Russian Political, Economic, and
Security Issues and U.S. Interests
Jim Nichol, Coordinator
Specialist in Russian and Eurasian Affairs
June 13, 2011
Congressional Research Service
7-5700
www.crs.gov
RL33407
CRS Report for Congress
P
repared for Members and Committees of Congress

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Summary
Russia made some uneven progress in democratization during the 1990s, but according to most
observers, this limited progress was reversed after Vladimir Putin rose to power in 1999-2000.
During this period, the State Duma (lower legislative chamber) came to be dominated by
government-approved parties, and opposition democratic parties were excluded. Putin also
abolished gubernatorial elections and established government ownership or control over major
media and industries, including the energy sector. The methods used by the Putin government to
suppress insurgency in the North Caucasus demonstrated a low regard for the rule of law and
scant regard for human rights, according to critics. Dmitriy Medvedev, Vladimir Putin’s chosen
successor and long-time protégé, was elected president in March 2008 and immediately
designated Putin as prime minister. President Medvedev has continued policies established during
the Putin presidency. In August 2008, the Medvedev-Putin “tandem” directed wide-scale military
operations against Georgia and unilaterally recognized the independence of Georgia’s separatist
South Ossetia and Abkhazia, actions that were censured by most of the international community
but which resulted in few, minor, and only temporary international sanctions against Russia.
Russia’s economy began to recover from the Soviet collapse in 1999, led mainly by oil and gas
exports, but the decline in oil and gas prices and other aspects of the global economic downturn
beginning in 2008 contributed to an 8% drop in gross domestic product in 2009. In 2010-2011,
rising world oil prices have bolstered the economy. Russia continues to be challenged by an
economy highly dependent on the production of oil, gas, and other natural resources. It is also
plagued by an unreformed healthcare system and unhealthy lifestyles; low domestic and foreign
investment; and high rates of crime, corruption, capital flight, and unemployment.
Russia’s military has been in turmoil after years of severe force reductions and budget cuts. The
armed forces now number about 1.0 million, down from 4.3 million Soviet troops in 1986. Troop
readiness, training, morale, and discipline have suffered, and much of the arms industry has
become antiquated. Russia’s economic growth during most of the 2000s allowed it to increase
defense spending to begin to address these problems, and some high-profile activities were
resumed, such as Mediterranean and Atlantic naval deployments and strategic bomber patrols.
Stepped-up efforts were launched in late 2007 to further downsize the armed forces to improve
their quality. Russia’s 2008-2009 economic downturn, strong opposition among some in the
armed forces, mismanagement, and corruption have appeared to slow force modernization efforts.
After the Soviet Union’s collapse, the United States sought a cooperative relationship with
Moscow and supplied $17 billion in aid for Russia from FY1992-FY2010 to encourage
democracy and market reforms and in particular to prevent the proliferation of weapons of mass
destruction (WMD). U.S. aid to reduce the threat posed by WMD proliferation has hovered
around $700 million-$900 million per fiscal year, while other foreign aid to Russia has dwindled.
In past years, U.S.-Russia tensions on issues such as NATO enlargement and proposed U.S.
missile defenses in Eastern Europe were accompanied by some cooperation between the two
countries on anti-terrorism and non-proliferation. Russia’s 2008 conflict with Georgia, however,
threatened such cooperation. The Obama Administration has worked to “re-set” relations with
Russia, which welcomed the Administration’s announcement in September 2009 of the
cancellation of the planned deployment of a missile defense system in Poland and the Czech
Republic. The Administration has hailed the signing of a new Strategic Arms Reduction Treaty on
April 8, 2010, and the approval of new sanctions against Iran by Russia and other members of the
U.N. Security Council on June 9 , 2010, as signifying the “re-set” of bilateral relations.
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Contents
Post-Soviet Russia and Its Significance for the United States....................................................... 1
Political and Human Rights Developments.................................................................................. 1
Background .......................................................................................................................... 1
The Putin-Medvedev Era....................................................................................................... 2
The Impasse of Political Pluralism ........................................................................................ 5
Human Rights Problems........................................................................................................ 9
Insurgency in the North Caucasus ................................................................................. 12
Defense Reforms................................................................................................................. 15
Trade, Economic, and Energy Issues ......................................................................................... 18
Russia and the Global Economic Crisis ............................................................................... 18
Russia’s Accession to the World Trade Organization (WTO) and PNTR for Russia.............. 19
Intellectual Property Rights (IPR) Enforcement in Russia, Agricultural Trade, and
Other Issues ..................................................................................................................... 20
Medvedev’s Modernization Initiative .................................................................................. 21
The Skolkovo Center for Innovation.............................................................................. 23
U.S. and Foreign Interest in Skolkovo ........................................................................... 23
Russian Energy Policy ........................................................................................................ 24
Foreign Policy........................................................................................................................... 26
Russia and the West ............................................................................................................ 26
NATO-Russia Relations ................................................................................................ 27
Russia and the European Union..................................................................................... 30
Russia and the Soviet Successor States ................................................................................ 33
U.S.-Russia Relations ............................................................................................................... 36
The Obama Administration “Re-sets” Bilateral Relations .................................................... 36
Bilateral Relations and Iran ................................................................................................. 40
Bilateral Relations and Afghanistan..................................................................................... 43
Bilateral Relations and North Korea .................................................................................... 46
Russia’s Role in the Middle East Quartet............................................................................. 47
Arms Control Issues............................................................................................................ 49
Cooperative Threat Reduction ....................................................................................... 49
The New Strategic Arms Reduction Treaty .................................................................... 49
The Ratification of the New START Treaty in Russia .................................................... 51
Russia and Missile Defense........................................................................................... 52
U.S.-Russia Economic Ties ................................................................................................. 60
U.S. Assistance to Russia .................................................................................................... 62

Tables
Table 1. U.S. Merchandise Trade with Russia, 1993-2010 ......................................................... 60
Table 2. U.S. Government Funds Budgeted for Assistance to Russia, FY1992-FY2009 ............. 63
Table 3. Assistance to Russia, FY2010-FY2011, and the FY2012 Request ................................. 64

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Contacts
Author Contact Information ...................................................................................................... 64
Acknowledgments .................................................................................................................... 64

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Post-Soviet Russia and Its Significance for the
United States
Although Russia may not be as central to U.S. interests as was the Soviet Union, cooperation
between the two is essential in many areas. Russia remains a nuclear superpower. It still has a
major impact on U.S. national security interests in Europe, the Middle East, and Asia. Russia has
an important role in the future of arms control, the nonproliferation of weapons of mass
destruction (WMD), and the fight against terrorism. Such issues as the war on terrorism, the
future of NATO, and the U.S. role in the world are affected by developments in Russia.
Russia is a potentially important trading partner. Russia is the only country in the world with a
greater range and scope of natural resources than the United States, including vast oil and gas
reserves. It is the world’s second-largest producer and exporter of oil (after Saudi Arabia) and the
world’s largest producer and exporter of natural gas. It has a large, well-educated labor force and
a huge scientific establishment. Also, many of Russia’s needs—food and food processing, oil and
gas extraction technology, computers, communications, transportation, and investment capital—
are in areas in which the United States is highly competitive, although bilateral trade remains
relatively low.
Political and Human Rights Developments
Background
Russia is a multi-ethnic state with over 100 nationalities and a complex federal structure inherited
from the Soviet period that includes regions, republics, territories, and other subunits. During
Boris Yeltsin’s presidency, many of the republics and regions won greater autonomy. Only the
Chechen Republic, however, tried to assert complete independence. During his presidency,
Vladimir Putin reversed this trend and rebuilt the strength of the central government vis-à-vis the
regions. In future decades, the percentage of ethnic Russians is expected to decline because of
relatively greater birthrates among non-Russian groups and in-migration by non-Russians. In
many of Russia’s ethnic-based republics and autonomous regions, ethnic Russians are becoming a
declining share of the population, resulting in the titular nationalities becoming the majority
populations. Implications may include changes in domestic and foreign policies under the
influence of previously marginalized ethnic groups and federal devolution. Other consequences
may include rising ethnic conflict and even separatism.
The Russian Constitution combines elements of the U.S., French, and German systems, but with
an even stronger presidency. Among its more distinctive features are the ease with which the
president can dissolve the legislature and call for new elections and the obstacles preventing the
legislature from dismissing the government in a vote of no confidence. The president, with the
legislature’s approval, appoints a prime minister who heads the government. The president and
prime minister appoint government ministers and other officials. The prime minister and
government are accountable to the president rather than the legislature. In November 2008,
constitutional amendments extended the presidential term to six years and the term of Duma
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deputies from four to five years. These changes will come into effect after the late 2011 Duma
election and the early 2012 presidential election.
The bicameral legislature is called the Federal
Russia: Basic Facts
Assembly. The State Duma, the lower (and
Area and Population: Land area is 6.6 million sq. mi.,
more powerful) chamber, has 450 seats. In
about 1.8 times the size of the United States. The
May 2005, a law was passed that all 450
population is 138.7 million (World Factbook, mid-2011
est.). Administrative subdivisions include 46 regions, 21
Duma seats would be filled by party list
republics, 9 territories, and 7 others.
elections, with a 7% threshold for party
representation. In the December 2007
Ethnicity: Russian 79.8%; Tatar 3.8%; Ukrainian 2%;
Bashkir 1.2%; Chuvash 1.1%; other 12.1% (2002 census).
legislative election, the pro-Kremlin United
Russia Party won 315 seats, more than the
Gross Domestic Product: $2.2 trillion; per capita
two-thirds majority required to amend the
GDP is about $15,900 (World Factbook, 2010 est.,
purchasing power parity).
constitution. The upper chamber, the
Federation Council, has 166 seats, two from
Political Leaders: President: Dmitriy Medvedev; Prime
Minister: Vladimir Putin; Speaker of the State Duma:
each of the current 83 regions and republics of
Boris Gryzlov; Foreign Minister: Sergey Lavrov; Defense
the Russian Federation. Deputies are
Minister: Anatoliy Serdukov.
appointed by the regional chief executive and
Biography: Medvedev, born in 1965, received a
the regional legislature.
doctorate in law from Leningrad (now St. Petersburg)
State University in 1990. In 1991-1996, he worked with
The judiciary is the least developed of the
Vladimir Putin as an advisor to the mayor of Leningrad.
three branches. Some of the Soviet-era
In late 1999, he became deputy head of Putin’s
structure and practices are still in place.
presidential administration, and in October 2003, chief of
staff. From 2000-2008, he also was vice chairman or
Criminal code reform was completed in 2001.
chairman of the board of Gazprom. In November 2005,
Trial by jury was planned to expand to cover
he became first deputy prime minister and was elected
most cases, but recently was restricted
President in March 2008.
following instances where state prosecutors
lost high-profile cases. The Supreme Court is the highest appellate body. The Constitutional Court
rules on the legality and constitutionality of governmental acts and on disputes between branches
of government or federative entities. Federal judges, who serve lifetime terms, are appointed by
the president and must be approved by the Federation Council. The courts are widely perceived to
be subject to political manipulation and control.
The Putin-Medvedev Era
Former President Boris Yeltsin’s surprise resignation (December 31, 1999) was a gambit to
permit then-Prime Minister Vladimir Putin to become acting president, in line with the
constitution, and to situate him as a known quantity for election as president in March 2000.
Putin’s electoral prospects were cemented by his depiction in state-owned television and other
mass media as a youthful, vigorous, sober, and plain-talking leader; and by his decisive launch of
military action against breakaway Chechnya. Putin was a Soviet KGB foreign intelligence officer
for 16 years and later headed Russia’s Federal Security Service (the domestic component of the
former KGB). His priorities as president were strengthening the central government and restoring
Russia’s status as a great power.
Under Putin, the government took nearly total control of nation-wide broadcast media, shutting
down or effectively nationalizing independent television and radio stations. In 2006, the Russian
government forced most Russian radio stations to stop broadcasting programs prepared by the
U.S.-funded Voice of America (VOA) and Radio Liberty (RL). Journalists critical of the
government have been imprisoned, attacked, and in some cases killed with impunity.
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A defining political and economic event of the Putin era was the October 2003 arrest of Mikhail
Khodorkovskiy, CEO of Yukos, then the world’s fourth-largest oil company. Khodorkovskiy’s
arrest was triggered by his criticism of some of Putin’s actions, his financing of anti-Putin
political parties, and his hints that he might enter politics in the future. Khodorkovskiy’s arrest
was seen by many as politically motivated, aimed at eliminating a political enemy and making an
example of him to other Russian tycoons. In May 2005, Khodorkovskiy was found guilty on
multiple criminal charges of tax evasion and fraud and sentenced to eight years in prison. Yukos
was broken up and its principal assets sold off to satisfy alleged tax debts. Since then, the
government has re-nationalized or otherwise brought under its control a number of other large
enterprises that it views as “strategic assets.” These include ship, aircraft, and auto
manufacturing, as well as other raw material extraction activities. At the same time, the Kremlin
installed senior officials to head these enterprises. This phenomenon of political elites taking the
helm of many of Russia’s leading economic enterprises led some observers to conclude that
“those who rule Russia, own Russia” (see also below). In December 2010, Khodorkovskiy was
found guilty in a new trial on charges of embezzlement, theft, and money-laundering and
sentenced to several additional years in prison. In February 2011, an aide to the trial judge alleged
that the conviction was a case of “telephone justice,” where the verdict had been dictated to the
court by higher authorities. In late May 2011, the Russian Supreme Court upheld the sentence on
appeal.1
Another pivotal event was the September 2004 terrorist attack on a primary school in the town of
Beslan, North Ossetia, that resulted in hundreds of civilian casualties. President Putin seized the
opportunity provided by the crisis to launch a number of political changes he claimed were
essential to quash terrorism. In actuality, the changes marked the consolidation of his centralized
control over the political system and the vitiation of fragile democratic reforms of the 1980s and
1990s, according to many observers. The changes included abolishing the popular election of
regional governors (replacing such elections with the appointment of presidential nominees that
are confirmed by regional legislatures) and mandating that all Duma Deputies be elected on the
basis of national party lists, based on the proportion of votes each party gets nationwide. The first
measure made regional governors wholly dependent on, and subservient to, the president. The
second measure eliminated independent deputies, further strengthening the pro-presidential
parties that already held a majority of Duma seats. In early 2006, President Putin signed a new
law regulating non-government organizations (NGOs), which Kremlin critics charged has given
the government leverage to shut down NGOs that it views as politically troublesome.
The Kremlin decided to make the December 2, 2007, State Duma election a display of Putin’s
popularity. Putin’s October 2007 announcement that he would run for a Duma seat at the head of
the United Russia ticket made the outcome doubly sure (under the constitution, however, a sitting
president is barred from also sitting in the Duma). Russian authorities effectively prevented the
Organization for Security and Cooperation in Europe (OSCE) from sending observers by

1 S.Res. 189, introduced by Senator Roger Wicker on June 18, 2009, and a similar bill, H.Res. 588, introduced by
Representative James McGovern on June 26, 2009, expressed the sense of the chamber that the prosecution of
Khodorkovskiy was politically motivated, called for the new charges against him to be dropped, and urged that he be
paroled as a sign that Russia was moving toward upholding democratic principles and human rights. S.Res. 65,
introduced by Senator Wicker on February 17, 2011, expressed the sense of the Senate that the conviction of
Khodorkovsky and Lebedev constituted a politically motivated case of selective arrest and prosecution and that it
should be overturned. President Obama also raised concerns about Khodorkovskiy’s new trial. The White House.
Office Of The Press Secretary. Transcript of President Obama’s Interview with Novaya Gazeta, July 6, 2009. For
Congressional comments after Khodorkovskiy received a second sentence, see Senator Wicker, Congressional Record,
January 5, 2011, p. S54; Representative David Dreier, Congressional Record, January 19, 2011, p. H329.
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delaying the issuance of visas until the last minute, thus blocking normal monitoring of the
election campaign. United Russia won 64.3% of the popular vote and 315 of the 450 seats—more
than the two-thirds majority required to amend the constitution. Two other pro-Putin political
parties won 78 seats, giving the Kremlin the potential support of 393 of the 450 Duma members.
The only opposition party in the Duma is the Communist Party, which won 57 seats.2 Closing out
its four-year term, elections to the Duma are scheduled for December 4, 2011 (this new Duma
will serve for five years as a result of constitutional changes; see below).
Barely a week after the 2007 Duma election, Putin announced that his protégé Dmitriy Medvedev
was his choice for president. Medvedev announced that, if elected, he would ask Putin to serve as
prime minister. This arrangement presumably was meant to ensure political continuity for Putin
and those around him. The Putin regime manipulated election laws and regulations to block
“inconvenient” candidates for the prospective March 2, 2008, presidential election from getting
onto the ballot, according to many observers. Medvedev garnered 70% of the vote against three
candidates. As with the Duma election, the OSCE refused to submit to restrictions demanded by
Moscow and did not send electoral observers.3
There has been considerable speculation about power-sharing between President Medvedev and
Prime Minister Putin. The dual power arrangement has been stable, although occasionally
tensions have appeared in their relationship, perhaps exacerbated by conflicts between their
respective supporters. Possible succession scenarios include Medvedev stepping down after his
first term as president or even resigning just short of the end of his first term. In either case, Putin
would be eligible to run, since he would not have served more than two consecutive terms.
Medvedev has suggested that he and Putin would not both run as candidates.4 In recent weeks, it
has seemed that Putin is maneuvering to reclaim the presidency.
In late March 2011, President Medvedev outlined “10 theses” to improve the climate for private
investment in Russia, including that government ministers and deputy prime ministers
specializing in certain areas of the economy resign from the boards of directors of state-owned
corporations in competitive markets by the end of June 2011. Other high officials would have
until October 2011 to resign. He also called for reducing the share of state ownership in many
corporations or for their outright privatization, and for the Ministry of the Economy and the
deputy ministers to seek out and eliminate regulations harmful to investment. He suggested
examining whether health insurance and pension payments by firms could be reduced. Among the
officials that were required to step down as board directors or members were First Deputy Prime
Minister Viktor Zubkov; Deputy Prime Minister Igor Sechin; Deputy Prime Minister Sergey
Ivanov; Deputy Prime Minister Aleksey Kudrin; Transport Minister Igor Levitin; and Energy
Minister Sergey Shmatko. Also, the Deputy Chief of the Presidential Staff, Aleksandr Beglov, and
Sergey Prikhodko, Presidential Advisor, were reportedly required to resign seats as several
corporations. Although Sechin resigned in April 2011 from Rosneft and apparently from Inter
RAO, other officials reportedly have resisted. According to one Russian analyst, these moves by
President Medvedev may aim at enhancing his chances to gain reelection as president by
weakening Putin’s base of support.5

2 See CRS Report RS22770, Russia’s December 2007 Legislative Election: Outcome and Implications, by Jim Nichol.
3 RFE/RL, Newsline, February 5, 20, 2008.
4 The ISCIP Analyst, November 12, 2009.
5 CEDR, June 2, 2011, Doc. No. CEP-46006; Interfax, June 14, 2011.
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The Impasse of Political Pluralism
Many observers had hoped that President Medvedev would be more democratic than former
President Putin. Despite some seemingly liberal statements and decisions by President Medvedev,
the main trend has been a continuation of the political system honed by current Prime Minister
Putin, according to most observers. In late 2008, President Medvedev proposed a number of
political changes that were subsequently enacted or otherwise put into place. Observers regarded
some of the changes as progressive and others as regressive. These included constitutional
changes extending the presidential term to six years and State Duma deputies’ terms to five years,
giving small political parties more rights (see below), requiring annual government reports to the
State Duma, permitting regional authorities to dismiss mayors, reducing the number of signatures
for a party to participate in elections, reducing the number of members necessary in order for
parties to register, and abolishing the payment of a bond in lieu of signatures for participation in
elections.
Seen by some observers as a possible sign of democratization, in February 2009 Medvedev
revived a moribund “Presidential Council to Promote the Development of Civil Society
Institutions and Human Rights,” including by replacing several pro-government members with
prominent oppositionists. He met with the Council in April 2009, at which criticism of the human
rights situation in Russia included that NGOs were being harmed by the 2006 NGO law. In
response to the criticism, in mid-May 2009 Medvedev established a Working Group on Nonprofit
Organization Law to consider amendments to the NGO law. On June 17, 2009, Medvedev
submitted amendments proposed by the Council to the legislature, and they were approved and
signed into law on July 20, 2009. Changes included easing some reporting requirements and
limiting the ability of bureaucrats to inspect NGO facilities. Restrictions on foreign-based NGOs
were only slightly eased, however. Some critics viewed the approved amendments as mainly
cosmetic.6
Seeming to be a sign of increasing political accountability, the Federal Assembly approved a
Medvedev proposal in April 2009 for political parties that get between 5%-7% of the vote in
future Duma elections (in the 2007 election, a party had to get 7% or more of the vote to gain
seats) to win one or two seats. In June 2009, Medvedev met with unrepresented party leaders for
discussions on how the government might improve the environment in which the parties operate,
such as making media access more available. He also called for regional authorities to ensure that
small parties are freely able to participate in local elections.
In May 2009, Medvedev submitted legislative amendments to laws on the Constitutional Court
and on a probationary period for judicial appointments that were quickly approved. The changes
to the selection of the chairman and two other officials of the Constitutional Court—to have the
president effectively select these officials rather than to have the members of the court elect
them—were widely viewed as democratically regressive. Alternatively, the proposal to eliminate
a probationary period for newly appointed judges was viewed as progressive, since it eliminated
an executive branch method of removing non-compliant judges. Constitutional Court Chairman
Valeriy Zorkin appeared to strongly oppose the change in the court’s election process, although
his reasons may have dealt with preserving the prerogatives of the members of the court and with
preserving existing procedures. In the latter part of 2009, two Constitutional Court judges who

6 Michael Allen, “Obama Trip Prompts Token NGO Reform, but Kremlin Incapable of Real Change,” Democracy
Digest, July 6, 2009.
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had been appointed during the Yeltsin era openly criticized Medvedev’s changes as indicative of
the growing lack of judicial independence in Russia. One was forced out and the other was
stripped of some duties. In December 2009, Zorkin in an article extolled the benefits of
authoritarian state order and condemned chaotic democratization and imposed modernization. His
article may have constituted open criticism of Medvedev.7
Genri Reznik, president of the Moscow Bar Association and member of the Public Chamber,
argued in May 2009 that the presidential selection process for judges was a “mockery of justice,”
since the process was largely based on political rather than professional criteria, and that “the
situation has become much worse in terms of judges’ independence” from political pressure.8 In
August 2009, President Medvedev called for further limiting jury trials (he had signed a law at
the end of 2008 limiting jury trials in terrorist or extremist cases) that involve “criminal
communities,” which some legal experts and civil rights advocates criticized as an effort to
further squelch unwanted acquittals by juries. At the end of 2010, President Putin claimed that
clan interests also tainted jury decisions.
President Medvedev authored an article in September 2009—“Go Russia”—that pledged that
Russian democracy would be developed slowly so as not to imperil social stability and that
“foreign grants” would not be permitted to influence the development of civil society (these
views seemed to echo those of Central Asia’s authoritarian leaders). He hailed such changes as
political party participation in the Duma (mentioned above) as marking progress in
democratization, but also admitted that “we have only just embarked” on creating a judicial
system free of corruption that is capable of protecting citizens’ rights and freedoms.9 A few days
later, Russian Duma Speaker Boris Gryzlov (who is, along with Putin, the top leader of United
Russia) published an article that praised former President Putin’s abolition of popular
gubernatorial elections as strengthening central government administration. He praised
Medvedev’s proposal to “perfect” the process by having the dominant local political party
propose gubernatorial candidates to the president and hailed Medvedev’s statement that Russia
would democratize at its own pace and in its own way.”10
In the state of the nation address to the Russian Federal Assembly on November 11, 2009,
President Medvedev deplored the economic downturn in Russia and proposed a program of
technological modernization (see also below, “Medvedev’s Modernization Initiative”). He also
appeared to criticize the top-down administrative authoritarianism implemented by Putin and the
“prejudice and nostalgia” of current foreign policy. He called for 10 political reforms—such as
standardizing the ratio of deputies to the voting populations of the regions, using the internet to
disseminate legislative debates and campaign information, and eliminating the gathering of
signatures by parties in order to qualify to run in elections—that were viewed by some critics as
useful but minor.
President Dmitriy Medvedev convened a meeting of the advisory State Council (a conclave of
governors) in January 2010 to discuss electoral and legislative reform proposals he and various
political parties had proposed. Strong criticisms about political developments in Russia by the
Communist Party and other opposition parties were televised nationwide. A report by a State

