This Week’s Highlights:

• New Russian legislation retaliating against the latest U.S. sanctions could hurt whatever is left of U.S.-Russian cooperation against nuclear terrorism.

• Even with U.S. Defense Secretary Jim Mattis urging caution, U.S. officials said it was hard to envision that Trump would not move ahead with strikes, given that he has promised retaliation.

• A U.S. strike on Syria can set off a chain of events that would put America and Russia on the brink of war, according to Russian military experts.

• The Trump administration opposes a bill drafted by two Congressmen that would sanction Russia’s sovereign debt.

• Nervous Russian tycoons may be driving a selloff in the Swiss franc. Vladimir Potanin was the biggest total-value loser with $1.5 billion wiped out, even though he was not on the U.S. sanctions list.

• The U.K. says Russia has been running a program to test the means of delivering chemical warfare agents, including nerve agents, such as by application to door handles.

• Nearly 74 percent of Russian citizens want their government to maintain and develop the country’s nuclear industry.

• Luhansk in eastern Ukraine is one of the most mine-contaminated places on Earth, according to the U.N.

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

Nuclear security and safety:

• On April 13 Russia outlined a broad range of potential retaliatory moves against new U.S. sanctions. The proposed measures suggest Russia should suspend cooperation with the United States on atomic energy. The new legislation could also hurt the U.S.-Russia initiative to prevent nuclear terrorism. (Bloomberg, 04.13.18, Reuters, 04.13.18) See more in subsection on “Other bilateral issues.”
• “The global situation is sobering. Russia is modernizing its full range of nuclear systems while espousing a theory of nuclear escalation in military conflict. … Globally, nuclear terrorism remains a tangible threat,” U.S. Defense Secretary James Mattis told budget hearings at the House of Representatives’ Armed Services Committee. (Congressional Documents and Publications, 04.12.18)
• U.S. President Donald Trump’s 2019 budget request for the National Nuclear Security Administration (NNSA) is $15.1 billion, an increase of $1.2 billion or 8.3 percent over the 2018 request. More than half of the NNSA's facilities are over 40 years old, and roughly 30 percent date back to the Manhattan Project era. (Congressional Documents and Publications/Senate, 04.11.18)

North Korea’s nuclear and missile programs:

• North Korea's foreign minister, on a visit to Moscow, said that the situation on the Korean Peninsula and world events showed that his country and Russia needed to forge stronger ties. Russian Foreign Minister Sergei Lavrov said that he had accepted an invitation to visit Pyongyang and added that no decisions had been made on talks between Russian President Vladimir Putin and North Korean leader Kim Jong Un. (The Moscow Times, 04.10.18)

Iran’s nuclear program and related issues:

• U.S. and European officials said they’ve made progress on revisions to the Iran nuclear accord to address ballistic missiles and sunset provisions. Officials from the U.K., France and Germany emerged from talks this week with U.S. officials more confident than they’ve been after previous meetings. A decision by Trump not to renew sanctions relief for Iran on May 12 would not necessarily mean the U.S. had withdrawn from the 2015 Iran nuclear deal, U.S. Treasury Secretary Steven Mnuchin said. During confirmation hearings, Trump’s nominee for secretary of state, Mike Pompeo, said he’s committed to trying to “fix” the nuclear agreement with Iran before and after the May 12 deadline Trump has set. (Bloomberg, 04.12.18, Reuters, 04.12.18)

Military issues, including NATO-Russia relations:

• Chief of the Russian General Staff Gen. Valery Gerasimov and NATO’s Supreme Allied Commander in Europe Gen. Curtis Scaparrotti plan to meet before the end of April to discuss the prevention of military incidents amid rising tensions. (TASS, 04.10.18)

Missile defense:

• No significant developments.

Arms control:

• “Our relationship with Russia is worse now than it has ever been, and that includes the Cold War. There is no reason for this. Russia needs us to help with their economy, something that would be very easy to do, and we need all nations to work together. Stop the arms race?” U.S. President Donald Trump tweeted April 11. Russia's Foreign Ministry then called for Washington to destroy its chemical weapons, mocking Trump’s proposal. (The Moscow Times, 04.11.18, Fortune, 04.11.18)

Counter-terrorism:

• Russian security forces have prevented six terrorist attacks this year, including two planned on Election Day in March, the head of the Federal Security Service said. The total body count of militants and their accomplices killed so far this year stood at 15, with 189 suspects detained and 12 terror cells disbanded. (The Moscow Times, 04.10.18)
• A campaign to hack and jam Islamic State last year represented the first time that Britain has used its cyber capabilities as part of a joint military campaign, Jeremy Fleming, head of the country’s electronic intelligence unit, said. He said cyber-attacks had “made a significant contribution” to the war against the extremist group. (Financial Times, 04.12.18)

Conflict in Syria:

• U.S. President Donald Trump told a meeting of advisers on April 9 that he would take a decision that night or shortly after on a response to a suspected poison gas attack, which killed at least 60 people in Syria’s rebel-held Douma, and that the United States had "a lot of options militarily" on Syria. Trump also canceled a scheduled trip to South America to focus on the U.S. response to the suspected attack. The U.S. president then publicly warned Russia on April 11 of imminent military action in Syria over the chemical weapons attack. “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and 'smart!'," Trump tweeted. "You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it!" Trump said, referring to Moscow's alliance with Bashar Assad. On April 12, however, he played down the possibility of an imminent military response: “Never said when an attack on Syria would take place. Could be very soon or not so soon at all!” (RFE/RL, 04.10.18, The Moscow Times, 04.11.18, RFE/RL, 04.11.18, The Moscow Times, 04.10.18)
• U.S. officials said that U.S. Defense Secretary Jim Mattis had been raising concerns for days about the risks of an expansive attack on Syria that might accidentally kill Russians working with Syrian forces. Mattis told the House Armed Services Committee April 12 that his greatest fear of a potential strike on Syria is that the conflict would “escalate out of control, if you get my drift.” He said that the U.S. role in Syria is to defeat Islamic State, not “to engage in the civil war itself.” But referring to the use of chemical weapons, Mattis said that “some things are simply inexcusable, beyond the pale” and require a response. However, he also said that the Pentagon was still trying to pin down evidence related to the Douma attack. During a closed-door White House meeting officials said Mattis pushed for more evidence of Syrian President Bashar al-Assad's role in a suspected chemical attack last weekend that would assure the world that military action was necessary. In contrast Nikki Haley, U.S. ambassador to the United Nations, said that ''we definitely have enough proof'' of a chemical weapons attack. Even with Mattis urging caution, administration officials said it was hard to envision that Trump would not move ahead with strikes, given that he has promised retaliation. (Bloomberg, 04.12.18, RFE/RL 04.13.18, Wall Street Journal, 04.12.18, New York Times, 04.13.18)
• The U.S. State Department says the symptoms of the victims of an alleged April 7 chemical weapons attack in Douma are consistent with “an asphyxiation agent” and “a nerve agent of some type.” U.S. State Department spokeswoman Heather Nauert said on April 7 that the "United States calls on Russia to end this unmitigated support immediately and work with the international community to prevent further, barbaric chemical weapons attacks." (RFE/RL, 04.08.18, RFE/RL, 04.09.18)
• The Russian military expects the U.S. to provide the coordinates of its potential targets to avoid losses among Russian servicemen in Syria, according to anonymous sources in Russia’s Defense Ministry. Moscow has reportedly been in direct contact with the U.S. Joint Chiefs of Staff about the situation in Syria following Trump’s threat. (The Moscow Times, 04.12.1, Bloomberg, 04.11.18)
•  “We do not participate in Twitter diplomacy,” Kremlin spokesman Dmitry Peskov told reporters in response to a question about U.S. President Donald Trump’s Twitter activity after Trump used the platform to warn Russia of imminent military action in Syria, before offering to better relations. Peskov also said Russian and U.S. militaries are maintaining contact via a telephone hotline. (The Moscow Times, 04.12.18)
• Russian Foreign Minister Sergei Lavrov on April 13 warned the West against possible military action in Syria, saying "adventures" in Syria would lead to greater numbers of refugees in Europe.  He also said he hoped that there would be no repeat of the experience of Libya and Iraq in the Syria conflict. Lavrov also claimed the reported chemical attack in Syria was staged by foreign agents while the Russian military alleged the attack was directed by Britain. Britain’s U.N. ambassador, Karen Pierce, is vehemently denying the claim, calling it “bizarre” and “a blatant lie.” (The Washington Post, 04.13.18, BBC, 04.13.18, Reuters, 04.13.18)
• In response to U.S. President Donald Trump’s April 11 tweet, Russia's Foreign Ministry said "smart missiles should fly towards terrorists, not legal government." Invoking an earlier statement by the chief of the Russian General Staff, Russia's ambassador to Lebanon, Alexander Zasypkin, said any U.S. missiles fired at Syria would be shot down and the launch sites targeted, a step that could trigger a major escalation in the Syrian war. Valery Gerasimov, chief of the Russian General Staff, said in March: “In case the lives of our soldiers are under threat [in Syria], the armed forces of the Russian Federation will take retaliatory measures … against missiles and against the delivery vehicles used.” (The Moscow Times, 04.11.18, Financial Times, 04.11.18)
• “We have to say once again that military interference in Syria, where Russian forces have been deployed at the request of the legitimate government, under contrived and false pretexts, is absolutely unacceptable and can lead to very grave consequences,” the Russian Foreign Ministry said April 8. (Financial Times, 04.09.18)
