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Russia 110606Basic Political DevelopmentsItar-Tass news outlook for Monday, June 6. PRESIDENT - - AFRICA MOSCOW - - Russian President Dmitry Medvedev and African Union President and Equatorial Guinea’s leader Teodoro Obiang Nguema Mbasogo, who will arrive on an official visit in Russia on Monday, will have negotiations here on Monday to focus on a tense situation in North Africa and bilateral cooperation, particularly military-technical and energy cooperation, the Russian presidential press service reported on Sunday. PRIME MINISTER - - GAS PIPELINE MOSCOW - - Russian Prime Minister Vladimir Putin will make a working visit to Sochi to take part in the ceremony of launching a new gas pipeline and meet with builders working at Olympic facilities. The gas pipeline “Druzhba” – Lazarevskoye - Sochi” was built according to the program of building Olympic facilities and developing the city of Sochi as a mountain-skiing resort. ATOM - - FORUM MOSCOW - - A third Moscow international forum Atomexport-2011 will open here on Monday. The forum, which will bring together the chiefs of the nuclear power agencies from almost all member-countries of the world nuclear club, is entitled “Development of Nuclear Power: Pause or Continuation.” The forum will last three days at the Manezh Central Exhibition Hall in the Russian capital. ISS - - CREW BAIKONUR - - The crew of the second digital space ship – Soyuz TMA-02M, which will start to the ISS on Wednesday, will include Russian cosmonaut Sergei Volkov, astronaut of the Japanese Space Agency Satoshi Furukawa and NASA astronaut Michael Fossum. This decision was adopted by the state commission in Baikonur. JAPAN - - SITUATION TOKYO - - A small amount of plutonium from the crippled reactor of the Fukushima-1 was for the first time found outside the territory of the station. SITUATION IN LIBYA CAIRO / EL KUWAIT - - NATO aircraft continue bombing the Libyan capital. Since March 31, when the command of the Libyan operation was transferred NATO, its aircraft made 9,778 combat sorties, during 3,694 of them, strikes were delivered on land targets. EUROPARLIAMENT - - SESSION STRASBOURG - - Key aspects of cooperation of the European Union with Russia will be in the focus of attention of a regular session of the European Parliament. RUSSIAN - - INDIA MOSCOW - - Secretary of the Russian Security Council Nikolai Patrushev, who will head a Russian interdepartmental committee, will fly to India on Monday to have several negotiations and consultations with several top political and military officials in the country. UKRAINE - - EXERCISE ODESSA - - A Ukrainian-US naval exercise with the invitation of representatives of other countries of “Sea Breeze 2011” are beginning. Representatives of 17 countries’ fleets will take part in the exercise. IAEA - - COUNCIL VIENNA - - Issues connected with nuclear activities of Iran and Syria, as well as the accident at the Fukushima-1 NPP will be considered at the opening session of the IAEA Council of Managers. THE HAGUE - - The trial of leader of the Serbian Radical Party Voislav Sheshel accused of disrespect of the court is resuming at The Hague Tribunal. CULTURE YALTA (the Crimea) - - A 5th international festival “The Great Russian Word” will open here, when the world will celebrate the 212th birthday anniversary of a great Russian poet Alexander Sergeyevich Pushkin. YEREVAN - - Armenia will mark Russian Language Day, which the United Nations Organization celebrates on Monday. The U.N. House in Yerevan will dedicate a festive event to the language of the great Russian poet Pushkin, whose the 212th birthday anniversary will be also celebrated on Monday. TBILISI - - The international poetry festival “Dreams about Georgia,” in which 80 Russian-speaking poets and writers from 32 countries of the world, including Russia, will take part, is opening in here. Russian President’s envoy goes to BenghaziRussian envoy to meet Libyan rebels - Mikhail Margelov, Mr Medvedev's envoy for Africa, told the RIA Novosti news agency he would meet Mustafa Abdul Jalil, the chairman of the National Transitional Council that controls eastern Libya around Benghazi. He is also to meet the rebels' military affairs chief Omar el-Hariri and the prime minister of the National Transitional Council Mahmoud Jibril, he said.Kremlin mediator to fly to Libya on Monday: report AFP - A high-ranking Russian source familiar with the situation told AFP on Thursday that Margelov would also travel to Tripoli. Russia Profile Weekly Experts Panel: Medvedev’s Libyan ImbroglioJerusalem should be divided into two parts - Sergey LavrovJanukovych, Medvedev to meet in Donetsk in autumn – LavrovLavrov: Russia, Ukraine not going to start 'political games' with Black Sea FleetKazan meeting to achieve breakthrough in Karabakh conflict-Turkish FMRussian Security Council head to discuss cooperation with IndiaRussia Security Council secretary to discuss cooperation in India. Vietnam says Russian-bought submarines for self-defenceRussia toughens sanitary control over cargo on Russian-Ukrainian border over cholera outbreak - Onishchenko (Part 2) - The Russian sanitary services on Monday toughened control on the Russian-Ukrainian border over an outbreak of cholera in Mariupol, Ukraine.Poland's Minister to Meet Russian Counterpart Over Imports Ban - "On Monday I will discuss the matter with Yelena Skrynnik, Russia's Agriculture Minister," Sawicki said.Russian church goes up in the Emirates - The first Russian church has been constructed in the United Arab Emirates to become the one and the only Orthodox shrine on the Arabian Peninsula.EU has not removed Russia's concerns about E. coli infection - Chief Sanitation DoctorRussia and EU clash on trade ahead of summit – by ANDREW RETTMANBan on Vegetable Imports Threatens to Derail EU Summit - By Nikolaus von TwickelNATO, Russia hold air exercises - The Russian and NATO air force will hold their first joint exercises against air terrorism, Vigilant Skies 2011. The maneuvers will be mostly carried out over the Polish territory, as well as in the Turkish air space to practice the elements of interaction with the NATO aircraft.RUSSIAN SUB SUNK AT CARTAGENA - A huge NATO exercise is taking place of the coast of Cartagena, featuring some 2,000 service staff on board 18 vessels, with ships, submarines and aircraft all coming together in a joint NATO and non-NATO exercise.?President: Cyprus and Russia relations at their best standing everS-300 unit put on duty in Central Military DistrictMedvedev toughens punishment for fire safety violationsPutin welcomes independent activists to Popular FrontMoscow int’l nuclear forum to assess world nuclear situation. - “Several countries, including Russia, are close to a deadline to decommission most nuclear reactors of the first generation, and the tragic events at the Fukushima-1 nuclear power plant speed up this process,” the chief of the Russian state-run nuclear corporation Rosatom Sergei Kiriyenko said. “The Moscow international nuclear forum should discuss and set the guidelines for the development of the world nuclear industry and should determine new technologies that will ensure security of nuclear power plants,” the Rosatom chief said. Banking made kosher: Russia enters world of Islamic finance - Hoping to attract Arab capital, Russia will take its first step into the world of Islamic finance in June by issuing sukuk, Islamic bonds which comply with Muslim religious rules.State commission approves 28/29th mission to ISS. Railway to major plants, coal pit to be built in Khakassia. Altai territory creating timber processing cluster. Radical Islamists should better move to Mideast rather than live in Russia - presidential envoy to N. CaucasusBanditry, property redistribution takes place in N Caucasus-envoy. RF Supr Court to consider Yamadayev murder case sentence legality. Insurgents hit Russian federal police in more Caucasus attacks - Insurgents opposing Russian control of the restive Caucasus region killed a policeman and injured two more in a series of attacks aimed at law enforcement officials, according to Monday news reports. Police officer killed in Chechen blastPhone terrorist sentenced to 2 years in tight security prison. Influx of tourists to N Caucasus will grow - Khloponin. Over 50 wildfires fixed in Russian Irkutsk region. Some 417,200 hectares of lands burnt down in RF's Far East in 2011. All forest fires put out in Kamchatka. Senior Russian military officers to lose posts over military depots incidentsDamage caused by Udmurt ammo depot blasts assessed at RUB 1 bln. EMERCOM task forces involved in ammo firefighting back to bases. Servicemen, outsourcing companies to restore ammo blast-hit houses. Viktor Baturin gets 3 year suspended sentence for realty fraud. Former Moscow mayor's brother-in-law gets suspended sentence for fraudReuters PRESS DIGEST - Russia - June 6RIA Russian Press at a Glance, Monday, June 6, 2011Patrick Leahy: If U.S. were to breach New START with offensive weapons, Russia has right to quit it - U.S. Senator Patrick Leahy, chairman of the State and Foreign Operations subcommittee in the U.S. Senate‘s Appropriations Committee, who visited Russia this week has given an interview to Interfax in which he speaks about U.S.-Russian bilateral relations, in particular the New START treaty and cooperation on Afghanistan, as well as the Middle East situation, the elimination of Osama Bin Laden and support to civil societies in Russia and Georgia.Russia’s students look to the west - By Stephen Hoare Russia social networking site speaks for dead soldiers - By Katia Moskvitch Science and technology reporter, BBC News First LDS stake in Russia organized - Elder Russell M. Nelson of The Church of Jesus Christ of Latter-day Saints' Quorum of the Twelve Apostles organized the Moscow Russia Stake in a meeting attended by more than 1,100 in the Moscow's Amber Plaza auditorium.Moscow works less and sleeps more - A pilot study into how people use their time – or have it used for them – found that the capital works less and sleeps more than the national average.National Economic TrendsGrain prices surge as exports set to resume - The price of wheat has surged more than 10% in southern Russia as grain exporters are stepping up purchases before the ban is lifted on Russia's grain exports, RBC Daily reported today, citing industry experts.Kremlin suggests raising profit tax to pre-crisis 24%Social tax discussion continuesRuble Needs 3% Inflation to Globalize Russian Inflation Rate Was Probably Unchanged in May on FoodINTERVIEW: Russia's privatisation chief discusses the 3-year programme bne:Chart: Russia's crash and recovery in motion CBR's Ulyukaev gives interview to Vedomosti - rates and reserve requirements for the summer holidaysBusiness, Energy or Environmental regulations or discussionsMechel, TMK, Nomos Bank, Wimm-Bill-Dann: Russia Equity PreviewEnergy Ministry against ban on MRSK stake reduction, privatizations Russia's Global Ports eyes $100 mln from London IPOGlobal Ports eyes $750m London IPONomos Bank Advances Most in Two Weeks as Profit Jumps 20%Nomos Bank posts net profit of 3.2 bln rubles in Q1Russian Railways ups traffic in 5M Volkswagen Seeks to Double Russian Car Production, DPA-AFX SaysPetersburg’s Nissan plant resumes production after 5-day lull. Nissan and Renault plan $2bn investment driveSibur progresses with construction of US$2 bln petrochemical complex in Sib...?(6-6-2011)Acron Q1 net profit jumps 120% to 3.8 bln rblsUPDATE 1-Russia's TMK net profit beats estimates in Q1Lagardere Finalises Sale Of Magazine Buinesses In Russia, Ukraine PRIME-TASS business news agency changes name, carries out rebrandingRussia’s Anisimov Plans to Sell Up to $4.7 Billion of Property, RBC SaysInvestors flee Russia despite oil revenue boom - By Dmitry Zaks (AFP)FACTBOX-Russian companies seeking IPOsActivity in the Oil and Gas sector (including regulatory)Jugba-Sochi gas pipeline launched - The pipeline will be 177 km long, with 159.5 km running under the sea.GazpromEquipment for Badra oil field arrivesRussia’s Gazprom puts eye on Germany energy market------------------------------------------------------------------------------------------Full Text ArticlesBasic Political Developments11:06?06/06/2011ALL NEWSItar-Tass news outlook for Monday, June 6. Tass 116 Telephone: 8 (499) 791-00-18 Fax: 8 (499) 791-00-19. PRESIDENT - - AFRICA MOSCOW - - Russian President Dmitry Medvedev and African Union President and Equatorial Guinea’s leader Teodoro Obiang Nguema Mbasogo, who will arrive on an official visit in Russia on Monday, will have negotiations here on Monday to focus on a tense situation in North Africa and bilateral cooperation, particularly military-technical and energy cooperation, the Russian presidential press service reported on Sunday. PRIME MINISTER - - GAS PIPELINE MOSCOW - - Russian Prime Minister Vladimir Putin will make a working visit to Sochi to take part in the ceremony of launching a new gas pipeline and meet with builders working at Olympic facilities. The gas pipeline “Druzhba” – Lazarevskoye - Sochi” was built according to the program of building Olympic facilities and developing the city of Sochi as a mountain-skiing resort. ATOM - - FORUM MOSCOW - - A third Moscow international forum Atomexport-2011 will open here on Monday. The forum, which will bring together the chiefs of the nuclear power agencies from almost all member-countries of the world nuclear club, is entitled “Development of Nuclear Power: Pause or Continuation.” The forum will last three days at the Manezh Central Exhibition Hall in the Russian capital. ISS - - CREW BAIKONUR - - The crew of the second digital space ship – Soyuz TMA-02M, which will start to the ISS on Wednesday, will include Russian cosmonaut Sergei Volkov, astronaut of the Japanese Space Agency Satoshi Furukawa and NASA astronaut Michael Fossum. This decision was adopted by the state commission in Baikonur. JAPAN - - SITUATION TOKYO - - A small amount of plutonium from the crippled reactor of the Fukushima-1 was for the first time found outside the territory of the station. SITUATION IN LIBYA CAIRO / EL KUWAIT - - NATO aircraft continue bombing the Libyan capital. Since March 31, when the command of the Libyan operation was transferred NATO, its aircraft made 9,778 combat sorties, during 3,694 of them, strikes were delivered on land targets. EUROPARLIAMENT - - SESSION STRASBOURG - - Key aspects of cooperation of the European Union with Russia will be in the focus of attention of a regular session of the European Parliament. RUSSIAN - - INDIA MOSCOW - - Secretary of the Russian Security Council Nikolai Patrushev, who will head a Russian interdepartmental committee, will fly to India on Monday to have several negotiations and consultations with several top political and military officials in the country. UKRAINE - - EXERCISE ODESSA - - A Ukrainian-US naval exercise with the invitation of representatives of other countries of “Sea Breeze 2011” are beginning. Representatives of 17 countries’ fleets will take part in the exercise. IAEA - - COUNCIL VIENNA - - Issues connected with nuclear activities of Iran and Syria, as well as the accident at the Fukushima-1 NPP will be considered at the opening session of the IAEA Council of Managers. THE HAGUE - - The trial of leader of the Serbian Radical Party Voislav Sheshel accused of disrespect of the court is resuming at The Hague Tribunal. CULTURE YALTA (the Crimea) - - A 5th international festival “The Great Russian Word” will open here, when the world will celebrate the 212th birthday anniversary of a great Russian poet Alexander Sergeyevich Pushkin. YEREVAN - - Armenia will mark Russian Language Day, which the United Nations Organization celebrates on Monday. The U.N. House in Yerevan will dedicate a festive event to the language of the great Russian poet Pushkin, whose the 212th birthday anniversary will be also celebrated on Monday. TBILISI - - The international poetry festival “Dreams about Georgia,” in which 80 Russian-speaking poets and writers from 32 countries of the world, including Russia, will take part, is opening in here. Russian President’s envoy goes to Benghazi 6, 2011 03:22 Moscow TimeRussian President’s special envoy Mikhail Margelov is going to Benghazi today to meet with representatives of the Libyan opposition. The sides will discuss ways to resolve the conflict and the possibility of preventing a humanitarian catastrophe.Meanwhile, NATO aircraft continued to bomb the capital of Libya.British "Tornado” fighter-bombers on Saturday night attacked Tripoli and its surroundings, aiming to wipe out missile depots of Gaddafi’s anti-aircraft defense. Meanwhile, helicopters destroyed a radar station near the town of El-Brega in the country’s east and about 20 tanks, armored vehicles, command posts and missile launchers.Russian envoy to meet Libyan rebels: 08:59, Monday, 6 June 2011The special envoy of Russian President Dmitry Medvedev is to travel to the Libyan rebel stronghold of Benghazi today.The special envoy of Russian President Dmitri Medvedev is to travel to the Libyan rebel stronghold of Benghazi to meet the leaders of the opposition fighting against Muammar Gaddafi.Mikhail Margelov, Mr Medvedev's envoy for Africa, told the RIA Novosti news agency he would meet Mustafa Abdul Jalil, the chairman of the National Transitional Council that controls eastern Libya around Benghazi.He is also to meet the rebels' military affairs chief Omar el-Hariri and the prime minister of the National Transitional Council Mahmoud Jibril, he said.Mr Medvedev announced at the G8 summit last month that he would be sending the envoy to Libya, as Moscow seeks to present itself as a potential mediator and expresses growing alarm over the continued conflict.It was not clear if Mr Margelov would travel on to Gaddafi's stronghold of Tripoli after meeting the rebel leaders or when the talks with the Benghazi rebels would take place.Although Mr Medvedev's order for Russia to abstain in a crucial UN Security Council vote essentially allowed the NATO-led military action against Gaddafi targets to go ahead, Moscow has become increasingly angry over the air strikes.'The Russian president strongly supports the sovereignty, independence and territorial integrity of Libya,' Mr Margelov said.'The Arab world, Africa, and the whole international community needs a united democratic Libya.'In a sign of Russia's suspicion of Western interference in the conflict, Mr Margelov said 'Libyans are capable of solving their own problems themselves.''A drawing out of the armed conflict will worsen the humanitarian situation not only in Libya but also in neighbouring states that are taking on Libyan refugees.''This all threatens a dangerous destabilisation of the situation in the region,' he said.Russia Foreign Minister Sergei Lavrov warned on Saturday that the operation in Libya was 'sliding towards' a land campaign, after NATO acknowledged that it had now deployed British and French attack helicopters.Kremlin mediator to fly to Libya on Monday: report AFP Jun 04 2011 12:16:16 GMT+0400 (Arabian Standard Time)?Oman TimeRussia: Russian envoy will travel to Libya on Monday evening to try to mediate in the conflict, visiting Benghazi and meeting opposition representatives, the Interfax news agency reported Saturday. "On the evening of June 6 I am flying out to Libya on the president's order and intend to meet representatives of the opposition and a number of other political forces in Benghazi," the envoy, Mikhail Margelov, told the agency. Russian President Dmitry Medvedev said Thursday that he would send Margelov, Russia's special representative to Africa, to the rebel bastion of Benghazi. A high-ranking Russian source familiar with the situation told AFP on Thursday that Margelov would also travel to Tripoli. Margelov told Interfax that he "intended to meet leaders of Libya's National Transitional Council," headed by rebel leader Mustafa Abdul-Jalil. Russia abstained from the UN Security Council resolution on Libya and has called for a negotiated solution to the conflict, which has cost thousands of lives since it erupted in mid-February.Russia Profile Weekly Experts Panel: Medvedev’s Libyan Imbroglio by Vladimir Frolov Russia Profile 06/03/2011 Contributors: Vladimir Belaeff, James Jatras, Edward Lozansky, Vlad Sobell, Ira StrausAt his press conference two weeks ago, Russia’s President Dmitry Medvedev essentially reversed his position on the UN resolution on Libya, hinting that he was duped by the United States and other Western powers into not vetoing it and that he would not make the same mistake in the case of Syria. Has Medvedev erred in his initial judgment of the UN resolution on Libya due to his lack of foreign policy gravitas? Or was it a sign of