7 Open Source Center. Central Eurasia: Daily Report (hereafter CEDR), December 15, 2009, Doc. No. CEP-46009.
8 CEDR, May 6, 2009, Doc. No. CEP-4003.
9 CEDR, September 10, 2009, Doc. No. CEP-378001.
10 CEDR, September 14, 2009, Doc. No. CEP-23005.
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Council commission on the parties’ suggestions mostly praised the current political system (the
report had been edited by Vladislav Surkov, first deputy chief of staff of the presidential
administration). Medvedev defended Russia’s electoral system as basically democratic, stating
that allegations that recent local elections were not free and fair had not been proven in the courts.
In June 2010, the Working Group on Nonprofit Organization Law (mentioned above) reportedly
discussed further possible amendments to the NGO law, including the easing of restrictions on
foreign NGO activities in Russia. One Russian analyst suggested that the discussion of possible
amendments was timed to take place just before President Medvedev’s visit to the United States,
where civil society might be a topic of summitry. Also in June 2010, the Presidential Council to
Promote the Development of Civil Society Institutions and Human Rights sent a legal analysis to
President Medvedev in opposition to a bill that criminalized disobeying an employee of the
Federal Security Service (FSB) or hindering him in the performance of official duties. The bill
also permitted the FSB to issue warnings to individuals or groups whose actions it felt might
jeopardize national security, even if the actions were not crimes. The Council warned that “this
kind of return to the worst and unlawful practices of a totalitarian state … cannot be perceived by
society as anything other that legitimizing the suppression of civil liberties and dissent.”11 Despite
this criticism, the FSB bill was approved with minor changes and signed into law.
In a September 2010 speech, President Dmitry Medvedev built on his “Go Russia” article by
spelling out five requirements of democratization in Russia and other countries: the enshrinement
of humanistic values in legislation; economic and technological modernization to ensure a decent
standard of living; protecting citizens from terrorism, corruption, drug trafficking, and illegal
migration; a high level of education and culture, including a culture of self-restraint; and a
personal feeling that one is free, that one can solve one’s own problems, and that there is justice.
He suggested that Russia is making progress in meeting these five standards since it rejected
communism two decades ago, that it has some distance to travel, that the pace of change should
be moderate to avoid social disruption, and that democratization is a process rather than an end
point. He rejected the idea “that we are living under a police regime in an authoritative state,” or
in a “decorative democracy.”12
In the state of the nation address to the Russian Federal Assembly on November 11, 2010,
President Medvedev only touched on political reforms. He appeared to call for establishing a
party list or mixed system for upcoming municipal legislative elections, and stated that such a
change would ensure that the “State Duma election next December will take place with a political
system that has been renewed at all levels.”13
In an assessment of democratization trends in 2010, Freedom House, a non-governmental
organization, concluded that not only did Medvedev fail to fulfill his pledges to implement the
rule of law, but human rights conditions appeared to even worsen by the end of the year.
According to Freedom House, political stability is increasingly ensured through repression,
including assassinations of media and civil society personnel. Elections too are increasingly

11 CEDR, June 22, 2010, Doc. No CEP-4005; June 24, 2010, Doc. No. CEP-950171.
12 “Speech of President of Russia Dmitriy Medvedev at Plenary Session of Global Policy Forum ‘The Modern State:
Standards of Democracy and Criteria of Efficiency,’” and “Meeting of President of Russia Dmitriy Medvedev with
Leading Russian and Foreign Political Analysts at Global Policy Forum,” The Kremlin, President of Russia, September
10, 2010, at http://eng.kremlin.ru/news/920.
13 Presidential Address to the Federal Assembly of the Russian Federation, The Kremlin, President of Russia,
November 30, 2010, at http://eng.kremlin.ru/transcripts/1384.
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controlled by the authorities, so that more and more Russian citizens decline to vote. The
judiciary remains subject to political pressure, and media face ongoing restrictions on coverage.
Since neither Putin nor Medvedev has ruled out running in a presidential election scheduled for
2012, the current authoritarian system may continue for some time, Freedom House warns.14
Elections to many regional and district legislatures were held in March 2011. Similarly to local
elections held in March and October 2009 and 2010, irregularities were reported that do not bode
well for a free and fair Duma election in December 2011, according to many observers. The
results of the March 2011 elections appeared to indicate that United Russia’s popularity had
waned since the December 2007 Duma elections. According to one Russian analyst, a major prior
support for United Russia in the localities—the backing of a popular governor—had been
undermined when governors became appointed rather than elected. Because of rising popular
discontent with government policies, United Russia could not run a campaign based on policy
proposals but was forced to run a negative campaign attacking opponents, according to this
analyst. The main target of negative campaigning was the Just Russia Party, which the United
Russia Party accused of being linked to organized crime. In many regions, United Russia received
less than 50% of the vote, despite the prevalence of vote-counting manipulation, according to this
analyst.15
In February 2011, Mironov stated that his party had decided not to endorse any presidential
candidate nominated by United Russia and instead might nominate its own candidate. In mid-
March 2011, he accused United Russia of becoming a “trade union of bureaucrats, which has
united capital and power and developed a strategy for enriching itself at people's expense.”16
Putin—the chairman of United Russia, although not a formal member—appeared to question one
of Mironov’s remarks as extremist during a meeting in early April 2011, perhaps marking a loss
of confidence by Putin in Mironov’s leadership.17 Within days of this meeting, Mironov
announced that he was stepping down as chairman of Just Russia. According to one
interpretation, Mironov stepped down as chairman, while retaining influence in the party, as a
means to quell growing criticism by United Russia and others that an increasingly vocal political
oppositionist should not also be the head of the Federation Council (senators in the Federation
Council, the majority of which are United Russia Party members, elected him as chairman; also,
senators are supposed to be nonpartisan in the performance of their duties).
United Russia, however, had decided to seek Mironov’s ouster as head of the Federation Council,
and its members in the St. Petersburg legislature launched an effort in early May to recall him.
United Russia controlled 23 of 50 seats in the city legislature, and only had to gain 3 more votes
to recall Mironov. Further inflaming the local United Russia Party, Just Russia had declared that it
would seek to gain a majority in the St. Petersburg legislature in elections in late 2011, and that it
would not support the retention of Putin protégé Valentina Matviyenko as chief of the city. United
Russia charged that Mironov had offended it and the people of St. Petersburg and led a
overwhelmingly successful May 18 recall vote. President Medvedev termed United Russia’s

14 Arch Puddington, “Freedom in the World 2011: The Authoritarian Challenge to Democracy,” Freedom House,
January 13, 2011; Robert Orttung, “Russia,” Nations In Transit 2010, Freedom House, June 29, 2010.
15 CEDR, March 15, 2011, Doc. No. CEP-8011.
16 CEDR, March 20, 2011, Doc. No. CEP-950025.
17 RIA-Novosti, the government press agency, quoted unnamed Kremlin officials as terming Mironov’s proposal that
the assets of officials suspected of corruption be confiscated as “strange,” “populist,” and “unconstitutional.” CEDR,
April 3, 2011, Doc. No. CEP-950042.
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campaign against Mironov a case of normal “political competition.”18 Some critics argued that the
Kremlin, which had created Just Russia in 2006 as a harmless foil to United Russia, had become
incensed that Just Russia was becoming a real opposition party by fits and starts and was gaining
in popularity.19 Mironov subsequently filled a seat in the Duma vacated by a fellow Just Party
deputy on his behalf.
At a meeting of United Russia on May 6, 2011, Prime Minister Putin called for the creation of a
“broad popular front [of ] like-minded political forces,” to participate in the Duma election,
including United Russia and other political parties, business associations, trade unions, and youth,
women’s and veterans’ organizations. United Russia’s party list would include non-party
candidates nominated by these various organizations, he stated. Following Putin’s speech, a
headquarters and regional branches, leadership, and a website were quickly set up. Until the
popular front works out a five-year plan for the development of Russia to serve as its program,
the front is urging both individuals and groups that care about the “fate” and “victory” of Russia
and want “access to participation in power” to fill out an application on the website of Prime
Minister Putin. Putin’s aides have stated that he is the “informal head” of the popular front, but
deputy prime minister and chief of government staff Vyacheslav Volodin has been named the
head of the popular front headquarters. In early June 2011, Volodin called for regional United
Russia/popular front offices to work to increase United Russia’s vote in the Duma election,
particularly where results had been weak during local legislative elections in March 2011.20
Critics have objected that it is illegal for government resources and officials to be involved in
political party activities. They also have claimed that the idea of the “popular front” is
reminiscent of the one in place in the German Democratic Republic when Putin served there in
the Soviet-era KGB.
Human Rights Problems
According to the State Department’s Country Reports on Human Rights Practices for 2010, there
were numerous Russian government human rights problems and abuses during the year. There
were numerous reports that police engaged in torture, abuse, and violence to coerce confessions
from suspects, and there were allegations that authorities did not consistently hold police
accountable for such actions. During the year, reports by refugees, non-governmental
organizations (NGOs), and the press suggested a pattern of police beatings, arrests, and extortion
when dealing with persons who appeared to be of Caucasus, Central Asian, African, or Romani
ethnicity. Government forces engaged in the conflict in the North Caucasus reportedly tortured
and otherwise mistreated civilians. Authorities selectively detained and prosecuted members of
the political opposition. Human rights organizations and activists identified the following
individuals during the year as political prisoners: Aleksey Sokolov, Igor Sutyagin, Zara
Murtazaliyeva, Valentin Danilov, Mikhail Khodorkovskiy, and Platon Lebedev.
There were reports of attacks on and killings of journalists by unidentified persons for reasons
apparently related to their activities. According to the Russian Glasnost Defense Foundation, an
NGO, a number of journalists were killed during the year, possibly for reasons related to their
professional activities, and there were 58 attacks against journalists, approximately the same level

18 Interfax, May 18, 2011.
19 CEDR, May 23, 2011, Doc. No. CEP-6025.
20 CEDR, June 6, 2011, Doc. No. CEP-46014.
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as in 2009. The government officially reopened investigations into the killings of several
journalists from previous years, and there was an arrest in one case, that involving the killing of
Novaya Gazeta reporter Anastasiya Baburova and lawyer Stanislav Markelov.
The government controlled many media outlets and infringed on freedoms of speech and
expression. It harassed and intimidated some journalists into practicing self censorship and
pressured major independent media outlets to abstain from critical coverage with regard to the
conduct of federal forces in the North Caucasus, human rights, high-level corruption, and
opposition political views. In some cases the government used direct ownership, or ownership by
companies with government links, to control or influence media outlets, especially television. The
federal government owned one of the six national television stations and had a controlling interest
in one other. State-owned or state-affiliated companies owned controlling interests in three others,
and the Moscow city administration owned the sixth. Approximately two-thirds of the other 2,500
television stations in the country were completely or partially government-owned. More than 60
percent of the country's 45,000 registered local newspapers and periodicals were government-
owned or controlled. The government maintained ownership of the two largest radio stations.
According to media NGOs, some authorities used the media's widespread dependence on the
government for transmission facilities, access to property, and printing and distribution services to
discourage critical reporting.
Local authorities continued to restrict freedom of assembly. According to the Russian human
rights NGO AGORA, more than 3,160 civil activists were arrested following public events during
the year. Demonstrations that took place without official permission were often broken up by
police, who frequently detained demonstrators. Many observers noted a selective and consistent
pattern of encouraging rallies friendly to the government—while preventing politically sensitive
demonstrations.
Rule of law and due process violations remained a problem. Judges remained subject to influence
from the executive, military, and security forces, particularly in high profile or politically
sensitive cases, such as the Khodorkovskiy case. Despite recent increases in judges' salaries,
reports of judges accepting bribes continued. Legal limitations on detention were generally
respected outside of the North Caucasus, and judges occasionally suppressed confessions of
suspects if they were taken without a lawyer present. They also at times freed suspects who were
held in excess of detention limits. Authorities did not provide adequate protection for witnesses
and victims from intimidation or threats from powerful criminal defendants. During the year the
European Court for Human Rights found 84 violations by the country involving the right to a fair
trial and 29 violations involving proceedings that exceeded a "reasonable" length of time.
The government made it difficult for some nongovernmental organizations (NGOs) to carry out
their work. Unidentified assailants physically attacked NGO leaders who took positions opposed
to government policies or private interests. Security services and local authorities at times
fabricated grounds for legal justification for searches and raids on civil society groups.
Authorities subjected some NGOs with foreign funding to lengthy financial audits or delayed the
registration of their foreign-financed programs.21
Responding to the State Department’s human rights report, Mikhail Fedotov, head of the
Presidential Council to Promote the Development of Civil Society Institutions and Human Rights,

21 U.S. Department of State. Country Reports on Human Rights Practices for 2010, April 8, 2011.
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stated that it had overstressed problems of human rights in Russia and had not focused on positive
signs such as the holding of some rallies, the opening of new television stations with diverse
programming, and a Russian Supreme Court decision in 2010 that widened freedom of the media.
He urged that “our council would like to see an appreciation of positive changes taking place in
our country in the field of human rights. We have lots of problems, but it is important to see the
trend and the direction in which we are trying to make our movement proceed. Perhaps we do not
always succeed, but we do try.”22
Among recent actions bearing on human rights taken by Russia, a Working Group on Civil
Society, part of the U.S.-Russia Bilateral Presidential Commission (see below, “The Obama
Administration “Re-sets” Bilateral Relations”), held its first U.S. meeting in late January 2010.
As per agreement, the working group is composed mainly of government officials and a few
NGO representatives. The officials and NGO representatives met in separate sessions, and then
the two groups compared notes. The topics of discussion included countering corruption,
protecting children, prison reform, and rights of immigrants (the White House subsequently has
described these topics as discussed by separate subgroups). Some Members of Congress had
called in December 2009 for the Administration to boycott the meetings until Russia changed its
head of the group.23 In late May 2010, the Working Group held another meeting in Vladimir,
Russia.24 During the presidential summit in Washington, DC, in June 2010, a semi-official
meeting of civil society groups took place on the sidelines of the summit. Follow-on meetings of
civil society groups took place in several Russian cities in October 2010.25 A meeting of civil
society groups took place in late May 2011, followed a week later by a session of the Working
Group in Washington, DC. One Russian human rights activist not involved in the session, Lev
Ponomarev, complained that the working group session was top-heavy with officials.26
In June 2010, the Duma passed on first reading (introduced) amendments to the Law on the FSB
that permitted the FSB to issue a warning to a person or group “on the impermissibility of actions
that would comprise grounds and create conditions for the commission of crimes.” Another
amendment would introduce a fine by the FSB for “disobeying the legal instruction or directive
of an FSB official.” Prime Minister Putin admitted that he authored the bill. The bill elicited
widespread public criticism, so that it was slightly altered in its second reading on July 9, 2010
(considered the main vote, with a third reading being the final vote). Critics raised concerns that
major rationales for the language included further restricting the ability of individuals or groups
to hold demonstrations and of media to operate freely.27 The bill received final approval and was
signed into law by President Medvedev on July 29, 2010, despite the urging of human rights
groups that it be reconsidered.

22 CEDR, April 11, 2011, Doc. No. CEP-950198.
23 “Interview: McFaul on U.S., Russian Stereotypes and His Controversial Co-Chair, RFE/RL, January 28, 2010.
24 Nikolaus von Twickel, “’Reset’ Delegation Visits Vladimir Prison,” The Moscow Times, May 28, 2010; Simon
Shuster, “Russian Human Rights: Is the U.S. Backing Off?” Time, June 5, 2010.
25 C2C: U.S.-Russia Civil Society to Civil Society Summit—2010, Summary Report, International Research and
Exchanges Board, November 15, 2010.
26 Andrey Denisov, “Khodorkovskiy May Land on Surkov-McFaul Commission Agenda: Kremlin Administration’s
Deputy Chief To Discuss Problems of Civil Society in Russia with Americans,” BBC Worldwide Monitoring, June 8,
2011.
27 CEDR, July 7, 2010, Doc. No. CEP-8004; July 7, 2010, Doc. No. CEP-8022.
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The Russian Levada Center polling organization reported in June 2010 that 72% of Russians
surveyed feared arbitrary actions by the police, tax inspectors, courts, and other government
agencies. Such views might have been reinforced by the case of Sergey Magnitskiy—a lawyer for
the Hermitage Fund, a private investment firm—who died in November 2009 in detention 11
months after being arrested on tax evasion charges after he alleged that police and other officials
had illicitly raided Hermitage assets. In the 112th Congress, H.R. 1575 (McGovern), introduced
on April 15, 2011, and S. 1039 (Cardin), introduced on May 19, 2011, impose sanctions on
persons responsible for the detention, abuse, or death of Sergei Magnitsky, for the conspiracy to
defraud the Russian Federation of taxes on corporate profits through fraudulent transactions and
lawsuits against Hermitage, and for other gross violations of human rights.
In December 2010, a series of riots took place in Moscow targeting dark-skinned Caucasian and
Central Asian individuals. President Medvedev convened a joint session of the State Council and
the Commission for the Implementation of Priority National Projects and Demographic Policy in
late December to discuss the riots. He appeared to stress migration into Russia as a major source
of inter-ethnic tensions. He called for officials to encourage inter-ethnic harmony, for educational
curricula to be altered to stress tolerance, for youth sports to be expanded, for a crackdown on
illegal immigration, and for police to quell “ignorant rabble-rousers.” Prime Minister Putin called
at the session for the development of “all-Russian patriotism,” as a substitute for Soviet
nationality policy, which he claimed had “created an atmosphere of inter-ethnic and inter-faith
peace.” President Medvedev agreed that a statist identity needed bolstering, but stressed that
during the Soviet period, inter-ethnic stability was ensured through “severe” methods, whereas in
post-Soviet times, “other methods” needed to be developed to encourage ethnic peace. In January
2011, Medvedev stressed that “we must give attention to our multi-ethnic culture, but without any
doubt, we must give particular attention to Russian culture.”28
Insurgency in the North Caucasus
Some observers have argued that Russia’s efforts to suppress insurgency in the North Caucasus—
a border area between the Black and Caspian Seas that includes the formerly breakaway
Chechnya and other ethnic-based regions—have been the most violent in Europe in recent years
in terms of ongoing military and civilian casualties and human rights abuses.29 In late 1999,
Russia’s then-Premier Putin ordered military, police, and security forces to enter the breakaway
Chechnya region. By early 2000, these forces occupied most of the region. High levels of fighting
continued for several more years and resulted in thousands of Russian and Chechen casualties and
hundreds of thousands of displaced persons. In 2005, then-Chechen rebel leader Abdul-Khalim
Saydullayev decreed the formation of a Caucasus Front against Russia among Islamic believers in
the North Caucasus, in an attempt to widen Chechnya’s conflict with Russia. After his death, his
successor, Doku Umarov, declared continuing jihad to establish an Islamic fundamentalist
Caucasus Emirate in the North Caucasus and beyond.
Russia’s pacification policy in Chechnya has involved setting up a pro-Moscow regional
government and transferring more and more local security duties to this government. An

28 Opening remarks at Joint Meeting of State Council and Commission for Implementation of Priority National
Projects and Demographic Policy, The Kremlin, President of Russia, December 27, 2010; Meeting with Leaders of the
Federal Assembly, The Kremlin, President of Russia, January 17, 2011.
29 For background information, see CRS Report RL32272, Bringing Peace to Chechnya? Assessments and
Implications, by Jim Nichol.
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important factor in Russia’s seeming success in Chechnya has been reliance on pro-Moscow
Chechen clans affiliated with regional President Ramzan Kadyrov. Police and paramilitary forces
under his authority have committed flagrant abuses of human rights, according to rulings by the
European Court of Human Rights and others.
Terrorist attacks in the North Caucasus appeared to increase substantially in 2007-2010. Although
the rate of increase of terrorist incidents may have lessened in 2010 from the high rate of increase
in 2008-2009, the rate of civilian casualties substantially increased throughout the North
Caucasus in 2010 and a rising number of terrorist incidents took place outside of Chechnya.30
Among recent terrorist incidents, on March 29, 2010, suicide bombings in Moscow’s subway
killed 39 people and wounded dozens. Prime Minister Vladimir Putin condemned the attack and
pledged that law enforcement personnel would “track down the organizers of the crime [and]
scrape them from sewer bottoms and bring them into God’s light of day.” Another suicide
bombing in Russia’s North Caucasus region of Dagestan two days later claimed 12 lives. Putin
suggested that the bombings in Moscow and Dagestan were linked and that both were “crimes
against Russia.” President Dmitriy Medvedev vowed to “eliminate the terrorists” responsible for
the bombings, to strengthen security forces in the North Caucasus, and to continue to carry out
“pinpoint strikes” there to destroy terrorists “and their shelters.” He also stressed that “resolving
social and economic problems is in many respects the key to bringing about change in the
situation [in the North Caucasus republics]. Apart from the security side of things, we also need to
work on this, work with the people, work with communities and offer them better conditions for
life.”31 Umarov took responsibility for the Moscow bombings and stated that they were revenge
for an attack by Russian security forces on the village of Arshty in Chechnya on February 11.
President Obama condemned the “outrageous” bombings in Moscow and classed them with other
“violent extremism and heinous terrorist attacks that demonstrate ... disregard for human life.”32
On September 9, 2010, a car-bomb attack occurred at a crowded marketplace in Vladikavkaz, the
capital of North Ossetia, killing 19 adults and children and injuring over 190. President
Medvedev responded that “we will certainly do everything to catch these monsters,… who have
committed a terrorist attack against ordinary people. What's more, a barbarous terrorist attack. We
will do everything so that they are found and punished in accordance with the law of our country,
or in the case of resistance or other cases, so that they are eliminated.” The Caucasus Emirate’s
Ingush Vilayet reportedly took responsibility, stating that the attack was aimed against “Ossetian
infidels” on “occupied Ingush lands.”33
On January 24, 2011, a suicide bombing in a publicly accessible area of Moscow’s Domodedovo
international airport resulted in over 40 reported deaths and nearly 200 injuries. Doku Umarov
took responsibility. Caucasian terrorists also had taken responsibility for the 2004 bombing of two
airplanes that had taken off from the same airport. President Obama reportedly telephoned
Russian President Dmitriy Medvedev the next day to offer condolences to the victims and to offer

30 Gordon Hahn, “Trends in Jihadist Violence in Russia During 2010 in Statistics,” Islam, Islamism and Politics in
Eurasia Report, Monterey Institute for International Studies, January 26, 2011.
31 Open Source Center. Central Eurasia: Daily Report (hereafter CEDR), March 30, 2010, Doc. No. CEP-950185;
April 1, 2010, Doc. No. CEP-950200; The Kremlin. President of Russia. Opening Remarks at Meeting with Security
Council Members, March 31, 2010; Voice of America, April 1, 2010.
32 The White House. Office of the Press Secretary. Statement by the President on the Bombings on the Moscow Metro,
March 29, 2010.
33 CEDR, September 9, 2010, Doc. No. CEP-950171; September 17, 2010, Doc. No. CEP-4015.
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assistance in apprehending the perpetrators. In a speech to the Federal Security Service (FSB) on
January 25, President Medvedev stated that “terrorism remains a major threat to the security of
our country, the main threat for Russia, for all our citizens.” Claiming that the terrorist threat is
greater in Russia than the United States, he denounced Russian security efforts that have not
matched those of the United States. He condemned lapses in police and other agency protection at
the airport and pledged to prosecute or dismiss those responsible for lapses.
Many observers suggested that the bombings were further evidence that Moscow’s ongoing
security operations in the North Caucasus—which have resulted in many human rights abuses—
as well as its efforts to boost the regional economy have not yet ameliorated instability there.
At a May 2010 meeting of the Presidential Council to Promote the Development of Civil Society
Institutions and Human Rights, President Medvedev argued that there needed to be a youth policy
for the North Caucasus, including to ameliorate the 20% unemployment in the region, which
heavily impacted youth. He also requested his presidential staff to study the issues of dwindling
schooling and healthcare in the region. He dismissed calls to investigate past extrajudicial killings
and urged focusing on the future. He also objected to discussants distinguishing between a region
and Russia, stating that “Dagestan is part of Russia,” and rejected use of the term “guerrillas”
instead of “terrorists.” He called for forging a new “Russian identity” in the region that would
reduce inter-ethnic conflict, and implored North Caucasian ethnic groups to stop being extra
“touchy” and “sensitive” about the actions of governors he appoints.34
On June 23, 2010, Secretary of State Clinton designated Caucasus Emirates leader Doku Umarov
as a terrorist under Presidential Executive Order 13224, which targets terrorists and those
providing support to terrorists or acts of terrorism, to help stem the flow of financial and other
assistance to Umarov. In the Congress, H.Res. 1315 (Hastings), introduced on April 29, 2010, had
called on the Secretary of State to designate the Caucasus Emirate as a foreign terrorist
organization. On May 26, 2011, the United States similarly designated the Caucasus Emirate
under Presidential Executive Order 13224 as a Specially Designated Global Terrorist group, and
included Doku Umarov in its “Rewards for Justice” program, offering a reward of up to $5
million for information leading to his location.
An official North Caucasus development strategy was promulgated in September 2010. It sets
forth goals through 2025, stressing investments in agriculture, tourism, health resorts, energy and
mining, and light industry. It also calls for encouraging ethnic Russians to resettle in the area,
including by initially setting employment quotas for ethnic Russians. Eventually, by encouraging
inter-ethnic harmony, the strategy suggests, the practice of allocating jobs by ethnicity and clan
rather than merit might be eliminated. The strategy sets forth an optimum scenario where average
wages increase by 250% and unemployment decreases by 70% by 2025. An inter-agency
commission to carry out the strategy was formed with Prime Minister Putin as its head. At a May
2011 session, Putin announced that 30 agriculture, tourism, and information technology
development projects were moving forward, but he criticized progress in extending loan
guarantees for private enterprise development. Regional Development Minister Viktor Basargin
stated that $9.7 billion would be budgeted for development projects in the North Caucasus
through 2013.35

34 The Kremlin. Speech at Meeting of Council for Civil Society Institutions and Human Rights, May 20, 2010; ITAR-
TASS, May 20, 2010.
35 Interfax, May 4, 2011.
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Defense Reforms
Despite the sizeable reduction in the size of the armed forces since the Soviet period—from 4.3
million troops in 1986 to 1.0 million at present—the Russian military remains formidable in some
respects and is by far the largest in the region. Because of the deteriorating capabilities of its
conventional forces, however, Russia relies on nuclear forces to maintain its status as a major
power. There is sharp debate within the Russian armed forces about priorities between
conventional versus strategic forces and among operations, readiness, and procurement. Russia is
trying to increase security cooperation with the other Soviet successor states that belong to the
Commonwealth of Independent States (CIS).36 Russia has military facilities on the territory of all
the CIS states (even in Azerbaijan, there is a Russian military contingent at a radar site).
Attempting to resist, Georgia, Moldova, and Azerbaijan (and until recently, Ukraine) shifted their
security policies toward a more western, pro-NATO orientation. The passage of legislation in
October 2009 providing for the Federation Council to authorize the use of troops abroad to
protect its “peacekeepers” and citizens, and to combat piracy at sea, appears to underline that
Russia might use military force to reinforce the “lesson” that small countries adjacent to Russia
may disregard Moscow’s interests and warnings only at their peril.
The improvement of Russia’s economy since 1999, fueled in large part by the cash inflow from
sharply rising world oil and gas prices, enabled Russia to reverse the budgetary starvation of the
military during the 1990s. Defense spending increased substantially in most of the 2000s, and
even continued to increase slightly after the global financial crisis of 2008 impacted Russia’s
economy. The 2011 defense budget is $51.3 billion, up from $39.6 billion in 2010.37 The
increased defense spending in 2011 was explained as a means of boosting the Russian economy
as well as modernizing defense procurement. Even factoring in purchasing power parity, Russian
defense spending still lags far behind current U.S. or former Soviet levels. The efficacy of the
larger defense budgets is reduced, however, by systemic corruption. Some high-profile military
activities have been resumed, such as large-scale multi-national military exercises, show-the-flag
naval deployments to the Mediterranean and the Atlantic, and strategic long-range bomber patrols
that approach U.S. and NATO airspace.
In February 2007, then-President Putin appointed Anatoly Serdyukov as defense minister. With a
career outside the military establishment, many observers suggest that Serdyukov was chosen to
carry out a transformation of the armed forces from a mobilization model—large divisions only
partially staffed and dependent upon the mobilization of reserves during emergencies—to
permanently staffed smaller brigades. Problems of force composition, training, command and
control, equipment, and doctrine were highlighted during the August 2008 Russia-Georgia
conflict. According to the British International Institute for Strategic Studies, the poorly executed
Russian invasion of Georgia “increased doubt that the military could be seen as a reliable
instrument to support Russian foreign- and security policy objectives, and also reinforced the
perception that the armed forces could not in the future guarantee reliable conventional defense
capabilities.”38

