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

Nuclear security:

• The National Nuclear Security Administration (NNSA), in partnership with the Federal Bureau of Investigation’s Weapons of Mass Destruction (WMD) Directorate, recently conducted the “Atomic Thunder” tabletop exercise at the Rhode Island Nuclear Science Center in Narragansett. The exercise was the capstone event to NNSA-led training on physical protection upgrades and response to alarms. (NNSA, 01.04.17)

Iran’s nuclear program and related issues:

• "During President Obama’s first term, the United States and Russia reset our relationship, which led to tangible benefits on nuclear arms control and supply routes for our troops in Afghanistan. In discrete areas, we have retained our ability to work together on areas of shared interest, such as negotiating the JCPOA [Joint Comprehensive Plan of Action], protecting maritime areas, and coordinating on Arctic issues," said U.S. Secretary of State John Kerry in his Cabinet Exit Memo, published on Jan. 5. (TASS, 01.05.17)
• Iran and the six world powers that negotiated the 2015 landmark nuclear deal—the U.S., the U.K., Russia, France, China and Germany—have released previously restricted documents in a bid to dispel suspicions that Tehran is cheating on the deal. (RFE/RL, 12.24.16)

Military issues, including NATO-Russia relations:

• Russia’s Foreign Ministry has unexpectedly spoken out in favor of a reset with NATO. A representative of the Ministry said it denied seeing the NATO alliance as an anachronism, and expressed a desire to restore relations with the military bloc. “We need to build normal relations with NATO and renew what we had before,” Andrei Kelin, the Ministry’s head of the Department of European Cooperation, told Interfax. (The Moscow Times, 01.04.17)
• Ships began unloading U.S. tanks, self-propelled howitzers and hundreds of other fighting vehicles Jan. 6 in the northern German port of Bremerhaven, to be moved into Eastern Europe to bolster NATO’s deterrence against possible Russian aggression. Some 3,500 troops from the 4th Infantry Division in Fort Carson, Colorado, will join up with the equipment, which includes 87 tanks and 144 Bradley fighting vehicles, over the next two weeks. (AP, 01.06.17)
• Dozens of United States Special Operations forces are now in the Baltics to bolster the training and resolve of troops who are confronting a looming threat from Russia, and to enhance the Americans's ability to detect Moscow's shadowy efforts to destabilize the former Soviet republics. ''They're scared to death of Russia,'' Gen. Raymond T. Thomas, the head of the Pentagon's Special Operations Command, who visited the Baltics recently, said of the tiny militaries of Latvia, Lithuania and Estonia. The three countries increased spending on new defense equipment to $390 million in 2016, from $210 million in 2014. (New York Times, 01.02.17)
• Estonia's 16,000-member league, called the Kaitseliit, doubles as a volunteer firefighting corps. The 9,000 people in Latvia's Home Guard includes 1,100 members aged 55 or over. (Wall Street Journal, 01.03.17)
• U.S. Sen. John McCain said in the Estonian capital of Tallinn on Dec. 27 that the best way "to prevent Russian misbehavior [is] by having a credible, strong military and strong NATO alliance." (RFE/RL, 12.27.16)
• Russia’s Aurora Airlines has denied that one of its planes nearly collided with another aircraft—let alone a NATO military plane. The airline's comments directly contradict earlier reports by the Interfax news agency, which cited a source within Russian security services. (The Moscow Times, 01.05.17)
• A serious military confrontation between Russia and a NATO member state or a severe crisis in North Korea are among top international concerns for 2017 cited by a new survey of experts conducted by the Council on Foreign Relations’ ninth annual Preventive Priorities Survey. (Council on Foreign Relations, December 2016)

Missile defense:

• Russia has sharply criticized an annual defense spending bill signed by U.S. President Barack Obama last week, accusing him of seeking to undermine U.S. President-elect Donald Trump and forcing a "depraved anti-Russian" policy on him at the start of his term. The Russian statement said that portions of the law governing U.S. missile-defense plans were "aimed at demolishing nuclear parity with Russia" and achieving "unilateral advantages in this strategic area." (RFE/RL, 12.27.16)

Nuclear arms control:

• No significant developments.

Counter-terrorism:

• Turkish authorities say they have identified the perpetrator of the New Year’s Day massacre at an Istanbul nightclub, as Turkish President Recep Tayyip Erdogan declared that the country would not surrender to "terrorists." Iakhe Mashrapov, a citizen of Kyrgyzstan whose name and passport have been circulated in Turkish and Italian media, and widely on social media, was questioned by Turkish and Kyrgyz authorities in the Kyrgyz capital of Bishkek but later released. The New Year’s shooting rampage took the lives of 39 people, 26 of whom were foreign nationals, including 1 Russian woman. The Islamic State terrorist organization later claimed responsibility for the attack. A spokesman for Kyrgyzstan's National Security Service told RFE/RL on Jan. 3 that Mashrapov is now in Kyrgyzstan and had been questioned by both the Kyrgyz and Turkish authorities. (RFE/RL, 01.03.17, The Moscow Times, 01.03.17, TASS, 01.02.17, RFE/RL, 01.04.17)
• Russia's security agencies say they have arrested seven people suspected of preparing New Year's terror attacks in Moscow on orders from the Islamic State (IS) extremist group in Syria. Russia's main domestic security agency, the Federal Security Service (FSB), said on Dec. 29 that its agents arrested the suspects in the North Caucasus region of Dagestan. (RFE/RL, 12.30.16)
• Russian authorities said on Dec. 30 that one police officer and two suspected militants have been killed in a shoot-out in Dagestan, in Russia’s volatile North Caucasus region. Then a security-service official in Dagestan said on Jan. 1 that two militants had been killed in a counterterrorist operation by security forces as they hid in a house in the village of Yaman-Su in the Novolaksky district. (RFE/RL, 12.30.16, RFE/RL, 01.01.17)
• Khurshed Haydarov, a truck driver from Uzbekistan who held up traffic on a U.S. freeway for hours during the holiday weekend in an armed standoff with police, has pleaded not guilty to charges of making a terrorist threat. (RFE/RL, 12.29.16)
• The Islamic State’s Amaq News Agency claims that the so-called caliphate carried out at least 1,141 “martyrdom operations” (suicide attacks) in Iraq, Syria and Libya in 2016. The overwhelming majority of these, 1,112 in all, were launched in Iraq and Syria. (Long War Journal, 01.03.17)

