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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russia Update: March 6, 2015

Publication: Russia Update
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The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russian Opposition Leader Navalny Chosen Among Time's 30 Most Influential People on the Internet

Today, anti-corruption blogger Alexey Navalny got out of jail after serving 15 days for leaf-letting -- last month, when he and Boris Nemtsov, his fellow opposition leader now dead, went out to leaflet in the metro for an opposition march that never happened.

He and his followers were pleased to discover that Navalny has been selected by Time magazine as one of the 30 most influential people on the Internet -- right up their with Beyonce, Justin Bieber, Matt Drudge and Taylor Swift.


In fact, Navalny is one of only 7 foreigners on a list dominated by Americans.

While he was under house arrest, and supposedly barred from the Internet, Navalny managed to post constantly on Twitter, Facebook, and his own web site through his wife and colleagues. Even while he was in jail, he penned a statement about the meaning of the assassination of Nemtsov.

The Internet has amplified the critical voice of Navalny and many others, but it is also a ephemeral means of building a constituency in Russia because at any time the government can block web sites. While circumvention tools make it possible to get around the censorship, readership is lost. Now Russia is threatening even to block or control Western social media by requiring company servers with customer data to be placed on Russian soil.

-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Wife of Navalny's Anti-Corruption Former Fund Director Reported 'Wanted' By Interpol - But Is She?

Yesterday, March 5, Russian media, both state and independent, reported that Aleksandrina Markvo, the common-law wife of Vladimir Ashkurov, the former director of Alexey Navalny's Anti-Corruption Fund, was now "declared wanted by Interpol".

The announcement relates to a case which we reported in December 2014 opened up against Markvo and her driver, Andrei Mylnikov, nominal director of BYURO17, a company she created, on charges of embezzlement in fulfilling a state contract. In February, Moscow's Basmanny Court issued an arrest warrant for Markov.

"We declared her to be on the international wanted list, and through Interpol channels we will establish her location," said Yelena Alekseyeva, a Russian Interior Ministry official. An announcement was placed on the Interior Ministry's web site regarding the request to extradite Markvo sent to Interpol.

This announcement was taken at face value, and many readers likely had no doubt that now a respected international policing body had taken up the fight against alleged corrupt opposition members in Russia.

The problem is that the Interpol web site does not even have Markvo's case, and there is no evidence that international Interpol -- a body made up of the sum of its constituent country members -- has in fact accepted this case as valid.

And that's because Russia's notification to Interpol and the misleading claim that she is now "on the international wanted list" doesn't mean that now there is recognition by the international community that what someone is alleged to have done is a crime.

In fact, as press has reported, there is massive abuse of Interpol by Russia and other Eurasian states, even as Russia produces the overwhelming number of criminals on Interpol's list (1,245 cases, whereas other countries in Europe have in the double or low triple digits.) Many political activists from Russia, the Caucasus and Central Asia have found themselves unjustly placed on Interpol's list, harassed and detained at international airports, and have had to fight their way to recognition of their innocence.

As a result, both the Parliamentary Assembly of the Council of Europe (PACE) and the Organization for Security and Cooperation in Europe (OSCE) have done studies about this rampant problem, whereby the Kremlin and other regional regimes file cases to Interpol about people who are actually just critics of oppressive governments or members of opposition parties.

No information has been supplied by the independent media to exonerate Markov, but judging from the case itself, as we reported, there are questions about the government's charges. Like the other economic cases brought against Navalny, this one seems politically motivated and the evidence flimsy. Markvo had a PR firm and a contract with a city government office to do literary events in parks to promote Russian classics and reading among young people. The claim is that prizes she purchased with city funds to give out at competitions were undervalued, and that an event she was supposed to have arranged in a rented space to give them was never held. The amount the government believe was "diverted to the opposition" was about $36,000.

The fact that a company she created has her own driver as an officer is an instant recipe for derision among Russian readers, as they are all too familiar with legion examples of bogus companies named after animals and flowers or the initials of their relatives, created by corrupt officials using the names of their spouses, children, drivers, nannies and sometimes just random people in provincial cities who may have just gotten out of jail. But drivers are also trusted confidantes in Russia, and by itself, it is not a crime to put your driver in a company.

Ashkurov has fled to London with his wife, and she had a baby last year; their whereabouts aren't a mystery as Ashkurov has given interviews to the British press. They have applied for political asylum. Asylum can be granted not on the basis of determination of innocence regarding criminal charges (although this can be a factor) but is issued when the person faces "a well-founded fear of persecution" and might face torture if imprisoned upon return. Thus asylum is likely in this case and in this climate in the UK, where the Litvinenko inquiry is now finally proceeding.