36 Members include Armenia, Azerbaijan, Belarus, Moldova, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Ukraine, and
Uzbekistan. Georgia withdrew following the August 2008 Russia-Georgia conflict.
37 “Russia,” The Military Balance, International Institute for Strategic Studies, February 3, 2010, p. 219.
38 The Military Balance, p. 211.
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Partly in response, a reform plan entitled “The Future Outlook of the Russian Federation Armed
Forces and Priorities for its Creation for the period of 2009–2020” was launched in October 2008
that called for accelerating planned cuts in the bloated officer corps, to reduce their numbers from
355,000 to 150,000 within three years. Also, the plan called for abolishing the non-commissioned
officers’ ranks of warrant officer and midshipman in the Russian Army and Navy. The bulk of
these 140,000 NCOs would retire and 78,000 professional sergeants would be trained. Among
other changes, the number of personnel at the Defense Ministry and General Staff would be cut
and the number of higher military schools would be reduced. Also, the four-tier command system
of military districts, armies, divisions, and regiments would be altered to a three-tier system of
strategic commands, tactical commands, and brigades. The total size of the armed forces would
be reduced from 1.2 million to under 1 million.
During 2009, the brigade system for ground forces was set up and other reforms were carried out.
Russian Airborne Troops, however, rejected abolishing divisions. In March 2010, President
Medvedev claimed that the armed forces re-organization had been completed and that personnel
had been successfully reduced to 1 million. He stated that improving the combat readiness of
combined-arms forces in their new organizational and staffing structure would be the focus in
2010, as well as the development of a 10-year plan for weapons modernization.
Contrary to Medvedev’s assessment, some reports suggested that many or most of the new
brigades were not adequately supplied with weapons and that warrant officers and midshipmen
continued to serve. Similarly, Gen. Makarov stated in February 2010 that the transition to
professional (contract) soldiers had largely failed. Critics argued that the sums paid to contractees
were far below adequate wages, so that the quality and number of contractees had remained low.
Critics also alleged that large sums in the 2004-2007 defense budgets for transitioning to
contracts had been pilfered.39 The armed forces now face a crisis in finding enough young men to
conscript for a one-year term of service given a sharp decline in births in past years and unhealthy
living conditions. Alternatives include reducing the armed forces below 1 million or increasing
the length of service. A program covering the period up until 2015 calls for units and formations
to be staffed with conscripts (privates) and professionals or contract servicemen (noncoms). The
first training center for noncoms was established in Ryazan. Some elite branches of the military,
like Airborne Troops, are planned to be staffed solely with professionals. Reportedly, there are
currently about 100,000 contract servicemen in the Russian military.
Also contrary to Medvedev’s assertion that reorganization was complete, in July 2010 Makarov
announced that military districts would be abolished and the West, East, South and Central
unified commands would be set up. Reportedly, these four unified commands were established by
mid-October 2010. Command West controls personnel and equipment from the former Moscow
and Leningrad military districts and the Baltic and Northern Fleets. Command South is in charge
of the former North Caucasian Military District and the Black Sea Fleet and Caspian Flotilla.
Command Center controls the former Volga-Urals Military District and the western part of the
Siberian Military District. Command East is in charge of the former Far Eastern Military District
and the larger part of the Siberian Military District.
Weapons modernization has included the development of the RS-24 strategic nuclear ballistic
missile with multiple independently targetable reentry vehicles (MIRVs). However, substantial
modernization is contingent on rebuilding the largely obsolete defense industrial complex. Some

39 CEDR, June 24, 2010, Doc. No. CEP-358007.
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observers have argued that Russia is seeking as a partial alternative purchasing some advanced
military weapons and technology from abroad, such as a contract for 12 unmanned aerial vehicles
(UAVs) from Israel Aerospace Industries (delivered in 2010) and a contract with France’s Thales
for the licensed production in Russia of thermal imaging systems for T-90 tanks.
Beginning in 2009, Russia negotiated with France over the purchase of a newly designed French
amphibious assault warship, called the Mistral. Some Members of Congress raised concerns with
France over the Mistral negotiations, as did the country of Georgia, which feared that Russia
might in the future use the ship against it. On January 25, 2011, the French defense minister,
Alain Juppe, and a Russian deputy prime minister, Igor Sechin, signed an intergovernmental
cooperation agreement for two Mistrals to be built in France and two in Russia. The agreement
calls for technology transfers necessary for the construction of the hulls, but for no weapons
systems to be transferred.40 Reportedly, new shipyard facilities will be built in Kronstadt, Russia,
to construct the two Mistrals, after which the facilities will be used to build other warships.41
After the Mistral deal appeared to founder, Presidents Sarkozy and Medvedev stated that they
made progress on the sidelines of the Group of 8 meeting in Deauville, France, on May 26, 2011,
on finalizing a contract, and that this contract might be signed by late June 2011. Among issues of
contention have been pricing and Russian requests that the combat information and control
system SENIT-9 be included in the sale. Some elements of the Russian military have opposed the
Mistral and other military technology imports.
Force reductions and lagging weapons modernization have increased the Russian government’s
emphasis on its strategic nuclear forces. A new Russian military doctrine released in February
2010 declares that nuclear weapons may be used in local and regional conflicts with non-nuclear
powers. Some observers view this language as lowering the threshold of use, but this issue
remains opaque, since details are provided only in a classified follow-on to the doctrine termed
“Principles of National Nuclear Deterrence Policy to 2020.”42
At the July 2009 U.S.-Russia Summit, the two sides agreed to the resumption of military-to-
military activities, which had been suspended since the August 2008 Russia-Georgia conflict. The
two sides agreed in their work plan to conduct nearly 20 exchanges and operational events before
the end of 2009, and to plan a more ambitious work plan for 2010. The two sides also agreed to
renew the activities of the Joint Commission on POW/MIAs and the four working groups that
seek to account for personnel from World War II, the Korean War, the Vietnam War, and the Cold
War, including Soviet military personnel unaccounted for in Afghanistan. The commission’s work
had been disrupted since 2004, when Russia downgraded the status of its representatives and
failed to appoint a co-chair in the face of cooling U.S.-Russia relations. In September 2010, the
United States and Russia signed a military cooperation agreement during a visit by Serdyukov to
the United States that replaces a 1993 agreement. The two sides issued a declaration of
cooperation and agreed to form a defense cooperation working group to meet annually.43 At a
meeting in St. Petersburg in early May 2011, the heads of the Presidential Commission’s working
group on military cooperation, Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, and

40 Open Source Center, Europe: Daily Report, January 25, 2011, Doc. No. EUP-950035.
41 CEDR, January 26, 2010, Doc. No. CEP-349004.
42 CEDR, January 5, 2010, Doc. No. CEP-358002; December 15, 2009, Doc. No. CEP-677001; The ISCIP Analyst,
October 29, 2009.
43 Roger McDermott, “Gates and Serdyukov Agree On Closer US-Russian Defense Cooperation,” Eurasia Daily
Monitor, September 21, 2010.
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Army General Nikolay Makarov, Chief of the General Staff, reportedly focused on missile
defense. The two military leaders also signed an agreement on military counterterrorism
cooperation.
Trade, Economic, and Energy Issues
Russia and the Global Economic Crisis44
The Russian economy was hit hard by the global financial crisis and resulting economic
downturn. The crisis exposed weaknesses in the economy, including its significant dependence on
the production and export of oil and other natural resources and its weak financial system. Russia
shows signs of economic recovery, but persistent flaws in the economy could limit the recovery’s
depth and length.
Before the global financial crisis, Russia experienced a decade of strong economic growth. From
1999 to 2008, Russia’s gross domestic product (GDP) increased 6.9% on average per year in
contrast to an average annual decline in GDP of 6.8% during the previous seven years (1992-
1998). The surge in economic growth—largely the result of increases in world oil prices—helped
raise the Russian standard of living and brought a large degree of economic stability that Russia
had not experienced since the collapse of the Soviet Union at the end of 1991. Russia’s
government revenues increased, and that, together with fiscal discipline, allowed the government
to generate budget surpluses after years of large deficits. Economic growth also contributed to
strong popular support for Vladimir Putin and Dmitriy Medvedev.
However, in 2008, Russia faced a rapid decrease in the prices for oil and other commodities. It
also faced investor unease caused in part by Russia’s military confrontation with Georgia in
August 2008 and also by the Russian government’s reassertion of control over major industries,
especially in the energy sector. Along with these events, the global financial crisis hit Russia in
the latter part of 2008 as foreign banking credits, on which many Russian companies depend,
decreased. As a result, Russia’s period of economic growth came to an abrupt end. Although
Russian real GDP increased 5.6% in 2008 as a whole, it did not grow at all during the fourth
quarter of 2008. Russian GDP declined 7.9% in 2009. The decline occurred across most sectors of
the economy, with manufacturing, construction, and transportation hit especially hard.45
The economic downturn also exposed Russia’s dependence on the production and export of oil,
natural gas, and other fossil fuels for economic growth and government revenues. On July 4,
2008, the price of a barrel of Urals-32 (the Russian benchmark price for oil) peaked at $137.61
and declined to a low point of $34.02 by January 2, 2009—a drop of 75.3% in six months.46 The
fuels accounted for about two-thirds of Russia’s export revenues and for more than half of
government revenues. Such a sharp drop in oil prices, along with heightened government

44 Prepared by William H. Cooper, Specialist in International Trade and Finance.
45 Economist Intelligence Unit.
46 CRS calculations based on data from the U.S. Department of Energy, U.S. Energy Information Administration,
http://www.eia.doe.gov.
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expenditures to stimulate the economy, forced the government to incur its first budget deficit in
10 years in 2009—a deficit equivalent to 5.9% of GDP.47
The Russian government responded in 2008-2009 to the global financial crisis with various fiscal
measures including heavier spending and tax cuts equivalent to more than 6% of GDP. These
measures were designed mostly to support the banking system, increase social expenditures, and
assist large state enterprises. The stimulus also included monetary measures that included
reducing refinance rates by the Central Bank of Russia (CBR).48 The CBR also drew down
foreign reserves in order to defend the ruble against rapid depreciation.
Russia is slowly emerging from its recession. Russian real GDP is estimated to have increased by
4.0% in 2010, according to the Economist Intelligence Unit, as demand for Russian exports has
increased and oil prices have risen. In 2010, the manufacturing and transport sectors rebounded,
but construction continued to decline.49 During the summer of 2010, Russia experienced a record-
breaking heat wave that adversely affected crops, including wheat, causing the government to
impose a ban on wheat exports. Some companies, including auto manufacturing firms, closed
down operations temporarily because of concerns for the health and safety of its workers, but
these events are not expected to have a permanent effect on the Russian economy.50 Nevertheless,
in the long term, unless Russia can reduce its dependence on the production of oil and other
commodities and diversify and reform its economy, any recovery will likely remain fragile.51 On
several occasions, President Medvedev has expressed the need for Russia to diversify its
economy. As part of that effort, he visited Silicon Valley in California during his June 2010 trip to
the United States in order to persuade U.S. high-tech companies to invest in Russia.52 The
Russian government also announced that it planned to sell some of its shares in major companies,
including several major banks and oil companies, beginning in 2011.53
Russia’s Accession to the World Trade Organization (WTO) and
PNTR for Russia
Russia first applied to join the General Agreement on Tariffs and Trade (GATT—now the World
Trade Organization (WTO)) in 1993. Russia has been in the process of completing negotiations
with a WTO working party (WP), which includes representatives from about 60 WTO members,
including the United States and the European Union (EU). WP members have raised concerns
about Russia’s IPR enforcement policies and practices, sanitary and phytosanitary (SPS)
regulations that may be blocking imports of agricultural products unnecessarily, and Russia’s
demand to keep its large subsidies for its agricultural sector. The United States has also raised
issues regarding the role of state-owned enterprises (SOEs) in the Russian economy and Russian
impediments to imports of U.S. products containing encryption technology.

47 Economist Intelligence Unit, Country Report—Russia, September 2010, p. 21.
48 IMF. Russian Federation: 2010 Article IV Consultation—Staff Report; and Public Information Notice on the
Executive Board Discussion, July 2010, p. 8.
49 Economist Intelligence Unit, Country Report—Russia, September 2010, p. 18.
50 Economist Intelligence Unit. Country Report—Russia, September 2010, p. 19.
51 The World Bank, Russian Economic Report, No. 22, June 2010, p. 1.
52 Wall Street Journal, June 24, 2010.
53 Economist Intelligence Unit. Country Report—Russia. January 2010.
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Prime Minister Putin’s June 9, 2009, announcement that Russia would be abandoning its
application to join the WTO as a single entity and would instead pursue it with Belarus and
Kazakhstan as a customs union seemed to set back the accession process. However, after meeting
resistance from WTO officials, Russia and the other two countries decided to pursue accession
separately but with common proposed tariff schedules for the three countries. On June 24, 2010,
during their meeting in Washington, DC, President Obama and President Medvedev pledged to
resolve the remaining issues regarding Russia’s accession to the WTO by September 30. The
United States also pledged to provide technical assistance to Russia to speed up the process of
Russia’s accession, taking into account its customs union with Belarus and Kazakhstan. On
October 1, 2010, USTR announced that the United States and Russia had resolved some key
issues, including those related to IPR. In addition, Russia completed negotiations with the EU. It
still must finish its work with the working party. Russia could complete the process by the end of
2011 and be set to join the WTO.
The WTO requires that each member grant to all other members “unconditional” most-favored-
nation (MFN), or permanent normal trade relations (PNTR) status, the term used under U.S. law.
WTO rules require that mutual PNTR must convey between WTO members to enable them to
have the relationship within the WTO framework. If the United States has not given PNTR to a
new WTO member, it must invoke the WTO’s non-application clause, which would essentially
preclude the United States and Russia from having a trade relationship under WTO rules. This
would mean , for example, that the United States could not pursue dispute settlement action on
discriminatory treatment against imported U.S. cars.
Normal Trade Relations (NTR) status is used under U.S. law to denote nondiscriminatory
treatment of a trading partner compared to that of other countries. Russia’s NTR status is
governed by Title IV of the Trade Act of 1974, which includes the so-called Jackson-Vanik
amendment (section 402). Under Title IV, Russia currently receives NTR on the condition that the
President continues to determine that Russia complies with freedom-of-emigration criteria under
section 402, subject to a semiannual review and to a possible congressional resolution of
disapproval. In order for Russia to receive unconditional or “permanent” NTR (PNTR), Congress
would have to pass, and the President would have to sign, legislation indicating that Title IV no
longer applies to Russia. No such legislation was introduced in the 111th Congress. However, as
Russia’s accession to the WTO approaches, legislation to do so could be introduced in the 112th
Congress. Russian leaders consider the absence of PNTR an affront and the Jackson-Vanik
amendment to be a relic of the Cold War that should no longer apply to U.S.-Russia trade
relations, especially since such still ostensibly communist countries as China and Vietnam are
afforded PNTR status by the United States.
Intellectual Property Rights (IPR) Enforcement in Russia,
Agricultural Trade, and Other Issues
Several issues have hampered U.S.-Russian economic relations and have prevented the
relationship from developing. The lack of adequate intellectual property rights (IPR) protection in
Russia has tainted the business climate in Russia for U.S. investors for some time. The Office of
the United States Trade Representative (USTR) consistently identifies Russia in its Special 301
Report as a “priority watch list” country, as it did in its latest (April 30, 2010) report. While the
USTR report acknowledges some improvement in IPR protection, it also finds that
implementation of IPR laws has been slow and enforcement weak. In particular, the report cites
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the failure of Russia to fulfill its commitments to improve IPR protection made as part of the
2006 bilateral agreement that was reached as part of Russia’s WTO accession.54
Russia’s treatment of imports of U.S. meat, especially poultry, has been a sensitive issue in U.S.-
Russian trade relations. Since the collapse of the Soviet Union in 1991, Russia has become an
important market for U.S. exports of meat. On January 1, 2010, the Russian government
implemented new regulations on imports of poultry, claiming that the chlorine wash that U.S.
poultry producers use in the preparation of chickens violates Russian standards and is unsafe.
These regulations effectively halted U.S. exports of poultry to Russia. The United States claimed
that the wash is effective and safe and that Russian restrictions are not scientifically based. U.S.
and Russian officials conducted discussions to resolve the issue. At their June 24, 2010, press
conference that closed a bilateral summit meeting, President Obama and President Medvedev
announced that the dispute over poultry trade had been resolved and that U.S. shipments of
poultry to Russia would resume. However, the full resumption of shipments was delayed over
Russian demands to inspect U.S. poultry processing plants before poultry products can be
certified for shipping to Russia. The two countries reportedly reached a compromise on this issue
on September 30, 2010, whereby Russian inspectors would inspect plants in the United States
more quickly, beginning in earlier October in order to resume shipments.55
Other Russian economic policies and regulations have been a source of concern to the United
States. U.S. officials and the U.S. business community have asserted that structural problems and
inefficient government regulations and policies have been a major cause of the low levels of trade
and investment with the United States. Russia maintains high tariffs on a number of goods of
interest to U.S. exporters. For example, tariffs and excise taxes add close to 70% to the price of
imported U.S. passenger cars and sports utility vehicles. U.S. exporters have also cited problems
with Russian customs regulations that are complicated and time-consuming. In addition, some
experts have suggested that the heavy concentration of state control in the economy, especially in
lucrative sectors, such as energy, has bred corruption (i.e., the use of political power for private
gain), further poisoning the business environment.56 The U.S. Commercial Service cites
government corruption as a potential impediment to U.S. companies doing business in Russia.57
Medvedev’s Modernization Initiative58
Toward the end of his presidency, Vladimir Putin called for an updated economic strategy to the
year 2020 to guide his chosen successor, Dmitriy Medvedev. The goal of the strategy was to make
Russia one of the five major economic powers in terms of technological innovation, energy
development, and finance. The global financial crisis led the Medvedev government to
promulgate an “anti-crisis plan” in early 2009, but it pledged to retain the goals of “Strategy
2020.” In May 2009, Medvedev complained that technological innovation was lagging, including
because private businesses were not making long-term investments, and he decreed the

54 Office of the United States Trade Representative, Special 301 Report, April 30, 2010, p. 23.
55 World Trade Online, September 30, 2010. For more information on issues pertaining to U.S. exports of meat to
Russia, see CRS Report RS22948, U.S.-Russia Meat and Poultry Trade Issues, by Renée Johnson.
56 Aslund, Anders, and Andrew Kuchins, The Russia Balance Sheet, Petersen Institute for International Economics,
April 2009. p. 47-48.
57 http://www.buyusa.gov/russia/en/ccg.html.
58 Prepared by Jim Nichol, Specialist in Russian and Eurasian Affairs.
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establishment of a “Presidential Commission on Modernization and Technological Development
of the Russian Economy.” The foci of the monthly meetings of the commission are on medical
technology, pharmaceuticals, energy efficiency, nuclear technology, computer hardware and
software, space technology, and telecommunications.
In September 2009, Medvedev published the article “Go Russia!” that deplored the economic
downturn in Russia and called for stepped-up efforts to boost technological innovation. In a
subsequent state of the nation address to the Russian Federal Assembly (legislature) in November
2009, he further spelled out his plans for technological modernization. A few days later, however,
the congress of the United Russia Party approved a “conservative ideology” that appeared at
variance with Medvedev’s call for modernization. State Duma (lower legislative chamber)
Speaker Boris Gryzlov then published an article that proclaimed that conservatism and
modernization were compatible, since Medvedev was advocating incremental rather than
revolutionary change that would fulfill Putin’s Strategy 2020 and maintain “traditional Russian
values.”59
The Medvedev government has compiled a list of countries that are advanced in high technology
of interest and has been inviting these states to invest in Russia. In a foreign policy speech in July
2010, President Medvedev argued that the global economic crisis had brought about a “paradigm
shift in international relations [which] opens for us a unique opportunity to put Russia’s foreign
policy instruments to the most effective use possible to assist the country’s modernization.” He
called for his diplomats and trade officials to forge a “modernization alliance” with Western
democracies, such as the European Union and the United States, and other countries.60
In a September 2010 speech, Medvedev stressed that the purpose of technological innovation was
to raise living standards. If existing government rules and regulations are rigorously applied and
living standards are improved, he appeared to argue, then there is progress in democratization. He
did not mention the need for progress on free elections, freedom of assembly, or other civil or
human rights as components of democracy, according to some critics.61
U.S. critic Leon Aron argues that in order to modernize, Russia must stop persecuting Russian
businessmen, strengthen democratic institutions, protect property rights, and withdraw its troops
from Georgia.62 Rejecting the argument that his modernization program is authoritarian, in
September 2010 President Medvedev asserted that “I would like the people to be the modernizers
- not only the political parties, not only the president with his iPod, or the jet set society….
Modernization can only be carried out by free people ... A man who is afraid of the government,
law enforcement agencies, opponents, and life is unable to engage in modernization.”63

59 CEDR, December 1, 2009, Doc. No. CEP-49009.
60 CEDR, June 24, 2010, Doc. No. CEP-4950250; The Kremlin, Speech by Dmitry Medvedev, President of the Russian
Federation, at the Meeting with Russian Ambassadors and Permanent Representatives to International Organizations,
July 12, 2010.
61 CEDR, September 13, 2010, Doc. No. CEP-4013; Doc. No. CEP-4009.
62 Leon Aron, Dmitriy Medvedev’s Modernization Thaw: Objectives, Actions, and Policy Tests, American Enterprise
Institute, Summer 2010.
63 “Speech of President of Russia Dmitry Medvedev at Plenary Session of Global Policy Forum ‘The Modern State:
Standards of Democracy and Criteria of Efficiency,’” Global Policy Forum 2010, September 9, 2010, at http://en.gpf-
yaroslavl.ru/presscenter/publications/Speech-of-President-of-Russia-Dmitry-Medvedev-at-plenary-session-of-Global-
Policy-Forum-The-Modern-State-Standards-of-Democracy-and-Criteria-of-Efficiency.
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The Skolkovo Center for Innovation
At a meeting of the Presidential Commission on Modernization in February 2010, Medvedev
announced that a campus for high technology research and commerce would be constructed
outside of Moscow near the town of Skolkovo. To attract domestic and foreign firms, tax benefits
have been offered. Construction is set to begin in 2011.
According to U.S. critic Matthew Jojansky, Russia is unlikely to be successful in creating a
Silicon Valley-like environment at Skolkovo, because Russia “does not have the rule of law
climate, it does not have the investor-friendly climate, [and] it does not have the capital, [so] it
has to attract it from abroad.” Also, he stressed, Medvedev aimed to create Skolkovo by
bureaucratic fiat, rather that “growing this thing organically by approaching the root-level drivers
of innovation and profitability and commercialization of high technology…. He wants to create a
little bubble outside of Moscow in which the rule of law, [such as] protections for intellectual
property, will all be there within this bubble but not … in the rest of Russia.”64
U.S. and Foreign Interest in Skolkovo
The United States and other countries and international corporations have already pledged to
become involved in the Skolkovo Center for Innovation, and many others have indicated interest
in the project. After visiting Silicon Valley on June 24, 2010, President Medvedev traveled to
Washington, DC, for a presidential summit meeting and a conclave hosted by the U.S. Chamber
of Commerce. At the summit, the two presidents issued a “Joint Statement on a Strategic
Partnership in Innovation” that expressed the intent of the two sides “to begin new and dedicated
efforts to promote collaboration in the areas of development of civil technologies, open standards,
and innovation and technology policy.” The Skolkovo Innovation Center appeared to be
referenced when the two sides pledged to develop “cooperation on innovation in science and
technology through both existing mechanisms of strategic partnership and through new
cooperation instruments at the level of government institutions, non-governmental organizations,
and the private sector.” At the “U.S.-Russia Business Summit” hosted by the Chamber of
Commerce, President Obama specifically mentioned the Skolkovo Innovation Center, stating that
he had “pledged to President Medvedev that the United States wants to be Russia’s partner as he
pursues his vision of modernization and innovation in Russia, including his initiative to create a
Russian Silicon Valley outside of Moscow. American companies and universities were among the
first to invest in this effort.”65
Among other international interest, at the November 2009 EU-Russia Summit, President
Medvedev called for more stress on high technology trade and investment, and at the June 2010
EU-Russia Summit, the two sides signed a “Partnership for Modernization.” However, the EU
insisted that in addition to combating corruption and enhancing property rights, democratization
and respect for human rights were fundamental to modernization. Medvedev stated that during his
September 2010 visit to China he had discussed possible cooperation in the Skolkovo project with
Chinese Premier Hu Jintao. Medvedev reported that “Hu Jintao said this was interesting and that

64 Larisa Epatko, “Q&A: Medvedev Meets With Obama on Modernization Plan, Arms Control,” PBS Newshour, June
24, 2010.
65 The White House, Office of the Press Secretary, Joint Statement by the Presidents of the United States of America
and the Russian Federation on a Strategic Partnership in Innovation, June 24, 2010; Remarks by President Obama and
President Medvedev of Russia at the U.S.-Russia Business Summit, June 24, 2010.
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Chinese partners were ready to participate in Skolkovo.”66 One Polish analyst has suggested that
Russia’s plea for Chinese assistance amply illustrated the changed power (and technological)
relationship between the two countries in recent years.67
Russian Energy Policy68
The Russian oil and natural gas industries are important players in the global energy market,
particularly in Europe and Eurasia. Russia has by far the largest natural gas reserves in the world,
possessing nearly 24% of the world’s total. It is seventh in the world in oil reserves, with over 5%
of the global total. Firms in these industries are either directly controlled by the Russian
government or are subject to heavy Russian government influence. The personal and political
fortunes of Russia’s leaders are tied to the energy firms. Russian government revenues and
Russia’s economic revival in the Putin/Medvedev era have been heavily dependent on the
massive wealth generated by energy exports, mainly to Europe.
Some Members of Congress, U.S. officials, and European leaders (particularly those in central
and eastern Europe) have claimed that European dependence on Russian energy and Russia’s
growing influence in large segments of Europe’s energy infrastructure poses a long-term threat to
transatlantic relations. Analysts have noted that Russia itself views its natural resources as a
political tool. Russia’s “National Security Strategy to 2020,” released in May 2009, states that
“the resource potential of Russia” is one of the factors that has “expanded the possibilities of the
Russian Federation to strengthen its influence on the world arena.”69
Concerns about Russian energy policy have centered largely on Russia’s natural gas supplies to
Europe. The state-controlled Russian natural gas firm Gazprom halted all gas supplies transiting
Ukraine for nearly three weeks after the two sides failed to reach agreement on several issues,
including a debt allegedly owed by Ukraine to Gazprom and the price that Ukraine would pay for
gas supplies for 2009. About 80% of Europe’s natural gas imports from Russia transit Ukrainian
pipelines. A similar Russian-Ukrainian dispute had led to a gas cutoff to Europe at the beginning
of 2006. In 2010 and 2011, disputes between Russian and Belarus over a variety of issues,
including energy prices, debts owed by Belarus, and transit fees paid by Russia for the use of
Belarusian pipelines, led to temporary reductions of oil and natural gas supplies to Belarus and
neighboring countries. These incidents have provided further evidence of Russia’s unreliability as
an energy supplier, according to some observers.
On the other hand, concerns about the reliability of gas transit through Ukraine and Belarus have
caused Russia and some European countries to propose new pipeline projects. Gazprom is
building the Nord Stream natural gas pipeline system, which will transport natural gas from
Russia to Germany via two pipelines under the Baltic Sea, bypassing pipelines running through
the states of central and eastern Europe. Nord Stream will have a planned capacity of 55 billion
cubic meters (bcm) per year, as compared to the Ukrainian pipeline system’s 120-130 bcm per
year. The first deliveries from the first pipeline are expected before the end of 2011.

