US and Russia Discuss Lifting Sanctions on Kremlin Fund

Russia and the United States are discussing whether to lift American sanctions on the Russian Direct Investment Fund, the Kremlin's sovereign wealth fund, a senior Kremlin aide said this week, in talks that sit inside the wider push to end the war in Ukraine.

Yuri Ushakov, President Vladimir Putin's foreign policy aide, told reporters that talks on lifting sanctions on the fund have "been going on for some time," the Russian state news agency TASS reported on Wednesday. "What the outcome will be, I do not know," he added. Ushakov said the fund's chief executive, Kirill Dmitriev, who also serves as a presidential envoy, was actively engaging American officials on the question.

An American official told CNN that Dmitriev "has been a helpful envoy to US negotiators in discussions" to end the war in Ukraine, and that the administration was running its normal process on the fund's application to be removed from the sanctions list, "in an effort to improve U.S.-Russia relations and help end the war." The New York Times first reported on Tuesday that the administration was considering the step.

A fund sanctioned in 2022

The United States sanctioned the fund in 2022, after Russia's full-scale invasion of Ukraine. The Biden administration's Treasury Department called it a "known slush fund" for Putin and his inner circle. Removing it from the list would hand Moscow a concrete economic win before any settlement of the war, and it would reopen a channel for Russian state capital that has been closed for more than four years.

Diesel first, then the fund

The fund talks follow an economic opening that moved faster. Earlier this month, President Donald Trump announced a deal allowing Russian diesel exports to global markets and waived a further slate of sanctions on Russian fossil fuel sales that had only just been signed into law. The diesel arrangement suspends fuel export sanctions for six months. Russia had banned diesel exports in early July, after Ukrainian drone strikes on its refineries set off fuel shortages across the country.

Trump has tied the easing directly to the peace track. "I am in the process of negotiating Peace in the war between Russia and Ukraine, and don't want to do anything that will drive, foolishly, Russia away from the bargaining table," he wrote on Truth Social on October 18. Dmitriev told Reuters on October 14 that the diesel agreement could serve as a model for later deals, and special envoy Steve Witkoff confirmed on October 21 that the Treasury Department was in direct contact with Dmitriev on economic cooperation.

What happens next

Peace talks between Russia and Ukraine, under American mediation, are set to resume in November after a long pause, and Putin has said the Kremlin would be ready to resume three-way talks after mid-November at Witkoff's request. No decision on the fund has been announced. The question in Washington is whether sanctions relief is being traded for movement at the table, or given ahead of it. The answer decides how much leverage the United States still holds when the talks restart.