from its pipeline in the Arctic. The incident is the latest in a series of environmental disasters to hit around the Far Northern city of Norilsk. Norilsk Nickel faced pressure from a key shareholder on July 14 to overhaul management after disasters including a massive Arctic fuel spill that sparked a state of emergency. Aluminum producer Rusal, which owns 28 percent in Norilsk Nickel, said it was "seriously concerned" over recent environmental accidents in the Russian Arctic and called for a shakeup in management. (The Moscow Times, 07.14.20, RFE/RL, 07.12.20)
• Russia's forest service said there were nearly 300 wildfires blazing across the vast country's northern wilderness on July 11, as it attempted to contain them with methods including explosives and cloud seeding. (AFP, 07.12.20)
• A recent heatwave in Siberia that saw temperature records tumble as the region sweltered in 38-degrees-Celsius highs was "almost impossible" without the influence of manmade climate change, leading scientists said July 15. (The Moscow Times, 07.16.20)

Defense and aerospace:

• Putin has ordered a snap "combat readiness check" involving 150,000 personnel and hundreds of aircraft and naval vessels to ensure security in Russia's southwest, where he sees a "serious threat" from terrorism. Russian Defense Minister Sergei Shoigu said on July 17 that the "check" had already begun and will test the readiness of Russian armed forces for the Caucasus-2020 military maneuvers scheduled for September. (RFE/RL, 07.17.20)

Security, law-enforcement and justice:

• A Russian couple that is on trial for high treason for photographs taken at their wedding five years ago that revealed the identity of a security operative when published online are facing a new charge: passing secret information to Latvian intelligence. Konstantin Antonets and Antonina Zimina were detained in July 2018 in Russia's Baltic Sea exclave of Kaliningrad and went on trial behind closed doors in May this year. The couple maintains they are innocent. (RFE/RL, 07.16.20)
• A police major in Far Eastern Russia has fallen to her death from a window after testifying against her boss in a criminal extortion case, news outlets reported July 16. Security cameras reportedly captured the lifeless body of criminal investigation officer Yekaterina Mishkina near a nine-floor apartment building in the city of Khabarovsk more than 8,000 kilometers east of Moscow. (The Moscow Times, 07.16.20)
• Russian prosecutors have confirmed murder charges against three Khachaturyan sisters accused of killing their abusive father in 2018, the sisters' defense team says, reversing their earlier calls for charges to be dropped and dealing a blow to women's rights activists who see the case as a litmus test for Russia's approach to domestic violence. (RFE/RL, 07.13.20)
• A Moscow municipal lawmaker has accused officials of corruption after discovering a contract price written in disappearing ink. Cheryomushki District councilor Yelena Selkova posted a video of herself holding a lighter next to the contract. Within seconds, the 2.6 million ruble ($37,500) figure can be seen vanishing from the paper. (The Moscow Times, 07.14.20)

 

III. Russia’s relations with other countries

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

• Libya’s eastern-based parliament has said it would “welcome” Egyptian military intervention in the country’s civil war to counter what it described as “breaches of Libya’s sovereignty” by Turkey, which supports the U.N.-recognized administration in Tripoli. The invitation to Cairo from the assembly aligned with renegade General Khalifa Haftar increases the risk of direct clashes between Egypt and Turkey. Abdel Fattah al-Sisi, the Egyptian president, warned last month that he would send his forces into Libya if the Turkey-backed forces aligned with the Government of National Accord crossed a “red line” by trying to capture the strategic port city of Sirte or the desert air base of Juffra. (Financial Times, 07.14.20)
• The U.N.-backed Libyan government will agree to a ceasefire to end the conflict in the north African state only if renegade general Khalifa Haftar withdraws his forces from key central and western regions, Turkey’s foreign minister Mevlut Cavusoglu has said. (Financial Times, 07.12.20)

China-Russia: Allied or Aligned?