66 Interfax, September 28, 2010.
67 Adam Balcer, “The Dragon Has Already Entered,” Demos-EUROPA, Center for European Strategy, January 21,
2011.
68 Prepared by Steven Woehrel, Specialist in European Affairs.
69 The text of the National Security Strategy can be found at the website of the Russian National Security Council at
http://www.scrf.gov.ru/documents/99.html
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Another pipeline project favored by Moscow is South Stream. In November 2007, Gazprom and
the Italian firm ENI signed an agreement to build South Stream, which would run from Russia
under the Black Sea to Bulgaria, with branches to Austria, Italy, and Greece. Serbia and Hungary
have also signed on to the project. Russia plans to start construction of South Stream in 2013, and
begin deliveries in 2015. Like Nord Stream, South Stream would bypass Belarus, Ukraine,
Poland, and other central European countries. The pipeline has a projected capacity of 63 bcm per
year.
Those concerned about the possible consequences of overdependence on Russia for energy have
called for the building of a “Southern Corridor” of pipelines circumventing Russian territory that
would transport Central Asian gas supplies to Europe. The EU is supporting the creation of the
Nabucco pipeline, which could have a capacity of 31 bcm per year. It would get its supplies from
Azerbaijan and perhaps Turkmenistan through pipelines in Georgia and Turkey. It is hoped that
work on the pipeline could begin in 2012, with the first gas supplies available by 2015 and full
capacity reached in 2019.
While denying that Nabucco and South Stream are conflicting projects, Russian officials have
cast doubt on Nabucco’s prospects, claiming that the gas supplies for such a pipeline may be
difficult to find. Russia has attempted to buy up gas supplies in Azerbaijan and Turkmenistan, in
what some analysts view as an attempt to undermine Nabucco. In order to build political support
for South Stream, Russia has tried to entice key western European companies to participate in the
project. It has also discussed the possibility of changing the route for the pipeline, in order to play
potential transit countries off against each other. However, some observers are skeptical about
South Streams prospects as well, pointing to its projected cost and doubts about Russia’s ability to
significantly expand its gas production.
While proposing pipelines that would circumvent Ukraine, Russia continues its long-standing
efforts to gain control of Ukraine’s pipeline system. Ukrainian President Viktor Yanukovych has
expressed concern about the impact of South Stream on transit volumes through its pipeline
system. He has offered Russia partial ownership of the Ukrainian pipeline system in exchange for
a share in natural gas fields in Russia and guaranteed transit volumes through Ukraine’s pipelines.
So far Russia has not accepted Kyiv’s terms. Instead, Moscow proposed the merger of Gazprom
with Naftohaz, Ukraine’s gas company. Ukraine has rejected this approach, noting that it would
amount to a Russian takeover of Naftohaz, given Gazprom’s vast size.
Russia’s dominant role in the transport of Central Asian energy supplies faces challenges not only
from projects like Nabucco, but also from demand in Asian countries. A pipeline from
Turkmenistan to China opened in 2009, which will eventually deliver 40 bcm of gas per year.
Turkmenistan has also expanded its gas pipeline capacity to Iran, which is expected to reach 20
bcm. Other factors could diminish Russia’s leverage over Eurasian natural gas supplies. The
development of previously difficult-to-develop “unconventional” gas deposits, including shale
gas, in Europe and elsewhere could diversify supplies and keep prices down. The growth of the
spot market for natural gas and the development of liquefied natural gas infrastructure in Europe
could also help diversify supplies as well as reduce dependence on Russian-controlled pipelines.
Like the Bush Administration, the Obama Administration has promoted the diversification of
natural gas supplies and pipelines to Europe, including the building of pipelines from Central
Asia and the Caspian region that bypass Russia, including Nabucco. However, the Obama
Administration has been less critical of Nord Stream and South Stream than the previous
Administration. Part of the change in tone may be due to the effort to “re-set” ties with Russia
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that were frayed during the Bush years. Ambassador Richard Morningstar, the State Department
Special Envoy for Eurasian Energy, has denied that the United States and Russia are involved in a
“great game”—that is, a geopolitical struggle—for Central Asian energy supplies. Morningstar
has said that the United States does not oppose Nord Stream and South Stream; that the United
States does not see Nabucco as being in competition with South Stream; and that it was possible
that Russia could provide gas for Nabucco.70
Foreign Policy
Russia and the West
After the collapse of the Soviet Union and the turmoil associated with the Yeltsin period, a
consensus emerged as the Putin era began on reestablishing Russia’s global prestige as a “great
power” and its dominance in “the former Soviet space.” The pursuit of these goals by then-
President Putin and his closest policy advisors seemed to be driven by the belief that the West,
and in particular the United States, had taken advantage of Russia’s political turmoil and overall
weakness during the Yeltsin years. Putin and his advisors were determined to restore what they
believed to be Russia’s rightful place as a significant influence on the world stage.
Fueled in part by the massive inflow of petro-dollars, Moscow’s self-confidence grew over the
several years prior to the late 2008 global economic downturn, and officials and observers in
Europe and the United States expressed growing concern about what they viewed as an
increasingly contrarian Russian foreign policy. This was evident in recent years in Russia’s sharp
political struggles with Estonia and Ukraine, its opposition to a planned U.S. missile defense
system in Eastern Europe, the suspension of compliance with the Conventional Armed Forces in
Europe Treaty, and its strong opposition to NATO membership for Ukraine and Georgia.
According to analyst Dmitri Trenin, then-President Putin became greatly alarmed following the
“orange revolution” in Ukraine in 2004-2005 and the “tulip revolution” in Kyrgyzstan later in
2005, and his attitude toward the United States hardened. Trenin claims that Putin viewed these
popular revolts as “part of a U.S.-conceived and led conspiracy. At minimum, these activities ...
aimed at drastically reducing Russia’s influence.... At worst, they constituted a dress rehearsal for
... installing a pro-U.S. liberal puppet regime in the Kremlin.”71 In February 2007, at the 43rd
annual Munich Security Conference, President Putin delivered a particularly harsh speech
attacking Bush Administration policies and condemning the “unipolar” world he alleged the
United States was creating.72
In contrast to Putin, President Medvedev has been considered by some observers to be a
potentially pragmatic leader who could shift Russia’s attitudes more positively toward the United
States and the West. However, during Medvedev’s first year or so in office, Russia’s relations

70 Morningstar’s testimony before the House Foreign Affairs Committee Subcommittee on European and Eurasian
Affairs, June 2, 2011; Senate Foreign Relations Committee hearing “$150 Oil: Instability, Terrorism, and Economic
Disruption, July 16, 2009; and State Department Foreign Press Center Briefing, June 23, 2009.
71 Dmitri Trenin, “Russia’s Spheres of Interest, not Influence,” The Washington Quarterly, October 2009.
72 The full text of Vladimir Putin’s speech at the 43rd Munich Conference on Security Policy, February 10, 2007, can be
found at http://www.securityconference.de.
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with the West became increasingly tense. In the aftermath of the August 2008 Russia-Georgia
conflict, relations between Russia and the West reached what many considered to be their lowest
point since the Cold War. Russia continued to voice strong opposition to NATO enlargement to
Georgia and Ukraine; invaded Georgia and occupied two of its regions; refused to recognize
Kosovo’s independence; cut off or reduced energy supplies in disputes with Ukraine and Belarus;
boosted ties with Cuba and Venezuela; and attempted to end the use of airbases in Central Asia by
the United States and NATO.
Responding in part to the Obama Administration’s efforts to “re-set” relations, Russia has
appeared somewhat more conciliatory toward the EU and the United States in recent months. An
alleged Russian Foreign Ministry document leaked to the media in May 2010 called for the
government to adopt a more conciliatory foreign policy toward the West in order to attract foreign
investment. Similarly, Russian analyst Igor Yurgens has argued that the Russian leadership no
longer is concerned that the West seeks to foment “colored revolutions” in Russia, stating that
“there is no danger that someone from the West will want to rock the situation in our country.”73
According to Polish analyst Adam Balcer, in the future Russia may seek to develop a strategic
partnership with the EU (and the United States) in order to counter growing Chinese influence on
Russia, including in the economic realm. A variant situation might be more pragmatic Russia-EU
(and U.S.-Russia) relations, whereby China’s dominant influence over the Russian economy
moderates Russia’s formerly ultra-nationalistic and exceptional foreign policy toward the West.74
NATO-Russia Relations75
Post-Cold War efforts to build a cooperative NATO-Russia partnership have had mixed results, at
best. Russian views toward NATO, particularly since the beginning of the Putin era, have been
marked predominantly by suspicion and skepticism regarding NATO’s intentions. However, since
NATO-Russia relations reached a new low in the wake of Russia’s 2008 invasion of Georgia, the
two sides have renewed efforts to strengthen ties. At NATO’s November 2010 Summit in Lisbon,
Portugal, NATO Heads of State met with Russian President Medvedev to mark what they hope
will be the beginning of a new era NATO-Russia relations, based on practical cooperation on
common security challenges. Observers point out though that while Russian officials have
welcomed NATO and U.S. overtures, they remain critical of many aspects of NATO policy.
Similarly, some NATO members continue to disagree on their assessment of Russian intentions.
The principal institutional mechanism for NATO-Russia relations is the NATO-Russia Council
(NRC), established in May 2002. Recognizing that both NATO and Russia face many of the same
global challenges and share similar strategic priorities, Russian and NATO leaders structured the
NRC as a “consensus” forum of equals with a goal of “political dialogue, common approaches,
and joint operations.”
Most observers agree that despite having advanced NATO-Russia cooperation in some key areas,
the NRC has failed to live up to its potential. The NRC’s perceived shortcomings are often

73 Owen Matthews and Anna Nemtsova, “The New Putin Profile,” Newsweek, June 12, 2010; CEDR, June 22, 2010,
Doc. No. CEP-4005.
74 Adam Balcer, “The Dragon Has Already Entered,” Demos-EUROPA, Center for European Strategy, January 21,
2011.
75 Prepared by Paul Belkin, Analyst in European Affairs.
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attributed to Russian suspicion about NATO’s long-term intentions. Many in Russia viewed
NATO’s 1999 and 2004 enlargements to 10 former Soviet satellite states as a serious affront to
Russian power and prestige and Russian leaders continue to oppose the idea of NATO
enlargement to former eastern bloc countries.76 The establishment of U.S. and NATO airbases in
Central Asia for operations in Afghanistan after the September 11, 2001, terrorist attacks and a
United States decision to establish military facilities, albeit non-permanent, in Bulgaria and
Romania after NATO’s 2004 enlargement were viewed by some in Moscow as further evidence
of an encirclement of Russia by NATO and the United States.
Tensions between Russia and NATO escalated in the wake of Russia’s August 2008 invasion of
Georgia, after which the two sides suspended formal ties in the NATO-Russia Council. Russia’s
actions sparked a strong debate within the alliance over how Europe should react to what many
considered a new, more aggressive Russian foreign policy intended to reestablish a Russian
sphere of influence along its border with Europe. Some allies argued that NATO’s inability or
unwillingness to prevent Russia from moving to establish a permanent military presence in
Abkhazia and South Ossetia could lead some to question the credibility of the alliance’s core
principle of collective defense, as enshrined in Article 5 of the North Atlantic Treaty. Although
Georgia is not a member of the alliance, they contended that NATO had given the impression that
it could concede to Russian demands in its relations with aspiring alliance members. Several
Central and Eastern European allies also expressed concern about a reported lack of NATO
contingency planning in response to the possibility of future Russian action against a NATO ally
or partner.
More recently, Russian leaders appear concerned by NATO and U.S. plans for a ground-based
missile defense system in Europe and NATO insistence that the alliance will not recognize a
Russian sphere of influence along its borders. Moscow has criticized NATO member states for
their refusal to recognize the Russian-encouraged independence of Abkhazia and South Ossetia
and for their reluctance to establish alliance relations with the Russian-led Collective Security
Treaty Organization (CSTO members include Armenia, Belarus, Kazakhstan, Kyrgyzstan,
Tajikistan, and Uzbekistan). In 2007, Russia suspended compliance with the Treaty on
Conventional Armed Forces in Europe (CFE Treaty), it has vocally opposed proposals to enhance
NATO ties with Georgia and Ukraine, and Russian officials have said the country would develop
offensive nuclear forces if the two sides were not to agree to a framework for cooperation on
missile defense. Finally, Russian proposals for an alternative European security architecture have
been viewed by many as an attempt to undermine NATO and to increase Russian influence in
European affairs. Moscow has also been critical of those who have suggested a more formal role
for NATO in European energy security issues.
The allies have consistently sought to assure Moscow that NATO does not pose a security threat
to Russia. In addition, the allies have emphasized the two sides’ shared interests and have agreed
to make these interests the basis for enhanced cooperation. Since resuming meetings of the
NATO-Russia Council in April 2009, NATO and Russia have developed a Joint Review of 21st
Century Security Challenges, intended to serve as a platform for future cooperation. The shared
assessment was formally adopted by NATO Heads of State and Russian President Medvedev at
an NRC meeting at NATO’s November 2010 summit in Lisbon. Common security challenges
identified include ongoing instability in Afghanistan, terrorism, the proliferation of weapons of

76 The Czech Republic, Poland, and Hungary joined the alliance in March 1999; Bulgaria, Estonia, Latvia, Lithuania,
Romania, Slovakia, and Slovenia joined in March 2004.
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mass destruction, piracy, and natural and man-made disasters. In Lisbon, NATO and Russia
pledged to pursue formal cooperation on missile defense, to support the Afghan government and
promote peace and stability in the region, to enhance joint counterterrorism efforts, and to jointly
combat piracy and armed robbery at sea, among other things. NATO-Russia cooperation in some
of these areas has expanded in 2011, while NRC working groups have had difficulty making
progress in other areas.
Allied officials point to several areas of enhanced NATO-Russia cooperation over the past several
years, and particularly since the Lisbon Summit. Russia has allowed the establishment of air and
land supply routes for the NATO mission in Afghanistan on its territory and has agreed to bolster
training for Afghan and regional counter-narcotics officers. Russian helicopters, operated by
civilian crews, have also begun providing transport in Afghanistan, and the NRC has established a
Helicopter Maintenance Trust Fund. The Helicopter Maintenance Fund, jointly funded by NATO
and Russia, will provide maintenance and repair support to the Afghan National Security Forces.
In April 2011, the NRC approved a new Action Plan on Terrorism, designed to improve both
sides’ capabilities to deter, combat, and manage the consequences of terrorist attacks. Joint
activities include exchange of classified information, development of technology to detect
explosive devices, and improved protection of critical infrastructure. In early June, NATO and
Russian fighter aircraft held their first ever joint exercise over Poland and the Black Sea, as part
of the Cooperative Airspace Initiative (CAI), aimed at preventing attacks like those of September
11, 2001, through coordinated interception of renegade aircraft.77
Observers point out that while progress has been made in some of the aforementioned areas,
disagreement both within the alliance and between NATO and Russia persists on some core
issues. NATO and Russia’s November 2010 agreement to pursue cooperation missile defense was
seen as a significant breakthrough in NATO-Russia ties and recognized as one of the biggest
achievements of the Lisbon Summit. Analysts caution, however, that the two sides may face
significant obstacles in reaching agreement on the conditions for such cooperation (discussed in
more detail below). In addition, little, if any, progress has been made on the issue of Georgia’s
territorial integrity and NATO membership prospects, the unratified CFE Treaty, and Russian
calls for more influence within the Euro-Atlantic security architecture.
President Medvedev introduced the idea of a new Euro-Atlantic security architecture in June
2008. He has argued that the United States, through its membership in NATO, continues to
exercise disproportionate influence in European affairs and that Russia should have a more
formal role in the current European security architecture. While Russian officials claim that a new
security architecture would improve trust among Euro-Atlantic governments and reduce the risk
of internal European conflicts, many in the United States and Europe view the Russian proposals
as attempts to weaken NATO, constrain the OSCE, and stop further encroachment of these
organizations on Russia’s borders. The United States and most European countries maintain that
any dialogue on the future of European security must build upon the existing Euro-Atlantic
institutions.
NATO’s ongoing efforts to enhance NATO-Russia ties appear in line with the Obama
Administration’s stated intention to pursue a path of constructive engagement with Russia. U.S.
officials have emphasized the need to engage Russia in an effort to improve U.S.-Russia and

77 See NATO, “NATO and Russia Building Trust Through Defense Cooperation,” June 8, 2011,
http://www.nato.int/cps/en/SID-B870F09C-E03D10D0/natolive/news_75197.htm.
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NATO-Russia cooperation in areas ranging from the NATO mission in Afghanistan and counter-
terrorism, to arms control and non-proliferation and international efforts to curb Iran’s nuclear
program.78 At the same time, NATO and U.S. officials stress that they will continue to oppose
Russian policies that they perceive as conflicting with the core values of the alliance. They say,
for example, that NATO will not recognize a Russian sphere of influence outside its borders and
will continue to reject Russia’s recognition of Georgia’s breakaway regions, Abkhazia and South
Ossetia. There continues to be concern among some NATO allies that Russia has not changed its
fundamental view of NATO as a security threat and that unresolved issues will continue to plague
NATO-Russia relations. Observers and officials in some allied nations—notably Poland and
Lithuania—have at times expressed concern that NATO’s reengagement with Russia could signal
that the alliance is not serious about standing up to Russian behavior it has deemed unacceptable.
In this vein, they have urged the United States Administration to consider the interests and views
of all NATO allies as it seeks to improve relations with Russia.
Russia and the European Union79
Attitudes and outlooks on Russia differ widely among the 27 member states of the European
Union (EU). The governments of some countries, such as Germany, France, and Italy, are inclined
to an approach based on pragmatism and engagement. They believe that the maintenance of
extensive ties and constructive dialogue is the most effective way to influence Russia. Supporters
of this approach also argue that Russia should be viewed as a strategic partner and observe that
Russian cooperation is important on issues such as energy, Iran, climate change, and arms control.
Countries such as Poland and the Baltic States, on the other hand, tend to view Russia as a
potential threat to themselves and their neighbors. Difficult relations between these countries and
Russia are deeply rooted in the historical experiences of the Soviet domination of Eastern Europe.
A measure of Polish-Russian rapprochement has reportedly diminished some of the sharpness of
inter-European divisions about Russia. Relations were improved by the joint commemoration and
recognition of the World War II Katyn massacre and by the sympathetic cooperation which
followed the April 2010 airplane crash that killed the Polish president and high-ranking Polish
officials on their way to the commemoration ceremony in Russia. Controversy over the January
2011 release of a Russian report on the crash, however, has reignited some bilateral tensions.
As a result of its internal differences, the EU has had difficulty developing coherent and robust
common policies on Russia, and critics note that the EU lacks a comprehensive strategic
approach to its eastern neighbor. The EU was critical of Russia’s actions during the August 2008
conflict with Georgia and continues to object to Russia’s support of Georgia’s breakaway
provinces. The EU has also sought to pressure Russia on governance and human rights issues, but
some analysts argue that the EU’s attempts to influence Russia in such areas have been tempered
and ineffective. The Lisbon Treaty, the EU reform treaty that came into effect in December 2009,
is designed to give the EU new institutional tools with which to develop stronger and more visible
external policies. Nevertheless, the EU Common Foreign and Security Policy (CFSP) remains
based on member state consensus—CFSP tends to be weak or non-existent in areas where such a
consensus is lacking.

78 See Remarks by Vice President Biden at the 45th Munich Security Conference, February 7, 2009,
http://www.whitehouse.gov/the_press_office/
RemarksbyVicePresidentBidenat45thMunichConferenceonSecurityPolicy/
79 Prepared by Derek E. Mix, Analyst in European Affairs.
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Relations between the EU and Russia revolve largely around energy and economics. Russia
supplies the EU with more than one-quarter of its total gas and oil supplies, and some EU
member states are almost completely reliant on Russian energy. As discussed above (see “Russian
Energy Policy”), energy dependence and aggressive Russian energy policies contribute to the
tensions felt by some of the countries of central and eastern Europe with regard to Russia. The
EU’s energy dependence on Russia is expected to grow substantially over the next 20 years and
the apparent Russian inclination to use energy supplies as an instrument of foreign policy has
raised concerns about potential vulnerabilities that could arise from this trend. Many officials and
analysts agree on the need for the EU to diversify its energy supply, but the EU has struggled to
formulate a common strategic energy policy. According to some observers, the willingness of
numerous EU member states to conclude bilateral energy deals with Russia has served to
undermine the prospects of developing a stronger common policy.
Russia signed the EU Energy Charter treaty, which sets out market principles for energy
cooperation, in 1994. Russia never ratified the treaty, however, due to an unwillingness to apply
the requirements regarding transparency and foreign investment reciprocity—before terminating
provisional application of the treaty altogether in October 2009, Russia had in effect applied only
those treaty elements it deemed consistent with standing Russian law. EU and Russian officials
have been discussing the conditions under which Russia might agree to return to the treaty
framework.80
To some extent, however, the EU-Russia energy relationship works two ways: while Russia is a
crucial energy supplier for Europe, Europe is also a vital energy market for Russia. In terms of
trade and investment, the EU is an even more important partner for Russia, accounting for more
than half of Russia’s trade and three-quarters of its foreign direct investment (FDI).81 Russia, in
turn, is the EU’s third-largest trade partner (behind the United States and China); EU-Russia trade
totaled some €245 billion (approximately $343 billion) in 2010.82
In general, Russia has tended to perceive EU enlargement with less hostility and suspicion than
NATO enlargement. Russian officials, however, have expressed displeasure with the EU’s Eastern
Partnership initiative, which seeks to deepen ties with six countries of the former Soviet Union
(Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine). At the May 2009 EU-Russia
summit, President Medvedev expressed a view that the Eastern Partnership was directed against
Russia. U.S. officials have expressed support for the Eastern Partnership as a way to “extend
democracy, stability, and security” to the post-Soviet region.83
The EU and Russia have been negotiating a new framework agreement to replace the EU-Russia
Partnership and Cooperation Agreement (PCA) that came into force in 1997.84 Progress was long
slowed by contention over Russia’s bid for membership in the World Trade Organization (WTO),

80 Energy Charter Secretariat website, http://www.encharter.org/.
81 European Commission, DG Trade, http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/
russia/index_en.htm.
82 Eurostat press release, Partial recovery of trade in goods between EU27 and Russia in 2010, June 9, 2011,
http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/11/82&format=HTML&aged=0&language=EN&guiL
anguage=en.
83 Philip H. Gordon, Assistant Secretary, Bureau of European and Eurasian Affairs, U.S. Department of State, The
United States and Europe: An Agenda for Engagement, Remarks at the SAIS Center for Transatlantic Relations,
Washington, DC, October 18, 2010, http://www.state.gov/p/eur/rls/rm/2010/149608.htm.
84 The PCA was valid for an initial period of 10 years. Since 2007, it has been renewed on an annual basis.
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but in November 2010 the two sides announced that they had resolved all outstanding issues and
concluded bilateral negotiations about Russia’s WTO accession. EU leaders have expressed hopes
that this step might lead to more rapid progress in Russia’s remaining multilateral WTO
negotiations and in negotiations on a new PCA.
Under the original PCA, the EU and Russia launched efforts in 2003 to develop a more open and
integrated Common Economic Space (CES) and to establish deeper cooperation on issues such as
rule of law, human rights, research, education, crisis management, and non-proliferation.85 The
EU-Russia Summit held on May 31-June 1, 2010, launched a “Partnership for Modernization” in
which the EU pledged to help develop and diversify the Russian economy while encouraging
reforms related to governance and rule of law.86
The most recent EU-Russia Summit, held on June 9-10, 2011, was largely a follow up exercise
taking stock of progress in the Partnership for Modernization.87 At the past three EU-Russia
Summits, Russian leaders have been particularly interested in the potential economic and
technological benefits of the Partnership for Modernization: leaders at the summit announced a
agreement for €2 billion (approximately $2.8 billion) in loans from the European Investment
Bank (EIB) to support related projects, and the two sides are reportedly exploring cooperation on
Russia’s Soyuz space program and the EU’s Galileo global positioning systems.88 While EU
leaders at the summit repeated their concerns about human rights, political pluralism, and rule of
law, critics note that this business is going ahead despite a lack of reforms on the Russian side. At
the same time, increased investment in Russia by the private sector of the EU’s member states
does not appear to be immediately forthcoming, due in no small part to concerns over the rule of
law in Russia’s business environment.
The most recent summit also allowed leaders to touch on international themes of continuing
concern, including the global economy, North Africa and the Middle East, and “frozen conflicts”
in Transnistria, Nagorno-Karabakh, and Georgia. Nevertheless, critics noted that on the whole the
summit focused on relatively mundane and technical issues—the Partnership for Modernization,
WTO accession, visa-free travel negotiations, and the safety of European vegetables in the wake
of the E. coli. scare—rather than larger strategic issues.89
One broader idea that has been under consideration, originally proposed by German Chancellor
Merkel and President Medvedev in June 2010, is the creation of a new EU-Russia Political and
Security Committee. Such a committee, made up of foreign ministers and EU High
Representative Catherine Ashton, would be intended to strengthen civil and military cooperation
in crisis management operations.

