Analysts predict grim outlook for the future of the Russian economy

Oct 28 2015

On October 26, 2015, at Washington’s Center for Strategic and International Studies, a panel discussion occurred centering around the future of the Russian economy and more specifically the large energy sector.

Featured at the event were Olga Oliker, head of the Russia and Eurasia Program at CSIS, Vladimir Milov of the Institute for Energy Policy, Ilya Ponomarev, the exiled State Duma MP and the only Duma MP to vote against the annexation of Ukraine’s Crimean peninsula, Ilya Zaslavskiy of Chatham House, and Sergey Aleksashenko of the Brookings Institution. Both Olga Oliker and Jeff Mankoff of CSIS thanked Free Russia Foundation for the idea of the event and invitation of leading Russian experts as panelists.

Vladimir Milov stressed the redundancies of the statements issued by Russian state officials regarding the state of the economy. The Russian economy, already under some strain from low oil prices, mismanagement, and international sanctions, could be headed for even harder times. Milov claimed there was no clear view for improvement of the economy when the sharp decline in domestic demand and consumer purchasing power wasn’t showing signs of improvement. Even in the 1990s, widely regarded both within and beyond the Russian borders as a time of runaway corruption, economic destruction, and weakness, domestic demand and consumer purchasing power was able to rebound.

Real wages and pensions in Russia are sharply declining due to the weak rouble. Low oil prices, by contrast, while certainly part of the equation, may not be as large a part of the economic decline as previously thought. The recession in 2008 also featured a large drop in oil prices, but back then the rouble was stable and there were no international sanctions to speak of.

Russia is also in an international credit rut. Today, in contrast to the economic problems in 2008, banks are much more cautious to lend money to Russia and Russians, even those who are not included on sanctions lists.

“We do not know who Russia will invade tomorrow”. Milov said referring to this reluctant mood.

Are these problems here to stay? It is often argued that a removal or phasing out of sanctions could give the economy a much-needed jump start, but the problems plaguing the Russian economy may be more deeply rooted than previously speculated. Further shocks to the rouble’s stability, already weak, could happen in the future and Russia’s service, industrial, and manufacturing sectors, while still operating very close to their pre-sanctions capability, could be forced to downsize in the future. State authorities, Milov claimed, had implicitly instructed these sectors to stay the course until things calm down.

Whether that stability will come is another question. Domestic car sales, for instance, have plummeted by 40 percent.

In Russia’s large energy sector, things also look grim. Oil fields in Western Siberia are depleted. Growth at the tip of the iceberg, in terms of smaller oil companies, is still present but not very substantial. Large companies with state investment such as Rosneft and Lukoil are starting to shrink.

Milov compared the situation to a matryoshka doll, in that the energy sector’s outlook seems to become progressively worse the further in it is examined.

How does Russia reverse this? The answer is simple-more drilling and investment, but the Kremlin’s look towards heavier taxes and overall under-financing of the industry could hurt that hope substantially. A similar policy, with similarly negative results, was undertaken by the Kremlin in the late 1980s under Premier Mikhail Gorbachev.

Budget spending could also be a liability down the road. The Kremlin wants to keep the budget where it is according to Milov, but they’re going to need more money to do that, and they may have to get it from taxes levied on the energy sector. If that happens, there’s a large possibility of the oil industry, still in the black at the moment, to fall into the red.

The federal budgets in 2012 and 2013 were allegedly geared to benefit wealthy Russians rather than teachers and healthcare workers

When asked about his analysis, Mr. Milov stressed the overall atmosphere of uncertainty. In addition to higher taxes becoming a concrete policy enacted by Moscow, the idea of printing more money is also allegedly being mulled by the Kremlin. Over the last ten years, the Kremlin has stressed state investment as the primary way to grow the Russian economy. Unfortunately, since 2008, that growth has been minimal or nonexistent. It’s not corruption to blame, but what Milov claimed was “sunken capital”. Russia’s far eastern regions, for instance in the city of Vladivostok, have seen extensive projects with little use or benefit.

Next to speak was former A Just Russia State Duma MP Ilya Ponomarev. Mr. Ponomarev was exiled and branded as a traitor to his country when he became the lone MP to vote against the March 2014 annexation of Crimea.

Ponomarev, a far-left politician, began his remarks by claiming that the economic crisis in Russia didn’t start with the War in Eastern Ukraine, but the presidential election in 2012. Russia’s social safety net infrastructure, in addition to the public sector’s health, was not very good. The federal budgets in 2012 and 2013 were allegedly geared to benefit wealthy Russians rather than teachers and healthcare workers, Ponomarev explained. As a result, the regions became over-saturated with expenses they couldn’t pay for.

