It was a coronavirus aid shipment that already had raised eyebrows in both the United States and Russia.
A Russian Defense Ministry cargo jet loaded with masks, ventilators, and other medical equipment arrived at New York’s John F. Kennedy International Airport on April 1: It was “humanitarian assistance,” according to the Kremlin, to help the United States in its fight against COVID-19.
Later that same day, however, the State Department contradicted the Kremlin: No, in fact, the United States had purchased the shipment from Russia. The State Department declined to say how much was paid.
A day later, Russia’s Foreign Ministry spoke up, saying that Moscow and Washington had split the cost.
Now there’s another wrinkle: two of the Russian entities involved in the shipment were hit with sanctions by the U.S. administration as part of Western punishment imposed for the seizure of Ukraine’s Crimean Peninsula in 2014.
Adding yet further confusion: An anonymous U.S. administration official was quoted as saying that contrary to the Russian statement, the cost was not shared — the United States paid for the entire shipment.
The back-and-forth raised questions among observers: Did the United States violate its own sanctions, or carve out a special exemption to allow the shipment to go forward? If so, why? And why the conflicting accounts about the payment?
Days earlier, U.S. President Donald Trump made passing reference to the aid shipment, saying it came up during a phone call he had with his Russian counterpart, Vladimir Putin. But he spoke about it as if it had already occurred.
On April 2, Trump was asked by reporters about the shipment, and specifically whether he thought it could be used as a part of a propaganda message by the Kremlin.
“He was very nice,” Trump said of his phone call with Putin. “He said: ‘We have it…. They have difficulties with this virus also, as you know. It was a very nice gesture on behalf of President Putin. I could have said ‘No.’ But I said: ‘I’ll take it.'”
“I’m not concerned about Russia and propaganda, not even a little bit. There is a lot of medical, very high-quality stuff that I’ve accepted. It may save a lot of lives and I will take it every day,” he said.
Western and Russian critics of Moscow say that the Kremlin is using aid as part of a propaganda campaign amid the global coronavirus pandemic.
In Moscow, Russian state media broadcast stories about the shipment, including footage of the Antonov cargo jet being loaded with supplies. The cardboard boxes were printed with the words “From Russia With Love.”
Russia’s ambassador to the United States said in a post to the embassy’s official Facebook page that he hoped the U.S. government would help Russia in the future, if needed — “without any politicization.”
“We can provide emergency equipment needed to save Americans. The Russian humanitarian mission can already be successful even if a single life is saved,” Anatoly Antonov said. “We are sure that the U.S., if necessary, will also assist us and we will gladly accept the aid. Without any politicization.”
In his second major televised address on the coronavirus crisis in Russia, shown the day the jet arrived in New York, on April 2, Putin did not mention the shipment.
But the shipment drew criticism from some of Russia’s loudest opposition voices, including anti-corruption crusader Aleksei Navalny and the Doctors’ Alliance, a nongovernmental organization that has been outspokenly critical of the state’s coronavirus response.
“This is wonderful,” the group said sarcastically. “We raise money all over the country to buy medical workers protective equipment, and our authorities sell [it] to the United States. This is some kind of mockery or something.”
A day after the U.S. State Department clearly described the shipment as a “purchase of needed supplies,” Russian Foreign Ministry spokeswoman Maria Zakharova told reporters that the shipments’ costs were split.
“Half of the cost of cargo was paid by the Russian Direct Investment Fund [RDIF] and half by the American side, on their own,” she said, adding that the RDIF “plays a significant role” in U.S.-Russian business cooperation and “supports American business in Russia.”
On April 3, an unnamed senior U.S. administration official contradicted Zakharova.
“The United States is purchasing the supplies and equipment outright, as with deliveries from other countries,” the unnamed official was quoted as telling Reuters. “We appreciate Russia selling these items to us below market value.”
The RDIF, which says it has $10 billion in assets under management, is a sovereign wealth fund, and is used, similar to other nations’ sovereign wealth funds, by the Russian government to invest in projects around the world.