85 European Union External Action Service, http://eeas.europa.eu/russia/common_spaces/index_en.htm.
86 Council of the European Union, Joint Statement on the Partnership for Modernisation, June 1, 2010,
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/er/114747.pdf.
87 See Statement by European Commission President Barroso following the Russia-EU Summit, June 10, 2011,
http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/430&format=HTML&aged=0&language=EN&
guiLanguage=en and Remarks by Herman Van Rompuy, President of the European Council, at the press conference
following the EU-Russia Summit, June 10, 2011,
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/122555.pdf.
88 Andrew Rettman, "EU and Russia hold 'Vegetable Summit'," euobserver.com, June 10, 2011,
http://euobserver.com/9/32478.
89 Fraser Cameron, "The Vegetable Summit," The Moscow Times, June 9, 2011,
http://www.themoscowtimes.com/opinion/article/the-vegetable-summit/438525.html.
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Russia and the Soviet Successor States90
Russia’s July 2008 Foreign Policy Concept and the May 2009 National Security Strategy hail
cooperation within the CIS as “a priority foreign policy direction.” The latter document proclaims
that the Collective Security Treaty Organization (CSTO; composed of CIS members Armenia,
Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan) is “the main interstate
instrument” to combat regional military threats.91 The February 2010 Military Doctrine states that
the priorities of military-political cooperation are Belarus (formally part of a union with Russia),
the CSTO, and the CIS. Despite Russia’s emphasis on interests in the CIS, there has long been
scant progress toward overall CIS integration. Many CIS summit meetings have ended in failure,
with many of the presidents sharply criticizing lack of progress on common concerns and Russian
attempts at domination.
The CSTO was formed in 2002 with a headquarters in Moscow.92 An airbase at Kant, Kyrgyzstan,
was designated in 2002 to provide support for Central Asian rapid reaction forces, but the base
has housed Russian troops. President Medvedev called in February 2009 for forming a new and
sizeable CSTO rapid reaction force based in Russia, which he claimed would rival NATO.
Uzbekistan raised concerns that the force could be used by Russia to intervene in its internal
affairs, and refused to sign a June 2009 agreement on the formation of the force. Belarus too
balked at signing the agreement until October 2009. Despite the lack of consensus within the
CSTO, Russia moved forward unilaterally, assigning the 98th Airborne Division and the 31st
Airborne Assault Brigade (reportedly 8,000 troops) to the force. Although Russia welcomed
Belarus as a member of the force in October, the Belarusian constitution forbids the use of its
troops abroad. The rapid reaction force ostensibly is to be used to repulse military aggression
from outside the CSTO, react to natural disasters, and to combat terrorist groups, trans-national
organized crime, and drug traffickers. The force may be used outside the CSTO at the aegis of the
U.N. The decision to use the rapid reaction force is made by the presidents of the member-states
at the request of one or a group of member states. The worth of the CSTO has been a matter of
debate among its members and others, since it has not been efficacious in protecting borders or
halting internal disorder. The CSTO’s worth appeared to be placed in added question in June 2010
when Russia and other members balked at Kyrgyzstan’s request for troops to quell inter-ethnic
conflict in southern Kyrgyzstan.
Russian policy toward Belarus has been focused on gaining control of Belarus’s key economic
assets, while limiting subsidies to the Belarusian economy. Moscow forced Belarus to sell control
of the Beltransgaz natural gas firm (which controls the pipelines and other infrastructure on
Belarusian territory) to Russia by threatening steep gas price rises if it did not. Moscow has also
manipulated the issue of export duties on and the price of Russian crude oil delivered to
Belarusian refineries. Inexpensive and duty-free crude oil supplies, long a key de facto subsidy to
Belarus’s economy, have declined. In June 2011, the Russian-led Eurasian Economic Community
offered Belarus a three-year, $3 billion loan to bolster the country’s rapidly deteriorating foreign
exchange position, but in return Belarus had to agree to privatize $7.5 billion in state-owned

90 Prepared by Jim Nichol, Specialist in Russian and Eurasian Affairs, and Steven Woehrel, Specialist in European
Affairs.
91 The Kremlin. President of Russia. The Foreign Policy Concept of the Russian Federation, July 12, 2008; Russian
Federation Security Council. Russian Federation National Security Strategy Until 2020, May 12, 2009; The Kremlin.
President of Russia. The Military Doctrine of the Russian Federation, February 5, 2010.
92 The Collective Security Treaty was signed in 1992 and renewed in 1999.
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assets. Russia and Russian businessmen are seeking to buy key Belarusian firms, including
Belaruskali, a leading potash firm, as well as the half of Beltransgaz that Russia does not already
own.
Lukashenko has pointed to close military cooperation between the two countries and Belarus’s
geographical position between NATO and Russia as reasons for Russia to subsidize energy
supplies to Belarus. Belarus is a member of the Russian-dominated Collective Security Treaty
Organization (CSTO), which Russia hopes to make into a counterweight to NATO influence.
However, Belarus has distanced itself from the CSTO’s rapid reaction force, saying that Belarus
would not deploy its forces outside its borders. Lukashenko has also agreed that Belarus will
further integrate its economy with Russia’s in a regional “Single Economic Space.” On the other
hand Belarus has shown independence from Moscow on some issues, such as refusing to
recognize the independence of Georgia’ breakaway regions of Abkhazia and South Ossetia,
despite Russian pressure. In other circumstances, recent Russian economic pressure on Belarus
could have caused Minsk to seek closer ties with the United States and EU, but relations with the
West were seriously damaged by Lukashenko’s repression of opposition groups in the wake of
Belarus’s fraudulent December 2010 election.
Russian forces remain in the Transnistria region of Moldova against the wishes of the Moldovan
government (and in violation of Russia’s 1999 commitment under the adapted CFE Treaty to
withdraw the forces). Russia also provides economic subsidies to bolster the pro-Russian
separatist regime in Transnistria. The United States and the EU have called upon Russia to
withdraw its forces from Moldova. Russian leaders have sought to condition the withdrawal of
their troops on the resolution of Transnistria’s status. Informal talks on Transnistria are scheduled
to be held in Moscow on June 21, 2011, after which the resumption of formal negotiations (which
have been suspended for five years) may occur. Observers believe that Russia is pressuring
Transnistria to return to the negotiating table in part due to Germany’s influence. In June 2010,
German Chancellor Angela Merkel and Russian President Dmitri Medvedev agreed in Meseberg,
Germany, on a memorandum that appeared to offer German support for the creation of an high-
level EU-Russia Political and Security Committee in exchange for Russian support for restarting
settlement talks and achieving “tangible results.”93 Some experts believe Russia may be pushing
for a Transnistria settlement that would give the pro-Russian enclave effective veto power over
the country’s foreign and domestic policies, which could stymie Moldovan efforts toward
European integration, in particular closer relations with NATO. In 2003, Russia offered such a
proposal, called the Kozak Memorandum, that Moldova ultimately rejected.
Moscow has used the Armenian-Azerbaijani conflict over Nagorno-Karabakh to pressure both
sides, maintain Armenia as an ally, and otherwise exercise regional influence. Citing instability
and the threatened spread of Islamic extremism on its southern flank as a threat to its security,
Moscow intervened in Tajikistan’s civil war in 1992-1996 against Tajik rebels. Russia’s policy of
trying to exclude U.S. influence from Central Asia as much as possible was temporarily reversed
by President Putin after the September 11, 2001, attacks, but appeared to be put back in place as
the 2000s progressed. On July 29, 2005, the Uzbek government directed the United States to
cease its operations at the Karshi-Khanabad (K2) airbase within six months. Tashkent is believed
to have acted not only in response to Russian and Chinese urging but also after the United States
criticized the Uzbek government’s repression in Andijon in May 2005. In February 2009,
Kyrgyzstan accepted a large loan proffered by Russia and simultaneously requested that the

93 See also CRS Report RS21981, Moldova: Background and U.S. Policy, by Steven Woehrel.
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United States wind up operations at the Manas airbase by August 2009. After intense U.S.-Kyrgyz
talks, Kyrgyzstan reversed course in late June 2009 and agreed to permit U.S. and NATO cargoes
to transit through Manas, reportedly angering Putin.94 In the wake of the “re-set” in U.S.-Russia
relations in 2009-2010, there appears to again be some cooperation from Russia regarding a U.S.
and NATO military presence in Central Asia to support operations in Afghanistan.
The international community condemned Russia’s military incursion into Georgia in early August
2008 and President Medvedev’s August 26, 2008, decree officially recognizing the independence
of South Ossetia and Abkhazia. Russian officials announced in September 2008 that two army
brigades, each consisting of approximately 3,700 troops, would be deployed to new military bases
in Abkhazia and South Ossetia (the brigades were reduced to a reported 1,700-1,800 troops each
in mid-2009, allegedly because of Russia’s budgetary problems). A part of the Black Sea Fleet
also was deployed to Ochamchire in Abkhazia. The United States and others in the international
community have called for Russia to reverse these deployments and rescind the recognitions of
independence. Russia and Georgia have yet to reestablish diplomatic relations that Georgia broke
off following the August 2008 conflict.
During the presidency of Viktor Yushchenko from 2005 until February 2010, Russia’s relations
with Ukraine were often tense due to differences over such issues as the supply of Russian energy
through Ukrainian pipelines (leading to shut-offs of natural gas to Europe in 2006 and 2009),
Russia’s conflict with Georgia in 2008, the status of the Russian Black Sea Fleet in Ukraine’s
Crimea region, and Yushchenko’s advocacy of NATO membership for Ukraine. The victory of the
pro-Russian Viktor Yanukovych in Ukrainian presidential elections in February 2010 has led to a
rapid improvement in Russian-Ukrainian relations. Yanukovych dropped Yushchenko’s NATO
membership aspirations, saying that the country will remain outside all military blocs. Russia and
Ukraine have agreed to extend the stay of the Russian Black Sea Fleet in Crimea until 2042, from
the original withdrawal date of 2017. In exchange, Russia will provide Ukraine with discounted
prices for natural gas supplies for 10 years, a benefit that the two sides estimated as worth $40
billion. However, rising global energy prices have negated much of the savings Kyiv counted on
from the Black Sea Fleet accord, and Yanukovych continues to seek further gas price reductions
from Russia. This situation may give Moscow more leverage to secure additional foreign policy
and economic concessions from Kyiv. Russian firms, with Russian government support, have
stepped up efforts to buy key industrial assets in Ukraine since Yanukovych has come to power.
Some of Russia’s boldest proposals appear to have gone further than Kiev can support. Ukraine
has rebuffed Russian suggestions that it join the CSTO. It has also so far not accepted Russia’s
proposal that that it join the customs union with Russia, Belarus and other former Soviet
countries, which would likely conflict with Ukraine’s WTO membership and its professed desire
for a free trade agreement with the European Union.

94 For more on Russian policy in these regions, see CRS Report RL33453, Armenia, Azerbaijan, and Georgia: Political
Developments and Implications for U.S. Interests, CRS Report RL33458, Central Asia: Regional Developments and
Implications for U.S. Interests; and CRS Report R40564, Kyrgyzstan and the Status of the U.S. Manas Airbase: Context
and Implications, all by Jim Nichol.
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U.S.-Russia Relations
The spirit of U.S.-Russian “strategic partnership” of the early 1990s was replaced by increasing
tension and mutual recrimination in succeeding years. In the aftermath of the September 11, 2001,
attacks, the two nations reshaped their relationship on the basis of cooperation against terrorism
and Putin’s goal of integrating Russia economically with the West.95 However, tensions soon
increased on a number of issues that contributed to ever-growing discord in U.S.-Russian
relations. Cooperation continued in some areas, and then-Presidents Bush and Putin strove to
maintain at least the appearance of cordial personal relations. In the wake of the August 2008
Russia-Georgia conflict, bilateral ties reached their lowest point since the Cold War.
The Obama Administration “Re-sets” Bilateral Relations
The Obama Administration called for starting a dialogue with Russia from a fresh slate. A
February 2009 speech in Munich by Vice President Biden to “re-set” U.S.-Russian relations was
an early sign of the President’s intentions. At their first “get acquainted” meeting on April 1,
2009, in London, Presidents Obama and Medvedev issued two joint statements on opening
nuclear weapons talks and on U.S.-Russia relations.
In their joint statement on U.S.-Russia relations, the two presidents agreed to “deepen cooperation
to combat nuclear terrorism” and to “support international negotiations for a verifiable treaty to
end the production of fissile materials for nuclear weapons.” President Obama confirmed his
commitment to work for U.S. Senate ratification of the Comprehensive Nuclear Test Ban Treaty.
Both sides also pledged to bring into force the bilateral Agreement for Cooperation in the Field of
Peaceful Uses of Nuclear Energy, which former President Bush had withdrawn from
consideration in the U.S. Senate following the August 2008 Russia-Georgia conflict. Russia
agreed to assist the United States and the international community in responding to terrorism and
the insurgency in Afghanistan and Pakistan, and to drug trafficking from Afghanistan. The two
sides called for the continuation of the Six-Party Talks and for the verifiable denuclearization of
the Korean Peninsula. They also pledged to strengthen Euro-Atlantic and European security,
including through the OSCE and NATO-Russia Council.96
Reflective of Russia’s views of the bilateral relationship, its May 2009 National Security Strategy
states that Moscow strives to establish “an equal and full-fledged strategic partnership” with the
United States. The Strategy claims that the two countries have “key” influence in the world and
should work together on arms control, on confidence-building measures, on the nonproliferation
of weapons of mass destruction, on counterterrorism, and on the settlement of regional conflicts.
The Strategy proclaims that Russia will work to maintain parity with the United States in strategic
offensive weapons even if the United States deploys a global missile defense system.97
At the July 2009 summit, President Obama stated that “the relationship between Russia and the
United States has suffered from a sense of drift” in recent years, and that the two presidents had

95 For the change in Russian policy toward integration with the West and cooperation with the United States, see CRS
Report RL31543, Russian National Security Policy After September 11, by Stuart D. Goldman.
96 The White House. Office of the Press Secretary, Remarks By President Obama and Russian President Medvedev
after Meeting, April 1, 2009.
97 Russian Federation Security Council. Russian Federation National Security Strategy Until 2020, May 12, 2009.
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“resolved to reset U.S.-Russian relations.” He stressed that the United States wanted “to deal as
equals” with Russia, since both countries are nuclear superpowers, and that the United States has
recognized that its role “is not to dictate policy around the world, but to be a partner with other
countries” to solve global problems. Some observers have argued that these statements were
aimed at assuaging Russian sensitivities about the country’s status in the world. Russia’s
hyperbole about its role in the world, these observers have suggested, was evidenced by President
Medvedev’s statement at the summit that the United States and Russia are “powerful states [that]
have special responsibility for everything that is happening on our planet,” and that strengthened
bilateral cooperation “will ensure international peace and security.”
The two presidents and other officials signed six accords and issued three joint statements (details
on significant decisions and deliberations at the summit are discussed below). According to
Michael McFaul, the Senior Director for Russian and Eurasian Affairs on the National Security
Council, the main topics at the summit were Iran, a major U.S. concern, and missile defense, a
major Russian concern. One achievement of the summit was the establishment of a U.S.-Russia
Bilateral Presidential Commission intended to strengthen consultations and diplomacy. President
Obama highlighted the commission as the “foundation” element in re-setting relations, since it
would greatly expand communications between the two countries. The presidents are the co-
chairs, and the Secretary of State and the Foreign Minister coordinate meetings.
At the July 2009 summit, President Obama stated that one area where the two presidents “agreed
to disagree” was on Georgia. McFaul reported that President Obama stated that the United States
would not recognize South Ossetia and Abkhazia as independent states and also argued that the
Russian idea of a “sphere of influence” in the Soviet successor states does not belong in the 21st
century. The two presidents did agree, however, that “no one has an interest in renewed military
conflict.” They also discussed the Armenia-Azerbaijan conflict over Azerbaijan’s breakaway
Nagorno Karabakh (NK) region, according to McFaul, and agreed to continue cooperative efforts
to resolve the conflict.
Secretary of State Hillary Clinton reported that her visit to Russia on October 12-14, 2009, had
resulted in progress in negotiations to replace the expiring Strategic Arms Reduction Treaty
(START), support for the Global Initiative To Combat Nuclear Terrorism, and cooperation in
Afghanistan. Discussions about Iran’s nuclear proliferation threat revealed ongoing differences,
with Foreign Minister Lavrov stating that tightened sanctions against Iran were premature while
diplomatic efforts were underway to ensure that Iran does not develop nuclear weapons. Meeting
with Russian human rights advocates, Secretary Clinton argued that the United States would
continue to advocate democratization and respect for human rights in Russia.
During her visit, Secretary Clinton and Foreign Minister Lavrov convened the first meeting of the
U.S.-Russia Bilateral Presidential Commission. They agreed to create added working groups on
counterterrorism, the environment, and on military-to-military ties. Several of the co-chairs of
working groups attached to the commission also met. McFaul, who co-chairs the civil society
working group, reportedly stated that government officials and representatives of non-
governmental groups would meet separately. Some Russian human rights groups criticized their
exclusion from the working group. Ahead of Secretary Clinton’s trip, some co-chair meetings
already had taken place, including the education and culture working group and the anti-narcotics
trafficking working group in Washington, DC, in late September. At the latter working group
meeting, Russia urged the United States to greatly step up poppy eradication efforts in
Afghanistan.
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Meeting on November 15, 2009, on the sidelines of the Asia-Pacific summit in Singapore,
Presidents Obama and Medvedev continued discussions on START and Iran. President Obama
reported that he had again stressed to Medvedev that added international sanctions should be
applied to Iran if it continued to defy its international obligation not to develop nuclear weapons.
In her January 2010 speech on European security, Secretary of State Clinton stated that Russia
had violated a fundamental principle of U.S. and European policy—respect for the sovereignty
and territory of all states—by invading Georgia and by claiming that Georgia’s breakaway
regions are independent. She more broadly criticized efforts to declare a sphere of influence in
Europe, presumably by Russia. Secretary Clinton called for Russia instead to recognize that the
enlargement of NATO and the European Union benefits it as well as the rest of Europe by
spreading peace and prosperity. She praised President Medvedev’s proposal for broadening
European security, but rejected his call for a new European Security Treaty. Instead, she called for
existing European institutions—the OSCE and the NATO-Russia Council—to examine how to
enhance European security. She hailed U.S.-Russia cooperation on such issues as challenging
Iran’s nuclear ambitions, stabilizing Afghanistan, confronting North Korea, negotiating a new
Strategic Arms Reduction Treaty, and tackling pandemic disease, cyber warfare, and the
trafficking of children.98
The Obama Administration’s National Security Strategy, released in May 2010, asserts that the
United States endeavors “to build a stable, substantive, multidimensional relationship with
Russia, based on mutual interests. The United States has an interest in a strong, peaceful, and
prosperous Russia that respects international norms.” The strategy calls for bilateral cooperation
with Russia—termed one of the 21st century centers of influence in the world—in bolstering
global nonproliferation; in confronting violent extremism, especially in Afghanistan; in forging
new trade and investment arrangements; in promoting the rule of law, accountable government,
and universal values within Russia; and in cooperating as a partner in Europe and Asia. At the
same time, the strategy stresses that the United States “will support the sovereignty and territorial
integrity of Russia’s neighbors.”99
President Medvedev visited the United States on June 22-24, 2010, to focus on business and
technology ties between the two countries. In 11 joint statements, the two presidents pledged
further cooperation to achieve stability in Afghanistan, to foster open government, and to
strengthen counter-terrorism cooperation, among other issues. In a joint statement on strategic
stability, they vowed to continue “the development of a new strategic relationship based on
mutual trust, openness, predictability, and cooperation.” President Obama also called for
accelerating efforts with other members of the World Trade Organization (WTO) to complete the
steps necessary for Russian accession to the WTO. He announced that Russia had agreed to
purchase 50 Boeing aircraft, worth $4 billion, and that the two countries had reached an
agreement that would permit U.S. poultry products to again be exported to Russia.100
Just days after Medvedev’s U.S. visit, the United States announced on June 28, 2010, the arrest of
11 Russian spies (one spy was outside the United States and apparently escaped). Some of the
spies had been paired as couples by the Russian Foreign Intelligence Service. The spies had lived

98 U.S. Department of State. Remarks on the Future of European Security, January 29, 2010.
99 The White House. National Security Strategy, May 2010.
100 The White House. Office of the Press Secretary. U.S.-Russia Joint Statements, June 24, 2010; Remarks by President
Obama and President Medvedev of Russia at Joint Press Conference, June 24, 2010.
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in several U.S. metropolitan areas for up to 10 years or longer. They were arrested on charges that
included money-laundering and not registering as foreign agents. An FBI investigation against the
“deep cover” agents reportedly had been ongoing for several years. The timing of the arrests may
have been determined by suspicions of one of the agents that her cover had been blown. The 10
agents were swapped in Vienna, Austria, on July 9 for four Russian citizens whom Moscow had
alleged were U.S. or British spies. Some U.S. observers suggested that the focus of the 10
Russian agents on seemingly public information gathering was a reflection of the paranoia and
myopia of Russia’s political leaders.101 Some observers in the United States and Russia speculated
that the quick resolution of the spy case indicated a concerted effort among policymakers in both
countries to preserve the “re-set” in bilateral relations.
In November 2010, Presidents Obama and Medvedev met on the sidelines at the Group of 20
industrialized states in Seoul, South Korea, at the Asia-Pacific Economic Summit in Yokohama,
Japan, and at the NATO-Russia summit in Lisbon, Portugal. At the session of the NATO-Russia
Council in Lisbon, the heads of state agreed to work on cooperation on common security
challenges, to resume theater ballistic missile defense exercises, to identify opportunities for
Russia to cooperate with NATO’s new territorial missile defense capability, to expand Russia’s
support for NATO operations in Afghanistan, and to explore revitalizing and modernizing the
Conventional Forces in Europe (CFE) Treaty. President Obama hailed the agreements as part of
the reset in NATO-Russia relations and as indicating that Russia is a partner rather than an
adversary of NATO. The 112th Congress may hold oversight hearings on all of these issues.
In early December 2010, Secretary Clinton attended the OSCE Summit in Astana, Kazakhstan.
On the one hand, Russia and the United States reportedly clashed, with Russia objecting to the
establishment of an OSCE mission in Georgia that would have a mandate that included Georgia’s
breakaway Abkhazia and South Ossetia and the United States objecting to Russian calls for a new
European security treaty. Secretary Clinton also stressed that all OSCE members should fully
implement their pledges to democratize and respect human rights. On the other hand, President
Medvedev and Secretary Clinton joined in calling for the peaceful settlement of the Armenia-
Azerbaijan conflict over the breakaway Nagorno Karabakh region, and the Astana summit
declaration called for opening negotiations in 2011 on revitalizing the CFE Treaty.
In May 2011, Presidents Obama and Medvedev met on the sidelines at the Group of 8
industrialized states in Deauville, France. The main topics discussed included U.S. plans for
missile defense deployments in Central Europe, counter-terrorism cooperation, and economic
issues, including Russia’s efforts to obtain entry into the World Trade Organization (WTO).
President Medvedev indicated that Russia would continue discussions about its concerns over
NATO missile defense plans, but stated that there was no breakthrough at the talks and suggested
that progress might have to be deferred to 2020 (the final phase of missile deployments) and to
“other politicians.” Seemingly in contrast, National Security Council official Michael McFaul
asserted that there was progress in discussing cooperation on missile defense. McFaul stated that
a major part of the discussion of WTO was concerned with Georgia’s concerns. The two
presidents also discussed the “Arab Spring,” Iran’s nuclear program, and NATO actions in Libya.
In regard to the latter issue, McFaul indicated that the views of the two presidents did not widely
diverge, and Deputy National Security Advisor Ben Rhodes stated that President Obama agreed
to consult with the Russians about events in Libya.