A goal of the highly-politicized Investigative Committee, which has now been discovered openly defying even a request from the prosecutor to drop the "art theft" case against Navalny for lack of evidence, is to find cases that will illustrate the Anti-Corruption Fund runs counter to its own principles and its officers themselves are corrupt. This has been the theme of every case against Navalny and his colleagues at the fund. In the Yves Roches case, for example, while the French firm ultimately had no claims against Navalny or his brother for wrong-doing, Russian officials claimed they could find evidence of fraud and sentenced Navalny to 3.5 years' suspended imprisonment and his brother to 3.5 years of forced labor.

We don't know if the charges here stick, but many questions have to be asked about "Interpol cases" starting with the absence of the case on Interpol's international web site.

-- Catherine A. Fitzpatrick

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Ukrainian Prosecutor's Office Says Duritskaya Received Death Threats After Nemtsov Murder

Interfax-Ukraine reports that the office of the Ukrainian Prosecutor General has announced the opening of a criminal investigation into death threats received by Anna Duritskaya (also referred to by her name in Ukrainian, Hanna Duritska), a Ukrainian citizen who was with Boris Nemtsov when he was assassinated a week ago.

"Prosecutor General of Ukraine Viktor Shokin has ordered that all necessary measures be taken to protect the life and health of Hanna Durytska, a witness in the killing of Russian opposition politician Boris Nemtsov," it said.

On March 5, Durytska alerted the Bila Tserkva police department in Kyiv region that she had received death threats from unknown people while staying with her parents, the Prosecutor General's Office said.

Acting on orders issued by the Kyiv region Prosecutor's Office, the Bila Tserkva police department opened a criminal investigation on counts of "attempted premeditated murder", it said.

All measures are now being taken in order to protect Durytska's life and health. The Ukrainian prosecutor general is personally coordinating the inquiry.

Duritskaya returned home to Ukraine on the evening of Monday, March 2

Her lawyer, Vadim Prokhorov, reported that she had been held in a private apartment and kept under surveillance while in Moscow.

-- Pierre Vaux

The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
One Year After US Sanctions Began Against Russia Over Its War in Ukraine, Are They Working?

One year ago today, the US government announced its first sanctions against Russia over the forcible annexation of the Crimea.

Philip Shishkin published a story in the Wall Street Journal today showing the effect of Western sanctions as just revealed by the US:

Banks controlled by three billionaire friends of Russian President Vladimir Putin have seen about $640 million of assets frozen in the U.S. as retaliation for the Kremlin’s actions in Ukraine, according to U.S. government records.

The figures, not previously reported, show the surprising extent to which the economic sanctions imposed by the U.S. have pinched the pockets of some of Russia’s most politically connected firms.

Hit the hardest is Bank Rossiya, which had at least $572 million blocked in U.S. accounts, according to records released to The Wall Street Journal by the Treasury Department. That is equivalent to roughly 10% of its 2013 assets, at today’s exchange rate.

The St. Petersburg bank, whose founder Yuri Kovalchuk is alleged by the U.S. to be one of Mr. Putin’s “cashiers,” was described by the Obama administration as a personal bank for senior Russian officials.

See  U.S. Sanctions Over Ukraine Hit Two Russian Banks Hardest

While it would seem that freezing the assets of oligarchs close to Putin, especially his "cashier" would have some impact, a key point by those arguing against sanctions now is that they don't work, says Shishkin:

The idea was to penalize the Kremlin’s inner circle and increase the pressure on Mr. Putin to change course. Yet, nearly a year after the Kremlin grabbed Crimea from Ukraine, there is no evidence the strategy has substantially affected Mr. Putin’s calculus.

Even as Western sanctions help push the Russian economy toward recession, Western officials say Moscow has continued to support and arm separatists in eastern Ukraine in a fight that has claimed some 6,000 lives.

Yet the debate to have isn't about whether sanctions "stopped" the supporting and arming of separatists but whether they curbed the escalation of the conflict or even reduced it, and whether they forced Putin to come to the negotiations table. That they did in September 2014 at the Minsk talks, after an offensive in Ilovaisk in which Russia lost a lot of its own soldiers, although it did not admit it.

As we can see from the list of announcements of sanctions, the Obama Administration announced further sanctions on July 29. This didn't stop the August offensive, but it may have been a factor in forcing the Minsk agreement September 5. The US went on to announce additional sanctions on September 11 "within Russia's financial services, defense or related materiel, and energy services sectors" and this was warranted, both in response to the August offensive and to make clear that ceasefires would be rewarded only if they really worked. This one didn't, which is why it lead to the second Minsk agreement of February 12.

If this ceasefire holds -- and it has had serious violations from the beginning, starting with the grab by Russian-backed forces of Debaltsevo and the continued pressure on the front line in order to obtain more territory -- the issue of whether to withdraw sanctions will once again be debated.

Indeed, it is already being debated,  along with the issue of whether to supply Ukraine with lethal military aid.

Yesterday in the New York Times Samuel Charap and Bernard Sucher argued that sanctions will "backfire" -- that is, they will work all too well in actually influencing Russian behavior, at a time when others are arguing that they have "no" or "little" influence on Russian behavior, but will work in the wrong direction, counter to US interests.

