Washington Weighs Lifting Sanctions On Russian Investment Fund

The Russia Direct Investment Fund, known as RDIF, is at the center of new US-Russia negotiations. The fund, which Washington once labeled a slush fund for President Vladimir Putin, is now the focus of efforts to lift financial sanctions. These talks aim to end the war in Ukraine and improve relations between the two governments.

Yury Ushakov, a Kremlin foreign policy adviser, confirmed the discussions on October 28. He stated that the conversation has been ongoing for some time. Ushakov identified Kirill Dmitriev, the fund’s chief executive, as the primary Russian point of contact for American officials. This confirms a report by The New York Times published the day before.

The RDIF was created in 2011 during the term of Dmitry Medvedev. It was designed to make targeted investments in Russian industries such as construction, telecommunications, finance, and healthcare. The fund reports total investments of 2.3 trillion rubles, or 29 billion dollars, since its start. About 80 percent of this capital came from partner funds, including Saudi Arabia’s Public Investment Fund.

US regulators first sanctioned the fund in 2015. The Obama administration barred American individuals and businesses from lending to or buying equity in the RDIF. This action followed the fund’s link to the state investment bank VEB. Russian authorities later separated the RDIF from VEB to make it a standalone entity.

The fund gained international attention in 2020 for its role in promoting the Sputnik V vaccine. The RDIF directed money to research and aggressively marketed the vaccine while criticizing Western alternatives. It also paid for half the cost of 45 ventilators sent to the United States, though the devices were never used. US authorities had concerns about the fund’s involvement and the safety record of those specific ventilator models.

Kirill Dmitriev, 51, has led the RDIF since its inception. Born in Kyiv and educated at Stanford and Harvard, he previously worked at Goldman Sachs and McKinsey. Dmitriev serves as the Kremlin’s special economic envoy. He has met repeatedly with Steve Witkoff, the White House lead envoy, and Jared Kushner over the past 16 months. These meetings occurred in Moscow and included discussions around the release of American citizen Stephen Hubbard from a Russian prison.

Dmitriev also helped secure a deal allowing Russian diesel fuel to enter the US market. Democratic lawmakers and some Republicans have criticized the deal, arguing it violates the spirit of a recently passed sanctions law. Several lawmakers have threatened criminal liability for American companies involved in the imports. Iikka Korhonen, head of research at the Bank of Finland Institute for Emerging Economies, called the potential lifting of sanctions without reciprocal Russian concessions confused policy-making.

Speaking at an energy conference in Moscow on October 16, Dmitriev described the US sanctions law as misguided. He said progress is difficult due to widespread resistance but expressed confidence in upcoming announcements. Dmitriev stated that the ice has begun to break. The RDIF did not respond to an email seeking comment on the current negotiations.