forward-looking statesmanship on the part of the Russian leader, who has sought to orient Russia more closely with the West? Will Medvedev’s Libyan imbroglio speed up the process of putting Russian foreign policy back into Putin’s adult hands and be a factor in securing his return to the Kremlin next year?Two months into the air war on Libya, the NATO-led international coalition has strayed far away from what was initially billed as a humanitarian operation to protect Libyan civilians from air attacks by Colonel Muammar Gaddafi’s air force. It has instead turned into a full-fledged Western military intervention in the Libyan Civil War, with daily air strikes at Gaddafi’s command centers and presidential palaces, designed to kill the Libyan strongman.The broad mandate in the vaguely worded United Nations Security Council Resolution 1970 gives NATO unlimited latitude in conducting its war on Gaddafi, with no restrictions against supplying the Libyan rebels with Western arms or launching a ground invasion to remove the Libyan strongman.This is exactly what Russia’s Prime Minister Vladimir Putin warned against when he criticized the UN resolution as “deeply flawed” and the Western intervention as a "crusade." Medvedev immediately criticized Putin’s statement as “unacceptable” and said that Gaddafi had lost any legitimacy due to his brutal suppression of the opposition. He further stated that he had personally instructed the Russian Foreign Ministry not to veto the UN resolution.Two months later, things in Libya have turned out much the way prime minister Putin predicted, and president Medvedev is facing increasing criticism in Russia for failing to safeguard an important motif of Russian foreign policy: the sovereign rights of nations. Medvedev is also being criticized for his simplistic approach to foreign policy, as well as for his naiveté in taking Barack Obama and Nicolas Sarcozy at their word and not negotiating for more restrictive language in the UN resolution.Here is how Eric Kraus, the publisher of the “Truth & Beauty” investment newsletter and a contributor to the Experts Panel, put it for : “At the very least, Russia should have negotiated strict limitations on Western involvement in the Libyan Civil War, as well as the need to return to the Security Council for continuing authorization. Putin spoke his mind about the ‘latter day crusade,’ only to be sharply contradicted by Medvedev. A few weeks have gone by and it is now obvious that Putin was right, with the Kremlin now belatedly expressing righteous indignation at an outcome which should have been obvious to all: NATO has become a partisan player embroiled in a civil war, and increasingly alienated from its UN mandate of simply ‘preventing civilian casualties.’”Many in Moscow accused Medvedev of seeking to curry favor with U.S. President Barack Obama at the expense of Russian national interests, while getting nothing in return. At the G8 summit in Deauville, France, Moscow has taken some comfort in putting language in the final communiqué that admitted serious flaws in the actions of the international coalition in Libya. Medvedev and his foreign policy team were also visibly pleased by the U.S. proposal that Russia should serve as an intermediary to colonel Gaddafi in order to convince him to leave the country into a safe-haven exile in an Arab or African country.President Medvedev immediately dispatched his Special Envoy for Africa Mikhail Margelov to Libya with a mandate to negotiate with both the Libyan leader and the leaders of the rebels in Bengazi. Margelov emphasized that Russia, having abstained on the UNSC Resolution 1970, has maintained its credibility with both camps in Libya. Further, as a non-colonial power, Russia is uniquely well positioned to mediate the conflict and help the United States and NATO to save face.But is it really so? Or is it just a positive spin on a major foreign policy blunder by an inexperienced Russian president? Has Medvedev erred in his initial judgment of the UN resolution on Libya due to his lack of foreign policy gravitas? Or was it a sign of forward-looking statesmanship on the part of the Russian leader, who has sought to orient Russia more closely with the West? Has the G8 decision at Deauville to give Russia a center-stage role in finding a settlement for the Libyan imbroglio justified Medvedev’s initial judgment? Do they prove that his bet on aligning Russia with the West on Libya would advance Russian strategic interests, like securing meaningful cooperation with NATO on missile defense or technology transfer for Russian modernization? Or does the lack of progress on missile defense with Obama at Deauville show that such hopes were futile from the start? With Medvedev balking at the Western proposal to seek a similar UNSC resolution on Syria, has Putin asserted more control of Russian foreign policy? Will Medvedev’s Libyan imbroglio speed up the process of putting Russian foreign policy back into Putin’s adult hands and be a factor in securing his return to the Kremlin next year?Vlad Sobell, Independent analyst, LondonLet us start with the premise that the most prolific source of evil is unquestioned adherence to a belief (be it religious or scientific), rather than wicked individuals themselves (and, hence, demonstrably evil individuals, such as Hitler, take advantage of such absolute faiths through cynical manipulation of population). That premise is based on evidence from religious conflicts throughout the millennia and, more recently, on the impact of totalitarian creeds.On the basis of that premise, we should beware the blind and total embrace either of the principle of non-intervention (in the internal affairs of a country) or its diametrical opposite – namely, the notion that the civilized “international community” has the right, if not obligation, to prevent a tyrant from butchering his own or any other people. Let us, in other words, face up to the uncomfortable truth that each such case must be approached strictly on its individual merits (intuitively it seems that adhering to any fast rules would be “too easy” and that weighty decisions – either in politics or business – are rarely straightforward and cost-free).That said, it is clear that the leaders of great powers routinely face dilemmas that we, the mere public or analysts, would rather not have to address ourselves. Their predicament is made worse by their awareness that whichever (of the mutually exclusive) options they plumb for, their decisions are bound to have advantages and disadvantages, benefits as well as costs. And in the present case of “humanitarian intervention” against the inviolability of “state sovereignty,” such decisions inevitably have deadly consequences for a great number of people.Were I a leader of a great power, and having carefully considered the specific conditions of Libya, I would probably be inclined to support international intervention, albeit at the cost of violating the principle of national sovereignty. My main reasons would be as follows (the list is far from exhaustive):Firstly, with his regime crumbling and unsustainable in the long run, colonel Gaddafi has little to lose; this means that, like a cornered beast, he is very dangerous (his past brutality has been well documented). Secondly, the fact that he himself is relying on foreign mercenaries could be classed as a form of external intervention; NATO intervention, therefore, is neutralizing this act on his part. Thirdly, Western refusal to intervene would lead to a protracted war of attrition in Libya – the last thing either its troubled population or the region as whole needs. Fourthly, since there are solid grounds for suspecting that Gaddafi was directly responsible for acts of terrorism (most notoriously, the bombing of aircraft over Lockerbie in 1988), the idea that a terrorist should be able to hide behind the noble principles of national sovereignty would seem abhorrent.And lastly, given that Western powers have the resources and the wherewithal to remove Gaddafi, and that the insurgents themselves have requested NATO’s aid, do we really want to wring our hands and observe yet another “Bosnia” or “Rwanda?” Is there not a point at which such a passive stance might amount virtually to complicity in war crimes?What has this got to do with Russian politics and the questions raised by Vladimir Frolov? The answer is as follows: far from showing his “inexperience,” president Medvedev demonstrated great integrity and statesmanship by not obstructing the Western decision to intervene in Libya (and the ill-disguised Western push to remove Gaddafi). Prime Minister Putin, on the other hand, was exposed as a cynical, populist hypocrite. After all, Moscow had no apparent moral and legalistic problems (justifiably) with intervening in the nominally Georgian province of South Ossetia in August 2008. In fact, it justified its repulsion of Mikheil Saakashvili’s attack on Tskhinvali’s civilians by invoking the same principles as those invoked by the West in the case of Libya.It is, therefore, regrettable that Medvedev now feels obliged to bend with the prevailing wind in Russia and modify his admirable earlier stance. And it is equally regrettable that the Putin camp (and evidently the Russian public) feels that Russia should be playing politics – and scoring cheap points against the West – by using the issue of the intractable situation in Libya today to its “advantage.” Russia has little to lose by standing, on this occasion, on the Western side of the divide, while its ability to rise above opportunism (in stark contrast to the West’s behavior in 2008) would win it considerable moral kudos.So it is with regret that I must profess myself to be in disagreement both with Vladimir Frolov (when he describes this unfortunate development as the “return of Russia’s foreign policy back into the adult hands of Putin”) and with Eric Kraus, to whose sober and enlightened views I normally subscribe 110 percent.? Ira Straus, U.S. Coordinator, Committee on Russia in NTO, Washington, DCMedvedev was right initially; now he is wrong.He is backtracking for political reasons, taking cover in the face of Putin’s popularity – Putin at his worst, the Putin who is a demagogic “mobilizer” of anti-Western sentiment. Putin's appeal on this matter is classic nationalist populism, an easy path to popularity in Russia – a fact that in itself is a sorry reflection of Russia's popular frame of mind. Resentment-venting against the establishment is a degraded mentality, shared by immature and nihilistic people the world over, including plenty of Western pundits.It was inevitable that, if things didn't go 100 percent smoothly and quickly – and things rarely do in military actions – this resentment-populism would gather strength, and Medvedev would be in a weak position politically on the issue. It is strange for me to read that this means Putin was right substantively; no, it just means he was right as a demagogic politician. What is not strange at all, but still sad, is that Medvedev, in face of this atmosphere, is backtracking.A more logical conclusion, for those who sincerely object to the human cost of a dragged out war, would be that the neutralism of the resolution was a mistake. In that case, Russia should not have fought to restrict the resolution at all; instead it should have supported a resolution that would not have excluded concrete actions to get rid of Gaddafi.What is most unfortunate is that Russians are talking and acting in a way harmful to their own interest on the Mideast, and not just with regard to Libya. Russia's most substantive reason for being against democracy promotion in the Islamic world was always for fear of it bringing the Islamists to power. Its considered interest was, accordingly, to call for greater discrimination in Western democratization policy; particularly, less promotion of overthrow of moderate regimes such as those of Hosni Mubarak and Zine al-Abidine Ben Ali, limitation of democracy promotion for overthrowing truly malicious regimes such as those of Iran, Syria, and Libya. In other words, Russia's honest reasoning would translate as: "we want the West to use double standards more, not less. And more openly and intelligently. Our only complaint is that they often do it stupidly, based on prejudice instead of true interest. We want the West to reach agreement with us on what double standards to apply where. That way we'll have the same double standards, and be able to cooperate better and implement both our interests more effectively." But in practice, Russia has done the opposite. Russians have been so obsessed with their resentment against the West that they seem at times to expend most of their intellectual energy complaining about "Western double standards," the usual phrase of teenagers and demagogues for arousing resentment against the powers that be. They also express their resentment of the West by running diplomatic interference on behalf of the more radical and malicious regimes of the Mideast, and by doing their best to create static and confusion in the international community. As a result, they are undermining Russia's declared interest in stability, along with undermining nearly every other valid interest and value at issue.By complaining and slowing down the process, Russia damages its national interests. This damages them to the point of placing some of their own vital interests at risk.Edward Lozansky, President, American University in Moscow and World Russia Forum in Washington, DСThis is not the first time when NATO has initiated a military operation with no clear idea on how to proceed, and then has asked Moscow for help. Back in 1999, the Russian envoy Viktor Chernomyrdin had succeeded in convincing Yugoslav leader Slobodan Milosevic to step down in the face of Serbia’s bombing campaign. However, not only did Russia fail to find any benefit in this action, but, moreover, when Milosevic accepted the deal he nevertheless was put on trial for war crimes in the Hague, where he died in a prison cell in 2006. I am sure Muammar Gaddafi remembers this story very well, and therefore the chances that he accepts Medvedev’s mediation are slim, especially taking into account that the top prosecutor of the International Criminal Court in the Hague said this month that he wants the colonel arrested for crimes against humanity.However, none other than Gaddafi’s Prime Minister Baghdadi al-Mahmudi put in an urgent call to Moscow asking for immediate involvement and who knows, perhaps against all odds, Medvedev might succeed where others, including South African President Jacob Zuma, failed. Recent defections among Gaddafi’s top generals and ministers certainly bring additional incentives for him to rely on Russia’s mediation.While considering the benefits for Russia in helping NATO, let us not forget about Afghanistan, where strained relations between the United States and Pakistan make northern supply routes through Russian territory a key factor in the military campaign in this part of the world.The logical question for the Kremlin is what does Russia get in return? On the one hand, it looks like the United States and NATO in Afghanistan are fighting the same enemy that threatens Russia, and therefore they deserve any help from Moscow they can get. On the other hand, according to reliable statistics, drug production and trafficking in Afghanistan increased 40 times after the start of the U.S.-led war in 2001. This resulted in the death of more Russians every year than during the whole Soviet invasion period back in the 1980s. At the same time, Moscow’s appeals to Washington and Brussels for greater activity in the war on drugs are largely ignored under the cynical pretext that it might turn drug producers into terrorists.Ironically, a similar question about benefits from cooperation with Russia are raised in United States, as they were put bluntly in a recent Washington Post editorial with its usual hysterical, Pravda-style rhetoric. After blaming Obama and his new Russian Ambassador-in-waiting Michael McFaul for their “reset” policy and betraying Georgia as well France for selling four Mistral-class warships, the question was asked: “Are we getting anything from Russia in exchange?”? If you think that betraying Georgia doesn’t mean loudly protesting Saakashvili for the brutal treatment of the opposition, you are wrong. The Washington Post is angry with Obama for his pledge to support Russia’s WTO accession despite Georgia’s objections.To summarize, Medvedev’s agreement to help with the Gaddafi quagmire would be a wise decision, but only if solid guarantees for certain rewards can be negotiated in return, for example new Libyan oil contracts, pledges of repayment for weapons contracts by Libya’s new regime, etc.Needless to say that all this is very unlikely and in view of Obama’s flat refusal to accept Russia’s proposals on missile defense, the best Medvedev can get, even if he succeeds with Gaddafi, is a friendly pat on the back. What it means is that regrettably at the end Medvedev will score a few points in the West, but will lose the same number of points, if not more, at home.? James George Jatras, Director, American Council for Kosovo, Deputy Director, American Institute in Ukraine, Washington DC“Fool me once, shame on you. Fool me twice, shame on me.” It is good to see the Russians will not allow themselves to be tricked by NATO on Syria as they were on Libya, at least initially. But of course this is neither the first, nor the second time Moscow has been cast as the object of Western manipulation, enlisted as a “postman” (in Alexander Rahr’s apt characterization) to advance NATO interests that conflict with Russia’s.The dispatch of Margelov as a mediator in Libya’s apparently stalemated civil war, in which colonel Gaddafi has already been declared – with Moscow’s assent – as lacking “legitimacy,” calls to mind an earlier bit of Russian postman-ship. In 1999, Russia’s former Prime Minister Viktor Chernomyrdin, with perennial Western errand-boy Martti Ahtisaari of Finland in tow, met with then-Yugoslav President Slobodan Milosevic to “mediate” an end to NATO’s illegal bombing campaign.?? As Milosevic described it to me in person a few years later, Chernomyrdin and Ahtisaari delivered NATO’s offer to take the two unacceptable American demands that tanked the farcical Rambouillet non-negotiation off the table: independence for Kosovo and NATO occupation of all of Serbia and Montenegro, not just of Kosovo. But the duo warned him that if the offer were refused, NATO would vastly intensify its bombing of civilian targets. “Faced with such a choice, what alternative did I have?” Milosevic asked me. I countered, “But NATO had no intention of keeping any promises about Kosovo. As for the threat of stepped-up bombing, NATO was on the verge of cracking. We were already pounding dirt in places we had bombed before, with almost no damage to Yugoslav military forces. It was mainly a question of which NATO country would be first to pull the plug on the operation. Surely you knew they were lying to you?” With a melancholy glance at the dreary walls of the prison he would never leave alive, he said: “I know that now.”Milosevic’s own delusions of “partnership” with Western powers intent on destroying him prevented his seeing what should have been obvious even at the time. But Gaddafi can hardly have any doubts about his eventual fate under any “compromise” that entails his stepping down. Whatever personal assurances he receives simply will not be honored. It is mere detail whether, like Milosevic, he will be dragged in chains before an international kangaroo court where his guilt is a foregone conclusion, or whether he will meet the more colorful fate of a Benito Mussolini, a Saddam Hussein, or a Nicolae Ceausescu. He knows that his political survival and physical survival are congruent.?? More relevant is what Russia might hope to gain. As in 1999 over Kosovo, we hear today that, in Libya, NATO’s “credibility” is on the line. Even critics of the wisdom of president Obama’s decision to support the European push for involvement suggest that now that NATO is committed, we can’t allow the alliance to fail. So Washington and the European capitals once again look to Russia to help NATO and the United States “save face.”But Russia has no stake in helping to extricate NATO from another mess of their own making. Rather, it is in Russia’s interest for NATO to fail – the more spectacularly, the better. Has Moscow so soon forgotten the fruits of Chernomyrdin’s earlier helping hand in 1999? A second round of NATO expansion up to the environs of St. Petersburg, “color revolutions” in Georgia and Ukraine and invitations for them to join NATO too, plans to deploy a supposedly defensive missile system in Poland and the