• Russian Deputy Foreign Minister Mikhail Bogdanov said there was no threat of the situation in Syria resulting in a military clash between Russia and the United States. Bogdanov was quoted as saying that Russia and U.S. officials had "working contacts" over Syria and he believed common sense would prevail. (The Moscow Times, 04.10.18)
• Russian U.N. Ambassador Vassily Nebenzia said on April 9 that Moscow has warned the United States of "grave repercussions" if it carries out an attack against Syrian government forces over reports of a deadly chemical weapons attack. "The immediate priority is to avert the danger of war," Nebenzya said April 12. But he added that "we cannot exclude" the possibility of Western air strikes escalating into a broader conflict. (RFE/RL 04.13.18, The Moscow Times, 04.10.18)
• The U.S. and France have positioned warships armed with cruise missiles within firing range of Syria. The Syrian military expects the U.S. to target air bases in the Damascus province, especially those used to carry out attacks on the rebel enclave of Eastern Ghouta, including the site of the April 7 suspected chemical attack. (Wall Street Journal, 06.11.18, Wall Street Journal, 04.11.18)
• French President Emmanuel Macron has not said whether his country would join possible military operations. But he said France has "proof" that that Syrian forces launched chemical attacks that "at least" include chlorine. Macron also expressed his “profound” concern about the war in Syria and his “regrets” over Russia’s decision to block a U.N.-led investigation into a suspected gas attack in a phone call with Russian President Vladimir Putin on April 13. (Financial Times, 04.13.18, RFE/RL 04.13.18, The Washington Post, 04.12.18)
• While German Chancellor Angela Merkel condemned the use of chemical weapons and cited “very strong evidence” that the Syrian regime has again deployed them, the country ruled out participating in any military action. (Bloomberg, 04.11.18)
• U.N. Secretary-General Antonio Guterres and former U.S. President Jimmy Carter warned against allowing the war in Syria to spiral out of control, hours after U.S. President Donald Trump’s April 11 tweet in which he told Russia to "get ready" for retaliatory missile strikes. (RFE/RL, 04.11.18)
• "I rule out a scenario in which the United States will intentionally strike a facility in Syria where Russian servicemen are located," Military Sciences Academy Vice President Sergei Modestov said. Igor Korotchenko, a member of the Russian Defense Ministry's public advisory council, said any U.S. attack that killed Russians in Syria would compel a military response, potentially against a U.S. plane or ship. That could bring about a chain of events as dangerous as the Cuban missile crisis, Korotchenko said, and potentially "provoke World War III." "We've practically come to the brink of war,” said Alexander Golts, an independent military analyst in Moscow. (The Washington Post, 04.10.18, Financial Times, 04.09.18, The National Interest, 04.09.18, The Washington Post, 04.12.18, The Washington Post, 04.12.18)
• Moscow and Washington halted each other’s attempts in the U.N. Security Council on April 10 to set up international investigations into chemical weapons attacks in Syria. The U.N. Security Council was then scheduled to hold an emergency meeting at Russia's request on the "threat to international peace" from possible air strikes on Syria by the United States and its allies. (The Moscow Times, 04.13.18, RFE/RL 04.13.18, The Moscow Times, 04.11.18)
• At the invitation of the Syrian government, the Organization for the Prohibition of Chemical Weapons said it would deploy a fact-finding mission to Douma on April 14. (Wall Street Journal, 04.11.18, RFE/RL 04.13.18)
• Thousands of militants and their families arrived in rebel-held northwestern Syria after surrendering Douma to government forces. The evacuation deal restores Assad's control over the entirety of Eastern Ghouta, formerly the biggest rebel bastion near Damascus. Russian military police entered Douma on April 12 to act as "guarantors of law and order in the town," the Russian Defense Ministry said. Russian troops had arrived earlier April 9 under the terms of a surrender deal reached with the rebels after the suspected chemical attack—which Russia and Syria say did not happen. (The Moscow Times, 04.10.18, The Washington Post, 04.12.18)
• The Russian military said on April 9 that two Israeli F-15 war planes had carried out strikes on a Syrian air base on April 8. Interfax cited the Russian Defense Ministry as saying the Israeli war planes had carried out the strikes from Lebanese air space, and that Syrian air defense systems had shot down five of eight missiles fired. (The Moscow Times, 04.09.18)
• The Russian military has reportedly been disrupting U.S. military drones in Syria by scrambling their signals amid fears that Washington would launch a retaliation airstrike after a suspected chemical attack in Syria. (The Moscow Times, 04.10.18)
• Gen. Joseph Votel, the head of U.S. Central Command, predicted that the "hard part" lies ahead, as Syrian towns and cities now free of the Islamic State seek to rebuild and ensure that militants cannot return. “Of course there is a military role in this," he said. (The Washington Post, 04.08.18)
• CIA Director Mike Pompeo told Congress on April 12 that a "couple hundred Russians" were killed by U.S. artillery and air strikes in February when a base housing U.S. troops and their allies was attacked in eastern Syria. (RFE/RL 04.13.18)