Conflict in Syria:

• Russia's naval battlegroup in the Mediterranean Sea is preparing to head home after completing its mission in Syria. Armed Forces Chief of Staff Valery Gerasimov announced on Jan. 6 that the Admiral Kuznetsov aircraft carrier’s departure will be followed by the missile cruiser Peter the Great and the rest of the naval battlegroup. The force reduction follows an order given by Russian President Vladimir Putin on Dec. 29. (AP, 01.06.16, The Moscow Times, 01.06.17)
• Russian naval aviation pilots have performed 420 sorties and destroyed 1,252 terrorist facilities over the two months that the aircraft carrier naval group has participated in the Syrian operation, according to Commander of Russia’s Group of Forces in Syria Colonel-General Andrei Kartapolov on Jan. 6. (TASS, 01.06.17)
• Turkey's military said in late December that Russian aircraft have carried out three air strikes over 24 hours targeting Islamic State (IS) militants in northern Syria, in what appears to be the first Russian support for Turkish forces in the area. The military said in a statement on Dec. 30 that the air strikes killed 12 IS fighters in the Syrian town of Al-Bab, where Turkish forces launched an operation in August to push back IS from the border region. (RFE/RL, 12.30.16)
• The Russian Embassy in the Syrian capital of Damascus has been shelled twice, the Russian Foreign Ministry said in a statement on Dec. 28.(RFE/RL, 12.28.16)
• Syria would be divided into informal zones of regional power influence and Syrian President Bashar al-Assad would remain president for at least a few years under an outline deal between Russia, Turkey and Iran, sources say. Assad's powers would be cut under a deal between the three nations, say several sources. Russia and Turkey would allow him to stay until the next presidential election when he would quit in favor of a less polarizing candidate from the Alawite branch of Islam. (Reuters, 12.28.16)
• Russian President Vladimir Putin and his Iranian counterpart, Hassan Rohani, spoke by telephone on Dec. 24 and described the Syrian government’s capture of the Syrian city of Aleppo as a “milestone” in the conflict. Putin spoke by telephone on Dec. 23 with Syrian President Bashar al-Assad and the two agreed that the capture of Aleppo “has opened the door” for a political process by encouraging “many who earlier hampered a political settlement in Syria to join the process.” (RFE/RL, 12.24.16)
• In a statement published on Jan. 2, Syrian rebels said they had suspended talks over peace negotiations scheduled for later in January, accusing pro-government forces of breaking a cease-fire intended to stem bloodshed ahead of the meeting. Brokered by Russia and Turkey, the truce was to be followed by talks between mainstream rebel factions and government representatives in the Kazakh capital of Astana. The cease-fire took effect in Syria on Dec. 30 and does not cover those deemed to be terrorist groups, including the al-Qaeda associated Nusra Front and ISIS. (AP, 01.02.17, The Moscow Times, 01.02.17)
• U.S. President Barack Obama welcomed Turkey's effort with Russia to revive a Syrian cease-fire and peace talks in a conversation with Turkish President Recep Tayyip Erdogan on Jan. 3. (RFE/RL, 01.04.17)
• The United States is encouraging Syria peace talks being prepared by Russia for later in January in the Kazakh capital Astana and hopes they will produce a step toward peace, U.S. Secretary of State John Kerry said on Jan. 5. (Reuters, 01.06.17)
• "Russia’s unprecedented cyber intrusions and its military intervention in Syria have also posed significant challenges to both our bilateral relationship and to international stability, and it is critical that we remain vigilant against these and other threats, even as we look for areas where it is in our interest to cooperate with Russia," said U.S. Secretary of State John Kerry in his Cabinet Exit Memo, published on Jan. 5. (TASS, 01.05.17).
•  "We hope [the cease-fire] will be implemented fully and respected by all parties," U.S. State Department spokesman Mark Toner said in a statement. "Any effort that stops the violence, saves lives and creates the conditions for renewed and productive political negotiations would be welcome." (RFE/RL, 12.29.16)
• Moscow is pushing back against harsh criticism by Central Intelligence Agency (CIA) Director John Brennan, who told PBS in an interview Jan. 3 that Russia has pursued a “scorched-earth policy” in Syria, leading to “devastation and thousands upon thousands of innocent deaths.” Igor Konashenkov, the spokesperson for Russia’s Defense Ministry, said on Jan. 4 that the U.S.-led international military coalition has “methodically destroyed Syria’s infrastructure in order to maximize the weakening of the country’s legitimate government, despite the threat to the civilian population.” (The Moscow Times, 01.04.17)
• The Russian Foreign Ministry has stated that the United States has “completely lost its grip on reality” in response to sanctions that Washington has imposed on Syrian officials and a Russian bank for their roles in the conflict in Syria. The United States on Dec. 23 added nine board members of a previously blacklisted Moscow bank called Tempbank to the list of Specially Designated Nationals allegedly providing financial services to Syrian President Bashar al-Assad’s government. (RFE/RL, 12.24.16)
• The United States said it has no plans to provide portable rocket launchers to Syrian rebels, dismissing Moscow’s warnings that such weapons might fall into the hands of Islamic militants. (RFE/RL, 12.28.16)
• The Chinese government is sending China’s special envoy for Syria, Xie Xiaoyan, to visit several countries, including Russia, to discuss the possibility of settling the Syrian crisis, Chinese Foreign Ministry spokesman Geng Shuang said on Jan. 4. (TASS, 01.04.17)
• France has called on Russia to stop military action in Syria and respect a fragile cease-fire brokered by Moscow and Turkey seeking to end nearly six years of war. (Reuters, 01.02.17)