Czech Republic, and ginning up our unhinged puppet in Tbilisi, Mikheil Saakashvili, to attack civilians and Russian peacekeepers in South Ossetia.Fast forward to 2011, with a nearly bankrupt America bogged down in a worsening Afghan morass, still unsure how to get out of Iraq without leaving either chaos or a pro-Iranian regime in our wake, stumbling into Libya, and floating yet another misadventure to help empower the Muslim Brotherhood in Syria, as we effectively have in Egypt. Russia again is asked to help NATO, but how has NATO changed toward Russia? Have the 2009 Bucharest invitations to Georgia and Ukraine been rescinded? Of course not. Has missile “defense” been shelved? No, it’s only been shifted a bit south and offshore, while Russian proposals for a truly joint system are sandbagged. To be sure, with the progressive unraveling of our laughably designated “major non-NATO ally” Pakistan, whose treachery was decisively exposed in Abbottabad, NATO finds itself more and more dependant on Russia for supply to Afghanistan (let’s ignore for the moment the question of why NATO, meaning really the United States, can’t take a hint and get the hell out of there). The bottom line is, even if despite its preferences NATO needs to rely on Russia, the converse is not true.? With any luck, if Moscow refuses to be fooled into brokering a phony Libyan “deal,” it will only advance the day that NATO – a formerly defensive formation that has lost all justification for its increasingly malign existence – will suffer a well-deserved fatal blow to its sham “credibility” and finally go the way of the Warsaw Pact. Let’s hope that’s something Medvedev and Putin can agree on.?????? Vladimir Belaeff, Global Society Institute, San Francisco, CAFirstly, some clarification is necessary. UNSC resolution 1970 was adopted unanimously. That resolution condemned the actions of the Tripoli regime in suppressing political protest with heavy weapons. Economic sanctions were imposed on key individuals in Gaddafi’s government and travel bans were imposed. Russia voted in favor of Resolution 1970, although it was instrumental in the removal of text which would enable foreign military intervention in what by then was already a Libyan civil war.It was UNSC resolution 1973, which enabled military intervention by mandating an enforced no-fly zone. Russia and China abstained in that vote (thereby enabling the resolution’s passage.) Of the NATO and EU members of the UNSC, Germany’s abstention is notable. Tripoli immediately declared its compliance with each resolution as it was approved – but did not in fact implement this claimed compliance. Thus, there is now little international credibility for recent declarations by Tripoli of their readiness for a cease-fire.Libya presents a difficult challenge to the international community. From the beginning, the Tripoli regime has executed a brutal and massive military suppression of the opposition. A fact that Russian mass media tend to occlude is that the Benghazi leadership includes former senior members of the Tripoli government, and is not just a rag-tag assembly of ad-hoc opponents of Gaddafi.The international community must impose a cease fire in Libya to enable a modicum of political progress there. If Gaddafi is as popular as he claims to be, then he should have no need to use rocket artillery on his opponents. “Popular” Tripoli has not complied with neither the milder UNSC resolution 1970, nor the harsher resolution 1973.Gaddafi is a political problem and a potential liability for Russia. There is the Soviet legacy of alignment with “Arab socialist” regimes, of which Gaddafi (the “Che Guevara of the sands”) is an extravagant example. This nostalgic attachment, unjustified in terms of the real national interests of Russia, is the cause for a very evident uncertainty in Russia’s policy about Libya.In a broader perspective, the Russians face a real-life example of how the international policies of the Soviet Union (which never really strayed from the promotion of a global socialist revolution) did not match genuine Russian national interests. Supporting a recalcitrant relic of the 1970’s, doomed by the logic of political of events, is not viable either morally or practically. Russia needs stabilization in Libya so that everyone (above all the Libyans) can rebuild that country and resume the numerous projects for Libya’s modernization.One must note that in Deauville, Medvedev reiterated the G8 consensus that Gaddafi must go. This is a very sensible position, shared by all sane participants. The big problem is that Gaddafi himself does not share the G8 view. His own vision for the future can only be imagined.Russia indeed has potential as a mediator for Libya, although as of this writing the Margelov mission seems to have been pre-empted (without success) by Zuma.Conversely, on a grander scale Libya should just be a side-show for Russia. Events there are of more importance to European countries in closer proximity to North Africa (France, Italy) and those countries who have suffered from Libya-related terror attacks (the UK and United States). Therefore, one must question just how much of a true imbroglio does Libya represent for anyone in Russia? Realistically, Libya’s significance to Russia should be almost nil.Jerusalem should be divided into two parts - Sergey Lavrov 5, 2011 22:45 Moscow TimeIn Russia they believe that Jerusalem should be divided into two parts: western - Israeli, and eastern - Palestinian, while the holy sites can only be under international control.Russian Foreign Minister Sergei Lavrov spoke about this to journalists. In his opinion, the statements that Jerusalem belongs only to one side "will never work." This should be part of an overall settlement, when Palestine and Israel agree on their border - he stressed.Palestinian National Authority (PNA) seeks to establish an independent state within the 1967 borders.Janukovych, Medvedev to meet in Donetsk in autumn – Lavrov President Dmitry Medvedev and Ukrainian President Viktor Yanukovych will meet in Donetsk in autumn, Russian Foreign Minister Sergei Lavrov said in a Sunday interview with Ekho Moskvy radio."We will be working for much more comfortable terms [of travels between the regions of Ukraine and Russia] and are drafting corresponding proposals for the next meeting of the two presidents that will be held in Donetsk in autumn and involve the heads of all border regions and also the heads of regions that closely cooperate between each other," Lavrov said.Lavrov: Russia, Ukraine not going to start 'political games' with Black Sea Fleet at 09:32 | Interfax-Ukraine The basic Russian-Ukrainian agreements over the Russian Black Sea Fleet are not called into question, however, talks continue over a number of agreements, said Russian Foreign Minister Sergei Lavrov. "There are situations where the absence of a legal framework creates problems. But under the current Ukrainian leadership we have an absolutely reciprocal understanding that instead of trying to start some political games, given the lack of specifics of these agreements, one should sit down and settle these issues professionally and competently," he said in an interview with the Ekho Moskvy radio station."Basic agreements over the Black Sea Fleet have been signed, they are absolutely beyond anyone's doubt, but these basic agreements stipulated that various details regarding matters that will arise during the presence of the Russian Black Sea Fleet on Ukrainian territory will be agreed upon in additional agreements," Lavrov said."And several dozen such agreements - additional, sectoral, industrial, if you will - have already been signed. There remain some draft documents which are in the negotiating process. They focus on the procedure of movement of Russia's Black Sea Fleet servicemen in Ukraine in situations where they have to move from one base to another, which involves crossing territories not covered by the basic agreements. These are absolutely practical issues - they need to be resolved," the minister said. Read more: meeting to achieve breakthrough in Karabakh conflict-Turkish FM 06, 2011 | 09:32 Turkey hopes a breakthrough in Nagorno-Karabakh conflict resolution will be achieved during Armenian, Azerbaijani and Russian Presidents in Kazan, Turkish Foreign Minister Ahmet Davutoglu stated in an interview with ANS TV.“Nagorno-Karabakh issue is a focal point during each meeting between U.S, Russian and French officials. We will step up efforts to resolve the conflict. I am certain breakthroughs will be achieved at the Presidents’ meeting in Kazan. The joint statement on Nagorno-Karabakh adopted within the framework of G8 Summit opened encouraging prospects. We hope Armenia will realize that protracting the conflict resolution conflicts with its positions and will make a right choice in the earliest possible timeframe,” he said.The meeting between Armenian, Russian and Azerbaijani Presidents in Kazan is scheduled for June 25.Presidents of Russia, France and Armenia issued a joint statement on Nagorno-Karabakh within the framework of G8 Summit, on May 26. They called upon the Presidents of Armenia and Azerbaijan to demonstrate their political will by finalizing the Basic Principles during their upcoming summit in June.Russian Security Council head to discuss cooperation with India 06/06/2011Russian Security Council Secretary Nikolai Patrushev will arrive in India on a one-day visit on Monday, the council said.Patrushev, who will lead a Russian delegation, will discuss military and technical cooperation, as well as interaction in the power industry, space research, and international and regional security issues.His agenda includes meetings with Indian Prime Minister Manmohan Singh and national security officials.MOSCOW, June 6 (RIA Novosti)02:48?06/06/2011ALL NEWSRussia Security Council secretary to discuss cooperation in India. Tass 6MOSCOW, June 6 (Itar-Tass) —— Secretary of the Russian Security Council Nikolai Patrushev, who will head a Russian interdepartmental committee, will fly to India on Monday to have several negotiations and consultations with several top political and military officials in the country.“Patrushev is to meet with his Indian counterpart Shiv Shankar Menon and Prime Minister Manmohan Singh,” the press service of the Russian Security Council told Itar-Tass on Sunday.The sides will discuss “the state and prospects of Russian-Indian cooperation in the energy sector, space peaceful exploration, military-technical cooperation and will share views on the most topical problems in international and regional security,” the press service said, noting that it will be Patrushev’s fourth official visit to India for the last three years.Meanwhile, the New Delhi negotiations will focus on the cooperation within the Shanghai Cooperation Organisation and between the BRICS states, the press service reported.Vietnam says Russian-bought submarines for self-defence Jun 2011 06:30Source: reuters // Reuters SINGAPORE, June 5 (Reuters) - Vietnam said on Sunday six Kilo class diesel-powered submarines that it was buying from Russia would be used only for self-defence. "We regard this as a normal activity for the People's Army of Vietnam," Vietnamese Defence Minister General Phung Quang Thanh told the Shangri-La Security Meeting in Singapore. "That is to defend (the country) and take part in national construction. Vietnam's policy is completely for self defence and we would never compromise any other country's sovereignty. But we must deter anyone who tries to compromise Vietnam's sovereignty." The submarine deal, signed in 2009, is worth $3.2 billion, according to Russian media. Vietnam is one of the claimants to the oil-rich Spratly islands in the South China Sea, along with Malaysia, Taiwan, China, the Philippines and Brunei. The People's Army daily, run by Vietnam's Defence Ministry, said Thanh expressed concern to his Chinese counterpart, Liang Guanglie, at the Singapore meeting about an incident last week in which three Chinese patrol boats challenged a Vietnamese oil exploration ship in the South China Sea. All sides say however they are committed to a peaceful resolution of the dispute. (Reporting by Raju Gopalakrishnan; Editing by Jonathan Thatcher) June 06, 2011 12:27Russia toughens sanitary control over cargo on Russian-Ukrainian border over cholera outbreak - Onishchenko (Part 2). June 6 (Interfax) - The Russian sanitary services on Monday toughened control on the Russian-Ukrainian border over an outbreak of cholera in Mariupol, Ukraine."We have had to intensify border supervision and monitor more closely those cargo and goods that are moving in the direction of Rostov-on-Don," Russia's chief sanitary inspector Gennady Onishchenko told Interfax on Monday.Ukraine has rejected Russia's assistance in the investigation and containment of the cholera outbreak in Mariupol, Onishchenko said. "We believe this decision is not substantive, but lies in a different realm," he said.On Friday, Russia offered help to Ukraine and was ready to send to Mariupol a special anti-epidemic brigade from Rostov-on-Don, Onishchenko said. On Monday, Ukraine rejected that offer, he said. "We see that as a decision that lies far from the essence of the problem," Onishchenko said.The medical experts Russia was ready to send to Mariupol were ready to do a large amount of work involving lab diagnostics, identification of agents, and epidemic studies."We needed that to protect the southern regions of Russia. Mariupol, the center of cholera, is located 160 km from Rostov-on-Don," Onishchenko said.Fourteen cholera cases were registered in the infectious disease unit of Mariupol's Hospital No.4 as of Monday morning. av jv(Our editorial staff can be reached at eng.editors@interfax.ru)Poland's Minister to Meet Russian Counterpart Over Imports BanThe Warsaw Voice ? Business ? News - June 6, 2011 's Agriculture Minister Marek Sawicki wants to meet his Russian counterpart this week to discuss Russia's ban on vegetable imports from EU countries following the E.coli outbreak. "On Monday I will discuss the matter with Yelena Skrynnik, Russia's Agriculture Minister," Sawicki said."I believe that Poland, as an EU member state and taking over the EU presidency, cannot be passive in the face of the problem," he added.Russian church goes up in the Emirates 6, 2011 11:40 Moscow TimeThe first Russian church has been constructed in the United Arab Emirates to become the one and the only Orthodox shrine on the Arabian Peninsula. Located in the city of Sharjah, the church was built by order of Sheikh Sultan Bin Mohammed Al Qasimi, the current ruler of the Sharjah emirate.?Apart from a five-dome church, the group of buildings also includes a three-storey cultural and educational center. In 2007, the foundations of the Russian spiritual complex in Sharjah were consecrated by Metropolitan of Smolensk and Kaliningrad Kirill, now the Patriarch of Moscow and all Russia.June 06, 2011 09:27EU has not removed Russia's concerns about E. coli infection - Chief Sanitation Doctor. July 6 (Interfax) - The Russian sanitation service is not satisfied with the EU reply about the safety of European vegetables."Neither the German authorities, nor the EU authorities have demonstrated readiness to clarify the situation. It means that they really don't have answers to our questions," Russia's Chief Sanitation Doctor Gennady Onishchenko told Interfax on Monday. He said the Russian sanitation service remains in constant dialogue with colleagues from the EU."We received a letter which, unfortunately, did not clarify the situation and we did not get an answer to our questions," he said.Russia banned vegetable imports from EU countries as of last Thursday. The ban does not apply to potatoes. The spread of the E. coli infection in Europe, primarily in Germany, is the reason for the ban.Onishchenko said that the letter "once again confirmed groundless confidence that measures are being taken.""I sent a reply and repeated the list of questions raised before," he said meaning the conditions on which vegetables from the EU could return to the Russian market.He said that reports came from EU on Sunday that the E.coli infection was registered in 13 European countries with 2,300 people contracting it and 22 dying."Half of EU member-nations are affected. The number of countries where the infection is registered continues to grow together with the number of patients. This does not make us more optimistic about the speedy solution of the matter," he said.Ml(Our editorial staff can be reached at eng.editors@interfax.ru)Russia and EU clash on trade ahead of summit RETTMANToday @ 08:15 CETEUOBSERVER / BRUSSELS - Russian Prime Minister Vladimir Putin has made fun of the World Trade Organisation (WTO) and the EU ambassador in Moscow in the run-up to an EU-Russia summit.Using his trademark colourful language, Putin told press in Sochi on Friday (3 June) that he will not lift Russia's E-Coli-related import ban on EU vegetables."The EU says Russia's decision contradicts the spirit of the WTO, but we can't poison people because of some spirit," he said, according to newswires. "I openly admit I don't know what spirit is being contradicted ... But when people are dying from eating cucumbers, then something stinks." Putin's remarks came after the EU ambassador in Moscow, Fernando Valenzuela, protested that the blanket ban goes against the code of the Geneva-based free trade club. "As the intention of Russia, which we support fully, is to join the WTO, possibly this year ... Russia should voluntarily be already implementing these rules in full," the EU envoy told reporters in Moscow on Thursday.The disagreement comes a few days before EU and Russian officials sit down in Nizhny Novgorod on 9 June to discuss prospects of Russia's WTO entry. An EU official told this website that EU-Russia talks are in the "endgame" phase, but that concerns remain over "protectionism" in some sectors. The vegetable ban is set to help domestic Russian farmers - Russia imports 11 percent of its tomatoes from the EU and five percent of cucumbers.Lebanon is the only other country to react with a total blockade. The EU envoy in Beirut, Angelina Eickhorst, said on Saturday the vegetable ban is "scientifically unjustified" and violates a 2006 EU-Lebanon agreement. German scientists over the weekend continued to hunt for the source of the E Coli outbreak, with the likeliest suspect being bean sprouts in Lower Saxony.The World Health Organisation (WHO) says over 20 people have died and 2,000 have been infected since early May. Cases - relating to people who travelled to Germany - have also occurred in Austria, the Czech Republic, Denmark, France, the Netherlands, Norway, Spain, Sweden, Switzerland, the UK and the US. The epidemic has mostly affected women. The Escherichia coli (E Coli) bacterium lives in the gut of warm-blooded animals. It can cause bloody diarrhoea, cramps, fever and vomiting. Some patients develop haemolytic uraemic syndrome, a potentially fatal kidney condition.EU health ministers will discuss the situation at a meeting in Luxembourg on Monday.Ban on Vegetable Imports Threatens to Derail EU Summit June 2011By Nikolaus von TwickelFueled by harsh words from Prime Minister Vladimir Putin, Moscow's decision to ban all European vegetable imports because of a deadly E. coli outbreak is now threatening to derail relations with Brussels just days before a summit with EU leaders.Putin spoke of "poisonous" cucumbers Friday in defending the ban announced a day earlier by the country's top sanitary official, Gennady Onishchenko.Facts About E. Coli Outbreak The deadly strain of E. coli that has killed at least 18 people in Europe and sickened 1,836 since May 2 has never been seen in a human population and may be the most toxic yet, health experts said. Here are answers to some frequently asked questions about the outbreak. What is E. coli? Escherichia coli (E. coli) is a group of bacteria that live in the intestines of many animals, including humans. Most strains are harmless, but others can cause illness ranging from diarrhea to pneumonia. E. coli infections can be mild to life-threatening. How is E. coli spread? E. coli infections are caused by ingesting the feces of infected animals or humans, often via contaminated food or water. People can contaminate food by failing to wash their hands after using the toilet or changing a baby’s diaper, although person-to-person infection is rare. Feces from animals, ranging from cows to birds, can contaminate water or crops. What is the strain? The strain that is sickening people in Germany and other parts of Europe, known as 0104:H4, is part of a class of bacteria known as Shiga toxin-producing Escherichia coli, or STEC. It is the first time the strain has caused an outbreak in humans. Symptoms of STEC infections vary for each person but often include severe stomach cramps, diarrhea (often bloody) and vomiting. Low fever (less than 38.5 degrees Celsius) also may be present. Most people recover within five to seven days. What are the major complications of this strain? Hundreds of people sickened in the outbreak have developed hemolytic uremic syndrome, or HUS, a life-threatening complication of E. coli infections. The syndrome, which results in the destruction of red blood cells and severe kidney problems, usually arises about a week after diarrhea starts. Symptoms of HUS include decreased frequency of urination, extreme fatigue and the loss of the skin’s pink color. Children, the elderly and people with compromised immune systems are usually at highest risk for HUS. In the case of this outbreak, healthy adult women have been hard hit. What is the medical treatment? Experts said supportive therapy, including hydration, is important. Treatment for HUS includes dialysis for kidney failure and blood transfusions for anemia. Antibiotics should not be used, as there is no evidence that treatment with antibiotics is helpful. Antibiotics and antidiarrheal agents like Imodium also may increase risk of HUS.