Ponomarev once represented the well-off city of Novosibirsk, Russia’s third largest city and the largest in Russia’s vast Asian region. Novosibirsk was well-off in terms of small business, but in the last few years has suffered from a much-smaller-than-needed budget, “Going from profitable to inept in one year” as he said. Capital expenditures ground to a screeching halt, hurting the regional economies and consumer confidence.

The perception of Siberians and Russians from the eastern areas also changed, he said, from good, loyal producers to “beggars, jumping high to receive subsidies”. To make matters worse, regional debt skyrocketed as well as interest, and state banks were unable to refinance or provide money to remedy the sick economy. Prices also increased.

Rather than blaming the incompetence or mismanagement undertaken by the government, Russia’s extensive media controls drove the blame towards the United States and Ukraine, or as Mr. Ponomarev phrased it, “Bloody America and the fascist Kyiv junta”.

This might be slowly but surely changing. Support for the War in Eastern Ukraine, once as high as 70 percent, has dropped to around 50%. On this subject, Mr. Ponomarev claimed that it would continue to drop but that protests were unlikely. Unlike the introductory speaker, he said that economic problems didn’t create social unrest in Russia on their own, even if they sometimes laid a foundation for it. Pension reform in the 2000s created nearly spontaneous large protests, some bigger than the infamous Bolotnaya protests, and the government had to step in and pump money back into the system to calm things down. In 1998, when Russia defaulted and the rouble was near worthless, protests were scattered at most.

What’s the political impact? Regional elections aren’t looking super hopeful for the ruling United Russia party. The Communist Party of the Russian Federation is gaining momentum in Siberia, even winning in Irkutsk, another comparably well-off region. Change, if it is to come, will happen in the developed regions rather than the depressed ones. United Russia will likely keep its majority but lose some seats in the 2016 Duma elections as opportunity pops up on the left side of Russian politics, but whether democratic forces will come into some power is still very much questionable.

The Kremlin seems stuck on ideas and proposals that the other members of the Eurasian Economic Union  are not interested in

Ilya Zaslavskiy of Chatham House suggested Russia may take advice from Iran and Belarus to relieve its economic rut, namely, to reach small but pivotal agreements with the United States and European Union while keeping the broad overall policies and rhetoric intact. Russia’s energy sector, however, has no clear policy to remedy its problems despite a lot of talk of closer ties with China and the chilling effect will remain a thorn in Russia’s side. The “obsessions” of “building pipelines around Ukraine and the new friendship with China” sound like the same old mistakes as the proposed North Stream may be delayed or cancelled if the EU does not choose to cooperate, and not many binding agreements have been made with the Chinese despite extensive effort and talks. Chinese banks have not been loaning Russia as much money as originally hoped.

To distract from that, Mr. Zaslavskiy floated the idea of another area of tension between Russia and the West: Central Asia. The Kremlin seems stuck on ideas and proposals that the other members of the Eurasian Economic Union (Kazakhstan, Kyrgyzstan, Armenia, and Belarus) are not interested in. Kazakhstan and Uzbekistan are both facing looming succession crises to their longtime strongman leaders Nursultan Nazarbayev and Islom Karimov, who are 75 and 77 respectively. In addition, Kyrgyzstan seems to be drifting towards a pro-Kremlin autocracy after flirting with democracy, and Tajikistan and Turkmenistan are under threats from the jihadist group Islamic State and its affiliates. Closer to home, the Kremlin is mulling the construction of a military base in Belarus and may decide to “protect its interests” in Moldova, where protests reminiscent of Ukraine’s Maidan Revolution are taking place.

766435346

Like Mr. Ponomarev, Sergey Aleksashenko of the Brookings Institution was insistent that Russia’s economic problems have been festering since before the Ukrainian Conflict. He stressed the drop in investment and scathingly criticized the current administration, claiming Putin “destroyed the federation” by 2004 and “Humiliated property rights and the electoral process”.

At the same time, Aleksashenko firmly stated that despite the fact that the Russian economy was not going to collapse any time soon, prospects of growth looked grim. Many Russians point to the large growth the Russian economy saw during Putin’s first two terms in office, but the truth is that those seven years of growth have been followed by eight years of stagnation and decline. Furthermore, the Russian government’s use of reserve funds to prop up the rouble and the budget could have disastrous consequences. Even the usual refrains of bolstering the social safety net, long a campaign promise of many of the large Russian political parties, may be discarded in next year’s Duma elections.