Cyber security:

• Following a 90-minute meeting on Jan. 6 between U.S. President-elect Donald Trump and the nation’s intelligence chiefs, Director of National Intelligence James Clapper, Federal Bureau of Investigation (FBI) Director James Comey and Central Intelligence Agency (CIA) chief John Brennan, Trump issued a statement acknowledging the hacking of “the cyber-infrastructure of our governmental institutions, businesses and organizations including the Democrat National Committee.” But he said it had “absolutely no effect on the outcome of the election.” The meeting in New York was to review the evidence behind the intelligence community’s conclusion that senior Russian officials were aware of and directed the computer breaches of Democratic officials and organizations last year. (Bloomberg, 01.05.17, New York Times, 01.06.17)
• The United States struck back at Russia on Dec. 29 for hacking the U.S. presidential campaign with a sweeping set of punishments targeting Russia’s spy agencies and diplomats. U.S. President Barack Obama sanctioned Russia’s Main Intelligence Agency (GRU) and Federal Security Service (FSB), the leading Russian intelligence agencies the U.S. said were involved. As part of the punishment, the U.S. also kicked out 35 Russian diplomats who the U.S. said were actually intelligence operatives, and shut down a pair of Russian compounds, in New York and Maryland. House Speaker Paul Ryan (R-Wis.) greeted the sanctions as an “overdue” gesture, while still jeering at the Obama administration over the timing, noting that the imposition of punitive measures was “an appropriate way to end eight years of failed policy with Russia.” Senate Majority Leader Mitch McConnell (R-Ky.) called the sanctions “a good initial step, however late in coming.” Rep. Devin Nunes (R-Calif.), chairman of the House Intelligence Committee, said in a statement that he had urged action on hacking “for years.” Rep. Trent Franks (R-Ariz.), said on MSNBC that it was important to note that no one accused Russia of hacking the election itself. Rep. Ted Yoho (R-Fla.), a member of the House Foreign Relations Committee, said on CNN that he was “not thoroughly convinced” that Russia had been behind the hack.  (The Washington Post, 12.29.16, AP, 12.29.16, The Washington Post, 12.30.16, The Washington Post, 12.29.16)
• Russian President Vladimir Putin of Russia announced on Dec. 30 that he would not retaliate against U.S. President Barack Obama’s decision to expel Russian diplomats and impose new sanctions. While the Russian Foreign Ministry had initially recommended that Putin expel 35 U.S. diplomats and close two properties used by the U.S. Embassy in Moscow, Putin said that he didn't plan to “create problems for American diplomats.” Maria Zakharova, a spokeswoman for the Russian Foreign Ministry, has hit back at claims that authorities were planning to close an American school in Moscow in an act of retribution for wide-ranging U.S. measures against Russia. Russian diplomats who were expelled by Obama’s order have left Washington and are heading to Moscow. A total of 96 Russian diplomats and their family members were to have left the U.S. Consul general Sergey Petrov says the chef at the Russian Consulate in San Francisco is among four diplomats being expelled. (New York Times, 12.30.16, AP, 12.30.16, RFE/RL, 01.01.17, AP, 12.03.16, TASS, 12.30.16)
• U.S. President-elect Donald Trump on Dec. 30 expressed his appreciation to Russian President Vladimir Putin after the Russian president said he would not expel American diplomats in response to new U.S. sanctions over hacking as a gesture to the incoming administration. “Great move on delay (by V. Putin),” Trump tweeted. “I always knew he was very smart!” On Dec. 29 Trump played down the ramifications of any Russian interference in the U.S. election, saying it is “time for the country to move on to bigger and better things.” Incoming White House press secretary Sean Spicer said that Trump will be asking questions of U.S. intelligence agencies following U.S. President Barack Obama’s new sanctions. “One of the questions that we have is why the magnitude of this? I mean you look at 35 people being expelled, two sites being closed down, the question is, is that response in proportion to the actions taken? Maybe it was; maybe it wasn't but you have to think about that," Spicer said. (The Washington Post, 12.30.16, Reuters, 01.02.17)
• U.S. President-elect Donald Trump has called the furor over an alleged Russian cybercampaign to meddle in the U.S. presidential election a "political witch hunt.” Trump has called for a congressional investigation of NBC News for reporting the contents of a classified intelligence report about alleged Russian computer hacking targeting U.S. elections. NBC News reported that the intelligence document concludes, among other things, that the hacks were payback for the Obama administration's questioning of Vladimir Putin's legitimacy as Russia's president. Trump has also earlier quoted WikiLeaks founder and fugitive Julian Assange questioning the Russians’ role in hacking Democrats’ e-mails. However, Trump then wrote that it was "wrong" for media reports to suggest he agrees with Assange, who has maintained he didn't receive the stolen information from the Russian government. (RFE/RL, 01.06.17, The Washington Post, 12.29.16, The Moscow Times, 01.04.17, Bloomberg, 01.03.17, Wall Street Journal, 01.05.17, AP, 12.30.16, RFE/RL, 01.06.17)
• U.S. President-elect Donald Trump is considering plans to restructure and slim down a top U.S. intelligence agency, a person familiar with the discussions said Jan. 5. The move comes after Trump questioned the intelligence community’s assessment that Russia interfered with the presidential election on his behalf. Trump still is expected to name a Director of National Intelligence, and former Indiana Sen. Dan Coats is a leading candidate for the post, but he is said to be looking at ways to reorganize the agency. (AP, 11.05.17)