— Reuters, using data from the U.S. Centers for Disease Control and PreventionThis may be against "the spirit of the WTO … but cucumbers that people die from after eating really stink," Putin told a gathering of rail executives in Sochi.?He apologized to his audience for digressing to the subject at the end of a discussion about rail infrastructure, but said he had to address the "gathering scandal."Putin was adamant that the ban would not be lifted before the Europeans pinpointed the source of the infection, which has killed at least 18 people and sickened 1,836 since May 2, mainly in northern Germany."We cannot for the sake of some spirit poison our people, since there are people dying from eating this produce," Putin said.No one has been reported ill in Russia amid the outbreak, which health experts blame on a new strain of E. coli. Cucumbers were initially thought to be the source of the illness, and Germans have been advised to avoid all raw vegetables. But amid signs that infection rates were stabilizing over the weekend, some experts raised doubts over whether contaminated vegetables are the source.The head of the EU delegation to Moscow, Fernando Valenzuela, criticized Russia’s ban as unjustified and warned that it could undermine the country's chances of joining the World Trade Organization this year."I think we have to look at this situation positively and hope that it will be resolved within a few days, and consequently it should not have any influence on the WTO negotiations," he told reporters.Valenzuela argued that if Moscow wanted to join the WTO, it should voluntarily adhere to its rules. "There is no point … in waiting until the very last day to do that," he said, Interfax reported. But the government rejected that notion.Maxim Medvedkov, Moscow's top negotiator for the membership talks, said import restrictions on food that might harm people's health were in line with WTO rules. "Any WTO member is entitled to this, and Russia has and will have this right after joining the organization," Medvedkov said in comments carried by Interfax.European officials complained that no other country has banned all vegetables from the 27-member bloc. EU Consumer and Health Commissioner John Dalli demanded that the ban be lifted immediately, saying cucumbers were probably not responsible for the infections. In a letter to Russian authorities, Dalli stressed that Brussels has kept and will keep Moscow and all other trade partners fully informed about developments, the EU said in an e-mailed statement Friday.Officials also said the ban hurts not only European farmers but also Russian traders. The EU provides a third of the country's vegetable imports, and Valenzuela said the shipments amounted to a quarter of the EU's vegetable exports, worth nearly 600 million euros ($877 million) last year. "You cannot substitute this immediately," EU delegation spokesman Denis Daniilidis told The Moscow Times.Moscow regularly prohibits food imports because of health concerns, and last week it also announced bans on Brazilian meat and Egyptian potatoes for not meeting sanitary standards.Some previous embargoes have smacked of political punishment, like those on Georgian and Moldovan wine and on Belarussian dairy products.But analysts suggested that the vegetable ban might just reflect Moscow's protectionist instincts."This supports domestic producers, which fits into Onishchenko's political strategy," said Alexei Mukhin, head of the Center for Political Information, a think tank.He said a little trade spat might actually be welcomed by the Kremlin. "I bet [President Dmitry] Medvedev is smiling now —?after the EU gave him such a hard time on security policy and visas," he said.Russian officials have expressed frustration with the European Union after it largely ignored Medvedev's initiative for a new European security architecture and bowed to resistance from individual EU member states for visa-free travel.The trade spat strikes at a particularly sensitive time because the European Union, which supports Moscow's WTO ambitions, wants to discuss progress on the negotiations at the EU-Russia summit, which kicks off Thursday in Nizhny Novgorod.EU delegation spokesman Daniilidis said he hoped to keep the vegetable issue out of the political sphere and to have it solved before the summit. "If there is no solution by then, we would be in a very uncomfortable position because it distracts from our positive agenda," he said.Analysts said they did not expect much substance from the summit, which is held twice a year.EU officials have said they will issue a joint progress report on the Partnership for Modernization, a plan to swap European technology and know-how for Russian reforms. They also said much-touted agreement on common steps toward visa-free travel will not be signed because further consultations are needed inside the 27-member union.Vladislav Belov, an analyst with the Moscow State Institute of International Relations, said the vegetable ban should be seen as a political opportunity instead of a threat. "It actually offers a nice chance to discuss soft security factors — how to cooperate during a dangerous outbreak," he said by telephone.Meanwhile, Onishchenko, the top sanitary official, defended the ban Saturday and urged people to demand documentation from retailers showing the origins of their produce. “If the vegetables are from Europe, I advise you not to buy them,” he said. “If you have any doubts, cook the produce.”Roland Oliphant contributed to this report from Sochi.NATO, Russia hold air exercises 6, 2011 09:16 Moscow TimeThe Russian and NATO air force will hold their first joint exercises against air terrorism, Vigilant Skies 2011. The maneuvers will be mostly carried out over the Polish territory, as well as in the Turkish air space to practice the elements of interaction with the NATO aircraft.The drills are designed to prevent terrorist attacks with the use of civil aircraft, such as those of September 11th, 2001 in the US.RUSSIAN SUB SUNK AT CARTAGENA Nolan / 2011-06-06 09:20:52A huge NATO exercise is taking place of the coast of Cartagena, featuring some 2,000 service staff on board 18 vessels, with ships, submarines and aircraft all coming together in a joint NATO and non-NATO exercise.?Taking place until the 20th June, with staff from more than 20 countries, including the United States, Sweden, Britain, Spain, Italy, Netherlands, Portugal, France, Norway, Greece and Turkey, the exercise to give the staff and ships an experience of what might happen during an incident they may one day be called upon to assist in.?Still raw in the memory of those who were involved, as well as those who watched the unfolding tragedy from afar, a moment of history was pinpointed in August 2000, when the Russian submarine Kursk sank in the Barents sea, killing all 188 on board.?As a part of this exercise in Cartagena, a Russian submarine will be “bottomed” as if sunk, with a co-ordinated effort to rescue those on board is launched, in the hope that lessons can be learned from both historic tragedies, and modern exercises that give staff a real life feeling of the dramas that might face their chosen roles.?The Russian B-871 Alrosa submarine, which first entered service in the early 1980?s, will be the key learning tool for the exercise. Generally used as a patrol vessel, the submarine is designed as an anti-sub or anti-ship attack sub, carrying 18 torpedoes, with six 533mm torpedo tubes.?With a crew of 53, the submarine is less than half the capacity of the Kursk, but will still serve as a unique opportunity for rescue operations to be played out in a real life situation.Prior to the launch of the exercise, a number of ships were displayed for the public to visit, including an active Spanish submarine, the S71 - Galerna, and the gigantic transport ship L51 – Galicia, used to transport troops and machinery to coastal landing sites.?The crowds were eager to board the vessels and have a guided tour by some of the staff who live on these intricate fighting warships. Young and old came together, as all nationalities met, with a goal of educating and practising how life could be saved by a combined effort, whatever your nationality.President: Cyprus and Russia relations at their best standing ever GAZETTE? Sun, Jun 05, 2011President Christofias has stressed that Cyprus -Russia bilateral relations are, without a doubt, at their best ever in all fields. In his address at the official opening ceremony of the sixth Cyprus – Russia Festival, held Saturday in Limassol, President Christofias described his presence at the event as a tangible proof of the importance his Government attaches to the further deepening of the cultural relations between the two countries. He said “nowadays, political, cultural and economic relations between our two countries flourish in the fertile soil of 50 years of mutual cooperation and solidarity.''He noted that “the historic visit of President of the Russian Federation Dmitry Medvedev to Cyprus, last October, marked 50 years of our diplomatic relations”. At the same time, he added, Medvedev’s visit constituted a historic landmark and highlighted our political will, at the highest level, to further deepen and develop the brotherly ties of friendship and cooperation between our two countries.'' He went on to say that nowadays the two countries and people, through the implementation of bilateral agreements and plans, enjoy the benefits and the results of these brotherly relations and cooperation. ''Our bilateral relations, without a doubt, are going through the best ever time in all fields,'' he stressed. At the business and trade level, he added, ''this relationship has excellent prospects for the future.''President Christofias said that there are prospects for co-operation in a wide range of fields especially in investment, energy and tourism.In addition, he said that especially this year a remarkable increase is recorded in tourist flow from Russia to Cyprus and it gives us great pleasure, ''he said.He also said that the Festival highlights the friendship between Cyprus and Russia, and shows our common will to further deepen the strong ties between the two countries and people''In conclusion, President said that “we are very grateful to the Soviet Union and the Russian Federation for the firm and longstanding support to the struggle of the Cypriot people”.Cyprus was divided after the 1974 Turkish invasion. UN led talks are underway between President of the Republic Demetris Christofias and Turkish Cypriot leader Dervis Eroglu in an effort to reunite the island under a federal roof.June 06, 2011 11:40S-300 unit put on duty in Central Military District. June 6 (Interfax-AVN) - An air defense unit of the Central Military District armed with S-300 anti-aircraft missile systems of the Almaz-Antei Concern has been put on duty in a new positioning area."The main mission of the unit is to prevent unauthorized flights and air space trespassing and to stop aircraft that illegally cross the Russian border within the air defense sector," says a report of the information group of the Central Military District received by Interfax-AVN on Monday.The unit operates S-300 road-mobile launchers capable of "destroying any type of modern air targets, including ballistic and flying at the minimal altitude," the report said.te(Our editorial staff can be reached at eng.editors@interfax.ru)Medvedev toughens punishment for fire safety violations 06/06/2011Russian President Dmitry Medvedev has signed into law a bill to raise fines for violations of fire safety regulations.The law that introduces amendments to Russia's Administrative Offenses Code was passed by the lower house of parliament, the State Duma, on May 10, and by the upper house, the Federation Council, on May 25.In line with the law, fines are doubled for individuals and raised tenfold for some organizations. Companies' operations may be suspended for 90 days if they are found to violate rules on internal water supply and evacuation system maintenance.Around 100 people were injured last week in a fire at an ammunition depot in Russia's Urals republic of Udmurtia.More than 150 people died in 2009 in a nightclub fire in the Urals city of Perm that was triggered by an indoor fireworks display.MOSCOW, June 6 (RIA Novosti)RT News line, June 6Putin welcomes independent activists to Popular Front who do not belong to any public organization can now also join United Russia’s Popular Front. Initially, the Popular Front was meant to unite organizations and movements of various profiles. However Vladimir Putin has decided to change that, so independent activists also "have some access to power," Putin’s spokesman, Dmitry Peskov, has told Kommersant daily. In order to join the front, activists are required to fill in a form at Putin’s official website and wait until their application is considered.04:04?06/06/2011ALL NEWSMoscow int’l nuclear forum to assess world nuclear situation. Tass 7 MOSCOW, June 6 (Itar-Tass) —— A third Moscow international forum Atomexport-2011 will open here on Monday. The forum, which will bring together the chiefs of the nuclear power agencies from almost all member-countries of the world nuclear club, is entitled “Development of Nuclear Power: Pause or Continuation.” The forum will last three days at the Manezh Central Exhibition Hall in the Russian capital. “Several countries, including Russia, are close to a deadline to decommission most nuclear reactors of the first generation, and the tragic events at the Fukushima-1 nuclear power plant speed up this process,” the chief of the Russian state-run nuclear corporation Rosatom Sergei Kiriyenko said. “The Moscow international nuclear forum should discuss and set the guidelines for the development of the world nuclear industry and should determine new technologies that will ensure security of nuclear power plants,” the Rosatom chief said. The Russian nuclear corporation believes that the debates and the exchange of opinions at the forum will make the world nuclear community ready for a July IAEA session, which will be devoted to the condition of the emergency Japanese nuclear power plant Fukushima-1. This IAEA session “will be devoted to a detailed report, which Japanese nuclear power engineers are expected to deliver on the ongoing restoration at the emergency nuclear power plant and the cleanup of the nuclear disaster,” the Rosatom source said. The Rosatom director of the department for mass communications Sergei Novikov told Itar-Tass on the eve of the Moscow forum that it “will be arranged in the format of plenary meetings and sessions, workshop discussions, round-table meetings and symposiums.” “Director General of the World Nuclear Association John Ritch and President of the Japan Atomic Industrial Forum Takuya Hattori” are expected to attend the first plenary session of the forum. “Rosatom Director General Sergei Kiriyenko, U.S. Secretary of Energy Steven Chu and Chairman of the French Atomic Energy Commission Bernard Bigot will deliver reports at the forum sessions,” Novikov noted. The round-table meetings will discuss such issues as the education in nuclear power engineering in the countries, which embarked on the path of nuclear power development, the problems in the development of nuclear power machine building and cooperation in this sphere, as well as new uranium production technologies. “A round table meeting will be devoted to the resistance of modern nuclear reactors to natural disasters. This round table meeting will discuss in detail the lessons, which were drawn from the nuclear disaster at the Fukushima-1 nuclear power plant,” the source said. On the last day of the forum the Russian Foreign Ministry and Rosatom are expected to sign an agreement to assign several Rosatom envoys in the capacity of diplomats in several Russian embassies. Several members of the Russian government are expected to attend the forum. Banking made kosher: Russia enters world of Islamic finance AFP Published: June 6, 2011KAZAN, RUSSIA:? Hoping to attract Arab capital, Russia will take its first step into the world of Islamic finance in June by issuing sukuk, Islamic bonds which comply with Muslim religious rules.The bonds are to be issued by the majority Muslim Russian republic of Tatarstan in the Volga region, which has embarked on an ambitious drive to attract foreign investment.“Russia will show that it can be interesting for Muslim countries,” one of the project’s backers, Linar Yakupov told AFP.“Right now Islamic banks cannot work in Russia, because our legislation does not take into account the Holy Quran’s restrictions.”Islam forbids borrowing or paying with interest, and sukuk (the plural of the Arabic word for a financial deed) are not based on debt like traditional bonds.Instead, buying the bonds secures partial ownership in a concrete asset like land or a building, and investors are guaranteed a part of the profits generated by this asset.The first sukuk to be issued in Tatarstan’s capital Kazan on June 20 will be going toward financing a major business centre in the city whose construction will cost $200 million.“Sukuk are guaranteed by the Tatarstan government, the operator will be based in Luxembourg, and we know that the international market is ready to buy,” Yakupov said.Among the interested investors are the Jeddah-based Islamic Development Bank, and various banks in the Middle East, Malaysia, and Russia, he said.Russia’s finance ministry told AFP that it “supports Russia’s first emission of Islamic bonds in Tatarstan” but pointed out that “Arab capital is already present in Russia.”Elnour Gurbanov, an analyst at Deloitte, said the initiative “can contribute to attracting Arab capital in Russia, but only in the long-term” since incorporating Islamic finance into Russia’s legislation will take time.Tatarstan has maintained privileged relations with countries in the Middle East and Southeast Asia. It prides itself on maintaining a distinct identity within Russia although talk of secession that followed the collapse of the USSR has now died down.For years it has urged Russia to adopt a legal framework to permit the work of Islamic banks in the manner of Britain, France, or Luxembourg.Bringing Islamic banks to Russia is “possible and even necessary”, Tatarstan’s leader Rustam Minnikhanov told investors in Dubai in early May, according to the RIA Novosti agency.In Moscow, however, federal authorities are showing greater caution. “There is no existing law nor a draft law regulating Islamic finance. Given the lack of eagerness from the federal authorities to study this issue, we should not expect it for another two or three years,” said Oleg Ivanov, vice-president of the Regional Banks Association of Russia.Ivanov’s association has tried without success to include Islamic finance into Russia’s strategy for developing its banking system to 2015, which was adopted by the government two months ago.