For Russia and the United States, this year began with a new row that revived the atmosphere of a Cold War and deepened the political crisis in Russia.

1. The Crown Capital Management
International Relations A troubled
relationship frays further

2. President Barack Obama shakes hands with Russia’s President Vladimir Putin in a
bilateral meeting during the G20 Summit, Monday, June 18, 2012, in Los Cabos,
Mexico.

3. For Russia and the United States, this year began with a new
row that revived the atmosphere of a Cold War and deepened
the political crisis in Russia.
As 2012 drew to a close the two countries adopted legislation
penalising each other for alleged human rights abuses.
Shortly before the New Year, U.S. President Barack Obama
signed into law a bill that blacklists Russian officials allegedly
implicated in the death of Russian lawyer Sergei Magnitsky
and in other “gross violations of human rights.” The 37-year-
old lawyer, in 2009, died in a Russian prison where he was
sent to by some Interior Ministry officials after blowing the
whistle on their multi-million tax scam.

4. Russia hit back by adopting an “anti-Magnitsky” law that not only
mirrored American sanctions but also banned U.S. adoptions of
Russian orphans. It is for the first time in the history of their relations
that Russia/the Soviet Union and the U.S. have resorted to
blacklisting each other’s citizens on the basis of their human rights
record.
In the opinion of Russia’s Foreign Minister Sergei Lavrov, the
Magnitsky Act was a Republican conspiracy to destroy Mr. Obama’s
“reset” policy of constructively engaging Russia. The U.S. Congress
adopted the Magnitsky Act on the same day it finally repealed the
four decades-old Jackson-Vanik amendment, which required Russia
to undergo every year a humiliating certification of its human rights
record to qualify for normal trade relations with the U.S.
Russian President Vladimir Putin called the U.S. move a “slap” in
Russia’s face.

5. “Why does one country feel entitled to extend its jurisdiction to
the entire world? This undermines the fundamental principles
of international law,” he told a press conference last month.
Americans, who “keep people jailed for years without being
charged” at Abu Ghraib and Guantánamo and who “have
legalised torture in their own country,” have no business
lecturing Russia on human rights, the Russian leader said.
LEAVING THE DOOR AJAR
Despite Russia’s anger, its response to the Magnitsky Act was
largely a symbolic gesture that did not really hurt U.S.
interests. Hardly any American officials will be harmed by not
being able to travel to Russia or keep their money in a
Russian bank

6. . Analysts were quick to note that if Mr. Putin really wanted to hit
the U.S. where it hurts he could have imposed restrictions on
American companies in Russia or shut off U.S. logistics
lifelines to Afghanistan that run through Russia. By sparing
U.S. interests, Mr. Putin sent a signal that Moscow is still
open to doing business with Washington.
However, the U.S. sanctions and the Russian retaliation badly
poisoned the air between the two countries. Both sides
promised to keep adding new names to their blacklists of
persona non grata.
“The ‘reset’ is unravelling at the seams,” said political scientist
Boris Shmelyov. “The two countries are a step or two away
from a new round of the Cold War.”

7. ADOPTIONS AND PUTIN’S IMAGE
The ban on American adoptions of Russian orphans, especially
children with disabilities, hardened Mr. Putin’s image in the
West as a cruel and vindictive autocrat, who used children as
hostages in his political disputes with Washington. Critics said
that for tens of thousands of Russian disabled orphans,
foreign adoption was the only chance to find a family.
Russians almost never adopt such children as they need
expensive treatment and rehabilitation that are not available in
Russia for free. Children with serious health problems
accounted for a fair share of more than 60,000 Russian
orphans adopted by Americans over the past two decades.

8. Mr. Obama will now come under increased pressure from the
Congress to put human rights at the top of his Russia agenda.
Several European countries are weighing the option of
adopting their versions of the Magnitsky Act.
While the Magnitsky Act was driven by U.S. political battles, the
“anti-Magnitsky” law had more to do with Russian domestic
politics than with foreign policy. Apart from outlawing U.S.
adoptions, the Bill allows Russian authorities to ban
“politically-active” non-governmental organisations (NGO) that
receive American funds or engage in activities that “represent
a threat to the interests of the Russian Federation.” It also
bars Russians who also have dual Russian-American
citizenship from participating in political NGOs

9. . Mr. Putin thereby sought to kill two birds with one stone: strike
a blow against his foes and boost popularity among his
conservative constituency by stoking anti-Americanism. In a
recent poll, more than 75 per cent of Russians said that they
supported the ban on American adoptions of Russian
orphans.
At the same time the adoption ban met with indignation among
the more enlightened middle classes and reignited urban
protests that were sparked by Mr. Putin’s decision to reclaim
the presidency last year. Up to 30,000 demonstrators
marched through central Moscow earlier this month
denouncing the ban as “cannibalistic” and branding its
advocates “scoundrels.”

10. ATTEMPT AT CONSOLIDATION
Analysts said Mr. Putin is trying to firm up his grip on power by pitting
the conservative working class provinces susceptible to
manipulation by state-run television against the increasingly
Opposition-minded big cities.
The Kremlin “hopes to consolidate sections of society on the issue of
foreign encroachment on Russia’s sovereignty,” said analyst Dmitry
Oreshkin. “The Kremlin narrative is: ‘there are enemies all
around, so we must rally around our leader’.”
However, Mr. Putin’s tactic had a bad downside: it provoked a split in
the Russian elites. For the first time in recent history, several senior
ministers, including a Deputy Prime Minister and the Foreign
Minister, registered their opposition to the orphan adoption ban on
the grounds that it violated Russian and international legislation. The
disagreement was apparently not serious enough for any of the
ministers to resign, but it may be just the tip of an iceberg.

11. One section of the elite — modernisers — favour
liberalisation and foreign investment to speed up growth¸
while the other more conservative section, dominated by
security cadres, fear that greater openness to the world
would undermine their positions in power and therefore
advocate tightening the screws on the Opposition and
building new walls between Russia and the West.
“The conflict that has long been brewing in society has now
spilt over to the ruling elite, which until a few months ago
was united,” said billionaire Mikhail Prokhorov, who last
year ran for President and set up his own party, Civil
Platform.

12. Mr. Putin, who had long played the role of above-the-fight arbiter
for rival power groups, is now seen to have joined the
conservatives. Experts said his demonstrative refusal to
investigate and prosecute the officials blamed for Magnitsky’s
death showed how much he treasures the support of security
clans, while the adoption ban demonstrated how little he
cares for his international reputation and Russia’s relations
with the West.
The “anti-Magnitsky” law “is a catastrophe for Mr. Putin. The
road taken by the Kremlin will soon lead to a real crisis of his
legitimacy,” said Gleb Pavlovsky, a former Kremlin PR
strategist.