What is Russia’s sovereign wealth fund, Putin’s “slush fund” and why does Trump want to lift US sanctions? Explained | Today’s news
The Trump administration is considering lifting sanctions on Russia’s multibillion-dollar sovereign wealth fund, the Russian Direct Investment Fund (RDIF), as Washington explores trade deals with Moscow alongside efforts to end the war in Ukraine.
The move could mark a significant shift in US policy toward Russia, potentially easing economic pressure on the Kremlin while giving Moscow more room for international investment and trade partnerships.
What is the Russian State Investment Fund?
The Russian Direct Investment Fund is a government-backed investment fund that has invested billions of dollars in Russian companies, often alongside investors from the Middle East and elsewhere. It has also sought to expand Russia’s global influence through international investment partnerships.
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The Biden administration imposed sanctions on the fund days after Russia invaded Ukraine in 2022. US officials have described it as a “slush fund” for Russian President Vladimir Putin and “an emblem of Russia’s broader kleptocracy.”
Eric Green, who oversaw Russia policy at the White House National Security Council at the time, said, The New York Times reported, that targeting the fund was an early priority because its access to the Western financial system could help Russia finance the war.
Why does Trump want to lift sanctions?
The Trump administration sees trade talks with Russia as a potential way to improve bilateral relations and encourage Putin to end the war in Ukraine.
A U.S. official confirmed that the administration is reviewing the fund request through established procedures as part of an effort to “improve U.S.-Russian relations and help end the war.”
Fund chief Kirill Dmitriev has emerged as Russia’s key economic envoy in talks with Washington. Trump’s special envoy, Steve Witkoff, praised him, telling Putin, “Kirill got along really, really well.”
The administration’s approach centers on the possibility that trade deals could demonstrate the benefits of a closer relationship with the United States. But critics say easing sanctions risks Moscow reaping economic benefits without securing concessions for Ukraine.
Green said lifting the sanctions would send “a really strong message that we are loosening the previous position that we are not going to loosen the economic sanctions and other costs until there is a settlement in Ukraine.”
What does Moscow gain by this?
Russia can gain better access to international financial channels, expanded investment opportunities and greater scope for trade partnerships. The fund has also been involved in efforts to ship Russian diesel to the United States.
Russian officials said three tankers carrying Russian diesel had set sail for the US this month, with Deputy Prime Minister Aleksandr Novak citing “significant support from the fund”.
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According to people familiar with the negotiations, Dmitriev asked for sanctions relief for his fund while also helping to arrange the diesel business. But the U.S. Treasury Department says the October 9 suspension of sanctions already authorizes the relevant diesel transactions.
The fund must still demonstrate that the reasons for its original designation no longer apply to ensure that the sanctions are fully removed.
Dmitriev argued that the deals could change America’s stance on sanctions, saying: “Sanctions are fundamentally philosophically wrong.