The RDIF, which says it has $10 billion in assets under management, is a sovereign wealth fund, and is used, similar to other nations’ sovereign wealth funds, by the Russian government to attract investment within Russia.
In 2015, the fund was put on a U.S. Treasury Department sanctions list, which blocked U.S. individuals and companies from making loans to it or investing in it. It was hit with sanctions because of its connection to another Russian development bank, Vnesheconombank, as part of wider sanctions levied in response to Russia’s seizure of Crimea.
In a comment to RFE/RL, RDIF spokesman Arseny Palagin said the existing sanctions do not apply to the fund in this case.
“The sectoral sanctions imposed against certain Russian companies and their subsidiaries affect only specific transactions which relate to long-term financing of these companies by U.S. and European entities in the form of equity or debt,” he wrote in an e-mail. “All other transactions, including co-investments and other business transactions are permitted.”
Meantime, the ventilators that were included in the shipment to the United States were reportedly supplied by a Urals-based company known as Radio-Electronic Technologies, according to the Russian media outlet RBK, which examined photographs of the shipment. That company is owned by Rostec, a massive state conglomerate that encompasses some of Russia’s best-known technology manufacturers.
Radio-Electronic Technologies has been under U.S. Treasury sanctions since July 2014, as part of the Ukraine and Crimea-related measures.
The U.S. Treasury Department did not respond to an e-mail seeking comment, and U.S. officials have not publicly described any deliberations or debate within the administration regarding the shipment.
In comments about the imminent delivery on March 31, Kremlin spokesman Dmitry Peskov appeared to suggest that there had been U.S. officials or agencies that raised objections to the shipment. His remark also echoed a Russian narrative asserting, without specific evidence, that some U.S. officials are out to undermine prospects for bilateral cooperation.
“It seemed that there were some on the American side who at least did not contribute to the prompt resolution of the technical issues in pursuance of the two presidents’ agreement,” Peskov was quoted as saying.
Brian O’Toole, a former analyst in the U.S. Treasury Department office that develops and oversees sanctions, said that there was not necessarily anything wrong with the investment fund’s involvement, from a sanctions perspective. The involvement of the ventilator manufacturer, however, is more problematic, he said.
“Even if [the U.S. administration] ends up violating their own sanctions, buying respirators or ventilators or [other] stuff, it’s not like they’re going to punish their own agencies,” O’Toole told RFE/RL. “The issue is more it’s they don’t know what they’re doing, which is a consistent criticism of this administration.”
“My sneaking suspicion is that they didn’t bother to do research ahead of time, no one bothered to put two and two together,” he said.
‘Throwing The Middle Finger’
Neither the State Department nor the Russian Foreign Ministry disclosed the value of the shipment; the unnamed U.S. administration official told Reuters that the goods were sold “below market value.”
Based on the type and number of ventilators included in the shipment, and the price list shown on the manufacturer’s website, the ventilators alone would appear to normally cost around 76 million rubles, roughly $1 million.
It’s also virtually certain that the Russian government knew it was involving two entities that had been sanctioned by the United States, O’Toole said.
“It’s a silly story, in a lot of ways,” O’Toole said. “More than anything, this is probably Putin throwing the middle finger at us again.”
“It is entirely on brand for Putin to sneak a [sanctioned] company into the transaction in order to tweak us,” he said.
Other former U.S. officials said that, sanctions aside, the perception of Russia supplying humanitarian aid to the United States — which Putin and the Kremlin continue to see as an adversary — was “a propaganda bonanza.”
“All of the dealings between Trump and Putin over the past 3 ½ years have been marred by this element of Trump’s inexplicable chasing after Putin and currying favor,” said Andrew Weiss, a former top Russia adviser at the National Security Council under President Barack Obama. “Putin very easily plays on that and takes on advantage of that, and tries to throw shade on U.S. policy.”
“The Russians have an interest in using Trump as a battering ram to undermine U.S. policy goals, this week’s phone call fits into that,” said Weiss, who is now at the Carnegie Endowment for International Peace in Washington, D.C.