Cyber security:

• A hack on an Arizona election database during the 2016 U.S. presidential campaign was carried out by suspected criminal actors and not the Russian government, a senior Trump administration official said. (The Moscow Times, 04.09.18)
• The U.S. Department of Homeland Security is giving states a chance to game out how they might respond to a cyberattack on election systems ahead of this year’s midterm vote. (Bloomberg, 04.10.18)

Elections interference:

• U.S. President Donald Trump lashed out April 11 at the "never ending and corrupt" investigation into Russian interference in the U.S. election, and decried the "unthinkable" raid to seize documents from his personal lawyer Michael Cohen. He took aim at both Robert Mueller and Rod Rosenstein as "conflicted" and attempting to overreach with their authority. The FBI agents who raided Cohen’s office and hotel were seeking details on his relationship with the Trump campaign and his efforts to suppress negative information about Trump. The FBI is also examining the lawyer's interactions with a bank that gave him loans against his taxi business. When he was in the taxi business full time, Cohen worked with Simon Garber, an immigrant from the former Soviet Union who also operated a fleet of cabs in Moscow. Deputy Attorney General Rod Rosenstein personally signed off on April 9’s FBI decision to raid Cohen’s office. Trump then reportedly discussed firing Rosenstein with White House aides on April 11. (The Washington Post, 04.13.18, The Washington Post, 04.11.18, New York Times, 04.12.18, The Washington Post, 04.13.18)

• The White House says U.S. President Donald Trump believes he has the power to dismiss special counsel Robert Mueller. In early December, Trump, furious over news reports about a new round of subpoenas from Mueller’s office, told advisers in no uncertain terms that Mueller's investigation had to be shut down. (New York Times, 04.10.18, RFE/RL, 04.11.18)
• Special counsel Robert Mueller defended his latest indictment of former Trump campaign chairman Paul Manafort while ignoring Trump’s caustic criticisms this week of Mueller’s investigation. Mueller’s prosecutors used a court filing April 10 to urge a judge to reject Manafort’s request for dismissal of his tax and bank fraud indictment filed in Virginia. (Bloomberg, 04.11.18)
• Former FBI Director James Comey said U.S. President Donald Trump last year mulled ordering the bureau to investigate the most salacious allegation in a controversial dossier—that Trump was with prostitutes in Moscow in 2013, and Russians filmed the encounter. Taking to Twitter shortly after the tape aired, Trump called Comey an “untruthful slime ball” and attacked his tenure as FBI leader. (Bloomberg, 04.13.18)  
• U.S. Justice Department officials on April 11 provided House Intelligence panel members a fuller view of a highly classified intelligence document that may have kicked off the FBI’s investigation of contacts between Donald Trump’s presidential campaign and Russian operatives. (Bloomberg, 04.11.18)
• U.S. President Donald Trump has been advised not to contribute to a fund set up to help former campaign aides and White House staffers pay legal bills related to the investigations into Russian interference in the 2016 election. (Bloomberg, 04.09.18)
• Appearing before a joint hearing of the Senate Judiciary and Commerce committees, Facebook CEO Mark Zuckerberg said April 10 that his company is cooperating with special counsel Robert Mueller in his investigation. “There’s no question that we should have spotted Russian interference earlier, and we’re working hard to make sure it doesn’t happen again,” his April 11 prepared testimony to Congress says (Bloomberg, 04.11.18m Politico, 04.09.18)
• Social media network Reddit announced on April 10 that it had taken down nearly a thousand accounts suspected of links to Russia's Internet Research Agency. (The Moscow Times, 04.11.18)
• CIA Director Mike Pompeo, U.S. President Donald Trump’s nominee for secretary of state, said he has spoken with special counsel Robert Mueller, who is investigating Russian interference in the 2016 election. “He requested an interview. I cooperated,” Pompeo said April 12 during his Senate Foreign Relations Committee confirmation hearing. (Bloomberg, 04.12.18)
• A new poll finds that nearly 7 in 10 American adults say they support Robert Mueller's focus on possible collusion with Russia. Sixty-four percent say they want the special counsel investigating Trump's business activities, and a 58 percent majority supports investigating alleged payments by Trump associates to silence women who say they had affairs with him. (The Washington Post, 04.13.18)
• A company tied to Yevgeny Prigozhin, a Russian caterer nicknamed “Putin’s chef” because of his close ties to Russian President Vladimir Putin, has hired a lawyer to defend U.S. charges that it joined in a long-running scheme to interfere with the 2016 presidential election. (Bloomberg, 04.11.18)
• Russian senators have named BBC’s Russia service as part of 12 foreign news media that they accuse of interfering in the country's latest presidential elections. In addition to BBC Russia, the list includes Germany’s Deutsche Welle, French radio station RFI and U.S. state-funded Voice of America and Radio Liberty. (The Moscow Times, 04.13.18)

Energy exports:

• German Chancellor Angela Merkel said a new Russian natural-gas pipeline is impossible if it leaves Ukraine empty-handed. Merkel said political considerations must play a role on Nord Stream 2, which would double an existing pipeline’s capacity to almost 30 percent of EU demand. "I made very clear that a Nord Stream 2 project is impossible without clarity on the future transit role of Ukraine," Merkel said at a news conference with Ukrainian President Petro Poroshenko in Berlin on April 10. (Bloomberg, 04.10.18, RFE/RL, 04.10.18)

Bilateral economic ties:

• No significant developments.