By Kyle Menyhert

 

Featured at the event were Olga Oliker, head of the Russia and Eurasia Program at CSIS, Vladimir Milov of the Institute for Energy Policy, Ilya Ponomarev, the exiled State Duma MP and the only Duma MP to vote against the annexation of Ukraine’s Crimean peninsula, Ilya Zaslavskiy of Chatham House, and Sergey Aleksashenko of the Brookings Institution. Both Olga Oliker and Jeff Mankoff of CSIS thanked Free Russia Foundation for the idea of the event and invitation of leading Russian experts as panelists.

Vladimir Milov stressed the redundancies of the statements issued by Russian state officials regarding the state of the economy. The Russian economy, already under some strain from low oil prices, mismanagement, and international sanctions, could be headed for even harder times. Milov claimed there was no clear view for improvement of the economy when the sharp decline in domestic demand and consumer purchasing power wasn’t showing signs of improvement. Even in the 1990s, widely regarded both within and beyond the Russian borders as a time of runaway corruption, economic destruction, and weakness, domestic demand and consumer purchasing power was able to rebound.

Real wages and pensions in Russia are sharply declining due to the weak rouble. Low oil prices, by contrast, while certainly part of the equation, may not be as large a part of the economic decline as previously thought. The recession in 2008 also featured a large drop in oil prices, but back then the rouble was stable and there were no international sanctions to speak of.

Russia is also in an international credit rut. Today, in contrast to the economic problems in 2008, banks are much more cautious to lend money to Russia and Russians, even those who are not included on sanctions lists.

“We do not know who Russia will invade tomorrow”. Milov said referring to this reluctant mood.

Are these problems here to stay? It is often argued that a removal or phasing out of sanctions could give the economy a much-needed jump start, but the problems plaguing the Russian economy may be more deeply rooted than previously speculated. Further shocks to the rouble’s stability, already weak, could happen in the future and Russia’s service, industrial, and manufacturing sectors, while still operating very close to their pre-sanctions capability, could be forced to downsize in the future. State authorities, Milov claimed, had implicitly instructed these sectors to stay the course until things calm down.

Whether that stability will come is another question. Domestic car sales, for instance, have plummeted by 40 percent.

In Russia’s large energy sector, things also look grim. Oil fields in Western Siberia are depleted. Growth at the tip of the iceberg, in terms of smaller oil companies, is still present but not very substantial. Large companies with state investment such as Rosneft and Lukoil are starting to shrink.

Milov compared the situation to a matryoshka doll, in that the energy sector’s outlook seems to become progressively worse the further in it is examined.

How does Russia reverse this? The answer is simple-more drilling and investment, but the Kremlin’s look towards heavier taxes and overall under-financing of the industry could hurt that hope substantially. A similar policy, with similarly negative results, was undertaken by the Kremlin in the late 1980s under Premier Mikhail Gorbachev.

Budget spending could also be a liability down the road. The Kremlin wants to keep the budget where it is according to Milov, but they’re going to need more money to do that, and they may have to get it from taxes levied on the energy sector. If that happens, there’s a large possibility of the oil industry, still in the black at the moment, to fall into the red.

The federal budgets in 2012 and 2013 were allegedly geared to benefit wealthy Russians rather than teachers and healthcare workers

When asked about his analysis, Mr. Milov stressed the overall atmosphere of uncertainty. In addition to higher taxes becoming a concrete policy enacted by Moscow, the idea of printing more money is also allegedly being mulled by the Kremlin. Over the last ten years, the Kremlin has stressed state investment as the primary way to grow the Russian economy. Unfortunately, since 2008, that growth has been minimal or nonexistent. It’s not corruption to blame, but what Milov claimed was “sunken capital”. Russia’s far eastern regions, for instance in the city of Vladivostok, have seen extensive projects with little use or benefit.

Next to speak was former A Just Russia State Duma MP Ilya Ponomarev. Mr. Ponomarev was exiled and branded as a traitor to his country when he became the lone MP to vote against the March 2014 annexation of Crimea.

Ponomarev, a far-left politician, began his remarks by claiming that the economic crisis in Russia didn’t start with the War in Eastern Ukraine, but the presidential election in 2012. Russia’s social safety net infrastructure, in addition to the public sector’s health, was not very good. The federal budgets in 2012 and 2013 were allegedly geared to benefit wealthy Russians rather than teachers and healthcare workers, Ponomarev explained. As a result, the regions became over-saturated with expenses they couldn’t pay for.

