February 5, 2018

The Last Warning to Moscow

According to the “On Countering America's Adversaries Through Sanctions Act” (adopted in August, 2017), on January 29, 2018 the US Department of the Treasury provided for the consideration of US Congress the so-called “Kremlin List”, which includes 210 people close the President of Russia V. Putin. At this, the secret appendix to the document contains information about their commercial relations and relatives and friends who can become formal owners of enterprises and financial assets of the Russian elite to withdraw them from under sanctions.

According to the official explanations of the US Department of State, the publication of the “Kremlin List” does not mean an automatic introduction or strengthening of sanctions against its figurants. At the same time, it creates the basis for the US secret services' more in-depth investigation of the facts of the involvement of the RF authorities in Russia's armed aggression against Ukraine, interference with the US elections, as well as corruption, money laundering and various forms of illegal activity, in both, the United States of America and other countries.

Taking into consideration the totalitarian and systemic corruptive nature of Putin's regime, all the key figures that are the initiators and leaders of its policy, are placed under the threat of new sanctions. Moreover, the inclusion of Russian oligarchs into the “Kremlin List” (and this is almost all of Putin's environment) has already caused them significant image and, consequently, business losses. This includes increasing the distrust of the individuals listed from their business partners and financial-credit institutions.

At the same time, the risk of Russian oligarchs' losing their property, financial and other assets in the USA and EU countries (hundreds of billions of dollars) sharply increases. And not just that. As shown by the arrest in France in November last year of a member of the RF Federation Council, billionaire Suleiman Kerimov for illicit financial transactions, the United States and their partners are ready to apply the whole range of rigorous and decisive measures against the Russian establishment.

Of course, all this could not help causing panic in the ruling elite of Russia, which began immediately after the adoption by the US Congress of the “On Countering America's Adversaries Through Sanctions Act”, and peaked after the release of the “Kremlin List”. Thus, according to sources in the US State Department and the US Department of the Treasury, last autumn most Russian oligarchs sent their representatives to Washington asking the American side not to include them in the list. At this, as usual, were used traditional methods of bribery and corrupt lobbying of their interests, which in this case did not work.

Under these circumstances, in Putin's environment, disagreements keep growing between the representatives of the big business, who suffer the greatest losses from sanctions and advocate for the change of the Russian policy (including reaching compromises with the West over the Ukrainian issue) and the siloviki who are adherents of Russia's hard foreign course (as the basis for maintaining their positions and influence). In particular, after the adoption in the USA of the above-mentioned “Act”, it was the Russian oligarchs who persuaded Putin to make certain concessions in terms of agreeing to the deployment of the UN mission in the Donbas, including on the Ukrainian-Russian border. However, in the aftermath under the pressure by siloviki, the Russian President abandoned this and agreed only to the deployment of a mission on the line of separation of sides.

Since the USA's publishing the “Kremlin List”, Russia's position on peacekeepers in the Donbas has undergone another change, which has become an obvious manifestation of Putin's move to the side of the oligarchs under the influence of the joint threat of Western sanctions getting tougher. Thus, during a meeting of the Special Representative of the US State Department for Ukraine, K. Volker and Assistant to the President of the Russian Federation V. Surkov on January 28, in Dubai, the Russian side again agreed to the gradual deployment of the UN mission throughout the conflict zone in the Donbas. Thus, on the eve of the release of the “Kremlin List”, Moscow showed willingness to make certain concessions in exchange for the USA's easing sanctions policy.

Against this background, a joint visit by the Director of the Foreign Intelligence Service of Russia S. Naryshkin, the Director of the FSB A. Bortnikov and the Chief of the Main Intelligence Department of the General Staff of the RF Armed Forces, who are precisely the top of the siloviki in V. Putin's environment and are under the Western sanctions. According to official reports of both sides, during their meeting with the CIA Director M. Pompeo the plans of the joint fight against terrorism and key problems of the Russian-American relations were discussed.

Well, very relevant questions and an appropriate opportunity to discuss them right now. In particular, if we take into consideration that today the main problem in relations between Russia and the USA is the “Kremlin List”, which directly affects the interests of the leadership of the Russian Federation, including the heads of Russian special services. In fact, it is exactly this and the firmness of the USA's position (demonstrated by M. Pompeo during negotiations with Russian counterparts) that became the main reasons for the siloviki's retreat from their positions.

However, the next demonstration of concessions by Russia does not mean a radical change in its course. Moscow's agreement on the gradual deployment of the UN mission in the conflict zone in the Donbas means only that this process may be suspended by it at each stage, under any trumped-up pretext.

Nevertheless, the USA's measures aimed at making Russia go to concessions and dialogue under the consistently increasing pressure on it, already produce results, including in the form of a gradual shift in Moscow's attitude to the UN peacekeeping mission in the Donbas. Moreover, the USA has already shown readiness to take new steps to implement its sanctions policy.

In particular, at the end of January 2018, a new bill “Defending Elections from Threats by Establishing Redlines Act” was submitted for consideration by the US Congress. The document contains a list of penalties against any country that will try to interfere in the US elections. One of the sections of the bill is directly related to Russia.

All this is critical for the leadership of the Russian Federation in the context of preserving significant problems in the Russian economy, which in no way “has adopted to Western sanctions” as the Kremlin claims. Thus, according to the Bloomberg agency, since the middle of last year, Russia's GDP keeps steadily falling, including by 0.2 % in the third quarter and by 1.5 % in the fourth quarter. At an even faster pace, the volumes of industrial production decrease — by 3.6 % on the results of last year. On February 1, 2018, the Russian Reserve Fund officially ceased to exist, and since the beginning of the year, there began the planned reduction of Moscow's last hope — National Wealth Fund.

On the one hand, this will somehow force the Putin’s regime to make further concessions over the Ukrainian issue, but on the other — it will, to its last minute, endeavor to achieve his goals in Ukraine. At this, with the aggravation of problems in the Russian Federation, such efforts will be becoming more and more active.

In particular, the evidence of this is the launch of Russia's next campaign to counter anti-Russian sanctions in the EU countries through its lobby in their political and business circles. At the same time, through all sorts of pro-Russian and populist forces, new attempts are being made to shake loose the situation in Ukraine.

However, all this will not help Moscow. The firmness of the USA's intentions to remove Russia from the world arena as its geopolitical rival, in fact, does not leave the latter any chance. Lately, such intentions have been confirmed in the new US National Security Strategy and in US President D. Trump's annual speech before the US Congress on January 30, 2018.