Other bilateral issues:

• Russian Prime Minister Dmitry Medvedev on April 9 ordered his government to draw up possible retaliatory steps after the United States imposed new sanctions on Moscow on April 6. On April 13 the State Duma outlined a broad range of potential retaliatory moves against new U.S. sanctions. The Duma will discuss the proposed bill next week. The draft law envisions curbs on the use of U.S. software and technology products by Russian government agencies, state companies; on the use of U.S. audit and consulting services by government agencies and state companies; on imports of U.S. pharmaceuticals, agricultural, alcohol and tobacco products. The proposed measures would also suspend remnants of Russia’s cooperation with the United States on atomic energy, rocket engines and aircraft manufacturing, including Russian supplies of uranium, which meet around 20 percent of U.S. uranium needs. The new legislation could also hurt the U.S.-Russia initiative to prevent nuclear terrorism. The measures would also curb hiring U.S. citizens in Russia, and envision increasing air-navigation fees for U.S. airlines. The document also includes potential curbs on U.S. buying Russia’s goods and equipment with rare-earth metals, such as titanium. (Bloomberg, 04.13.18, Reuters, 04.13.18)
• During his confirmation hearings at the Senate, U.S. President Donald Trump’s nominee for secretary of state, Mike Pompeo, vowed to advise a tough approach toward Russian President Vladimir Putin. “Vladimir Putin has not yet received the message sufficiently and we need to continue to work at that,” Pompeo said. (Bloomberg, 04.12.18)
• America’s Alcoa Corp. and Century Aluminum Co. appear to be two of the main U.S. beneficiaries of sanctions on Rusal and seven other firms linked to Oleg Deripaska. Shares in the two U.S. companies have rallied more than 17 percent since March 29. “If the U.S. uses all of its capacity that’s not being used right now, we can cover our imports,” Jorge Vazquez, managing director at Harbor Intelligence, said. (Bloomberg, 04.09.18)
• The Trump administration’s latest round of sanctions on Russian oligarchs will echo through the U.S. as well as Moscow: Americans at blacklisted companies—or on their boards of directors—will have to leave their roles. Glencore PLC said CEO Ivan Glasenberg had resigned as a director of Rusal, which made Washington's sanctions list last week. Glencore owns a nearly 9 percent stake in the firm. (Wall Street Journal, 04.09.18, Wall Street Journal, 04.10.18) For impact of latest U.S. sanctions on Russia see “Politics, economy and energy” subsection in “Russia’s domestic news.”
• The Trump administration is standing by its advice to Congress against sanctioning Russian debt, U.S. Treasury Secretary Steven Mnuchin said April 11, as Democratic Rep. Joaquin Castro of Texas and Republican Mike Turner of Ohio are attempting to drum up support for legislation that would prohibit purchases of Russian sovereign debt. (Bloomberg, 04.11.18)
• U.S. congressman Ted Deutch called on the Treasury Department to investigate whether Kalashnikov USA, which makes AK-47-style guns in Florida, violated sanctions on Russian arms makers, after a Bloomberg report revealed its executives had ties to a Russian manufacturer. (Bloomberg, 04.11.18)
• The National Rifle Association received about $2,512 from those with Russian addresses between 2015 and April 2018, an attorney for the firearms lobby said in a letter dated April 10. The letter was released by Sen. Ron Wyden, the ranking Democrat on the Finance Committee. (Bloomberg, 04.11.18)
• The United States has warned that former Russian double agents who were swapped to the West for Russian spies could face danger in the wake of the poisoning of an ex-agent in Britain. (The Moscow Times, 04.09.18)
• The United States has advised its soccer fans to “think twice” before traveling to Russia for the 2018 FIFA World Cup. (The Moscow Times, 04.10.18)
• A Belarusian escort jailed in Thailand who claims to have evidence of Russian meddling in United States elections faces new criminal charges of solicitation and conspiracy. (New York Times, 04.06.18)

II. Russia’s domestic news

Politics, economy and energy:

• Russia’s 50 richest businessmen have reportedly lost close to $12 billion since the U.S. imposed a new wave of sanctions against individuals and companies close to the Kremlin. Metals tycoon Vladimir Potanin was the biggest total-value loser with $1.5 billion wiped out even though he was not on the sanctioned list. Oleg Deripaska, with stakes in eight of the 15 entities sanctioned, followed with an estimated $1.3 billion loss from his $6.7 billion net worth. A senior Kremlin official said that it could have been worse because Oleg Deripaska and Viktor Vekselberg were not members of Putin’s inner circle. Shareholders in Deripaska’s Rusal aluminum group have lost more than half their money since last week. A former Russian government official said he believed the U.S. had settled for names that would also serve the administration’s other policies. “Targeting Deripaska may make sense in the context of their protectionist trade policies,” he said. (Financial Times, 04.09.18, The Moscow Times, 04.09.18, Bloomberg, 04.12.18)
• The benchmark MOEX Russia Index sank 8.6 percent, the most since March 2014 at the height of the Crimea conflict. Russian five-year credit-default swaps—contracts that insure against potential default—climbed 15 basis points, or 12 percent, on April 9, the most since December 2014 when Russia was facing a currency crisis. The cost of insuring Russian debt against non-payment, as measured by five-year credit default swaps, has climbed 40 basis points this week to 162 as the stand-off with the U.S. over Syria intensifies. (Bloomberg, 04.09.18, Bloomberg, 04.11.18)
• The ruble fell as much as 11 percent this week to 65.06 per dollar, the weakest since 2016. However, currency traders are now plowing into the options market, positioning for a rebound in the ruble. Options transactions reported April 12 to the Depository Trust & Clearing Corp. were more than 900 percent greater than the five-day average as of April 12. (Bloomberg, 04.13.18)
• Investors have continued to pour money into Russian stocks and bonds this week, despite fresh sanctions and escalating tensions between Washington and Moscow over Syria. Net flows to Russian equity funds amounted to 0.9 percent of assets under management in the week through April 11, according to data from EPFR Global and Bank of America Merrill Lynch. (Wall Street Journal, 04.13.18)
• U.S. sanctions and tensions over Syria forced Russia to cancel a regular bond auction for the first time since 2015. (Bloomberg, 04.13.18)
• Eight of the Russian airports likely to be used by teams competing in this year's FIFA World Cup are owned by entities now on a U.S. sanctions blacklist. (The Moscow Times, 04.11.18)
• Russian Prime Minister Dmitry Medvedev said the country will cope with the latest round of U.S. sanctions. "At the end of the day, we will turn all those actions to the benefit of our own economy,” he added. “But we will not forget those who keep pushing forward that anti-Russia policy." Medvedev said on April 12 sanctions-hit Russian companies that have fallen into difficulties should receive support from the state to help them retain staff. (The Moscow Times, 04.12.18, RFE/RL, 04.11.18)
• Russia’s Economic Development Minister Maxim Oreshkin has promised that the country will be able to withstand losses suffered since the latest round of U.S. sanctions triggered sell-offs. He echoed Deputy Prime Minister Arkady Dvorkovich’s earlier remarks prioritizing the need to “minimize uncertainty” and ensure that sanctions-hit Russian firms stayed afloat. (The Moscow Times, 04.10.18)
• Russia’s Foreign Ministry has claimed that Western sanctions aim to divide and impoverish the Russian population instead of punishing Moscow for geopolitical decisions and suspected election meddling. (The Moscow Times, 04.09.18)
• “With $460 billion of reserves, less than 15 percent total external debt to GDP, having massively reduced reliance on external funding since 2014 and diversified its oil transactions across non-USD currencies, Russia is well placed to weather any USD funding stress, at a time when oil prices are well supported,” according to Damien Buchet, chief investment officer of Finisterre Capital. (Financial Times, 04.12.18)
• The chief executive of the Telegram messenger app, Pavel Durov, has vowed to allow users to circumvent a Russian government ban of the service following a court decision on April 13. (The Moscow Times, 04.13.18)
• Russian lawmakers have passed legislation that will allow authorities to block websites that publish defamatory information against public figures. (The Moscow Times, 04.12.18)
• Russian opposition leader Alexei Navalny has called on his supporters to take to the streets to oppose Russian President Vladimir Putin’s election victory in a pre-inauguration demonstration on May 5. (The Moscow Times, 04.13.18)
• Russian opposition politician and Moscow municipal deputy Ilya Yashin has become the latest public figure to announce his candidacy for the mayoral election on Sept. 9. (The Moscow Times, 04.11.18)
• A Moscow court on April 12 rejected an appeal by former Russian economy minister Alexei Ulyukayev against his conviction for bribery and left his eight-year jail sentence unchanged. The appeal was rejected after Igor Sechin, who had declined to attend the December trial despite being summoned four times, testified as a witness at a closed session of the hearing on April 12. (The Moscow Times, 04.13.18)
• Aman Tuleyev, the embattled governor of Russia's Siberian region of Kemerovo, who stepped down last week after a deadly shopping mall fire, has now been voted in as a speaker of the region’s parliament. (The Moscow Times, 04.10.18)
• The Kremlin’s claim that there are no oligarchs in Russia has resonated with only three percent of the population, according to a state-run poll that also named Roman Abramovich the most famous Russian oligarch. (The Moscow Times, 04.12.18)
• Nearly 74 percent of Russian citizens want their government to maintain and develop the country’s nuclear industry, a sector they consider to be safe and clean despite Moscow’s troubled history with the technology and the government’s lack of transparency about its use, according to a recent poll by the Levada Center. (Bellona, 04.10.18)

