| U.S. Government Assistance to and Cooperative Activities with Eurasia -FY 2004 Released by the Bureau of European and Eurasian Affairs January 2005 Annex A: Assessments of Progress in Meeting the Standards of Section 498A of the Foreign Assistance Act of 1961
CRITERIA FOR U.S. ASSISTANCE UNDER SECTION 498A(a) OF THE FOREIGN ASSISTANCE ACT OF 1961 RUSSIA Section 201 of the FREEDOM Support Act amended Section 498A of the Foreign Assistance Act of 1961 to require that the President "take into account not only relative need but also the extent to which that independent state is acting to:"
Section 498A(a)(1): "make significant progress toward, and is committed to the comprehensive implementation of, a democratic system based on principles of the rule of law, individual freedoms, and representative government determined by free and fair elections." The 1993 Constitution established a governmental structure with a strong head of state (a President), a Government headed by a Prime Minister, and a bicameral legislature (Federal Assembly) consisting of the State Duma (lower house) and the Federation Council (upper house). President Vladimir Putin was re-elected in March 2004. OSCE election observers found that the election was well administered and "reflected the consistently high approval rating of the incumbent president, but lacked elements of a genuine democratic contest." The observers concluded that the election "failed to meet important commitments concerning treatment of candidates by the State-controlled media on a non-discriminatory basis, equal opportunities for all candidates and secrecy of the ballot." They also noted that the election process lacked "vibrant political discourse and meaningful pluralism."
Party lists and single-mandate districts currently elect duma deputies, although a Kremlin-backed proposal to eliminate single-mandate candidates is widely expected to become law. Regional governors and regional legislatures appoint members of the Federation Council: two from each of the 89 regions of the Federation. Duma elections, in 1993, 1995 and 1999 met international standards, despite some deficiencies in the 1999 elections. As for the December 2003 Duma elections, however, the International Election Observation Mission led by the Organization for Security and Co-operation in Europe (OSCE) reported that, while voting procedures were conducted in a technically correct way, the election process overall failed to meet many international standards. The OSCE expressed concerns about this step backwards, stating that "[t]his is a worrisome development that calls into question Russia’s fundamental willingness to meet European and international standards for democratic elections."
In December 2004, the Russian legislature passed and President Putin signed new law that eliminates direct gubernatorial elections and allows the president to appoint the 89 governors.
The Constitution provides for an independent judiciary, including a Supreme Court that hears appeals from the courts of general jurisdiction and a Constitutional Court. The judiciary remains seriously impaired by a shortage of resources and by corruption, and is still subject to undue influence from the executive branch. In September 2004, the Federation Council proposed legislation that would increase presidential control over the judiciary, allowing the president to nominate 10 of 21 members of the Supreme Collegium – who make decisions on appointing judges – and to choose one member himself. The judiciary is slowly undergoing other reforms; laws on judicial procedure, the status of judges, and the Constitutional Court, and a Code of Criminal Procedure, are being phased in over a three-year period that began in 2002. The judicial system continues to be plagued by large case backlogs and trial delays, though both the number of persons in pre-trial detention and the average length of time spent there have declined significantly.
The arrest in October 2003 of former Yukos CEO Mikhail Khodorkovskiy, his ongoing trial and continued incarceration, as well as the legal and tax case against Yukos itself, have raised concerns about the Russian Government’s commitment to promote transparency and rule of law. Furthermore, there have been several prosecutions in relation to so-called "espionage" cases that raise questions about whether the accused are being punished for legitimate research or journalistic activity, for example, the cases of defense and arms control researcher Igor Sutyagin, who in April 2004 was sentenced to 15 years in prison on alleged espionage charges, physicist Valentin Danilov who in November 2004 was sentenced to 14 years in prison on alleged espionage charges, and Mikhail Trepashkin, who was sentenced to four years of forced labor for allegedly disclosing state secrets and illegal possession of a handgun and ammunition. They also raise concerns about due process and the apparent undue influence of the Federal Security Service (FSB).
Russia has yet to enact comprehensive anti-corruption legislation or to develop a multidisciplinary approach to address corruption. The Government has, however, begun to engage on the issue in multilateral fora, such as the UN, the G-8, OECD, and the Council of Europe. The Duma held hearings on the problems of implementing Russian legislation in connection with Russia’s joining the UN Convention Against Corruption.
Section 498A(a)(2): "make significant progress in, and is committed to the comprehensive implementation of, economic reform based on market principles, private ownership, and integration into the world economy, including implementation of the legal and policy frameworks necessary for such reform (including protection of intellectual property and respect for contracts)." As of December 2004, the Russian economy was on track for 6.8 percent growth during 2004, down from 7.3 percent growth in 2003. Russia has maintained prudent macroeconomic policies, and its federal budget surplus will likely amount to 3% of GDP in 2004 -- three times higher than anticipated. This fiscal restraint will continue through next year, as the 2005 draft budget estimates a surplus of 1.5% of GDP, partly due to the rise in oil prices, but also a consequence of tighter fiscal policy. The external current account surplus has remained at 8-9% of GDP during the past two years, supported by high commodity prices. Core inflation has become entrenched at 10-11% over the same time. The country has maintained a stable exchange rate, and accumulated international reserves of over $135.9 billion. Public external debt has fallen from 80% of GDP in 1999 to approximately 20% of GDP in 2004, eliminating concerns about debt servicing. In addition, Russia plans to use excess oil stabilization fund revenues to prepay existing debt, which would further reduce its debt stock.
The early 2000s saw relatively quick Implementation of economic reforms but during President Putin’s second term the pace of reform has slowed. Much remains to be done in this arena to ensure Russia's sustained economic development. Even with the economic windfalls from energy exports, slow development and uneven enforcement of securities regulation, continued confusion caused by government restructuring, lack of a developed real property system, lack of financing due to political and economic uncertainty and a relatively weak banking system, over-reliance on barter transactions and failure to enforce bankruptcy against insolvent enterprises continue to prevent the Russian economy from reaching its potential, and render it vulnerable to adverse external shocks. In addition, resistance by the bureaucracy and other vested interests has attempted to divert reforms from their original aims, and hampered implementation, especially at the local level.
Since 1995, Russia's trade regime has moved generally toward greater liberalization, eliminating an oil export quota, special exporter regime and export tariffs. Russia's trade surplus, fueled by high oil prices, was $60.5 billion in 2003 and continues to grow. Russia's economy -- and its federal budget -- is particularly vulnerable to the world energy markets. A provision for a stabilization fund appeared for the first time in the 2004 budget. The new stabilization fund has accumulated $16.5 billion.
Russia's economic team appears committed to a reformist agenda, but remaining reforms -- breaking up the monopolies, fighting corruption, improving corporate governance, reducing dependence on a few sectors, reforming the public service and banking sectors, and more -- will be difficult. Since 1994, U.S. presidents have determined, subject to semiannual reporting requirements, that Russia is in compliance with the freedom of emigration provisions of the Jackson-Vanik amendment to the Trade Act of 1974, allowing Russia to receive normal trade relations status. Russia joined the Asia-Pacific Economic Cooperation group in 1998. While the Russian Government is committed to further integration into the world economy, making the necessary reforms has proved politically difficult. A bilateral investment treaty (BIT) was signed with Russia in 1992, but it has not entered into force because Russia has not ratified it. Russia also has an OPIC agreement, which it concluded in 1992.