101 Financial Times (London), July 1, 2010.
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The two sides signed or issued nine agreements, statements, memoranda of understanding (MoU),
and reports, including a protocol of cooperation on the global eradication of polio; statements of
cooperation on visa issues, on counter-terrorism, and on the Bering Strait Region; memoranda of
understanding on cooperation on civil aviation security, on “smart grid” energy, and on medical
research; and reports on the progress of the U.S.-Russia Presidential Commission and on
assessing future missile challenges (the presidents stated that the latter report had been finalized,
but it was not released). It also was announced that two new working groups had been created at
part of the bilateral Presidential Commission, a working group on innovation and a working
group on the rule of law. The former group is headed by the U.S. Under Secretary of State and a
Russian presidential advisor and the latter group is headed by the Russian Justice Minister and the
U.S. Attorney General. According to McFaul, a major goal of the working group on innovation is
to assist in Medvedev’s modernization campaign, including investment at the Skolkovo Center
(see below), and a major goal of the working group on the rule of law is to strengthen legal
institutions in Russia to facilitate investment.102
Bilateral Relations and Iran
Russian perceptions of the Iranian nuclear threat and its policies toward Iran are driven by a
number of different and sometimes competing factors. Russia signed the agreement to build a
nuclear power plant at Bushehr and provide other assistance to an Iranian civilian nuclear
program in January 1995. Although the White House and Congress have argued that Iran will use
the civilian nuclear reactor program as a cover for a clandestine nuclear weapons program, Russia
refused to cancel the project. Moscow maintains that its cooperation with Iran’s civilian nuclear
program is legal, proper, and poses no proliferation threat, arguing that Iran is a signatory of the
Nuclear Non-Proliferation Treaty (NPT), and that the light water reactor built by Russia is not
well-suited for producing weapons-grade fissionable material.
Russia agrees with the United States and many other nations that a nuclear-armed Iran would be
destabilizing and undesirable. After Iran’s clandestine program to master the entire nuclear cycle,
including uranium reprocessing, was revealed, Russia withheld delivery of nuclear fuel for the
Bushehr reactor, pending agreement with Tehran about return of spent fuel to Russia for
reprocessing. Russia joined the United States and the “EU-3” group (Great Britain, France, and
Germany) in approving a series of limited U.N. Security Council (UNSC) sanctions related to
Iran’s nuclear infrastructure, including asset freezes and trade bans targeting certain Iranian
entities and individuals.103 Moscow temporarily withdrew most of its technicians and scientists
from the unfinished Bushehr reactor in 2007. However, Russia soon resumed construction and
shipment of nuclear fuel to Bushehr. Fuel delivery was completed in January 2008. In January
2011, Russia’s permanent representative to NATO, Nikolay Rogozin, alleged that a computer
virus had delayed the start-up of the reactor.104 Reportedly, some damaged systems had to be
replaced, but Russian officials announced that the reactor had begun operation on May 8, 2011,
and would soon be connected to the power grid.

102 The White House, Office of the Press Secretary, Remarks by President Obama and President Medvedev of Russia
after Bilateral Meeting in Deauville, France, May 26, 2011; Fact Sheet: U.S.-Russia Agreements and Joint Statements,
May 26, 2011; Press Briefing by National Security Council Senior Director for Russia and Eurasia McFaul and
Deputy National Security Advisor Rhodes, May 26, 2011.
103 See CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
104 Interfax, January 27, 2011.
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In a joint statement issued at their meeting on April 1, 2009, Presidents Obama and Medvedev
“urged Iran to ... address the international community’s concerns” about its civilian nuclear
energy program. They stressed that Iran had pledged as a signatory of the NPT to retain its status
as a state that does not possess nuclear weapons, and called on Iran to fully cooperate with the
International Atomic Energy Agency. At the July 2009 U.S.-Russia summit, nuclear and missile
proliferation by Iran were the dominant topics, according to McFaul. President Medvedev did not
mention Iran by name at the summit press conference, but he did admit that some countries “have
aspirations to have nuclear weapons and declare so openly or, which is worse, [build them]
clandestinely.... These are areas where we should concentrate our efforts together with our
American partners.”
On September 21, 2009, Iran informed the IAEA that it had been building a second uranium
enrichment plant near the city of Qom. Many observers raised fears that the disclosure was
further evidence that Iran intended to build nuclear weapons. On September 23, President Obama
reported that a meeting he held with President Medvedev on the sidelines of a U.N. General
Assembly session dealt mostly with Iran. President Medvedev stated that the international “task is
to create ... a system of incentives that would allow Iran to continue its fissile nuclear program,
but at the same time prevent it from obtaining nuclear weapons.”105 In a meeting with concerned
nations on October 1, 2009 (now termed the Sextet, consisting of the United States, United
Kingdom, France, Russia, China, and Germany), Iran agreed to a late October IAEA inspection of
the Qom enrichment site and initially appeared positive toward a plan to export most of its low-
enriched uranium to Russia or France to be further enriched to fuel the Tehran Research Reactor.
After inspecting the enrichment plant near Qom, the IAEA concluded that it was in an advanced
stage of completion and that Iran’s efforts to hide it for years heightened IAEA concerns that
other nuclear facilities were being hidden. Russia reportedly mediated with Iran to urge it to
accept the research reactor fuel deal.
On November 15, 2009, after meeting with President Obama in Singapore, President Medvedev
stated that “we are prepared to work further to ensure that Iran’s nuclear program is only for
peaceful purposes. In case we fail, the other options remain on the table.” The next day, Russia
announced that it was further delaying the start-up of the Bushehr reactor, perhaps indicating
some Russian pressure on Iran to accept the research reactor fuel deal.106 On November 18, Iran
rejected the research reactor fuel deal. On November 27, Russia joined other representatives of
the IAEA in censuring Iran for concealing the enrichment plant near Qom. In February 2010, Iran
stated that it would start enriching uranium to 20% to fuel the Tehran Research Reactor.
In early March 2010, President Medvedev stated that Russia might consider cooperating on a
UNSC resolution that imposed “smart sanctions” on Iran that impacted only Iran’s nuclear
proliferation capabilities and not its population. Foreign Minister Lavrov asserted on March 27,
2010, that Russia would only back a new sanctions resolution that affirmed the non-use of force
against Iran.107 According to some observers, Russia had changed its stance that its cooperation
on further UNSC sanctions on Iran was contingent on the United States ending plans for missile
defenses in Eastern Europe.108

105 The White House. Office of the Press Secretary. Remarks by President Obama and President Medvedev of Russia
after Bilateral Meeting, September 23, 2009.
106 U.S. Fed News, November 16, 2009.
107 BBC Worldwide Monitoring, March 27, 2010.
108 Alexander Gabuyev, “Bushehr Nuclear Power Plant Stopped Moscow and Washington,” Defense and Security,
(continued...)
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On June 9, 2010, the IAEA reported that the United States, Russia, and France had raised joint
objections to a uranium swap deal reached by Brazil and Turkey to supply nuclear fuel for the
Tehran research reactor. Objections included that Iran had a larger amount of low-enriched
uranium than was considered under the swap deal (and under the October 2009 proposal
mentioned above).
Also on June 9, 2010, Russia supported the approval of UNSC Resolution 1929, which expressed
growing international concern with Iran’s lack of compliance with ensuring that its nuclear
program is peaceful and directed an expanded international arms embargo and added restrictions
on commerce dealing with “proliferation-sensitive activities” in Iran. Explaining Russia’s vote for
the resolution, U.N. ambassador Vitaliy Churkin stated that “it has become inevitable that
additional restrictive measures should be adopted to constrain development in those Iranian
activities that run counter to the task of strengthening the non-proliferation regime.”109 Perhaps
also a significant factor, simultaneously with Russia’s agreement on the draft resolution, its state
arms export agency, Rosoboronexport, and other Russian firms were removed from U.S. lists of
sanctioned entities.110
After CIA revelations about Iran’s possession of highly enriched uranium, President Medvedev
concurred in July 2010 that “Iran is nearing the possession of the potential which in principle
could be used for the creation of a nuclear weapon.” He also stated that “we should not forget that
Iran’s attitude [toward cooperation with the international community] is not the best one.” Iran’s
Foreign Minister Manouchehr Mottaki reacted that these “comments made by Medvedev
regarding the Iranian nuclear theme are totally false and we deny them… Russia is our neighbor
and we want to maintain good relations but we are critical of some of its positions.”111
Russia’s backing for UNSC Resolution 1929 has contributed to tension in its ties with Iran which
both states have attempted at times to smooth over. Russia has in part appeared to try to deflect
Iran’s anger by denouncing added sanctions imposed by the United States, the EU, and other
countries in the wake of the approval of UNSC Resolution 1929. In September 2010, Iran
expressed anger after President Medvedev signed a decree banning the supply of the S-300
surface-to-air missile system to Iran, asserting that the weapons transfer to Iran is blocked by
UNSC Resolution 1929.
In testimony in December 2010, Under Secretary of State William Burns asserted that “Russia’s
partnership [with the United States] in the diplomacy which led to Resolution 1929 and to its own
decision to cancel the S–300 sale was crucial. Without Russia’s partnership, I don’t think we
would have had Resolution 1929 [or] as significant a set of measures from the EU and from many
others. So that painstaking effort to work together with regard to a shared concern about Iran’s
nuclear ambitions has been right at the core of our relationship with Russia over the last couple of
years.” At the hearing, some Members raised concerns that Russia’s past and ongoing support for
Iran’s civil nuclear program might have facilitated its nuclear weapons ambitions. Under

(...continued)
March 22, 2010.
109 United Nations. Security Council. 6335th Meeting, Meeting Record, S/PV.6335, June 9, 2010.
110 CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
111 Ministry of Foreign Affairs of the Russian Federation. Speech by Dmitry Medvedev, President of the Russian
Federation, at the Meeting with Russian Ambassadors and Permanent Representatives to International Organizations,
July 13, 2010; Agence Presse France, July 13, 2010.
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Secretary Burns argued that Russia and other countries have become increasingly worried about
Iran’s nuclear intentions and have intensified their support for countervailing international
actions.112
In January 2011, Russia joined the other members of the Sextet at a meeting with Iran in Istanbul
to urge Iran to commit to a modified agreement worked out by Russia, the United States, and
France to exchange the bulk of Iran’s low-enriched uranium for fuel rods for the Tehran research
reactor. Iran raised preconditions to such an agreement that were rejected by the Sextet. Just
before the meeting, Russia joined the Sextet in calling for fully implementing the sanctions under
UNSC Resolution 1929, but again refused to join what it termed “unilateral sanctions” beyond
those agreed to by the UNSC. On January 27, 2011, President Medvedev stated that “Iran needs
to dispel the international community’s doubts in relation to its nuclear program. It [Iran] should
persuade us that this program is of a peaceful nature.”113
The final declaration issued at the May 2011 meeting of the heads of state of the Group of 8
industrialized countries in France warned that “the severe proliferation challenges ... in Iran and
North Korea ... pose a threat to global stability.”114
On June 1, 2011, Lavrov stated that because the United States and European countries imposed
added sanctions on Iran after the approval of UNSC Resolution 1929—sanctions that he claimed
they had agreed to forego during negotiations prior to the approval of the resolution—Russia
would not agree to further UNSC sanctions.115 That same day, the Russian Foreign Ministry
reported that Lavrov rejected a call by visiting Israeli Deputy Prime Minister Moshe Ya'alon for
concerned countries to warn Iran that it faces military reprisals if it proceeds with its nuclear
weapons development program. According to the Foreign Ministry, Lavrov reiterated Russia’s
views that concerns about Iran’s nuclear program should be resolved exclusively through
negotiations and that Iran has the right to pursue a peaceful nuclear program.116
On June 9, the Sextet issued a statement calling for Iran to hold discussions on many unresolved
concerns to rule out a military component to Iran’s nuclear program. The statement was issued in
response to an announcement by Iran that it would greatly increase the amount of uranium it
would enrich to 20%.
Bilateral Relations and Afghanistan
In a meeting with Afghan President Hamid Karzai in August 2008, Russian President Medvedev
called for “opening a new page in relations” between the two countries, “because, unfortunately,
our countries are coming up against similar threats and problems.” Russia provides some foreign
assistance and investment to Afghanistan, although it has rejected sending military forces. Russia
hosted a Shanghai Cooperation Organization conference on Afghanistan, counter-terrorism, and

112 U.S. House of Representatives, Committee on Foreign Affairs, Hearing on Implementing Tougher Sanctions on
Iran: A Progress Report, December 1, 2010.
113 Interfax, January 27, 2011.
114 G8 Declaration: Renewed Commitment For Freedom And Democracy, G8 Summit of Deauville, France, May 26-
27, 2011, at http://www.g20-g8.com/g8-g20/g8/english/live/news/renewed-commitment-for-freedom-and-
democracy.1314.html
115 Ministry of Foreign Affairs of the Russian Federation, June 2, 2011.
116 CEDR, June 1, 2011, Doc. No. CEP-950139; June 1, 2011, Doc. No. CEP-365001.
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counter-narcotics in late March 2009, which was attended by U.S. and NATO observers. The
conference communique praised the efforts of the International Security Assistance Force (ISAF)
in Afghanistan but offered no substantive assistance. At the July 2009 U.S.-Russia summit, a joint
statement on assistance to Afghanistan called for enhancing cooperation within the U.S.-Russia
Counter-Terrorism Working Group (established in 2000); further implementing the Russia-NATO
Council’s counter-narcotics project; supporting Afghanistan-related activities of the OSCE;
increasing training for the Afghan National Army, police, and counter-narcotics personnel; and
greatly increasing cooperation to halt illicit financial flows related to heroin trafficking in
Afghanistan. The two sides also called for enhancing counter-terrorism cooperation between
Afghanistan and Pakistan.
The State Department reported that an agenda-setting meeting of the Counter-Terrorism Working
Group took place in Berlin in November 2009. In January 2010, the director of Russia’s Federal
Drugs Control Service, Viktor Ivanov, raised concerns that of the 28 anti-narcotics policemen
trained under the Russia-NATO cooperation plan, 26 allegedly had been fired by Afghan officials.
The Russian permanent representative to NATO, Dmitry Rogozin, and Moscow Regional
Governor Boris Gromov (the former commander of Soviet forces in Afghanistan) called in
January 2010 for NATO forces not to “withdraw without victory” in Afghanistan. They argued
that Soviet forces had withdrawn in 1989 after ensuring some political stability, and that the
international community had not “thanked” the Soviet Union for its efforts to combat the first
terrorist threat to Europe. They asserted that the “Russian position” is that NATO should ensure
political stability in Afghanistan and claimed that Russia is forming the CSTO’s rapid reaction
forces to protect Central Asia as a hedge against NATO’s failure in Afghanistan. In late March
2010, Rogozin suggested that Russia should link its cooperation as a transit state for supply
shipments to Afghanistan (see below) to a NATO pledge to combat drug trafficking into Russia.
Seeking to elevate its status, the CSTO repeated a call for NATO to formally cooperate with it in
order to stanch drug trafficking from Afghanistan and to defeat the Taliban.117
In January 2011, Russia’s ambassador to Afghanistan, Andrey Avetisyan, stressed that NATO
forces should not leave Afghanistan until the country is able to defend itself. He stated that Russia
was ready to assist Afghanistan in rebuilding infrastructure and facilities that had been
constructed by the former Soviet Union, but that such rebuilding would need international
financing. He also renewed Russia’s call for NATO to combat drug production. He also dismissed
what he claimed were U.S. arguments that combating poppy growing in Afghanistan was
complicated because it risked antagonizing farmers, stating that “while this compromising and
appeasing position could produce some short-term benefits, this could harm the NATO forces
themselves in the long run. The money made on the production of drugs … finances the militants
… and part of the Afghan heroin also goes to Europe and the United States.”118
Alternative Supply Routes to Afghanistan
In late 2008, the United States and NATO stepped up efforts to develop supplemental air and land
routes into Afghanistan because of growing problems in sending supplies through Pakistan. The
incoming Obama Administration also planned increasing the number of troops in Afghanistan,

117 ITAR-TASS, January 18, 2010; Boris Gromov and Dmitry Rogozin, “Russian Advice on Afghanistan,” The
International Herald Tribune, January 12, 2010; BBC Worldwide Monitoring, March 31, 2010; “NATO Not
Cooperating Sufficiently with Russia—CSTO Head,” RIA Novosti, March 27, 2010.
118 Interfax, January 27, 2011.
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which also spurred the search for alternate supply routes. A “northern supply network” was
envisaged for transits through Russia or the South Caucasus to Central Asia and then to
Afghanistan. The U.S. Manas airbase in Kyrgyzstan, established in late 2001, was to be a
component of this route. In February 2009, however, Kyrgyzstan announced that it intended to
close the airbase, but an agreement was reached in late June 2009 to keep it open in exchange for
higher U.S. rent and other payments.
As early as the April 2008 NATO summit, Russia’s then-President Putin had offered to permit the
shipment of non-lethal NATO goods through Russia to Afghanistan. In late 2008, Russia also
permitted Germany to ship weapons and other equipment by land to its troops in Afghanistan.
NATO reached agreement with Russia in February 2009 on the land transit of non-lethal supplies
to Afghanistan, and all the Central Asian states except neutral Turkmenistan also agreed to permit
overland shipments. The first railway shipment from the Baltic states reached Afghanistan—after
transiting Russia, Kazakhstan, and Uzbekistan—in late March 2009.
At the U.S.-Russia summit meeting in early July 2009, Foreign Minister Lavrov and Under
Secretary of State Burns signed an agreement allowing up to 4,500 annual official air flights of
troops and lethal supplies through Russia to Afghanistan, and unlimited numbers of commercial
charter flights of nonlethal supplies. Lauded by McFaul as “historic,” the agreement complements
the NATO-Russia arrangement reached in early 2009 on land transit. The Administration reports
that air transit through Russia could save the United States government up to $133 million
annually in fuel, maintenance and other transportation costs, and that this agreement would be
free of any air navigation charges.
Reportedly, the first flight by the United States using this route took place in early October 2009,
and another took place in November 2009. Allegedly, Russia was slow in facilitating such flights,
and the United States and NATO used alternative air transit through the Caspian region to reach
Afghanistan. According to Assistant Secretary of State Philip Gordon, these air transit problems
were resolved. He stated in mid-2010 that “on average, two U.S. planes a day to fly over Russia
carrying troops and supplies in support of the mission in Afghanistan. To date, over 275 flights
have carried over 35,000 passengers and valuable cargo. Russia’s rail network has facilitated
transit of more than 10,000 containers of supplies…. About 30% of cargo to Afghanistan goes
through the Northern Distribution Network (NDN) and 60% of the NDN [cargo] goes through
Russia.”119 An April 2011 Administration factsheet stated that 1,000 U.S. official flights over
Russia had carried over 150,000 passengers and cargo. The factsheet also stated that more than
25,000 containers had transited Russia under the NATO-Russia transit agreement.120
A June 2010 Administration factsheet on the results of the “reset” gave some information on
Russian commercial support for the Afghan conflict. It stated that Russian companies had made
over 12,000 flights in support of U.S. operations in Afghanistan and Iraq, had supplied over 30%
of the fuel U.S. military troops use in Afghanistan, and provided over 80 MI-17 helicopters to the
Afghan National Army, Afghan National Police, and Afghan Drug Interdiction Forces.121

119 U.S. Department of State. U.S.-Russia Relations Under the Obama Administration: Remarks at the German
Marshall Fund, June 16, 2010.
120 The White House, Office of the Spokesman, 1000th ISAF Supply Mission Transits Russian Airspace, April 20,
2011.
121 The White House. Office of the Press Secretary. U.S.-Russia Relations: “Reset” Fact Sheet, June 24, 2010.
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Bilateral Relations and North Korea
Russia has expanded its ties with North Korea in recent years as part of its policy of strengthening
its role as an Asia-Pacific power. Russia stresses a negotiated settlement of the Korean conflict
that protects the stability of its eastern regions and ensures a draw-down of U.S. forces in South
Korea. Russia also seeks the continuation of the six-party talks on North Korea’s de-
nuclearization (see below) as a means of containing, if not reducing, the threat posed by a
nuclear-armed Pyongyang, according to some observers. Russia prefers that the transition of
power from Kim Jong Il to his son be relatively peaceful, rather than involve a regime collapse
that could involve refugee flows into Russia or other trans-border problems, or the occupation of
North Korea by South Korea or China, according to some observers. Moscow will seek to retain
effective relations with Pyongyang throughout the succession period, in this view. Russia seeks
working relations with South Korea for many of the same reasons—the pursuit of Asia-Pacific
regional influence and stability in areas near its borders—as well as for economic and trade
benefits.122
A phase of closer Russia-North Korea ties was launched in February 2000, when the foreign
ministers of the two countries signed a Treaty on Friendship, Good-Neighborly Relations and
Cooperation. Then-President Vladimir Putin visited Pyongyang in July 2000 and Supreme Leader
Kim Jong Il visited Russia in August 2001. Because of the closer bilateral ties, North Korea
insisted in 2003 that it would not take part in multinational denuclearization talks unless Russia
also participated. These six-party talks (including the two Koreas, the United States, Russia,
China, and Japan) opened in August 2003. On September 19, 2005, the sides agreed to a
statement on denuclearization of the Korean peninsula that committed North Korea to abandon
nuclear programs and weapons and return to IAEA monitoring.
Russia-North Korea relations appeared strained somewhat after Russia supported UNSC
Resolution 1718 in October 2006 that criticized a North Korean nuclear test and applied
sanctions. Russia stressed that the sanctions did not involve military force, and urged that the six-
party talks continue. Russian concerns included that the nuclear test site was less than 60 miles
from Russia’s border. Tensions in the relationship increased in April-May 2009 after Russia
supported the UNSC in approving Resolution 1874 that condemned North Korean missile and
nuclear tests and increased sanctions on North Korea. Russia’s Permanent Representative to the
U.N., Vitaliy Churkin, stressed that the sanctions excluded military force and argued that they
would be reviewed once North Korea renewed cooperation within the format of the six-party
talks. Russia and China insisted that a UNSC Presidential Statement issued in July 2010 not
assess blame for the sinking of the South Korean naval corvette Cheonan. Russia argued that its
stance of not assessing blame would help “de-escalate tensions on the Korean Peninsula, restore
dialogue and interaction between North Korea and South Korea, and resume the six-party
talks.”123
Seemingly taking a stronger stance than in the case of the attack on the Cheonan, Russian Foreign
Minister Lavrov immediately condemned the North Korean artillery attack and the loss of life on

122 Alexander Vorontsov, Current Russia—North Korea Relations: Challenges And Achievements, The Brookings
Institution, February 2007; Georgy Toloraya, “Russia and the North Korean Knot,” The Asia-Pacific Journal: Japan
Focus Newsletter, April 19, 2010.
123 “Moscow Backs UN Security Council Statement on S. Korean Corvette Incident,” Russia & CIS General Newswire,
July 10, 2010.
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South Korea’s Yeonpyeong Island in late November 2010, but also called for restraint by both
sides. He similarly expressed “profound concern” over revelations by North Korea at the end of
the year that it was enriching uranium as part of a civil nuclear power program, and termed such
enrichment a violation of UNSC resolutions and the 2005 denuclearization statement.124 In late
2010, Prime Minister Putin stated that Russia and the United States were working together to
encourage North Korea to rejoin the six-party talks.
In mid-May 2011, the head of Russia’s Foreign Intelligence Service, Mikhail Fradkov, visited
North Korea, perhaps indicating that Pyongyang continues to consider contacts with Russia as
well as China as means to engage the outside world, according to some observers.125 The heads of
state of the Group of 8 industrialized nations issued a statement in late May 2011 warning that the
nuclear programs of North Korea and Iran are a threat to global stability. In early June 2011,
Russian Deputy Prime Minister Sergei Ivanov appeared to claim that Russia has little influence
over North Korea. He stated that “Russia plays its role as much as we can [in the six-party talks].
Currently we have nearly no trade or connection with North Korea despite our common
border.”126
Russia’s Role in the Middle East Quartet
Russia is a member of “the Quartet” (formed in 2002 by Russia, the United States, the EU, and
the U.N.) that mediates between Israel and the Palestine Liberation Organization (PLO), chaired
by President Mahmoud Abbas. Russia supported the holding of the U.S.-brokered Annapolis
Conference in 2007 on a two-state solution, and the Quartet has agreed in principle to a Russian
proposal to hold a follow-on conference in Moscow at some point. Meeting a condition set by
Israel for attending such a conference, Russian Foreign Minister Sergey Lavrov has stated that it
will be limited to representatives from countries, so that the Palestinian Hamas and the Lebanese
Hezbollah—considered to be terrorist groups by the United States, EU, and Israel but to be
“popular movements” by Russia—will not be invited.
According to Russian analyst Dmitriy Trenin, Russia seeks to present itself as an unbiased arbiter
in the Quartet, and participates in order to demonstrate its status as a great power.127 Russian
Foreign Minister Lavrov met with Hamas leader Khaled Meshaal in 2006 to discuss the future of
the peace process after Hamas won a majority of seats in the Palestinian National Authority
Legislative Council. Russia argues that Hamas has popular support among Palestinians and that
Russian contacts with Hamas enable Russia to urge Hamas to moderate its behavior and take part
in the establishment of a peaceful Palestinian state. The other members of the Quartet maintain
that that there should be no engagement with Hamas until it forswears terrorism, recognizes
Israel’s right to exist, and supports the Middle East peace process as outlined in the 1993 Oslo

