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Putin's New Weapon Against Western 'Undesirables'

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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Last weekend, President Vladimir Putin signed a law that allows any nongovernmental organization to be banned from Russia as undesirable simply on suspicion of anti-government activity. Clearly, a previous anti-NGO law, passed when Putin still cared about what the world thought of him, has been deemed too mild.

QuickTake Vladimir Putin

The Arab Spring revolutions of 2011 convinced Putin that NGOs were sinister tentacles of the U.S. State Department and Western intelligence services. He's not alone in this belief. In Egypt, for example, both the deposed Islamist government of  Mohamed Mursi and the current military regime of Abdel-Fattah El-Sisi have made life difficult for such groups. In 2012, Putin, who had just survived the biggest protests in Moscow since he came to power 12 years before, pushed through a law that allowed the Justice Ministry to brand an NGO a "foreign agent" if it received foreign funding and was involved in "political activity," which wasn't defined.

Once designated as a "foreign agent," a group couldn't receive grants from the Russian government or have any other dealings with it. Mainly, however, the label was intended as a mark of shame. 

Though the law was originally meant to mirror U.S. legislation on foreign lobbying, the way it was applied made it a tool against anyone receiving foreign funding. Three years later, 67 groups are registered as "foreign agents," including the Russian branch of the anti-corruption organization Transparency International and a number of lesser-known human rights groups. Few of these have anything to do with politics. 

The latest addition to the list is Dynasty, the charity foundation of Dmitry Zimin, the founder of Vimpelcom, one of Russia's three nationwide wireless operators. Zimin didn't need foreign funding, but he transferred about $10 million of his own money to Russia from his foreign investment vehicles to fund mainly educational projects, as well as  an annual journalism prize that largely rewards anti-Putin writers (I was shortlisted last year). Personalities such as former Finance Minister Alexei Kudrin and the sister of billionaire Mikhail Prokhorov, herself a major figure in the Russian NGO world, have protested Dynasty's inclusion on the list of "foreign agents."

Zimin himself reacted angrily: "Suddenly our foundation is a foreign agent. Of course we have never been one and we'll never be one, we'd rather close."

The foundation's board will decide June 6 what to do next. 

Generally, however, the "foreign agent" law hasn't been very effective. True, it contributed to the U.S. Agency for International Development's decision to close its Moscow office, forced some groups, such as Russia's biggest remaining independent polling organization, the Levada Center, to stop accepting foreign grants, and led some NGOs to shut down. Yet the pro-government newspaper Izvestia, citing Justice Ministry data, said this month that in 2014, 4,108 Russian NGOs received 70 billion rubles ($1.4 billion) in foreign funding. "In the last two years, such funding of the third sector suspiciously increased more than tenfold," Izvestia wrote

If Izvestia's figure is correct, it dwarfs Russian government funding for NGOs. Only 4.7 billion rubles was earmarked this year, and a lot of that money probably won't be delivered to its intended recipients. According to a recent report by Transparency International, 58 percent of the groups receiving so-called presidential grants in 2013 were founded by government officials or members of Putin's tame Public Chamber, designed to represent Russia's civil society. Only 21 percent of these groups published financial accounts as required.

If the Kremlin cannot outspend mysterious foreign donors and thwart their nefarious goals, it needs more potent tools to keep them out. Enter the "undesirable organizations" law signed by Putin on May 23. Its drafters, two members of Russia's staunchly pro-Putin parliament, wrote in an explanatory note:

The domestic political, military and international conflicts that have recently involved a growing number of states, create the opportunity for the development of destructive groups, bearers of terrorist, extremist and nationalist ideas. As these organizations pursue their criminal goals, they do substantial damage to the world community by stimulating the emergence of new hotbeds of political, ethnic and religious tension.

To curtail "criminal activity," the new law, which has been condemned by the U.S. State Department, allows the Russian prosecutor general's office, in cooperation with the Foreign Ministry, to ban "undesirable" international and foreign NGOs that threaten "state security and national interests." It also allows the government to freeze the accounts of these NGOs and prevent Russian groups from receiving funding from them. 

Unlike the "foreign agent" law, the new legislation gives the Kremlin to power to cut off grants at the source. It seems easier to make a list of Kremlin-unfriendly donors and bar them than to make the overmatched Justice Ministry audit thousands of Russian NGOs. 

Nationalist legislator Vitaly Zlochevsky has already asked the prosecutor's office to check Transparency International, Human Rights Watch and the Carnegie Endowment for signs of undesirability. The prosecutor's response will be the first test of Putin's new weapon. If any of these groups are barred, that will mean the Kremlin intends to expel all international "political" NGOs from Russia. If not, the new law is no more than a threat, a warning for these groups to be careful what they say and whom they fund.

Either way, the legislation is another step toward Putin's dictatorship. There isn't much else he can do to protect his political fortress from foreign influences, short of introducing Chinese-style Internet censorship.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor on this story:
Max Berley at mberley@bloomberg.net