The administration of US President Donald Trump is considering lifting sanctions against the Russian Direct Investment Fund, which is headed by Vladimir Putin’s special representative, Kirill Dmitriev. This was reported by The New York Times on 27 October. The issue is being discussed as part of economic talks between Washington and Moscow, particularly regarding the supply of Russian diesel fuel to the US market.
Briefly about the main points
- The New York Times reported that the US is considering lifting sanctions against the Russian Direct Investment Fund (RDIF).
- Moscow wants to involve the fund in financial settlements for diesel fuel.
- The US imposed sanctions on the fund and Dmitriev in 2022.
- The OFAC licence for diesel does not lift the restrictions on the RFPI.
- Zelenskyy warned of the risk of Russia gaining additional revenue for the war.
Moscow wants to bring the fund on board for the diesel deal
Russian representatives are insisting on an easing of restrictions on the fund as part of negotiations on economic cooperation with the United States. According to the NYT, the RFPI plans to be involved in the financial backing of diesel fuel supplies, although the current sanctions make it more difficult to carry out calculations.
16 October Dmitriev He stated that the US Treasury Department had approached the fund with a request to help organise payments relating to the diesel deal. According to him, the parties were looking for ways to circumvent the sanctions restrictions.
Why has Washington imposed restrictions on the RFPI?
The Russian Direct Investment Fund was established in 2011 to attract international capital and finance investment projects in Russia. Dmitriev heads the fund and also serves as the Russian President’s Special Representative for investment and economic cooperation with foreign states.
28 February 2022 US Department of the Treasury imposed sanctions against the RFPI, its management company and Dmitriev himself. The US agency described the fund as a financial resource Putin and explained that the sanctions are intended to cut off access to the US financial system and international funding for entities linked to the Kremlin.
Authorisation for diesel-related transactions does not lift the sanctions
On 9 October, the US Treasury Department’s Office of Foreign Assets Control issued General Licence No. 135. It authorised certain transactions involving the sale, delivery, unloading and import of diesel fuel of Russian origin following agreements Trump and Putin regarding his exports to international markets.
This authorisation relates to specific fuel-related transactions, rather than a complete lifting of sanctions against the RFPI. On 21 October, the US President’s Special Representative Steve Witkoff confirmed that the US Treasury Department is working directly with Dmitriev on economic cooperation, without specifying the nature of any potential authorisations.
Reuters also reported that Moscow and Washington are discussing other potential joint projects, including the construction of data centres powered by nuclear energy.
Ukraine warns against additional revenue for Russia
President Volodymyr Zelenskyy On 16 October, he criticised the agreements concerning Russian diesel fuel. In his view, such an agreement could provide Moscow with additional revenue, which it could use to continue the war against Ukraine.
Zelenskyy also cast doubt on the idea that Russian supplies would have a significant impact on the fuel shortage on the global market. The conditions under which the US might be prepared to make further concessions to Russia regarding sanctions – in particular, a possible link to steps towards ending the war – have not been publicly disclosed.