Section 498A(a)(3): "respect internationally recognized human rights, including the rights of minorities and the rights to freedom of religion and emigration."
Russia's Constitution guarantees respect for internationally recognized human rights, but the Russian parliament has been slow to pass human rights legislation in many areas. The Government’s respect for the human rights of its citizens was uneven, and has worsened in several areas. The Government’s tendency in 2003 to exert strong pressure on certain democratic gains of the past decade continued in 2004.
There were continuing, numerous credible reports of human rights violations by Russian troops in Chechnya. (Chechnya is further addressed in the following section (a)(4).)
The treatment of prisoners and conditions in pretrial detention facilities and prisons were generally poor. Lack of respect for due process remains a serious shortcoming. In June, Russian Human Rights Ombudsman Vladimir Lukin described violations of human rights by law enforcement agencies as "most serious and most blatant." There were credible reports that law enforcement personnel continued to torture, beat, and otherwise abuse detainees and suspects. Lukin announced a joint Internal Affairs Ministry-Ombudsman effort to create an agreement on cooperation to provide oversight in internal affairs agencies. Arbitrary arrest and detention remained problems, as did police corruption. The Government prosecuted some perpetrators of abuses, but many officials were not held accountable for their actions.
The Russian Constitution provides for freedom of expression and of the media. Nevertheless, despite a wide diversity of print and internet media outlets, the state has assumed full control over nationwide television, which is the primary source of news for the overwhelming majority of the population. State-controlled television has provided little independent coverage of the government or dissenting views. The NTV network’s cancellation of the "Namedni" and "Freedom of Speech" programs in the summer of 2004 left Russian national television without any independent political programming. Beyond national television, there are many newspapers and local radio and TV channels that offer a range of views, however state pressure is not limited to TV. The September dismissal of Ref Shakirov, the editor-in-chief of "Izvestiya," one of Russia’s most widely read newspapers, following his paper’s critical coverage of the Beslan tragedy, sent a negative signal to other news organizations. Even in the regions, newspapers are under growing pressure to conform to government-endorsed views. In Kazan, for example, police officials confiscated 143,000 copies of a local newspaper after it criticized authorities and supported an opposition political candidate for the presidential election. The independent and reliable media freedom organization The Committee to Protect Journalists has raised concerns this year about the "deteriorating press freedom conditions in Russia," noting an "escalation of the FSB’s campaign of intimidation and harassment against Russia’s independent media."
The Russian Constitution prohibits discrimination based on race, sex, religion, language, and social status. However, both official and societal discrimination still exist, despite appeals for tolerance by the President and other senior officials. Police and other security forces in various parts of Russia continue their practice of targeting citizens from the Caucasus and darker-skinned persons in general for arbitrary searches and detentions on the pretext of fighting crime and enforcing residential registration requirements. Human rights groups in Moscow continue to report increased detentions of people from the Caucasus. Roma, persons from the Caucasus and Central Asia, and dark skinned persons faced widespread governmental and societal discrimination, which often is reflected in official attitudes and actions.
Although religious freedom has greatly expanded in Russia since the end of the Soviet Union, with a variety of faiths experiencing new opportunities and gaining new adherents, the last year has seen continued pressure on non-traditional religious minorities. Security services reportedly have increasingly treated the leadership of some minority religious groups as security threats, obstructed church meetings, and threatened to confiscate church property. A number of regional governments and officials have taken actions to discriminate against some minority religious organizations; a Moscow Court decision to ban Jehovah’s Witnesses was upheld by an appellate court in June 2004. Other minority faith groups that have been targets of officials in several regions include the Church of Latter-day Saints ("Mormons"), the Church of Scientology, the Unification Church, and Pentecostals. Federal officials have failed to address discriminatory actions taken at the local level or, when appropriate, to hold accountable the officials at fault. The Federal Security Service notified some religious believers that their foreign colleagues were denied visa renewals on the grounds that they were now considered a threat to "sectarian" and national stability. The USG and NGO community are monitoring this closely and have raised these issues with Russian officials at the highest levels.
Muslims, Jews and members of some non-traditional religious minority groups continue to encounter societal prejudices, antagonism, and discrimination. With the continuing conflict in Chechnya, and more recently the airplane and subway bombings and the tragedy at Beslan, societal discrimination and harassment against Muslims is frequently reported. President Putin and other officials have called for greater tolerance and specifically have condemned anti-Semitic acts. President Putin has spoken out publicly on the need to protect religious freedom, promote tolerance, and preserve the separation of church and state. While many groups have noted improvements in certain respects over the past year, societal discrimination, harassment, and violence against members of some religious minorities remain a problem.
Some regional governments severely restrict the constitutional right of citizens to freely choose their place of residence by requiring residence permits to live and work in a specific area. These restrictions, though repeatedly challenged in court, remain largely in force and are tolerated by the Federal Government. The presence of these restrictions demonstrated the continued obstacles to the enforcement of judicial rulings. Citizens may freely travel within Russia, but must carry internal passports. Citizens are free to emigrate. However, individuals who, during the course of their work, had access to classified material can be refused permission to travel abroad for five years following the last date of access to such material. The law allows for an additional period of five years, although in practice, restrictions of more than five years are rarely imposed. Section 498A(a)(4): "respect international law and obligations and adhere to the Helsinki Final Act of the Conference on Security and Cooperation in Europe and the Charter of Paris, including the obligations to refrain from the threat or use of force and to settle disputes peacefully."
Responding to attacks on Dagestan in July and August 1999 by extremist Chechen field commander Shamil Basayev, and to the bombing of apartment buildings in Moscow and elsewhere, the Russian Government launched a military campaign to assert control over Chechnya. The indiscriminate use of force by both government and rebel troops resulted in widespread civilian casualties and the displacement of more than 250,000 people, the majority of whom sought refuge in the neighboring republic of Ingushetia. Five years later, the conduct of Russian armed forces in the campaign against Chechen rebels continues to be poor. Furthermore, human rights abuses have spread to Ingushetia. Russian officials continue to rule out negotiations with Maskhadov or any other Chechen separatist. President Putin declared his own political solution for Chechnya, centered around a constitutional referendum in March 2003, followed by a Chechen presidential election in October 2003. Prior to the presidential election, the exit of all viable challengers to Akhmad Kadyrov’s candidacy and the overt control of Chechen media by pro-Kadyrov forces resulted in an election that failed to meet international standards for free and fair elections. Similar shortcomings were noted during the August 29, 2004 presidential election held to elect a replacement for Kadyrov, who was assassinated in May 2004. As a result of serious flaws in the electoral process, especially the disqualification of a serious candidate on a flimsy pretext, the August vote did not meet international standards for a democratic election and the authorities missed two opportunities to have a legitimately elected leader as president of Chechnya. Section 498A(a)(5): "cooperate in seeking peaceful resolution of ethnic and regional conflicts."
In 2004 Russia continued its more assertive foreign policy toward former Soviet states. Russia made little effort to resolve regional conflicts and has intervened only in instances where the situations threatened to escalate into destabilizing violence. Russia has generally been reluctant to use its undoubted influence on leaders of the separatist conflicts and has not supported efforts to change ineffective, and often Russian-dominated, negotiating fora. Russia has a strong interest in increasing stability and security along its borders to reduce the threats of terrorism, extremism, narcotics trafficking, and organized crime growing out of unresolved regional conflicts. Moscow, however, sometimes uses unresolved conflicts as leverage to pressure its neighbors. Russia's foreign policy remains committed to strengthening the Commonwealth of Independent States (CIS), preserving and enhancing Russia's influence in the region of the former Soviet Union and defending the interests of ethnic Russians in neighboring states.