Defense and aerospace:

• Russia’s Defense Ministry said on April 9 that it had launched drills stretching from Siberia to the Urals and the Volga region, as well as in Russian military bases in Tajikistan and Kyrgyzstan. (The Moscow Times, 04.09.18)
• A Russian Ka-29 military helicopter with two pilots on board crashed in the Baltic Sea late on April 12. (The Moscow Times, 04.13.18)

Security, law-enforcement and justice:

• No significant developments.

III. Foreign affairs, trade and investment

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

• Yulia Skripal was discharged from the hospital on April 10 more than a month after she was poisoned by a military-grade nerve agent together with her father. She did not wish to take up the offer of assistance from the Russian embassy in London. In a statement issued on her behalf by British police, Skripal said her father remained seriously ill and she was still suffering from the effects of the military-grade Novichok nerve agent used against them. (The Moscow Times, 04.10.18, The Moscow Times, 04.12.18)
• A nerve agent was used to poison a Russian former spy and his daughter, the Organization for the Prohibition of Chemical Weapons said, as its inquiry backed the U.K. on the toxin’s identity. Results of the OPCW’s analysis “confirm the findings of the United Kingdom relating to the identity of the toxic chemical that was used in Salisbury,” the organization said in a statement  on April 12. It said the poison was of “high purity” but declined to identify it publicly, adding that “the name and structure of the identified toxic chemical are contained in the full classified report” issued to member states. Moscow on April 12 rejected the findings of OPCW as part of a British information war against Russia. (Bloomberg, 04.11.18, Financial Times, 04.12.18)
• Some chemistry experts said there is no way to link traces of Novichok collected from the crime scene with a particular manufacturing site using science alone, without the use of intelligence sources. “The whole family of Novichoks are quite easy to make,” said Phil Parsons, an organic chemistry professor at Imperial College London. “You could synthesize them in any good chemistry lab, though you would have to take stringent safety precautions to prevent the staff being poisoned.” Details of several Novichok agents have been available on the internet for years. (Financial Times, 04.11.18)
• Russian officials are denying a British newspaper report that the nerve agent used against a former Russian spy in England came from a closed military facility on the Volga River. Their denials came on April 6 after The Times newspaper cited British security sources as saying they believe the nerve agent, which the British government has identified as Novichok, was manufactured and stored at a facility in the town of Shikhany, about 800 kilometers southeast of Moscow. (RFE/RL, 04.07.18)
• In a letter sent April 13 to NATO General Secretary Jens Stoltenberg, British national security adviser Mark Sedwill said the U.K. has intelligence that “during the 2000s Russia commenced a program to test the means of delivering chemical warfare agents and to train personnel from special units in the use of these weapons. This program subsequently included investigation of ways of delivering nerve agents, including by application to door handles.” The letter also said the U.K. has “information indicating Russian intelligence service interest in the Skripals, dating back at least as far as 2013, when email accounts belonging to Yulia Skripal were targeted by GRU cyber specialists.” (Financial Times, 04.13.18)
• The nerve agent attack on two people in England “demonstrates how reckless Russia is prepared to be, how little the Kremlin cares for the international rules-based order,” according to Jeremy Fleming, director of the Government Communications Headquarters, the British equivalent of the National Security Agency. (New York Times, 04.12.18)
• Britain's Sunday Times newspaper is reporting that the country is considering offering Russian former spy Sergei Skripal and his daughter new identities and a new life in the United States to protect them from further attempts on their lives. The Russian Embassy in London said it would consider any secret resettlement of Sergei and Yulia Skripal as an abduction of its citizens. (RFE/RL, 04.08.18,The Moscow Times, 04.10.18)
• The Russian Embassy in London has requested a meeting with British Foreign Secretary Boris Johnson over the poisoning of the Skripals, saying its dealings with Britain over the issue had been "utterly unsatisfactory." (RFE/RL, 04.07.18)
• A poll conducted in late March by YouGov PLC found that 19 percent of Britons said they didn't know if Russia was behind the early March attack, and 5 percent believed Russia was probably not behind the attack or definitely not behind it. In Russia, where propaganda from the Kremlin has long been a powerful tool in shaping public opinion, only 9 percent of the public think Moscow carried out the attack, according to a poll this month by the Levada Center. (Wall Street Journal, 04.13.18)
• A scientist has said she found no plant toxins in the stomach of a Russian mafia whistle-blower, Aleksandr Perepilichny, who died suddenly in Britain in 2012, challenging earlier evidence that he may have been poisoned by a deadly plant that can cause cardiac arrest. (RFE/RL, 04.11.18)
• Russia’s chief prosecutor has demanded that Britain return 500 billion rubles ($8.4 billion) stolen by Russian economic criminals that Moscow has been seeking to repatriate for over a decade. (The Moscow Times, 04.09.18)
• The European Union’s ambassador to Russia has returned to Moscow less than three weeks after being recalled by the EU foreign-policy chief amid severe tensions. (RFE/RL 04.13.18)
• Russia's foreign ministry said on April 9 that the Israeli army's use of force against Palestinians at protests inside the Gaza Strip was unacceptable. (The Moscow Times, 04.09.18)
• Russia’s energy minister has said Rosatom, the country’s state nuclear corporation, is prepared to finish Turkey’s first nuclear power plant all by itself, despite assurances from the company that it would draw investors to finance nearly half its cost. (Bellona, 04.09.18)
• Russia has asked Europe’s leading security body to condemn neighboring Latvia’s restrictions on foreign-language education in schools. (The Moscow Times, 04.13.18)
• The Swiss franc has fallen to its weakest level versus the euro since January 2015. The currency’s slide this week has been out of character with its status as a safe asset during times of market turmoil. Nervous Russian tycoons may be driving a selloff in the Swiss franc. (Bloomberg, 04.13.18)
• Biathlon's world governing body has said that its president Anders Besseberg is stepping down amid allegations that he and other union officials took some $300,000 in bribes to cover up doping by Russian athletes. (RFE/RL 04.13.18)
• Vladislav Surkov, veteran adviser to Russian President Vladimir Putin, says that Russia has abandoned its centuries-long hopes of integrating with the West and is bracing for a new era of “geopolitical solitude.” (RFE/RL, 04.10.18)