Interestingly, while the authors invoke the prospect that Russia may "become more belligerent if externally inflicted economic blows deepen the country’s crisis," they don't concede that other factors led to the economic crisis for which Putin's own policies, not Western sanctions are to blame. These include the tripling of the deficit of Russia's regions in 2013 to 642 billion rubles ($9.5 billion) after they over-extended themselves to meet Putin's populistic campaign pledges, as Prof. Natalya Zubarevich of Moscow State University, an economic geographer, told in connection with a conference Vyacheslav Volodin, deputy head of the presidential administration, held with regional governors.

As we pointed out in December, sanctions, while certainly a contributing factor, did not even start the collapse of the ruble. Putin's policies did.

Read: It’s Not Just Oil And Sanctions Killing Russia’s Economy: It’s Putin

Indeed, the pain Putin and his cronies may feel personally from the sanctions' pinch could make them double down in anger and defiance, continue to perpetrate the war in Ukraine, and make other police and military crackdowns at home and abroad. But since they began this war before any sanctions, and there is evidence that the Kremlin planned for not just annexation of the Crimea but also the Donbass, sanctions cannot be blamed for the war.

Putin may be following this trajectory of militarization and aggression all on his own, regardless of sanctions  -- as he did for years before sanctions, with the war in Georgia leading to the seizure of Abkhazia and South Ossetia, and as he did in the years when the US was friendly to him during the "re-set" from 2009 until December 2012, during which the Kremlin cracked down on opposition marches challenging Putin's fraudulent re-election.

That date doesn't mark the end of the re-set -- which persisted until early 2014 -- but it was the month when the Magnitsky Act was passed to place sanctions on those responsible for the death of lawyer Sergei Magnitsky and other officials who committed mass violations of human rights. Russia immediately retaliated by ending US adoptions of Russian orphans, expelling USAID and forcing private US foundations to leave, and ending other types of exchanges.

Charap and Sucher also invoke the damages supposedly brought to US interests if Russia is not integrated into the world financial system. In fact, it was only with the removal of the application of the Jackson-Vanik to Russia, and the related passage of the Magnitsky Act that the way was cleared to bring Russia into the World Trade Organization. Jackson-Vanik, the Soviet-era vehicle for addressing human rights issues by linking them to trade, was replaced by the Magnitsky Act, which removed linkage but kept punishment.

The problem with integration Russia into the world trade system isn't just the high level of human rights issues -- which are also a marker for lack of transparency and the rule of law for business. It's the high level of crime, as court cases in the dockets of courts in London and New York illustrate along with with scholarly studies. Bill Browder's Red Notice, an account of how his tax attorney Magnitsky was allowed to die in prison after he uncovered a scheme to steal $230 million, is a good expose of how the criminalized Russian state works in these cases.

Charap and Sucher maintain that ordinary people who are ostensibly harmed by sanctions will only turn further against the US -- and we could add, will have a lot of help to do so from Russian TV propaganda. Yet while economic hardship in Russia now is real, arguably it doesn't come from sanctions, but from the crash of the ruble, which is tied both to the drop in the price of oil, and a loss of faith in the credit and good will of the Russian state,  which in turn comes about from the war in Ukraine itself and other politicized actions like seizing Bashneft from a top oligarch and re-nationalizing it, years after its purchase.

Ordinary Russians have been more affected by the counter-sanctions imposed by Russia on food imports which caused them to face shortages and of course by the loss of a third of their income and savings -- which is about the ruble crash, again, not something that can be directly booked to sanctions.

Charap and Sucher also make a new argument in this debate we haven't seen before, which is that sanctions harm independent Russian entrepreneurs. The reasoning goes that if the sanctions were meant to affect Putin and his cronies as the main financiers of war, then it is having the unintended affect of also hitting private businesses unrelated to the state or oligarchies. The mechanism for how this work isn't made explicit by Charap and Sucher's piece, but is interpreted by The Nation's editor:

We'd like to see some facts and figures about that private sector that is wholly independent of large state or pro-government corporations controlled by oligarchs. Most business in Russia is dependent on the state in one way or another, if not for permission to exist, then for loans -- and it remains to be seen whether the "tight policy" which is political as well as financial and existed before the war isn't actually inherent to the "state capitalism" system Charap and Sucher concede exists in Putin's Russia. One sector that is ostensibly not under state financial control directly, but which certainly has pro-government investors among the oligarchs, is related to Internet-based businesses.

Pavel Durov, the entrepreneur who founded VKontakte, the largest Russian social network, ended up being forced to sell his shares and flee Russia as increasing government pressure was put on him to turn over private customer data and block accounts the government didn't like. The story of investments in his country is also one where those loyal to the government increasingly gain the upper hand.

Durov's departure from Russia -- like the doubling of capital flight to $115 billion this year -- is an indication that the state-free private sector in Russia may be under siege, and that it is damaged more by Putin's policies than Western sanctions.

-- Catherine A. Fitzpatrick