With the exception of its positive role in expediting the departure of Ajarian strongman Aslan Abashidze, Russia’s involvement in Georgian separatist conflicts in 2004 has been characterized by Russia’s desire to preserve the status quo. When the conflict in separatist South Ossetia threatened to spiral out of control as Georgia moved troops into the Zone of Conflict during the summer, the Russian-sponsored Joint Control Commission played an important part in defusing tensions and establishing a cease-fire that still holds. At the same time, Russia has not supported proposals for negotiations towards a final political settlement of the conflict. Russia has been cool to overtures from Georgian President Mikheil Saakashvili and appears content to allow the South Ossetia conflict to linger without final resolution. Until Russia demonstrates political will to solve the conflict and bring its undoubted influence to bear on separatist leaders, a peaceful solution is unlikely.
Russia plays an even more complex -- and not always positive -- role in Abkhazia. President Putin made clear his support for Abkhaz "presidential" candidate Raul Khajimba. Then, when Khajimba apparently lost the October 3 election to his opponent Sergey Bgapsh, Moscow attempted to mediate between the two candidates. When this failed and Bgapsh supporters seized public buildings in Sukhumi, the Russian MFA issued a statement saying that Russia was prepared, if necessary, to protect its interests in Abkhazia. Moreover, although Moscow says that it supports Georgian sovereignty and territorial integrity, it has taken few, if any, serious steps to press the Abkhaz to negotiate seriously toward a settlement. Recently, however, Russia has responded positively to a request to hold a high level meeting of the UN Secretary General’s Friends of Georgia and in fact called such a meeting "imperative." Finally, Georgia has expressed concern over Russia's issuance of passports to ethnic Russians living in Abkhazia and about the reopening of a rail link between Sukhumi and Sochi without Georgia’s consent. As in South Ossetia, a peaceful resolution is unlikely until Russia demonstrates political will to solve the conflict.
With regard to Russian forces in Abkhazia, at the Istanbul OSCE Summit (November 18-19, 1999) Georgia secured a Russian commitment to: remove all equipment limited by the CFE Treaty from the Gudauta base in Abkhazia (as well as from certain other facilities) by December 31, 2000 and to disband the Gudauta and Vaziani bases entirely by July 1, 2001. Russia withdrew from Vaziani before the deadline and later announced that it had disbanded Gudauta and withdrawn all but "peacekeeping" troops from Gudauta. However, Russia and Georgia have not yet agreed on the status of the Gudauta base and Russian troops located there, nor have they reached a common understanding on transparency modalities for the base. Russia has also failed to satisfy another requirement established at Istanbul to reach agreement with Georgia over the duration of the residual Russian presence at two other bases, Batumi and Akhalkalaki. Georgia and Russia renewed base withdrawal talks in June 2004, although no concrete progress was made.
Russia, the United States, and France co-chair the Minsk Group peace process, which is the OSCE's negotiating forum for a peaceful settlement of the Nagorno-Karabakh conflict. Cooperation among the co-chairs has been excellent. The Co-Chairmen of the Minsk Group have been actively negotiating with the parties to reach a durable settlement. A Russian-brokered cease-fire has been in effect in Nagorno-Karabakh since May 1994 and has held, despite sporadic violations. 2004 saw the first substantive work on Nagorno-Karabakh since the 2003 elections in Armenia and Azerbaijan. The Armenian and Azerbaijani Foreign Ministers and the Minsk Group Co-Chairs held four meetings this year, and President Putin met together with Presidents Aliyev and Kocharian during the September CIS summit in Astana. Following the summit, dialogue between the parties and the co-chairs has continued.
Russia and Ukraine signed a Friendship and Cooperation Treaty in May 1997. The two sides also concluded agreements to resolve the issue of the Ukraine-based Black Sea fleet, which had been a source of disagreement since 1992. In 2003 unresolved border issues in the Sea of Azov and Kerch Strait grew contentious when local Russian engineers began constructing a causeway to link the Russian mainland to a Ukrainian island in the strait. Both sides traded accusations and counteraccusations for several weeks, but Presidents Putin and Kuchma signed a Treaty on the Sea of Azov and the Kerch Strait in December 2003. Questions related to the Kerch Strait were referred to expert commissions for further discussion, however, and a final delineation has yet to be agreed.
Russia made no secret that it favored Prime Minister Yanukovych to succeed President Kuchma in the Ukrainian presidential elections of October-November 2004. Kremlin-backed spinmeister Gleb Pavlovskiy opened a "Russia Club" in Kiev to coordinate Russian support for Yanukovych. In the clearest indication of support, President Putin met on a number of occasions with Yanukovych. Putin carried out a highly visible state visit to Kiev on the eve of the first round of elections in October and returned to Ukraine again in early November. When Yanukovych was pronounced the winner in the second round of voting despite widespread reports of fraud, Putin was the first and only major international leader to phone and congratulate Yanukovych. Russia has taken every opportunity to express its displeasure over the street demonstrations by supporters of opposition candidate Yushchenko and opposed calls to annul the election results. Now that the Ukrainian Supreme Court has called for new elections, Russia is accusing the EU, the OSCE, and the U.S. of "double standards" and of meddling in Ukraine’s internal affairs.
Russia played a significant role in facilitating the peace process in Tajikistan that led to a comprehensive settlement of the internal conflict there in June 1997. Russia's 201st Motorized Rifle Division and Russian Border Force (RBF), stationed in Tajikistan since Soviet times, are still present in the country. The RBF and the 201st, respectively, are the largest groups of Russian forces outside Russian borders, though the enlisted manpower of both units is comprised mostly of Tajik nationals in Russian service. (The RBF is now a larger contingent—for the time being—than the 201st, which has shrunk considerably in the last few years.) The 201st Division supports the current regime and Russia's interests in the region, and it cooperates with Tajik armed forces. In October 2004, Presidents Putin and Rahmonov signed an agreement establishing a permanent Russian base. The RBF has had primary responsibility for policing Tajikistan’s Afghan border. In 2004, Russia and Tajikistan agreed that the RBF would withdraw by 2006, turning over complete responsibility for Tajikistan’s border control to Tajik authorities. Only a small RBF advisory group will remain after 2006.
In Moldova, Russia has played a less than helpful role in 2004 in efforts to reach a peaceful political settlement of the conflict between Moldova and its secessionist region of Transnistria. In 2003 Russia went outside the agreed upon five-sided negotiating format (involving Moldova, Transnistria, Russia, Ukraine, and the OSCE) and sought to resolve the conflict by undertaking non-transparent, unilateral shuttle diplomacy between Moldova and Transnistria. (This effort, while ultimately unsuccessful, would have resulted in an agreement skewed heavily in favor of Russia and the Transnistrian separatists.) In early 2004 Russia agreed to a U.S. proposal for pentagonal talks involving the OSCE, Russia, Ukraine, EU, and U.S., but in the spring Russia backpedaled from this commitment when Ambassador Nesterushkin replaced DFM Trubnikov as Russia’s special negotiator for Transnistria. Russia did little to help defuse the "schools crisis" that brought the separatist conflict to a new low in the summer and fall of 2004 when Transnistrian authorities closed a number of Latin-script Romanian language schools on territory they controlled. This led Moldova to drop out of five-sided negotiations and to push instead for a "Pact on Stability and Security for Moldova" according to which the proposed signatories (Russia, Ukraine, the U.S., the EU, and Romania) would pledge to support Moldova’s sovereignty, territorial integrity, and democratic institutions. The draft "Pact" was subsequently recast as a political "Declaration," but as of the end of 2004, Russia was refusing to consider the document. Absent Russian willingness to use its influence on separatist leaders, the Transnistrian conflict will continue to fester.
