September 20, 2022
What Russia’s Failed Coercion of Transnistria Means for the Annexation of Occupied Territory in Ukraine
[Notice: The Critical Threats Project frequently cites sources from foreign domains. All such links are identified with an asterisk (*) for the reader’s awareness.]
The series of bombings in Transnistria in late April was likely a false flag operation executed by the Kremlin intended to draw Transnistria into its invasion of Ukraine. Moscow’s effort was likely unsuccessful due to a fundamental misalignment of interests between the Kremlin and Viktor Gushan, the most powerful player in Transnistria. The Kremlin’s failure to coerce Transnistrian leadership could be part of the dynamic, along with recent Ukrainian battlefield successes, driving Moscow to annex occupied territory in Ukraine. This failure also demonstrates the extent to which Moscow’s proxies and allies are hesitant to join the Kremlin’s faltering invasion of Ukraine.
At 5:00 p.m. on April 25, a series of explosions rocked* the Ministry of State Security (MGB) headquarters in Transnistria, a Russian-backed breakaway republic in Moldova. Transnistria’s president quickly went on air and spoke live to the nation, blaming Ukraine for these “terrorist attacks”* and demanding that Kyiv crack down on rogue militant groups within its borders. Russian officials began commenting* on the explosions the next day and warned of the dangers of “Ukraine’s attacks” in Transnistria.
This series of events alarmed many international observers. Russia’s invasion of Ukraine was stalling at the time. Some experts feared* that Moscow would attempt to open an additional front by invading Ukraine through Transnistria, which the bombings looked like the perfect pretense for. The Critical Threats Project assesses that the bombings were likely an attempt by Moscow to involve Transnistria in the war.
More remarkable than the explosions was what came after them—nothing. There was no significant reaction from the Transnistrian breakaway state. This lack of reaction suggests that Moscow failed to strong-arm Transnistria. While it is unclear what exactly the Kremlin wanted from Transnistrian leadership, it is clear that it wanted them to do something. This failure to coerce is an instructive case on the limits of the Kremlin’s power at a time when Moscow is considering what to do with its proxies in Russian-occupied areas in Ukraine. Understanding this failure may predict the Kremlin’s future course of action with its Ukrainian proxies. The Kremlin may also continue to pressure Transnistria even if success is unlikely. It is important to understand the Transnistrian breakaway state structure to understand what went wrong for the Kremlin in Transnistria and the limits of this case’s predictive power.
What Is Transnistria?
Transnistria is an unrecognized breakaway republic on the left bank of the Dniester River in Moldova. The region declared its independence in 1990 amid the breakup of the Soviet Union and achieved de facto independence from Moldova in 1992 after Russian troops intervened in fighting between Transnistrian and Moldovan forces, killing* 700 troops. The region has remained in this de facto independent state since 1992. Roughly 1,500 Russian troops are still stationed there. The vast majority of people in Transnistria speak Russian, and the region has retained many Soviet-era symbols and practices. The Kremlin maintains significant influence in Transnistria as its primary international sponsor. Moscow values this influence because Transnistria’s de facto independence prevents Moldova from joining Western alliance structures and keeps it in Russia’s sphere of influence.
Formal Structure of Transnistria
Transnistria is officially a presidential republic. The president is head of the executive branch and appoints a prime minister with little authority. The Supreme Council is the sole legislative body, with the Renewal Party currently occupying* 29 of its 33 seats. Transnistria’s president is a member of the Renewal Party, giving it total control over the government.
Russian aid to Transnistria is crucial to Transnistrian government operations and solidifies a strategic partnership. Russia effectively supplies the region with natural gas free of charge, delaying indefinitely the $7 billion* that it owes Moscow for gas. This free natural gas is the key pillar of Transnistria’s economy, as “separatist authorities relied on income from natural gas–derived products for 53% of their budgetary spending in 2019 and for 40% in 2020.”
Russian platforms also serve as essential middlemen between Transnistria and the global economy. For example, Transnistria’s state bank uses* Russian Sberbank to execute all international transactions, because global corporations will not operate with it directly. Transnistrian authorities repay this Russian support by emphasizing their close ties with Moscow. Transnistria’s current president Vadim Krasnoselsky in 2018 affirmed* his commitment to ensuring that Transnistria eventually becomes part of Russia. Transnistria’s head of the Ministry of Internal Affairs said* in 2019 that Transnistria “remains an outpost of the Russian world in the region.”
Informal Structure of Transnistria
There are two main players in Transnistria whose power overshadows that of the territory’s official governing structures: Sheriff Enterprises, a company owned by ex-KGB agent Viktor Gushan, and the Ministry of State Security (MGB).