Ponomarev once represented the well-off city of Novosibirsk, Russia’s third largest city and the largest in Russia’s vast Asian region. Novosibirsk was well-off in terms of small business, but in the last few years has suffered from a much-smaller-than-needed budget, “Going from profitable to inept in one year” as he said. Capital expenditures ground to a screeching halt, hurting the regional economies and consumer confidence.

The perception of Siberians and Russians from the eastern areas also changed, he said, from good, loyal producers to “beggars, jumping high to receive subsidies”. To make matters worse, regional debt skyrocketed as well as interest, and state banks were unable to refinance or provide money to remedy the sick economy. Prices also increased.

Rather than blaming the incompetence or mismanagement undertaken by the government, Russia’s extensive media controls drove the blame towards the United States and Ukraine, or as Mr. Ponomarev phrased it, “Bloody America and the fascist Kyiv junta”.

This might be slowly but surely changing. Support for the War in Eastern Ukraine, once as high as 70 percent, has dropped to around 50%. On this subject, Mr. Ponomarev claimed that it would continue to drop but that protests were unlikely. Unlike the introductory speaker, he said that economic problems didn’t create social unrest in Russia on their own, even if they sometimes laid a foundation for it. Pension reform in the 2000s created nearly spontaneous large protests, some bigger than the infamous Bolotnaya protests, and the government had to step in and pump money back into the system to calm things down. In 1998, when Russia defaulted and the rouble was near worthless, protests were scattered at most.

What’s the political impact? Regional elections aren’t looking super hopeful for the ruling United Russia party. The Communist Party of the Russian Federation is gaining momentum in Siberia, even winning in Irkutsk, another comparably well-off region. Change, if it is to come, will happen in the developed regions rather than the depressed ones. United Russia will likely keep its majority but lose some seats in the 2016 Duma elections as opportunity pops up on the left side of Russian politics, but whether democratic forces will come into some power is still very much questionable.

The Kremlin seems stuck on ideas and proposals that the other members of the Eurasian Economic Union  are not interested in

Ilya Zaslavskiy of Chatham House suggested Russia may take advice from Iran and Belarus to relieve its economic rut, namely, to reach small but pivotal agreements with the United States and European Union while keeping the broad overall policies and rhetoric intact. Russia’s energy sector, however, has no clear policy to remedy its problems despite a lot of talk of closer ties with China and the chilling effect will remain a thorn in Russia’s side. The “obsessions” of “building pipelines around Ukraine and the new friendship with China” sound like the same old mistakes as the proposed North Stream may be delayed or cancelled if the EU does not choose to cooperate, and not many binding agreements have been made with the Chinese despite extensive effort and talks. Chinese banks have not been loaning Russia as much money as originally hoped.

To distract from that, Mr. Zaslavskiy floated the idea of another area of tension between Russia and the West: Central Asia. The Kremlin seems stuck on ideas and proposals that the other members of the Eurasian Economic Union (Kazakhstan, Kyrgyzstan, Armenia, and Belarus) are not interested in. Kazakhstan and Uzbekistan are both facing looming succession crises to their longtime strongman leaders Nursultan Nazarbayev and Islom Karimov, who are 75 and 77 respectively. In addition, Kyrgyzstan seems to be drifting towards a pro-Kremlin autocracy after flirting with democracy, and Tajikistan and Turkmenistan are under threats from the jihadist group Islamic State and its affiliates. Closer to home, the Kremlin is mulling the construction of a military base in Belarus and may decide to “protect its interests” in Moldova, where protests reminiscent of Ukraine’s Maidan Revolution are taking place.

766435346

Like Mr. Ponomarev, Sergey Aleksashenko of the Brookings Institution was insistent that Russia’s economic problems have been festering since before the Ukrainian Conflict. He stressed the drop in investment and scathingly criticized the current administration, claiming Putin “destroyed the federation” by 2004 and “Humiliated property rights and the electoral process”.

At the same time, Aleksashenko firmly stated that despite the fact that the Russian economy was not going to collapse any time soon, prospects of growth looked grim. Many Russians point to the large growth the Russian economy saw during Putin’s first two terms in office, but the truth is that those seven years of growth have been followed by eight years of stagnation and decline. Furthermore, the Russian government’s use of reserve funds to prop up the rouble and the budget could have disastrous consequences. Even the usual refrains of bolstering the social safety net, long a campaign promise of many of the large Russian political parties, may be discarded in next year’s Duma elections.