In connection with the Transnistrian conflict, Russian forces have been stationed in Moldova since July 1992 pursuant to a bilateral peacekeeping arrangement. Additionally, remnants of the Soviet 14th Army, now referred to as the Operational Group of Russian Forces, are present in Moldova. At the Istanbul OSCE Summit in 1999, Russia agreed to withdraw all of its military forces from Moldova by December 31, 2002. The status of this commitment is discussed in the arms control section below (498A(a)(6)(A)). Withdrawal of arms and ammunition from Moldova was not completed by that deadline. At the OSCE Ministerial Meeting in Porto, Portugal (December 6-7, 2002), Russia agreed to complete the withdrawals by December 31, 2003. Important progress was made in 2003 on the withdrawal of stored Russian munitions from Moldova, but Russia did not meet that extended deadline. Although more than half of the Russian ammunition and military equipment has now been removed from Moldova, further progress has come to a halt with only one ammunition train leaving Moldova in the first eleven months of 2004.
Russia has been generally constructive in mediating international conflicts, e.g. as a co-sponsor of the Middle East peace process, a former part of the international security presence in Kosovo (KFOR), a member of the Bosnia Contact Group, and a supporter of UN and other multinational peace initiatives in Africa. Section 498A(a)(6): "implement responsible security policies, including-- (A) adhering to arms control obligations derived from agreements signed by the former Soviet Union; (B) reducing military forces and expenditures to a level consistent with legitimate defense requirements; (C) not proliferating nuclear, biological, or chemical weapons, their delivery systems, or related technologies; and (D) restraining conventional weapons transfers." Arms Control: The Government of Russia continues to make progress resolving arms control issues inherited as a result of the disintegration of the Soviet Union, including the fulfillment of obligations undertaken in connection with bilateral and multilateral treaties such as the Intermediate Range Nuclear Forces (INF) Treaty, Strategic Arms Reduction Treaty (START), the 1972 Convention on the Prohibition on the Development, Production, and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on Their Destruction (BWC), and the Conventional Armed Forces in Europe (CFE) Treaty. Russia is also a party to the Chemical Weapons Convention (CWC). However, we continue to have concerns about Russia’s current arms control compliance in some areas, notably biological and chemical weapons.
Since the START Treaty entered into force on December 5, 1994, Russia has verifiably eliminated substantial numbers of strategic offensive arms. Russia met its START Treaty reduction obligations by the December 5, 2001 deadline, and is in compliance with the Treaty’s central limits. Nevertheless, Russia has failed to fulfill some of its other START obligations and in some cases has not allowed the United States to exercise fully its Treaty verification rights. The Parties continue to work through diplomatic channels, including the Joint Compliance and Inspection Commission (JCIC), the Treaty’s implementing body, to resolve compliance issues and questions. The JCIC meets periodically in Geneva; a number of implementation questions have been resolved through this mechanism. The United States will continue to press Russia to take steps to resolve outstanding compliance issues.
Russia is in compliance with the INF Treaty. The Soviet Union completed its INF Treaty-required eliminations in May 1991. The INF inspection regime was successfully completed on May 31, 2001. Russia continues to observe its obligations under the INF Treaty, including participating in the Special Verification Commission (SVC), the mechanism for resolving implementation questions under the Treaty.
Russia continues to reaffirm its commitment to comply with the CFE Treaty and urges entry into force of the CFE Adaptation Agreement signed by the 30 States Parties at the OSCE Summit in November 1999. Russia complies with key elements of the CFE Treaty, although important longstanding compliance concerns remain.
According to its flank data as of July 1, 2003, and a related notification, Russian holdings of Treaty-limited equipment (TLE) continue to exceed most of the legally-binding limits for the original and revised flank areas. The 30 CFE States Parties agreed to higher flank ceilings for the Russian equipment under the Adapted CFE Treaty, which was signed in 1999 but has not yet entered into force. Russia now appears to be within the future limits of the Adapted CFE Treaty for TLE on Russian territory in the revised flank area (the "adapted flank" area).
Russian data as of January 1, 2003 showed compliance with overall limits for TLE, but Russia continued to exceed its overall limits for artillery and tanks in active units. While Russia has demonstrated a generally positive record of implementation of most CFE Treaty provisions, there have been some areas of non-compliance that the Administration has continued to monitor closely.
In addition, for several years, there have been serious concerns about Russian forces stationed in Georgia and Moldova in spite of a CFE provision that requires the consent of those countries for the presence of Russian forces on their territory. At the 1999 OSCE Summit in Istanbul, Russia committed to specific actions related to withdrawal of its forces and equipment from these two States Parties. Russia has fulfilled some of these commitments, in particular those that pertain directly to CFE TLE. But the issue of the continuing presence of Russian forces without host State consent and the failure of Russia to fulfill its remaining Istanbul commitments remains unresolved.
In Moldova, Russia fulfilled its Istanbul commitment to destroy or withdraw its declared TLE by the end of 2001. Fulfillment of the commitment to withdraw all Russian forces by the end of 2002 was hindered by political issues related to the Transnistrian separatist regime, which has obstructed the process, and by the magnitude of certain aspects of the withdrawal task, which includes the removal, destruction, or demilitarization of large quantities of stored Russian ammunition and Russian small arms. Some ammunition was withdrawn in 2002, encouraged in part by assistance from the OSCE via a Voluntary Fund. This withdrawal was confirmed using multinational OSCE and CFE inspection teams. At the 2002 OSCE Ministerial in Porto, Russia committed to complete the withdrawal as early as possible and stated its intention to do so by December 31, 2003. OSCE Voluntary Fund donor states provided continued support for the withdrawal process and the pace of withdrawals picked up in early 2003. It halted in mid-July again due to Transnistrian obstructionism and Russian failure consistently to use its political influence to overcome that obstructionism. Withdrawals resumed in November and December 2003 but the revised deadline was not met. However, the end of 2003 had verifiably withdrawn approximately half of the munitions stored at the main Kolbasna depot withdrawn to Russia. Russian authorities made little effort to restart the withdrawal process in 2004, and only one withdrawal train departed in March 2004.
In Georgia, Russia completed its Istanbul commitments to withdraw CFE TLE in excess of agreed levels by December 31, 2000, and closed and transferred to Georgia its base at Vaziani by July 1, 2001, as agreed at Istanbul. Still to be achieved – consistent with the Istanbul commitments contained in a Georgia-Russia Joint Statement (Annex 14 of the CFE Final Act) – are agreements between Russia and Georgia on the status of the Russian base at Gudauta in separatist Abkhazia (which was to have been disbanded by July 1, 2001), and on the duration of the residual presence of Russian forces at the remaining bases at Batumi and Akhalkalaki. Following the OSCE’s Porto Ministerial in December 2002, Russia and Georgia resumed discussions of withdrawal issues at the expert level. Some discussions continued in 2003, but without any concrete results.
