One of the most discussed issues of recent days was a document for the Congress published by the US Finance Ministry on January 29, which was called "Kremlin report" in the mass media. The report contains the names of 114 top government officials, including ministers from the President Vladimir Putin's team, as well as 96 billionaire oligarchs who represent the most profitable sectors of the Russian economy. There is also a classified part of the report, which, as stated in the published part, contains the names of officials of lower rank and businessmen with a fortune of less than a billion dollars. In the "Kremlin report" it is indicated that officials and oligarchs named in it participate in pernicious activities. The report is not a sanctions list and does not provide for restrictive measures. At the same time, US Treasury Secretary Steve Mnuchin said that sanctions would follow the publication of a list of top Russian officials and billionaires.
Formally, the Ministry of Finance prepared the "Kremlin report" for section 241 of the Act on Countering US Enemies with Sanctions. One of the provisions of the Act was the preparation for the Congress of annual reports on the largest businessmen associated with the Kremlin. According to this law, the Ministry of Finance was to provide the necessary information within 180 days. The act provides for extended sanctions against Russia, Iran, and North Korea and was adopted by both chambers of Congress, signed by US President Donald Trump in August 2017. The reason for new sanctions against Russia was the possible information interference in the US presidential election in 2016. "Kremlin Report" is not a new initiative, but simply an addition to the previously approved Act. Democratic Senator Sherrod Brown even accused Mnuchin of delaying the publication of the report. Nevertheless, it was not spontaneous in the US Treasury that they took the time and published the report right now, and not in August last year.
Distracting maneuver for the Congress
The "Kremlin report" was published on the same day with the extremely ambiguous statement of US State Department spokesman Heather Nauert about anti-Russian sanctions. She said that now there is no need to impose sanctions on specialized enterprises and individuals, because the law itself, providing sanctions, is acting as a deterrent. According to Nauert, foreign governments postponed buying weapons for a few billion dollars from Russia. The "Counteracting the US Opposition Act" opened the possibility of imposing sanctions against countries that buy Russian weapons. Indeed, after the Act came into force, the government of Saudi Arabia abstained from buying 4 divisions of Russian S-400 SAM systems worth $ 2 billion.
Nevertheless, Turkey ignored the provisions of American law and decided to buy from Russia S-400 complexes for $ 2.5 billion. Philippine President Rodrigo Duterte purchased from Rosoboronexport company 5,000 Kalashnikov assault rifles, as many army helmets, about a million ammunition to them and 20 military trucks. In general, over the past year, Russia's profits from the arms trade amounted to 14 billion dollars. According to Dmitry Shugaev, head of the Federal Service for Military-Technical Cooperation of Russia, the portfolio of export orders for Russian armament and military equipment is about 47-50 billion dollars. At the same time, the foreign policy of Russia has not returned to the peaceful course. The Kremlin does not withdraw troops from the occupied territories of Donbas, does not return Crimea to Ukraine, continues to sponsor Syrian President Bashar Assad and interferes in the political processes of other countries using social networks and media resources. At least the fears of Russian information interference were expressed by politicians and experts in Mexico, where presidential elections will be held this year, and in the Czech Republic, where President Milos Zeman, the supporter of rapprochement with Russia, was recently elected for a second term.
Donald Trump refrains from tightening anti-Russian sanctions because he wants to wait for the final results of the investigation into Russia's interference in the presidential election in 2016. Senator Mark Warner is convinced that the investigation should continue throughout 2018, and the US government should more zealously protect the electoral system of the country. The topic of Russia's interference in the US elections is extremely unpopular for Trump, as it casts a shadow on his reputation. If he imposes new sanctions against Russia and its partners, it means that he recognizes Moscow's interference in the elections in which he won. The proof of Russia's interference in the presidential campaign in the US will cast doubt on the legitimacy of Trump's in power. His opponents from the Democratic and Republican parties can raise the issue of holding repeated elections in the Congress and the impeachment procedure for the president.
The "Kremlin report" was published in order to mitigate the resonance from Nauert's statement that the State Department is not actually going to follow the recommendations of the Congress. It was necessary to prevent another wave of criticism of Trump in the US Congress and abroad, including in Ukraine. The team of Trump took a dual position. On the one hand, they are not ready to apply new sanctions now. On the other hand, they are ready to add personal restrictive measures of the US Congress against the main representatives of the political and economic elite of Russia, if they consider it necessary. For Trump, it is not profitable, that he was accused of espionage and working for the Kremlin because he is now trying to build confidence among ordinary Americans by improving the economic situation in the United States. With new successes in the American economy, Trump devoted a speech at the World Economic Forum in Davos. Last year, Trump reduced taxes for individuals and corporations, which increased the interest of companies to invest in American industry and technology. According to CNBS, 250 US companies announced large investment projects, increased salaries, and preferences for employees. In the third quarter of 2017, the US GDP growth rate was 3.3%. According to a survey by NBC News and The Wall Street Journal, 69% of Americans are very satisfied with the economic situation in the country.