China:

• No significant developments.

Ukraine:

• The office of special counsel Robert Mueller is investigating a payment made to U.S. President Donald Trump’s foundation by a Ukrainian steel magnate for a talk during the campaign, as part of a broader examination of streams of foreign money to Trump and his associates in the years leading up to the election. Investigators subpoenaed the Trump Organization this year for an array of records about business with foreign nationals. In response, the company handed over documents about a $150,000 donation that Ukrainian billionaire Victor Pinchuk made in September 2015 to the Donald J. Trump Foundation in exchange for a 20-minute appearance by Trump that month through a video link to a conference in Kiev. (New York Times, 04.09.18)
• Ukrainian President Petro Poroshenko has announced plans for Ukraine to quit the Commonwealth of Independent States and terminate parts of a friendship treaty with Russia. (RFE/RL 04.12.18)
• Ukraine's prosecutor general's office announced April 10 that it has arrested a Russian dredger on charges of illegal sand removal. The vessel is the second Russian ship in a month to be arrested in connection with the dispute over the control of Crimea. (Maritime Executive, 04.10.18)
• Ukrainian police say a missing family of four has been killed in an antitank mine explosion near the front line in the eastern region of Luhansk, an area the United Nations has called one of the most mine-contaminated places on Earth. (RFE/RL, 04.11.18)
• Ukrainian law enforcement officers have searched the home and office of lawmaker Nadia Savchenko, who is in jail pending trial on charges of plotting a terrorist attack on parliament with grenades and automatic weapons. (RFE/RL, 04.10.18)
• Ukrainian authorities say they are investigating as "hooliganism" a rocket-propelled-grenade attack on a building that houses the offices of two of Ukraine's top independent news outlets in central Kiev. (RFE/RL 04.13.18)

Russia’s other post-Soviet neighbors:

• Authoritarian leader Aleksandr Lukashenka has dangled the prospect of decreasing the ample powers of the president in Belarus, but suggested that such a change should not be expected in the near future. In a meeting with heads of Belarusian media outlets on April 10, Lukashenka suggested that the powers of the prime minister and cabinet should be strengthened. (RFE/RL, 04.10.18)
• Azerbaijan's authoritarian president, Ilham Aliyev, has secured a landslide victory in a snap presidential election that was boycotted by the main opposition parties. (RFE/RL, 04.11.18)
• Armen Sarkisian has been sworn in as president of Armenia amid speculation that outgoing President Serzh Sarkisian will become prime minister, a post that is now more powerful than the presidency due to constitutional reforms. Armenian opposition lawmakers called for a rally on April 13 against plans by former President Serzh Sarkisian to run for prime minister in next week's election. (RFE/RL, 04.09.18, RFE/RL, 04.11.18)

IV. Quoteworthy

• “We lived for many centuries without private property in a paternalist state. So, while everybody now wants a car, a flat, jewelry, they also think you should not own a factory. And this is wrong. Public opinion is like a natural disaster. You cannot manage it. It starts raining, and well, you get wet,” Russian oligarch Vladimir Potanin said. (Financial Times, 04.13.18)