Gushan and Sheriff
Informally, Transnistria is a mafia state ruled by ex-KGB agent Gushan, who owns a company called Sheriff Enterprises. Sheriff-affiliated companies receive one-third* of Transnistria’s government spending and control 60 percent* of the region’s economy. Sheriff also sponsors the Renewal Party. President Krasnoselsky is a member of the Renewal Party and worked* as an adviser to the head of a Gushan-owned company from 2012 to 2015 before becoming president in 2016. This stranglehold means that Sheriff, and Gushan by extension, effectively controls Transnistria’s government.
Gushan and business partner Ilya Kazmaly founded Sheriff in 1993 in the aftermath of the dissolution of the Soviet Union. The business venture started out as a cigarette smuggling operation. Gushan leveraged his border-control contacts to ensure his goods crossed the long Ukraine-Transnistria border unimpeded. Gushan then again leveraged his old KGB contacts to outmaneuver his competition in buying up formerly state-owned enterprises in Transnistria. Sheriff’s business ventures now include supermarkets, gas stations, and internet providers and companies in the telecommunications, textile production, broadcast and cable television, auto sales, publishing, cognac production, light manufacturing, and advertising industries.
The only significantly powerful organization outside of Gushan’s control in Transnistria is the Russian-dominated MGB. There is likely competition between the MGB and Sheriff for influence in Transnistria, despite the lack of clear evidence of infighting in open source media. The MGB is commonly understood* to be a “department of the Russian FSB (Federal Security Service)” and likely takes orders directly from Moscow. MGB heads almost always come from the ranks of the Russian security apparatus. Transnistria’s first MGB head, Vladimir Antyufeev, worked in the Ministry of Internal Affairs in Riga, Latvia under the Soviet Union. Antyufeev led a coup that failed* to keep Latvia from leaving the Soviet bloc in 1991 during his tenure in Riga. Antyufeev also claims to have later traveled to Crimea and helped set conditions for Russia’s absorption of Crimea in 2014. He was appointed First Deputy Chairman of the Council of Ministers of the Donetsk People’s Republic after his time in Crimea. The current head of the MGB, Valery Gebos, served* in the Soviet border guards from 1984-1991.
The MGB’s responsibilities and long tenure indicate the organization’s influence. The MGB’s most important, and lucrative, responsibility is border control.* Regulating the inflow and outflow of goods allows the MGB to extract rents on both legal and illegal goods. This responsibility likely gives the MGB significant resources to command. Heads of the MGB tend to serve long tenures and are not often rotated. These long tenures allow MGB heads to establish significant human networks, entrench themselves in their positions, and accrue influence. MGB heads tend to serve the entire length of the president’s tenure. For example, Transnistria’s first MGB head, Vladimir Antyufeev, held his post during the entire 20-year tenure of President Igor Smirnov. Likewise, the current MGB head, Valery Gebos, has been in office for six years as President Krasnoselsky nears the midpoint of his second term in office.
Interest Misalignment Between Transnistria and the Kremlin
Russia’s attempt to draw Transnistria into the war in Ukraine likely failed because Gushan’s Sheriff Enterprises and the Russian-dominated MGB have fundamentally different interests. Sheriff’s primary interests are economic, while Russia’s are political.
Gushan benefits from the current status quo of receiving Russian subsidies while selling products on European markets. Sheriff’s exports to the EU currently dwarf its exports to the Russia-dominated Eurasian Economic Union. Sheriff’s pivot toward Western trade began in 2014 when the Moldovan government signed a trade deal with the EU that guaranteed tariff-free access to EU markets. Transnistrian businesses were included in this tariff exemption as long as they were registered in Transnistria and submitted to customs checks by Moldovan officials. A “massive swing” in trade took place shortly thereafter, as 58 percent of all exports from Transnistria went to the EU in the first three months of 2016. In contrast, just 6 percent of all exports went to the Eurasian Economic Union. By comparison, only 27 percent of Transnistrian exports went to the EU in 2015. These Western-oriented exports incentivize Gushan to maintain economic contacts with the West.
Gushan also has a vested interest in reestablishing cordial relations with neighboring Ukraine. Transnistria imported and exported most of its goods through Ukraine’s Black Sea ports until Russia invaded and Ukraine closed its border with Transnistria for the first time in 30 years. This border closure means that Transnistria’s only way to import and export goods to the global market is through Moldova, which is an uncomfortable arrangement for the breakaway republic. Gushan is likely economically motivated to normalize relations with Ukraine enough to reopen the border. He is unlikely to accept permanent reliance on Moldova to remain economically solvent.