Putin's pressure for change
The "Kremlin report" became a Republican message to Russian President Vladimir Putin, in which they hinted at the need to update personnel in the state apparatus of Russia and change the foreign policy course. The Americans have identified the lion's share of the staff of the Russian government and other authorities involved in pernicious activities. In the "Kremlin report" we see officials who directly participate in the implementation of Russia's foreign policy, including aggression in Ukraine: prime minister Dmitry Medvedev, foreign minister Sergei Lavrov, defense minister Sergei Shoigu, presidential spokesman Dmitry Peskov, an assistant of President Vladislav Surkov, Deputy Prime Minister Dmitry Rogozin, Chairman of the Federation Council Valentina Matvienko, Chief of the General Staff Valery Gerasimov, Head of the Main Intelligence Directorate Igor Korobov, Director of the Federal Security Service (FSB) Alexander Bortnikov, and many others.
The Kremlin report was published a few days after Trump accused Russia of providing assistance to North Korea, bypassing international sanctions. Russian tankers delivered fuel to the DPRK. The United States makes it clear to Putin that if he wins the presidential election in March 2018, they expect him to stop foreign policy adventures and appoint new people who are capable of constructive dialogue with the West. If Russia's foreign policy line does not change, then the US reserves the right to impose personal sanctions on virtually all current officials. Personal sanctions include a ban on the entry into the United States of individuals and the freezing of their assets in the US territory.
With the help of the "Kremlin report", the United States is trying to make enemies of representatives of Russia's big business and Vladimir Putin. The document specifies the owners and managers of companies that are key players in the most profitable sectors of the Russian economy. Enterprises with a share of the state's assets account for one-third of the existing jobs in Russia, and they provided 70% of GDP in 2016. The report specifies the chairmen of the Gazprom board of directors Alexei Miller and the Rosneft company chairman Igor Sechin. The share of Gazprom in gas production in Russia is 72%. Rosneft controls 40% of oil production. The blacklist conducts the name of the chairman of Sberbank German Gref. In 2016, the share of Sberbank in the total volume of assets of the Russian banking sector was 28.7%, in the private deposits market it was 46%. This institution issued 38.7% of all loans to Russians. The "Kremlin list" specifies the shareholders of the mining and metallurgical holding "Evraz" Roman Abramovich and Alexander Abramov. In 2016, the Russian enterprises of the Evraz holding produced 11.7 million tons of steel. This is 16.5% of the total Russian volume (70.8 million tons). At the same time, the company took the first place in terms of revenue (504.2 billion rubles) among Russian metallurgical plants. These are not the only large enterprises which owners were in the "Kremlin report". Even leaders of state monopolies, such as Rosatom (Alexei Likhachev), and Russian Railways (Oleg Belozerov) got there.
Irony of Putin and the inevitability of sanctions
The Russian political elite pretended not to take seriously the "Kremlin report". Putin joked that the report did not mention him. He sees no point in Washington's actions, which hinder the establishment of relations between the two countries. Medvedev stressed that if sanctions are imposed on the persons mentioned in the Kremlin report, Russia will take countermeasures. First Deputy Chairman of the Federation Council Committee on Foreign Affairs Vladimir Jabarov called the report "stupidity", to which attention should not be paid.
The "Kremlin report" pretty outraged some of the so-called Russian "democrats" who are in opposition to the ruling United Russia party. The candidate for the presidency of Russia from the Yabloko party Grigory Yavlinsky criticized the report and called it "idiotic" and "anecdotal." He is convinced that the policy of anti-Russian sanctions is erroneous and should be abolished, as it withdraws the Russian economy away from world markets. However, Yavlinsky forgot that the report indicates his political opponents from the camp of "United Russia".
Another presidential candidate, Ksenia Sobchak, also criticized the report. In her opinion, only corrupt officials and persons responsible for military operations in Ukraine were to be present, but not businessmen who are developing the Russian economy. She is convinced that in the US they allegedly "do not really understand what laws govern business and power in Russia." Rather, Sobchak does not want to realize that her country is an authoritarian regime where big business has a connection to power bloc and a state party, and with money paid as taxes, Russia carries out aggression in Ukraine and conducts a military operation in Syria, sponsors separatist regimes in post-Soviet countries.
The "Kremlin report" once again revealed the background of the Russian systemic opposition, which in its views differs little from United Russia. They, like the current government, want to abolish anti-Russian sanctions before the withdrawal of Russian troops from Donbas and the return of Crimea to Ukraine. They are campaigning against the background of the "Kremlin report" and are trying to rally the Russian electorate with the help of an external threat before the elections. Russia is not ready for a constructive dialogue. The reaction of the authorities and the opposition to the "Kremlin report" confirms this. It is not worth Trump and his team to cherish hopes for Putin's liability. Strengthening of anti-Russian sanctions is inevitable process. It is only a matter of time and political will of the West. In another way, it will not be possible to correct Russia's behavior on the international arena.