• AliExpress Russia is aiming to reach $10 billion gross merchandise volume (GMV) by 2022-2023, CEO of the company Dmitry Sergeev said. The analysts estimate that AER accounted for 12-12.5 percent of the Russian e-commerce market (both cross-border and domestic) in 2019. (bne IntelliNews, 07.13.20)
• China has helped Russia prepare for the fight against the COVID-19 pandemic, Kirill Dmitriev, CEO of the Russian Direct Investment Fund, the country's sovereign wealth fund, said on July 16. Russia was among the first to receive important information about the disease from China back in January, Dmitriev said. "This allowed us to focus on starting the production of both tests and drugs," he added. (Xinhua, 07.16.20)
• On June 24, Robert O'Brien, Trump's national security adviser, gave a speech saying that assumptions that China would liberalize as it developed economically had proven wrong. O'Brien equated President Xi Jinping of China to Josef Stalin, the Soviet dictator. (New York Times, 07.17.20)

Ukraine:

• Human error was behind the Jan. 9 missile strike that downed the UIA flight shortly after it left Tehran airport, killing all 176 aboard. At an air defense unit, an operator forgot to re-adjust the north direction on the radar system after moving to a new position, an error that contributed to misreading the radar’s data, according to a report posted July 11 on the website of Iran’s Civil Aviation Organization. (Ukraine Business News, 07.13.20)
• Separatists forces fired at Ukrainian positions in Donbass on July 13 near the settlement of Slavne, as a result of which one soldier was killed, another soldier was blown up on an unknown explosive device near the settlement of Zaitseve, the press center of the Joint Forces Operation headquarters reports. (Interfax, 07.13.20)
• "This past week, the situation in southeastern Ukraine, I mean the settlement process, was touched on during a brief meeting of the [Russian] Security Council …and absolute disappointment was expressed over the fact that there is no dynamics whatsoever, absolutely. Kyiv keeps on doing nothing in terms of implementing the Minsk Package of Measures and Paris agreements," Kremlin spokesman Dmitry Peskov said. (Interfax, 07.13.20)
• Ukraine wants the "Normandy Four" nations (Ukraine, Germany, France, Russia) to hold a summit in Berlin. "The Berlin summit must be held," presidential office chief Andriy Yermak told journalists in Kyiv. "The next [prisoner] exchange will take place in the very near future," he said. (Interfax, 07.10.20)
• More Ukrainians distrust President Volodymyr Zelenskiy than trust him for the first time since he took office in May 2019, according to the latest poll released on July 15. About 48.6 percent of respondents said they don’t trust Zelenskiy, compared to 44.2 percent who trust him, according to the poll by the Western-sponsored Razumkov Center and Kucheriv Democratic Initiatives Fund. (bne IntelliNews, 07.16.20)
• Ukraine’s parliament voted on July 16 to approve Kyrylo Shevchenko, the CEO of state-controlled Ukrgazbank, as the new governor of the National Bank of Ukraine (NBU). Shevchenko will replace Yakiv Smoliy, who resigned citing “systematic political pressure” on the bank that made it impossible for him to effectively carry out his duties. He later claimed that Zelenskiy had put pressure on him to quit with the aim of installing a more “manageable” NBU governor. (bne IntelliNews, 07.16.20)
  • The IMF has earlier pressed Zelenskiy to preserve the independence of the central bank. “It is in the interest of Ukraine to preserve the independence of [the National Bank of Ukraine] and it is also a requirement under the current IMF-supported program,” said Kristalina Georgieva, IMF managing director. “The IMF reads the riot act to Zelenskiy about maintaining central bank independence—reading between the lines—no more money unless they choose a decent governor,” Timothy Ash, analyst at BlueBay Asset Management, wrote. (Financial Times, 07.15.20)
  • Ukraine must preserve the independence of the central bank under the next governor as part of the $5 billion IMF deal, the IMF's country representative said in the first public comments since Smoliy quit July 1. (Ukraine Business News, 07.13.20)
  • The day after Zelenskiy called for an 11 percent devaluation of the hryvnia, the IMF representative said: “The current Stand-By Arrangement is premised on...a continuation of the economic policies of inflation targeting, a floating exchange rate, accumulation of foreign reserve and strengthening of the financial sector." (Ukraine Business News, 07.13.20)
• The Ukrainian Prosecutor-General's Office has launched four additional criminal cases against former President Petro Poroshenko, his lawyer Ihor Holovan said. According to Holovan, the probes were launched at the request of tycoon Ihor Kolomoyskiy, who accuses Poroshenko of interference with the activities of PrivatBank—once owned by Kolomoyskiy—revealing sensitive information regarding PrivatBank's activities, abuse of office and money laundering. (RFE/RL, 07.10.20)

Russia's other post-Soviet neighbors:

• Putin and members of Russia's Security Council expressed "extreme concern" over the flare-up in fighting between Armenia and Azerbaijan that erupted last week, Kremlin spokesman Dmitry Peskov said. Putin alongside senior Russian government officials "emphasized an urgent need for the parties to adhere to a ceasefire, and voiced a readiness to mediate efforts," Peskov said. The most recent flare-up in fighting began on July 12, with both sides accusing the other of starting the shelling that has continued sporadically for several days and so far claimed a total of 17 lives, including an Azeri general. (The Moscow Times, 07.17.20, bne IntelliNews, 07.15.20)
  • Yerevan hasn’t asked the Collective Security Treaty Organization (CSTO) for help in connection with the situation on the border between Armenia and Azerbaijan, Armenia’s Deputy Foreign Minister Shavarsh Kocharyan stated on July 17 within the framework of a meeting of the Intergovernmental Council of the Eurasian Economic Union (EAEU). (TASS, 07.17.20)
  • Azerbaijani President Ilham Aliyev has replaced the long-time Foreign Minister Elmar Mammadyarov with Ceyhun Bayramov amid an escalation of the conflict with neighboring Armenia. (RFE/RL, 07.16.20)
  • Azerbaijani police have cracked down on thousands of protesters who rallied around the country’s parliament, the Melli Majlis, in support of a full-blown war with Armenia following days of fatalities. (bne IntelliNews, 07.15.20)
• The European Court of Human Rights has ordered Azerbaijan to pay 40,000 euros ($45,660) as compensation to prominent human rights activists Leyla Yunus and her husband, Arif Yunus, for violating their basic rights. (RFE/RL, 07.16.20)
• Belarusian President Alexander Lukashenko has said that he "will not give our country to anyone," a day after police across the country violently dispersed thousands of demonstrators following the exclusion of top challengers to him from the country's election next month. Belarusian police detained dozens of demonstrators on July 15 as protests against the barring of two major opposition candidates from the presidential ballot continued all over the country. (RFE/RL, 07.15.20, bne IntelliNews, 07.15.20)
  • The Central Election Commission of Belarus has barred Viktar Babaryka, seen as a major rival to incumbent Lukashenko, from running in a presidential election next month. Another strong challenger, Valery Tsepkalo, a former ambassador to the United States and founder of a successful high-tech park in Belarus' capital, Minsk, was also rejected after a large proportion of signatures supporting his presidential bid were nullified. The campaigns of Svyatlana Tsikhanouskaya, former Belgazprombank head Viktar Babaryka and prominent businessman Valer Tsapkal, three opposition figures involved in Belarus’s upcoming presidential election, have issued a joint statement on cooperation. (bne IntelliNews, 07.14.20, RFE/RL, 07.14.20, RFE/RL, 07.16.20)
• A court in Dushanbe has sentenced seven Tajik citizens to prison terms of between two and 27 years for a deadly attack on a post along the Tajik-Uzbek border in November. Tajik officials have said that 20 members of the Islamic State attacked the Ishqobod border post on the frontier with Uzbekistan, located 60 kilometers southwest of Dushanbe in the Rudaki district in the early hours of Nov. 6. (RFE/RL, 07.14.20)
• Uzbekistan halted air and rail transportation on domestic routes on July 13, a statement from the Ministry of Transport said on July 10. The restrictions, likely attempting to curb the spread of the novel coronavirus were put in place until Aug. 1. (bne IntelliNews, 07.13.20)
• Turkmenistan, the only country in Central Asia that has not officially registered any coronavirus cases within its borders, has suspended the operation of passenger trains amid reports of COVID-19 infections across the tightly controlled energy-rich nation. Turkmenistan’s government recommended on July 13 that its residents start wearing masks to combat “dust” in the air. The World Health Organization said on July 15 it was "concerned" about pneumonia reports in Turkmenistan, which continues to claim that it has zero coronavirus cases. The statement came after a long-delayed 10-day visit to Turkmenistan. (bne IntelliNews, 07.14.20, RFE/RL, 07.14.20, bne IntelliNews, 07.15.20)

 

IV. Quoteworthy

• “My prognosis is 55 percent versus 45 percent that he [Putin] will not run for the presidency in 2024. Let's face it: he didn't want to be a lame duck. His thinking was that elites shouldn't look for a future leader; they should stop thinking about the future. This is Putin's main obsession. The tradition from Byzantium is to intrigue rather than work. Putin doesn't want to encourage that. Most likely Putin will quit the job in 2024 and not violate the spirit of the Constitution,” owner and editor-in-chief of Nezavisimaya Gazeta Konstantin Remchukov said. (The National Interest, 07.10.20)