Russia’s main goal with the MGB was to strong-arm Transnistria into supporting Moscow’s military campaign in Ukraine, which ultimately failed. The MGB’s goals contradict Sheriff’s goals because overtly supporting Russia’s invasion of Ukraine would likely imperil Sheriff’s lucrative business ties with the West. Transnistria’s refusal to support Moscow’s campaign suggests that Gushan won the power struggle for control over Transnistria and stands as the strongest player in the territory.
Russian Defeats in Ukraine Have Likely Devalued the Kremlin’s Coercive Power over Transnistria
The Kremlin’s faltering invasion of Ukraine has likely devalued its military coercive power over Transnistria. The Kremlin’s military presence in Transnistria is weak. There are currently approximately 1,500 Russian troops stationed in Transnistria. Only 50–100 of these are Russian soldiers dispatched from Russia. The remaining 1,400 troops are Transnistrian locals who have been given Russian passports and serve as Russian soldiers. Two units make up this 1,500-strong contingent: the peacekeeping force (MC) and the Operational Group of Russian Forces (OGRF).
The MC is the smaller of the two and is responsible for patrolling security zones between Transnistria and Moldova. The OGRF is stationed without any agreement from Moldova and guards a large ammunition depot that remains from the Soviet Union. These troops engage in regular military exercises,* but they are very poorly equipped. The poor performance level of Russian troops fighting in Ukraine suggests that the troops in Transnistria would perform poorly in combat. Furthermore, their overwhelming status as native Transnistrians means they offer little coercive power over the Transnistrian government itself, since they are unlikely motivated to attack their homeland to enforce Russian demands.
The poor performance of the Kremlin’s troops in Ukraine also decreases the likelihood that Moscow will airdrop troops into Transnistria or otherwise use the territory as a springboard for operations into Ukraine. The Kremlin has lost significant numbers of troops since the invasion began and is struggling to make even incremental territorial gains in eastern Ukraine. Moscow is unlikely to have the spare manpower to open a new front in the west, pushing on Odessa. The Kremlin has little ability to militarily coerce Transnistria without the threat of the arrival of additional trained Russian forces. The Kremlin’s failure to coerce Transnistria may affect its decision-making regarding the degree of control it chooses to exert over occupied territories in Ukraine. This experience may also have several implications for the decision-making of other Kremlin proxies and allies.
Moscow’s failure to coerce Transnistria into joining its invasion of Ukraine has implications for how the Kremlin interacts with its proxies.
A caveat. Transnistria is an outlier among the Kremlin’s proxies. Gushan has assembled significantly more economic and political power in Transnistria than any local actor has assembled in the Kremlin’s other proxies. The predictive power of Transnistria’s case is therefore limited. This case nevertheless offers valuable information about the limits of the Kremlin’s coercive power and offers hints as to how the Kremlin may act with its proxies in Ukraine.
The Kremlin will likely attempt to directly absorb into the Russian Federation the territory it captured in Ukraine rather than turning it into a Transnistria-style client state. The huge amount of political, economic, and diplomatic capital the Kremlin has invested in its Ukraine invasion means it cannot afford to lose control over annexed territory. Moscow will therefore likely attempt to avoid the headache of managing a client state by directly absorbing the captured Ukrainian territory into the Russian Federation, which would give the Kremlin direct control over it. Russia’s absorption of these territories would not likely carry any additional political cost, because Western leaders are unlikely to decrease sanctions pressure on Russia in the short to medium term, no matter what the Kremlin does.
The Kremlin likely has insufficient bandwidth and capital to increase its control over Transnistria in the short to medium term. Moscow’s security services are likely using all of their operational bandwidth on securing territory it has captured in Ukraine. The security services likely do not have the time or resources to invest in the MGB to increase the ministry’s influence in Transnistria. Transnistria will therefore likely continue to balance between the West and Russia to maintain its access to Western markets and free Russian energy.
The Russian military’s poor performance in Ukraine likely played a role in deterring Transnistria from participating in its invasion. Russia’s forces have become bogged down in eastern Ukraine over the first seven months of the war. This poor performance made joining the operation an unattractive proposition. Transnistrian leadership likely calculated that joining the invasion or offering significant assistance would net only marginal returns. Conversely, aiding the invasion would significantly damage lucrative economic ties with the West.
The Russian military’s poor performance has likely deterred and will continue to deter Belarus from directly participating in the invasion. Belarusian President Alexander Lukashenko is likely conducting the same cost-benefit analysis that Transnistria’s leaders conducted—and reaching a similar conclusion. Minsk has so far refrained from sending troops into Ukraine, despite its willingness to allow the Russian military to launch missiles from Belarus and use it as a staging ground for the invasion. Lukashenko likely correctly assesses that directly joining the invasion would lead to significantly increased Western pressure and threaten his hold on power. Minsk will consequently likely continue to refrain from directly participating in the invasion.