“The government and the Central Bank did not support us,” Ivanov told AFP.Ivanov added however that the emergence of Islamic finance in the country “will definitely be positive for the development of the financial sector in Russia”, noting that the assets of Islamic banks are estimated at a trillion dollars.Published in The Express Tribune, June 6th, 2011.08:45?06/06/2011ALL NEWSState commission approves 28/29th mission to ISS. Tass 98 BAIKONUR (Kazakhstan), June 6 (Itar-Tass) — The state commission in Baikonur has approved the crew of a next mission to the International Space Station. Soyuz TMA-02M, the second vehicle of the new series with digital systems, will blast off to the ISS overnight to Wednesday, carrying the crew of Sergei Volkov (Roskosmos), Satoshi Furukawa (JAXA) and Michael Fossum (NASA), a source from the Roskosmos space agency told Tass on Monday. The 28/29th mission will continue for five months. The backup crew of Oleg Kononenko, Andre Kuipers and Donald Pettit will stay on Earth till December. The launch is scheduled for 00:12 Moscow time on June 8, and overnight to June 10 the three astronauts are expected to join on board the ISS the crew of Russian cosmonauts Andrei Borisenko and Alexander Samokutyaev and NASA astronaut Ronald Garan, who have worked on board the space station starting from early April. 08:29?06/06/2011ALL NEWSRailway to major plants, coal pit to be built in Khakassia. Tass 57 GORNO-ALTAISK, June 6 (Itar-Tass) — Work will soon begin to design a reserve railway to major aluminium plants and a coal pit in Russia’s republic of Khakassia. Its construction will make it possible to avoid the threat of their stoppage, and will also give a new impetus to the development of republic’s economy, deputy director of En Group Company Rashad Guseinov said on Monday. The official spoke after the launch of a restored railway bridge across the Abakan River. According to him, the project to build the reserve railway will be realized on the basis of state-private partnership. It has already been approved by the Russian Transport Ministry and the Ministry for Regional Development. Last Sunday railway communication was restored across the river near the Kamyshta station, which was suspended after two bridge pillars had collapsed. It took specialists 26 days to restore the only route through which raw materials to aluminium plants of RUSAL Company in Sayanogorsk are delivered and through which coal is removed from the Vostochno-Beisky coal pit of Siberian Coal Energy Company. That railway is also used to deliver equipment for the restoration of the Sayano-Shushenskaya hydropower plant, badly damaged in an accident on August 17, 2009. In order to avoid the stoppage of the Sayanogorsk and Khakassian aluminium plants, raw materials were brought on vehicles along the Abakan-Sayanogorsk highway.08:14?06/06/2011ALL NEWSAltai territory creating timber processing cluster. Tass 90 BARNAUL, June 6 (Itar-Tass) — Timber companies in Russia’s Altai territory will be united into a separate industrial cluster, governor Alexander Karlin said during his visit to one of the region’s biggest timber processing complexes. The creation of a timber processing cluster will allow to resolve the whole range of tasks, including ecologically-friendly utilization of timber waste, the region’s administration told Itar-Tass on Monday. “The cluster’s creation rules out the use of illegal timber in the production,” the governor said. The Altai territory actively applies a cluster-based production development system. The region has already created biopharmaceutical, tourist, agricultural, fuel and energy, energy machine-building and efficient technologies clusters that are successfully operating. 06 June 2011, 10:04Radical Islamists should better move to Mideast rather than live in Russia - presidential envoy to N. Caucasus, June 6, Interfax - Adherents to radical trends in Islam refusing to abide by secular Russian laws should move to Middle Eastern countries, said Russian Deputy Prime Minister and presidential envoy to the North Caucasus Alexander Khloponin."My position is clear: those who do not want to live in Russia according to secular Russian laws should not live here. There are countries in the Middle East for this, and so go and live there," Khloponin said on Rossiya-1 television channel.Some countries neighboring Russia could also welcome such people, he said."There are also some neighboring countries encouraging exactly radical trends in Islam to enter Russian territory," Khloponin said.As for law-abiding people, they should not worry for their wellbeing regardless of their ethnic background or religion, he said."Those who are ready to co-exist peacefully and understand that they live in a secular state where there are laws and the constitution, they can live and work safely on Russian territory," Khloponin said.08:51?06/06/2011ALL NEWSBanditry, property redistribution takes place in N Caucasus-envoy. Tass 78 MOSCOW, June 6 (Itar-Tass) — The Russian president’s envoy to the North Caucasus federal district, Alexander Khloponin, has expressed an opinion that what is going on in the North Caucasus looks more like banditry and redistribution of property. “There is a territory in the North Caucasus where counterterrorist operations are underway. But what is going on there looks more like banditry and redistribution of property than like strongly radical Islamic extremism,” he said in an interview with the Kommersant business daily on Monday. “In 2011 the law enforcement agencies achieved very good results in the fight against extremists in the North Caucasus,” the envoy said. “Practically all ringleaders were destroyed, but we do not stop on this. Now we are facing the task of preventing the illegal armed formations, ranks of the so-called extremists from filling with the youth. For this it is necessary to create conditions for employing our youth.” Khloponin added that police checkpoints will exist on the territory of the Caucasus until the issue of eradiating extremism and terrorism is resolved. “I would like that already by 2013 this issue to be resolved and no checkpoints between the territories to exist,” the envoy said. He promised “toughest measures” against those checkpoint officers “who in fact are racketeering against entrepreneurs and ordinary people.” “Today we have the Internet and mobile phones for this, make records and report about such cases. I will take toughest measures, if such incidents are exposed at these checkpoints,” he said, 11:53?06/06/2011ALL NEWSRF Supr Court to consider Yamadayev murder case sentence legality. Tass 38 MOSCOW, June 6 (Itar-Tass) — Russia’s Supreme Court on Monday is expected to consider the legality of the sentence in the case of murder of former State Duma deputy, Hero of Russia Ruslan Yamadayev. The corresponding appeal was filed by representatives of the defendants. Earlier, the court repeatedly postponed the meeting for various reasons. The Moscow City Court in October 2010 sentenced to 20 years imprisonment Chechen national Aslambek Dadayev, finding him guilty of murder of Yamadayev and attempted murder of former military commandant of Chechnya Sergei Kizyun. The crime accomplice Elimpasha Khatsuyev who, according to the verdict, took the killer to the crime scene and then helped him escape, was sentenced to 15 years imprisonment. Timur Isayev, born in Grozny, was sentenced to 14 years in prison. He was figuring in an episode of attempted murder of Chairman of the Board of KonversBank Alexander Antonov. The defence lawyers appealed the sentence, insisting on its quashing. All the convicts have denied any involvement in the crime and pleaded not guilty. The court established that on September 24, 2008 Dadayev and Khatsuyev on the Smolenskaya Embankment in Moscow fired at the car of Ruslan Yamadayev, killing the politician and seriously injuring his passenger - a retired general and former commandant of Chechnya Sergei Kizyun. Killer Dadayev, according to the investigation, 16 times fired a submachine gun through a partly open armoured glass of the Mercedes 600 car, and the driver Khatsuyev drove him to the crime scene in his car and then helped to escape. On March 11, 2009, members of the same group ambushed Chairman of the Board of KonversBank Alexander Antonov near his office, according to the investigation materials. The killer was Timur Isayev, who fired on the businessman who was coming out of the bank 18 times, seriously wounding him. Ruslan (Khalid) Bekmirzayevich Yamadayev (December 10, 1961 – September 24, 2008) was a Chechen military leader and politician. A member of the high-profile Yamadayev clan. Ruslan Yamadayev belonged to the Gudermes-based Chechen Benoi teip. Along with his brothers Sulim Yamadayev and Dzhabrail Yamadayev, he fought against the Russian forces during the First Chechen War before turning to Russia’s side in 1999. For his struggle against the separatists in the Second Chechen War, Yamadayev was promoted to the rank of colonel and granted the title of Hero of the Russian Federation. From 2003 to 2007, he was a deputy to the State Duma from Chechnya. In 2004 he was nominated for the Chechen presidency. He also ran several Moscow-based businesses for the Yamadayev clan. On September 24, 2008, Ruslan Yamadayev was assassinated in central Moscow near the Russian White House when returning from a meeting in the Kremlin. He was shot ten times while sitting in a car owned by his brother Sulim Yamadayev. Initial press responses reported the name of the victim as Sulim, which was corrected later. The other victim of the shooting, the former military commandant of Chechnya and retired Colonel General Sergei Kizyun, was hospitalised in grave condition. The Russian police launched a criminal case on charges of murder and attempted murder. The pro-Moscow president of Chechnya Ramzan Kadyrov (who had, in the months prior to the assassination, engaged in a bitter rivalry with the Yamadayevs) denied accusations of being behind the killing, and suggested Yamadayev fell victim of a blood feud. Sulim Yamadayev also accused Kadyrov and promised to take revenge. Sulim himself was reported killed on March 29, 2009 in Dubai. Insurgents hit Russian federal police in more Caucasus attacks 6, 2011, 7:38 GMT Moscow - Insurgents opposing Russian control of the restive Caucasus region killed a policeman and injured two more in a series of attacks aimed at law enforcement officials, according to Monday news reports. A roadside bomb hit paramilitary police patrolling in a mountain village of the state of Chechnya Sunday, killing one officer and hospitalizing two more. The province has long been a centre of Muslim insurgent resistance to Russian rule. Army troops were searching the mountain village Alkhazurovo and its vicinity for suspects, a Russian Interior Ministry statement read. A police station in the neighbouring region of Dagestan was hit with automatic weapons fire 'from several bandits' early Sunday morning. Police returned fire, but neither side appeared to have suffered casualties in the firefight, Interfax reported. A police officer in the Dagestani capital of Makhalachka narrowly avoided death or injury later on Monday morning after a bomb concealed in his automobile detonated as he was preparing to go to work. The policeman, a resident of a working-class Makhalachka suburb, noticed a suspicious object beneath his Mercedes and was able to back up a few metres before the blast took place, a police spokesman said. The Kremlin maintains some 100,000 troops and a powerful police force throughout the Caucasus region, and, with rare exceptions, has filled all local governments with its picked representatives. Years of raids on homes by Russian forces, detentions of military-age men and widespread corruption have helped keep alive an anti-government insurgency. The rebels use suicide bombers, roadside bombs and less frequently ambushes to fight the Russians. Officials hired by Russia for local law enforcement jobs are a top assassination target for insurgents, who consider regional policemen traitors. Police officer killed in Chechen blast 06/06/2011One police officer was killed on Sunday when a bomb exploded during a special operation in Russia's volatile southern republic of Chechnya, local police said.Two soldiers were injured in the attack in the mountainous Urus-Martan district, around 20 kilometers south-west of the Chechen capital Grozny.Russian federal troops fought two brutal wars against Islamist separatists in Chechnya in the 1990s and early 2000s. Security forces troops continue to fight militants in the region and its neighboring republics, where terrorist attacks are common.MOSCOW, June 6 (RIA Novosti)?09:34?06/06/2011ALL NEWSPhone terrorist sentenced to 2 years in tight security prison. Tass 107 TYUMEN, June 6 (Itar-Tass) — A telephone terrorist has been sentenced to two years in a tight security prison in the Kurgan region. The press service of the regional prosecutor’s office reported on Monday that this decision was made by the Lebyazhyevsky district court that considered the case of Vyacheslav Glukhov who on April 5, 2011 made a phone call to the district police department and reported that a bomb was planted at the Lebyazhyevsky special boarding school. After the bomb threat call, a total of 80 people, including 72 disabled children were evacuated from the school building. No bomb was found. The court recognised Glukhov guilty of false reporting of an act of terrorism (Article 207 of the RF Criminal Code) and sentenced him to two years in a tight security penal colony. According to the courts’ verdict, Glukhov will also have to compensate for material damage associated with the call of security services amounting to more than 7,000 roubles. 09:32?06/06/2011ALL NEWSInflux of tourists to N Caucasus will grow - Khloponin. Tass 85 MOSCOW, June 6 (Itar-Tass) — The influx of tourists to resorts in the North Caucasus will only grow, the Russian president’s envoy to the North Caucasus federal district, Alexander Khloponin, said in an interview with the Kommersant business daily on Monday. “If you come to a mountain resort neighbouring to Arkhyz that is second to modern resorts in level and quality, you will find out that generally speaking, you practically cannot get place there,” he said. “Local sanatoriums and hotels chronically lack vacancies. Thus, we have no problems with occupancy of mountain resorts.” “Moreover, there is such a notion as historical memory, when traditions are passed over from generation to generation. People who got used to come to the Caucasus and Karachai-Cherkessia vacate there – go skiing, mountaineering and rafting,” the envoy said. “The number of tourists will only increase, especially when a high-level and high-quality cluster is created,” Khloponin said recalling that a tourist cluster is being constructed in the North Caucasus. He assured that there will be no opportunity for stealing money earmarked for the construction of ski resorts. “In compliance with the existing model of government and business partnership, the government will invest exclusively into the infrastructure development. An investor will look after his money as it should be,” the envoy said. Khloponin added that state-run North Caucasus Resorts Company together with France’s Caisse des Depots et Consignations will set up a managing company that will monitor and manage investments into the ski resorts’ infrastructure development. The French company is ready to invest around 2 billion euro into the joint venture. The envoy described corruption as “a disease that became symptomatic for the whole Russia.” “It is impossible to fight corruption at a separate territory, comprehensive efforts should be taken all over the country. We will make progress in this direction if we abide by two conditions – develop an independent judicial system and create a civil society,” Khloponin said. 09:08?06/06/2011ALL NEWSOver 50 wildfires fixed in Russian Irkutsk region. Tass 58 IRKUTSK, June 6 (Itar-Tass) — A total of 54 wildfires affecting the area of 3,468 hectares are fixed in Russia’s Irkutsk region. Two of them are major fires, covering all in all the area of 2,420 hectares. Eleven wildfires are raging at the distance of less than ten kilometres away from local settlements, sources from the regional department of the Russian Ministry for Emergency Situations told Tass on Monday. All in all, taiga is burning in 13 districts of the Baikal region. The Nizhneilimsky district, where the blaze has engulfed the area of almost 2,000 hectares, is the most hard hit. On the whole, a fire alert regime is in place in 23 municipal districts, including in Bratsk, the second biggest city of the region. 07:37?06/06/2011ALL NEWSSome 417,200 hectares of lands burnt down in RF's Far East in 2011. Tass 82 KHABAROVSK, June 6 (Itar-Tass) —— Some 417,200 hectares of lands, including 313,700 hectares of forests, have burnt down in the Russian Far East since the start of the fire-prone season. The fire situation was put under control only in late May, a source in the forest economy department in the Far Eastern Federal District told Itar-Tass on Monday. Some 13 fires were reported on a total area of 7,700 hectares in the Far Eastern Federal District by Monday morning, the source said. The fire area in the forests and other lands went down 300 hectares for the past day. Six from seven fires sparked up on Sunday were localized. Yakutia remains in the hardest fire situation in the Far East. Six fires were reported on over 6,700 hectares in the republic. Two of six fires were localized, the Yakutia forest economy department told Itar-Tass. Seven forest fires on 266 hectares were put down in Yakutia last weekend. Some 348 people, 23 units of machinery, two helicopters Mi-8 and two airplanes An-2 were involved in the firefighting efforts. The same firefighting forces keep fighting the forest fires on Monday. Five fires are raging in the Khabarovsk Territory and one fire in the Primorsky Territory. Some 568 people and 67 units of machinery, including nine aircraft, were involved in the firefighting efforts in the Russian Far East, the Far Eastern regional EMERCOM center reported. No threat for settlements and economic facilities exists. 07:18?06/06/2011ALL NEWSAll forest fires put out in Kamchatka. Tass 54 PETROPAVLOVSK-KAMCHATSKY, June 6 (Itar-Tass) —— All forest fires were put out in Kamchatka, the press service of the Kamchatka territorial emergencies department told Itar-Tass on Monday. Eight forest fires on a total area of a little bit more than 24 hectares were reported in Kamchatka from the beginning of spring. Five forest fires were extinguished in the Elizovo, Ust-Kamchatsk and Milkovo districts of the territory last weekend. The forest fire situation on the peninsula remains quite calm against the summer of 2010, the press service reported. Then for the same period of time more than 30 forest fires were reported on a total area of more than 2,500 hectares. Senior Russian military officers to lose posts over military depots incidents 6, 2011 00:58 Moscow TimeSeveral senior military officers will lose their positions over the incidents at military depots in the Russian regions.Arsenal 102 in Udmurtia and 99 in Bashkortostan are beyond salvaging, said a source in the Defense Ministry.Their leadership will be recommended for dismissal from the Armed Forces for negligent performance of their duties.Also recommended for discharge will be the Defense Ministry Chief of Artillery Missile command and Deputy Commander of the Central Military District - the chief of artillery-missile armaments.10:29?06/06/2011ALL NEWSDamage caused by Udmurt ammo depot blasts assessed at RUB 1 bln. Tass 109 IZHEVSK, June 6 (Itar-Tass) — The damage to the housing fund caused by a fire and explosions at military arsenal No 102 near the village of Pugachevo in Udmurtia, is 1 billion roubles. Construction Minister of Udmurtia Alexei Shikalov cited these data at a meeting with the republic’s head. He noted that housing fund facilities in 32 localities were damaged as a result of the emergency. Builders have surveyed 5,821 houses, of which 2,862 were damaged. Windows were smashed in the houses, roofs were torn down and walls collapsed in some of the houses. At the same time, said Shikalov, damage to commercial properties has not been calculated yet. The damage to 27 houses located in the military town has also not been taken into account. According to chief of the Russian Emergency Situations Ministry’s (EMERCOM) main department for Udmurtia Pyotr Fomin, it has been estimated that 123,950 sheets of slate, 80 square metres of glass, more than 1 kilometres of cable are needed for the restoration of the buildings. A total of 12 thousand square metres of glass have been provided from the reserve of the government of Udmurtia. The emergency at the military arsenal happened on the night to June 3. About 100 injured have applied for medical aid. Russia’s EMERCOM has transferred territories of the arsenal in Udmurtia under control of the Defence Ministry. “All open fires are extinguished, and the situation is under control,” regional branch of Russia’s EMERCOM reported earlier. The territory of the military and the technical zone are free from explosives. On Saturday, rescuers located 740 explosive objects and were preparing a place to destroy them. “EMERCOM’s robots have fulfilled the task, the aviation has finalised their mission,” the source said. “The aviation made 178 flights and dropped 2,204 tonnes of water on the fire.” Udmurtia’s branch of Russia's Federal Security Service said that “an act of terror could not be a reason of the fire and explosions at the arsenal.” 