A Russian state-owned fund that says it footed half the bill of a coronavirus aid shipment delivered to the U.S. on Wednesday has been on a U.S. Treasury restricted lending list since 2015.
The Russian Direct Investment Fund, a $10 billion sovereign-wealth fund started by Russian President Vladimir Putin in 2011, said Thursday it paid for half the cost of a shipment of medical supplies promised by Moscow in a call with President Trump on Monday.
The shipment was delivered to the Federal Emergency Management Agency in New York, according to the U.S. State Department. A Russian Defense Ministry video showed a transport plane it said was filled with the supplies taking off from a Moscow region airstrip.
The RDIF was launched to help attract investment into Russian companies and infrastructure projects. Its former advisers included the founders of private-equity firms
Blackstone Group Inc.
and
In 2015, the Obama administration placed the RDIF on a U.S. Treasury sanctions list that prevents U.S. individuals and businesses from making loans to or buying equity in the fund.
The RDIF landed on the sanctions list because of its ties to the Russian development bank Vnesheconombank. The designation was part of an executive order punishing Russia for its annexation of Ukraine’s Crimea region.
The RDIF said Thursday its funding of the coronavirus aid was part of an effort to foster dialogue between Russia and the U.S.
Russia has since distanced the fund from Vnesheconombank—now called VEB—passing a law in 2016 that made it a stand-alone sovereign fund directly owned by the state.
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“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,” Arseniy Palagin, an RDIF spokesman, said Thursday. “All other transactions, including co-investments and other business transactions are permitted.”
A State Department spokesperson said Thursday that the U.S. sanctions on RDIF didn’t apply to the provision of medical equipment.
The RDIF’s role in the coronavirus aid package seems intended to burnish the fund’s reputation with the U.S. government and Western businesses, according to Peter Harrell, a senior fellow at the Center for a New American Security.
“Politically, Russia clearly wants this aid shipment to be a propaganda ploy,” Mr. Harrell said. “The involvement of RDIF seems intended to send a message that despite being on [a sanctions] list, RDIF is and should be thought of as a legitimate institution.”
Write to Dylan Tokar at [email protected] and Kristin Broughton at [email protected]
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