• The Office of the U.S. Director of National Intelligence (DNI) released a report, entitled “Assessing Russian Activities and Intentions in Recent US Elections” on Jan. 6. DNI said the report is a declassified version of the assessment that has been provided to the U.S. president. “We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the U.S. presidential election. Russia’s goals were to undermine public faith in the U.S. democratic process, denigrate Secretary Clinton and harm her electability and potential presidency. We further assess Putin and the Russian Government developed a clear preference for President-elect Trump…. [and] aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him.” (Belfer Center, 01.06.17)
• The FBI did not examine the servers of the Democratic National Committee before issuing a report attributing the sweeping cyber intrusion to Russia-backed hackers, BuzzFeed News has learned. The FBI has instead relied on computer forensics from a third-party tech security company, CrowdStrike, which first determined in May 2016 that the DNC’s servers had been infiltrated by Russia-linked hackers, a U.S. intelligence official told BuzzFeed News. U.S. President-elect Donald Trump seized on this admission. “So how and why are they so sure about hacking if they never even requested an examination of the computer servers?” Trump said on Twitter Jan. 5. (BuzzFeed, 01.04.17, Bloomberg, 01.06.17)
• Only Russia’s most senior officials could have authorized the data theft and disclosures that took place during the U.S. 2016 election campaign, according to three top U.S. intelligence officials. In a joint statement to the Senate Armed Services Committee, Director of National Intelligence James Clapper, Undersecretary of Defense for Intelligence Marcel Lettre and National Security Agency Director Admiral Michael Rogers said they stood by the intelligence community’s Oct. 7 finding that Russia interfered with U.S. political institutions last year. Pressed by Sen. John McCain (R-Ariz.) on whether the actions constituted an “act of war,” Clapper said that was “a very heavy policy call” more appropriate for other entities in the U.S. government to decide. Clapper said the intelligence community cannot gauge the influence that the leaks of information had during the campaign or whether they influenced voters' choices. (Bloomberg, 01.05.17, The Washington Post, 01.05.17, Wall Street Journal, 01.05.17)
• Senior officials in the Russian government celebrated U.S. President-elect Donald Trump’s victory over Hillary Clinton as a geopolitical win for Moscow, according to U.S. officials who said that American intelligence agencies intercepted communications in the aftermath of the election in which Russian officials congratulated themselves on the outcome. (The Washington Post, 01.05.17)
• The CIA has identified Russian officials who fed material hacked from the Democratic National Committee and party leaders to WikiLeaks at the direction of Russian President Vladimir Putin through third parties, according to a new U.S. intelligence report, senior U.S. officials said on Jan. 5. (Reuters, 01.06.17)
• Republican U.S. Sen. John McCain said on Jan. 5 the goal of the intelligence community's review of Russian hacking and any influence on the 2016 U.S. election is not intended to question the result of the November poll. (Reuters, 01.05.17)
• Incoming White House press secretary Sean Spicer is defending cryptic comments by U.S. President-elect Donald Trump that he knows “things that other people don’t know” when it comes to allegations of Russian hacking. Spicer also dismissed on Jan. 2 a report released by the FBI and the Homeland Security Department supporting the accusations against Russia, calling it a “how-to” manual on basic cybersecurity for Democrats. (AP, 01.02.17)
• In December, the U.S. Department of Homeland Security and the FBI released the most detailed report yet on accusations that Russia interfered in the U.S. presidential election by hacking American political sites and email accounts. The 13-page joint analysis is the first such report ever to attribute malicious cyber activity to a particular country or actors. (AP, 12.30.16)
• Like U.S. President-elect Donald Trump, Henry Kissinger has also cast doubt on intelligence agencies’ conclusion that Russia sought to sway the election in Trump's favor, telling a recent interviewer: “They were hacking, but the use they allegedly made of this hacking eludes me.” (Politico, 12.24.16)
• As U.S. federal officials investigate suspicious Internet activity found last week on a Vermont utility computer, they are finding evidence that the incident is not linked to any Russian government effort to target or hack the utility, according to experts and officials close to the investigation. (The Washington Post, 01.02.17)
• The Organization for Security and Cooperation in Europe (OSCE) has suffered a "major" cyberattack, a spokeswoman has confirmed. (RFE/RL, 12.28.16)
• Mikhail Yakushev, a regional vice president at the Internet Corporation for Assigned Names and Numbers, said that nothing short of banning electricity could rob Russians of their access to global cyberspace. Earlier Russian President Vladimir Putin’s Internet advisor, German Klimenko said in an interview that Russia could be cut off entirely from the World Wide Web. (The Moscow Times, 12.29.16)
• Aleksandr B. Vyarya thought his job was to defend people from cyberattacks until, he says, his government approached him with a request to do the opposite. “Sorry, I can't,'' Vyarya said he told an executive at a Russian military contracting firm who had offered him the hacking job. (New York Times, 12.29.16)
• Russia's military laid out what is now seen as a blueprint for cyberwarfare with a 2013 article in a professional journal by Gen. Valery Gerasimov, the chief of Russia's General Staff. Cyberspace, wrote Gen. Gerasimov, “opens wide asymmetrical possibilities for reducing the fighting potential of the enemy." (Wall Street Journal, 12.30.16)
• It was not the quantity of Edward Snowden's theft but the quality that was most telling. Snowden's theft put documents at risk that could reveal the National Security Agency’s (NSA) Level 3 tool kit—a reference to documents containing the NSA's most-important sources and methods. Since the agency was created in 1952, Russia and other adversary nations had been trying to penetrate its Level-3 secrets without great success. (Wall Street Journal, 12.30.16)

