Washington is considering lifting 2022 sanctions on the Russian Direct Investment Fund, whose chief Kirill Dmitriev leads Moscow's talks with the Americans. Critics warn that the move could benefit Kremlin-linked investments without winning concessions on Ukraine.
The Kremlin confirmed that lifting sanctions on the Russian Direct Investment Fund is under discussion in talks with the United States. Kremlin foreign policy adviser Yury Ushakov spoke on October 28, confirming a New York Times report from a day earlier. He said the conversation has been going on for some time, though he does not know what the result will be.
The proposal sits inside a wider push. After months of dormancy, US negotiators have ramped up efforts to end Russia's war on Ukraine and normalize relations between Washington and Moscow.
Why the fund drew sanctions
The US government and its Western allies sanctioned the fund in 2022, four days after Russia launched its all-out assault on Ukraine. According to the US Treasury, the fund is "a slush fund for President Vladimir Putin".
Russia established the fund in 2011. It says it has made 2.3 trillion rubles ($29 billion) in investments since its inception, with about 80 percent coming from "partner funds." Unlike Russia's traditional sovereign wealth fund holdings, it makes targeted investments in Russian companies. Experts say its management strategy more closely resembles a private equity fund.
Critics see a one-sided concession
Peter Harell, who served as a senior director on the White House National Security Council from 2021 to 2022, said unsanctioning the fund would mean prioritizing American investment in Kremlin-aligned projects over supporting Ukraine.
Iikka Korhonen, head of research at the Bank of Finland Institute for Emerging Economies, called lifting sanctions without Russia giving anything in return an example of confused policy-making.
Dmitriev has also been central to a recently announced deal that would allow Russian diesel fuel to be imported into the United States. Democratic lawmakers and some Republicans have criticized it, saying it violates the spirit of a recently passed sanctions law.
Source: Oilprice.com
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