By Kyle Menyhert

 

Lukashenka’s Ryanair Hijacking Proves Human Rights is a Global Security Issue

May 24 2021

The forced diversion and landing in Minsk of a May 23, 2021 Ryanair flight en route from Greece to Lithuania, and the subsequent arrest of dissident Roman Protasevich who was aboard the flight, by the illegitimate Lukashenka regime pose an overt political and military challenge to Europe, NATO and the broad global community.  NATO members must respond forcefully by demanding (1) the immediate release of Protasevich and other political prisoners in Belarus, and (2) a prompt transition to a government that represents the will of the people of Belarus. 

The West’s passivity in the face of massive, continuous and growing oppression of the Belarusian people since summer 2020 has emboldened Lukashenka to commit what some European leaders have appropriately termed an act of “state terrorism.”

The West has shown a manifest disposition to appease Putin’s regime —Lukashenka’s sole security guarantor. It has made inappropriate overtures for a Putin-Biden summit and waived  Nord Stream 2 sanctions mandated by Congress. These actions and signals have come against the backdrop of the 2020 Russian constitutional coup, the assassination attempt against Navalny and his subsequent imprisonment on patently bogus charges, the arrests of close to 13,000 Russian activists, and the outlawing of all opposition movements and activities. All this has led Putin and Lukashenka to conclude that they eliminate their political opponents with impunity.  

Today’s state-ordered hijacking of an international passenger airplane—employing intelligence agents aboard the flight,  and accomplished via an advanced fighter-interceptor—to apprehend an exiled activist, underscores that violation of human rights is not only a domestic issue, but a matter of international safety and security.  Western governments unwilling to stand up for the victims of Putin’s and Lukashenka’s regimes are inviting future crimes against their own citizens. 

Absent a meaningful and swift response, the escalation of violence and intensity of international crimes committed  by Lukashenka’s and Putin’s regime will continue, destabilizing the world and discrediting the Western democratic institutions. 

CALL FOR SUBMISSIONS – THE KREMLIN’S INFLUENCE QUARTERLY

May 20 2021

The Free Russia Foundation invites submissions to The Kremlin’s Influence Quarterly, a journal that explores and analyzes manifestations of the malign influence of Putin’s Russia in Europe.

We understand malign influence in the European context as a specific type of influence that directly or indirectly subverts and undermines European values and democratic institutions. We follow the Treaty on European Union in understanding European values that are the following: human dignity, freedom, democracy, equality, the rule of law, and respect for human rights. Democratic institutions are guardians of European values, and among them, we highlight representative political parties; free and fair elections; an impartial justice system; free, independent and pluralistic media; and civil society.

Your contribution to The Kremlin’s Influence Quarterly would focus on one European country from the EU, Eastern Partnership or Western Balkans, and on one particular area where you want to explore Russian malign influence: politics, diplomacy, military domain, business, media, civil society, academia, religion, crime, or law.

Each chapter in The Kremlin’s Influence Quarterly should be around 5 thousand words including footnotes. The Free Russia Foundation offers an honorarium for contributions accepted for publication in the journal.

If you are interested in submitting a chapter, please send us a brief description of your chapter and its title (250 words) to the following e-mail address: info@4freerussia.org. Please put The Kremlin’s Influence Quarterly as a subject line of your message.

Criminal operations by Russia’s GRU worldwide: expert discussion

May 06 2021

Please join Free Russia Foundation for an expert brief and discussion on latest criminal operations conducted by Russia’s GRU worldwide with:

  • Christo Grozev, Bellingcat— the legendary investigator who uncovered the Kremlin’s involvement, perpetrators and timeline of Navalny’s assassination attempt. 
  • Jakub Janda, Director of the European Values Think Tank (the Czech Republic) where he researches Russia’s hostile influence operations in the West
  • Michael Weiss, Director of Special Investigations at Free Russia Foundation where he leads the Lubyanka Files project, which consists of translating and curating KGB training manuals still used in modern Russia for the purposes of educating Vladimir Putin’s spies.