 Energy exports from CIS:

• A big component of the recent rally in the price of oil was Russia's pledge to contribute 300,000 barrels a day of output cuts in the first half of 2017 to supplement a deal by the Organization of the Petroleum Exporting Countries (OPEC). Russian government data peg recent crude output at 11.2 million barrels a day, forming the basis for cuts. The problem is that this puts output near a post-Soviet record and about 370,000 barrels a day higher than in July. In other words, production since talks began about a coordinated output freeze has risen by more than the agreed cut to production. (Wall Street Journal, 01.05.17)
• Russia set a record for annual oil extraction in 2016 amid some of the lowest oil prices in recent history. In 2016, Russia extracted 527,499 million tons of oil and gas condensate, a 2.5% increase from 2015. (The Moscow Times, 01.02.17)
• Russian gas giant Gazprom says it pumped a record volume of natural gas through the Nord Stream pipeline on New Year's Day. The 160.75 million cubic meters of gas that transited through the pipeline on Jan. 1 exceeded the pipeline's design capacity, demonstrating that an additional pipeline is needed, the company said on Jan. 2. (RFE/RL, 01.02.17)
• A system operator for Ukrtransgaz said that Ukraine's gas transit system handled over 82 billion cubic meters of gas in 2016, an increase of 23% compared to the year before. (Sputnik, 01.03.17)
• The Russian energy giant Gazprom has applied to boost gas transit to the European Union through the Ukrainian gas transportation system, Ukrtransgaz, to 278.9 million cubic meters per day, spokesman for Ukrtransgaz Maxim Belyavsky said Jan. 6. (TASS, 01.06.17)
• Turkmenistan said that it has restricted natural gas deliveries to Iran over unpaid debts. (AP, 01.03.17)
• Oil rose to an 18-month high as output cuts by Kuwait and Oman signaled that OPEC and its partners are delivering on their accord to stabilize the market. Futures climbed as much as 2.8% in New York after adding 45% last year, the biggest annual gain since 2009. (Bloomberg, 01.02.17)

Bilateral economic ties:

• In 2016, the U.S. Commercial Service in Russia advised more than 700 U.S. companies on some aspect of the Russian market. (The Moscow Times, 12.22.16)

Other bilateral issues:

• There’s a widespread expectation that U.S. President-elect Donald Trump will ease sanctions on Russia upon coming into office, but legal experts told Risk & Compliance Journal that it’s more likely he would nibble at the edges of the program than lift the measures outright. Some of the measures, such as the Magnitsky Act sanctions, are imposed by Congressional statute. Other measures, including the embargo of Crimea and the sanctions designations on Russian President Vladimir Putin’s inner circle, were coordinated with European allies who want to keep the pressure on Moscow to back down on its activity in Syria, Ukraine and elsewhere. (Wall Street Journal, 01.05.17)
• Rex Tillerson, U.S. President-elect Donald Trump's nominee for secretary of state, has won over some Republicans on Capitol Hill, but Democrats have said they want more time to scrutinize his ties to Exxon Mobil and Russia. Top Senate Foreign Relations Committee Democrat Ben Cardin (D-Md.) said after meeting with Tillerson for over an hour on Jan. 4 that the businessman was “pretty forthcoming” on sanctions and “understands the importance of sanctions and recognizes that you need to have the ability to get results.” As Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.) tells it, Tillerson pointed to the European sanctions on Russia, which grandfathered in existing contracts, as a model he could respect. Tillerson has surfaced earlier in a corporate registration document leaked to journalists from the tax haven of the Bahamas. The document shows Tillerson served with U.S. and Russian executives as a director and officer of an Exxon subsidiary that operates a vast oil and gas reserve off the Russian coast. The document does not indicate anything illegal or improper. (The Washington Post,  11.05.17, RFE/RL, 01.05.17, The Washington Post, 12.28.16)
• U.S. President-elect Donald Trump has selected former Indiana Sen. Dan Coats to lead the Office of the Director of National Intelligence. In 2014, as part of the Kremlin’s response to U.S. and European sanctions for its actions in Ukraine, Coats was one of several members of Congress who were banned from Russia. In April 2014, Coats wrote an op-ed, lamenting “the lack of a forceful, effective response to the invasion of Ukraine.” “At a minimum, Congress must refuse to recognize Russian sovereignty over Crimea by passing my legislation,” he wrote. He also wrote to the Fédération Internationale de Football Association (FIFA) at the time, requesting that Russia be banned from the 2014 World Cup in Brazil and stripped of the right to host the 2018 tournament. Coats has also criticized an Obama administration program that, he said, provided American taxpayer dollars to a Russian company owned by one of Russia’s richest oligarchs, Alexei Mordashov. In 2015, however, Coats said, the heightened sense of crisis since the Paris attacks might require the two countries to put aside their differences in the war against the Islamic State. “As we learned in 1941, national emergency can create strange bedfellows,” Coats said. (AP, 01.05.17, The Washington Post, 01.05.17, Belfer Center, 01.05.17, McClatchyDC, 11.17.15)
• The Kremlin considers former U.S. Secretary of State Henry Kissinger as one of the wisest politicians possessing profound knowledge in Russia-U.S. relations, Russian presidential spokesman Dmitry Peskov said on Dec. 27. Peskov made these comments after Germany’s Bild newspaper reported that the ex-head of U.S. diplomacy might act as a mediator between Moscow and Washington under U.S. President Donald Trump. Kissinger recommended his former assistant, K.T. McFarland, to be incoming national security adviser Michael Flynn’s deputy, and urged Trump to nominate Rex Tillerson, the chief executive officer of Exxon Mobil, as his secretary of state. Kissinger is one of the few people in Trump’s orbit who can get him on the phone whenever he wants, according to one transition adviser. (TASS, 12.27.16, Politico, 12.24.16, Bloomberg, 01.04.17)
• Managing director at Kissinger Associates, Inc. Thomas Graham is being floated among lower-level transition interlocutors as a potential ambassador to Russia, according to a source familiar with the conversations. Graham met with House Foreign Affairs Committee staffers on Capitol Hill earlier this month, accompanied by other Russia observers, according to four people familiar with the session. Graham also sought meetings in the Senate. Graham appeared to be trying to identify people who shared similar outlooks on Russia and had connections to the Trump transition, three of the people said. (Politico, 12.24.16)
• Russian President Vladimir Putin's favorable rating among U.S. President-elect Donald Trump voters has risen to 35%, according to a recent poll conducted by YouGov for the Economist. U.S. President Barack Obama's favorable rating, meanwhile, is just 9% among Republicans. (The Washington Post, 01.04.17)

II. Russia’s domestic news

Politics, economy and energy:

• The Russian Defense Ministry’s Tupolev Tu-154 plane crashed early in the morning on Dec. 25 shortly after leaving Adler airport. There were 92 people on board: military servicemen, TV camera crews, human rights activist and medical worker Yelizaveta Glinka and a large group of performing artists from the Russian army’s Aleksandrov song and dance company, who had been expected to perform in front of the Russian aerospace group’s personnel at the Syrian air base Khmeymim on New Year’s Eve. (TASS, 12.29.16)
• On Jan. 5 during trading on the Moscow Stock Exchange, the U.S. dollar's value fell to less than 60 rubles for the first time since 2015, the RBC newspaper reported. (The Moscow Times, 01.05.17)
• Russian President Vladimir Putin participated in a ceremony to begin construction of a new pipeline to supply gas to Crimea from continental Russia. (TASS, 12.27.16)
• According to a recent report by the Credit Suisse Research Institute, 1% of the population in Russia holds 75% of the country’s wealth. That puts Russia in first place for inequality among the 38 countries that hold majority of the world’s wealth. (The Moscow Times, 01.03.17)
• The British finance journal The Banker has named Russian Central Bank Head Elvira Nabiullina the European Central Bank Chairman of the year. (The Moscow Times, 01.04.17)
• Russia’s Novovoronezh 3 was shut down on Dec. 25, becoming the oldest VVER-440 reactor to enter decommissioning. (World Nuclear News, 12.28.16)
• Russian President Vladimir Putin has instructed the presidential staff, Justice Ministry and the presidential envoy for environmental protection to analyze regulatory enforcement of the non-governmental organizations operating as foreign agents and financed by state. (TASS, 01.03.17)
• Russian authorities have sought to cast doubt on a New York Times report that said the country had conceded the existence of a widespread doping conspiracy among sports officials and athletes, claiming that statements by its anti-doping chief were "distorted and taken out of context." (RFE/RL, 12.28.16)

Defense and Aerospace:

• Vice Adm. Viktor Bursuk, deputy commander of the Russian navy, said that the ballistic-missile-carrying, Borei-class Prince Vladimir and the Yasen-M attack boat Kazan "will be floated out" by the end of 2017. (The Washington Post, 12.29.16)
• There will be no gaps in Russia’s early-warning coverage as three radars are to begin combat duty in 2017. According to the Russian defense minister, three new early-warning radars will begin combat operations in 2017—Orsk, Barnaul and Yeniseisk. Three additional radars—Baranovichi, Murmansk and Pechora—have been "upgraded." (Russianforces.org, 12.23.16)
• The Russian Air Force is set to receive five new fighter jets in 2017 as part of plans to modernize Russia's military forces. Five Sukhoi T-50 jets will join Russia's fleet, alongside more than 20 Su-30SM fighter jets, upgraded Tu-95 and Tu-160 strategic missile carriers and Mi-28 and Ka-52 attack helicopters, according to Commander Col. Gen. Viktor Bondarev. (The Moscow Times, 01.06.17)
• A new air-route radar complex, Sopka-2, has entered service on Wrangel Island in the Arctic Ocean in northeast Russia, spokesman for Russia’s Eastern Military District Col. Alexander Gordeyev said on Jan. 4. (TASS, 01.04.17)
• The combat potential of the Russian armed forces increased by 14% in 2016, Russian Defense Minister Sergei Shoigu reported to Russian President Vladimir Putin during the end-of-the year defense meeting. (TASS, 12.28.16)

Security, law-enforcement and justice:

• Former Economic Development Minister Alexei Ulyukayev was unaware that he was being "bribed" shortly before he was arrested on corruption charges, his legal team claims. (The Moscow Times, 01.03.17)

III. Foreign affairs, trade and investment

General developments and relations with “far abroad” countries:

• Russia is eyeing naval exercises with the Philippines and deployed two navy ships for a several day goodwill visit to the Philippine capital of Manila on Jan. 3. Philippine President Rodrigo Duterte said on Jan. 6 that he hoped Moscow would become his country's ally and protector as he toured one of two Russian warships. Duterte will consider joint naval exercises with Russia, his spokesman said Jan. 5, months after he decided to reduce military drills with the U.S. Rear Adm. Eduard Mikhailov, deputy commander of Russia’s Pacific Fleet, led the visit of vessels. Moscow is ready to become a "close friend of the Philippines" as the southeastern Asian country diversifies its foreign ties, Russia's ambassador has said. (AP, 01.03.17, RFE/RL, 01.04.17, Bloomberg, 01.05.17, Reuters, 01.06.17)
• Russia is hindering the removal of Gulbuddin Hekmatyar, one of Afghanistan's most notorious warlords, from a United Nations sanctions list, Afghan and Western officials said Jan. 2, a move that could complicate efforts to implement a peace deal seen as a model for a similar accords with the Taliban and other insurgent groups. (Wall Street Journal, 01.03.17)
• Swiss-British commodities trading firm Glencore and the Qatari Sovereign Wealth Fund have closed a deal to purchase 19.5% of state-controlled Rosneft, according to a statement on Glencore’s website. (The Moscow Times, 01.04.17)
• French presidential candidate Marine Le Pen says she believes that Russia’s annexation of the Crimean peninsula from Ukraine was legal. The Front National leader also said that France and Russia must establish “strategic relations” in the fight against the Islamic State terrorist group, the RIA Novosti news agency reported. Ukraine indicated on Jan. 4 that it would bar Le Pen from entering the country for the comment. (The Moscow Times, 01.03.17, Reuters, 01.04.17)

Ukraine:

• Ukraine on Dec. 29 reported its first combat death since Kiev agreed to a new "indefinite" ceasefire deal with pro-Russian insurgents in the separatist east. The insurgents agreed to the truce on Dec. 23—two days after it was negotiated by Ukraine and Russia with the help of mediators from the Organization for Security and Cooperation in Europe (OSCE). (AFP, 12.29.16)
• Hackers have targeted Ukrainian state institutions about 6,500 times in the past two months, including incidents that showed Russian security services were waging a cyberwar against the country, Ukrainian President Petro Poroshenko said. (Reuters, 12.29.16)
• Sen. John McCain, who has emerged as the chief opponent within the Republican Party to U.S. President-elect Donald Trump's warming relations with Russian President Vladimir Putin, underscored his tough stance by spending New Year's Eve at a forward combat outpost with Ukrainian troops. McCain said in Kiev that the United States will not strike a "Faustian bargain" with Putin. Sen. Lindsey Graham (R-S.C.) said Congress would pursue in 2017 more sanctions against Russia, targeting the energy and banking sectors, as well as "Putin and his inner circle." (USA Today, 01.02.17, RFE/RL, 12.30.16)
• The Ukrainian state-run defense company Ukroboronprom announced a plan to manufacture firearms, such as the M16 assault rifles, in Ukraine in accordance with NATO standards jointly with the U.S. Aeroscraft company, Ukroboronprom’s press service said Jan. 3. (Sputnik, 01.03.17)
• About 2.5 million Ukrainians are staying on Russian territory, of whom 1 million are residents of Ukraine’s southeastern regions, head of the Russian Interior Ministry’s Main Department for Migration Olga Kirillova told TASS on Jan. 4. (TASS, 01.04.17)
• The Simon Wiesenthal Center has called on the Ukrainian government to take legal action against marchers who yelled anti-Semitic slogans in an event held on New Year’s Day to mark the birthday of Ukrainian Nazi collaborator Stepan Bandera, whose followers murdered thousands of Jews at the beginning of the Holocaust. (The Jerusalem Post, 01.05.17)
• Ukraine reported on Jan. 2 a one-third drop in its natural gas use along with general energy savings that will be cheered by its financial backers from the International Monetary Fund. (AFP/Yahoo, 01.03.17)
• The revenue of Ukraine’s national budget in January through December 2016 totaled Hr 616.219 billion ($ 22 billion), which was up 15.2% from 2015 and 1.7% less than the target, according to a posting on the website of the State Treasury Service of Ukraine. (Interfax, 01.03.17)
• Yulia Marushevska, a young activist who became prominent in Ukraine's 2014 uprising and was later appointed to work on a major project to reform the corruption-plagued customs of Odessa, is herself being investigated for corruption. (Reuters, 12.29.16)

