The major stories you need
to understand Russia

An insider view, in 5 minutes

A rare interview with FSB top official, new offshore capital amnesty for large Russian business and Russian talent in the Silicon Valley

The director of FSB Alexander Bortnikov. Photo: Kremlin.ru

1. What the top FSB officer thinks about Russia’s conflict with the West

What happened

The head of the Federal Security Service (FSB), Alexander Bortnikov, gave an interview (Russian) to the official government publication, Rossiyskaya Gazeta. The cause was the 100th anniversary of FSB, KGB and their predecessor secret services. Almost half of the interview focuses on the history of the Soviet secret services and the FSB as their  successor, but much of the rest addresses foreign adversaries’ plans to destroy Russia.

Read the highlights:

  • On foreign adversaries: “Our Fatherland has many times become an object for hostile infringements by foreign powers. The enemy has tried to defeat us both in open battle and with support from the traitors inside the country. For some [adversaries], the destruction of Russia is still an obsession. Our goal is to prevent them from fulfilling it.”
  • On Soviet mass repressions of the 1930s: “Many associate this period with mass fabricated charges, but the archival documents give evidence that a significant part of the accusations were based on real facts, including the famous open trials.”
  • On the fall of the Soviet Union: “The reform team led by M.Gorbachev hadn’t lifted the ban on investigation of the Party elite. The Party Central Committee gave no response to the information about foreign agents of influence in the Soviet government.”
  • On foreign intelligence activity in Russia now: “Foreign intelligence services are still trying to penetrate into all the areas of work of our government. Naturally, they are met with firm response by our counter-intelligence. Since 2012, 137 foreign secret service agents were sentenced for espionage”
  • On Ukraine: “We pay special attention to building up a secure barrier to the threats coming from Ukraine. We take measures to prevent the diversionary and terrorist activities by its intelligence, which are coordinated by the Western secret services.”
  • On cyber security: “In recent years, the maintenance of the cyber security of our country advanced to another level. Under the direction of the FSB, since 2013 we have established a system of prevention and mitigation of cyber attacks, which proved its effictiveness during the 2016 DDoS attacks and the May 2017 [Wannacry] virus attack.

Why the world should care:

Bortnikov’s interview is a rare occasion to get an understanding of what  people from the FSB — perhaps the strongest faction in the Russian elite today — think about the conflict with the West. For the top FSB officers, the concept of foreign powers’ quest to tear  Russia into parts is not a propaganda cliche but a fundamental element of their picture of the world.

Yet Bortnikov is still moderate in speech, unlike the former director of the FSB, now head of the National Security Council, Nikolai Patrushev. The latter usually calls a spade a spade, saying in multiple interviews that the goal of the U.S. is to destroy Russia in order to get access to its rich resources.

2. THE BELL SCOOP: Government may extend capital amnesty to return more funds to Russia

What happened

At a meeting with Russia’s wealthiest business people, Vladimir Putin announced a special anonymous treasury bonds issue, designated for  Russian billionaires who wish to return their foreign funds home. As The Bell has learned (Russian), the government is also weighing the possibility of extending the capital amnesty.

  • Under the capital amnesty law, Russian residents willing to return their undeclared foreign assets to the country, were freed from legal responsibility for failing to declare the assets, and related tax penalties.
  • The law was introduced in 2014, after the capital outflow from Russia increased due to an economic downturn and deterioration of relations with the West. The amnesty expired on July 1, 2016.
  • About 2,500 Russians took advantage of the amnesty. The total amount of funds that returned to Russia is unclear, but in 2015 foreign direct investment from offshore centers has risen (Russian) in billions U.S.
  • Repatriation of capital through special treasury bonds is a novelty. Reuters fist reported the idea earlier in December. The terms of the issue may be favorable, with rates exceeding those of bank deposits and guaranteed anonymity for the bidders.
  • Both acts are introduced based on requests from large business owners, who fear further extension of U.S. sanctions after February 2018, which may block their assets in the West.

Why the world should care

In general, the repatriation of foreign funds, mostly held offshore, is good news for the national economy. However, for the Russian elite those monies provide an essential tie to the Western world, and in current circumstances, the move might become another step further isolating the country.

3. Russian parliament to register individuals as media foreign agents

What happened

Russian legislators are going further in their campaign against state-backed foreign media. A month after the implementation of the law introducing foreign agent status for select international outlets, the parliament has proposed  amendments allowing individuals to be added to the foreign agent media list (here’s the piece on it in English by the official agency TASS).

The move is described as yet another retaliation to the labeling of the Russian state TV channel RT and news agency Sputnik as foreign agents in the U.S. RT and Sputnik editor in chief Margarita Simonyan suggests that the legislation will be used against Russian journalists who report for the media controlled by the U.S. Department of State as freelancers, thus helping them to avoid official registration in Russia.

Why the world should care

While the Russian and American state-backed news outlets might be different in their goals, attitude and credibility, the foreign agent war hurts lots of innocent people in both countries — like this local radio station owner in Virginia and many others.

4. Russians behind Silicon Valley giants’ success

What happened

Russia is still not just a source of oil, offshore capital and secret service conspiracy theories for the world. In  Silicon Valley, Russians are among the people behind the success of the major tech companies and most promising startups. This week, The Bell launched a special project of video interviews with about Russians in the Valley, starting with Google product director for VR and the designer of the YouTube mobile app, Andrey Doronichev. Here’s a promo video of the project with subtitles in English.

Why the world should care

Despite what you read in the news (including our newsletter, unfortunately), the Russians in fact are not alligators; besides oligarchs with unfairly collected fortunes. There are talented entrepreneurs, inventors and achievers, and we want to share the stories of those people.

Peter Mironenko, The Bell editor