There are a number of other compliance-related issues that the United States continues to track, including: instances of denial of full access during on-site inspections at sites where units or installations that are not subordinate to the conventional armed forces are present; denial or delay of inspections due to questionable claims of force majeure; questionable armored personnel carrier (APC) ambulances at some flank units; continued Russian claims of more decommissioned items than the Treaty allows to be exempted from counting rules (although this did not take place in Russia’s data as of January 1, 2003, it has been a frequent occurrence); continued Russian failure to count against limits items characterized as "non-combat-capable" (a category that the Treaty does not recognize); declaration of all ground TLE in the flank zone as being in active units (which would not be permitted unless and until entry into force of the Adapted Treaty took place); and Russian refusal to declare MT-LB-APC look-alikes or IRM armored infantry fighting vehicle (AIFV) as TLE look-alikes that are listed in the Treaty's "Protocol on Existing Types" of CFE-accountable equipment. (Details can be found in the Annual Compliance Reports). Also troubling is the recent unilateral removal from accountability under Treaty limits of the BRM-1K, an armored infantry fighting vehicle, an action clearly inconsistent with Russian CFE Treaty obligations.
On the other hand, in late spring 2003, the United States and NATO agreed that there was sufficient evidence to support Russia’s claims of having fulfilled the provisions of a CFE-related side agreement on equipment destruction outside the CFE area, on Russian territory east of the Urals. The United States and NATO accepted Russian commitments that extended the deadline and modified some of the parameters of this agreement.
Russia has submitted Vienna Document 1999 Confidence- and Security-Building Measures (CSBM) data declarations annually and has conducted and received CSBM inspections and evaluation visits in accordance with Vienna Document provisions.
Russia is also a party to the Treaty on Open Skies (OS), which establishes a regime of unarmed aerial observation flights over the territories of States Parties. (The Soviet Union was not a party to the OS Treaty.) The Treaty is a U.S. initiative designed to enhance mutual understanding and confidence and to promote openness and transparency in military forces and activities. Prior to the Treaty’s entry into force on January 1, 2002, Russia cooperated with 26 other signatories during its period of provisional application. The Treaty has been successfully implemented since it entered into force, with Russia conducting over fifty missions, two of which were over the United States. A number of implementation issues have arisen during the missions, some of which have required U.S. discussions with Russian counterparts regarding proper legal interpretation of Treaty provisions. Russia has made corrections in its procedures accordingly. Additional issues remain to be resolved.
The Chemical Weapons Convention (CWC) requires Russia to declare and destroy its chemical weapons (CW) stocks and to forgo the development or possession of CW. (Russia ratified the CWC, but it was never an obligation of the Soviet Union, as the break-up of the Soviet Union pre-dated the entry into force of the CWC) after dissolution of the Soviet Union; the CWC entered into force in 1997.) . Russia has requested Cooperative Threat Reduction (CTR) assistance to destroy Russian chemical weapons stocks and to destroy several former chemical weapons production facilities (CWPFs) in accordance with the Convention. In May 1997, the Duma passed and President Yeltsin signed the Russian Federal Law on Chemical Weapons Destruction, approving implementation of the 1996 destruction plan. The plan has subsequently undergone several revisions, the latest in 2003.
In recent years, the Russian Federation has taken steps to strengthen its CW destruction program, including consolidating responsibility under civilian leadership and significantly increasing funding, admittedly from a low starting point. For both financial and bureaucratic reasons, progress toward fulfilling Russia’s CWC destruction obligations has been slow, and senior-level Russian policy statements regarding Russia’s general commitment to destroy its CW stocks remain largely unimplemented. As a result, Russia has requested extensions on its CW destruction deadlines from the Organization for the Prohibition of Chemical Weapons (OPCW). With international assistance, Russia in April 2003 completed the destruction of one percent of its Category 1 stockpile three years after the original CWC deadline for completing such destruction.
Since the December 1997 entry into force of the convention in Russia, the United States has considered the CWC provisions to be the appropriate basis for evaluating Russia’s commitment toward CW disarmament. The CWC provides mechanisms under Article IX for pursuing concerns about Russia’s compliance. Any development, production, stockpiling or retention of any agents that meet the definition of "chemical weapons" under the CWC are prohibited by that Convention. While Russia has declared CW agent and weapons at seven declared storage sites, the United States is concerned that Russia may possess chemical agent/munitions stocks in excess of what it declared under the CWC.
The Administration also believes that the Russian declaration of chemical weapons development facilities is incomplete. Moreover, there are facilities that Russia may be required but has failed to declare as chemical weapons production facilities (CWPF). Rather than destroying many of its declared CWPFs, Russia is converting them into commercial chemical production facilities, making them sources of revenue. Once completed, the implementation of U.S.-negotiated changes at these converted facilities should allow them no greater capability than equivalent industrial facilities to produce CW, as required under the CWC. These facilities will be subject to OPCW inspections t at least through 2012, at which time CWC States Parties can review their status to determine if continued verification is warranted.
The USG and the Russian Federation continue to engage at senior levels and through expert-level bilateral consultations to address concerns about CW.
With respect to the 1972 Convention on the Prohibition on the Development, Production, and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on Their Destruction (the BWC), the United States has determined that the offensive biological weapons (BW) program Russia inherited from the Soviet Union violated the BWC at least through March 1992. Russia succeeded to the obligations of the Soviet Union under this convention, which was originally adopted by the Soviet Union. In early 1992, President Yeltsin confirmed that the former Soviet Union had an offensive BW program and issued a decree prohibiting all activities that contravened the BWC. In June 2000, President Putin reiterated Russia’s adherence to the BWC. By April 2001, the Duma voted to remove a Russian reservation to the 1925 Geneva Protocol that had allowed for Russia’s retaliatory use of biological weapons.
Beginning in September 1992, U.S. and UK officials have met their Russian counterparts to discuss compliance issues related to the BWC. The so-called "Trilateral Process" has remained moribund recently primarily due to Russian refusal to allow access to military facilities suspected of having the capability to make offensive BW weapons. While there has been a significant increase in openness on an institutional level at key civilian facilities associated with the former Soviet BW program, the United States remains concerned about the activities taking place at former Soviet BW-related facilities, especially those controlled by the Russian Ministry of Defense.
Reducing Forces and Expenditures: Due to extreme budgetary constraints and a changing view of Russian military needs, military spending on equipment and manpower was drastically reduced during the period of 1992-1995. During this period, Russian troop strength was cut by approximately 35%, while tanks, ACVs and artillery were reduced by 50% or greater. Since 1995, Russian personnel strength has continued to drop sharply from a level of 1.7 million authorized military personnel to a present level of roughly one million. However, Russian equipment levels have declined to a lesser degree in this time period as the Russian military restructures its forces in accordance with planned military reforms. We continue to have concerns about possible Russian offensive chemical and biological programs, as described in the previous section. Any such activities exceed legitimate defense requirements.
Non-Proliferation: The United States and Russia have continued their active dialogue concerning non-proliferation of nuclear, biological, and chemical weapons, their delivery systems, and related technologies. Moreover, nonproliferation has become a key part of the new relationship, with the agenda broadening to include regional issues. The United States and Russia are, for example, conducting a high-level dialogue on Iran nonproliferation issues, both bilaterally and in multilateral fora such as the IAEA and the G-8, , and Russia has joined the U.S. and others in urging Iran to suspend all enrichment-related and reprocessing activities and to cooperate fully with the IAEA.
