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Basic Political Developments
• Police enhancing security at strategic facilities across Russia – Interior Ministry
• Organizer of blasts at Baksanskaya HPP identified - The organizer of the attack has been identified as one of the leaders of North Caucasus paramilitaries – Kazbek Tashuyev, RIA Novosti agency reports quoting a Russian security official.
• Blasts at Kabardino-Balkaria hydro plant equivalent to over 20 lbs - The blasts at the hydropower plant in Russia's North Caucasus republic of Kabardino-Balkaria were equivalent to more than 10 kg of TNT (22 lbs) altogether, a source from the local law enforcement authorities said on Thursday.
• RusHydro, KBR to discuss Baksan HPP restoration - RusHydro specialists and Kabardino-Balkaria's (KBR) authorities will discuss the measures for the soonest restoration of the Baksan hydropower plant, where several blasts went off on Wednesday, the press service of the republican branch of the company told Itar-Tass.
• Azerbaijan Railways: Blasts on railways in Russia significantly reduced passenger traffic - Due to frequent blast incidents on the railway on Russia's territory (Dagestan), demand for tickets for trains leaving Azerbaijan in this direction, fell by 20-30 percent, Azerbaijan Railways chief engineer Gurban Nazirov said July 22.
• A large cache of weapons and ammunition discovered in Chechnya
• In Moscow, weapons of Chechen rebels found on scene of accident
• Explosive device goes off at busy crossroads in Russia’s Bratsk - An explosive device detonated at a busy crossroads in the city of Bratsk, Irkutsk Region late on Wednesday, a source in the local emergencies administration told Itar-Tass, adding that no casualties or damages were reported.
• Moscow urges Hamas to join PLO - Inter-Palestinian unity is a cornerstone of the Middle East peace process. The statement came from Russia’s Ambassador to the United Nations Vitaly Churkin during a UN Security Council meeting on the Middle East.
• Russia, NATO officials to discuss military cooperation - A NATO delegation will visit Russia on July 22-24 to discuss cooperation on the fight against sea piracy and Russia's assistance to NATO contingent in Afghanistan, the Russian Defense Ministry said.
• NATO Military Committee chief to visit Russia July 22-24 - “The NATO delegation will visit the 5th Motorised Infantry Brigade of the Moscow [Military] District to familiarise itself with the training of the servicemen and the material and technical base of the brigade created as part of the Armed Forces reform. Admiral Di Paola will meet with the NATO military attaches accredited in Moscow to tell them of the priority areas of military cooperation between Russia and NATO,” the press service said.
• NATO should open its doors to Russia – by Jonathan Power
• Lavrov to attend Russia-ASEAN ministerial meeting - Russian Foreign Minister Sergei Lavrov will attend the annual Russia-ASEAN ministerial conference on Thursday, July 22. Russian Foreign Minister Sergei Lavrov will attend the annual Russia-ASEAN ministerial conference on Thursday, July 22.
• Vietnam Official: To Sign Nuclear Plant Contract With Rosatom - "We will likely sign the contract in October this year for the construction of the Ninh Thuan 1 nuclear power plant," Pham Khanh Toan, head of the Vietnam Institute of Energy under the Ministry of Industry and Trade, told Dow Jones Newswires.
• Russian President Dmitry Medvedev Will Visit Baku In September
• St. Petersburg talks contribute to Karabakh settlement - Armenian president
• The new Belarusian president-to-be on inspection visit to Moscow - Leaders of the United Civil Party, Anatoly Lebedko and his deputy Jaroslav Romanchuk and Alexander Dobrovolsky, were invited to Moscow under the pretext of celebrating the 60th anniversary of Gozman
• Russia: Dispute Over Detained Pilot - The Russian Foreign Ministry on Wednesday accused the United States of kidnapping a Russian pilot in Liberia. The pilot, Konstantin Yaroshenko, 41, who was arrested in May, was charged with smuggling cocaine, the United States Drug Enforcement Administration said.
• Russia, Lithuania sign cross-border cooperation deal
• Monument to commemorate Kuril islands annexation unveiled again - Kamchatka has seen the unveiling of a restored monument to the sailors that liberated the South Kuril islands from Japanese troops in 1945.
• Russia drags its feet over resetting Japan relations - By Yuriko Koike /Tokyo
• Bishop Yakiv: Patriarch Kirill is attempting to restore communism
• Kiril never to make it up with Kyiv patriarch, Moscow church says - Moscow Patriarch Kiril will not make peace with the Kyiv Patriarch Filaret whom they regard as a breakaway leader, says representative of the Moscow-affiliated Ukrainian Orthodox Church Longin.
• Kommersant: Patriarch Kirill explores a canonical territory
• Ukrainian bishop, far-right activist slam visiting Russian patriarch - Russian Patriarch Kirill's visit to Ukraine and Odessa is an attempt to restore the past, atheism and Communism, Bishop Yakiv of Odessa and Balta, of the Ukrainian Orthodox Church of the Kiev Patriarchate, told a news conference in Odessa today.
Russia to keep 2nd place in fighter jet exports until 2013 - Russia currently maintains a second place with 377 new fighters worth over $16.3 bln, trailed by China, the U.K., Sweden and France.
• Pearl Aircraft to buy 30 SuperJet planes from Sukhoi
• Superjet seals second $900 million plan order
• Itar-Tass: Ilyushin Finance Co signs USD 3-1/2 bln worth of contracts at Farnborough
• Yuri Dolgoruky returned after sea trail
• Good neighbors: Russian-Finnish talks in Finland in friendly atmosphere
• Medvedev Predicts End to Finnish Trade Dispute in 2 Weeks
• Finnish & Russian Activists Appeal to Medvedev
• Faults in police work do not mean all Interior Ministry corrupt – Nurglaiyev
• Russian Constitutional Court slates Gazprom skyscraper plans
• Constitutional Court backs opponents of Gazprom’s skyscraper - Russia’s Constitutional Court has ruled that St. Petersburg’s city authorities acted against the constitution when they made an exception to the rules for the planned 400-meter-high “Okhta-Center” tower.
• Russian corruption means foie gras roads would be cheaper - Corruption in Russia has made road-building so expensive that the same stretch of highway could be coated in an eight-inch thick layer of foie gras for the same price, a study has found.
• Chasing Mayors Away - Mayors in Russia enter office less and less as a result of elections; they are instead being replaced by city managers appointed by local deputies.
• Russian Search Engine Idea Finds High-Level Support –Vedomosti
• Thirteen alleged neo-Nazis on trial in Moscow
• Mission: To clarify the outer border of Russia`s continental shelf - The flagship of Russia’s polar fleet “Academician Fyodorov” has left for the Arctic on an expedition to clarify the outer border of the country’s continental shelf. It will take 50 scientists on board in St. Petersburg for its 90-day expedition. The scientists will study the Lomonosov Ridge and the Mendeleev Rise in the Arctic with the assistance of the nuclear-powered icebreaker Yamal for 75 days.
• Hoof-and-mouth outbreak confirmed in Russia's south
• Sutyagin wishes to return to Russia, timeframe vague - The researcher said he did not know when he might cross the Russian border but believed that that would happen some day.
• Freed Russian spy Sutyagin plans to return to Russia
• Lawyer: Russian spy unhappy with rejection - A redheaded Russian spy whose photographs made her a tabloid favorite is upset that the United Kingdom has revoked her citizenship, her lawyer said Wednesday.
• Boris Berezovsky in '£100m' divorce battle - Boris Berezovsky, the Russian oligarch, will divorce his second wife Galina today in what could be the costliest marriage split in British legal history.
• E.coli and Rotten Tomatoes Found at Moscow McDonald's Restaurants
• PRESS DIGEST - Russia - July 22
o A rebel attack on a hydroelectric power plant in the North Caucasus on Wednesday demonstrated that strategic sites in Russia are still vulnerable to terrorist attacks, the daily writes.
o The government is planning to increase tax burden to attract more than one trillion roubles to the budget by 2013.
o The government is considering selling a third of its grain reserves to keep grain prices on the local market stable despite possible grain shortages caused by this year's drought.
o Russian businessman Sergei Pugachev is ready to sell a 75 percent stake in a large Siberian coal deposit, expecting to attract up to $3 billion, the daily says commenting on talks held on Wednesday between Pugachev's United Industrial corporation and Japan's Mitsui & Co (8031.T: Quote, Profile, Research).
o The Defence Ministry has sold a 460,000 sq meter allotment of land on the territory of its military airport in Kubinka near Moscow. Russian billionaire Suleiman Kerimov reportedly bought it to build a new airport for businessmen, the daily says.
o The territory of peat bogs on fire around Moscow increased four-fold this summer compared to last year due to the current heat wave that hit Russia's central regions.
• Press review
o The Vremya Novostey newspaper is highlighting the terrorist attack at the Baksan hydropower plant in Russia’s Kabardino-Balkar Republic.
o According to Rossiyskaya Gazeta, the second day of President Medvedev’s negotiations with his Finnish counterpart Tarja Halonen was devoted to environmental challenges, the human rights situation and some humanitarian issues, in particular the increasing number of family disputes between the two countries.
o The Kyrgyz government may consider allowing Russia to open its second military base in southern Kyrgyzstan, the country’s President Roza Otunbayeva told reporters on Wednesday.
o Low inflation in Russia has pushed poverty rates down. The RBC Daily says the government’s anti-inflationist measures and employment policy are bearing fruit.
o A tax on luxury may still appear in Russia. This week, the Economic Development Ministry is to submit proposals on the prospect of introducing a luxury tax, the Nezavisimaya Gazeta reports.
National Economic Trends
• Russian rouble shrugs off lower oil on local taxes
• Putin Lures $1 Billion Less Than Planned as Higher Yield Sought
• Finance Ministry Seeks $33Bln Through Tax Hikes
• Russia plans domestic grain sales to control price
• Putin Reverses Grain Intervention Strategy
• Russia to launch grain interventions next month
• Drought-affected regions to use fodder grain from govt stocks
Business, Energy or Environmental regulations or discussions
• Norilsk Nickel, Polyus Gold, RusHydro: Russian Equity Preview
• Russian Stocks Pare Losses as Oil Gains; Novatek, Rosneft Climb
• Russian Stocks Pare Losses as Oil Gains; Novatek, Rosneft Climb
• Law on Heat Supply paves the way to changes in heat regulation
• More noise regarding taxation of base metals - Ilya Trunin, head of the Finance Ministry's tariff department, stated publicly yesterday that the government is considering reintroducing copper export duties from 2011 (or possibly earlier) and a floating export duty on nickel from 2011 instead of the current 5% flat rate.
RBC: Sberbank's investment portfolio spirals up
• Moody's changes outlook on Sberbank's financial strength rating to stable from negative (Russia)
• Moody's affirms Baa1 and Aaa.ru Insurer Financial Strength ratings on ROSNO with a stable outlook
• Petropavlovsk Gold Output Falls 16%, Maintains Target (Update1)
• UPDATE 1-Petropavlovsk sees FY output at lower end of range
• Preparations underway for talks on Malév with Russians
• Mechel’s bloody ink - The company is building an oxygen-converter facility at the Chelyabinsk iron and steel works, based on design documentation that has not passed state inspection. These procedural violations have already led to accidents and human casualties at Mechel enterprises.
• EBRD raises US$ 200 million for Russia’s Brunswick Rail Group
• Pugachyov Seeks $3 Billion for Elegest Coalfield, Vedomosti Says
• Russia's Mirax faces over $18 mln in tax claims - paper
• Russia's Nafta Moskva buys chunk of military airfield - paper
• THE INSIDERS: Progress in Russia, but corporate governance remains a risk - International investors rightly complain that Russia's stock market is rather volatile. What's less widely appreciated is that, amidst the mood swings, the overall trajectory of the RTS index of leading Russian shares has most definitely been up.
Activity in the Oil and Gas sector (including regulatory)
• Russian Energy Tycoon Raises Stake in NOVATEK
• 'Last' Huge Oil Fields to Cost $2Bln - The Energy Ministry is seeking a record price of 60 billion rubles ($2 billion) to develop the Trebs and Titov oil fields, and the government looks determined to get as much as it possibly can from oil companies for the massive deposits.
• Oil MET hike could dent profitability and undermine production
• Oil & Gas Sector: Finance Ministry submits new tax proposals
Gazprom
• Gazprom Neft Fails In Challenge Of Price-Fixing Fine –Vedomosti
• Red Star Belgrade and Gazprom sign shirt deal - Serbian Red Star Belgrade has signed five-year multi-million dollar deal with Gazprom, the Russian energy company. Red Star has not had a shirt sponsor for a while now. This deal will see the AZS logo on the Red Star jerseys as this is the new regional brand of Gazprom.
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Full Text Articles
Basic Political Developments
July 22, 2010 10:53
Police enhancing security at strategic facilities across Russia – Interior Ministry
MOSCOW. July 22 (Interfax) - The Russian Interior Ministry and other law enforcement agencies are taking measures to step up security at strategic sites, including hydropower plants and other power facilities, following the Wednesday bombing of the Baksan Hydropower Plant in Kabardino-Balkaria, the Interior Ministry told Interfax on Thursday.
"In fulfilling the country leadership's instructions, the Interior Ministry and other law enforcement agencies are taking measures to ensure the security of vitally important sites," it said.
"Security plans for these installations are being revised," it said.
What has been preliminarily qualified as a terrorist attack on the Baksan Hydropower Plant left two people dead and two others injured and hospitalized. The plant's machine room was significantly damaged.
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Organizer of blasts at Baksanskaya HPP identified
|Jul 22, 2010 09:59 Moscow Time |
Government officials and executives from power generating companies are meeting in Kabardino-Balkaria, the Russian North Caucasus, following yesterday’s terror attack at the Baksanskaya hydropower plant. The attack came at dawn. Four apparently well-trained militants shot dead two security guards, sneaked into the engine compartment, beat three employees and planted homemade bombs. Four of the bombs where subsequently detonated, damaging power generators and other equipment, and one unexploded bomb was defused later. The organizer of the attack has been identified as one of the leaders of North Caucasus paramilitaries – Kazbek Tashuyev, RIA Novosti agency reports quoting a Russian security official. The victims’ families will receive compensation. The blasts caused no disruptions to electricity supplies in the region.
Blasts at Kabardino-Balkaria hydro plant equivalent to over 20 lbs
09:22 22/07/2010
The blasts at the hydropower plant in Russia's North Caucasus republic of Kabardino-Balkaria were equivalent to more than 10 kg of TNT (22 lbs) altogether, a source from the local law enforcement authorities said on Thursday.
The attack saw a group of up to four gunmen burst into Kabardino-Balkaria's Baksan Hydropower Plant early on Wednesday and shoot dead two security guards. Then they detonated four explosive devices. The resulting blaze covered an area of 250 sq meters.
The attackers were apparently well-trained militants, the source said. The Russian Federal Security Service has said the gang's leader had been identified.
The head of RusHydro's plant in the North Caucasus, Ali Sattaev, said two hydro units were damaged as a result of the blasts. However, a RusHydro spokesman said energy supplies to Kabardino-Balkaria would not be affected by the attack.
Some experts say the attack may be a "rehearsal" that could be followed by other similar attacks.
MOSCOW, July 22 (RIA Novosti)
RusHydro, KBR to discuss Baksan HPP restoration
TASS
July 22, 2010
RusHydro specialists and Kabardino-Balkaria's (KBR) authorities will discuss the measures for the soonest restoration of the Baksan hydropower plant, where several blasts went off on Wednesday, the press service of the republican branch of the company told Itar-Tass.
Early on Wednesday morning unidentified bandits broke into the hydropower plant. Killing two policemen and stealing their guns they captured the administrative building of the hydropower plant. The chief of the shift and his deputy were beaten up. The criminals planted several mines in the engine room, where four blasts went off later. Still one more device was later dismantled by the sappers. The detectives qualified the incident as an act of sabotage. "The suspects have been exposed, all these people are known," presidential plenipotentiary representative in the North Caucasus Federal District Alexander Khloponin said.
"On Thursday night RusHydro specialists were working at the station, examining the technical state of three turbines of the hydropower plant and discussing, what equipment should be replaced, where it could be ordered and how much it would cost. Two hydropower units were exploded, a fire broke out in the engine room and the equipment was poured down with water and foam. Meanwhile, each turbine of the hydropower plant is produced under a special order," the company press service said.
The RusHydro top managers and Kabardino-Balkaria's leadership will announce the preliminary results in Nalchik on Thursday, he said.
Deputy Prime Minister Igor Sechin held a meeting in Moscow on Wednesday to eliminate the aftermath of the blasts at the Baksan hydropower plant. The participants in the meeting decided that members of the expert group headed by the chief of the operational headquarters to eliminate the aftermath of the terrorist act would fly to Kabardino-Balkaria. The group included the representatives of all ministries, agencies and energy companies concerned.
Some instructions were given to put all facilities on high alert in order to avert terrorist acts at enterprises of the fuel and energy sector and to tighten all security measures.
Head of the republic Arsen Kanokov and Prime Minister Alexander Merkulov visited the Baksan hydropower plant on Wednesday. They expressed condolences to the families of killed private security guards and injured people.
Chief of the night shift Khasen Sabanchiyev beaten up by the attackers is staying in the intensive therapy ward, but his health is out of danger. Doctors permitted his deputy to go home.
Copyright 2010 ITAR-TASS News AgencyAll Rights Reserved
TASS
Azerbaijan Railways: Blasts on railways in Russia significantly reduced passenger traffic
22.07.2010 11:54
Azerbaijan, Baku, July 22 / Trend, E. Ismayilov /
Due to frequent blast incidents on the railway on Russia's territory (Dagestan), demand for tickets for trains leaving Azerbaijan in this direction, fell by 20-30 percent, Azerbaijan Railways chief engineer Gurban Nazirov said July 22.
He said blasts affect both passenger transportation and goods transportation, and lead to delays in the schedule of trains.
Nazirov stressed that however 30-40-percent growth is observed in domestic passenger traffic, which is due to university entrance exams in Azerbaijan.
Recently, blasts on the Russian railways on the territory of Dagestan have become more frequent. The last explosion took place July 15 when an explosive device went off during the movement of buffer trains, consisting of a locomotive and two wagons with sand. As a result of such incidents delays occur in the schedule of trains arriving in Azerbaijan and departing from Azerbaijan. At present CJSC Azerbaijan Railways implements rail runs through Dagestan on routes in the direction of Moscow, St. Petersburg, Rostov, Tyumen, Kiev, Kharkov and other cities.
A large cache of weapons and ammunition discovered in Chechnya
GOOGLE TRANSLATION
22.07.2010 15:32 |
GROZNY, July 22. Itar-Tass Ilyas Asuev. In the Chechen Republic during search operations by law enforcement agencies of the republic in the Urus-Martan district discovered a large cache of weapons and ammunition. Itar-Tass, the press service of Ministry of Internal Affairs of the Republic.
The press service noted that near the village of Alkhazurovo in the mountain woodlands of Urus-Martan district police seized a cache, you cache of three automats, eight shops to him, two Makarov pistol, grenade launcher RPG-26, five mortar projectiles caliber 82 mm, anti-personnel mines, five F-1 grenades, flares, and more than 1 thousand 600 cartridges of various calibres.
In Moscow, weapons of Chechen rebels found on scene of accident
GOOGLE TRANSLATION
Published:
July 22, 1910 (10:00)
Two motorcyclists have left on the scene in Moscow submachine gun "swift" and disappeared
Accidents involving motorcycles Honda has happened in the capital on the eve of around 18.10 in the street Lobachevsky. The driver and passenger of the motorcycle fled the scene of the accident. They threw a bag containing the gun was found gun K6-92 ("swift") and 19 cartridges. In addition, 300 meters from the accident scene police found the store to TT pistol with seven rounds.
According to RIA Novosti, the former owner of the motorcycle.was found. He said that three days ago, he sold it to men of Caucasian appearance, with no registration.
A criminal case under part 1 of article 222 of the Criminal Code (illegal possession of weapons, up to three years imprisonment). The investigation is underway.
Submachine gun K6-92 is actively used by militants in Chechnya, its production has been established with Dudayev. This weapon is also used in Armenia.
Explosive device goes off at busy crossroads in Russia’s Bratsk
22.07.2010, 11.20
IRKUTSK, July 22 (Itar-Tass) -- An explosive device detonated at a busy crossroads in the city of Bratsk, Irkutsk Region late on Wednesday, a source in the local emergencies administration told Itar-Tass, adding that no casualties or damages were reported.
According to the source, the blast occurred at about 22:00 local time (17:00 Moscow time) at the intersection of Baikalskaya and Lermontova streets. The device was planted at a curbstone. The explosion generated a one-meter crater.
Investigators found grenade body metal pieces, the source said.
The emergencies administration is in control of the situation.
Moscow urges Hamas to join PLO
|Jul 22, 2010 10:01 Moscow Time |
Inter-Palestinian unity is a cornerstone of the Middle East peace process. The statement came from Russia’s Ambassador to the United Nations Vitaly Churkin during a UN Security Council meeting on the Middle East. He said Moscow strongly supported efforts aimed at mending the rift between rival Palestinian factions and urged Hamas to join the Palestine Liberation Organization. Similar calls have repeatedly been made by the international Quartet of Middle East mediators from Russia, the United States, the European Union and the United Nations. Mr. Churkin said there had been signs of positive shifts on the part of Hamas though. He condemned Israeli plans to go ahead with construction of new Jewish homes in East Jerusalem.
Russia, NATO officials to discuss military cooperation
03:25 22/07/2010
A NATO delegation will visit Russia on July 22-24 to discuss cooperation on the fight against sea piracy and Russia's assistance to NATO contingent in Afghanistan, the Russian Defense Ministry said.