03:13?06/06/2011ALL NEWSEMERCOM task forces involved in ammo firefighting back to bases. Tass 129 MOSCOW, June 6 (Itar-Tass) —— The EMERCOM task force, including the aviation, have completed a firefighting operation at an ammunition depot in Udmurtia, a source in the information department of the Ministry of Emergency Situations (EMERCOM) told Itar-Tass on Sunday. “An EMERCOM airplane Il-76 arrived at 6.07 p.m. Moscow time on Sunday from Udmurtia at the Moscow regional airfield Ramenskoye. The airplane brought the Leader emergency task force and firefighting robots back to Moscow,” the source said. “The EMERCOM task forces came back to their permanent bases,” the source added. Open fires were put down, a source in the Volga regional EMERCOM center told Itar-Tass earlier. The fire situation is under control. “The chief of the Volga regional EMERCOM center Lieut. Gen. Igor Panshin and military officials signed a report of transfer of extinguished sections of the ammunition depot,” the source said. The military forces took the ammunition depot under control, the source noted. The military township and the technical zone of the ammunition depot were being searched through for any explosive objects in a field engineering reconnaissance mission. Some 740 highly explosive objects have been found for the past day. The found unexploded ammunition will be destroyed at a special place cleaned up at the ammunition depot. “The EMERCOM robots have completed their mission and will be withdrawn within 24 hours. The EMERCOM aviation also completed its mission. The EMERCOM aviation has made 178 water discharges, dropping 2,204 tonnes of water on the fires,” the source said. A major fire, which triggered the detonation of hundreds of shells at the 102nd ammunition depot in the village of Pugachevo in Udmurtia, broke out overnight to June 3. 04:44?06/06/2011ALL NEWSServicemen, outsourcing companies to restore ammo blast-hit houses. Tass 138a MOSCOW, June 6 (Itar-Tass) —— The servicemen from the Central Military District have examined 11 settlements, more than 4,500 residential houses and over 30 health care facilities, educational institutions and social facilities, which are situated near the 102nd artillery ammunition depot in Udmurtia, spokesman for the commander of the Troops in the Central Military District Col. Yaroslav Roshchupkin told Itar-Tass on Sunday. “An action plan for restoration works was made up to be performed by the military staff of the 102nd ammunition depot, the military district artillery formation and outsourcing organizations, which concluded the contracts with the Defence Ministry,” Roshchupkin said. “These restoration works include the repairs and restoration of the roofs and the installation of new doors and windows instead of those broken down,” he noted. Roshchupkin also noted that two parties on a field engineering reconnaissance mission will keep working to find and destroy highly explosive objects in the blast-hit settlements and along the route of the gas pipeline. “They focus attention on spotting and defusing the ammunition placed underground,” the press secretary said. “The Defence Ministry will pay all the expenses for the field engineering works,” he elaborated. Roshchupkin noted that the breach parties will be cleaning up the routes for the machinery, fully-tracked fire engines (based on the tank T-54) will be pouring water on probable fires in the technical zone of the ammunition depot, two parties on an field engineering reconnaissance mission will be unarming highly explosive objects at urgent requests from the municipal chiefs on Monday. 11:07?06/06/2011ALL NEWSViktor Baturin gets 3 year suspended sentence for realty fraud. Tass 139 MOSCOW, June 6 (Itar-Tass) — The Presnensky District Court of Moscow on Monday sentenced businessman Viktor Baturin – the brother of Moscow ex-mayor Yuri Luzhkov’s wife. The businessman got a 3 years’ suspended sentence. According to the verdict, the defendant's guilt of realty fraud (large-scale) is proven. During the oral statements of the parties the prosecutor requested a two-year suspended sentence for Baturin with a three-year probation. The defence lawyers asked to acquit him. The defendant himself also insisted on his innocence. Former Moscow mayor's brother-in-law gets suspended sentence for fraud 06/06/2011A Moscow court on Monday sentenced Russian businessman Viktor Baturin, the brother-in-law of former Moscow mayor Yuri Luzhkov, to a suspended three-year jail term for fraud.Baturin, the brother of property construction tycoon Yelena Baturina, was found guilty of selling one property in downtown Moscow to two men for $857,000 and $1.5 within the space of one month in 2008.Baturin pleaded not guilty to the charges against him.The Presnensky district court also fined Baturin $10,800 in damages.Dmitry Zhuravlyov, a gas entrepreneur who forked out the $1.5 million in June 2008, said Baturin had returned his money to him.In a newspaper interview last year, Baturin said he was being targeted by his sister, who he fell out with in 2005 over the running of their construction company Inteco."I am sure that my sister has a hand in this," he told the Kommersant daily in November.Baturina, who is believed to be Russia's richest woman with an estimated fortune of $1.1 billion, has denied the claim. Baturin asked prosecutors in fall 2010 to open a probe against his sister over 3 billion rubles ($100 million) of unpaid work he did for the construction giant.MOSCOW, June 6 (RIA Novosti)PRESS DIGEST - Russia - June 6 EDTMOSCOW, June 6 (Reuters) - The following are some of the leading stories in Russia's newspapers on Monday. Reuters has not verified these stories and does not vouch for their accuracy.KOMMERSANTkommersant.ru- Russia's lawmakers have started discussing amendments to legislation establishing full control over all export and import operations including financial tranactions. The new bill is expected to come in force by 2013, the daily says.- Russia will take comprehensive measures if NATO defensive systems in Europe infringe Russia's nuclear strategic forces, Deputy Defence Minister Anatoly Antonov says.ROSSIISKAYA GAZETArg.ru- Sberbank SBER03MM> CEO German Gref says in an interview that state presence in Sberbank could be cut to 25 percent from 60 percent.- Russia has no grounds for lifting its ban on vegetables imported form EU, Russia's health watch-dog Gennady Onishchenko says, adding that the e.coli infection spreading from Germany has appeared to be more serious as it was expected earlier.RBK DAILYrbcdaily.ru- Russia's government is expecting that Uralkali (URKA.MM: Quote, Profile, Research, Stock Buzz) potage producer, Siberian coal company, United Grain company and Metalinvest will take part in financing the launch of new Black sea terminal Taman in Krasnodar region.NEZAVISIMAYA GAZETAng.ru- Russia's ministries of culture and economic development have drafted a bill which will regulate the release of films which they deem justify terrorism or which contain information about banned organisations, the daily reports.- The government could spend up to 46 billion roubles to keep the national railways monopoly from rising its tariffs.IZVESTIAizvestia.ru- Russia has supplied India with five MiG-29K/KUB ship borne fighters as the first part of 16 ordered by Indian military.Russian Press at a Glance, Monday, June 6, 2011 06/06/2011A brief look at what is in the Russian papers todayPOLITICSFueled by harsh words from Prime Minister Vladimir Putin, Moscow's decision to ban all European vegetable imports because of a deadly E. coli outbreak is now threatening to derail relations with Brussels just days before a summit with EU leaders(Moscow Times)The remote Pacific island nation of Vanuatu has denied recognizing the independence of Georgia's breakaway region of Abkhazia, contradicting a statement made by an Abkhaz official days earlier(Moscow Times)The Moscow authorities will give priority when allocating permits to rally in the city to political groups that can amass vast numbers of people over small fringe groups(Kommersant)ECONOMY & BUSINESSBelarus made a first step toward overcoming a deep currency crisis on Saturday, securing a $3 billion loan from a Russian-led bailout fund, but said it still needed funding of up to $8 billion from the IMF(Moscow Times, Moskovskiye Novosti)The European Bank for Reconstruction and Development and the International Finance Corporation could buy part of the Russian Central Bank's stake in MICEX, Russia's leading stock exchange(Vedomosti)Loan interest rates in Russia will rise in the fall, Sberbank President German Gref said(Vedomosti)SOCIETYA Moscow military court has sanctioned the arrest of the country's chief military doctor on corruption charges, as well as a subordinate who fought riot police officers bare-handed during his arrest(Moscow Times)The car of Finance Minister Alexei Kudrin struck a homeless jaywalker, who rushed away fearing retaliation before he could receive first aid, news reports said(Moscow Times)Three large private pension funds were banned from independently operating in their main market segment(Kommersant)The Russian statistics service has found that Muscovites work less than the residents of other regions and are less interested in watching TV or reading books. Much of the time saved is spent sitting in traffic jams: traveling in Moscow takes twice as long as in other cities(Kommersant)The prosecutor general's office reported mass violations of anti-corruption laws among police in the North Caucasus Federal District, with many police officers conducting illegal businesses dealings or concealing their incomes. The department denied the accusations(Kommersant)June 03, 2011Patrick Leahy: If U.S. were to breach New START with offensive weapons, Russia has right to quit it. Senator Patrick Leahy, chairman of the State and Foreign Operations subcommittee in the U.S. Senate‘s Appropriations Committee, who visited Russia this week has given an interview to Interfax in which he speaks about U.S.-Russian bilateral relations, in particular the New START treaty and cooperation on Afghanistan, as well as the Middle East situation, the elimination of Osama Bin Laden and support to civil societies in Russia and Georgia.Question: What are the reasons for cutting the U.S.‘ support for the Russian civil society?Answer: The cuts are not aimed at Russian civil society. We haven‘t cut our support to Russian civil society. We have made major cuts in all our budgets. I am the chairman of the committee that handles all the funding of the State Department and all the funding for foreign aid, NGOs and humanitarian organizations. We have made cuts in every single area. We find the NGOs here in Russia to be very valuable. I met with a dozen of NGO representatives, very impressive in what they are doing. I support them. We have been cutting our budget in virtually every area. We are also cutting our budget in a lot of U.S. domestic programs that are very valuable to us.Q: And what about other countries of the former Soviet Union? For instance, recent weeks have seen some riots, disturbances in Belarus and Georgia. Is the U.S. going to support civil societies there, in these countries?A.: We have supported civil society in Georgia. We hope for moves towards democracy there. We do not agree with everything Georgians do by any means, and we do not agree with all that Russians do. But we do agree that there is great potential within some of the civil societies, educational, humanitarian and otherwise, and we will continue to support those.Q.: What do you think about the recent situation in Georgia? I mean those anti-riot measures?A.: I think that we have a number of areas around the world where people want to demonstrate. There should be a right in any country that claims to be democratic. They should be allowed to demonstrate as long as they are doing it peacefully without destruction and creating criminal activities. They ought to be allowed to demonstrate. I think that when governments put down peaceful demonstrations by violent means, ultimately it hurts the government. And that is a bad mistake on their part. It‘s certainly a wrong thing to do in any event, whether it hurts the government or not, it is a wrong thing to do. If a country wants to claim that its people are free, they better be free to dissent against the government, and they got to be free to state what their disagreements are with the government. We have people disagree with our government all the time in America. Ultimately, it makes us stronger, because it demonstrates that every voice can be heard. I have people come sometimes and demonstrate in front of my office. If this happens in cold weather, we bring out hot coffee for them, and I think it is wonderful. People should be allowed to do this.Q.: Turning back to Russia. What is your opinion on the criminal cases against Khodorkovsky and Magnitsky? Is it possible that the U.S. Congress will impose sanctions on the Russian side in connection to these cases?A.: What I know about the cases, is what I read in papers. I read the statement on the Magnitsky case and on the Khodorkovsky case. When you read the accounts of Khodorkovky‘s case in the European press and the U.S. press, you get a strong impression that you do not have an independent judiciary, especially in the second round of decisions. And again no democracy truly exists without an independent judiciary. This did not come across as an independent judiciary. The basic facts in Khodorkovsky‘s case - I‘m not going to judge those - but it certainly gives an impression that it‘s not being an independent judiciary. In the other case, again without going into the facts, we have a person who was ill and was being held in prison without anybody being able to at least take care of the illness. That‘s totally wrong. That would be unacceptable in any country, unacceptable in this case or in so many others we have heard about in the past. I would urge the Russians to make their prison system, their post-arrest situations far more transparent. We have to in our country. There were times when our authorities wished they did not have to, but overall we are better because they do have to. I believe the matter has gone before the Senate Foreign Relations Committee on Magnitsky to take actions on visas. And I have no idea whether this will go anywhere or not. Again I‘ve always been reluctant to interfere with a judicial system in another country if it is transparent.Q.: Talking about our bilateral relations, what are the prospects for scrapping the Jackson-Vanik Amendment this year? Is it true that the Congress and the Senate are going to adopt a new document concerning the current situation in Russia instead of this amendment?A.: The Jackson-Vanik Amendment [if it had any use at all] is long passed. I‘ve never been a supporter of the Jackson-Vanik. I think strong bilateral relations with another country are usually the best way to avoid huge mistakes. I believe our restrictions on Cuba have not changed a single thing there. If anything, the U.S. embargo on Cuba (which is not your question, but just an example) strengthened Castro and sometimes allows the government to blame all their problems on the U.S.. I agree with what President Obama said that this is the reset of our relations with Russia. At the American Chamber of Commerce, I heard many of them say, including Republicans, that they applauded the President‘s statement that we want to reset relations. And of course it helped that here in Russia we have a very good active embassy. The Ambassador speaks perfect Russian and has done a great deal of outreach. The idea of reset seems like a simple term but reflects a very ongoing open policy.Q.: You mentioned the U.S. embassy to Russia. Some U.S. media speculated that Michael McFaul will be nominated as the next U.S. ambassador. What do you think of that? Will you support his nomination?A.: I just saw that as we were leaving Washington. As you know, there is always a turnover of ambassadors, and we had a series of very good ambassadors here. Our current ambassador has the complete confidence of President Obama. McFaul also has the President‘s confidence. And the reaction I‘ve got is that it will be a good choice apparently because of his own experience. I will emphasize that to people who see these changes, this is not in any way a criticism of our current ambassador who is highly respected by both Democrats and Republicans in the U.S., by Americans. A respect what he has earned as a career diplomat. Ambassadors change. I think that with this new nominee it will have to take a few months to go through all background and confirmation by the U.S. Senate. I think that he is somebody who will be confirmed overwhelmingly by both Republicans and Democrats, and that will reflect the continuation of the American policy of wanting to have cooperation and work with Russia. There is a lot at stake for both Russia and the U.S. to have cooperation. This is not the Cold War rivalry, not how many warheads you have versus how may warheads we have. We could have fired more than enough to destroy the whole planet, and the fear was that we would, and now we are not adversaries. The Cold War era which unfortunately shaped many of the policies of both the USSR and the U.S. and often times to the detriment of both countries. We are not in the Cold War situation. Both countries face economic problems, both countries face problems of growth, both countries face the threat of terrorism internally or externally. In some ways that is harder to counter than the nuclear ballistic missiles, because you do not know where it is coming from. And yet both countries have the ability, intelligence ability and otherwise, and the global reach to stop terrorism in many, many instances. And so it is in our interest to cooperate. I know that it was not your question but I started to mention that.Q.: The New START treaty came one of the major points of the reset. But still it has some problems like missile defense. Do you think that Russia has a legal right to break this treaty should the U.S. continue to develop their missile defense?A.: That is not written into the treaty. I think that Russia‘s legal rights are within the four corners of the treaty: to what they agreed or not agreed. If the U.S. were to breach the treaty with offensive weapons, it has the right to breach the treaty. There is no provision as I recall to opt out of the treaty for the progression of defensive weapons. I know there are also ongoing discussions between the U.S. and Russia on what types of defensive weapons we have. These defensive weapons are not aimed at Russia, and there is no way they could be aimed at Russia.Q.: But why is the U.S. so unwilling to provide Russia with legally binding guarantees that this missile system is not directed against Russia?A.: We have given legally binding guarantees on offensive weapons against Russia. And that is really what they need. There is nothing we are doing here. They can see themselves. It is not an offensive weapon.Q.: In recent years Afghanistan has become one of the major points of Russian-U.S. cooperation. Russia and the U.S. signed a contract for supplying Russian helicopters to Afghanistan. Could you specify the sum that the U.S. is ready to devote for this purpose?A.: I do not know the sum. I know that Russia has made a major complement to cooperation that has been allowing overflights to U.S. in supplying Afghanistan. I find it interesting when I‘m going to our bases in Afghanistan there can be seen a number of Russian airplanes, transport planes. Russian helicopters are already there. Last time I saw a Russian helicopter in Kandahar. I do not know who was flying them, but it was taking off. I have no problem with Russia‘s selling helicopters to Afghanistan. There is no question that the Afghans should be able to train their pilots to a degree that they can easily fly them.Q.: One of the major concerns for the international community is the situation in Northern Africa, first of all in Libya. Do you think that the U.S. was right to start a NATO operation against Libya, and do you think it is legal that the coalition forces want to eliminate Col. Gaddafi?A.: The U.S. did not begin action in Libya. It was a NATO-led and directed action. The U.S. acted as a part of NATO in accordance with a significant UN resolution that could have been vetoed by any number of countries, including Russia. I listened to what the Russian president has said that it is time for Gaddafi to