Russia’s other post-Soviet neighbors:

• Russian President Vladimir Putin met with the leaders of several former Soviet republics in St. Petersburg on Dec. 26, a day after the 25th anniversary of the Soviet Union’s dissolution. Kremlin spokesman Dmitry Peskov said last week that Putin believes the collapse of the Soviet Union in 1991 was a disaster. While the disintegration cannot now be reversed, Putin believes a "new integration in the space of the former Soviet Union" is needed, Peskov said. (RFE/RL, 12.27.16)
• Officials say at least four soldiers were killed and several others wounded in a border clash between Armenian and Azerbaijani forces early on Dec. 29. (RFE/RL, 12.29.16)
• Russia wants to expand its air force deployment to Tajikistan and is in talks with Dushanbe for joint use of an air base in the former Soviet republic, the Russian ambassador in Dushanbe said on Dec. 27. (RFE/RL, 12.28.16)
• Georgian President Giorgi Margvelashvili and a delegation of U.S. senators have discussed the Caucasus country's aspirations for joining Western institutions and the Georgian-U.S. strategic relationship in Tbilisi. The president's office said Margvelashvili thanked John McCain (R-Ariz.), Lindsey Graham (R.-S.C.) and Amy Klobuchar (D-Minn.) on Jan. 2 for their support of Georgia's "sovereignty and territorial integrity" during talks in the Georgian capital. (RFE/RL, 01.02.17)
• U.S. President-elect Donald Trump’s company pulled out of a proposed $250 million tower project in the Georgian Black Sea resort town of Batumi, the latest effort by Trump to defuse charges that his global businesses will cause conflicts of interest once he enters the White House. (Bloomberg, 01.04.17)
• Kazakhstan says it has lifted visa requirements for citizens of countries of the European Union and Organization for Economic Cooperation and Development. (RFE/RL, 01.03.17)
• Nine candidates have registered to run in Turkmenistan's presidential election on Feb. 12, media reported on Dec. 27. (RFE/RL, 12.28.16)
• Moldovan President Igor Dodon has met with the de facto head of the breakaway Transdniester region, Vadim Krasnoselsky, in the separatist-controlled city of Bendery. Russian news agencies quoted Dodon as saying that "there are some complicated issues and there are different visions, but it does not mean we should not sit at the negotiating table or discuss and resolve our citizens' problems." (RFE/RL, 01.04.17)

IV. Zingers of the week

• Mustafa Nayyem, a former Ukrainian journalist turned lawmaker whose Facebook post on Nov. 21, 2013 is widely viewed as the catalyst for Euromaidan: "I have a strong feeling that if you leave everything as it is, awaiting us is a counterrevolution.” (RFE/RL, 12.29.16)
• Financial Times columnist Frederick Studemann: “The glory of Russia appears to have been restored. Its president, Vladimir Putin, stands as one of the few victors in a year of breathtaking upheaval. From Aleppo to allegations of the hacking of the U.S. election, the sense that Moscow has reclaimed the global power and relevance that it enjoyed during Soviet times is palpable. Against that, Barack Obama, the U.S. president, has been marginalized.” (Financial Times, 12.19.16)
• Secretary-general of the Arab League Ahmed Aboul-Gheit on Russia: "They want to be reckoned with, to have enough clout so that nothing will take place in the region without their consent. And they are succeeding.” (Wall Street Journal, 12.20.16)
• Author Robert D. Kaplan: “The task of the new administration will be to project power in both the Russian and Chinese near-abroads to a greater degree than Obama has done, in order to set a more favorable geopolitical context for negotiations—yet without actually coming to blows with these regional powers.” (The National Interest, January-February 2017)
• Historian Niall Ferguson: “The biggest miscalculation was the willingness of the Bush administration to consider Ukraine for NATO membership and the later backing by the Obama administration of EU efforts to offer Ukraine an association agreement.” (Foreign Policy, 12.23.16)
• Philippine President Rodrigo Duterte to Rear Admiral Eduard Mikhailov, head of the Flotilla of the Russian Navy Pacific Fleet: “We welcome our Russian friends. Anytime you want to dock here for anything, for play, for replenish supplies or maybe our ally to protect us.” (Reuters, 01.06.17)
• House Speaker Paul Ryan: “Russia didn’t tell Hillary Clinton not to go to Wisconsin or Michigan. They didn’t put the server in her basement or put the stuff on Anthony Weiner’s laptop.” (Yahoo, 01.05.17)
• When Soviet leader Nikita Khrushchev met then-recently elected President John F. Kennedy in Vienna, he told him: "You know, Mr. Kennedy, we voted for you." (The Washington Post, 01.06.17)