NATO officials, led by Chairman of the NATO Military Committee Adm. Giampaolo di Paola, will meet with Chief of the General Staff of the Russian Armed Forces Gen. Nikolai Makarov and other senior military officials.
"The sides are planning to review the preliminary results of Russia-NATO cooperation in 2010 and discuss the prospects of future interaction in various areas," the ministry said in a statement.
"The discussions will focus on the fight against sea piracy, logistics, and the situation in Afghanistan," the statement said.
NATO froze ties with Russia following the August 2008 armed conflict with Georgia and the recognition by Moscow of Georgia's breakaway regions of Abkhazia and South Ossetia.
However, Russia-NATO relations have improved over the last year as a result of a course towards "resetting" thorny relations between Moscow and Washington taken by Russian President Dmitry Medvedev and his U.S. counterpart Barack Obama.
In late January, the Russian and NATO chiefs of staff met in Brussels for the first time since their relations became warmer. As a result of the talks, a framework military cooperation treaty was approved, which is seen as an important step toward the restoration of military ties between Russia and the alliance.
Russia has allowed land transits of non-lethal NATO supplies to Afghanistan and promised more assistance in the bloc's operations in the war-torn country by expanding transits, supplying helicopters and training Afghan security forces.
Russia has been actively participating in international efforts to fight piracy along the Somali coast since October 2008.
MOSCOW, July 22 (RIA Novosti)
NATO Military Committee chief to visit Russia July 22-24
22.07.2010, 03.03
MOSCOW, July 22 (Itar-Tass) - NATO’s Military Committee Chairman, Admiral Giampaolo Di Paola will arrive in Moscow on Thursday, July 22, on a three-day visit to finally confirm that Russia-NATO military relations have been defrosted.
This is Paola’s first visit to Russia since his appointment to the post on June 27, 2008.
The main goal of the visit is to confirm the restoration of Russia-NATO relations in the military field.
On July 23, Paola will meet with the chief of the General Staff of the Russian Armed Forces, General Nikolai Makarov. “The sides intend to review interim results of interaction between Russia and NATO in 2010 and discuss prospects for further cooperation in the fields of mutual interest. Priority attention will be paid to the fight against sea piracy, logistical support, and cooperation in the settlement of the situation in Afghanistan,” the Defence Ministry press service said.
“The NATO delegation will visit the 5th Motorised Infantry Brigade of the Moscow [Military] District to familiarise itself with the training of the servicemen and the material and technical base of the brigade created as part of the Armed Forces reform. Admiral Di Paola will meet with the NATO military attaches accredited in Moscow to tell them of the priority areas of military cooperation between Russia and NATO,” the press service said.
The Italian admiral will also give a lecture on relations between Russia and NATO at the Centre for European Security Studies.
During his visit Paola will discuss military cooperation with Russia in the four main areas set forth in the Russia-NATO action plan for 2010 – antiterrorist efforts, fight against piracy, logistical support to troops, and search and rescue operations at sea.
In an interview with Itar-Tass before the trip, Di Paola said this would be the first visit to Moscow by a high-ranking representative of the alliance’s military command after a rough period of bilateral relations caused by the Georgian crisis in August 2008.
The visit will be a result of the political resetting of relations that began in 2009 at a meeting of foreign ministers. The admiral believes that the political resetting dos not mean that there are no more disagreements between Russia and NATO, but it indicates the two sides’ commitment to restoring and strengthening mutual trust.
Russia and NATO halted military cooperation after the conflict in South Ossetia in August 2008 and resumed it during the meeting of the Russia-NATO Council at the level of chiefs of the General Staff in Brussels on January 26, 2010.
The chief of the General Staff of the Russian Armed Forces, General Nikolai Makarov, visited Brussels for the second time on May 5 to approve a plan of cooperation.
The political dialogue between Russia and NATO was reset in May 2009.
According to Di Paola, military cooperation between Russia and NATO in 2010 will be more of a staff nature, aimed at preparing a substantive practical programme for 2011.
The visit will end on July 24.
NATO should open its doors to Russia
Jonathan Power
22 July 2010
Not long ago Zbigniew Brzezinski, President Jimmy Carter’s National Security advisor, told me that the Ukraine “smelt more like Europe” and that the West should concentrate on bringing Ukraine into Western institutions like NATO and even the European Union.
If I had more time with Brzezinski I would have said that if it hadn’t been for Russian resolve the Mongol and Tartar hordes would have conquered Moscow and quickly afterwards the rest of Russia. They would have turned Russia into an Islamic society that would have undermined the Christian civilization of both Russia and Europe.
Likewise, the Christian-influenced West owes much of the preservation of its religious beliefs to the Constantinople-based Eastern Orthodox Church. Constantine, who converted the Roman Empire to Christianity, moved the centre of the Church to Constantinople and it became the Byzantine Empire.
When the Ottomans ravaged Constantinople in 1453 the Byzantine Empire was incorporated into the Ottoman Empire. But later, driven out of Constantinople, the Eastern Orthodox Church moved to Moscow under the patronage of Grand Duke Ivan 111, ruler of Muscovy, leaving a rump Byzantine to limp along until the end of the Ottoman Empire in the early twentieth century. Until 1917 and the red revolution the Tsars believed they were the proper heirs to Eastern Orthodoxy with its pedigree that reaches back to Emperor Constantine.
Russia is many ways, despite its tradition of continuous authoritarianism, has been an important centre of European culture, with its composers, its literature, its art, its ballet and its orchestras. We only have to think of Chekov, Pushkin, Tolstoy, Turgenev, Dostoevsky, Tchaikovsky, Borodin, Rimsky Korsakov, Shostakovich, the Hermitage museum and the Bolshoi and Kirov ballet. Only Gogol came from the Ukraine. Indeed there is an argument that no other country has produced so many endeavours in so many of the arts. Ukraine “smells” more European? That’s doubtful.
In the New York Times, Nicolai Petro, an advisor under George G W Bush on policy towards the Soviet Union writes that Ukraine for 300 years was part of Russia: “Given the deep historical ties, it was probably a fool’s errand to try to set Ukraine against Russia [under President Bill Clinton and George W. Bush], especially by forcing Ukraine to chose between Russia and Europe. This is a false choice.....We can have both countries join Europe together”.....We should “replace the misguided divide and conquer policy.”
Undoubtedly Russia is more European than Ukraine but they should both approach Europe in tandem. Yet as Clinton decided with the East Europeans, waiting for the EU to absorb them was going to be a slow process so he decided to go the NATO route, which was more straightforward and relatively easy to do. Gorbachev, Yeltsin and Putin have all made speeches in which they have argued for Russia to be part of the “European house.” They were ignored. But now the “reset” button has been pressed it is time to reconsider how Russia could enter Europe. As Brzezinski argued in my lengthy interview with him in Prospect magazine, the UK’s most influential intellectual journal, more could have been done under Clinton and Bush to bring the Soviet Union and later Russia into the European orbit. But the same argument applies as it did for the East Europeans. Joining NATO should come first as it is an easier jump. It is in America’s interest to have Russia bound to a major Western institution rather than being tempted to do its own thing. It would also encourage democratising and pacifying elements in Russia, which President Dmitri Medvedev seems to be struggling for. The Russians are clearly reaching for something important beyond their present loose affiliation with NATO. It has proposed a European Security Treaty. Russia is not seeking a way for the fox to enter the hen house.
Russia and West already cooperate on some critical issues- the Iranian nuclear programme, terrorism, nuclear proliferation, climate change, cyber attacks and international crime and trafficking. They could cooperate more on Afghanistan, Iraq, North Korea and the Israel/Palestine conflict, contributing their historical experience and the wisdom that goes with it.
These links need to be tightened. NATO membership is a good way to do it. NATO chains are not that tight. Given its structure that demands unanimity before any action is taken the recent vogue is for “coalitions of the willing.” Russia can choose when it wants to be involved in military or peacekeeping action. Meanwhile, inside NATO it can make its voice heard in a way it can’t at the UN. For its part the West would be taking a major step forward in persuading the lion to lie down with the lamb.
Jonathan Power is a London-based foreign policy commentator
Lavrov to attend Russia-ASEAN ministerial meeting
22.07.2010, 01.32
HANOI, July 22 (Itar-Tass) -- Russian Foreign Minister Sergei Lavrov will attend the annual Russia-ASEAN ministerial conference on Thursday, July 22.
The purpose of the conference is to prepare the second Russian-ASEAN summit to be held in Hanoi in autumn.
Moscow expects the summit to “give an additional impetus to Russia’s interaction with the Association,” Foreign Ministry spokesman Andrei Nesterenko said.
“In the Russia-ASEAN format the foreign ministers will discuss the state and prospects for further development of political, economic and humanitarian cooperation,” the official said. “High on the agenda will be preparation for the second Russia-ASEAN summit in Hanoi this autumn that will give a fresh impetus to our cooperation with the Association.”
The ASEAN Regional Forum is an effective platform for security dialogue on multilateral cooperation in such areas as nuclear non-proliferation, emergency response, the fight against terrorism, piracy and other types of trans-national crime.
“The agenda of the ASEAN Regional Forum includes the formation of regional architecture in the Asia-Pacific Region and the exchange of opinions on pressing international problems,” the ministry's official said.
At the forum the Hanoi Plan of Action will be adopted to implement the ASEAN Vision 2020 Statement that stipulates concrete steps towards multilateral cooperation in regional security.
Lavrov is expected to hold bilateral meetings with Vietnam's President Nguyen Minh Triet and other top officials as well as his counterparts from countries of the Asia-Pacific Region.
The Association of South East Asian Nations (ASEAN) decided to involve Russia and the United States in East Asia summits starting from 2011. The foreign ministers of this regional organisation came to the agreement at a working meeting in Hanoi, diplomatic sources said.
The foreign ministers were expected to agree on technical aspects to involve Russia and the United States in East Asia summits in the Vietnamese capital on Tuesday. An ASEAN summit will take an official decision to this effect in October.
The first East Asia summit was held in Malaysia in 2005. Sixteen countries, including 10 ASEAN members, China, Japan, South Korea, India, Australia and New Zealand initiated the summit. The main goal of the forum is accelerated integration of East Asia as the most dynamically developing region in the world.
Vietnam Official: To Sign Nuclear Plant Contract With Rosatom
DALAT -(Dow Jones)- Vietnam will sign a contract with Russian energy group Rosatom for the construction of the country's first nuclear power plant, a senior government energy official said Thursday.
"We will likely sign the contract in October this year for the construction of the Ninh Thuan 1 nuclear power plant," Pham Khanh Toan, head of the Vietnam Institute of Energy under the Ministry of Industry and Trade, told Dow Jones Newswires.
Toan was speaking on the sidelines of a meeting of energy ministers from the Association of Southeast Asian Nations in Dalat City in Vietnam's Central Highlands.
-By Vu Trong Khanh, Dow Jones Newswires; +84 4 35123042; trong-khanh.vu@
Russian President Dmitry Medvedev Will Visit Baku In September
BAKU. July 21, 2010: Russian President Dmitry Medvedev will visit Azerbaijan in September, Russian Ambassador Vladimir Dorokhin told journalists yesterday. Several bilateral documents, in particular, the agreements on delimitation of state borders and apportioning of water of the border river Samur, will be signed during the Russian president's visit. In early August Sergei Naryshkin, head of the Russian presidential administration, plans to visit Azerbaijan, according to the diplomatic sources (Turan).
St. Petersburg talks contribute to Karabakh settlement - Armenian president
Armenia is ready to discuss the Nagorny Karabakh settlement with Azerbaijan on the basis of proposals made during talks between the two countries' presidents in St. Petersburg, Armenian media said, quoting President Serzh Sargsyan.
Sargsyan and his Azeri counterpart Ilham Aliyev discussed the Nagorny Karabakh issue in Russia's second city on June 18. A long-standing dispute over the breakaway region inside Azerbaijan with a predominantly ethnic Armenian population has been a sticking point in relations between the two countries.
The St. Petersburg talks were initiated by Russian President Dmitry Medvedev. Russia, along with the United States and France, is part of the OSCE Minsk Group mediating the conflict.
During the talks, Sargsyan and Aliyev agreed to continue negotiations on the basis of the OSCE Madrid principles adopted in November 2007. They envisage a stage-by-stage resolution of the Armenian-Azerbaijani conflict that should start with the gradual liberation of parts of Azerbaijan bordering Karabakh that were partly or fully occupied by Karabakh Armenian forces during the brutal war over the region in early 1990s.
"The talks will go on after Azerbaijan accepts proposals of the OSCE Minsk Group," Sargsyan was quoted by media reports as saying.
The conflict over Nagorny Karabakh first erupted in 1988, when the region claimed independence from Azerbaijan to join Armenia. The 1991-94 war claimed more than 30,000 lives on both sides. Karabakh has since remained under Armenian control.
YEREVAN, July 22 (RIA Novosti)
The new Belarusian president-to-be on inspection visit to Moscow
GOOGLE TRANSLATION
Today, 09:35
The Russian-Belarusian information war has entered the new stage of development. Leaders of the Belarusian opposition were invited to Moscow for informal meetings with Russian government officials and MPs.
Leaders of the United Civil Party, Anatoly Lebedko and his deputy Jaroslav Romanchuk and Alexander Dobrovolsky, were invited to Moscow under the pretext of celebrating the 60th anniversary of Gozman (the party the right thing). In addition to the culprit celebration, the event was attended by Anatoly Chubais, Alexei Kudrin, and of course the United Russia deputies. In an informal setting discussed the future of Russian-Belarusian relations. The meeting apparently failed, as was agreed to hold next month another one, but in the format of a conference.
Earlier media rumors that the Kremlin as a successor to Alexander Lukashenko, would like to see the leader of the European Belarus Andrei Sannikov - but his candidacy is not very popular in the west. Now, all attention focused on Moscow's new favorite - economist Yaroslav Romanchuk.
Russia: Dispute Over Detained Pilot
By THE ASSOCIATED PRESS
Published: July 22, 2010
The Russian Foreign Ministry on Wednesday accused the United States of kidnapping a Russian pilot in Liberia. The pilot, Konstantin Yaroshenko, 41, who was arrested in May, was charged with smuggling cocaine, the United States Drug Enforcement Administration said. “We’re talking about a kidnapping of a Russian national from a third country,” the Foreign Ministry said in a statement, calling the “forcible and secret relocation of our national” an example of “open lawlessness.” The D.E.A. said Mr. Yaroshenko was seized by Liberian authorities, who turned him over to the United States two days later. “While he was in D.E.A. custody, the D.E.A. followed the rules of law and the Geneva Convention regulations regarding treatment of a defendant,” the agency’s statement said.
Russia, Lithuania sign cross-border cooperation deal
05:25 22/07/2010
Russia and Lithuania signed on Wednesday a memorandum on interregional and cross-border cooperation to promote trade and the development of infrastructure along the border between the two countries.
The document stipulates a timely exchange of information on relevant changes in legislation and on regional best practice in cross-border cooperation, and emphasizes investment in joint commercial projects.
The sides also agreed to set up a joint group of experts to help resolve the complex issues of regional development more efficiently.
Russia's northwestern regions play an increasingly important role in relations between Russia and Europe, which has become one of the main priorities in Russia's foreign policy.
The cross-border cooperation models represent important vehicles for Russia's gradual integration into the European economic, political and security space.
Over the past decade, practically all Russian regions bordering countries of Central and Western Europe have developed different strategies for cross-border cooperation, ranging from dialogue among regional entities on both sides of the border, to more sophisticated models of cross-border integration, such as Euro-regions.
VILNIUS, July 22 (RIA Novosti)
Monument to commemorate Kuril islands annexation unveiled again
Jul 22, 2010 06:26 Moscow Time
Kamchatka has seen the unveiling of a restored monument to the sailors that liberated the South Kuril islands from Japanese troops in 1945.
A torpedo cruiser symbolizes the infantry landing on the island of Shushum that was considered an impenetrable bastion.
After several days of fighting the Russian troops defeated the enemy with the 60-thousand-strong Japanese contingent surrendering the islands to the USSR.
First unveiled 30 years after the Victory, on May 8th 1975, the monument decayed only to regain its splendor years after.
Russia drags its feet over resetting Japan relations
By Yuriko Koike /Tokyo
The recent smooth exchange of spies between Russia and the United States appears to demonstrate that the “reset” in relations between the two countries has worked. But Russia has so far done little to “reset” its relations with Japan. That is not only a lost opportunity, given Russia’s need to modernise its economy, but a grave strategic error in view of Russia’s increasing worries about China’s ambitions in Asia, which includes Russia’s lightly-populated Siberian provinces.
In April, China’s navy carried out military exercises near Japan, and its Fleet No. 91756, recognised as one of its finest, conducted a live-fire exercise in the East China Sea off the coast of Zhejiang province, including missile-interception training with new vessels. China’s objectives appear to have been to enhance its navy’s operational capacity, particularly in terms of jamming and electronic warfare, and to test its joint capabilities with the Chinese air force.
Perhaps more importantly, the Chinese seem to have intended to send a warning signal to US and South Korean naval forces as their joint manoeuvres in the Yellow Sea approach. But the Chinese also sent a powerful signal to Japan and Russia.
Japan’s government should, of course, be keeping a close eye on China’s military. Instead, the current Japanese administration plans to send the ex-chairman of sogo-shosha (a trading conglomerate) as its ambassador to China – that is, a man whose interests in China may be commercial rather than national security.
Meanwhile, Russia is only now beginning to realise that it must be pro-active in protecting its national-security interests in the Pacific region. The problem is that Russia’s focus is wrong-headed. For coinciding with China’s naval exercises in the Yellow Sea, the Russian Armed Forces carried out part of its “Vostok 2010” drills (involving 1,500 troops) on Etorofu, the largest island among the Russian-occupied Northern Territories of Japan. The entire Vostok 2010 exercise involved more than 20,000 troops.
Russia’s occupation of these islands began on August 18, 1945, three days after Japan accepted the Potsdam Declaration (or the Proclamation Defining Terms for Japanese Surrender), which ended the Pacific War. Stalin’s Red Army nonetheless invaded the Chishima Islands, and has occupied them, Southern Karafuto (or Southern Sakhalin), and the islands of Etorofu, Kunashiri, Shikotan, and Habomai – which had never been part of the Russian Empire or the Soviet Union at any point in history – ever since.
Indeed, the lower house of Russia’s Duma recently passed a resolution designating September 2 as the anniversary of the “real” end of World War II, effectively making it a day to commemorate the Soviet Union’s victory over Japan – and thus an attempt to undermine Japan’s claim that the occupation of the islands came after WWII’s end.
On a recent trip to Russia’s Asian port of Vladivostok, Russian President Dmitri Medvedev declared that the social and economic development of Russia’s Far East is a national priority. By continuing to maintain its occupation of Japanese territory, however, Russia precludes expansive Japanese involvement in this effort, effectively leaving the Chinese to dominate the region’s development.
Russia’s persistence in its self-defeating occupation is surprising. Indeed, when Boris Yeltsin was Russia’s president, the country came close to recognising the need to return the Northern Territories to Japan. But a nationalist backlash doomed Yeltsin’s efforts.
Even Japan’s strategically myopic current government seems to understand that Russia needs to play some role in achieving a new balance of power in Asia. There are rumours that Prime Minister Naoto Kan’s administration is planning to break the logjam in the Japan-Russia relationship by appointing Yukio Hatoyama, his predecessor as prime minister, ambassador to Russia.
Hatoyama is the grandson of prime minister Ichiro Hatoyama, who signed the Japanese-Soviet Joint Declaration on October 19, 1956, which formally restored diplomatic relations between two countries and also enabled Japan’s entry into the United Nations. That treaty, however, did not settle the territorial dispute, resolution of which was put off until the conclusion of a permanent peace treaty between Japan and the Soviet Union (now Russia).
In the 1956 declaration, the two countries agreed to negotiate such a treaty, and the Soviet Union was to hand over Shikotan and Habomai islands to Japan once it was concluded. In the meantime, the status of the larger Etorofu and Kunashiri islands would remain unresolved and subject to negotiation.
Japanese public opinion has remained adamant for decades that all four islands belong to Japan, and that no real peace can exist until they are returned. So sending Hatoyama as ambassador may elicit harsh criticism, as his grandfather once agreed to a peace process that returned only two islands, and many Japanese fear that his grandson may also be prepared to cut another unequal deal.
Ambassadorial appointments should never be used as political stunts. This is particularly true for the appointment of an ambassador to a country that is critical to Asia’s balance of power. But it is not surprising coming from a government that lacks any coherent concept of Japan’s national security.
Fortunately, Japanese voters sense their government’s irresolute nature, delivering it a sharp rebuke in the recent elections to the upper house of Japan’s Diet. But it is not only Japan that needs a government that takes regional security issues seriously. Russia should recognise that it has neglected its position in Asia for too long, and that only when it returns Japan’s Northern Territories can Japanese expertise be brought seriously to bear in developing Russia’s Far East.
Only normal bilateral relations will allow the two countries to work together to forge a lasting Asian balance of power. Given his record, Vladimir Putin would not face the type of nationalist backlash Yeltsin confronted if he sought to reach an agreement that restored Japan’s sovereignty over its Northern Territories. Will he have the strategic vision to do so? — Project Syndicate
**** Yuriko Koike, a former Japanese minister of defence and national security adviser, is a member of the opposition in Japan’s Diet.