As a co-depositary government of the NPT with the United States (and the UK), Russia continues to consult closely on matters relevant to this important Treaty. In a joint statement of November 13, 2001, Presidents Bush and Putin endorsed efforts to strengthen the NPT. The Treaty of Moscow, which was signed May 24, 2002, and entered into force June 1, 2003, both refers to and furthers Russia’s progress in meeting its disarmament obligations under the NPT. The United States and Russia consulted prior to and at the first three sessions (2002-2004) of the Preparatory Committee for the 2005 NPT Review Conference. The United States and Russia met in October 2004 to consult on preparations begun for the Review Conference to be held in New York in May, 2005.
Although economic difficulties have limited Russia’s ability to provide resources for dismantling activities, we believe it remains committed to making a substantial investment in dismantling weapons of mass destruction.
The government-to-government Highly Enriched Uranium (HEU) Agreement between the United States and the Russian Federation, signed February 18, 1993, provided for conversion of 500 metric tons of HEU from dismantled Russian nuclear weapons into low enriched uranium fuel over a 20-year period.
The Agreement provides for the United States Enrichment Corporation (USEC), the U.S. Executive Agent under the agreement, to purchase highly enriched uranium (HEU) as HEU or in the form of Low Enriched Uranium (LEU) suitable for fabrication into fuel for commercial power reactors. Between June 23, 1995, the date of the first LEU delivery, and September 30, 2004, approximately 6,648 metric tons of LEU (equal to roughly 226 metric tons of HEU) have been delivered to USEC. The LEU is sold by USEC for use as fuel in commercial nuclear reactors. In 2002, the U.S. and Russian executive agents entered into an amendment to the implementing contract that provides the terms for LEU shipments through 2013.
In March 1999, agreement was reached concerning the disposition of the natural uranium component of material delivered under the HEU Agreement. Under this arrangement, the USG agreed to purchase natural uranium associated with material delivered in 1997 and 1998. Under the terms of a separate contract, a group of Western companies (Cameco, Cogema and NUKEM) have had the option to buy a majority of the natural uranium component since 1999. Techsnabexport Joint Stock Company (Texnex), the Russian Executive Agent under the agreement may also purchase a portion. Material that is not purchased by the Western companies or by Texnex is either held for Russia in the United States or returned to the Russian Federation. The United States and Russia are cooperating on a variety of other initiatives and programs related to fissile materials. Among these is the bilateral initiative for disposition by the United States and Russia each of 34 metric tons--68 metric tons total--of weapon-grade plutonium that have been declared excess to defense needs. A bilateral agreement that records these mutual obligations and provides a framework for cooperation on the construction and operation of industrial-scale plutonium disposition facilities, including nonproliferation terms and conditions, was signed and began provisional application in September 2000. The United States is seeking participation in this initiative and additional funding through negotiations on a companion multilateral financing agreement with other G-8 countries in this initiative. Another initiative involves the 1997 agreement between the United States and the Russian Federation that, among other things, provided for the shutdown of the last three Russian plutonium production reactors and monitor the plutonium in storage that is produced until shutdown. The 2003 amendment to that agreement provides for the replacement of those reactors with fossil-fuel power plants, for which the U.S. is providing assistance.
The United States is also actively cooperating with Russia to improve security of fissile material stockpiles, combat illicit nuclear trafficking, protect radioactive sources and redirect the activities of weapons scientists and institutes, with the aim of reducing proliferation risks. Additionally, in December 1999, the United States, Russia, and the International Atomic Energy Agency began discussions on a proposed program to return fresh and spent nuclear fuel containing uranium enriched in Russia or the former Soviet Union from foreign research reactors to Russia for management and future disposition. In May 2004 these discussions culminated in a U.S.-Russia Agreement to implement the Russian Research Reactor Fuel Return Program. In August 2002 the Russian and Yugoslavian Governments cooperated with the United States in shipping nearly 50 kilograms of fresh HEU from the Vinca Institute in Belgrade to Dmitrovgrad in Russia, where it will be blended down to LEU. In September 2003, the Russian, Romanian, and U.S. Governments and the IAEA cooperated in the shipment of 15 kilograms of HEU reactor fuel to Russia for down blending, and in December of 2003 a similar shipment of about 14 kilograms of HEU fresh fuel was made from Bulgaria. In August 2004, 17 kilograms of fresh HEU fuel was shipped from Libya to Russia, and the Russian, Uzbek and U.S. Governments cooperated in shipping 11 kilograms of HEU fuel to Russia in September 2004.
Since 1996, the United States, Russia, and the IAEA have been working on a new IAEA verification regime that can be applied to materials declared excess to defense requirements in the U.S. and Russia. In 2002, the three parties concluded that the original task undertaken, i.e. to examine the technical, legal, and financial issues associated with such verification, had been successfully completed.
Russia continues its efforts to strengthen its export controls on sensitive materials and technology. In 2002 and 2003 the Russian Government has issued several regulations to implement the Federal Law on Export Controls, which was enacted in 1999. The United States continues to work closely with the Russian Government to aid in the effective implementation and enforcement of these laws and regulations. As part of this effort, Russia and the United States are working to educate Russian producers and exporters of sensitive technologies on the importance of export controls and of their obligations under Russian law, and to install internal compliance programs at individual Russian entities to help ensure that these entities fully comply with Russian export control laws and regulations. The U.S. is also helping to outfit key Russian border transit points with detection equipment to deter and interdict illicit transfers. Of concern, however, is Russian nuclear cooperation with India in violation of Nuclear Suppliers Group Guidelines for nuclear export control and Russian attempts to reinterpret the provisions for exemption from the full-scope safeguards provisions of the Guidelines.
Russia joined the Missile Technology Control Regime (MTCR) in August 1995, became an original Subscribing State to the International Code of Conduct Against Ballistic Missile Proliferation (ICOC) in November 2002, and has stated its commitment to missile nonproliferation, regional stability, and the goals of the MTCR. The Russian Government also has assured the United States of its commitment to the highest nonproliferation standards and has told us repeatedly that it does not support Iran’s long-range missile development efforts. In this context, the United States has pursued a high-level dialogue with Russia aimed at finding ways to work together to cut off the flow of sensitive goods to Iran’s ballistic missile development. The Russian Government has created the institutional foundations to implement a recently enacted nonproliferation policy and passed laws to punish wrongdoers. It also has passed new export control legislation and adopted implementing regulations to tighten government control over sensitive technologies and continued a dialogue with the United States aimed at strengthening export control practices at Russian aerospace firms. However, while some progress has been made, there are reports of missile cooperation by Russian entities with Iran, in many cases apparently without the knowledge of the Russian Government. In sum, Russian entities have engaged in transfers that are contrary to the nonproliferation criteria outlined in the MTCR guidelines. The Russian Government needs to address the remaining proliferation concerns in order to meet fully its political commitment under MTCR.
Russian entity support to sensitive nuclear programs in Iran remains a serious concern, and intensive discussions with Russia continue in order to find a satisfactory resolution of this issue. The United States also continues to press the Russian Government to take additional steps against entities involved in missile-related technology transfer to Iran. In June 1998 and January 1999, the United States imposed administrative measures pursuant to the provisions of Executive Order 12938, as amended, against a total of ten Russian entities involved in cooperation with Iran's missile or nuclear weapons programs. These measures remain in force (specifically, a ban on U.S. exports and U.S. Government assistance to these entities, and on imports and USG procurement from these entities). The Executive Order penalties imposed on entities INOR and Polyus in 1998 were lifted in November 2000. In November 2004, we also imposed Executive Order penalties on a Russian entity (Federal Research and Production Complex Altay) for transfer of MTCR-controlled items to a non-MTCR country. We periodically receive reports potentially related to Russian entity transfers of material, equipment, or technology that could contribute to the ability of countries to manufacture missiles or weapons of mass destruction (WMD). We carefully review these reports in light of legal obligations under the applicable nonproliferation sanctions laws. None of these reports has resulted in a sanctions determination on the Government of Russia for missile or WMD transfers during the reporting period.