124 CEDR, December 1, 2010, Doc. No. CEP-8009; Ministry of Foreign Affairs of the Russian Federation, Working
Visit to Russia by Pak Ui Chun, Foreign Minister of the DPRK, December 14, 2010.
125 CEDR, May 19, 2011, Doc. No. CEP-9016.
126 Question & Answer Session with Russian Deputy Prime Minister Sergei Ivanov and Singapore Defense Minister Dr.
Mg Eng Hen at the Sixth Plenary Session of the 10th IISS Asia Security Summit, The International Institute for Strategic
Studies, June 5, 2011.
127 Dmitriy Trenin, Russia’s Policy in the Middle East: Prospects for Consensus and Conflict with the United States,
The Century Foundation, 2010.
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Accords. Russian President Medvedev met with Meshaal during his May 2010 trip to Syria. Israel
condemned Medvedev’s meeting with Meshaal.128
Russia and other members of the Quartet urged the resumption of direct talks between the PLO
and Israel after the last such talks in 2008. The sides agreed to resume direct talks in August 2010
and PLO chairman Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu met on
September 2, 2010, in Washington, DC. Just days before the end of Israel’s moratorium on
settlements on the West Bank, the Quartet met and issued a statement on September 21, 2010,
calling for the moratorium to be continued.
On January 18, 2011, President Medvedev met with President Abbas in Jericho, where he
reiterated Russia’s call for convening in Moscow an international conference on the settlement of
the Middle East problem. He did not declare recognition of Palestinian statehood but reaffirmed a
statement of such support made by the former Soviet Union in 1988. At this Quartet meeting,
Secretary Clinton, Russian Foreign Minister Lavrov, EU High Representative for Foreign Affairs
and Security Policy Catherine Ashton, and U.N. Secretary General Ban Ki-moon issued a
statement urging the immediate resumption of peace talks, given the civil turmoil in the Middle
East. On February 18, 2011, the United States vetoed a UNSC draft resolution supported by
Russia that the United States termed “unbalanced and one-sided” in its condemnation of all Israeli
settlements established in occupied Palestinian territory since 1967 as illegal.
Russia supported the signing of the agreement in early May 2011 between Fatah and Hamas on
forming a power-sharing Palestinian Authority government for the West Bank and the Gaza Strip.
Russia endorses the formation of a cabinet composed of “technocrats” rather than politicians who
will “base their policies on the platform of the PLO and on the Arab peace initiative,” including
the recognition of Israel, rejection of violence, and adherence to the Quartet decisions. Following
the formation of the cabinet of technocrats, legislative and presidential elections are proposed to
be held within one year.129 On May 20, 2011, the Quartet issued a statement of support “for the
vision of Israeli-Palestinian peace outlined by U.S. President Barack Obama on May 19, 2011.
The Quartet agrees that moving forward on the basis of territory and security provides a
foundation for Israelis and Palestinians to reach a final resolution of the conflict through serious
and substantive negotiations and mutual agreement on all core issues.”130 Deputy Prime Minister
Moshe Ya’alon visited Russia in early June 2011 and reportedly praised Russia’s participation in
the Quartet, but stressed that “Hamas cannot be a partner for negotiations [and] cannot be
recognized as the legitimate authority in Gaza until it recognizes the State of Israel and renounces
terror entirely.”131 The United States has rejected dealing with Hamas unless it renounces
terrorism and meets other principles enunciated above by the Quartet, and has been wary of
French and Russian proposals for convening international conferences until the Israelis and the
Palestinians themselves make progress toward reopening talks. The Obama Administration has

128 “Israel Slams Russia’s Hamas Stance,” Jerusalem Post, May 12, 2010; Baraq Ravid, “Are Russia-Israel Ties Really
‘Better Than Ever’ Under Lieberman?” Haaretz, November 15, 2010.
129 Bloomberg Full Transcript Of Sergey Lavrov Interview, June 1, 2011, Moscow Ministry of Foreign Affairs of the
Russian Federation, June 2, 2011; Transcript of Foreign Minister Sergey Lavrov's Interview with Russian Media after
Attending CSTO Foreign Ministers Council Meeting in Minsk, May 31, 2011, Moscow Ministry of Foreign Affairs of
the Russian Federation, June 1, 2011.
130 U.S. Department of State, Office of the Spokesman, Joint Statement by the Quartet, May 20, 2011.
131 CEDR, June 1, 2011, Doc. No. CEP-365001.
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rejected the push by Palestinians for a vote in the U.N. General Assembly in September
supporting statehood. Russia has implied support for the vote but has not been explicit.132
Arms Control Issues133
Cooperative Threat Reduction
Since 1992, the United States has spent over $9 billion to help Russia and the other former Soviet
states dismantle nuclear weapons and ensure the security of nuclear weapons, weapons-grade
nuclear material, other weapons of mass destruction, and related technological know-how. This
funding supports the Cooperative Threat Reduction Program (CTR) managed by the Department
of Defense, along with nonproliferation programs managed by the Departments of Energy and
State. These programs have helped to eliminate nuclear weapons and delivery vehicles in
Ukraine, Belarus, and Kazakhstan, and to transport, store, and eliminate weapons in Russia. They
have also funded improvements in security at storage areas for both nuclear weapons and nuclear
materials. During the Bratislava Summit in 2005, Presidents Bush and Putin agreed to enhance
their cooperation and move more quickly in securing weapons and materials. As a result, the
Department of Energy has nearly completed its efforts to secure nuclear warheads in storage in
Russia and nuclear materials at a number of critical sites. The two sides have also cooperated to
construct a chemical weapons destruction facility in Shchuch’ye, which, after overcoming
congressional concerns between 2000 and 2002, is nearing completion.
The focus of U.S. threat reduction and nonproliferation assistance has changed over the years.
Initially, many in Congress saw U.S. assistance as an emergency response to impending chaos in
the Soviet Union. Even after the sense of immediate crisis passed in 1992 and 1993, many
analysts and Members of Congress remained concerned about the potential for diversion or a loss
of control of nuclear and other weapons. Now, much of the work on strategic offensive arms
reductions has been completed, and the United States has allocated a growing proportion of its
funding to projects that focus on securing and eliminating chemical and biological weapons and
securing storage sites that house nuclear warheads removed from deployed weapons systems.
Further, in recent years, the United States has increased funding for projects that seek to secure
borders and track materials, in an effort to keep weapons of mass destruction away from
terrorists. This has directed a growing proportion of the funding to nations other than Russia.
Many analysts in the United States see the U.S. threat reduction and nonproliferation programs in
Russia as a model for U.S. nonproliferation and anti-terrorism assistance to nations around the
world. Some who support this expansion of U.S. threat reduction assistance argue, however, that
the United States should not increase funding for other nations at the expense of funding for
programs in Russia because Russia is still home to large stocks of insecure nuclear materials.
The New Strategic Arms Reduction Treaty
In 2006, in advance of the impending December 2009 expiration of the 1991 Strategic Arms
Reduction Treaty (START), the United States and Russia began to discuss options for the future

132 CEDR, May 31, 2011, Doc. No. CEP-46014.
133 Prepared by Amy Woolf, Specialist in Nuclear Weapons Policy.
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of their arms control relationship. Many analysts had expressed concern that the two nations
would not be able to monitor compliance with the 2002 Moscow Treaty without START, as the
newer treaty lacked any verification provisions. They, and others who saw arms control as a key
feature of U.S.-Russian relations, hoped the two sides would agree to either extend or replace
START. Others suggested the two sides no longer needed to regulate their competition with arms
control agreements, and favored a posture that would allow START to lapse and allow both sides
to pursue nuclear force postures that met their own national security needs. When the discussions
began in 2006, Russia sought to replace START with a new, formal treaty that would include
many of the same definitions, counting rules, and restrictions as START, albeit with lower levels
of nuclear forces. The Bush Administration rejected this approach and offered, at most, to attach
an informal monitoring regime to the 2002 Moscow Treaty. When the Bush Administration
ended, the two sides had not agreed on whether or how to advance their arms control relationship.
The Obama Administration pledged to pursue arms control negotiations with Russia and to,
specifically, negotiate a new treaty to replace START. In April 2009, Presidents Obama and
Medvedev agreed that their nations would pursue stepped-up negotiations toward this end, and
that a new treaty would address deployed strategic offensive nuclear forces, leaving discussions
on nonstrategic nuclear weapons and warheads in storage to a future agreement, and to reduce
their deployed forces to levels below those set by the 2002 Moscow Treaty.
After nearly a year of negotiations, the United States and Russia signed the New START Treaty
on April 8, 2010. This treaty limits each side to no more than 800 deployed and nondeployed
ICBM and SLBM launchers and deployed and nondeployed heavy bombers equipped to carry
nuclear armaments. Within that total, each side can retain no more than 700 deployed ICBMs,
deployed SLBMs, and deployed heavy bombers equipped to carry nuclear armaments. The treaty
also limits each side to no more than 1,550 deployed warheads. The new treaty also contains a
number of complex and overlapping monitoring provisions that will help each side verify the
other’s compliance with the treaty. Many analysts believe that this verification regime is
particularly important because it mandates transparency and cooperation between the two sides.
The Obama Administration has argued that the New START Treaty will strengthen U.S. security
and contribute to the “re-set” in relations with Russia. The Administration has also noted that the
treaty contributes to U.S. nuclear nonproliferation goals by indicating that the United States and
Russia are both committed to meeting their disarmament obligations under Article VI of the
Nuclear Nonproliferation Treaty. Some, however, have questioned whether the United States and
Russia need a treaty to maintain stability in their relationship and reduce their nuclear weapons.
They note that Russia is already reducing its forces as it retires aging systems. Moreover, some
question whether arms control agreements between the United States and Russia will have any
affect on the goals and interests of nations seeking their own nuclear weapons. The Foreign
Relations Committee, Senate Armed Services Committee, and Senate Intelligence Committee
held a total of 21 hearings and briefings with Administration officials, senior statesmen, and
outside analysts between April and July, 2010. Most witnesses praised the treaty, and, although
recognizing that it contains only modest reductions in U.S. and Russian nuclear weapons, argued
that, on balance, it will enhance stability and predictability. Many also noted that its verification
regime will restore the ability of the United States and Russia to monitor each other’s strategic
forces. Some, however, questioned whether the treaty might restrain U.S. missile defense
programs. The Administration sought to alleviate this concern by noting that the treaty contains
no limits on current or planned missile defense programs and simply acknowledges that robust
missile defenses can undermine offensive forces. Others have noted that the treaty does not
address Russia’s stockpile of nonstrategic nuclear weapons. Treaty supporters agree with this
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point but argue that the United States and Russia cannot move on to a treaty that will address
these weapons until the parties ratify and implement New START. On September 16, 2010, the
Senate Foreign Relations Committee approved the Resolution of Ratification on the New START
by a vote of 14-4. The full Senate approved the treaty’s ratification by a vote of 71-26, on
December 22, 2010.
The Ratification of the New START Treaty in Russia134
Under the 1995 Russian constitution, both the Duma and the Federation Council must approve
the ratification of international treaties by majority votes. The Duma held hearings on the New
START Treaty during 2010, but stated that it would not proceed with approval for ratification
until such action was taken by the U.S. Senate. The chairmen of the International Affairs
Committees in the Duma and the Federation Council stated that the Russian Federal Assembly
(legislature) would follow a procedure of “synchronous ratification,” approving the treaty soon
after the U.S. Senate acted.135
Many Russian officials hailed the approval of New START by the U.S. Senate on December 22,
2010, but some Russian legislators and others voiced concerns about conditions, understandings,
and declarations contained in the Senate resolution of advice and consent to ratification. The
Duma initiated its formal ratification process for New START two days after the U.S. Senate
vote. The Russian Foreign Affairs Ministry worked closely with the International Affairs
Committees of the two chambers to prepare a statement reflecting Russian concerns that would
accompany the chambers’ votes on ratification.
The Duma approved New START on January 25, 2011, by a vote of 350 to 96 (only a simple
majority of 226 votes out of 450 was required), with the ruling United Russia Party and the pro-
government Just Russia Party voting for ratification, and the pro-government Liberal Democratic
Party and the opposition Communist Party voting against on the grounds that the treaty leaves
Russia “defenseless.” The Federation Council unanimously approved the treaty the next day, and
President Medvedev signed the law on ratification on January 28, 2011. The instruments of
ratification were exchanged and the treaty thereby entered into force during a meeting between
Foreign Minister Lavrov and Secretary Clinton on February 5, 2011, on the sidelines of the
Munich Security Conference.
The statement adopted by the Federal Assembly as part of the approval calls for continued robust
funding for modernizing Russia’s strategic nuclear forces, including funding for new efforts to
evade missile defenses, and raises concerns about the way in which the U.S. Senate addressed
missile defense and conventional, prompt global strike weapons. The statement warns that the
treaty “can only be effective and viable on condition of zero qualitative and quantitative buildups
in the resources of the missile defense systems of the United States that the latter deploys
independently or in collaboration with other states,” and asserts that “deployment by the United
States, another state, or group of states of a missile defense system capable of substantially
reducing the effectiveness of Russia's Strategic Nuclear Forces,” is grounds for withdrawal from
the treaty. It also states that “the deployment by the United States of non-strategic nuclear
weapons outside its territory is unjustified and runs against the character of present-day relations

134 Prepared by Jim Nichol, Specialist in Russian and Eurasian Affairs.
135 ITAR-TASS, September 17, 2010.
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in the Euro-Atlantic space.” Like the U.S. Senate, the Russian Federal Assembly calls for yearly
executive branch reports to the legislature on the implementation of the treaty.
Russia and Missile Defense136
Background: Recent U.S. Missile Defense Plans137
Successive U.S. governments have supported the development of a missile defense system to
protect against long-range ballistic missile threats from adversary states. The Bush Administration
argued that North Korea and Iran represented strategic threats and questioned whether they could
be deterred by conventional means. In 2007, the Bush Administration proposed deploying a
ground-based mid-course defense (GMD) element of the larger Ballistic Missile Defense (BMD)
system in Europe to defend against a possible Iranian missile threat. This “European Capability”
(EC) system would have included 10 interceptors in Poland and a radar in the Czech Republic.
Both countries signed agreements with the Bush Administration permitting GMD facilities to be
stationed on their territory; however, the two countries’ parliaments decided to wait to ratify the
accords until after the Obama Administration clarified its intentions on missile defense policy.
In September 2009, the Obama Administration canceled the Bush-proposed European BMD
program. Instead, Defense Secretary Gates announced U.S. plans to further develop a regional
BMD capability that could be surged on relatively short notice during crises or as the situation
might demand. Gates argued this new capability, known as the Phased Adaptive Approach (PAA),
would be based initially around existing BMD sensors and Patriot, THAAD and Aegis BMD
interceptors, and would be more responsive and adaptable to growing concern over the direction
and pace of Iranian short- and medium-range ballistic missile proliferation. The Administration
plans for the PAA to evolve and expand over the next decade to include BMD against
intermediate- and long-range Iranian ballistic missiles. This effort is largely supported by the
Congress.
The Russian Response138
The EC program significantly affected U.S.-Russia relations. At the February 2007 Wehrkunde
security conference in Munich, then-Russian President Vladimir Putin strongly criticized the
Bush Administration’s proposal, maintaining that it would lead to “an inevitable arms race.”
Russia threatened to abrogate the 1987 Intermediate-Range Nuclear Forces Treaty, and also
announced that it had suspended compliance with the Conventional Forces in Europe Treaty. In
August 2008, following the signing of the U.S.-Poland agreement, Russia once more vociferously
objected to the Bush Administration’s missile defense plan; a Russian general stated that Poland’s
acceptance of the interceptors could make it a target for a nuclear attack.
Some analysts argued that Russia had other motives for raising alarms about the U.S. missile
defense system: to foment discord among NATO member states, and to draw attention away from
Russia’s suppression of domestic dissent, its aggressive foreign policy actions, and its past

136 For additional information, see CRS Report RL34051, Long-Range Ballistic Missile Defense in Europe, by Steven
A. Hildreth and Carl Ek.
137 Prepared by Steven A. Hildreth, Specialist in Missile Defense.
138 Prepared by Carl Ek, Specialist in International Relations.
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nuclear technology cooperation with Iran. Observers pointed out that Russian acceptance of
NATO enlargement in 2004 was conditioned on a tacit understanding that NATO or U.S. military
expansion into the new member states would not occur. The proposed European GMD in this
regard was seen as unacceptable to Russia.
On November 5, 2008—the day after the U.S. presidential election—President Medvedev stated
that Russia would deploy short-range Iskander missiles to the Russian exclave of Kaliningrad,
which borders Poland and Lithuania, if the EC were built. In late January 2009, however, the
Russian media reported that Moscow had “suspended” plans to move short-range missiles to
Kaliningrad because the Obama Administration was not “pushing ahead” with the EC
deployment. However, there were reports that President Medvedev at the July 2009 G-8 (Group
of eight highly industrialized nations) summit may have intimated that the Iskander deployment
was still an option.
On February 7, 2009, at the annual Wehrkunde conference, Vice President Biden stated that “we
will continue to develop missile defenses to counter a growing Iranian capability…. We will do
so in consultation with our NATO allies and Russia.”139 However, the Obama Administration also
indicated that it was prepared to open talks with Tehran if it is willing to shelve its nuclear
program and renounce support of terrorism. During a February 10 visit to Prague, Secretary of
State Hillary Clinton said that any change in U.S. policy on missile defense would depend on
Iran, but that “we are a long, long way from seeing such evidence of any behavior change” in
Iran.140
In early March 2009, the media reported that President Obama had sent a letter to President
Medvedev offering to stop the development of the EC if Russia cooperated with international
efforts to halt Iran’s nuclear weapons and missile programs. President Obama denied such a quid
pro quo, stating that “what I said in the letter was that, obviously, to the extent that we are
lessening Iran’s commitment to nuclear weapons, then that reduces the pressure for, or the need
for a missile defense system. In no way does that diminish my commitment to [the security of ]
Poland, the Czech Republic and other NATO members.”141
In a joint statement issued at their “get acquainted” meeting on April 1, 2009, Presidents Obama
and Medvedev acknowledged that differences remained in their views toward the placement of
U.S. missile defenses in Europe, but pledged to examine “new possibilities for mutual
international cooperation in the field of missile defense.” Later that month, however, Russian
Deputy Foreign Minister Sergey Ryabkov charged that “[U.S.] work in the missile defense has
intensified, including in the NATO format.” Shortly thereafter, in a Russian media interview,
Ryabkov was asked to comment on U.S.-Russia-NATO cooperation on missile defense through
the use of Russian radar installations. He explained that the Russian offer was predicated on the
fulfillment of “certain preliminary stages,” including the U.S. cancellation of the EC program,

139 Vice President Joseph Biden’s speech at the 45th Munich Security Conference, http://www.securityconference.de/
konferenzen/rede.php?menu_2009=&menu_konferenzen=&sprache=en&id=238&
140 “Clinton Says Missile Shield Hinges in Part on Iran,” Reuters, February 10, 2009; “Obama Seen Unlikely to Hedge
on Missile Defense,” Associated Press, February 13, 2009.
141 The White House. Office of the Press Secretary. Remarks By President Obama and British Prime Minister Gordon
Brown After Meeting, March 3, 2009.
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followed by a threat assessment, and then by political and economic measures to eliminate the
threat.142
In early June 2009, a Russian official indicated that Moscow would not likely be willing to
reduce its nuclear weapons arsenal unless the United States were to scrap plans to establish its
missile defense site in Poland and the Czech Republic. However, the Russian government also
stated that it still might deploy Iskander missiles to Kaliningrad if the United States were to
transfer Patriot missile batteries to Poland.143
At the July 2009 U.S.-Russia summit, the two presidents declared in a joint statement that their
governments “plan to continue the discussion concerning the establishment of cooperation in
responding to the challenge of ballistic missile proliferation,” and that both countries would task
experts “to work together to analyze the ballistic missile challenges of the 21st century and to
prepare appropriate recommendations, giving priority to the use of political and diplomatic
methods.” One day after the meeting, however, Russian Foreign Minister Sergey Lavrov stated
that if the Obama Administration decided to pursue missile defense unilaterally, Russia might be
reluctant to reduce its nuclear arsenal.144
As noted above, in September 2009 the Obama Administration’s announced a new program for a
European-based BMD. In Russia, President Medvedev called the change “a responsible move,”
adding that “we value the responsible approach of the U.S. President to our agreement. I am
ready to continue our dialogue.”145 In addition, Moscow appeared to back away from its earlier
signal that it might deploy Iskander missiles to Kaliningrad. In November, the U.S. ambassador to
Ukraine quashed rumors that the United States had been discussing with Kiev deployment of
missile defense facilities in Ukraine.
Some analysts on both sides of the Atlantic, however, argued that cancelling the Bush
Administration’s BMD plan could be viewed by Moscow as a climb-down resulting from
Russia’s incessant diplomatic pressure.146 Further, some critics faulted the White House for not
having gained anything from Moscow in exchange for its change in policy. However, Obama
Administration supporters maintained that Russia likely would not have wished to reveal an
obvious quid pro quo immediately; Administration backers advised critics to wait and see what
actions Russia would take, particularly with respect to cooperation with the United States on
policy toward Iran.

142 “President Obama, Russian President Medvedev Commit To Reduce Nuclear Arms, Reset Relationship,” US Fed
News, April 11, 2009; “Russia Warns U.S. Stepping Up Shield Plans – Agency,” Reuters, April 21, 2009; Russian
Ministry of Foreign Affairs. Interview of Russian Deputy Minister of Foreign Affairs Sergey Ryabkov on Disarmament
Issues, April 23, 2009.
143 “Russian General Links Arms Cuts To Missile Shield,” Associated Press. June 5, 2009; “Russian Source: Patriot
Missiles To ‘Cloak’ Strategic Effort,” Interfax, May 22, 2009.
144 The White House. Office of the Press Secretary. Joint Statement By Dmitry A. Medvedev, President of the Russian
Federation, and Barack Obama, President of the United States, On Missile Defense Issues, July 6, 2009; “Russia
Warns U.S. Over Missile Shield,” Associated Press, July 7, 2009.
145 “Obama Cancels Bush Plan For European Missile Shield That Had Soured Relations With Russia,” Associated
Press Newswire. September 17, 2009; “Medvedev Praises Obama’s Move on Europe Missile Shield,” RIA Novosti,
September 17, 2009.
146 “Russia Could Scrap Baltic Missile Plans Following U.S. Move,” RIA Novosti, September 18, 2009.
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In October 2009, during a visit to Warsaw by Vice President Biden, Polish President Donald Tusk
announced that Poland would participate in the Obama Administration’s new BMD program by
hosting SM-3 short- to medium-range missiles.147
In December 2009, NATO foreign ministers commented favorably on the new U.S. missile
defense plan, and reiterated the alliance’s willingness to cooperate with Russia on the issue,
stating that they reaffirmed “the Alliance’s readiness to explore the potential for linking United
States, NATO and Russian missile defence systems at an appropriate time. The United States’
new approach provides enhanced possibilities to do this.” The Russian media reported that NATO
and Russia had formed a working group to study the issue. In a speech shortly thereafter, NATO
Secretary General Anders Fogh Rasmussen said that he hoped the alliance and Russia would have
a joint system by 2020.148
Before long, however, Russia began to criticize the new U.S. plan for missile defense against
Iran, reviving the argument that it would compromise Russia’s nuclear forces. In late December
Prime Minister Putin tied discussions over missile defense to the renegotiation of START. He
asserted that Moscow would need to beef up its offensive nuclear weapons forces in order to
“preserve a strategic balance” with the planned U.S. missile defense system. A State Department
spokesperson acknowledged the relationship between offensive and defensive missile
capabilities, but maintained that the two countries should discuss missile defense “in a separate
venue.” The Administration also said that it would “continue to reject any negotiated restraints on
U.S. ballistic missile defenses.”149 Observers assert that Putin’s intervention would not likely
affect the disarmament talks. Regarding missile defense, in January 2010 Russian Foreign
Minister Lavrov stated that Russia had “told the U.S. and NATO that it is necessary to start
everything from scratch – to jointly analyze the origin and types of missile proliferation risks and
threats.”150
Also in January 2010, the United States and Poland announced that, under the terms of the August
2008 agreement between Warsaw and Washington, a battery of short-range, surface-to-air Patriot
missiles—along with a crew of about 100 U.S. service personnel—would be rotated from
Germany to Poland in June and stationed close to Poland’s border with Kaliningrad. Foreign
Minister Lavrov claimed that he “doesn’t understand” the apparent need for Poland to defend
itself from Russia. In response to the planned deployment of the Patriots, a Russian official
indicated that Moscow might strengthen its Baltic fleet. In February 2010, a Polish official
expressed doubts that the Patriots would be stationed permanently in Poland.151