Bishop Yakiv: Patriarch Kirill is attempting to restore communism
Today at 10:40 | Interfax-Ukraine
The visit of Patriarch Kirill of Moscow and All-Russia to Ukraine and Odesa is an attempt to restore the past, atheism and communism, Bishop Yakiv of Odesa and Balta of the Ukrainian Orthodox Church of Kyiv Patriarchate said at a press conference in Odesa on Wednesday.
"In fact, the church has received a vacuum-like spiritual emptiness in the past, difficult years, a time of atheism and communism. At present, the goal of the church is to renew and enrich people spiritually… But we see how our neighbors are generously are trying to restore the past," he said, referring to the Moscow Patriarchate.
Head of Odesa regional All-Ukrainian Svoboda Association Pavlo Kyrylenko, in turn, said the patriarch's visit was a visit by a Kremlin mentor and agent of the State Security Committee (KGB) and the Federal Security Service (FSB) of the Russian Federation.
"The present Russian Orthodox Church of Moscow Patriarchate, in common with the Ukrainian Orthodox Church (of the Moscow Patriarchate), supports those political forces that, in fact, have [attempted to] destroy the Christian Church, and the Orthodox Church since 1917… How can such people support political forces that eliminated hundreds of thousands of Orthodox priests and destroyed the Orthodox Church? So, we can conclude that all these veritable patriarchs are Kremlin mentors and agents of KGB and FSB," Kyrylenko said.
Read more:
Kiril never to make it up with Kyiv patriarch, Moscow church says
Moscow Patriarch Kiril will not make peace with the Kyiv Patriarch Filaret whom they regard as a breakaway leader, says representative of the Moscow-affiliated Ukrainian Orthodox Church Longin.
“Who should make peace with whom? There are 15 independent Orthodox churches in other countries, and none of them recognized Filaret’s breakaway church. Reconciliation is possible is Filaret returns to the fold of the Orthodox church and repents,” Longin said.
“Last year the former president Yushchenko was eager to set up his own independent church in Ukraine, but nothing good came out of it. Yushchenko imagined himself a Messiah and wanted to make by force what couldn’t be done. The will of the people must not be suppressed. If they prefer to be members of the UOC (Moscow patriarchate), they cannot be forced to join any other church. We cannot violate the rules set by God,” Longin summed up, according to Liga.
Kommersant: Patriarch Kirill explores a canonical territory
Today at 06:21
Today the Patriarch of Moscow and All-Russia Kirill will be taking his third trip toUkraine since being elected patriarch. In Kiev, people are convinced that the nature of the visit is political, pointing to the conception of "a new Russian Orthodox world," which is being designed by the Russian Orthodox Church (ROC) leader and one of the components of which includes uniting various Orthodox countries under the aegis of the ROC.
During his visit, which will last until July 28, the head of the ROC plans to spend several days in Odessa and Dnepropetrovsk, where he did not have the chance to travel during his previous visits. On Sunday, Kirill will arrive in Kiev, where a session of the Holy Synod of the ROC will be held, although its agenda is being held secret. The visit will end with celebrations devoted to the introduction of Christianity into Russia: the patriarch will hold a liturgy at the Cathedral Square of the Kiev-Pechersk Lavra. As was previously the case, the patriarch's visit to the canonical territory of the ROC is being accompanied by scandals: Ukrainian nationalists of the organization Svoboda (Freedom) held a number of protests last week in Kiev.
"We are protesting against Patriarch Kirill's visit, not with [his] religious but political objectives - to build a 'Russian world' here," said Svoboda leader Oleg Tyagnibok. Statements regarding the political undertones of the visit were also made by representatives of Ukraine's Orthodox Church of the Kiev Patriarchate (UOC KP), which is competing for influence with the ROC.
These allegations were denied by the head of the Patriarch of Moscow and All-Russia's press service, Archpriest Vladimir Vigilyansky, in an interview with Kommersant.
"This is not a political visit, but a strictly pastoral one," he argued. "The Church does not strive to be engaged in politics, into which it is sometimes forcefully pushed. Unfortunately, under Viktor Yushchenko's presidency, religion was a major card for certain political forces."
According to Mr. Vigilyansky, the head of the ROC is the patriarch for the faithful of more than 15 countries.
"Certainly, Ukraine comes first on that list," he said. "Last year, the patriarch stated that he will visit Ukraine annually and become familiar with the life of the dioceses."
It should be noted that in the 18 years of his patriarchate, the late head of the ROC, Aleksey II, visited Ukraine only twice. The interest in the neighboring country expressed by the current primate of the ROC is also linked by Russian experts, as well as Ukrainian nationalists, to Kirill's conception of "a Russian Orthodox world." The first time the patriarch spoke on this subject in detail was in the fall of last year, and since then he has repeatedly referred to it in his statements.
The conception, according to him, assumes the spiritual unity of people "accepting Russian spiritual and cultural tradition as a basis of their national identity or, at least, as a significant component." The patriarch calls Russia, Ukraine, and Belarus the nucleus of the "Russian world," and stresses that their citizens "continue to spiritually be a single nation."
"The patriarch is showing that he is not only the primate of Russia; he is trying to create an eastern-Slavic Orthodox civilization," said Roman Lunkin, director of the Religion and Law Institute.
One of the obstacles standing in the way of implementing this conception is the religious split among Orthodox believers in Ukraine. Recall that in 1992, part of the ROC clergy created the Ukrainian Orthodox Church of the Kiev Patriarchate, which is not recognized by the Moscow Patriarchate. According to Ukraine's State Committee on Nationalities and Religions, by early 2010 the UOC MP had 44 dioceses and the UOC KP had 31. At that time, the Kiev Patriarchate expected its independence to be recognized by Ecumenical Patriarch Varfolomey. For many years, Varfolomey had maintained neutrality, but this year, after visiting Russia and after long talks with Patriarch Kirill, he urged the Orthodox Christians of Ukraine to return to the Moscow Patriarchate.
"Under the presidency of Viktor Yanukovich, Kirill's position in Ukraine became stronger," said Lunkin. "Even the leadership of the unrecognized Kiev Patriarchate, after having realized that it has no chances to legitimize under the new leadership, is trying to establish a dialogue with the ROC." Indeed, former president Viktor Yushchenko was a worshiper of the "independent" Church, and the current head of state, Viktor Yanukovich, supports the ROC. In mid-July, head of the unrecognized UOC KP Patriarch Filaret, who had previously refused the idea of so much as discussing the possibility of uniting his Church with the ROC, expressed his desire to initiate talks with the Moscow Patriarchate.
However, UOC KP representatives are not expecting a favorable outcome of these talks.
"The UOC MP enjoys such broad rights of self-governance, which no other Russian Orthodox Church has," said Kiev Patriarchate spokesperson Bishob Evstraty (Zorya). "Patriarch Kirill, judging from the year and a half of his patriarchate, is a centralizer. He is trying to centralize governance, making it similar to the vertical form of leadership that exists in the Russian government.t"
At the same time, as was earlier reiterated by the leadership of the unrecognized Church, relations with the ROC are only possible on the basis of UOC's full autonomy.
Read the full Russian-language version of the article here.
Read more:
Ukrainian bishop, far-right activist slam visiting Russian patriarch
Today at 06:16 | Interfax-Ukraine
Russian Patriarch Kirill's visit to Ukraine and Odessa is an attempt to restore the past, atheism and Communism, Bishop Yakiv of Odessa and Balta, of the Ukrainian Orthodox Church of the Kiev Patriarchate, told a news conference in Odessa today.
The church has got, one can say, vacuum-like spiritual emptiness following the past troubled years - the time of atheism and Communism. Today the goal of the church is to renew and enrich people spiritually, but we see our neighbours generously try to restore the past," he said, referring to the Moscow Patriarchate.
For his part, Pavlo Kyrylenko, the head of the Odessa branch of the [far-right] Freedom party, said that Kirill's visit was a visit by a Kremlin mentor [as received] and agent of the KGB and Russia's Federal Security Service [FSB].
"The present Russian Orthodox Church of the Moscow Patriarchate, just like the Ukrainian Orthodox Church (of the Moscow Patriarchate), supports the political forces which, in fact, were destroying the Christian church, the Orthodox church, starting from 1917. How can such people support the political forces which exterminated hundreds of thousands of Orthodox priests and destroyed the Orthodox church? So we can conclude that all these genuine patriarchs are Kremlin mentors and agents of the KGB and FSB," Kyrylenko said.
Read more:
Russia to keep 2nd place in fighter jet exports until 2013
06:19 22/07/2010
Russia will most likely continue holding a second place on the global market of new multirole fighter jets until at least 2013, a Russian arms trade expert said.
"We are expecting a significant growth of this [fighter jet] market segment both in terms of quantity [68%] and revenues [91%] until 2013 compared to the previous four years [2006-2009]," Igor Korotchenko, head of a Moscow-based think tank on the international arms trade, told reporters on Wednesday.
"According to our estimates, Russia will keep a solid second place during the upcoming four-year period," the expert said.
According to the Russian think tank, at least 1,589 multirole fighters worth over $82.5 billion will be sold on the global market in 2006-2013.
A total of 476 new fighters worth $27.7 billion were sold in 2006-2009. This figure will almost double in the next four years with the demand rising from 119 to 200 planes annually.
The United States tops the list with 472 new fighters worth over $19 bln, which were sold in the past four years and have been ordered for the next four.
Russia currently maintains a second place with 377 new fighters worth over $16.3 bln, trailed by China, the U.K., Sweden and France.
According to Russia's state arms exporter Rosoboronexport, the country could sign its first contract for the export of Su-35 Flanker-E fighter jets by the end of this year.
The Su-35 Flanker-E, a modification of the Su-27, is a heavy class, long-range, multirole fighter, whose technical characteristics can be compared with those of fifth-generation jets.
MOSCOW, July 22 (RIA Novosti)
Pearl Aircraft to buy 30 SuperJet planes from Sukhoi
22.07.2010, 05.01
FARNBOROUGH, July 22 (Itar-Tass) -- The company SuperJet International (49 percent of shares belong to Sukhoi) and the international leasing company Pearl Aircraft signed an agreement on Wednesday, July 21, for the supply of 30 Sukhoi SuperJet-100 passenger planes.
The agreement also includes an option for another 15 planes. The current catalogue price of 30 SuperJet plans is 900 million U.S. dollars.
The SuperJet-100 should replace Tu-132 planes now in operation. Initially, plane supplies were scheduled for the end of 2008.
The SuperJet, the first new Russian passenger plane over the past 20 years, is being created through unprecedentedly broad international cooperation that involves more than 30 major international aerospace companies, system and component suppliers.
Sukhoi SuperJet-100 integrates the world's best industry practices and solutions. All aircraft will be certified in accordance with both Russian and international requirements. SSJ100's technical and operational performance make the product fully marketable and capable of taking a solid share in the highly competitive global market. Thus, Sukhoi expects to sell 800 aircraft until the year 2024, while the global demand for the aircraft of this class totals 5,400. So far the company had secured 73 solid orders for the aircraft.
The SuperJet-100 was formerly referred to as the Russian Regional Jet, or “Sukhoi RRJ.” The name was changed on 17 July 2006. The aircraft will be equipped with two Saturn/SNECMA PowerJet SaM146 turbofans.
The Superjet-100 is intended to compete against the Antonov An-148, Embraer E-Jets and the Bombardier CSeries programs. Pogosyan claims the SSJ will have 10-15 percent lower operation costs than its Embraer or Bombardier counterparts and its wider cabin will offer more comfort; at the catalogue price of 27.8 million dollars, it should also be cheaper by 18-22 percent. On the other hand, both Embraer and Bombardier offer much more comprehensive after-sales and maintenance network.
SuperJet-100 will in the future provide the basis for a whole family of planes, including transport and special purpose planes. However now the main goal is the certification of the plane and serial production of 60-70 planes annually.
The project is implemented by Sukhoi Civil Aircraft Company created in 2000. Experts say that the SuperJet-100 project will secure Russia's leadership on the market of regional planes. Sukhoi Civil Aircraft is a subsidiary of the famous Sukhoi combat aircraft manufacturer. It was created to implement the latter's civilian projects. The chief task of the company is to develop a regional Superjet-100 plane that will replace Tu-134 liners that are now in use.
The Sukhoi SuperJet-100 family consists of two types of aircraft of basic and increased flying ranges with the carrying capacity of 75 and 95 passengers respectively.
The company is trying to make the two types of plane as universal as possible in order to increase the number of potential buyers.
The design of the plane meets the requirements applicable in Russia, the Commonwealth of Independent States and the West.
Superjet seals second $900 million plan order
Wed, Jul 21 2010
By John Bowker and Rhys Jones
FARNBOROUGH, England/MOSCOW (Reuters) - Russian planemaker Superjet unveiled a $900 million, 30 plane order on Wednesday, capping a bumper Farnborough Airshow that has seen belated overseas interest in its passenger plane.
The much delayed Superjet 100 will be the first passenger plane built by Russia since the fall of the Soviet Union, and will attempt to challenge market leaders Boeing and Airbus in the regional carrier sector.
The manufacturer, controlled by Russia's state-controlled Sukhoi and 25 percent owned by Italy's Finmeccanica, has reported 60 firm orders during the first three days of the event -- taking the history of the program's total to 161.
The latest was a $900 million deal with Bermuda-based lessor Pearl, with delivery of the 30 planes due next year. It followed a similar $951 million, 30 plane order on Monday by Indonesian airline Kartika.
Commercial plane orders have dominated this year's Farnborough Airshow as the industry emerges from a two year market lull caused by the global economic slowdown.
ENHANCES OUR POSITION
The mid-sized Superjet 100 made its maiden flight in May 2008, but a series of project delays mean first deliveries will not be made until the end of this year. Sukhoi Chief Executive Mikhail Pogosyan reiterated the target earlier in the airshow.
Its early orders were predictably dominated by Russian state airline Aeroflot. Prime Minister Vladimir Putin publicly urged Aeroflot Chief Executive Vitaly Savelyev to buy more locally made planes earlier this month.
Aeroflot had ordered 30 of the 100 planes announced before the airshow. Hungary's Malev has also ordered 30, but the multi-national make-up of the Farnborough buyers takes the firm out of Eastern Europe.
"This agreement with an international leasing company (Pearl) is proof of the quality of this aircraft and further enhances our position in the market," Superjet Chief Executive Alessandro Franzoni said of the latest deal.
A further 49 Superjet 100s have also been ordered during the airshow, including a possible 24 to Thailand's Orient Thai Airlines, although these are either optional deals or at the memorandum of understanding (MOU) stage.
In a separate deal, Gazpromavia -- the airline owned by Russian state gas monopoly Gazprom -- said it had signed a letter of intent to buy 10 Superjet 100s, although it did not give a value.
And Russia's OAK also said its Irkut subsidiary had signed a deal to sell 50 MC-21 passenger planes to Malaysian firm Crecom.
(Additional reporting by Gleb Stolyarov, Writing by John Bowker, Editing by Samia Nakhoul)
Itar-Tass: Ilyushin Finance Co signs USD 3-1/2 bln worth of contracts at Farnborough
22.07.2010, 07.34
FARNBOROUGH, July 22 (Itar-Tass) -- The leasing company Ilyushin Finance has signed 3.5 billion U.S. dollars worth of contracts at the air show at Farnborough, the company’s President Alexander Rubtsov said.
“We signed a contract for 20 An-158 planes and a memorandum of intent for the purchase of 50 MS-21 planes worth three billion U.S. dollars,” he said.
But before a firm contract is signed with Irkut for MS-21 planes, “big work has to be done,” Rubtsov added.
He believes that the MS-21 has a good future “if Irkut enters the market not later than 2014-2015 as it plans.”
In his opinion, Irkut’s main risks related to the new plane will be left behind “when the company builds and tests the wing prototype.”
The medium-haul passenger plane MS-21 is expected to go on its maiden flight in 2014.
MS-21 planes will have a wider body for the comfort of passengers. They will have a better wing sweep to increase safety during landings and takeoffs. The wings will be a bit thicker in order to take on more fuel, which will allow the planes to travel greater distances.
All these factors will negatively affect aerodynamic properties of the planes. “This makes the success of the scientists who have improved this crucial property of any aircraft all the more important,” Zhukovsky Central Aerodynamic Institute (TsAGI) Director Sergei Chernyshev said.
MS-21 Programme Director Andrei Matveyev said, “Increasing aerodynamic properties of a plane even by 1 percent over several years is considered to be a big achievement.”
He said the new design would reduce operating costs by 12-15 percent as compared to that of existing foreign counterparts and give additional competitive advantages to the new plane.
The Yakovlev Design Bureau is the principal designer of the MS-21 plane. It is working under the federal programme “Development of Civil Aircraft in Russia”. The state contractor is the Ministry of Industry and Trade.
The MS-21 aircraft has been developed on the basis of Yak-242 type by the Yakovlev Design Bureau in association with the llyushin Aviation Complex. The MS-21 airplane has been readily embraced by the aircraft market since it meets all the requirements and can compete against similar Boeing and Airbus aircraft, outdoing them in price, fuel efficiency and passenger comfort.
For instance, aircraft of the MS-21 project were compared against Airbus company's A320 and Boeing's latest models, B717 and B737. The Russian aircraft features an improved passenger comfort cabin, enhanced fuel efficiency and a reasonable price. In terms of cost-to-effectiveness ratio, the new Russian aircraft will significantly outperform similar advanced aircraft offered by Western producers.
The MS-21 aircraft is to replace all models of Tu-154B and Tu-I54M aircraft as well as Yak-42 in Russia. It is planned to build around 600 aircraft of the MS-21 family within 20 years, with an annual production rate of 30 to 36 machines. It is planned to sell around 640 MS-21 aircraft in 2008-2009, including around 415 planes going to Russia's domestic market and 225 to foreign customers. The MS-21 will provide the basis for a whole family of aircraft, including an MS-21-100 plane capable of carrying 132 or 116 passengers in a two-class configuration, an MS-21-200 to carry 156 or 140 passengers in a two-class configuration, an MS-21-300 to carry 174 or 158 passengers in a two-class configuration, an MS-2IK to carry cargoes, an MS-21KP to carry cargoes and passengers.
The MS-21 jet and the Sukhoi SuperJet-100 passenger plane together may meet 80 percent of Russian air carriers' demand for new aircraft.
The Irkutsk aircraft plant will begin the production of MS-21 mainline planes in 2014.
MS-21 will be manufactured in three modifications, for 150, 180 and 210 passengers. The first plane will be built in 2014, while a new model will appear on the market in 2015-2016.
Yuri Dolgoruky returned after sea trail
2010-07-22
Russia’s newest strategic submarine has returned to Severodvinsk after a two-week sea trail period in the White Sea.
During the testing period the crew has tested the submarine’s navigation system, controlled the buoyancy system of the vessel and also the submarine’s combat readiness, reports the web-portal of Sevmash, the shipyard in Severodvinsk that built Yuri Dolgoruky.
According to the chief builder of military equipment at Sevmash Vladimir Prokofiev, the tests were completed successfully as scheduled. The submarine returned to Severodvinsk on Wednesday July 21st.
-There are issues that need to be worked out in order to prepare the submarine for the next sea trail, says. Prokofiev.
Yuri Dolgoruky was launched in February 2008 and sailed first time out on sea trails from Severodvinsk in mid-June last year. Since then Yury Dolgoruky has been on sea trails several times.
Yuri Dylgoruky is the first of the 4th generation strategic nuclear powered submarines (SSBN) of the Borey-class. The submarine is 170 meter long and has a crew of 107.
Russia is planning to build at least eight submarines of the Borey-class.
The submarine is supposed to be armed with 12 of the new strategic ballistic missiles Bulava. However, the submarine sails without the missiles now, due to several failures on the Bulava-missile. So far, seven out of 13 test launches of the Bulava missile have failed.
Sevmash says the Yuri Dolgoruky will sail out for more sea trails soon.
Good neighbors: Russian-Finnish talks in Finland in friendly atmosphere
[22.7.10]
Dmitry Medvedev and President of Finland Tarja Halonen discussed a new European security architecture, developing the EU-Russia strategic partnership, including progress towards visa-free travel and the Partnership for Modernisation initiative, nuclear disarmament and non-proliferation, and a number of regional issues.
The two leaders examined cooperation within international and regional forums in the Baltic region, northern Europe in general, and in the Arctic.
Bilateral cooperation priorities were also on the agenda. Finland is one of Russia’s most important business partners. Trade between the two countries has increased more than five-fold, and total direct Finnish investment in the Russian economy has increased eight-fold over the last decade. Although 2009 saw bilateral trade drop to $13.1 billion, from $22.4 billion in 2008, Russia remained Finland’s biggest trade partner. Trade between the two countries has picked up again, posting an increase of more than 20 percent - $5 billion – for the first quarter of 2010. Innovation and high technology are among the two countries’ economic cooperation priorities.
Mr Medvedev and Ms Halonen gave a joint news conference following the talks.
Medvedev and Halonen: Press statements after talks in Finland:
PRESIDENT OF FINLAND TARJA HALONEN (retranslated): We have just held very successful talks here at Kultaranta. It has long been said in Finland that for a guest to really know his hosts, he has to stay the night, and I think that in this case the saying has proved absolutely correct. Between our official talks we managed to steam ourselves in the sauna, go for a swim, ride in the park, discuss various informal issues, and share some jokes. Of course we also held serious talks.
As you all know, the fundamental relations between Russia and Finland are excellent. We, the presidents, want to continue strengthening the cooperation between our countries’ governments, and this is why Prime Minister of Finland Mari Kiviniemi took part in a brief meeting with the two presidents this morning, at which we both wished success to the cooperation between Prime Minister Mari Kiviniemi and Prime Minister Vladimir Putin.