Conventional Arms: The United States and Russia maintain active contacts on a wide range of conventional arms transfer issues. The Government of Russia has generally complied with its obligations to observe UN arms sanctions against Iraq and the former Yugoslavia, and has worked with the UN Sanctions Committee as questions have arisen. Russia has moved away from past policies of arms transfers for ideological or strategic purposes and now relies heavily on arms exports to maintain the viability of its military-industrial base. We have continuing concerns with respect to Russian arms sales to state sponsors of terrorism and regions of instability and are working with the Russian Government to address these concerns.
In 1999, as a matter of policy, the U.S. Government imposed sanctions against three Russian entities for transfers of lethal military equipment to a state sponsor of terrorism. These measures included the denial of U.S. assistance to the entities, a ban on U.S. Government procurement, denial of new export licenses for USML items and an import ban on defense articles and services. In 2002, the United States, as a matter of policy, imposed sanctions (in this case the sanctions were imposed for one year) against three Russian entities for the transfer of lethal military equipment to state sponsors of terrorism. These measures included the denial of U.S. assistance to the entities, a ban on U.S. Government procurement, and the denial of new licenses for the export of defense articles and services to and from the sanctioned entities. Additional similar sanctions of Russian entities were imposed in 2003; sanctions were not imposed against the Russian Government.] The United States periodically receives reports potentially related to Russian entity transfers of material, equipment, or technology that could contribute to the ability of countries to manufacture missiles or weapons of mass destruction or acquire advanced conventional weapons. Reports of transfers that raise questions under the applicable nonproliferation sanctions laws are under review. The March reorganization also created a new Federal Agency for Ecological, Technical and Atomic Control reporting directly to the Prime Minister. The structure of this organization is still being developed, but the GOR is comparing its environmental capabilities and responsibilities to that of USEPA.
In recent years, the Ministry of Economic Development and Trade (MEDT) has taken a number of positive steps on the environment. It has re-inserted environmental language into Russia’s Medium-Term Program of Socio-Economic Development, and it now requires Russia’s regions to include an environmental chapter in their development plans. MEDT is also putting in place a countrywide system for financing environmental infrastructure. The system is capitalized by a World Bank loan of $55 million, and it now has a project portfolio on the order of $90 million.
Improvements in environmental quality have also been occurring as a result of actions taken in other Russian Government ministries and in certain sectors of the economy, primarily under the impact of economic and efficiency calculations. Energy-efficient building codes have been introduced countrywide in the construction sector, with concomitant reductions in energy use, greenhouse gas emissions, and emissions of conventional air pollutants. The phase-out of leaded gasoline is nearing completion, especially in European Russia.
Climate Change and CFCs: The United States and Russia announced in January 2003 the formation of an Inter-Ministerial Climate Change Policy Dialogue, one of several bilateral partnerships developed pursuant to President Bush’s February 2002 announcement of a new U.S. approach to climate change. The second meeting of the U.S.-Russia Climate Change Policy Dialogue was held in Washington in April 2004 with both sides expressing interest in collaborating more closely on climate-related projects, especially projects in the polar region. Russia participates actively in a number of U.S.-initiated multilateral climate partnerships: The Carbon Sequestration Leadership Forum, the International Partnership for the Hydrogen Economy, the Earth Observations Summit, and recently, the Methane to Markets initiative. Russia is a founding member of the U.S.-backed Methane to Markets Initiative, an action-oriented initiative that will reduce global methane emissions to enhance economic growth, promote energy security, improve the environment, and reduce greenhouse gases. Along with the U.S. and other key non-EU industrialized countries, Russia remains a member of the "Umbrella Group", a loose coalition for issues related to the U.N. Framework Convention on Climate Change (UNFCCC).
On November 19, 2004, Russia formally notified the U.N. of its ratification of the Kyoto Protocol, signaling that the international treaty will go into effect ninety days from this date. The GOR is now focused on implementing Kyoto. MEDT is taking the lead on coordinating implementation of the Kyoto Protocol. MEDT is currently working on a draft plan of action to combat climate change. During 2005, the GOR will compile an inventory of greenhouse gases and hopes to set up an emissions trading mechanism that will be accessible to both Kyoto and non-Kyoto participants. Russia has asked for U.S. technical assistance in conducting this inventory and also in the development of an emissions trading market.
Section 498A(a)(8): "deny support for acts of international terrorism."
The Government of Russia does not grant sanctuary from prosecution to individuals or groups who have committed acts of international terrorism or otherwise support international terrorism. Since the September 11, 2001 attacks, the Government of Russia has provided significant and unprecedented diplomatic and intelligence support to the coalition against terrorism and to Operation Enduring Freedom. Russia provided U.S. military aircraft with access to its airspace and took measures to assist in strengthening border security on the frontlines.
The United States has conducted regular counter-terrorism consultations with Russia since June 1994. After September 11, 2001, counterterrorism cooperation with Russia expanded to unprecedented levels. Counterterrorism consultations with Russia in the Afghanistan Working Group, which began in August 2000, were expanded to cover terrorist threats around the world in the new Counterterrorism Working Group. This met for the first time with the new mandate in July 2002 and has met semiannually since then. One of the Working Group's subgroups deals with the use of chemical and biological weapons as instruments of terror. In October 1991, shortly before the Soviet Union dissolved, Russia and eleven other Soviet republics signed a Memorandum of Understanding declaring themselves jointly and severally liable for the foreign debts of the former Soviet Union (FSU). In December 1991, Russia and seven other republics signed an agreement that assigned to each of the Newly Independent States (NIS) a share of all the external assets and foreign debt of the FSU. Russia’s initial share of the roughly $57 billion in FSU debt was 61%.
Beginning in 1992, Russia sought to replace the joint and several liability principles with the so-called "double-zero option" agreement, whereby all NIS countries would relinquish all Soviet-era assets and liabilities to Russia. By 1994 the Russian Government had signed the "double-zero option" agreement with Armenia, Azerbaijan, Belarus, Georgia, Moldova, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan. Under those agreements, the Russian Government assumed liability for all FSU foreign debt in return for the external assets of the FSU held by these countries.
In August 2000, Russia finalized the agreement reached in February 2000 with the "London Club" of commercial creditors to restructure about $32 billion in Soviet-era commercial debt. The London Club agreed to write off $10.4 billion in exchange for $270 million in cash payment and $20.6 billion in Eurobond issuances, a reduction of approximately 35 percent in the face value of the original debt. In those negotiations, Russia sought to restructure amounts owed to banks that were not insured by official guarantees and that arose in connection with loans to or other claims on the FSU. Repayment of each category of debt is scheduled to begin after completion of a seven-year grace period. In 2002, work began on restructuring foreign trade obligations -- borrowings by Soviet companies without state guarantees -- on similar terms. In recent years, increased Russian Government revenues due to high oil prices have made debt repayment easier. An aggressive debt management strategy that includes buybacks on secondary markets and negotiating debt reductions and swaps with creditors continues to produce significant reductions in Russian external debt owed to commercial creditors.