147 “US/CEE: Biden Touts New Missile Plan In Central Europe,” Oxford Analytica, October 22, 2009.
148 NATO. Meeting of the North Atlantic Council at the level of Foreign Ministers held at NATO Headquarters,
Brussels: Final Statement, December 4, 2009, at http://www.nato.int/cps/en/natolive/news_59699.htm?mode=
pressrelease; “Russia, NATO Form Working Group on Missile Defense – Rogozin,” RIA Novosti, December 5, 2009;
“Russia Not Ready to Set Up Missile Defense Shield Together With U.S. – Lavrov,” Interfax, January 22, 2010.
149 U.S. Department of Defense. Ballistic Missile Defense Review Report, Pt. IV, February 2010.
150 “Putin Plays MD Card, Placates Hardliners,” Oxford Analytica, December 29, 2009; “Russia to Continue Offensive
Arms to Balance U.S. – Putin,” RIA Novosti, December 29, 2009; “U.S. Missile Shield Holding Up Nuclear Deal –
Putin,” Reuters, December 29, 2009; “U.S. Rejects Russia Shield Concerns,” BBC News, December 29, 2009.
151 “CEE/Russia: CEE Attitudes to Russia become More Sober,” Oxford Analytica, January 21, 2010; “Polish Missile
Base Re-ignites Tension with Russia,” Deutsche Welle, January 22, 2009; “USA May Renege on Patriot Missile
Deployment Accord – Polish Daily,” BBC Monitoring European, February 12, 2010.
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On February 4, 2010, the U.S. and Romanian governments announced that Bucharest had agreed
to host U.S. short-to-medium-range interceptor missiles to extend missile defense into southern
Europe. The Romanians reportedly hope that the deployment will help cement bilateral ties, as
well as protect Romanian territory—the Bush Administration’s plan would only have covered the
western part of the country from a possible Iranian missile launch. A State Department
spokesperson and Romanian President Traian Basescu both stated that the system was not
intended to guard against Russia.
Russian officials, including the chief of Russia’s general staff, countered that the missile defense
system was indeed directed at Russia, and that the proposed deployment likely would delay
negotiations in arms talks between Russia and the United States. Moscow also expressed vexation
over the possibility of U.S Aegis anti-missile ships patrolling the Black Sea. Nevertheless,
commenting on Iran’s stepped-up uranium enrichment activities, the head of Russia’s National
Security Council appeared to confirm international concerns about whether Iran’s eventual goals
are scientific or military; he stated that doubts about Iran’s intentions “are fairly well-grounded.”
However, Dmitry Rogozin, Russia’s ambassador to NATO, stated that “maybe [U.S. BMD] is
against Iran, but this system could be aimed against any other country, including against Russia’s
strategic nuclear potential.” The ambassador took a rather truculent attitude toward the planned
deployment. Writing in Twitter, Rogozin, who reportedly has a reputation for being outspoken,
responded to the Romanian announcement by stating “the Americans and their allies want to
surround the cave of the Russian bear? ... How many times must they be reminded how
dangerous this is!? The bear will come out and kick the ass of these pathetic hunters.”152
Some analysts have argued, however, that the interceptors planned for Romania would not be able
to take out a Russian ICBM launched at the United States. A Russian military analyst, writing in
RIA Novosti, conceded that the Obama-proposed SM-3 interceptors stationed anywhere in Europe
would be incapable of downing Russian long-range ballistic missiles. He argued that Moscow’s
main objections were that 1) it had not been consulted on the decision, and 2) the U.S. system
might be subject to change. On the first point, a spokesperson for the Romanian Foreign Ministry
maintained that Russia had been kept in the loop, stating that “information coming from our
American partners indicate that in the time that followed the September 2009 announcement by
the U.S. president, the U.S. had detailed consultations with Russia concerning their plans for the
anti-missile defense system.” Also, on February 16, U.S. Under Secretary of State for Arms
Control and International Security Ellen Tauscher stated that Russia had been told of the planned
deployment to Romania. On the latter point, Russia is concerned that the SM-3 interceptors could
eventually be upgraded to bring down ICBMs without Russia’s knowledge, as the United States is
not required to share information about its missile defense system.153

152 “Russia Says Concerned at Romania Hosting U.S. Missiles,” Reuters News, February 5, 2010; “Russia: Disconnect
Between MD Policy, Iran Persist,” IHS Global Insight Daily Analysis, February 5, 2010; “Romania Agrees to Host
U.S. Anti-Missile System,” Oxford Analytica,. February 10, 2010; “Russia Toughens Line on Iran Nuclear Ambitions,”
Agence France Presse, February 9, 2010; “Twitter Diplomacy: Envoy Says Russia Will ‘Kick Ass’ of U.S.” Agence
France Presse, February 10, 2010.
153 “Romania Says U.S. Informed Russia on Anti-missile Shield Plan,” BBC Monitoring European, February 10, 2010;
“U.S. Kept Russia Informed About Romania Missiles Plan – U.S. Diplomat,” Interfax, February 16, 2010; “U.S. and
Romania: A New Alignment?” RIA Novosti, February 9, 2010; “Russia Cool to U.S. Plan for Missiles in Romania,”
New York Times, February 6, 2010.
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On February 12, Bulgaria’s prime minister announced that he supported participation in the U.S.
missile defense system; the U.S. ambassador to Bulgaria confirmed that discussions on such a
deployment were in their early stages with Bulgaria—and with other countries. Bulgaria’s foreign
minister noted that the missile shield would also protect Russia from the threat of Iranian
missiles. Russia, however, professed that it had been caught unawares by the announcement;
Foreign Minister Lavrov stated that “we have already questioned our U.S. partners in Washington
... as to the meaning of this, and why we have this Bulgarian surprise after the Romanian
surprise.” Russian NATO Ambassador Rogozin tweeted that “Bulgarians are our brothers, but
politically they are promiscuous.” A few days later, Russia turned aside an apparent offer by
Transnistria, a breakaway region of Moldova, to host Russian Iskander missiles.154
It has been argued that the new U.S. focus on Southern Europe is likely viewed with less alarm by
Russia than the former plan, which included Poland and the Czech Republic. However, a member
of the Russian Duma claimed that the possible deployments do not square with the Obama
Administration’s intention to improve relations with the Russian Federation. Konstantin
Kosachyov, chairman of the Duma’s International Affairs Committee, stated on February 16 that
“the most regrettable thing is that these plans [to deploy missile defense facilities] do not fit the
well known ‘reset’ program in Russian-American relations in any way.”155
Russia sought to tie discussions over missile defense to the renegotiation of START, contrary to
the July 2009 agreement reached by Presidents Obama and Medvedev not to link the two.
However, the United States refused to accede to the Russian position, and on April 8, 2010, the
two governments signed the New START Treaty, which was ratified by the U.S. Senate in
December and by the Russian Duma in January 2011. The agreement acknowledges that there is a
relationship between offensive and defensive systems, but does not place any limits on missile
defense or on the expanded system that has been proposed by the Obama Administration.156
On July 3, 2010, Secretary of State Clinton and Polish Foreign Minister Radek Sikorski signed an
annex to the 2008 U.S.-Poland agreement permitting the deployment of U.S. BMD in Poland.
The amendment provided approval for the deployment of SM-3 missiles, rather than silo-based
interceptors. After the signing ceremony, Sikorski stated that Russia would be permitted to
inspect the facilities. Russian Deputy Foreign Minister Ryabkov declared that Moscow did not
believe that the potential threat from Iran warranted an anti-missile system such as the Obama
Administration was planning to put in place; Foreign Ministry Spokesman Andrei Nesterenko
echoed these comments, and also complained of insufficient consultation. However, a Russian
parliamentarian stated that “there will be detailed discussions [concerning the proposed SM-3
deployment], but they will not be confrontational.”157

154 “Bulgaria Wants to Participate in US Missile Defense Shield: PM,” Agence France Presse, February 12, 2010;
“Russia Wants Bulgaria to Explain favor of U.S. Missile Shield,” Agence France Presse, February 14, 2010; “Russia’s
NATO Envoy Quashes Transdniestr Missiles Bid – Report,” Dow Jones International Press, February 16, 2010; “U.S.
Missile Shield Not Targeting Russia, Bulgaria Says,” Agence France Presse, February 17, 2010; “Dmitry Rogozin
Accuses Bulgarian Leadership of ‘Political Promiscuity,’” WPS: Defense and Security, February 17, 2010.
155 “U.S. New Missile Defense Plans Do Not Fit Logic of ‘Reset’ Policy – Russian MP,” Interfax, February 16, 2010.
156 CRS Report R41251, Ballistic Missile Defense and Offensive Arms Reductions: A Review of the Historical Record,
by Steven A. Hildreth and Amy F. Woolf.
157 “Moscow Says European Missile Defense Unjustified,” RIA Novosti, July 6, 2010; “U.S. & NATO Good Intentions
at Discrepancy with Deeds – RF ForMin,” ITAR-TASS World Service, July 5, 2010; “Moscow to Discuss Missile
Defense with Warsaw in Non-confrontational Way,” Interfax: Russia & CIS Military Newswire, July 5, 2010.
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Also in July 2010, it was reported that NATO Secretary General Rasmussen hoped not only to
have the Obama Administration’s PAA adopted as an additional alliance capability, but also to
have Russia participate with NATO in missile defense. Partnering with Russia would, in
Rasmussen’s words, “demonstrate that missile defence is not against Russia, but to protect
Russia.”158 In September, Russia was invited to attend the Lisbon summit meeting in November;
Rasmussen indicated he hoped that cooperation on missile defense could be taken up by the
NATO-Russia Council. Although some Russian officials continued to express misgivings about
the U.S./NATO missile defense plans, on October 20, 2010, President Medvedev announced that
he would attend the meeting in Lisbon.159
At their November 19-20, 2010, summit in Lisbon, NATO heads of state and government
officially identified territorial missile defense as a core alliance objective, and adopted it as a
NATO program in response to the threat of ballistic missile proliferation by potentially unfriendly
regimes. The NATO-Russia Council (NRC) meeting, held in conjunction with the alliance
meeting, endorsed cooperation between NATO and Moscow in the area of missile defense. The
NRC Joint Statement declared that
[w]e agreed to discuss pursuing missile defense cooperation. We agreed on a joint ballistic
missile threat assessment and to continue dialog in this area. The NRC will also resume
Theater Missile Defense Cooperation. We have tasked the NRC to develop a comprehensive
Joint Analysis of the future framework for missile defense cooperation. The progress of this
Analysis will be assessed at the June 2011 meeting of NRC Defense Ministers.160
The NATO-Russia accord did not constitute immediate full collaboration; rather, Russia approved
the involvement of Russian technicians in the planning and development of the system. President
Medvedev cautioned that missile defense cooperation must eventually amount to “a full-fledged
strategic partnership between Russia and NATO.” However, a State Department official
emphasized that, although Russia would be involved in the program, the United States would
“continue to reject any constraints or limitations on our missile defense plans.” In a televised
interview with Larry King, Prime Minister Putin indicated that if Russia perceives that the
PAA/NATO missile defense program is compromising Moscow’s nuclear deterrent, “Russia will
just have to protect itself using various means, including the deployment of new missile systems
to counter the new threats to our borders.”161
Analysts have argued that, despite its often-voiced reservations, Russia may have believed itself
compelled to cooperate on missile defense; because Russia could “neither block the [emergence
of missile defense] in Europe nor restrict its capacity by means of treaty constraints, [instead] the

158 “Trust, But Make Military Plans/NATO and Russia,” The Economist. July 31, 2010. For additional information, see
“A Primer On transatlantic Missile Defense,” by Patricia A. Puttmann and Robert Bracknell, The Atlantic Council.
October 2010.
159 “Russia Voices Skepticism Over NATO Missile Shield,” Agence France Presse. October 15, 2010. “Russia Accepts
Invitation To Attend NATO Summit Meeting,” New York Times. October 20, 2010.
160 NATO-Russia Council Joint Statement. November 20, 2010. NATO web site:
http://www.nato.int/cps/en/natolive/news_68871.htm?selectedLocale=en
161 “NATO Invites Russia To Join Europe Missile Shield,” The Washington Post, November 20, 2010. “Russia To Aid
NATO On Anti-Missile Network In Europe.’” The Washington Post, November 20, 2010. Europe and Eurasia: The
Obama Administration’s Efforts To Implement the European Phased Adaptive Approach. Testimony before the House
Armed Services Subcommittee on Strategic Forces by U.S. Deputy Assistant Secretary of State Frank A. Rose.
December 2, 2010. Transcript of TV Interview Vladimir Putin to CNN’s Larry King. RIA-Oreanda News. December 2,
2010.
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only way ... to influence its shape is to join the [missile defense] program on as favorable terms as
can possibly be snatched.”162 On December 20, 2010, Russian Foreign Minister Lavrov indicated
that Russian acceptance of and participation in NATO missile defense would be fundamental to
the success of such a system—and for improved Russia-NATO relations.163 Although details as to
how Russia might cooperate technologically remain to be seen, it is clear that NATO and the
United States want to find ways to engage Russia in partnership on BMD.
In an address to the nation on November 30, 2010, Russian President Medvedev buttressed his
case for striking a deal with Washington on missile defense. The Russian leader emphasized that
the absence of such an agreement might lead to a new arms buildup—one that a financially
strapped Russia could ill afford: “We will either come to terms on missile defense and form a full-
fledged joint mechanism of cooperation or ... we will plunge into a new arms race and have to
think of deploying new strike means, and it’s obvious that this scenario will be very hard.” A
Russian political analyst noted that “we know that it was the arms race that led to the
disintegration of the Soviet Union.... Russia is not ready financially for a new arms race.”164
At the Lisbon summit, Medvedev suggested without elaborating that Moscow preferred a
“sectoral” approach to missile defense. The plan was later clarified as one under which Russia
and NATO would guard the airspace above their respective territories: Russia would be
responsible for taking out missiles crossing its territory toward Europe, while NATO countries
would shoot down over Europe any missiles headed toward Russia. Moscow reportedly is seeking
agreement on such a plan because it remains concerned that the Phased Adaptive Approach might
eventually compromise Russia’s nuclear forces.
Although Moscow is advocating a “common” system with sectoral defense responsibilities,
NATO Secretary General Rasmussen has insisted that NATO and Russia must maintain
independent systems, and that cooperation will consist of information sharing. The Russian
proposal reportedly is unacceptable to NATO for reasons of both sovereignty and capabilities.
According to Rasmussen, NATO “is responsible for protecting the territory of NATO member
states and for the safety of their populations. We do not intend to transfer that responsibility to
anyone else.” In addition, analysts note that current Russian missile defense technology lags far
behind that of the NATO countries.165 But Moscow has stated that it wants specific details about
the arrangement. Russian leaders claim that they have not received “a direct and clear”
description of Russia’s role.166 Moscow is also now seeking written assurances from the United
States and NATO that the interceptors not be aimed at Russia.167

162 Prospects For Joint Russia-NATO Missile Defence System. By Beata Gorka-Winter, Robert Smigielski. Bulletin of
the Polish Institute of International Affairs. No. 129 (205). October 29, 2010.
163 “Success of Russia-NATO Relations Improvement Process Not Guaranteed - Lavrov Tells Interfax,” Interfax Russia
and CIS General Newswire. December 20, 2010.
164 “Russian President Warns of New Arms Race,” Washington Post, December 1, 2010. p. A8.
165 “Medvedev Wants Missile Defence Carve-up Of Europe: Reports,” Agence France Presse, November 22, 2010.
“NATO, Russia Missile Systems To Stay Separate: NATO Chief,” Agence France Presse, January 20, 2011. “NATO,
Russia vow unity on terrorism, disagree on shield,” Agence France Presse, January 26, 2011. “The Boogeyman the
Kremlin Loves To Hate,” The Moscow Times, February 8, 2011.
166 CRS Report R41549, Missile Defense and NATO’s Lisbon Summit, by Steven A. Hildreth and Carl Ek. “NATO,
Russia Missile Systems To Stay Separate: NATO Chief,” Agence France Presse, January 20, 2011. “Russia Waiting
For NATO Response To European Missile Defense Offer – Medvedev,” Interfax: Russia & CIS Military Newswire,
January 24, 2011.
167 “Russia Seeks Pledge From NATO On Missile Defense,” New York Times, May 21, 2011.
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In March 2011, the Russian media reported a view that appeared to be somewhat at variance with
other comments of the country’s political and military leaders. According to a official within the
Russian general staff, interceptors deployed in Poland would not represent a threat to Russia’s
nuclear force, as they would only be capable of shooting down mid- and short-range missiles.168
Negotiations over a new missile defense architecture continued through the first half of the year.
Vice President Joseph Biden met with President Medvedev and Prime Minister Putin in mid-
March 2011, and Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, met with his
Russian counterpart in early May 2011, and at the end of the month, President Obama and
Medvedev discussed the issue during the G-8 meeting in Deauville, France.
On June 1, 2011, during a meeting in Bulgaria of a working group on missile defense, Russian
Duma International Affairs Committee Chairman Konstantin Kosachyov warned that the
European missile defenses would be inoperable without Russian participation. He also
questioned whether the presumed threat justified the “colossal” costs of deploying a missile
defense system. On June 2, President Medvedev expressed impatience with the pace of ongoing
negotiations, stating “So far, I’m not pleased with how the U.S. and all NATO countries reacted to
my proposals because we are losing time.”169 NATO member state and Russian defense ministers
will take up the issue of missile defense, among other issues, on June 8.
U.S.-Russia Economic Ties170
U.S.-Russian trade and investment flows have increased in the post-Cold War period, reflecting
the changed U.S.-Russian relationship. Many experts have suggested that the relationship could
expand even further. U.S.-Russian trade, at least U.S. imports, has grown appreciably. The surge
in the value of imports is largely to attributable to the rise in the world prices of oil and other
natural resources—which comprise the large share of U.S. imports from Russia—and not to an
increase in the volume of imports. U.S. exports span a range of products including meat,
machinery parts, and aircraft parts. U.S. imports increased more than 244%, from $7.8 billion to
$26.8 billion from 2000 to 2008, and U.S. exports rose 343%, from $2.1 billion to $9.3 billion.
However, U.S. exports and imports with Russia declined substantially in 2009, as a result of the
global financial crisis and economic downturn, but increased in 2010 as both countries have
shown signs of recovery.
Table 1. U.S. Merchandise Trade with Russia, 1993-2010
(in billions of dollars)
U.S.
U.S.
U.S.
U.S.
Trade
U.S.
U.S.
Trade
Year
Exports
Imports
Balances Year
Exports
Imports
Balances
1993
3.0 1.7 1.3
2002 2.4 6.8

-4.4
1994
2.6 3.2 -0.6
2003 2.4 8.6 -6.2

168 “US Plans To Deploy ABM In Poland ‘No Threat To Russia’ – Russian Source,” Interfax, March 5, 2011.
169 “Without Russia, European Missile Defense Is Doomed,” The Voice of Russia, June 1, 2011. “Medvedev Says
Russia, US ‘Losing Time’ On Missile Defense,” Space Daily, June 2, 2011.
170 Prepared by William H. Cooper, Specialist in International Trade and Finance.
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U.S.
U.S.
U.S.
U.S.
Trade
U.S.
U.S.
Trade
Year
Exports
Imports
Balances
Year
Exports
Imports
Balances
1995
2.8 4.0 -1.2
2004 3.0 11.9 -8.9
1996
3.3 3.6 -0.3
2005 3.9 15.3
-11.3
1997
3.4 4.3 -0.9
2006 4.7 19.8
-15.1
1998
3.6 5.7 -2.1
2007 7.4 19.4
-12.0
1999
2.1 5.9 -3.8
2008 9.3 26.8
-17.5
2000
2.1 7.7 -5.6
2009 5.4 18.2
-12.8
2001
2.7 6.3 -3.5
2010 6.0 25.7
-19.7
Source: Compiled by CRS from U.S. Department of Commerce, U.S. Census Bureau data. FT900.
Note: Major U.S. exports: machinery; vehicles; meat; aircraft. Major U.S. imports: mineral fuels; inorganic
chemicals aluminum; steel.
Russia accounted for 1.3% of U.S. imports and 0.5% of U.S. exports in 2010, and the United
States accounted for 3.1% of Russian exports and 5.1% of Russian imports.171 Russia was the
37th-largest export market and 17th-largest source of imports for the United States in
2010.According to Russian government data, by the end of 2010, the United States accounted for
less than 2.5% of total accumulated foreign direct and portfolio investments in Russia and was the
However, the first three countries were Cyprus (20.7%), the Netherlands (13.5%), and
Luxembourg (11.7%), suggesting that at least 50% of the investments might have been repatriated
Russian funds.172
Russia and the United States have never been major economic partners, and it unlikely that the
significance of bilateral trade will increase much in the near term. However, in some areas, such
as agriculture, Russia has become an important market for U.S. exports. Russia is the largest
foreign market for U.S. poultry. Furthermore, U.S. exports to Russia of energy exploration
equipment and technology, as well as industrial and agricultural equipment, have increased as the
dollar has declined in value. Russian demand for these products will likely grow as old equipment
and technology need to be replaced and modernized. Russia’s significance as a supplier of U.S.
imports will also likely remain small given the lack of international competitiveness of Russian
production outside of oil, gas, and other natural resources. U.S.-Russian investment relations
could grow tighter if Russia’s business climate improves; however, U.S. business concerns about
the Russian government’s seemingly capricious intervention in energy and other sectors could
dampen the enthusiasm of all but adventuresome investors.
The greater importance of Russia’s economic policies and prospects to the United States lies in
their indirect effect on the overall economic and political environment in which the United States
and Russia operate. From this perspective, Russia’s continuing economic stability and growth can
be considered positive for the United States. Because financial markets are interrelated, chaos in
even some of the smaller economies can cause uncertainty throughout the rest of the world. Such
was the case during Russia’s financial meltdown in 1998 and more recently with the 2008-2009
crisis. Promotion of economic stability in Russia has been a basis for U.S. support for Russia’s

171 World Trade Atlas. Global Trade Information Services, Inc.
172 Russian Federal Statistics Service. http://www.gks.ru.
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membership in international economic organizations, including the IMF, the World Bank, and the
WTO. As a major oil producer and exporter, Russia influences world oil prices that affect U.S.
consumers.
U.S. Assistance to Russia
From FY1992 through FY2009, the U.S. government has budgeted about $18 billion in assistance
to Russia. The bulk of this assistance (nearly 60%) has been expended on CTR (Nunn-Lugar) and
other security-related programs aiming to prevent the proliferation of WMD, combat drug-
trafficking and transnational crime, foster law enforcement and criminal justice sector reforms,
and support reconciliation and recovery efforts in Chechnya and other areas of the North
Caucasus. Other aid has been provided for democratization, market reform, and health needs.
U.S. assistance to Russia as a percentage of all aid to Eurasia has declined over the years, but
historically Russia has received about one-half of all U.S. assistance to Eurasia.173
Annual foreign operations appropriations bills have contained conditions that Russia is expected
to meet in order to receive assistance:
• A restriction on aid to Russia was approved in the FY1998 appropriations act and
each year thereafter, prohibiting any aid to the central government (local and
regional government assistance is permitted) unless the President certifies that
Russia has not implemented a law discriminating against religious minorities.
Successive administrations have made such determinations each year.
• Since FY1996, direct assistance to the government of Russia has hinged on
whether it is continuing the sale of nuclear reactor technology to Iran. As a result,
in most years as much as 60% of planned U.S. assistance to Russia’s federal
government has been cut.
• The FY2001 foreign aid bill prohibited 60% of aid to the central government of
Russia if it was not cooperating with international investigations of war crime
allegations in Chechnya or providing access to NGOs doing humanitarian work
in Chechnya. Possibly as a result of Russian cooperation with the United States
in its war on terrorism, the war crime provision was dropped in subsequent years.


173 See CRS Report RL32866, U.S. Assistance to the Former Soviet Union, by Curt Tarnoff.
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Table 2. U.S. Government Funds Budgeted for Assistance to Russia, FY1992-FY2009
(in millions of dollars)
Fiscal
Year/
Program
Area
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Total
Economic
84.68 137.21 1187.92
231.37
72.69 39.35 51.21 74.0
58.65 60.13 60.62 54.47 33.93 9.54 7.71 3.41
1.21 0.91
2169.01
Growth
Governing
33.93 63.82 238.65 70.8 49.97 38.16 67.27 83.85 68.26 82.26 79.89 79.98 64.31 64.04 78.7 57.41 67.88 59.87 1349.05
Justly &
Democr.
Humanit.
167.89
1060.4
39.49 48.44
35.34
0.93 6.34 1167.34
243.1 92.37
23.83 26.1 19.97
1.5 13.23
0.0
3.67 4.2
2954.14
Asst.
Investing
13.1 8.31
79.85 12.67 10.98 10.59 10.55 15.42 15.88 21.92 21.92 19.36 21.31 28.59 23.82 23.95 29.64 23.71 391.57
in People
Peace &
28.81 182.71 361.69 203.19
323.18
456.21
461.36
790.05 667.52 694.86
822.79 727.59
802.43
897.75
854.8 926.66 779.58
1093.58
11074.76
Security
Program
0 0 4.0 0.44
0 0 0 0 0 0 0 0 0 0 0.1
1.25
1.41
7.84
15.04
Support
Cross-
0
0 0 0
0
0
0
0 0 4.19
5.49
5.0
2.71
6.88
4.48
0 0
0 28.75
Cutting
Total
328.41 1452.45 1911.6 566.91 492.16 545.24 596.73 2130.66 1053.41 955.73 1014.54 912.5 944.66 1008.3 982.84 1012.68 883.39 1190.11 17982.32
As % of


















48
Eurasia
aid
Source: U.S. Department of State, Office of the Coordinator of U.S. Assistance to Europe and Eurasia. Includes Freedom Support Act and other program and agency
assistance.

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Table 3. Assistance to Russia, FY2010-FY2011, and the FY2012 Request
(in millions of dollars)
Fiscal Year/Program
FY2012
Area
FY2010 Actual
FY2011 Request*
Request
Economic Growth
0.5
0.475
0.5
Governing Justly &
37.021 35.19 35.434
Democratically
Investing in People
22.508
21.979
19.34
Peace & Security
11.471
11.056
9.361
Total 71.5
68.7
64.635
As Percent of
12 11 13
Eurasian Assistance
Source: U.S. Department of State. Congressional Budget Justification for Foreign Operations, Annex: Regional
Perspectives, FY2011, March 2010.
Notes: Includes the Assistance for Europe, Eurasia, and Central Asia (AEECA) Account, Foreign Military
Financing, Global Health and Child Survival funds, International Military Education and Training funds, and the
State Department’s Non-proliferation, Anti-terrorism, Demining, and Related Programs. Does not include
Defense or Energy Department programs.
* Country totals for foreign assistance under the continuing resolution, H.R. 1473; P.L. 112-10, signed into law
on April 15, 2011, are being finalized.

Author Contact Information

Jim Nichol, Coordinator
Amy F. Woolf
Specialist in Russian and Eurasian Affairs
Specialist in Nuclear Weapons Policy
jnichol@crs.loc.gov, 7-2289
awoolf@crs.loc.gov, 7-2379
William H. Cooper
Steven A. Hildreth
Specialist in International Trade and Finance
Specialist in Missile Defense
wcooper@crs.loc.gov, 7-7749
shildreth@crs.loc.gov, 7-7635
Carl Ek
Paul Belkin
Specialist in International Relations
Analyst in European Affairs
cek@crs.loc.gov, 7-7286
pbelkin@crs.loc.gov, 7-0220
Steven Woehrel
Derek E. Mix
Specialist in European Affairs
Analyst in European Affairs
swoehrel@crs.loc.gov, 7-2291
dmix@crs.loc.gov, 7-9116

Acknowledgments
Some portions of this report are based on the work of former Specialist in Russian and Eurasian Affairs
Stuart Goldman.

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