We also discussed in detail my planned visit to Moscow in November. We examined the main cooperation and business issues before us. For our part, we are ready to help in areas in which problems exist or could arise. The most important thing, of course, is for our companies to have good relations and a firm commitment to continuing their fruitful work together. We think that this is the case.
Perhaps in the future, business delegations will accompany the presidents on their visits. We discussed other topical issues too, administrative matters, and it seems that we will manage to get a number of issues settled.
We spent quite a long time discussing environmental protection yesterday, and we will continue this discussion today when we go by yacht or motorboat to Seili Island, which is home to a centre for studying the state of the Baltic Sea. We also discussed UN environmental protection initiatives and sustainable development, and looked at the contribution Russia, Finland, the European Union and other countries are making to this. We discussed too the development prospects for Russian and Finnish society.
Yesterday evening I received very useful additional information from President Medvedev on modernisation, and proposed a partnership on the Finnish side in various sectors.
We still have discussions on a broad range of international issues ahead of today, and we will perhaps have the opportunity to examine the situation in the Middle East and Afghanistan.
We will be ready to answer more detailed questions on various areas after the opening remarks from my colleague, President Dmitry Medvedev.
PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Colleagues, ladies and gentlemen,
It always makes me very happy when events go the way they are now, here in Finland, at Kultaranta. I want to begin these opening remarks by thanking my colleague, President Halonen, for choosing to receive the Russian President on a working visit here at this venue, and for the very wide-ranging and at the same time substantive consultations that we have held.
The President of Finland has explained what we have been working on here. We did indeed discuss a diverse range of issues. Yesterday evening, we spoke at length about climate change, the environment, and the Baltic Sea. This morning, I had the chance to see for myself what this part of the Gulf of Finland looks like, see what state the sea is in.
We certainly have plenty of work to do in this area, and so we will continue discussing environmental issues and the state of the Baltic Sea today.
Regarding what Tarja Halonen said just now about our overall approaches and the overall relations between our countries, I agree fully with her assessment. We have a very tight and close partnership between two neighbouring countries, but this does not mean that we are without work to do. Our bilateral trade dropped somewhat last year because of the crisis. This year has seen the emergence of common economic trends that are reflected in our trade relations too. Our trade is on the rise again, and our ties are gaining more substance. There are issues on which we regularly exchange views, and there are some issues on which we differ in our positions. It was very useful to be able to discuss these matters yesterday, and again today with the Finnish prime minister present too. I took the occasion to wish the prime minister success in her work, and expressed the hope that she will have substantial and productive relations with the Russian Government.
At the same time, I think that our top-level meetings – and we have regular contacts with the Finnish president – should serve as an opportunity to discuss not only foreign policy and humanitarian issues, for example, which can be very urgent too, of course, but to resolve practical tasks.
I therefore think it would be the right decision indeed for a group of Finnish businesspeople to accompany the President of Finland on her next visit to Russia. It would boost the overall atmosphere of trust between our business communities, and would help us to address and resolve specific issues. What more do we need?
I am therefore looking forward to receiving President Tarja Halonen in Russia this autumn on a big visit during which we will examine not only global issues but also discuss absolutely practical matters. This is a very positive thing.
I probably spoiled my colleague’s appetite at dinner yesterday by speaking at such length about Russia’s modernisation drive. This is something of greater interest to Russians themselves, of course, but our Finnish colleagues patiently heard me out on the subject. I hope this will give our Finnish friends greater insight into what we are doing now. The President of Finland and I agreed that modernisation should take place in Chekhovian fashion, that is to say, it should involve changing not just the economic foundations and structure of the country, but changing the people too. Overall, this kind of working visit and the chance to taste the summer in such a beautiful place give us the opportunity to share our thoughts on a very wide range of subjects. This is very good.
We will also discuss today foreign policy issues, coordination of Russia’s and Finland’s foreign policy, and of Russian and European Union foreign policy. This is an area where we have all been active of late. There are a number of initiatives within the European Union, and there is also Russia’s initiative on concluding the European Security Treaty. I hope we will get the chance to discuss all of these matters during our excursion and visits to various sites today.
Of course, we did not shy away from more controversial topics too. I don’t want to steal the journalists’ work. It is your job to ask questions, after all, and what would be the point of me telling you now all about meat, milk, balances, and the humanitarian issues that exist in our relations when it is better that you ask these questions yourselves.
But whatever these issues, the most important thing of all is that we really do have very good and warmhearted relations. I want to end these opening remarks by once more thanking Tarja Halonen for the chance to meet here in this lovely place, for the wonderful weather we have been enjoying, and for the friendly atmosphere with its special Finnish touches that has been accompanying this visit. (Source: Press Release on the official website of the President; Photo: the Presidential Press and Information Office)
[ russia-media.RU – Murmansk & Shtokman News / FLAIT Murmansk ]
Medvedev Predicts End to Finnish Trade Dispute in 2 Weeks
22 July 2010
By Natalya Krainova
President Dmitry Medvedev expressed confidence Wednesday that a looming ban on Finnish meat and dairy goods would be lifted within two weeks and won support from Finland's president for visa-free travel for Russians.
Medvedev and Finnish President Tarja Halonen also discussed the rights of Russians living in Finland as they wrapped up a two-day visit in Naantali, a popular tourist town 14 kilometers west of Turku, and the Kremlin leader went swimming in the Gulf of Finland.
Medvedev said a ban on meat and dairy products from 14 Finnish producers, which is to take effect Friday, was "technical" and stemmed from Finland's failure to comply with new customs rules.
"I do not think that this is a serious problem," Medvedev told reporters, adding that he had eaten a lot of "good, fine" Finnish products while living in his native St. Petersburg "and haven't fallen ill yet."
"But we have changed the rules some time ago, and we told our Finnish friends already a year ago that they needed to change how they trade with Russia," Medvedev said, Interfax reported. "These are technical points: all kinds of forms and regulations that need to be filled out a little differently."
The Agriculture Ministry's safety watchdog banned animal-based products from 14 plants effective July 9 for unspecified violations of sanitation norms, but last week it lifted the ban until July 23. Among the companies caught in the ban is dairy producer Valio, which has four factories on the blacklist.
Medvedev called the ban an "absolutely normal trade issue" and said it should not be politicized.
"I hope that this matter will be closed within the next two weeks," he said.
Medvedev, making his case again for visa-free travel for Russians to the European Union, pressed Halonen to "convince" countries that are "hesitant" to open their borders, RIA-Novosti reported.
Halonen, speaking at the same news conference, said Finland would do "everything possible" to promote the visa-free travel of Russians to the EU.
Halonen also said Finnish laws were being changed to allow Russian nationals living in Finland to obtain residence permits for their elderly parents. The amendments were triggered by an outcry over the deportation last month of Irina Antonova, 82, who had lived with her daughter in Helsinki for two years.
Addressing mixed Russian-Finnish marriages, Halonen said Finland might negotiate a bilateral treaty regulating the rights of the parents in those marriages. "It is very important that authorities in Russia and Finland treat mixed families equally, without discriminating against anyone," she said.
Turku authorities in February removed a 7-year-old boy from a Russian-Finnish family and sought to strip the parents of their guardian rights after the boy told his classmates that his mother had hit him and that he might move to Russia, RIA-Novosti reported.
Medvedev and Halonen also discussed European security and trade relations, the Kremlin web site reported, calling Finland "a priority business partner." Bilateral trade has swelled by more than five times over the past decade, the Kremlin web site said.
Medvedev, meanwhile, urged Finland to work with Russia in cleaning up the Baltic Sea.
"The water was good yesterday and today," he said in response to a question from reporters who knew that he had planned to go for a dip in the Gulf of Finland, Interfax reported.
But the condition of Baltic Sea as a whole "is worse than it used to be," he said.
"I have always been tied to the Baltic Sea," he said. "I grew up on its shores."
Finnish & Russian Activists Appeal to Medvedev
July 21st, 2010
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Filed Under: International
Tags: Dmitri Medvedev • Finland • Finnish-Russian Civic Forum • FSB • Kasparov.ru • Strategy 31 • Tarja Halonen
Participants of the fourth annual Finnish-Russian Civic Forum have appealed to the presidents of both countries with a request to allow Russian opposition activists to exercise their constitutional right to free assembly, Kasparov.ru reports.
The forum, which is being held in Helsinki from July 21-22, brings together approximately 100 representatives of Russian and Finnish civil society “to promote cooperation between the peoples of Finland and Russia by supporting civic initiatives for democracy, human rights, and freedom of speech,” reads the forum’s website.
On Wednesday, representatives agreed on a statement asking that Russian President Dmitri Medvedev and Tarja Halonen turn their attention to the fact that Russian society continues to be deprived of the freedom of assembly.
“We are united all across Europe in our support of Russian activists who hold peaceful demonstrations under the Strategy 31 campaign. In another week, we will again express our solidarity with the Russians in Helsinki, Prague, Brussels, Berlin, and other cities all over the continent,” reads the statement. “We call upon you, President Medvedev, to ensure freedom of assembly both on July 31 and in the future.”
Forum participants also expressed concern over new federal legislation that would greatly expand the authority of the Russian Federal Security Services (FSB). Such legislation, said the participants, contradicts both the Russian constitution and international norms, and therefore should not be signed into law by the Russian president.
The statement also remarks upon the continued persecution of human rights advocates, participants of political movements, union leaders, and journalists in Russia.
“Instead of fighting terrorism and organized crime, thousands of law enforcement agents persecute civil and political activists, quite often under the pretense of the fight against extremism,” said the forum participants.
Civil activists from both countries expressed hope that Presidents Halonen and Medvedev would discuss these issues during their meeting on Wednesday. Whether or not they actually did remained unclear after a press conference later in the day.
Faults in police work do not mean all Interior Ministry corrupt – Nurglaiyev
22.07.2010, 04.00
SELIGER, July 22 (Itar-Tass) -- Shortcomings in police work do not mean that the whole Interior Ministry is corrupt, Interior Minister Rashid Nurgaliyev said.
“There may be some nasty phenomena, but they do not mean that the whole Interior Ministry is corrupt,” Nurgaliyev said at a meeting with Seliger-2010 youth forum participants on Wednesday, July 21.
“Tens and hundreds of thousands of officers honestly do their job,” he added.
He stressed that Interior Ministry reform would help cleans its ranks. “Reform and modernisation are necessary. It should mould a new image of Russian police,” he said.
Under a decree signed by President Dmitry Medvedev, the Interior Ministry’s size should be reduced by 227,000 personnel by 2012. “But this does not mean an arithmetic approach based on subtraction and division,” Nurgaliyev said.
He said the ministry would focus on the prevention of threats to society. “The emphasis will also be placed on human rights and freedoms,” he said.
Special attention will be paid to crime prevention.
“One should not be ashamed of police uniform. Let those be shamed who break the law,” the minister said, adding that cleansing the ministry’s ranks was “a conscientious approach.”
The Interior Ministry reform is in progress and on schedule, Nurgaliyev said earlier.
Work is in the final stage to determine the structure and staff size of the Interior Ministry’s main department for the North Caucasian Federal District and optimise the structure and staff of the main department for the Southern Federal District.
Special purpose centres and operational bureaus of the Interior Ministry have been created at the inter-regional level.
“The main condition we have to meet today when carrying out the reform is to avoid failures in the work of our services and units,” Nurgaliyev said. “People should feel secure irrespective of the processes in the ministry.”
“We implement everything that is set forth in the presidential decrees. More than 30 regulatory acts have been drafted for reform. They concern transport police, interior departments in closed territorial entities, as well as activities in the North Caucasian Federal District,” the minister said.
Medvedev said earlier that one of the key directions of Interior Ministry reform was organisational and personnel changes.
“Our task is to bring professionals into police who would defend the rights and interests of our citizens,” the president said. “This is the main duty of police. All the rest is secondary.”
“By the ay, such people make up the majority in the Interior Ministry. Even though it is violations that are usually remembered, people who are professionally trained, work well and serve our citizens make up the majority,” Medvedev said.
“I have friends who have been working there for 25 years, and they are real professionals,” he added.
At the same time, Medvedev called for constant monitoring of police activities in Russia.
“We need constant monitoring of law enforcement agencies’ activities, both governmental and public, which is equally important,” he said.
The president stressed that law enforcement agencies’ activities were under close public scrutiny in the country.
Medvedev signed a decree on December 24, 2009, on the improvement of the Interior Ministry’s work.
He said the minister’s proposals were based on the decree and “concern the status of Interior Ministry personnel, the ministry’s competence and the delimitation of jurisdiction with other agencies, procedural powers of the Interior Ministry, financial incentives for personnel, responsibility, organisational issues, that is practically all aspects of the ministry’s work”.
“This is a big and serious task, and we are not going to make the final decision now, but I would like … to hear a report on which proposals can be used and which need to be worked on further,” Medvedev said.
According to the decree, the strength of the Interior Ministry's personnel will be cut 20 percent by January 1, 2012.
Nurgaliyev was instructed to reconsider the selection of candidates for positions in the police force.
Simultaneously, the government was told to consider ways of increasing budget allocations to fund financial incentives of police personnel, including the funds saved through personnel cuts, and to submit proposals for reforming the system of police personnel's remuneration by January 1, 2011.
Earlier, State Duma Security Committee Chairman Vladimir Vasilyev called for a reasonable Interior Ministry reform.
“During the crisis, every kopeck has to be counted. And here we are talking billions,” he said.
“One has to pay for the honesty of Interior Ministry officers because the main motivation for work now is a profit. The simplest solution would be reducing the worst and give [the money thus saved] to the best,” the lawmaker said.
An adviser to the Constitutional Court chairman, Vladimir Ovchinsky, also believes that “Interior Ministry reform in the current economic situation should be minimal.”
He spoke against decentralisation and demilitarisation of the Interior Ministry system and removing some of the structures from it, ideas that have become quite popular in society lately.
“The administrative vertical may not be torn down under any circumstances. This will create chaos and a criminal crisis,” he warned.
Russian Constitutional Court slates Gazprom skyscraper plans
11:19 22/07/2010
MOSCOW, July 22 (RIA Novosti) - The Russian Constitutional Court chairman Valery Zorkin has signed a communique criticizing the construction of a 403-meter skyscraper in historic St. Petersburg's city center, Russian business daily Kommersant said on Thursday.
Local authorities should recognize both Russian and international law on cultural heritage preservation, the communique said.
The Constitutional Court got involved after activist Olga Andronova challenged the constitutionality of last year's public hearings on plans by the oil arm of Russian energy giant Gazprom to build the Okhta Business Center in St. Petersburg's historic down town, a UNESCO world heritage site.
Andronova said the procedure of the hearings, organized by the city council and Gazprom in September 2009, was violated as protesters opposed to the construction were attacked by unidentified men.
She said that local authorities were turning a blind eye to the city's planning restrictions for buildings over 100 meters tall and dismissing Russia's commitment to the UNESCO heritage protection convention.
The communique, which states that every citizen of St.Petersburg should have a "real opportunity" to speak out on the city's building policies, will no doubt fuel growing public discontent on the issue.
The Court backed the view that the tower will spoil the city's historic panoramas, pointing out that cultural heritage preservation includes "natural landscapes and the relation between city areas."
Russian President Dmitry Medvedev and Director of UNESCO's World Heritage Centre Francesco Bandarin have criticized the project but St. Petersburg Governor Valentina Matviyenko is still pushing for construction to go ahead.
Head of the State Preservation Committee for St. Petersburg Vera Dementyeva said Russia will hold "serious consultations with UNESCO on this project" at the upcoming UNESCO World Heritage Committee Session in Brazil in late July.
Constitutional Court backs opponents of Gazprom’s skyscraper
22 July, 2010, 11:24
Russia’s Constitutional Court has ruled that St. Petersburg’s city authorities acted against the constitution when they made an exception to the rules for the planned 400-meter-high “Okhta-Center” tower.
The multibillion project sponsored by gas giant Gazprom has drawn much criticism. Residents of St. Petersburg and cultural heritage organizations say that the gigantic structure will ruin the skyline of the city, even though the construction site is located far from the center, where most of the historical buildings are located.
Nevertheless, city authorities gave the tower the green light after controversial public hearings, where, according to opponents, dissenting opinions were completely ignored. The procedure of the hearings was the subject of review by the Constitutional Court. The court backed the protestors’ position, saying that the city authorities have violated the Russian Constitution.
There is a limit on the height of new buildings in St. Petersburg, though the city council made an exception for Okhta-Center. However, this action has gone against Russia’s international obligations to protect cultural heritage, the court decided. Judges also agreed that the public hearings did not give an opportunity to the protestors to voice their opinion, reports Kommersant business daily. The Constitutional Court’s ruling is binding for all other courts in Russia, which opens new possibilities for activists to challenge the project.
Earlier, President Dmitry Medvedev called for a closer examination of Okhta-Center and the possible damage it may cause to St. Petersburg. The president commented on a letter from UNESCO – the UN’s cultural heritage, education and science body – which argued strongly against the skyscraper. The letter was sent in response to the Constitutional Court’s request.
Russian corruption means foie gras roads would be cheaper
Corruption in Russia has made road-building so expensive that the same stretch of highway could be coated in an eight-inch thick layer of foie gras for the same price, a study has found.
The conclusion, reached by the Russian edition of Esquire magazine, is designed to embarrass the Kremlin, which has failed to tackle endemic corruption in all walks of life.
The magazine took one road, being built for the 2014 winter Olympics in the southern town of Sochi, as an example. The price tag for the 30-mile long road is a £4.9 billion. For the same money, the magazine calculated, it would be possible to coat the road with an eight-inch thick layer of foie gras or a two-inch layer of truffles.
Alternatively, it said, the road could be lined with a layer of oysters, black caviar or even a layer of fur coats. A river of Hennessy cognac just over five inches deep could also be created for the same cost.
The magazine said it wanted to highlight the fact that roads in Russia are among the most expensive in the world to build due to rampant corruption.
Government and city officials routinely take huge backhanders to award road building contracts and then the builders themselves inflate the cost of building materials, falsify labour costs, and loot public funds for their own enrichment.
Russian officials have argued that this particular stretch of road is more expensive than usual because it involves building tunnels and bridges high in the mountains. Critics say the sums involved are still far too high.
President Medvedev admitted recently that his campaign to clamp down on corruption has achieved little. Russians still routinely bribe traffic policemen, often buy their driving licences off the shelf rather than take a test, and are frequently forced to pay bribes for university places and results.
Chasing Mayors Away
21 July 2010
By Maria Tsvetkova / Vedomosti
Mayors in Russia enter office less and less as a result of elections; they are instead being replaced by city managers appointed by local deputies.
According to the law on local government that has been in effect since 2003, municipality heads may be elected, appointed from the local council or employed by the local council under contract, depending on what rule is stipulated in the municipality charter. The switch to appointing municipality heads was made easier in 2009 when Article 74.1 appeared in the law, allowing local councils with two-thirds of the vote to dismiss mayors on their own initiative or by proposal from the region’s head.
The Kremlin does not give new governors the authority to abolish mayoral elections, says an official close to the presidential administration.
It is simply more convenient for regional leaders coming to power to manage things that way, says an official close to the Kremlin.
The federal center is in favor of regional and local authorities deciding to abolish mayoral elections, if it does not entail political destabilization in the regions, said Vitaly Ivanov, the director of the Institute of Politics and Public Law.
In the last month, mayoral elections in Perm and Blagoveshchensk have been canceled. Canceling elections began as a result of then-President Vladimir Putin's formulation of the "power vertical" model of rule, says political analyst Rostislav Turovsky. Governors Misharin and Komarov, who have worked a while in Moscow, project themselves as obedient disciples, since no other orders on this matter have been forthcoming from President Dmitry Medvedev. Both the governors and United Russia stand to benefit from the cancelling of elections, but social unrest could appear under pressure, Turovsky concluded.
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Russian Search Engine Idea Finds High-Level Support –Vedomosti
First Published Thursday, 22 July 2010 03:45 am - © 2010 Dow Jones
DOW JONES NEWSWIRES
Prospects for Russia's own state-run Internet search engine aren't exactly clear, but the idea has found support at the upper tier of government, business daily Vedomosti reports Thursday.
The private sector is unlikely on its own to tackle such a costly, labor-intensive project, the newspaper cites a senior Kremlin official as saying. The risk that it wouldn't work is too great without state involvement, he added.
A person familiar with the plan said a national search engine would enhance the competitiveness of companies that help build the portal and spur development of other, new technologies.
Two weeks ago Vedomosti reported that Leonid Reiman, an adviser to President Dmitry Medvedev and former minister of communications, had said the government was interested in developing a search engine. Without giving details, Reiman said any private enterprise that took part in the work would be backed by the state, which he said might decide to finance the project once the technology was in place.
Wednesday, Reiman said he had no comment.
A person close to Medvedev's administration said that while the project so far has no specific mandate, it has already drawn interest from would-be participants. According to this source, the project was shepherded initially by the president's deputy chief of staff for domestic policy, Vyacheslav Surkov, but oversight then fell to the Ministry of Communications and Mass Media. Reiman ran the ministry from November 1999 to May 2008.
A ministry spokesman wouldn't comment Wednesday to Vedomosti. Reiman's successor, Igor Shchegolev, has denied that the ministry intends to get involved in creating a search engine.
Executives at several Russian Internet companies said earlier this month that recruiting firm Arthur Hunt Group had been luring developers from top domestic search providers to work on the project. It would have a $100 million budget and be modeled on industry leader Yandex, with the portal ready for use by the end of 2001. With work to begin this fall, hiring for the project has since stopped, the executives said this week.
An official at Yandex said no one has left that company to work on the state's project.