Section 498A(a)(10): "cooperate with the United States Government in uncovering all evidence regarding Americans listed as prisoners-of-war, or otherwise missing during American operations, who were detained in the former Soviet Union during the Cold War." In March 1996 General-Major Vladimir Zolotaryev became the Russian Chairman of the Commission, replacing General Volkogonov. In December 1998 Major-General Roland Lajoie, USA, retired, became the U.S. Chairman, replacing Ambassador Malcolm Toon, who had served as U.S. Chairman since the Commission's inception. In June 2004 Deputy Assistant Secretary of Defense Jerry D. Jennings succeeded General Lajoie as U.S. chairman. In 2004, the work of the commission has been hampered by the elimination of staff support by the Russian side as the result of the Presidential Administration’s reorganization. In a diplomatic note sent by the GOR in November 2004, the Russians expressed their intention to reconstitute the Russian side of the commission by appointing new members and transferring the activities of the commission from the Presidential Administration Security Council to the ministerial level, an apparent downgrade in the status of the commission from the Russian side. The Commission has held eighteen plenary sessions, the most recent in November 2002. Key events in 2004 included productive working-level meetings and a joint survey of suspected American crash on Kamchatka, which included the wreckage of an U.S. Army Air Force B-24 bomber, and investigations of burial sites in the Russian Far East. U.S. Chairman Jennings traveled to Moscow in September 2004 for a meeting with Russian Commission members. At the meeting, the Russians offered expressions of support for archival research, joint site surveys, and American investigative initiatives in Russia, including a planned visit to regional archives in the Russian Far East in 2005. The American side continues its effort to broaden access to Russian archives beyond the military's central archives and state archives, an effort that would help identify and locate historical records and eyewitnesses with possible knowledge of the fates of U.S. POW/MIAs from conflicts since World War II. Key Russian archives, especially those of the security services, continue to be closed to American researchers, and indications that they hold relevant materials -- presented repeatedly to the Russian side -- have not resulted in Russian release of these materials to Commission representatives. The American side of the Commission continues to investigate reports of sightings of American POWs in the Soviet Gulag. Russian officials do not impede investigation of these reports but have discounted them and offer little assistance in bringing them to a conclusion. Section 498A(a)(11): "terminate support for the communist regime in Cuba, including removal of troops, closing of military and intelligence facilities, including the military and intelligence facilities at Lourdes and Cienfuegos, and ceasing trade subsidies and economic, nuclear, and other assistance."
In 1991, Moscow ended its $4 billion-per-year subsidy of the Cuban economy. In 1992, Russia halted construction of the Juragua nuclear power plant near Cienfuegos, Cuba. Russia maintained a credit line for mothballing parts of the facility completed before suspension, but Castro announced in January 2001 that Cuba had decided against continuing with the project.
In 1993, Russia withdrew its last remaining combat troops from Cuba. On October 17, 2001 President Putin announced Russian withdrawal from Moscow's intelligence facility at Lourdes, Cuba. The Russians completed the dismantling of the Lourdes site by late summer 2002, and the Government of Cuba announced that it would convert the former listening post to a large computer science campus. With the closing of the facility, Russia ceased providing Cuba a $200 million annual payment for its use.
Russian officials continue to assert that Russia is not providing assistance to Cuba, and that all trade is conducted on a commercial, non-preferential basis. Russian-Cuban economic interaction centers on oil-for-sugar barter arrangements and nickel plant investments, both part of a 2001-2005 trade plan agreement which established "recommended" trade targets. According to the agreement, Russia aims at delivering 1.5-2.0 million tons of oil per year to Cuba. Other Russian exports include spare parts, fertilizers, and steel. Cuba exports the lion's share of its sugar production to Russia each year, as well as nickel, medicines, vaccines and medical equipment, citrus fruits, cigarettes and rum. Russia and Cuba recently announced plans to increase mutual investment. Tourism, energy, and mining were noted as promising avenues of economic cooperation.
CHECKLIST FOR GROUNDS OF INELIGIBILITY UNDER SECTION 498A(b) OF THE FOREIGN ASSISTANCE ACT OF 1961 RUSSIA Section 498A(b)(1): Has the President determined that the Government of Russia has "engaged in a consistent pattern of gross violations of internationally recognized human rights or of international law"?
No. The President has not made such determination at this time. However, there are grounds for concern: continuing and credible reports of human rights violations and abuses by Russian military forces and Chechen rebels in Chechnya; generally poor treatment of prisoners and inadequate detention facilities; and increasing pressure on minority religious groups. As a result of adverse trends over the past year, the Secretary of State was for the first time unable to certify the Russian Government’s commitment to observe internationally recognized human rights under the Cooperative Threat Reduction (CTR) Act and Freedom Support Act Title V assistance for FY 2005. We will continue working to address existing problems in the area of democracy and human rights not only through diplomatic efforts but also through our assistance programs.
Section 498A(b)(2): Has the President determined that the Government of Russia "has failed to take constructive actions to facilitate the effective implementation of applicable arms control obligations derived from agreements signed by the former Soviet Union"?
The President has not made that determination, as the Russians have taken constructive steps in this area. (A) missiles or missile technology inconsistent with the guidelines and parameters of the Missile Technology Control Regime; or (B) any material, equipment, or technology that would contribute significantly to the ability of such country to manufacture any weapon of mass destruction (including nuclear, chemical, and biological weapons) if the President determine[d] that the material, equipment, or technology was to be used by such country in the manufacture of such weapon"? During the reporting period, no determinations were made against the Government of Russia under this section.
Russia became an MTCR Partner in August 1995. Russia is a Party to the NPT, CWC, INF, START and BWC, and the Russian Government has demonstrated a commitment to the non-proliferation of weapons of mass destruction. There was no termination of assistance to Russia during the reporting year under section 498A(b)(3). Additional information related to implementation of this section, however, has previously been provided to Congress on a classified basis. (We periodically receive reports potentially related to Russian transfers of material, equipment, or technology that could contribute to the ability of countries to manufacture missiles or weapons of mass destruction. We have under review reports of transfers that raise questions under the applicable nonproliferation sanctions laws.) No. The Government of Russia is not prohibited from receiving assistance under these sections. No. The President has not determined that the Government of Russia is providing assistance for, or engaging in any non-market-based trade with, the Cuban Government. No. The process of Russian troop withdrawal from Lithuania was completed in 1993 and from Latvia and Estonia in 1994. Russia ceased operating its radar facility at Skrunda, Latvia, in August 1998 as called for in a bilateral agreement. Dismantling of the facility was completed ahead of schedule by September 1999 under OSCE supervision. The Baltic states were invited to join NATO at the November 2002 Prague Summit. Russia did not react sharply to the invitations but expressed concern that unless the Baltic states acceded to the Adapted Conventional Forces in Europe Treaty, their accession to NATO would raise security concerns for Russia. The Baltic states have indicated that they are ready to join CFE when that is possible. The current CFE Treaty does not permit accession by additional countries, however, so the Baltic states' accession is only possible under the Adapted CFE Treaty, which was signed in 1999 but not yet ratified by all 30 current CFE states. The United States and NATO Allies have made clear that Russia must first fulfill its 1999 OSCE Istanbul Summit commitments to create the conditions for ratification and entry into force of the Adapted CFE Treaty.
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