go. I agree with him. As far as targeting Gaddafi, if the U.S. had targeted Gaddafi, he would not be alive today. We target those forces he uses against his own people, he was using his forces to kill and murder innocent Libyans who in his mind spoke about their own aspirations for freedom. That we stopped. I think if you look at the [opposition Libyan forces] their primary target is Gaddafi. There has been great care in the bombing to date [by NATO forces] to go after command and control airfields, tanks, planes, but not Gaddafi. If that changes he would be well advised to seek another place to live. Press accounts say that Zuma from South Africa supposedly offered places to Gaddafi to go, but Gaddafi refused to leave. I think this is a mistake. He cannot stay dictator of this country all these years. The dictatorship which has made him and members of his family extraordinary wealthy. Things are changing, times are changing and that [regime] is also going to have to change.Q.: What about other North African and Middle East countries like Syria. The U.S. often says that it supports democracies in the Middle East. What is this support like? Is it financial, political or something else. If it is financial could you specify the sums that the U.S. gives to the Libyan or Syrian opposition?A.: We will support democratic movements that speak up for human rights and democracy all around the world. Syria I think is making the same mistakes others have made thinking that they can just stop people‘s hopes and aspirations with tanks and guns. It does not work. It has never worked in history. It ultimately changes. Syria is not a country that wants to be like North Korea for example. I do not want and cannot predict where Syria will be in two or three years. I suspect a changed state. I know there is a lot of concern in Iran, which has openly but also covertly supported Syria with money and weapons, intelligence operatives, and others.Q.: You mentioned our common fight against terrorism. One of the biggest victories lately has been the elimination of Bin Laden. Do you think it was legal? Is it true that in the U.S. had spent several billion dollars to track him down and eliminate over the recent years?A.: The billion dollars is greatly exaggerated. Bin Laden, the mastermind, struck at the U.S. within our country, killing thousands of totally innocent people: Christians, Muslims and Jews all died in that strike. Children, adults totally innocent people. It would be the height of stupidity for someone to think that the U.S. is not going to react and pursue who did that. Bin Laden could have turned himself in anytime he wanted, he would have been brought back and held for trial in U.S., he would have been given the same rights as any criminal. He could have been treated the same as any criminal, be it a mass murderer in this case. He is a terrorist. He did not. We learned more of other attacks against our embassies and other things he had organized. I think he would have been caught in Afghanistan a decade ago when he was basically surrounded. A big mistake by the U.S. was taking our special forces and others out of there to go into a war in Iraq. Iraq had absolutely nothing to do with 9/11. Saddam Hussein had nothing to do with 9/11. And unfortunately many in the government tried to act as though he did. While diverting our forces, Bin Laden was able to escape into Pakistan, and it cost maybe a trillion dollars and loss of countless lives in Iraq. It had nothing to do with 9/11. When President Obama came to the office, this has been made public. One of his first orders to the new head of the CIA Leon Panetta were to track and find Osama Bin Laden, capture him and bring him in. There was a special governmental unit who tracked Bin Laden. It was expensive. It was not billions of dollars, but it was expensive. They tracked him and then ultimately came about his capture where he had been living next to a large military installation in Pakistan for years. The execution of the capture was one that very few countries could have carried out. The President wanted to avoid bombing which would have killed children, women and innocent people, and he might not have known whether Bin Laden was actually dead. They did it with great precision. He was killed. His body was treated with appropriate Muslim respect and he was buried at sea.Russia’s students look to the west Stephen Hoare Published: June 6 2011 00:07 | Last updated: June 6 2011 00:07Michail Yurin graduated last year with an EMBA from the Institute of Business Studies-Moscow. A consultant specialising in distribution and logistics, Mr Yurin believes his degree has helped his business considerably and that his EMBA – an MBA for working executives – gave him sufficient exposure to western business practice.However Mr Yurin is in a minority. Although interest in management education in Russia is increasing as the economy grows, many Russian students are opting to study for an MBA outside the country. According to the Graduate Management Admission Council, last year 2,019 Russian citizens took the GMAT, or Graduate Management Admission Test, an increase of 64 per cent compared with 2006. But many of these would-be students either sent their scores to US schools last year (53 per cent) or schools in the UK and France. Only 2.4 per cent of Russian examinees sent their score reports to Russian programmes in 2010.There are 150 business schools in Russia offering an MBA, but apart from the 12 accredited or in the process of accreditation by the UK-based Association of MBAs, none has accreditation from either the US-based AACSB or Equis, the accrediting arm of the European Foundation for Management Development. Most MBAs are taught in Russian and many schools are seen as lacking the drive and innovation of their western counterparts. EFMD’s accreditation process favours MBA programmes that have a strong appeal to international students.Only a handful of Russian MBA candidates would consider studying in their home country, says Zoya Zaitseva, global operations director of the QS World MBA tour.“The majority of Russian business professionals want to gain international experience and study in a culturally diverse classroom.”To counter negative perceptions the Russian government is investing heavily in its elite Moscow School of Management Skolkovo, set up in 2006. Dmitry Medvedev, Russia’s president, has given this prestige project his backing and is chair of the business school. There are currently 145 students on Skolkovo’s MBA and EMBA programmes and numbers are rising.Other top Russian schools include IBS-Moscow, the Graduate School of International Business, Graduate School of Management St Petersburg University and the Moscow School of Social and Economic Sciences. Several western business schools – Duke in the US, Vlerick Leuven Ghent, Stockholm School of Economics, Grenoble Graduate School of Business and Kingston University in the UK have opened campuses in Moscow and St Petersburg, often with local partners and government support.Other business schools are finding an alternative route into the Russian market. For example, Insead in Paris and Singapore and London Business School are delivering executive education to one of Russia’s biggest financial institutions, Sberbank.“The bank is undergoing a huge programme of transformation and embracing a new, more efficient culture,” says Irina Pronina, Sberbank head of learning and development. “Companies who provide good educational opportunities for their people become employers of choice,” she adds. Sberbank opted for western schools because it wants both to become more international and to prepare its managers to operate globally, Ms Pronina believes Sberbank’s move will spark interest in western MBAs. “Our training consultants aim to show our high potential, the range of possible programmes being delivered by western business schools and we certainly hope some of our best people will go on to take an MBA.”Vlerick has run a part-time MBA from its campus in St Petersburg for the past five years and will launch an EMBA in Moscow later this year. However, Peter Rafferty, director of international business at Vlerick cautions that even in good times the Russian market is a risky proposition for business schools.“There are political risks to consider. Establishing a business school in Russia is a completely bureaucratic process. Your building needs to be approved. The institution needs to be approved and your course programme design needs approval,” he says.Nevertheless Dave Wilson, president and chief executive of GMAC, believes that Russia is on the cusp of growth in management education. “Russia has some world class universities and that is always a strong foundation for the building of world class business schools.“Moreover, as Russia itself grows, the demand for qualified managers will increase exponentially,” he says.Copyright The Financial Times Limited 2011. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.5 June 2011 Last updated at 23:04 GMT Russia social networking site speaks for dead soldiers Katia Moskvitch Science and technology reporter, BBC News "Hello, my name is Nikolay, I am 24 years old and I died serving in the Russian army."Twenty-seven young men, many in military uniform, gaze out from a page on the social networking site Odnoklassniki.ru - a Russian equivalent of Facebook. Many smile, looking happy and proud.All of them have died while in the army - but only a few perished in actual combat operations in Chechnya or Dagestan.A non-governmental charity, MThe Mother's Right Foundation, has set up the unusual page. It says that the majority died from extreme bullying, crime, bad living conditions or the abnormal psychological climate in the army.Some were killed by fellow servicemen, shot at point-blank range or beaten to death.Others were forced to commit suicide by constant violence and abuse, the charity claims.But on Odnoklassniki.ru, the men all look very much alive.Users can add them as friends, look at their photos, write on their walls or send a private message.And in their bios, they describe their lives - and deaths - in the first person.Nikolay Ishimov from the village of Mezhozernyj, not far from Chelyabinsk tells his story."On 20 August 2007, in front of 47 fellow soldiers, I was shot by a drunkenofficer, Vladimir Bazelev, just like that, for no reason."The bullet hit me right between the eyes; I died instantly."After three court cases and with the help of the Mother's Right, my mom managed to get my killer jailed for five years and eight months. "But my mom still cries, every day… Sometimes my parents see me in their dreams."Hearts and minds Only weeks into the internet campaign, this unusual way of drawing attention to the problem of violence in the Russian army has already got people talking, says the foundation's head, Veronica Marchenko."By sharing this information with the world, we show what happened not with some abstract words and statistics, but with these concrete examples, these boys, so that people start thinking about whether this is normal, and what they can do to change it."She explains that by using the first-person format, saying "I died, I was killed", the charity was suddenly able to hit a nerve, to get a reaction from people."You may live in the same building as a woman, but only find out that her son died in the army from this social network, because so many people go online and interact with one another more than they interact with their neighbours."Since 1990, The Mother's Right has been providing free legal aid and support to parents of deceased soldiers, guiding them through the labyrinths of the Russian court system.In 2009, the US First Lady Michelle Obama and US Secretary of State Hillary Clinton presented Veronica Marchenko with a prestigious International Women of Courage award for her work.Ms Marchenko says that parents of dead soldiers usually not only seek financial compensation and justice, but also attempt to establish why and how their son died. The most common verdict on a young conscript's death is suicide, but parents often say that after examining their child's body, they find internal injuries and fractured bones.Some believe that soldiers have been beaten to death then put into a noose to make it look like suicide, or even forced to hang themselves.Tortured Ninteen-year-old Igor Andreev from Saint Petersburg died in 2005. He was found hanging from his belt on a train while being transferred from one military unit to another."We were so shocked and shaken by the news that we never performed an autopsy," says Igor's mother Lyudmila Strugova, sobbing."They told us that his body had been lying in the coffin for five days and that they had forgotten to embalm it, so they said not to open it.""How is that possible? Why wouldn't they let us open the coffin?" she asks.On the website, Igor's story is laid bare for all to see."I was constantly bullied and abused by other soldiers: they demanded money, beat me, I was covered in bruises and haematomas," Igor "writes"."In March 2005, I was very badly beaten by a soldier, Ruslan Romadov, because I was unable to get the money for him. I had to ask my parents for money, and I come from a poor family."Serving in the president's unit, these constant beatings, extortion and humiliation broke me."Sobbing, Igor's mother says she had heard the army could be tough, but her family had never imagined the full extent of it - including the complete lack of punishment for the abusers while Igor was still alive."In court, I looked the officer in the eyes and asked him why my son was tortured, deprived of sleep for nights in a row, made to stand in the corner, constantly severely beaten - all of this is written in his case documents," she says."I did not get a real answer, but thanks to the lawyers from the charity, we were able to at least get the main person responsible for the abuse behind bars, and we got financial compensation."Igor and Nikolay's deaths are not isolated cases.Activists say thousands of Russian military personnel die from non-combat incidents every year - and many more come back home either mentally or physically handicapped, or both.Many are said to be the victims of "dedovshchina" - a brutal form of military hazing.Rite of passage One conscript, 19-year-old Andrei Sychev, made headlines in 2006 when his legs and genitals were amputated after he was forced to squat for several hours during New Year's Eve, and then tied to a chair and brutally beaten.His complaints of severe pain were ignored, and when he was finally hospitalised four days later, he had gangrene in his legs and doctors had to remove them.Hearing such horror stories, many young men try to avoid service any way they can, sometimes paying thousands of dollars in bribes or pretending to be clinically insane and spending months in a mental institution. The Russian government has been trying to eradicate the problem for some time. In 2008, the Defence Minister, Anatoliy Serdyukov, announced military reforms: cutting down the number of officers, reducing the service time to one year and eliminating some cadre formations and units, among other changes."It's much easier now that the service period has been reduced - there are no psychological reasons to first endure the service and then to take it out on the new recruits," explains Mikhail Nenashev, a Russian MP and member of the Duma defence committee.But Alexander Golts disagrees.He says that now the function of "enforcing discipline" - and all the abuses of power that come with it - lies with those "who have bigger fists".The Ministry of Defence acknowledges that several hundred soldiers - about 500 - still die every year during peace-time. NGOs say that the real figure is several times higher, putting the number at 2,000-3,000 deaths per year.Initiatives, such as The Mother's Right, help to keep up the pressure for change. For Igor Andreev's mother, it is a way to ensure that her son's death was not completely in vain.Nothing will bring Igor back, but sharing his story online could help save the lives of other young Russians and spare their families from pain. First LDS stake in Russia organized: Sunday, June 5, 2011 2:35 p.m. MDT By Scott Taylor,?Deseret NewsMOSCOW — The LDS Church's first stake in Russia — its second in the former Soviet Union — was created Sunday.Elder Russell M. Nelson of The Church of Jesus Christ of Latter-day Saints' Quorum of the Twelve Apostles organized the Moscow Russia Stake in a meeting attended by more than 1,100 in the Moscow's Amber Plaza auditorium.A Mormon stake is a geographic organizational and administrative unit comprised of local congregations called wards and branches. With a stake similar to what other faiths call a diocese, the LDS Church has 2,926 stakes worldwide.The LDS Church counts more than 21,000 members in Russia spread throughout 116 congregations in the country. The Moscow Russia Stake contains six wards and three branches. The new stake presidency includes Yakov Mikhaylovich Boyko as president, Vladimir Nikolaivich Astashov as first counselor and Viktor Mikhaylovich Kremenchuk as second counselor, with Vyacheslav Viktorovich Protopopov as stake patriarch.The first stake in the former Soviet Union was created in Ukraine almost exactly seven years previously, with Elder Nelson organizing the Kyiv Ukraine Stake on May 30, 2004. The Kyiv Ukraine Temple — the first Mormon temple in the former Soviet Union — was dedicated in August 2010 by LDS Church President Thomas S. Monson.Early LDS Church leaders were mindful of Russia. In 1843, Joseph Smith appointed Orson Hyde and George J. Adams to prepare for a never-fulfilled mission to the "vast empire" of Russia, to which "is attached some of the most important things concerning the advancement and building up of the kingdom of God in the last days."Russia's first Mormon converts were Johan and Alma Lindelof, baptized in St. Petersburg's Neva River in June 1895, many years after Lindelof heard the gospel in his native Finland, married, moved to Russia, worked as a goldsmith and petitioned the church's Scandinavian Mission.Other missionaries occasionally visited the Lindelofs over the years, with Elder Francis M. Lyman of the church's Quorum of the Twelve offering dedicatory prayers in 1903 in both St. Petersburg and Moscow. Following the 1917 Bolshevik Revolution, the wealthy Lindelofs were persecuted and exiled to labor camps or deported to Finland.Some Soviet-era Russians converted to the Mormon faith outside their homeland. It wasn't until the late 1980s that Elder Nelson of the Twelve and Elder Hans B. Ringger of the Quorums of the Seventy made historic visits to Soviet Union leaders, with the Leningrad (St. Petersburg) Branch created in 1990 and the church afforded initial recognition in 1991.In May 1998, the LDS Church was formally recognized by the Russian Federation's Ministry of Justice as a centralized religious organization.Moscow works less and sleeps more Andy Potts at 06/06/2011 11:50Moscow: Russia’s biggest, busiest and most over-stressed city. Right?Well, surprisingly, perhaps not. While the anthem insists that Moscow never sleeps, the Federal Statistics Service has published figures challenging that popular claim.A pilot study into how people use their time – or have it used for them – found that the capital works less and sleeps more than the national average.?100 minutes for freeAccording to the figures, an average working day for a Russian man is 8 hours, 14 minutes, half an hour more than the average for a woman.But in Moscow, the average man can expect to spend just 5 hours 33 minutes toiling away – a saving of 101 minutes. Women average 5 hours 23 minutes.That made the capital one of the least labor-intensive of the seven regions studied in the survey, Kommersant reported.And it flies in the face of the widely-held belief that many Muscovites are compelled to work extra hours – and often extra jobs – in order make ends meet.?Time flies, traffic crawlsHowever, the picture is complicated by the long commutes most of us face to get to our shorter working days.Stuck in lines of traffic, the average Russian spends about an hour getting to and from work. But in the capital the number of people commuting for two hours or more is twice the national average.That wipes out more than half the potential extra free time on offer in Moscow, where 101 extra minutes out of the office translate into just 45 extra minutes of leisure time.Despite this, the city that never sleeps often gets more shut-eye than its compatriots. Working men get almost half an hour’s more rest than their peers in Komi Republic, for example.?Leisure timeTraditionally Moscow has been regarded as a well-read city – but despite boasting the country’s largest bookstore, the survey