Yandex spokesman Ochir Mandzhikov said the company welcomes new players in the market if they're competing on technology and service quality. Carving into Yandex's business isn't likely, assured Igor Ashmanov, whose Web-hosting and marketing company, Ashmanov & Partners, is reportedly working on search technologies for the project. Instead, he said, the goal is to create a No. 2 portal with innovative tools especially for computers used by public officials.
Two other companies identified by the Internet executives as being involved -- Abbyy, a U.S. maker of document-recognition software, and Yahoo-style portal KM.ru -- declined to comment. Anatoly Karachinsky, president of IBS Group, said the IT holding company isn't involved, while spokesman Oleg Rumyantsev said national landline operator Rostelecom (RTKM.RS) is equipped to take part but hasn't signed any agreements toward that end.
Newspaper website: vedomosti.ru
Thirteen alleged neo-Nazis on trial in Moscow
22 July, 2010, 10:21
A group of alleged Neo-Nazis is on trial in Moscow accused of killing dozens of people in ethnically-motivated crimes. Other charges they face include attempted terrorism and inciting ethnic dissension.
During the trial the prosecutors will state the indictment, while the accused will respond with their plea.
Possible sentences should the accused be found guilty range from years in jail to a life sentence.
Investigators claim the gang was part of the National-Socialist Society and wants to turn Russia into a Nazi state.
The society was subsequently banned for being extremist.
Slowly getting better
Veronica Koroleva is a self-professed, deeply religious woman who is full of hate for those who are different. She despises immigrants and accuses them of occupying, disrespecting and contaminating her nation.
Russians she insists are fighting a race war motivated by love.
“Love for our homeland and our nation, love for our god. Pure families where people don't just date and then break up; but, rather, they get married in church; they don't practice abortions; they don't support inter-ethnic marriages,” Koroleva said.
“I believe everyone should live in their own homeland where they belong,” she reacted when seeing RT’s Staci Bivens.
Armed with this belief and inspired by racist bloggings, her husband Nikolay Korolev and two fellow students bombed Moscow’s Cherkizovsky market in 2006. They targeted it because of the number of traders that come from Central Asia and China. The blast killed 14.
Veronica’s husband is serving a life sentence for actions neither of them regrets and for a cause they both support.
Attacks against non-Slavic looking people are often brutal and, in cases like in Cherkizovsky market, they are deadly.
The deeds of angry mobs pummeling outnumbered victims are recorded by racists and then posted on nationalist websites.
Activists call the situation out of control, but Galina Kozhevnikova from SOVA Center for Information Analysis – a local, non-profit crime watchdog – does acknowledge it is slowly getting better.
“They started seizing the most odious groups that had been involved in systematic violence and terrorism. During the last two years, the largest formations in Moscow were dispelled, and the key activists and murderers were detained,” Kozhevnikova said.
She says 19 people have been killed due to hate crimes in 2010, which is down from 50 for the same time period last year.
However, that math does little to satisfy migrants, who feel self reliance is better than police protection.
“They won’t any longer walk alone, they will walk in crowds. People take care of their own safety. Law enforcement comes into action after a crime is committed, not before,” migrant labor rights activist Karomat Sharipov said.
Mission: To clarify the outer border of Russia`s continental shelf
[pic][22.7.10]
The flagship of Russia’s polar fleet “Academician Fyodorov” has left for the Arctic on an expedition to clarify the outer border of the country’s continental shelf. It will take 50 scientists on board in St. Petersburg for its 90-day expedition. The scientists will study the Lomonosov Ridge and the Mendeleev Rise in the Arctic with the assistance of the nuclear-powered icebreaker Yamal for 75 days.
Experts say that almost 7 percent of explored oil reserves in the world and 30 percent of gas are under the Arctic shelf. Moreover, there are large reserves of diamonds, gold and minerals. Another promising area is the possibility of laying shipping routes through the Arctic. Scientists insist that it is possible to open shipping routes from Russia’s European part to America or Asia within ten years owing to global warming. Earlier, basically Russia alone studied the Arctic as it has the largest sector in the Arctic shelf, but several countries, including China, which is not an Arctic littoral, have recently focused on the region.
China that is experiencing a shortage of fuel has already sent its icebreaker “Xuelong” or “Snow Dragon” twice to the North Pole and launched a research station on Spitsbergen.
Meanwhile, Denmark is attempting to prove that the Lomonosov Ridge is geographically linked to Greenland. If this is proved, the country will declare that the North Pole belongs to Denmark. Norway, on its part, is claiming 175 thousand square kilometers of the Russian shelf in the Barents Sea, where huge reserves of oil and gas condensate have recently been discovered.
The ongoing expedition is aimed at clarifying the border of the Arctic shelf and handing over the details to a relevant UN commission, says the deputy director of the Arctic and Antarctic Scientific Research Institute, Alexander Danilov.
“Russia has never launched such an expedition to substantiate the outer border of its continental shelf,” says Alexander Danilov.
“The results of a precise study will be the basis of a report that will be presented to the UN Commission by the Russian Federation. We have to prove that the deeper sector of the Arctic is the continuation of the Russian shelf. If the evidence is convincing, then Russia will increase its territory by additional millions of square kilometers,” Alexander Danilov said.
The research ship is equipped with advanced equipment, including multi-ray echo depth detector that measures the depth of the ocean in many points simultaneously and determines the relief of the bed.
This will be used to determine the outer border of the Russian continental shelf. In 2001, Russia submitted a document on its shelf to the United Nations. Since then, a great amount of research has been carried out.
This expedition will provide some more evidence and proof to confirm Russia’s claims to the Arctic shelf.
[ (Source: ”The Voice of Russia”) russia-media.RU Murmansk & Shtokman News / FLAIT Murmansk ]
Hoof-and-mouth outbreak confirmed in Russia's south
08:56 22/07/2010
An outbreak of hoof-and-mouth disease at a swine farm in southern Russia has resulted in the destruction of 204 pigs, the regional emergency ministry press service said on Thursday.
The carcass of a wild boar, which died of the disease, was discovered in the area in May, striking concerns of the possible spread of hoof and mouth. Authorities authorized the killing of wild boars in the region to deter the further spread of the disease to domestic livestock.
On Wednesday, two pigs died at a farm. Laboratory tests proved the animals died of hoof and mouth and the farmer was ordered to destroy the remaining 204 head of domestic swine.
Hoof and mouth is passed by direct contact with other animals. Though the disease poses no threat to humans, it does cause colossal financial losses among farmers with livestock.
ROSTOV-ON-DON, July 22 (RIA Novosti)
July 22, 2010 11:16
Sutyagin wishes to return to Russia, timeframe vague
MOSCOW. July 22 (Interfax) - Researcher Igor Sutyagin would like to return to Russia some day, lawyer Anna Stavitskaya told Interfax on Thursday.
"Igor Sutyagin would like to come back," she said.
Earlier in the day Ekho Moskvy radio posted Sutyagin's statement. He said he was planning return to Obninsk. "I intend to return to Obninsk and repair the shaky steps of our small house built on 400 square meters by the Protva [River]," said the scientist convicted in Russia on espionage charges and swapped for ten Russians the United States accused of spying for Russia.
The researcher said he did not know when he might cross the Russian border but believed that that would happen some day.
A police source told Interfax that there were no legal obstacles to Sutyagin's return to his home country.
"The Russian president pardoned Sutyagin. He is still a Russian citizen. I believe he is not deprived of rights and can come back to Russia any time," the source said.
te mj
Freed Russian spy Sutyagin plans to return to Russia
11:24 22/07/2010
MOSCOW, July 22 (RIA Novosti) - Nuclear weapons specialist Igor Sutyagin, one of four Russians exchanged as part of a Russian-U.S. spy swap in early July, says he plans to return to Russia, Ekho Moskvy radio station quoted the scientist as saying on Thursday.
"I'm going to return to Obninsk [near Moscow] and fix the rickety porch of our house," he said.
"Sooner or later, I don't know yet, but this will happen," he added.
Sutyagin, who is presently residing in Britain, was sentenced in 2004 in Russia to 15 years in prison for passing information to the CIA.
Under the spy exchange deal, which took place in Vienna on July 9, Russia pardoned and released four prisoners jailed for spying for the United States in exchange for ten people accused by the United States of spying for Russia.
Lawyer: Russian spy unhappy with rejection
Today at 08:28 | Associated Press
A redheaded Russian spy whose photographs made her a tabloid favorite is upset that the United Kingdom has revoked her citizenship, her lawyer said Wednesday.
Attorney Robert Baum said Anna Chapman, 28, also refused to let him send along a request from an adult movie company to appear in a film.
"They sent an e-mail with a letter. She didn't even want me to forward it," Baum said. "She didn't even want to consider the offer."
He did pass along notification to Chapman from the United Kingdom that her citizenship had been revoked and that she would not be permitted to enter the country. He said the citizenship decision can be appealed but it would be three years before she could apply again to re-enter England, where she has spent much of the last nine years.
"She's particularly upset" at the rejection by the United Kingdom, Baum said. "It was disappointing to learn she can't go back."
Baum said he has communicated regularly with Chapman by e-mail as he tries to return her belongings following her deportation nearly two weeks ago. She was required to leave the country along with nine other Russian spies immediately after they pleaded guilty to working as unregistered agents for Russia while living seemingly quiet lives in America.
Baum said he visited her nearly every day while she sat alone in a prison cell for 10 days after her June 27 arrest.
He said reports that she was trying to sell her story to make money were false.
"She has not been shopping her story. She's not granted any interviews. She has not hired an agent," Baum said. He said she read one report that she was selling her story and told him it was an "absolute lie."
Chapman became a tabloid darling three weeks ago as photographs gleaned from the Internet showed the smiling Russian enjoying Manhattan's nightlife, posing in front of the Statue of Liberty and mixing with businessmen at a conference. Later, several pictures showing her naked were published. Her popularity has flooded Baum's e-mail address with requests from journalists in the United States and England who want to talk to her and from authors who would like to write a book with her.
Chapman's plea agreement with federal prosecutors includes a clause forbidding her from making money from the sale of her story in book or movie form. However, there was no prohibition from her making money based on her celebrity status, Baum said.
And he indicated it was likely she eventually would tell her story, even if she's not allowed to accept money for it.
"She can tell her story but if she makes money on it, the U.S. government is going to try and seize the profits," Baum said. "I guess they figure if she's not being paid for it, she's not going to tak about it. That's probably not the case."
He said Chapman is happy to be reunited with her family, especially her sister who lives just outside Moscow.
Most of her time has been spent trying to resurrect a business that matches real estate agents with people looking to buy homes, he said.
Baum said Chapman has had very little contact with the Russian government since her return and was not receiving payments of any kind. A lawyer for one of her co-defendants had said the Russian government had promised his client $2,000 a month for life and lodging if he returned to Russia.
Baum said he is sure Chapman misses her life in the U.S.
"She wished that she hadn't been forced to leave," he said. "I know she wanted to stay here. She had a lot of friends."
Read more:
Boris Berezovsky in '£100m' divorce battle
Boris Berezovsky, the Russian oligarch, will divorce his second wife Galina today in what could be the costliest marriage split in British legal history.
By Gordon Rayner, Chief Reporter
Published: 7:05AM BST 22 Jul 2010
The exiled businessman, who will not contest the case at the High Court, is reportedly expected to pay his second wife anything up to £100 million, which would be more than double the previous record of £48m.
Mr Berezovsky and his wife have been married for 18 years, though they have been separated for the last 16. Mrs Berezovsky lives in London with the couple's two teenage children, while he lives in Surrey with his girlfriend of 15 years, Yelena Gorbunova, with whom he has another two children.
Mrs Berezovsky, who hired the law firm Mishcon de Reya to negotiate a divorce settlement, is reported to have been seeking a quarter of her husband's fortune, which was once estimated at £1 billion but is now thought to be far less.
The couple met in 1981 when Mr Berezovsky, 64, was a professor of mathematics in Moscow earning £60 a month. He later set himself up in business as a car dealer, founding the first Mercedes dealership in the old Soviet Union, then became one of the original Russian oligarchs when President Boris Yeltsin sold off state assets to favoured supporters for a fraction of their value.
He married Galina after divorcing his first wife, Nina, with whom he has two further children, but his second marriage hit trouble after only three years and the couple separated.
Mrs Berezovsky, 51, is reported to have filed for divorce after becoming irritated at reports describing Miss Gorbunova as the oligarch's "wife".
Mr Berezovsky was sentenced to six years imprisonment in his absence in Moscow after being found guilty of fraud, having been granted political asylum in 2003 when Russia applied to have him extradited. He has since accused the Russian prime minister Vladimir Putin of being behind a plot to assassinate him.
Lord Bell, Mr Berezovsky's spokesman, has confirmed in the past that the businessman was "negotiating a divorce settlement" and intended to marry Miss Gorbunova once the divorce was finalised.
The current record for a divorce settlement in a British court is the £48m awarded by the High Court to Beverley Charman, the former wife of the insurance millionaire John Charman, in 2006.
E.coli and Rotten Tomatoes Found at Moscow McDonald's Restaurants
22.07.2010
Russian Federal Consumer Rights Protection Service and Prosecutor’s office revealed the results of recent inspections of catering outlets in Moscow. The results, as always, are shocking. One can only wonder how Muscovites and visitors are still alive. In the current heat the situation with the lack of hygiene has worsened. Gross violations are found even in McDonald's chain of restaurants that always took care of its reputation. Most of the claims were registered at McDonald's located on Kashirskoye highway, where eight violations have been recorded.
According to Komsomolskaya Pravda, the inspectors checking McDonald's chain in Moscow in the first place did not like small kitchens. Several McDonald's restaurants did not have space for cutting vegetables. In McDonald's on Novoslobodskaya Street buns were stored on the floor.
Employees of the fast food restaurants caused a great deal of complaints, too. The staff of the restaurant located at the Andropov Avenue did not pass medical examinations in time. The cooks working in the restaurants at Grin Street and Leninsky Prospect had cuts and burns on their hands. In addition, out of 430 examined washings from the equipment and staff’s hands, 10 samples contained E. coli.
Substandard products were found in several restaurants. In McDonald's restaurants located at the Komsomolskaya Avenue, Yaroslavskoye, Dmitrovskoye and Kashirskoye highways the inspection revealed expired tomatoes and buns.
The leadership of the restaurant chain told to the newspaper that the audit was planned. “Let me just note that only in McDonald's the staff is required to wash their hands up to the elbow with antibacterial soap,” explained a representative of the chain. “Shortcomings in the work will be corrected under strict control.”
Prosecutors found expired products in the chain of Kopeika supermarkets
The Moscow Prosecutor's Office has identified violations of sanitary-epidemiological norms in the chain of stores Kopeika. According to Interfax referring to the press service of the prosecutor's office, medical examination terms in the stores were violated. Cleaning and disinfection of the premises is carried out poorly.
|[pic] |
In addition, it was revealed that the stores sell expired goods. Violation of the rules of food storage was also found in the store. The violations included absence of thermometers in refrigerators, lack of storage temperature maintenance, lack of suitable conditions for packaging of products, cleaning and processing of cutting tools. The stores stored food and household chemicals next to each other.
Twelve cases of administrative violations were opened as a result of the audit in respect of LLC Kopeika-Moscow and company officials.
In general, the situation with quality of the products sold to Muscovites looks depressing. “Public control” claims that Moscow buyers often complain about store chains of X5 Retail Group and The Seventh Continent that sell expired products.
The reputation of the French Ashan raised questions as well. In particular, in May of this year, “Public control” conducted a control purchase of Russian chickens in the supermarkets of the chain and found that 80% of the chickens were contaminated with salmonella. The Moscow veterinary committee believes that is the result of violations of chicken storage conditions in the stores.
Fish with arsenic
It turns out that this is just the tip of the iceberg. Thanks to the efforts of Moscow Veterinary Service, appearance of meat with salmonella and fish with arsenic in the stores was prevented, Itar-Tass was told at the press service of the veterinary committee. According to them, 88 tons of meat, fish, raw milk and byproducts from Russia, Germany, Argentina, China and Belgium were contaminated with Salmonella. More than 44 tons of beef, bacon, shrimp burgers and sea food cocktail have been recalled because of high content of mesophilic aerobic microorganisms. Twelve tons of meat was contaminated with E. coli. Ten tons of polar cod of domestic production contained arsenic, and 800 kilograms of honey contained lead. Approximately 2.6 tons of raw milk contained penicillin and inhibiting substances. All these products have been discarded.
In addition, in Moscow and Moscow region counterfeit goods trading is widely spread. In July, police shut down an underground shop in the south-east of Moscow, which supplied stores and markets with life-threatening dumplings and meatballs. And in mid-June, employees of Moscow Economic Crimes Department discovered illegal production of cheese. The products, some of which were struck by fungus, were supplied to major retail chains.
Komsomolskaya Pravda
PRESS DIGEST - Russia - July 22
11:49am IST
MOSCOW, July 22 (Reuters) - The following are some of the leading stories in Russia's newspapers on Thursday. Reuters has not verified these stories and does not vouch for their accuracy.
KOMMERSANT
kommersant.ru
- A rebel attack on a hydroelectric power plant in the North Caucasus on Wednesday demonstrated that strategic sites in Russia are still vulnerable to terrorist attacks, the daily writes.
- The government is planning to increase tax burden to attract more than one trillion roubles to the budget by 2013.
VEDOMOSTI
vedomosti.ru
- The government is considering selling a third of its grain reserves to keep grain prices on the local market stable despite possible grain shortages caused by this year's drought.
- Russian businessman Sergei Pugachev is ready to sell a 75 percent stake in a large Siberian coal deposit, expecting to attract up to $3 billion, the daily says commenting on talks held on Wednesday between Pugachev's United Industrial corporation and Japan's Mitsui & Co (8031.T: Quote, Profile, Research).
IZVESTIA
izvestia.ru
- The Defence Ministry has sold a 460,000 sq meter allotment of land on the territory of its military airport in Kubinka near Moscow. Russian billionaire Suleiman Kerimov reportedly bought it to build a new airport for businessmen, the daily says.
NEZAVISMAYA GAZETA
ng.ru
- The territory of peat bogs on fire around Moscow increased four-fold this summer compared to last year due to the current heat wave that hit Russia's central regions.
Press review
Jul 22, 2010 11:56 Moscow Time
The Vremya Novostey newspaper is highlighting the terrorist attack at the Baksan hydropower plant in Russia’s Kabardino-Balkar Republic. According to preliminary data, a group of 3-5 gunmen perpetrated into the station’s territory, shooting dead two security guards and badly beating nightshift employees. The assailants are reported to have laid and then detonated several improvised explosive devices in the machine room. Although a series of explosions destroyed two of the three functioning power units, they fortunately did not cause any power outages in the region. The Baksan plant produces some 7 percent of the republic’s consumed electricity and other plants managed to swiftly make up for the deficit. FSB Director Alexander Bortnikov informed President Dmitry Medvedev of measures being taken to eliminate the damage caused by the incident.
According to Rossiyskaya Gazeta, the second day of President Medvedev’s negotiations with his Finnish counterpart Tarja Halonen was devoted to environmental challenges, the human rights situation and some humanitarian issues, in particular the increasing number of family disputes between the two countries. “It is very important that government authorities in Finland and in Russia treat mixed families as equals, without any discrimination,” Tarja Halonen said. She added that the government is also preparing legislation amendments to allow Russian nationals living in Finland obtaining residence permits for their elderly parents. In his turn, Dmitry Medvedev stressed that relationships in mixed families are traditionally handled on the basis of national law, while international conventions have different approaches to the issues of conjugal relations and giving citizenship to children born in mixed families.
The Kyrgyz government may consider allowing Russia to open its second military base in southern Kyrgyzstan, the country’s President Roza Otunbayeva told reporters on Wednesday. Asked about the destiny of the U.S. Transit Center at Manas international airport near Bishkek, she said the issue would be decided by parliament after the October elections the Izvestia newspaper reports. The Manas air base was set up in 2001 to assist in U.S.-led counterterrorist operations in Afghanistan. Last year, the Kyrgyz authorities announced that the base would be withdrawn but then let it be transformed into a transit center.
Low inflation in Russia has pushed poverty rates down. The RBC Daily says the government’s anti-inflationist measures and employment policy are bearing fruit. Less than a year since the first sings of upturn in the Russian economy, poverty statistics has visibly improved. Economists warn, however, that it’s too early to relax. Prices may leap up in the following months.
A tax on luxury may still appear in Russia. This week, the Economic Development Ministry is to submit proposals on the prospect of introducing a luxury tax, the Nezavisimaya Gazeta reports. The idea of replenishing state coffers with tax payments from the owners of luxury yachts and private planes has long been hovering in the air. Faced with the need to reduce budget deficit and honor its social commitments, the government is looking for additional revenue sources. Apart from its fiscal function, the luxury tax is supposed to halt a widening gap between the rich and the poor.
National Economic Trends
Russian rouble shrugs off lower oil on local taxes
22 Jul 2010, 1318 hrs IST,AGENCIES
MOSCOW: The Russian rouble overlooked weaker oil prices and continued firming versus its basket in early trade on Thursday thanks to companies converting their dollar and euro revenues to pay local taxes.
By 0650 GMT, the rouble inched up 3 kopecks to 34.28 against the euro-dollar basket, immersing deeper in the zone of the central bank's "so-called" planned interventions. Dealers say the regulator buys $150 million-$200 million a day in the range of 33.40 to 34.40 roubles per basket to absorb excessive inflows of foreign currencies.
