‘Kremlin Report’ Sanctions List a Dud After Top Russian Intel Chiefs Visit Washington

The rich and powerful in Moscow were waiting with bated breath for the publication of the so-called “Kremlin Report,” mandated by the United States Congress under the Countering America’s Adversaries Through Sanctions Act (CAATSA). The document, compiled by the Treasury Department and made public on Tuesday, January 30, was supposed to be a list of Russian elites who could be targeted by additional sanctions. Some in Moscow were apparently fearful that punishing sanctions were imminent; reportedly, several Russian billionaires even employed Washington-based lobbyists to keep themselves off the CAATSA Kremlin Report list and safeguard the vast business interests of Russia’s ultra-rich. The publication of the list turned out to be something of an anti-climax: the Kremlin Report is incredibly lengthy but apparently unfocused and not particularly useful as a basis of any meaningful targeted sanctions. There are 210 names on the published list—114 top state officials and 96 billionaires or oligarchs. The list was apparently copy-and-pasted from some official Kremlin website. It has also been claimed the billionaire list derived from a Forbes’ ranking, though the Russian RBC media holding also claimed its ranking of Russian state-controlled corporations may have been used by the US Treasury Department (RBC, January 31).

Some of the oligarchs on the Kremlin Report list are indeed President Vladimir Putin’s close cohorts and backers, while others—less so. Some reside in Russia and are already under sanctions, and others are abroad and in disagreement with the Kremlin. Putin’s human rights advisor Mikhail Fedorov was included on the list. The chair of the Moscow Helsinki Group, Soviet-era dissident and US citizen Lyudmila Alexeyeva (90), expressed astonishment and bewilderment at Fedorov’s inclusion: “He is not rich or powerful—Fedorov is a human rights defender.” Whereas, according to the Kremlin’s human rights advisor, “I believed there was some serious analytical work going on in Washington, but my secretary could have put together such a list in ten minutes—what was the US administration doing spending months compiling it?” (Newsru.com, January 31).

After the publication of the Kremlin Report, there was something of a collective sigh of relief from the Russian elite: The exaggerated fears subsided since an extended list that covered almost everyone and did not distinguish specifically between friend or foe seemed to be, in essence, harmless. President Donald Trump opposed CAATSA when it was passed by Congress last year; he signed it into law only because it had bipartisan support and any veto would have been easily overruled by the Legislative Branch. The poor quality of the Kremlin Report list thus raises the question whether the Trump administration might be deliberately trying to sabotage CAATSA and turn it into a toothless paper tiger. Will any further proposed sanctions materialize? CAATSA was passed in part specifically to punish the Kremlin for its covert involvement in the 2016 US presidential election. But if Trump does not believe the Russians promoted his victory, why punish them?

According to the main shareholder of the Russian financial institution Alpha-group, billionaire Mikhail Fridman, “My partners and I are in the Forbes’ ranking, so we are in the Kremlin Report in accordance with the standards used by the US Treasury; but this will probably not hamper business.” Fridman is in the process of merging DEA AG—an international oil and gas company headquartered in Hamburg, Germany, which he acquired in 2015 for $6.1 billion—with Wintershall Holding GmbH, Germany’s largest oil and natural gas producer, owned by BASF. The multi-billion-dollar merger would give Fridman control of a third of the joint conglomerate or maybe more after a pending initial public offering (IPO). Fridman told journalists the process of merging Wintershall and DEA “is going as planned, and I do not see any additional risks because of the Kremlin Report.” Wintershall is financing the building of the Nord Stream Two underwater natural gas pipeline from Russia to Germany, which will allow Moscow to terminate transit through Ukraine. Washington opposes Nord Stream Two. According to Fridman, the joint Wintershall/DEA “will consider continued financing of Nord Stream Two” (TASS, February 1).

Putin summarized the overall attitude in Moscow after the Kremlin Report’s release: “It is an unfriendly act, but we will watch and see what it means in practice and are ready to rebuild relations.” Putin continued, “We were ready to take serious retaliatory action, to reduce our relations [with the US] to zero, but at present we will refrain doing it,” apparently implying the published Kremlin Report is meaningless and harmless. The United States and Russia can work together in combating terrorism: According to Putin, “The Americans give us intelligence on terrorists, and we, in turn give too, as just recently in Washington [during the visit of Aleksandr Bortnikov] our FSB [Federal Security Service] director.” “But,” continued Putin, “It is stupid—the US lumps us together with Iran and North Korea and then asks for our help in containing Iran and North Korea” (Interfax, January 31).

Indeed, the three top Russian intelligence chiefs secretly visited Washington last week—Bortnikov, the director of the FSB, Sergei Naryshkin, the head of the Foreign Intelligence Service (SVR), and Colonel General Igor Korobov, the chief of Russian military intelligence (GRU). Little is currently known about the visit. Apparently Naryshkin and Bortnikov met with Central Intelligence Agency (CIA) Director Mike Pompeo. Korobov it could be assumed, met with his US counterparts from the Defense Intelligence Agency (DIA). Bortnikov is under European Union sanctions, but has not been sanctioned by the US. Both Naryshkin and Korobov are under US personal sanctions. Korobov was sanctioned in December 2016 for alleged interference in the 2016 elections. Meetings of Russian and US top intelligence officials do happen: In May 2017, Pompeo visited Moscow. But a joint visit by all three top Russian intelligence chiefs to Washington—and with two of them under sanctions—is unprecedented (Interfax, February 1).

According to official readouts, the US and Russian intelligence chiefs “discussed terrorism and national security.” According to the leading Duma deputy from the ruling United Russia party, Vyacheslav Nikonov, “The Americans wanted to discuss Syria and the Kurdish problem as well as the Taliban in Afghanistan” (Regnum, January 31). Putin also insinuated—Iran and North Korea. Maybe by sending a big intelligence posse to Washington and dangling the prospect of cooperation on important issues, which the Trump administration has been long seeking, the Kremlin dodged a bullet. Reportedly (Atlanticcouncil.org, January 30), at the last minute, the Kremlin Report was diluted (expanded) into a harmless call-all list. If so, that was indeed good timing.