The event will take place on Tuesday, May 11 from 11 am to 12:30pm New York Time (17:00 in Brussels) and include an extensive Q&A with the audience moderated by Ilya Zaslavskiy, Senior Fellow at Free Russia Foundation and head of Underminers.info, a research project on post-Soviet kleptocracy

The event will be broadcast live at: https://www.facebook.com/events/223365735790798/

  • The discussion will cover Russia’s most recent and ongoing covert violent operations, direct political interference, oligarchic penetration with money and influence; 
  • GRU’s structure and approach to conducting operations in Europe
  • Trends and forecasts on how data availability will impact both, the Kremlin’s operations and their investigation by governments and activists; 
  • EU and national European government response and facilitation of operations on their soil; 
  • Recommendations for effective counter to the security and political threats posed by Russian security services. 

YouTube Against Navalny’s Smart Voting

May 06 2021

On May 6, 2020, at least five YouTube channels belonging to key Russian opposition leaders and platforms received notifications from YouTube that some of their content had been removed due to its being qualified as “spam, deceptive practices and scams”. 

They included: 

Ilya Yashin (343k YouTube subscribers)

Vladimir Milov (218k YouTube subscribers) 

Leonid Volkov (117k YouTube subscribers)

Novaya Gazeta (277k YouTube Subscribers) 

Sota Vision (248k YouTube Subscribers)

Most likely, there are other Russian pro-democracy channels that have received similar notifications at the same time, and we are putting together the list of all affected by this censorship campaign. 

The identical letters received from YouTube by the five account holders stated:

“Our team has reviewed your content, and, unfortunately, we think it violates our spam, deceptive practices and scams policy. We’ve removed the following content from YouTube:

URL: https://votesmart.appspot.com/

YouTube has removed urls from descriptions of videos posted on these accounts that linked to Alexey Navalny’s Smart Voting website (votesmart.appspot.com).

By doing this, and to our great shock and disbelief, YouTube has acted to enforce the Kremlin’s policies by qualifying Alexey Navalny’s Smart Voting system and its website as “spam, deceptive practices and scams”. 

This action has not only technically disrupted communication for the Russian civil society which is now under a deadly siege by Putin’s regime, but it has rendered a serious and lasting damage to its reputation and legitimacy of Smart Voting approach. 

In reality, Smart Voting system is not a spam, scam or a “deceptive practice”, but instead it’s a fully legitimate system of choosing and supporting candidates in Russian elections who have a chance of winning against the ruling “United Russia” party candidates. There’s absolutely nothing illegal, deceptive or fraudulent about the Smart Voting or any materials on its website.

We don’t know the reasons behind such YouTube actions, but they are an unacceptable suppression of a constitutionally guaranteed freedom of the Russian people and help the Kremlin’s suppression of civil rights and freedoms by banning the Smart Voting system and not allowing free political competition with the ruling “United Russia” party. 

This is an extremely dangerous precedent in an environment where opposition activities in Russia are being literally outlawed;  key opposition figures are jailed, exiled, arrested and attacked with criminal investigations; independent election campaigning is prohibited; and social media networks remain among the very few channels still available to the Russian opposition to communicate with the ordinary Russians.

We demand a  swift and decisive action on this matter from the international community, to make sure that YouTube corrects its stance toward Russian opposition channels, and ensures that such suppression of peaceful, legal  pro-democracy voices does not happen again. 

FRF Lauds New US Sanctions Targeting the Kremlin’s Perpetrators in Crimea, Calls for Their Expansion

Apr 15 2021

On April 15, 2021,  President Biden signed new sanctions against a number of officials and agents of the Russian Federation in connection with malign international activities conducted by the Russian government.

The list of individuals sanctioned by the new law includes Leonid Mikhalyuk, director of the Federal Security Service in the Russian-occupied Crimea.

A report issued by Free Russia Foundation, Media Initiative for Human Rights and Ukrainian Helsinki Human Rights Union in December 202, identified 16 officials from Russian law enforcement and security agencies as well as the judiciary operating on the territory of the Ukrainian Crimean Peninsula currently occupied by the Russian Federation. These individuals have been either directly involved or have overseen political persecution of three prominent Crimean human rights defenders – Emir-Usein Kuku, Sever Mustafayev and Emil Kurbedinov.

Leonid Mikhailiuk is one of these officials. He has been directly involved and directed the repressive campaign in the occupied Crimea, including persecution of innocent people on terrorism charges and massive illegal searches. The persecution of Server Mustafayev was conducted under his supervision. As the head of the FSB branch in Crimea, he is in charge of its operation and all operatives working on politically motivated cases are his subordinates. 

Within the extremely centralized system of the Russian security services, Mikhailiuk is clearly at the top rank of organized political persecution and human rights violations.

Free Russia Foundation welcomes the new sanctions and hopes that all other individuals identified in the report will also be held accountable.