However, such resistance looks not enough to offset the rouble's upward pressure. Ongoing month- and quarter-end domestic tax payments prompt Russian companies to convert their dollar and euro revenues to meet local liabilities, supporting the rouble. "It's the end of the month, plus oil prices are above $75. This may linger towards next Wednesday," said Roman Pakhomenko, a dealer at Lanta bank.
Bruised by worries about the global economy, the rouble's main benchmark, oil prices showed negative dynamics on Thursday although stood at levels of $75-$76, high enough to comfort rouble assets and ensure Russia's current account surplus.
Pricing in the broader euro weakness, the rouble rose 12 kopecks to 38.91 per euro, heading away from a three-month low of 39.63 hit in Monday. The short-term target for the euro/rouble pair is 38.85 and a break through would open a door for a fall to 38.60, technical analysts at Nettrader said in a note. Versus the dollar, the rouble gave up 6 kopecks to 30.51.
Investors' reluctance to increase positions on the summer-thinned market after several days of demand for relatively cheap dollars may also hamper the rouble's moves. "The market bought a lot in the last days so I don't expect a substantial rise in the basket," said Sergei Ponomaryov, a dealer at Promsvyazbank.
Putin Lures $1 Billion Less Than Planned as Higher Yield Sought
By Denis Maternovsky and Michael Patterson
July 22 (Bloomberg) -- Russia raised 34 billion rubles ($1.1 billion) less than offered at two bond auctions yesterday as investors demanded higher yields than the government was willing to pay.
Prime Minister Vladimir Putin’s administration failed to sell 30 billion rubles of bonds due in July 2015, said Alexander Shcherbakov, deputy head of the Finance Ministry’s debt department. The government issued 11 billion rubles of notes due January 2013, less than the 15 billion rubles planned, at a yield of 6.28 percent, four basis points, or 0.04 percentage point, higher than rates on existing debt, according to data compiled by Bloomberg.
Investors sought yields at least seven basis points higher than the ministry offered for the 2015 bonds, Troika Dialog’s Alexander Ovchinnikov said. The government is willing to wait to pay lower yields because borrowing needs have fallen, according to VTB Capital. Russia has sold about 21 percent of the 1.2 trillion rubles of bonds planned for this year to plug the budget deficit.
“It is clear that the ministry of finance was not satisfied with the yields that investors demanded,” said Ovchinnikov, a vice-president of global markets in Moscow at Troika Dialog, Russia’s oldest investment bank.
The canceled sale of 2015 bonds yesterday follows an auction of 45 billion rubles last week at yields as much as 11 basis points higher than rates on existing bonds, the first time in 10 months the government paid more than yields on the secondary market, data compiled by the Bank of Moscow show.
‘At Any Cost’
Russia doesn’t need money “at any cost,” said Mikhail Galkin, the Moscow-based head of fixed-income research at VTB Capital, the investment banking unit of state-controlled lender VTB Group. The government’s ruble bonds “will still be attractive for Russian banks and foreign investors that want exposure to the ruble,” he said.
Shcherbakov of the Finance Ministry’s debt department declined to comment on the reason for the auction’s cancellation.
The yield on the government’s federal notes, or OFZ bonds, due December 2014 fell 2 basis points to 6.76 percent yesterday, the lowest since July 9. The 7.15 percent notes maturing in January 2013 yielded 6.25 percent at the close of trading yesterday, up 1 basis point from the previous day.
The ruble strengthened 0.2 percent to 30.4475 per dollar in Moscow. Non-deliverable forwards, or NDFs, which provide a guide to expectations of currency movements as they allow foreign investors and companies to fix the exchange rate at a specific level in the future, show the ruble weakening to 30.6563 per dollar in three months.
Yield Gap
The extra yield investors demand to own the Russian government’s foreign-currency debt rather than U.S. Treasuries fell nine basis points to 252 yesterday, more than the spread of 166 for debt of similarly rated Mexico and 220 for Brazil, which is rated one step lower at BBB- by Standard & Poor’s, according to JPMorgan’s EMBI+ Indexes. The yield gap for Russian bonds is 50 basis points below the average for emerging markets, according to JPMorgan.
The cost of protecting Russian debt against non-payment for five years with credit-default swaps dropped about 3 basis points to 174 on July 20, according to CMA DataVision prices. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.
The yield on ruble bonds sold by gas producer OAO Gazprom is 198 basis points above the same-maturity Gazprom debt in dollars, down from a yield difference of about 600 a year ago, data compiled by Bloomberg show. The spread narrowed to as little as 115 on June 14.
Budget Shortfall
Russia faces its second budget shortfall since 1999 this year after the government stepped up welfare spending and deployed stimulus measures to revive the economy from 2009’s contraction. The deficit was 5.9 percent of gross domestic product last year as the economy shrank 7.9 percent, the most since the Soviet Union collapsed in 1991.
Putin, 57, said last week the budget gap may narrow to 5 percent of GDP this year. The reduction won’t prompt the government to cut its debt sale target, Deputy Finance Minister Dmitry Pankin said in an interview on July 9.
The Finance Ministry plans weekly bond auctions through the end of this quarter, seeking to raise a total of 375 billion rubles in August and September.
The sale of January 2013 bonds yesterday, completed after the failed auction of July 2015 debt, shows the government succeeded in “cooling off” investor demands for higher yields, said Ovchinnikov of Troika Dialog. “The ministry has significant funds on its accounts and was willing to show the market that they would not accept such premiums, at least for now.”
Last Updated: July 21, 2010 16:00 EDT
Finance Ministry Seeks $33Bln Through Tax Hikes
22 July 2010
By Peter France
The Finance Ministry on Wednesday proposed raising federal budget revenues 1 trillion rubles ($33 billion) over the next three years through a series of tax and tariff hikes, including higher extraction taxes on oil and gas.
The ministry wants to raise the extraction tax on gas by 61 percent next year, followed by hikes of 6 percent and 5.4 percent in 2012 and 2013, respectively, said Ilya Trunin, head of the Finance Ministry's tax policy department. The increased taxes on gas would bring in an extra 180 billion rubles over three years, he told reporters.
A similar measure was proposed for the oil extraction tax, with a 6.5 percent hike in 2012 and a 5.4 percent rise in 2013, bringing in an extra 225 billion rubles.
The measure would increase oil prices by about $1.60 per barrel, assuming a price for Urals crude of $75 per barrel, Andrei Kokin, an oil and gas analyst at Metropol, said in a note.
"We estimate that an integrated company, such as LUKoil, Rosneft or Gazprom Neft, could lose 6 percent to 8 percent of [earnings before interest, taxes, depreciation and amortization] in 2012 as a result," he said.
The ministry was able to push its plan to increase the gas tax past Gazprom — which put up stiff resistance to the proposal — after winning approval from Prime Minister Vladimir Putin, Trunin said.
"This is the position agreed to with the federal authorities," Trunin said, Reuters reported. "We were able to do that," he said.
The ministry is also considering an Economic Development Ministry proposal to impose a luxury tax on a range of high-priced goods, including chocolate, but Trunin said the levy was not likely to raise much revenue.
One tax likely to be cut is the politically sensitive transportation tax, and the Finance Ministry is backing a 50 percent reduction in the base rate starting next year. The levy would be eliminated altogether for drivers of cars with less than 150-horsepower engines, he said.
Under the plan, the cut would be offset by an increase in excise tax on fuel, however. The Finance Ministry has proposed raising the tax on gasoline by 1 ruble per liter per year over the next three years.
Copper will also be targeted in the Finance Ministry plan, which suggests a hike in export duties on the metal to 10 percent starting next year. The proposal also calls for nickel tariffs to be pegged to market prices for the metal, ranging between 5 percent and 7.5 percent.
Other new taxes that made it into the ministry's proposal were an increase in the water tax and higher excises on tobacco products, Trunin said.
Russia plans domestic grain sales to control price
By NATALIYA VASILYEVA
MOSCOW
The Associated Press July 21, 2010, 9:59AM ET
Russia will begin selling grain to its struggling meat and dairy producers after a severe drought killed at least one-fifth of grain crops across the country, the Agriculture Ministry said Wednesday.
The market interventions, totaling at least 3 million tons of grain, are aimed at containing food prices, Agriculture Minister Yelena Skrynnik said.
Russia -- the world's third-largest wheat exporter -- has suffered its worst drought in 130 years, according to officials. So far, the drought has destroyed 20 percent of the grain sown in central Russia and the Ural mountains, affecting more than 9.6 million hectares (24 million acres) of land and spurring an early harvest.
Some regions have lost up to 50 percent of their crops. At least 23 of Russia's 83 regions have announced a state of emergency.
As a result, grain traders have been driving up prices despite the fact that Russia and other exporters have large reserves, said Natasha Zagvozdina, head of Russian research at the Moscow-based Renaissance Capital.
The interventions will help "halt the rise of grain prices which have gone up disproportionally high compared to the drought figures we're receiving," Zagvozdina said.
Wheat futures on the Chicago Board of Trade have gained nearly 25 percent since June to reach $5.83 a bushel Wednesday on the reports of droughts in Russia and floods in Canada.
Russia's grain stock, meanwhile, stood at 24 million tons as of July 1, following several years of sizable local and foreign investment in land and modern farming practices after decades of Soviet neglect.
The country recorded its biggest harvest in 20 years in 2008 at 108 million tons of grain.
The government is concerned the rising produce prices may threaten its goal of single-digit inflation.
Economists and agriculture experts have said the higher grain prices could add up to 2 percentage points to the overall inflation rate. Consumer prices have added nearly 5 percent so far this year.
Putin Reverses Grain Intervention Strategy
22 July 2010
By Olga Razumovskaya
The state will begin unloading grain from its stockpiles August 4 to help relief efforts in drought-stricken regions, Agriculture Minister Yelena Skrynnik said Wednesday, ending two years of stockpiling meant to support prices.
The government also has said it hopes to help farmers and is considering five-year subsidized loans to purchase grain from stockpiles among other bailout measures to lessen the impact of the drought.
Twenty-three regions across Russia have declared a state of emergency as weeks of record-breaking heat have ruined 9.6 million hectares of grain this season.
Three million tons of grain from the 2005 and 2008 harvests will be distributed among cattle and poultry breeders, flour mills and processing plants in the affected regions, Skrynnik said.
Some farmers had been slaughtering animals and rushing the meat to market because of the rising prices to feed their herds.
Prime Minister Vladimir Putin held a separate meeting Wednesday with First Deputy Prime Minister Viktor Zubkov, whom he ordered to head a working group that will coordinate the response among governors.
"I think the situation should be taken under much tighter control. I'm asking you to create a working group and monitor the situation daily," Putin told Zubkov, according to a transcript posted on the government web site.
Skrynnik said the state-run United Grain Company, created in March 2009 to regulate exports, would start accrediting organizations to participate in trading sessions at the National Mercantile Exchange on Monday.
The grain intervention fund currently has 9.5 million tons in storage. Since 2007, the last year Russia sold grain from its stockpile, Russia has only been intervening in the market to purchase grain.
In 2008 and 2009, the country spent a combined 50 billion rubles ($1.6 billion) to buy from farmers and prop up prices. But the plan began to backfire as the government found itself losing 1 billion rubles a month on storage costs and rotting grain.
In that regard, the drought has come as a blessing in disguise, as it will allow the government to dump its unwanted grain back onto the market, analysts said.
During a meeting with Zubkov in mid-May, well before the drought hit, Putin had already decided that it was time to start selling.
"We have big reserves, but these reserves are becoming quite expensive for us," Putin said at the time.
"We need to make steps that would match the reality that has formed today both in our economy and the global market," he said. "These decisions may be quite energetic, brave. The most important thing is that they are helpful."
Both domestic and global prices have surged since the drought began, in part because of a panic among traders that has made prices for grain more volatile.
"The price is still fluctuating," said Igor Vasilyev, head of the Zerno Online news agency.
"If you have followed the market carefully, you would see that over the past three trading days, the European market has started to cool off. The drought is real, and speculative tendencies are on the rise, but it is still too early to say at what level the prices will settle," he told The Moscow Times.
Although Russian stockpiles, as well as this year's forecast yield of 85 million tons, are more than enough to cover domestic demand for grain, exports are expected to decline.
"The government is using this intervention program to regulate the market price, which has been going up for quite some time," Vasilyev said. "It will be knocking down the price domestically with the help of old grain, which in turn should affect the export price."
Wheat futures were up 2.3 percent at the open of Chicago trading after dropping for three straight sessions.
Russia to launch grain interventions next month
The Associated Press July 21, 2010, 7:49AM ET
MOSCOW
Russia's agriculture ministry says it will be introducing grain interventions next month as sweltering weather in Russia has killed at least one-fifth of grain crops across the country.
Agriculture Minister Yelena Skrynnik said in a statement on Wednesday that the government will sell at least 3 million tons of grain to struggling meat and dairy producers in the drought-affected areas.
The ministry earlier said that at least 9.6 million hectares of crops was destroyed by the heatwave in central Russia and the Ural mountains.
At least 23 of Russia's 83 regions have announced a state of emergency due to record-breaking temperatures that destroyed up to 50 percent of crops in some of the regions, inflating grain prices.
Drought-affected regions to use fodder grain from govt stocks
22.07.2010, 02.32
NOVO-OGAREVO, July 22 (Itar-Tass) -- Drought-stricken regions will be allowed to use fodder grain from the so-called interventions fund shortly, First Vice Prime Minister Viktor Zubkov said at a meeting with Prime Minister Vladimir Putin on Wednesday.
Putin urged Zubkov to watch the situation closely, “set up a working group and monitor the situation weekly.”
He admitted that “the [drought] situation is not improving but is deteriorating: we had 14-15 drought-affected regions, now there are many more of them.”
According to Zubkov, 23 regions have been affected by the drought and declared a state of emergency.
Putin asked Zubkov to remind regional leaders that the sooner they assess the damage from the drought, the faster the affected farms will get the aid.
“This should be done as quickly as possible,” he added.
Earlier, Putin urged regional authorities to help the farmers affected by the drought and promised financial assistance.
“We will certainly provide financial assistance to the effected regions and give them budget loans,” Putin said.
He stressed at the same time that “this does not relieve the regions from responsibility”.
“I think we can arrange for subsidies to the effected regions too,” he said, adding, “They will be given mainly to the regions that have actively developed agricultural insurance.”
“In the current situation we intend to us our Grain Intervention Fund to its full capacity. Our animal and poultry breeding farms should be able to buy grain in necessary amounts without delays,” the prime minister said.
He also vowed to “stop attempts to make a fortune on the drought”, referring particularly to “the insurance companies working in rural areas”.
Speaking of regions’ responsibility, Putin said, “They should also provide funding from their budgets for support to agricultural producers affected by the drought.”
“The leaders of some regions have already started doing it,” he added.
The prime minister stressed the need to develop the system of agricultural insurance. “Last year in Orenburg we spoke how important it was to develop modern market mechanisms for reducing risks in the agro-industrial sector. But unfortunately, little has changed in agriculture in this respect, and crop insurance remains more of an exception than the rule,” he said.
In his opinion, the Grain Interventions Fund should also play its role. It contains 9.5 million tonnes of grain, including 3.5 million tonnes of fodder grain.
Putin also warned regional governors against creating artificial obstacles to the movement of grain and fodder from well-off regions to the affected ones.
Zubkov said that it would take about a month to assess the damage from the drought.
Of 15 regions affected by the drought, seven have experienced it again. Particularly hard hit are small farms that need targeted assistance.
“It is necessary to provide direct financial support, together with regions, to regions and producers where crops have been destroyed completely… Budget loans will be provided to affected regions, and the procedure will be simplified,” Zubkov said.
He stressed that measures should be taken both at the federal and regional levels. “Regional support can involve tax or other preferences to the effected farms,” he said.
“We should fulfil both current and long-term obligations, prevent a disruption of field work, and sow all the areas that are intended for winter crops,” Zubkov said.
He also called on farmers to be more responsible and to spare no effort to preserve their property, and not just wait for the government support. “Obviously, farmers must be more responsible. Of course, the state renders help every year, last year we rendered help, as we are doing this year, but it is improper to take such financial, budgetary help for granted,” he stressed.
Zubkov pledged there would be no internal grain problems despite the drought. The country has grain reserves of 24 million tons, including 9.5 million tons in the interventions fund. Moreover, more than 5 million tons of grain have already been harvested, he said and added that Russia would not lose its positions as grain exporter either.
Our farmers are experiencing serious problems. Fourteen regions have announced a drought emergency. These include Tatarstan, Bashkortostan, Samara, Saratov and some other regions, where air temperatures have been abnormally high, Zubkov said.
“We are in control though. The Agriculture Ministry has formed a crisis staff led by the minister to amass drought information from regions. It is important to provide targeted assistance,” he said.
“Unfortunately, the amount of farming insurance dropped by 20 percent this year,” Zubkov said.
According to the Agriculture Ministry’s preliminary estimates, hot weather has ruined crops on nine million hectares, he said. The country has grain reserves of 24 million tonnes, including 9.5 million tonnes in the interventions fund. Assistance to farmers will be given from those reserves.
Business, Energy or Environmental regulations or discussions
Norilsk Nickel, Polyus Gold, RusHydro: Russian Equity Preview
By Anastasia Ustinova
July 22 (Bloomberg) -- The following companies may have unusual price changes in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.
Russia’s ruble-based Micex Index rose 1.9 percent to 1,354.83 in Moscow. The dollar-denominated RTS Index declined 0.4 percent to 1,411.40.
OAO GMKN Norilsk Nickel (GMKN RX): Russia’s copper producers may lose as much as $500 million a year if the government levies a 10 percent export duty on the metal, Nomura International Plc said. Russia’s largest miner advanced 1.1 percent to 4,886.03 rubles.
OAO Polyus Gold (PLZ RX): Gold rose in New York for a second straight day on speculation that a global economic recovery will boost demand for raw materials. Polyus Gold, Russia’s largest producer of the metal, added 2.5 percent to 1,438.42 rubles.
OAO Rosneft (ROSN RX): Crude oil fell after the government reported an unexpected increase in U.S. supplies and Federal Reserve Chairman Ben S. Bernanke said the economic outlook remains “unusually uncertain.” The shares added 1.5 percent to 186.20 rubles.
OAO RusHydro (HYDR RX): Russia’s largest hydropower company will halt its Baksanskaya plant in the North Caucasus for at least six weeks after an attack on the facility left two people dead. The shares added 0.3 percent to 1.589 rubles.
To contact the reporter on this story: Anastasia Ustinova in Chicago at austinova@.
Last Updated: July 21, 2010 19:51 EDT
Russian Stocks Pare Losses as Oil Gains; Novatek, Rosneft Climb
By Alex Nicholson
July 22 (Bloomberg) -- Russia’s 30-stock Micex Index erased losses, trading 0.2 percent higher at 1,357.06 as of 11:31 a.m. in Moscow. OAO Novatek, OAO Rosneft and OAO Gazprom climbed. Crude oil, the country’s key export earner, gained 0.2 percent to $76.68 a barrel in New York.
Last Updated: July 22, 2010 03:35 EDT
Law on Heat Supply paves the way to changes in heat regulation
VTB Capital, Russia
July 22, 2010
- RAB is mentioned as one of the options for regulation - we see TGKs as ultimate winners from proposed changes
News: On 9 July, the State Duma approved a new version of the Law on Heat Supply at the third reading. The document now goes to the Federation Council for review, with the final version to be signed by the president. We do not expect there to be any major amendments.
The major takeaways from the Law on Heat Supply are as follows.
• The Law mentions the possibility of long-term RAB regulation in the heat business as one of four approaches to be used for regulating heat (the others are cost plus, indexation and comparative). The regulator's decision on which approach to use must take heat producers' proposals into account. The first regulatory period for RAB is (at least) three years, with a transition thereafter to a five-year period (at least).
• It is possible to deregulate the heat market by switching to market pricing in areas which meet several criteria. These include: the availability of a properly-functioning gas distribution system (or other fuel availability), lack of cross subsidies and the availability of heat supply using other energy sources (with adequate prices).
• The document says that consumers will be charged to connect to heat grids and sets out how the fee is to be defined. In general, it will be set on a per unit of capacity basis and differentiated by technical parameters.
However, in case there is a shortage of current capacities to connect new customers, the connection fee will be set individually. This is a similar approach to that which FSK and the MRSKs used in electric grids.
• There is a possibility of long-term bilateral contracts for heat assets commissioned after 1 January 2010. In that case, no price regulation would be applied.
Our View: The Law gives the green light to changes in the heat business and we see more steps for reforming heat supply, which might ultimately lead to heat producers' profitability improving. We highlight TGKs, where about half of revenues are generated from heat sales, as the ultimate winners. To recap, the government has paved the way for long-term and/or RAB regulation to be introduced in the heat business (both in production and transportation) by 2012, as assumed by the Energy Efficiency Law.
Back to top Dmitry Skryabin
More noise regarding taxation of base metals
Troika, Russia
Thursday, July 22, 2010
Ilya Trunin, head of the Finance Ministry's tariff department, stated publicly yesterday that the government is considering reintroducing copper export duties from 2011 (or possibly earlier) and a floating export duty on nickel from 2011 instead of the current 5% flat rate.
In 2008 09, there were respective 5.0% and 8.5% export duties on potash and nitrogen/NPK fertilizers, a 10.0% export duty on copper and a 5.0% rate on nickel.
From this list, only the 5.0% duty on nickel was reinstated this year.
We believe that the government's agenda is currently being driven by budgetary funding constraints, given the economic slowdown, as well as the objective of ensuring economic diversification away from oil and gas, and equitable development of various regions of the country. We reiterate our view that non oil commodities will face the immediate threat of much heftier taxes as long as prices there perform stronger than oil.
Given the budget deficit, oil prices at $70 80/bbl and a pronounced price outperformance from the metals complex recently, we consider the risks of export duties eventually coming back to be pretty high at this stage, but we believe that the government's position will be balanced and reasoned.
As such, we already model a 10.0% copper export duty and 5.0% potash duty from 2011.
Importantly, various interest groups within the government apparently have yet to reach a consensus, so news flow is likely to remain contradictory. Also, the Finance Ministry is known for its particularly aggressive stance on additional taxation on mineral resources.
Mikhail Stiskin
RBC: Sberbank's investment portfolio spirals up
RBC, 22.07.2010, Moscow 11:56:06.Sberbank's investment portfolio nearly doubled in 2010, reaching RUB 1.7 trillion (approx. USD 55.9bn), RBC Daily wrote today citing the bank's Vice President Andrei Golikov. Almost all the securities Sberbank has invested in are on the Bank of Russia's Lombard List, which, according to Sberbank, will help it in case of possible problems on the market.
Russia's largest bank has left its competitors far behind when it comes to the rate of expansion of its securities portfolio. Last year, the share of securities in the bank's assets stood at 8.4 percent, and this year it has already reached 23.2 percent - the highest showing on the market, Golikov said, since most banks tend to invest roughly 15 percent of its assets on the stock market. He also admitted that the portfolio could even add another 5-10 percent by the year-end. As he specified, it depends on several different factors: the growth of lending, interest rates and the yield on bonds. If the demand for loans remains low, the bank will have to boost its investment in securities.
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|Moody's changes outlook on Sberbank's financial strength rating to stable from negative (Russia) |
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|egative_%28Russia%29/ |
|22/07/2010 10:43 (00:15 minutes ago) |
|The FINANCIAL -- Moody's Investors Service has on July 21 changed to stable from negative the outlook on Sberbank's D+ financial |
|strength rating (BFSR). |
At the same time, the bank's A3/Baa1 long-term local and foreign currency deposit and A3/Baa1 senior/subordinated debt ratings were affirmed. The outlook on the deposit and debt ratings is stable.The bank's P-2 short-term local and foreign currency deposit rating was also affirmed. Concurrently, Moody's Interfax Rating Agency affirmed Sberbank's Aaa.ru national scale rating (NSR); national scale ratings carry no specific outlook.
"The rating action reflects the gradual stabilization of Sberbank's financial fundamentals. The operating environment in Russia is showing signs of improvement after a turbulent 2009, with the economy growing 2.9% in Q1 2010," says Eugene Tarzimanov, a Moody's Vice-President --
Senior Analyst and lead analyst for the bank. Retail deposits - Sberbank's core funding base -- have grown by 22% at that bank in 2009 (Q1 2010: 11% growth, annualized), a good level considering the level of stress in the banking system seen last year. Sberbank's liquidity is adequate, with cash, cash equivalents and relatively liquid securities accounting for 29% of total assets at Q1 2010. Near-term refinancing risk is low, as Sberbank is not a large wholesale borrower.
Although problem loans are likely to grow somewhat before peaking at YE2010, we believe that most large problem exposures are already identified by the bank. "Although problem loans 90+ overdue stood at 8.9% at Q1 2010, and around 12% of loans were restructured, the level of loan loss provisions (11.7% of gross loans), total capitalization ratio (18.9%), and recurrent earnings all provide an adequate buffer for credit losses that are likely to materialise under our base case stress-test,"adds Mr Tarzimanov. So far, Sberbank has shown an adequate track record in managing its problem exposures: some very large problem loans were already repaid to the bank.
Sberbank's debt/deposit ratings continue to enjoy unconditional support from the Russian government. This is due to the bank's systemic importance and a huge market share in retail deposits (around 50% in Russia), supported by a high brand awareness and a very large distribution network. At the same time, negative BFSR drivers include Sberbank's high appetite for large single-party exposures, and corporate governance issues due to ownership by the Central Bank of Russia and state control over the bank.
Moody's previous rating action on Sberbank was on 24 February 2009, when we changed the outlook on the D+ BFSR to negative from stable, on expectations that the global economic crisis would have an increasinglynegative impact on the Russian economy and Sberbank's intrinsic strength.
July 22, 2010 09:55
Moody's affirms Baa1 and Aaa.ru Insurer Financial Strength ratings on ROSNO with a stable outlook
LONDON. July 21 (Interfax) - Moody's affirmed on Wednesday its Baa1 and Aaa.ru insurance financial strength ratings for OAO Rosno with a stable outlook, the agency said in a statement.
The statement said: "The ratings reflect the support provided to Rosno by 100% owner Allianz SE (rated Aa3 for financial strength and senior debt). The rating also reflects the company's good position in the Russian P&C market, its high degree of business diversification and a well-developed distribution network. This is offset by an asset allocation strategy which resulted in significant losses in 2008, high expense ratio and dependence on the rapidly evolving Russian P&C market for profitability. Rosno is an operating entity writing non-life insurance, as well as a holding company owning stakes in a number of subsidiaries, including ROSNO-Center (a reinsurer), Medexpress, ROSNO MS, Allianz ROSNO Asset Management and Allianz Ukraine, among others. The Group's business consists mainly of motor insurance (34% of gross written premium in 2009), voluntary medical insurance (27%) and property insurance (21%).
"Rosno showed significant operating performance improvement in 2009 when it recorded a net profit of Roubles 745 million, up from a net loss of Roubles 2,305 million in 2008. Rosno benefited from a de-risked investment portfolio following the sale of its equity investments in 2008, and from improvements to the insurance underwriting result as Rosno took steps to improve premium rates and remove unprofitable business. The removal of unprofitable business also saw premium income decline to Roubles 22,865 million from Roubles 24,689 million in 2008, although the income fall was also partly due to a contraction of the market as a whole. Moody's expects premium levels to recover in 2010 and onwards as the economic environment in Russia improves. In Moody's view capitalisation is low by international standards, but is high in comparison to Russian peers. The ratings on Rosno also incorporate a significant level of support from Allianz SE.
"Allianz demonstrated this support in 2008 and 2009 through significant capital injections to support the company during the economic downturn and to fund future growth. Allianz also provides significant reinsurance protection to Rosno and technical expertise. The rating carries a stable outlook however an upwards rating action is possible if there are substantial improvements in the stand-alone credit fundamentals, primarily underwriting performance and capitalisation or sustained improvements in the Russian insurance operating environment. Conversely, negative rating action may occur from reductions in the support assumptions from Allianz, or through a deteriorating economic environment in Russia, evidenced by negative rating actions on the Russian Government. The last rating action on Rosno was on 30th March 2007 when the rating was upgraded to Baa1
The following ratings were affirmed with a stable outlook:
OAO Rosno
Insurer Financial Strength Baa1
National Scale IFSR Aaa.ru"
Ih
Petropavlovsk Gold Output Falls 16%, Maintains Target (Update1)
By Thomas Biesheuvel
July 22 (Bloomberg) -- Petropavlovsk Plc, Russia’s third- largest gold producer, said second-quarter gold output fell 16 percent after a delay in equipment deliveries and said full-year production will be at the “lower end” of its target range.
Second-quarter attributable output was 100,700 ounces compared with 120,000 ounces a year earlier, the London-based company said in a statement today. It expects full-year output of 670,000 ounces to 760,000 ounces. Petropavlovsk, which produced 486,800 ounces of gold last year, is targeting annual output of more than 1 million ounces by 2013.
The company offered $380 million of convertible bonds in January to fund development projects, including its Malomir mine due to start production later this year.
The equipment delay “slowed down the schedule of our planned stripping works,” Chairman Peter Hambro said in the statement. “I nevertheless believe that we can achieve the lower end of our forecast production range for the year.”
First-half attributable output of the metal fell to 166,300 ounces from 224,600 ounces a year earlier.
OAO Polyus Gold is Russia’s largest producer of the precious metal, while OAO Severstal is the second biggest.
To contact the reporter on this story: Thomas Biesheuvel in London tbiesheuvel@.
Last Updated: July 22, 2010 02:38 EDT
UPDATE 1-Petropavlovsk sees FY output at lower end of range
Thu Jul 22, 2010 6:41am GMT
* Sees 2010 output at lower end of 670,000-760,000 oz range
* H1 gold output down 26 pct on planned work at Pioneer mine
* Buys additional mining licences in Russia
(Adds details)
LONDON, July 22 (Reuters) - Russian miner Petropavlovsk (POG.L) expects annual output to be at the lower end of the previously announced 670,000-760,000 ounce range after first-half gold production fell 26 percent on planned work at its Pioneer mine.
Gold production fell to 166,300 ounces from 224,600 ounces in the year-earlier period.
The London-listed company also announced that it acquired new mining licences in the Amur and Krasnoyarsk region of Russia.
The miner, which is considering a Hong Kong listing for its iron ore assets, last month launched its first Kuranakh iron ore mine. [ID:nLDE65N0WI]
The first product sales from Kuranakh are expected in August, it said on Thursday.
On June 7, Petropavlovsk said Hong-Kong based investors had agreed to take a $60 million equity stake in the group's non-precious metals division, valuing the iron ore operations at $860 million. [ID:nLDE65G16Q]
(Reporting by Julie Crust; editing by Victoria Bryan)
July 22, 2010, 9:42 CET
Preparations underway for talks on Malév with Russians
By MTI-ECONEWS
Preparations are being made for talks with Hungary's Russian partners on putting the situation of national carrier Malev in order, Attila Marton, government commissioner in charge of air travel, said on Wednesday.
The topic is expected to be put on the agenda of the next meeting of the Hungarian-Russian intergovernment economic committee, Mr Marton said.
Malev's current structure is unsustainable, Mr Marton said, adding that the room for financial manoeuvre for the airline and the government is still a question. Malev and the government are constrained, and what can be done will depend on ongoing talks with Vnesheconombank, Mr Marton said.
Hungary's National Asset Management Company (MNV) has called an extraordinary general meeting of Malev for Friday, July 23, Econews reported on Tuesday. The chairman of the board of directors is to be replaced at the meeting.
Malev was renationalised in February through a HUF 25.4bn capital raise by the state, including HUF 20.7bn in cash and HUF 4.7bn in converted debt. The state acquired a 95pc stake in the airline and former majority owner AirBridge kept 5pc. Russia's state-owned Vnesheconombank (VEB) - Malev owes the bank about EUR 134m - owns 49pc of AirBridge.
There were already problems with the airline's privatisation contract, Mr Marton said. This requires further review, but will be the task of government commissioner Ferenc Papcsak, he added.
The state assets manager did "not prescribe that the buyer give capital" to Malev when the capital-poor airline was sold, Mr Papcsak said. The buyer, AirBridge, should have assumed EUR 90m in loans, but it only signed a EUR 32m bank guarantee, he added.
Answering a question by MTI, Mr Marton said a guarantee by Eximbank under a government decree issued in February was for a loan of about EUR 13.2m from the European Investment Bank (EIB).
Mr Marton declined to reveal the current size of Malev's debts when asked by a journalist, but he did say that agreements on the debts have been reached with practically every lender.
Asked about further financing for Malev, Mr Marton said the matter had to be dealt with cautiously as Malev's competitors had already contested the financing with the EU.
Mechel’s bloody ink
20.07.2010 — Analysis
The Ural office of Rostekhnadzor (the regulatory body responsible for ensuring compliance with all relevant legislation and technical standards) has cited the public corporation Mechel for illegally constructing a dangerous facility. The company is building an oxygen-converter facility at the Chelyabinsk iron and steel works, based on design documentation that has not passed state inspection. These procedural violations have already led to accidents and human casualties at Mechel enterprises. Experts have told this columnist for RusBusinessNews that the problems with the design documentation demonstrate the incompetence of the management and will lead to further carnage.
The Urals office of Rostekhnadzor has filed a claim in the Chelyabinsk regional court of arbitration against the Chelyabinsk iron and steel works, a public corporation, accusing the plant’s administration of remodeling a particularly dangerous and technically complex facility without a building permit. The company is faced with a possible court-ordered shutdown.
Mechel has made no official comment on this. Experts claim that they have nothing to comment on, since the overwhelming majority of construction projects in Russia are built without the consent of regulatory agencies and sometimes even without design documentation. Viktor Tyumentsev, the assistant director for construction for the Construction and Manufacturing Company Ural Metallurgical Assembly LLC, claims that it takes a very long time to get an inspection of working documentation, and that sometimes officials demand bribes to get this done. Thus, industrialists start construction projects at their own risk and complete the paperwork after the fact.
Given the flagrant disregard for the law common in today’s Russia, the qualifications of the design engineers are what really matter. And these qualifications, the experts claim, are not always the best. One can still find design engineering firms who do their documentation "on the back of an envelope." Viktor Tyumentsev claims that he is aware of cases when the regulatory agencies forced the builders to strengthen the structural steel inside large facilities, which, in the end, caused the construction estimates to double. It is possible that the desire to build cheaply and quickly was what prompted the industrialists to build first, and to later convince the regulatory agencies to sign off on the documentation.
Those who do this claim that the officials can usually be persuaded. They do not recall any time when construction at a large facility was stopped by a court order. "They live in this world, too," explains Viktor Tyumentsev. "The officials understand that getting the necessary permits is often just a formality. That’s why I don't think that the construction of the facility at the Chelyabinsk iron and steel works will be suspended. Mechel is building something it’s going to use itself, after all, so I assume they won’t skimp on the safety of their own workers."
This expert, however, overestimated the conscientiousness of Mechel’s managers. In March of 2010, there was an explosion in one of Mechel-Koks facilities, and then a fire. People died. A commission established by Rostekhnadzor found that coke-oven gas, which had leaked into a tunnel of a coke-oven plant, had exploded. Workers at the facility who had carried out the planned maintenance of the gas pipeline, "did a rush job." According to the commission, the managers and specialists at Mechel-Koks did not have enough control over the technical operations and did a poor job of organizing the manufacturing work.
They did not devote sufficient attention to industrial safety at the Mechel enterprises in the Kemerovo region. The South-Siberian office of Rostekhnadzor found more than 1,000 violations of rules and regulations during a series of inspections. The inspectors discovered that the proper work procedures were not followed and the design documentation was ignored during mining operations. They found that underground fires were not effectively controlled and the equipment was not properly maintained. Rostekhnadzor claims that the miners used physically worn-out equipment, that was past its service life.
This is the dangerous state of affairs at the Southern Kuzbass State Regional Power Plant, where the equipment has not been renovated in over 50 years. Making improvements in this power plant, so that it is in a safe, working condition, will require huge amounts of money, but there are currently no plans to modernize it, since electricity consumption in Kuzbass is declining. Mechel’s business plans calls for investment in completely different assets - in April of 2010, the company announced that it was purchasing the Laminorul SA steel plant in Romania, and in July they acquired the Turkish steel trading group Ramateks. This new capacity promised additional income for Mechel, which eclipsed any arguments about whether power plants were dangerous things, where a big accident could be very expensive for the entire region. Mechel’s managers respond to these arguments by saying that there has not been a single court decision to suspend the holding company’s operations.
Aleksandr Grazhdankin, an employee of the private company "The Scientific and Technical Research Center on the Problems of Industrial Safety," notes that under current Russian law, regional courts are the ones responsible for deciding to suspend work at dangerous facilities and that these courts are dependent on the surrounding corrupt economy. In addition, this expert claims that the legal arm of Rostekhnadzor is fairly weak, which is why Mechel got the court decisions they wanted. Thus, Aleksandr Grazhdankin has no illusions about stopping the illegal construction at the oxygen-converter facility at the Chelyabinsk iron and steel works.
The business doesn’t even find it necessary to invent a more or less plausible reason why they began the construction of dangerous facilities without a state inspection. Simply saying that the consultation procedure with the regulatory agencies over the design documentation is too long and complicated is not a convincing argument - all this took far longer in Soviet times but managers put up with it.
Aleksandr Grazhdankin claims that today's Russia has some of the world’s most lenient laws on industrial safety. The requirements of American or Canadian regulations seem simply draconian in comparison. This expert is convinced that if Mechel’s management cannot prepare all the documents needed in order to undergo the inspection, it means that they are simply incompetent, or that they intend to ignore the regulations on industrial safety – and the weak, corrupt government cannot force them to obey the laws. That means there will be more blood shed at Mechel. According to Aleksandr Grazhdankin, all the safety rules have been written in the blood of previous victims.
Vladimir Terletsky
|EBRD raises US$ 200 million for Russia’s Brunswick Rail Group |
|$_200_million_for_Russia%E2%80%99s_Brunswick_Rail_Group/ |
|22/07/2010 10:26 (00:35 minutes ago) |
|The FINANCIAL -- The EBRD has raised US$ 200 million, including US$ 100 million through a heavily oversubscribed syndicated loan,|
|for Russia’s Brunswick Rail Group. |
According to EBRD, the funds will be used to finance the purchase of over 5,000 new railcars, primarily gondolas, to help meet growing demand as the Russian rail freight market recovers from the dramatic fall it suffered in 2008-2009.
Another international financial institution is in advanced negotiations to raise an additional US$ 100 million for the same project in conjunction with the EBRD loan, including US$ 50 million for syndication to commercial banks.
This EBRD transaction brings the Bank’s total investments in 10 railway and associated projects in Russia to nearly US$ 1.4 billion since the government in 2001 launched a structural reform of the sector aimed at liberalising the network and encourage private sector investment, said Sue Barrett, Director of the EBRD Transport Team.
It underlines the EBRD’s commitment to foster competition and increase the role of the private sector in a transport system that is vital to the health of the Russian economy, Sue Barrett added.
The EBRD funding will enable this private sector group to undertake a major fleet investment programme aiming to take advantage of a growing trend among local industrial companies and rail freight operators to switch from owning rolling stock to leasing it under operating leases, an area in which Brunswick is a leading specialist.
The group, which currently owns over 12,500 railcars, is one of the leading Russian privately owned providers of rolling stock, principally gondolas, under operating leases.
Operating leases enable corporate clients to increase transport capacity without adding debt to their balance sheets or using cash to acquire non-core assets. The funds thus freed up can instead be invested in core products and activities.
Only seven percent of Russia’s fleet of one million railcars are currently used under operating leases. The corresponding portion in the United States and Europe is over 30 percent. This fast-growing segment is forecast to expand at a greater rate than the overall market as customers increasingly make use of operating leases to fund their fleet expansion.
The EBRD is the lender of record for the full US$ 200 million under an EBRD A/B loan structure, and has used its own funds to provide an eight-year A loan of US$ 100 million.
The five-year B loan of US$ 100 million was syndicated to a group of five commercial banks. This part of the transaction, one of the first transport sector syndications in the EBRD region this year, was heavily over-subscribed.
UniCredit Bank AG and Société Generale have joined the transaction as Mandated Lead Arrangers and Bookrunners, while Raiffeisen Zentralbank Ősterreich AG and ING Bank N.V. are acting as Lead Arrangers and KfW Ipex-Bank GmbH is Lead Manager.
The borrower is “Brunswick Wagon Leasing Limited”, a member of the Brunswick Rail Group and incorporated in the Russian Federation.
Russian rail freight market volumes dropped 19 percent in 2009.
Pugachyov Seeks $3 Billion for Elegest Coalfield, Vedomosti Says
By Maria Kolesnikova
July 22 (Bloomberg) -- Russian lawmaker Sergei Pugachyov’s United Industrial Corp. wants more than $3 billion for as much as a 75 percent stake in Russia’s second-largest untapped deposit of coking coal, Vedomosti reported.
The company may hire Credit Suisse Group AG in coming days to manage the sale of the Yenisey Industrial unit, which holds the license, the newspaper said, citing an unidentified person familiar with the plans. Yenisey Industrial is valued at about $5 billion, Vedomosti reported.
Japan’s Mitsui & Co. may buy as much as 25 percent of the company and get an option to increase its stake to as much as 49 percent, the newspaper said. Russian steelmakers OAO Severstal, OAO Novolipetsk Steel, Evraz Group SA and OAO Magnitogorsk Iron & Steel may also seek a stake in the deposit, the newspaper said.
Pugachyov’s International Industrial Bank on July 7 became Russia’s first bank to renege on its foreign debt since 1999 after defaulting on $453 million of bonds.
To contact the reporters on this story: Maria Kolesnikova in Moscow at mkolesnikova@,
Last Updated: July 22, 2010 00:38 EDT
Russia's Mirax faces over $18 mln in tax claims - paper
11:30 22/07/2010
MOSCOW, July 22 (RIA Novosti) - The Russian tax authorities have demanded that a subsidiary of the Russian real estate developer Mirax Group pay over 560 million rubles ($18 million) in back taxes or face injunctive measures, including the seizure of its accounts and assets, RBK daily reported on Thursday.
The tax arrears of the Mirax subsidiary (Stroimontage) amounted to 412.5 million rubles ($13.5) as of late May, including arrears of profit tax and VAT payments, the paper said.
"The tax authorities resolved in early June to recover 93.4 million rubles [$3 million] and 73.7 million rubles [$2.4 million] from Stroimontage's accounts, bringing the total tax claims to Mirax Group's subsidiary to 564.3 million rubles," the paper said.
The articles of the Tax Code enumerated in tax claims allow tax authorities to seize the company's accounts and assets, the paper said.
"According to lawyers, the tax authorities will primarily seek to recover debts from the company's bank accounts," it added.
Mirax Group, however, has acknowledged only 162 million rubles ($5.3 million) in back taxes for 2009. The paper quoted a company spokesman as saying that Mirax paid over 2 billion rubles ($65.5 million) in taxes for 2009.
Mirax Group, owned by real estate tycoon Sergei Polonsky, is involved in high-profile development projects.
The company has faced serious financial difficulties since the global financial crisis struck Russia in 2008 and is saddled with an estimated $550 million in liabilities, including $120 million of overdue debt.
Before the financial crisis, Mirax was one of the most successful development companies in Russia. It is renowned for its luxury domestic and international housing and development projects.
Russia's Nafta Moskva buys chunk of military airfield - paper
11:48 22/07/2010
MOSCOW, July 22 (RIA Novosti) - Nafta Moskva, the investment vehicle of Russian billionaire Suleiman Kerimov, won a Defense Ministry auction to acquire 46 hectares of the Kubinka military airfield in the Moscow region for more than $7 million, Kommersant business daily said on Thursday.
Kommersant wrote that Nafta Moskva had been searching for an opportunity to build a business terminal for its own needs for a long time as takeoff lines at Vnukovo-3 airport were long and the airport was located inconveniently.
The paper quoted a Defense Ministry official as saying that the ministry had received only two bids, one from Kubinka Airport, which belongs to Nafta Moskva, and the other from Balt Invest. The contract will be signed within the next 20 days.
Analysts estimate the airfield's market price at $2,000-2,500 per hundred square meters, while Nafta Moskva will pay $1,500.
"This is an adequate price because there are several restrictions for using the land at the airfield," Kommersant quoted Geo Development Chief Executive Officer Maxim Leshchyov as saying.
Nafta Moskva has acquired only 10% of the airfield's overall territory. The flight strip still belongs to the ministry but will be used by both the government and the new investor.
A Nafta-Moskva official told Kommersant it had not worked out a land use plan yet, but the Aeroproject aviation institute had already started redesign works.
"We'll channel large amounts of money into the airfield and flight strip upgrade," the paper quoted a Nafta-Moskva spokesman as saying.
A Kommersant source familiar with the situation in Kubinka said the investment in the upgrade of the flight strip would amount to several dozen million dollars. The construction of a new passenger terminal, aircraft parking lots and service and maintenance infrastructure would cost about $25-27 million.
A source familiar with the project's details said the company would have to spend more than 130 million rubles (almost $4.5 million) to demolish the existing objects and buildings. He added the new investor would also have to construct a new two-kilometer road to the airfield. The source estimated the possible necessary investment at $60-100 million, while Nafta Moskva never unveiled the amount, but said it would be lower than that estimate.
A source close to Nafta Moskva said the company had no plans of inviting partners into the project.
THE INSIDERS: Progress in Russia, but corporate governance remains a risk
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Liam Halligan and Denis Spirin of Prosperity Capital Management
July 22, 2010
International investors rightly complain that Russia's stock market is rather volatile. What's less widely appreciated is that, amidst the mood swings, the overall trajectory of the RTS index of leading Russian shares has most definitely been up.
Between the start of 2000 and the end of 2009, the RTS rose no less than 724% in dollar terms – including the sub-prime related lurch. During the same period, the S&P500 and the FTSE-100 lost more than a fifth of their value. Mainstream western investors should keep that in mind given the near-constant drumbeat of negative media coverage associated with Russia.
Other big emerging markets also posted strong returns during the "noughties". China's Shanghai A index and India's Sensex gained 191% and 226% respectively. But none did as well as the RTS – which easily outperformed every other major stock index in the world. This market isn't for the faint-hearted or impatient. Looking back over the last 10 years, though, would it really have been "so stoopid" to have invested some of your money in Russia?
More important than previous returns is the market's current valuation. Despite rising seven-fold since 1999, the RTS is still trading at a composite multiple of 8x 2010 earnings - similar to 10 years ago.
That's astonishing. In 1999, Russia had just defaulted and was still shouldering huge Soviet-era debts. The country had no reserves, annual inflation was almost in triple-digits and oil was below $20 a barrel.
Spool forward a decade and Russia has paid off almost all state debts and still boasts the world's third biggest foreign exchange haul. Per-capita incomes have ballooned from $1,200 to $10,000. Annual inflation is 6%, global commodity demand is accelerating and Russia's burgeoning service sector now accounts for two-fifths of GDP. The general business environment – while still tough – is also unrecognizably better than 10 years ago. Yet despite such progress, the RTS has the same valuation now as during the chaos of 1999.
Under-rated
Why do global investors value India at 17.9x and China at 15.1x, but Russia at only 8.2x? One reason is that the RTS comprises some big oil and gas companies that are heavily taxed and operate on a low profit "cost-plus" basis, weighing down average valuations. Even after last year's meteoric 129% rise, the market is also still recovering from the 2008 credit crunch – when bouts of forced selling by leveraged investors pushed stocks way below "fundamental value." The main reason for the "Russia discount," though, is that many view this country as uniquely "dangerous".
Prosperity Capital Management is Russia/CIS-focused and controls $4bn of assets. We've been "long-only, buy-and-hold" equity investors in this region since 1996, but all our funding derives from elsewhere. Over the last 14 years, our flagship Russian Prosperity Fund has gained an annual average of 25% in dollar terms, while the Prosperity Quest Fund, launched in 1999 and with a lower-tier restructuring emphasis, has returned an unmatched 46% a year.
PCM has a large on-the-ground team in Moscow and sits on numerous Russian boards. It's our experience that most of the reasons put forward for Russia's low valuation don't stand up to scrutiny. Global investors generally cite macro, political, liquidity and corporate governance risks when explaining why they "won't touch Russia." The first three, at least, are heavily exaggerated.
Russia's macro economy is strong. Total leverage – consumer, corporate and state – amounts to less than 50% of GDP, compared with 250% and 350% in the US and UK. Last year, the economy contracted, but has since bounced back, growing by 5% during the first half of 2010. When the oil price fell sharply in 2008, Russia still ran a big external surplus – and has done for the last 10 years. Commodities anyway now account for 20% of national income, down from 40% in 2003.
Political risks are also over-stated. Viewing Russia as a malign influence suits Western prejudices and lingering Cold War clichés. But for 20 years now, Russia's political elite has been dismantling the state. There are lurches and some reversals, but the direction of travel is clear.
Liquidity is also better than perceived. Trading volumes are under-reported due to OTC deals and fragmented exchanges. A local presence also helps. Despite the volatility, PCM has never gated its clients - maintaining the weekly/monthly liquidity provisions on our open-ended funds.
The corporate governance risks, though, are real. Tackling such issues and standing up for shareholder rights is a large part of what we do. Over the last decade and more, PCM has built a strong reputation for shareholder activism, while making meaningful contributions to the development of Russian corporate law. Our ability to resolve complex issues, and untangle disputes, has been a significant source of our long-term out-performance.
That notwithstanding, a legal battle we're currently fighting at TGK-2 – one of the 14 combined heat and power generators spun off during the wholesale privatisation and restructuring of Russia's power sector - is among the worst we've ever seen.
Power games
In March 2008, Russia's Kores group took majority control of TGK-2 during the final privatisation auctions and, as such, was legally required to offer to buyout minority shareholders at the same price. PCM tendered its shares along with other minorities. But by the time the proceeds were due, prices had fallen. Ever since, Kores has done everything possible to create legal diversions to avoid meeting its obligations.
Over the last two years, we've campaigned against this blatant legal subversion. Kores owes PCM funds over $300m. The group effectively sued itself and obtained an injunction preventing the buy-back. Since then, this "blocking case" has been repeatedly adjourned - for months at a time - on flimsy technicalities.
Kores has also prevented the mighty Sberbank from meeting a guarantee to pay TGK-2 minorities buy-back receipts if the principal owner failed. The triggering of that mechanism would be official recognition of Kores' default. So the group sought and - incredibly - obtained a second injunction.
Kores then opened up a third front of legal obfuscation, claiming the buy-out obligation was null and void, as the group shouldn't have taken control of TGK-2 in the first place. The pretext for this is Russia's Strategic Investment Law (SIL) - and the fact that TGK-2 is involved, in a very minor way, with the treatment of radioactive material. That matters, Kores claims, because the group has affiliated companies based offshore - apparently rendering Kores' majority control of TGK-2 invalid, seeing as "foreign entities" need prior state permission for "strategic" transactions.
This is absurd. At the time of the buy-back, the TGKs were excluded from the SIL precisely to attract foreign investment. Kores is domiciled in Russia and controlled both directly and indirectly by Russian citizens. The offshore affiliates had absolutely no involvement in the TGK share offer.
Together with other minorities, PCM has tried disproving Kores' line of argument in the Moscow arbitration court, and then several courts of appeal. Yet at every turn - in four separate cases, involving leading international leading investment banks, 49 Russian defendants, 23 foreign defendants and Sberbank - the courts have backed Kores. This can only be described as a travesty of justice.
PCM is now leading to an appeal to Russia's Supreme Arbitration Court. In early August, the court will decide if our appeal can proceed. If approval is granted, it would be the first time litigation involving SIL has been heard at this level. Even before that decision, the case is front-page news in Russia. On July 21, Vedmosti published a full-page open letter written by PCM, urging Anton Ivanov, Russia's most senior commercial judge, to force Kores to give way.
Lots of leading Russian companies – including Gazprom, Rosneft, Gazprom Neft and Novotek – have offshore affiliates. All these companies, of course, are treated as "domestic" for the purpose of the SIL. If the Supreme Court fails to overturn successive rulings in favour of Kores, many of Russia's most important commercial entities, including those which are partially state owned, will be in breach of the law. Some of the most significant transactions in post-Soviet Russian history could be rendered null and void.
Russia has massive economic potential. It also boasts a stock market which, while volatile, is capable of generating enormous shareholder gains – not least because this country is so under-rated. The trouble is that, even though most of the bad things you hear about investing in Russia aren't true, corporate governance in this country, while improving, remains a major impediment to commercial progress.
Liam Halligan and Denis Spirin are, respectively, Chief Economist and Director of Corporate Governance at Prosperity Capital Management
Activity in the Oil and Gas sector (including regulatory)
22.07.2010
Russian Energy Tycoon Raises Stake in NOVATEK
The Volga Resources Fund, which belongs to Gennadiy Timchenko, has increased its stake in NOVATEK to 23.13 percent, RBK has reported. Volga Resources representative Anton Kurevin said 2.36 per cent of the company's shares were acquired on the open market. In March 2010, Volga Resources SICAV-SIF S.A. increased its share of NOVATEK to 20.77 percent after acquiring 2.57 percent on exchanges.
In December 2009, the Federal Antimonopoly Service allowed Volga Resources SICAV-SIF S.A. entities to bring their stake in the authorised capital of the independent gas producer to 23.49 percent.
Copyright 2010, Russia Energy Ministry Statistics Department. All rights reserved.
'Last' Huge Oil Fields to Cost $2Bln
22 July 2010
By Maxim Tovkailo and Oksana Gavshina / Vedomosti
The Energy Ministry is seeking a record price of 60 billion rubles ($2 billion) to develop the Trebs and Titov oil fields, and the government looks determined to get as much as it possibly can from oil companies for the massive deposits.
The fields are classified as strategic — meaning that they have more than 70 million tons of reserves — and their sale would be the first of a strategic deposit since changes to the law on subsoil resources in 2008.
Trebs and Titov have extractable ABC1 reserves of 78.1 million tons and 132.8 million tons, respectively.
"For oil execs, this is the last cherry to pick. Russia doesn't have deposits of this size left," said Denis Borisov, an analyst at Bank of Moscow.
Deputy Prime Minister Igor Sechin ordered the Energy Ministry in June to prepare a valuation for the fields. A ministry official told Vedomosti that the calculations were prepared by three independent appraisers using different methods.
The valuations ranged from 22.9 billion rubles to 101.6 billion rubles ($753 million to $3.3 billion), Interfax reported, citing an Energy Ministry source. Vedomosti's source in the ministry said the maximum price was $4 billion but that the ministry saw 60 billion rubles as the optimal one-off payment.
Oil companies, however, found even the Energy Ministry's figure discouraging.
"A bit pricey," sighed officials at two of Russia's largest oil companies. At that price, companies would have rethink their options for bidding to develop the fields. "It's possible the approach would have to be as a consortium," one of the oil company officials said.
"The final format for participation will depend on the approved price and the conditions put forward," said his colleague at another oil producer.
Spokespeople for Russia's largest oil producers declined to comment on the Energy Ministry's valuation until the official terms of the auction are published.
"The draft order on holding the auction has been agreed upon. It's waiting for the prime minister's signature and will be approved in the near future," Dmitry Peskov, Prime Minister Vladimir Putin's press secretary, told Vedomosti.
The document contains only the general terms of the auction, not the size of the payment, which will be discussed and approved by the government, a spokesperson for Sechin said. The government has already been given several figures to consider, including the Natural Resources and Environment Ministry's price of 17.8 billion rubles ($584 million).
A source in the government administration told Vedomosti, however, that it was vital to earn as much as possible from the sale to help the budget.
This is the sixth year running that the state has been trying to sell development rights for the Trebs and Titov fields, although other options have also been considered.
In late 2008, when oil was trading for just over $30 per barrel, the Federal Subsoil Resource Use Agency proposed that the government create a strategic oil reserve, which would include the Trebs and Titov deposits. Sechin approved the idea, but the reserve was never actually formed.
By late 2009, it was decided to sell the fields to help cover the budget deficit.
In the past, interest in the fields has come from state-run Rosneft, which is developing the nearby Val Gamburtseva deposit in the Nenets autonomous district. LUKoil, Russia's largest private oil producer, would also make a nice fit, because it has long been active in the Timan-Pechora oil basin and owns the nearest refinery.
Representatives of Gazprom Neft also expressed their interest in Trebs and Titov several times this spring.
These are the three companies with real chances of winning the development rights, whereas others could be scared off by the price, said Pavel Sorokin, an analyst at Alfa Bank.
Bank of Moscow's Denisov said he thought that the price was fair, given that Trebs and Titov were the last known major oil fields.
Surgutneftegaz, Russia's wealthiest oil company, has never expressed any interest in the assets. Foreign oil majors are unable to bid because Trebs and Titov are strategic fields.
According to the draft plan for the auction, potential buyers must provide the Federal Subsoil Resource Use Agency with technical and economic calculations for the work as well as proposals on refining the oil at their own refineries and selling the oil on Russia's commodities exchange, Interfax reported, citing a Natural Resources and Environment Ministry source.
These requirements are not entirely reasonable, said an official at one oil company. Russia still does not have a working oil exchange, while existing refineries are already working at full capacity, the official said.
Oil MET hike could dent profitability and undermine production
Troika, Russia
Thursday, July 22, 2010
The Finance Ministry will suggest that the base rate in the formula used to calculate the MET be increased by 6.5% in 2012 and 5.4% in 2013, an official said yesterday. He did not mention any increase in 2011.
If this happens, at a constant oil price and constant production, the blended EBITDA of a vertically downgraded company would fall by 4.7% in 2012 and by 9.3% in 2013, on our estimates. If the increase in MET leads to less drilling as more wells become unprofitable (as would surely be the case), then production would drop and the actual company by company downgrades would be more significant. Only some of the negative effect would be countered by the Finance Ministry's other proposal to lower the MET on smaller fields.
A hike in the MET seems counterintuitive to us. Legacy production has been steadily declining since at least 2007, and the government needs to be debating a cut in the MET, not a hike. We are left clinging to the fact that the Finance Ministry is not the final arbiter and that no decision has been made yet. We expect oil companies to fight the proposals.
The official also said that export duties on light and heavy oil products could be gradually equalized by 2013 at a level of 60% of the crude export duty. Under the current formula, at an oil price of $70/bbl, the export duty on light products, such as gasoline and diesel, is $175.9/tonne and that on fuel oil is $94.8/tonne, about a respective 72% and 39% of the crude duty ($244/tonne). The implied 16% reduction in light product duties and a 54% increase in fuel oil duties would, under Russia's liberalized oil products regime, translate into a comparable increase in domestic light product prices and a decrease in heavy product prices. This would be a net negative for the sector as a whole, at least in the first couple of years, before refineries switch to processing lighter fractions, because fuel oil and other heavy products now comprise over half of all exports and around a third of all production.
Indeed, the Finance Ministry seeks to raise an additional R81.4bn ($2.8bn) from the sector via this measure. At first, this would especially hurt Tatneft (the refinery of which would be producing significant amounts of fuel oil in the first few years) and perhaps Alliance Oil Company before its Khabarovsk refinery is fully modernized.
We would welcome a proposal that also reduces export duties on crude, as it would spur production in the country.
Oleg Maximov
Oil & Gas Sector: Finance Ministry submits new tax proposals
UralSib, Russia
July 22, 2010
When it rains it pours. Yesterday, the head of tax and customs policy for the Finance Ministry, Ilya Trutnev, confirmed the ministry had agreed on the following tax increases for the Russian oil and gas sector:
• Gas MET is to be increased by 61% YoY in 2011, 6% YoY in 2012 and 5.4% YoY in 2013; • Oil MET, by indexing the RUB bare rate (which is currently RUB419/ton), is to increase 6.5% YoY in 2012 and 5.4% YoY in 2013; • Unified export tax for light and heavy oil products could be introduced in 2012 at 56% of the crude export duty from 2011, 58% from 2012 and 60% from 2013.
• Excise tax will be increased RUB1/litre (RUB1,100/ton) per year for three years, starting in 2011.
We believe that these tax increases will be sufficient to cover the federal budget deficit, and while these increases have not yet been approved, some are imminent. While these tax hikes will be tolerable for the gas sector, they will be value destructive for the oil sector.
Cover holes now, kill production of the future. Just recently, the Finance Ministry had discussed the transition from the current inefficient tax regime to a profit-based tax system for the oil industry. Under the current tax regime, oil companies are cutting capex and many prefer to invest overseas. By increasing taxes now the Finance Ministry is targeting budget goals, but it risks oil companies curbing investment in greenfield projects. This implies unsustainable production in the future as well as further budget problems in the years to come.
Investors' value worn out. If these tax hikes materialize, we expect EBITDA and valuations to be mostly affected by the higher excise tax.
With a maximum negative impact in 2012 - 2013, EBITDA may decrease by 15% on average and by as much as 35% for Bashneft (due to its high exposure to downstream). On the back of these changes, we expect our target prices to decrease moderately for Gazprom and NOVATEK, by 7% and 4%, respectively, and substantially for the oil companies, by approximately 20-25% (with Bashneft being the hardest hit).
Victor Mishnyakov
Gazprom
Gazprom Neft Fails In Challenge Of Price-Fixing Fine –Vedomosti
First Published Thursday, 22 July 2010 04:53 am - © 2010 Dow Jones
DOW JONES NEWSWIRES
State-controlled oil producer OAO Gazprom Neft (SIBN.RS) has lost a legal fight against Russia's antitrust regulator, which fined it and other companies for price-fixing, business daily Vedomosti reports Thursday.
The Constitutional Court on Wednesday refused to consider Gazprom Neft's challenge to the national law on competition, saying the company's argument was insufficient to warrant a review.
Judges also questioned whether the person who signed the appeal on behalf of Chief Executive Alexander Dyukov had authority to do so. And they said the company filed with the high court too soon, before it had exhausted all appeals with the Federal Anti-Monopoly Service.
The FAS in late 2008 fined Gazprom Neft 6 billion rubles for abusing its market power in the pricing of refined-oil products. Its case is still being considered by the Moscow Arbitration Court and a federal arbitration tribunal. Given Wednesday's decision but with litigation continuing, it's hard to predict the final result for the company. Gazprom Neft was rebuffed in its request to have the lower-court proceedings transferred to the Constitutional Court.
A Gazprom Neft spokesman said Wednesday that he didn't know whether the company would amend and refile its complaint to the court.
Three other producers fined by the FAS for price-fixing -- state-controlled OAO Rosneft (ROSN.RS), nonstate OAO Lukoil (LKOH.RS) and BP PLC (BP, BP.LN) joint venture TNK-BP (TNBP.RS) -- also waged court fights over the penalty amounts. Only Gazprom Neft, after losing an appeal in Russia's Supreme Arbitration Court, moved to challenge the FAS's constitutional authority to impose such fines.
In late May, the Supreme Arbitration Court upheld the RUB1.1 billion fine against TNK-BP.
Newspaper website: vedomosti.ru
Red Star Belgrade and Gazprom sign shirt deal
22 Jul, 10 | Serbia | Sponsorship
Serbian Red Star Belgrade has signed five-year multi-million dollar deal with Gazprom, the Russian energy company. Red Star has not had a shirt sponsor for a while now. This deal will see the AZS logo on the Red Star jerseys as this is the new regional brand of Gazprom.
Red Star is a big player in south-east European soccer and is one of the two teams from the region to have won the European Cup (1990-91). In 1992 Red Star also won the Toyota Intercontinental Cup.
The contract is valued at USD 3.8 million a year totalling USD 19 million over 5 years. For its money Gazprom will be shirt sponsor for the first team and all youth teams of Red Star; it will also receive advertising place on perimeter boards and television ad time during broadcasts of club matches. A representative of Gazprom will be on the club's management board. It has been stated by both parties that 23 per cent of the total deal is to be invested in the development of young players at Red Star. There are also provisions for bonus money if the club wins domestic trophies and demonstrates excellence in European competition.
The club has been in a state of financial crunch recently and this deal will help work out some of its difficulties. The club is supposed to have debts of around USD 25 million.
Gazprom was named the world’s most profitable company in 2009 by Fortune magazine's Fortune Global 500. The Russian gas company has a presence in European soccer as it already owns the Russian club Zenit and is a shirt sponsor for Schalke 04. That deal is for USD 150 million over 5 years. Gazprom recently acquired a 51 per cent stake in the Serbian state energy company NIS.
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