found that even with their extra time away from the office, residents read just four minutes of fiction a day.However, it is less in thrall to the TV screen than most: men watch for 1 hour 50 minutes a day, and women for nine minutes less, while in Nizhny Novgorod 2 hours 15 minutes is the average time goggling at the box. But that still represents the largest slice of the 3 hours 46 minutes of free time available to men in the capital, or the 3 hours 1 minute for the average woman. National Economic TrendsGrain prices surge as exports set to resume , 06.06.2011, Moscow 11:49:38.The price of wheat has surged more than 10% in southern Russia as grain exporters are stepping up purchases before the ban is lifted on Russia's grain exports, RBC Daily reported today, citing industry experts.??????In the first three days after May 28, when Prime Minister Vladimir Putin announced that grain exports would resume from July 1, the prices of third- and fourth-grade wheat in grain storage facilities rose by RUB 700 (approx. USD 25.11) to RUB 5,980 (approx. USD 214) and RUB 5,500 (approx. USD 197) per ton, respectively, in the Krasnodar Region, according to Russian Grain Union President Arkady Zlochevsky. ??????Market participants expect grain prices to go up by another 10%-15% within a month. Kremlin suggests raising profit tax to pre-crisis 24% BankJune 6, 2011According to Vedomosti, the President's administration has proposed a return of profit tax to the pre-crisis 24% from the current 20% in order to offset the proposed reduction in payroll tax. However, we doubt that such a decision will take place, as the fiscal effect will not be enough to offset the lost tax revenues.The new suggestion to increase profit tax indicates that the Kremlin was not satisfied with the Finance Ministry's proposal to change the social tax scale, which would allow social tax to be cut to the 28.5% level. However, increasing profit tax, in our view, is not the way to resolve the problem of the State Pension fund. The proposed restoration of pre-crisis profit tax, which according to our estimates can bring an additional RUB400bn, does not seem to be enough to offset the lost revenues from the reduction in social tax, estimated at RUB0.8-1.0tn. Moreover, even this small sum will be difficult for the budget to collect, as any increase in profit tax risks an increase in tax evasion and will generate additional capital outflow. We therefore believe the proposal is unlikely to be implemented.Natalia OrlovaSocial tax discussion continues CapitalJune 6, 2011News: According to Vedomosti, the government and the Presidential Administration are to discuss changes to the social tax (national insurance contributions) this week. Last week, they did not manage to reach an agreement concerning the President's order (announced in March) to repeal the hike in the social tax (it was raised from 26% to 34% as of 1 January).Vedomosti states that one of the proposals by the Presidential Administration is to hike corporate income tax 4pp to 24% in exchange for a decrease in the social tax to 26%.Our View: The proposal to compensate for a lower social tax with a hike in corporate income tax might help to alleviate the tax burden for labour-intensive sectors. Also, the government lowered corporate income tax to 20% during the crisis and raising it to 24% would just imply that anti-crisis measures were being closed down.However, the current proposal would be a wrong signal to business. If the government's strategy is to stimulate investment, modernise the economy and increase its efficiency, then a higher corporate income tax is a no go.Ruble Needs 3% Inflation to Globalize June 2011ReutersKIEV?— The?Russian ruble's role in?global trade will increase if the?government manages to?cut annual inflation to?a stable 3 percent to?4 percent, Finance Minister Alexei Kudrin said Saturday."In order to?make the?ruble more widely used, we need to?address a?series of?macroeconomic indicators," Kudrin said after a?meeting of?finance ministers from?the Commonwealth of?Independent States in?the capital of?Ukraine. "If Russia moves to?3-4 percent inflation a?year, and?keeps it at?that level for?five-six years, this will indicate a?new quality of?the currency."Fiscally prudent Kudrin has long called for?increasing efforts to?fight inflation, which has plagued post-Soviet Russia and?threatens to?overshoot the?Central Bank's target of?6 percent to?7 percent in?2011.So far this year, consumer prices have risen 4.8 percent and?the government is counting on?a good harvest and?the traditional abundance of?fruit and?vegetables in?the summer to?push prices down.Russia has long sought to?make Moscow a?major global financial center and?elevate the?ruble's role in?international trade. But so far only a?small percentage of?Russian export contracts are charged in?rubles, chiefly with former Soviet republics.Kudrin said that although he sees the?ruble already "fully convertible," the?country needs time to?prove the?stability of?both the?ruble and?its economy. "We need a?little bit of?established history to?show that the?government and?the Central Bank will strive for?low inflation along with other macroeconomic indicators," said Kudrin, the?longest serving finance minister in?the Group of?Eight, adding for?now Russia's inflation level does not allow it to?reach those goals. In?April, Prime Minister Vladimir Putin said Ukraine wanted to?pay for?Russian energy supplies with rubles instead of?dollars, a?fact that he said signified the?ruble's growing importance in?the former Soviet Union.Ukrainian President Viktor Yanukovych said such payments were possible if Moscow cut prices.Russian Inflation Rate Was Probably Unchanged in May on Food Agnes Lovasz - Jun 5, 2011 10:00 PM GMT+0200 Russia’s inflation rate was probably unchanged in May as the impact of last year’s drought on food prices faded. The annual inflation rate remained at 9.6 percent for a second month, according to the median estimate of 11 economists surveyed by Bloomberg. Prices probably rose 0.5 percent in a month after increasing 0.4 percent in April, the survey showed. The Federal Statistics Service plans to report the figures today or tomorrow. Food-price growth slowed after the effects of the country’s worst drought in 50 years abated. Inflation is "in order," Bank Rossii Chairman Sergei Ignatiev said on May 26, before the central bank indicated it would leave borrowing costs unchanged for several months. "The evident slowdown in food-price growth suggests that the shocks from internal agriculture prices are wearing out," VTB Capital economists Alexey Moiseev, Aleksandra Evtifyeva and Dmitri Fedotkin said in an e-mailed note on May 31. The central bank "appears comfortable with inflation." Food-price growth slowed to 14.1 percent in April from 15.3 percent in the first quarter, according to the statistics office. Prices for products including potatoes and buckwheat began rising last year after unseasonably hot weather destroyed harvests across the country. The ruble’s gains help limit the growth of consumer prices in monthly terms, Ignatiev has said. The ruble, which has gained a record 9.9 percent against the U.S. dollar this year, closed 0.4 percent higher at 27.81 per dollar on June 3. Close to Peak The central bank expects inflation to slow significantly in the second half of 2011 and has a full-year target of between 6 percent and 7 percent. Consumer prices rose 4.6 percent this year through May 23. "We’re probably very close to the peak," Paul Biszko, an emerging-market strategist at Royal Bank of Canada in Toronto, said June 3. "Policy makers will be looking ahead to that and assuming there’s no sharp acceleration from here, it’s going to give them some room to pause." The central bank last week raised its overnight deposit rate to 3.5 percent from 3.25 percent, surprising 11 of 20 economists in a Bloomberg survey. It left the key refinancing and overnight repurchase rates unchanged after a quarter-point increase in April. Borrowing costs may remain unchanged "for the nearest months," with interest rates at the level necessary to tackle inflation and promote economic growth, the bank said. Gross domestic product expanded an annual 4.1 percent between January and March. Only Serious Risk Lifting a ban on grain exports introduced in response to last year’s crop shortage is the "only serious, significant risk factor" for inflation, Ignatiev said last week. The resumption of exports on July 1 may push domestic prices higher, Julia Tsepliaeva, head of research at BNP Paribas SA in Moscow, said on May 30. Increased government spending and wage increases to public workers before parliamentary elections at the end of the year and a presidential vote in early 2012 may also boost inflation, VTB Capital has said. There is also concern that Russia’s ban on imports of vegetables from the European Union, imposed after an E.coli outbreak, may boost food prices. "We note the upside risks to inflation associated with the restrictions on vegetable imports which may neutralize some of the favorable deflationary effects that are typically observed in the summer period," Deutsche Bank economist Yaroslav Lissovolik said in an e-mailed note on June 3. To contact the reporter on this story: Agnes Lovasz in London at alovasz@ To contact the editor responsible for this story: Balazs Penz at bpenz@ INTERVIEW: Russia's privatisation chief discusses the 3-year programme Aris in Moscow June 6, 2011Russia's government, strapped for cash and keen to turn over as much of the badly run state-owned business to the private sector as it can, has restarted its privatisation programme after a decade-long hiatus. The last sell-off in the 1990s turned into a land grab that made the well-connected fabulously wealthy, but Alexander Uvarov, who heads the state agency overseeing the latest privatisation programme, tells bne this time will be different. bne: What is the goal of the privatisation programme – to make money or to get business out of state hands and into private hands? AU: It is a combination of the two: money and management. The federal budget is in deficit, but raising money is not the overriding goal of the programme. The privatisation will have a good effect on the companies that will become transparent and understandable to international investors, as they will be brought to the same high standards as in the West. We want our companies to meet this standard. bne: How many companies are being sold and how much money do you expect to raise? AU: It is a three-year programme and it is very big. There are more than 1,400 on the privatisation list, of which about 90% are small and medium-sized enterprises. These are companies that have ended up in government hands during the transition of the last 10 years. They are state-owned, but most of these companies are sick and they will only be interesting to local business investors. It is only the top 10% of the companies on the list that will interest the international investors. And these are big strategic companies that we plan to sell off gradually through to 2013 and raise RUB1 trillion ($33bn) in the process. We expect to raise RUB200bn this year with the sales of stakes in Sovkomflot and a stake in Sberbank. bne: How will these companies be sold? By auction, through IPOs or from direct negotiation with foreign strategic investors? And will you sell controlling packets or in pieces? AU: The method we use to sell the company will depend on the company itself. There is no universal recipe. The size of the packets will also depend on the company. For example, we could sell a controlling package to a big foreign investor or sell them via IPOs in chunks with subsequent issues of shares. The government has hired several investment banks which are studying the companies and will advise us on what is the best method for selling them. bne: Following the infamous "loans-for-shares" auctions in the mid-1990s auctions have a bad name in Russia. What can you do to ensure auctions are transparent and open to everyone? AU: The auctions will be absolutely open and transparent. Unlike then, there is no privatisation law, only auctions, so anyone that wants to can participate. All they have to do is pay the deposit and then they can participate. The auctions in 1995 were not really privatisations, as they were linked to the loans. This is a different case. bne: While there are a few important companies on the list, won't it be hard to sell most of the companies? For example, in May the attempt to sell Murmansk port failed, as there were no bidders. AU: We expect that about a third of the companies will not be sold at the first attempt. So what should you do with these companies? If they are not sold at the first auction, then we will use a "Dutch auction" and try again [where the auction starts at a high price, but reduces it until there is a buyer ending the auction.] In 2010 and this year, we have sold most of the objects put up for auction, despite the failure of Murmansk, but if the object is a good one, then it will be sold. bne: What are the major companies on the list that will most interest foreign investors? AU: In 2011 the major companies to be sold include [shipping giant] Sovkomflot and a 5% stake in [retail banking giant] Sberbank. In 2012, amongst the most important companies on the list are [state-owned energy transmission company] FSK, [state-owned hydropower holding] RusHydro, and another 10% of [Russia's second biggest bank] VTB Bank. Sovkomflot is the biggest shipping company in the world, and it already works to international standards and works all over the world. It already has to compete with its international peers and so it is already ready to be sold. We plan to sell a 25% minus one share stake this year. it will probably be sold as an IPO, privatising the share through the stock market, and use it as an instrument to raise funds and improve the quality of the market. If it works well, then the value of the shares will go up and if it goes badly, then they will go down. Later we will sell another 25% and could sell a 25% stake plus one or two shares and that could happen in 2015. But the long-term goal is to leave the company completely. bne: Another company on the schedule this year is Perm Pig, a state-owned agricultural concern in an attractive sector. AU: Perm Pig is one of the strongest kombinats in Russia and 100% owned by the state. We have given the mandate to the investment banks to prepare the company for sale and they are looking at the market and the company to decide how best to sell it. It could be sold on the stock market or it could be sold to an investor, but in this case we will sell a 100% of the company in the privatisation. bne: Some of these companies are very expensive – isn't there a danger of flooding the market with shares, as the market only has a limited capacity to absorb auctions of these sizes? AU: The valuation of some of these companies is very high and we can't sell them all at once. We also understand that Russia's privatisation programme is in competition with the privatisation programmes of other countries, which are also selling companies to raise money for their budgets. There is a lot of activity on the international markets at the moment and investors have a great choice of companies to choose from, but there are limited funds available. But we believe it is possible to raise RUB1 trillion in the next three years. bne: The government has done an about face, as some of the companies on the list are included under the "strategic investment law" that was passed in 2008 and excludes foreign investors from some sectors. How will these companies be sold? AU: The strategic objects will also be sold and can be sold to foreign investors, however, there will be a state commission that will review the sale. But there are only a few of this type of company on the list, like the Murmansk port. The deal will have to be reviewed by the commission, but the sales will almost certainly be approved. bne: You have a schedule for the sales, but the market conditions remain volatile. How important are the conditions for the sales? Will you go ahead with the sales even when conditions are bad? AU: Market conditions are important, as we don't want to privatise objects irrespective of the price. We do want to sell these companies over the next three years, but we won't sell them cheap. Getting a good price is not the top priority, but we are not going to sell at any price either. We are planning to sell Sovkomflot and Sberbank this year, but if the market conditions are very bad, we will delay the sale. bne:Chart: Russia's crash and recovery in motion June 6, 2011Google has introduced a really cool new function – moving charts. If a picture is worth a thousand words, then a moving chart is worth a million of them. This is going to be the emerging markets' century – so everyone says – but at bne we have been struggling to get across just how dynamic the pace of change in Russia has been. In the space of a decade, this country has been transformed from a basket case and consumer desert to a more-or-less normal country. But commentators can't get past the corruption and the flaws in the political system to see the underling transformation that's going on at street level. Click here or on the link below and press the "play" button. You will see an extraordinary chart that is the most graphic illustration highlighting the dynamism of Russia's change. Investors are fixated on China's massive population and its ballistic growth of over 10% a year. While clearly the world order is shifting and China together with India will become the dominant global economic powers sometime in the next 20 to 40 years, this chart shows that the biggest changes are currently occurring in Russia – the unloved Bric. Let us walk you through the chart (you have to press play in the bottom left corner). At first, there is the slow growth of the other Brics in the 1980s. Then, following the collapse of the Soviet Union in 1991, Russia appears and the country's relatively high levels of income drop like a stone. Then the surprises start. While 1998 is generally taken as the point when Russia crashed, actually it is the year when the turnaround began. Also notice that the fall between 1991 and 1998 was vertical – ie. spending was static. The reason? The ruble was massively overvalued, the payment system had collapsed, and Russia was a so-called "virtual economy" operating on barter rather than cash. You can't spend anything if you don't have any cash. But the 75% devaluation of the ruble was a godsend. Overnight, the economy was re-moniterised and from 1999 you can see that once real money returned, both incomes and spending start to increase as the cogs of commerce began to turn. Then in 2000, when oil prices started to recover, the economy takes off and both incomes and spending start to grow strongly. Indeed, all the emerging markets begin to grow strongly from 2000, but what this chart illustrates so well is the speed with which the Russian economy accelerates away from the rest. Finally, the most dramatic change arrives in about 2006 (unfortunately the data only runs to 2008) when income growth begins to slow, but spending accelerates again and flies off to the right after lending reaches critical mass. The epilogue to this story (not shown on the chart) is that incomes continued to rise throughout the crisis, but both lending and spending stopped. However, the most recent data from Russia's Ministry of Economic Development and Trade from the first quarter of this year shows that spending has already recovered to its pre-crisis levels, but is growing at a slower pace – on a par with its mid-2000 levels. The problem is that while banks are flush with cash, they haven't started lending again. However, according to the central bank, credit is starting to pick up again and should accelerate in the second half of this year as confidence returns. More to the point, Russia is already accelerating away from the other Brics again towards normalcy. CBR's Ulyukaev gives interview to Vedomosti - rates and reserve requirements for the summer holidays CapitalJune 6, 2011News: In an interview to Vedomosti, First Deputy Chairman of the CBR Alexey Ulyukaev has reiterated a number of the statements that he made at VTB Capital's Russia Calling conference (for more details, see our Conference notes - Panel Discussion Day One, of 1 June).Ulyukaev stated that the CBR took the attractiveness of rouble assets into account when deciding on policy interest rates. The latest decision to increase the deposit rate 25bp and keep the repo and refinancing rates unchanged was partly motivated by a continued decline in the savings rate. And it is easier for the CBR to hike deposit rates when there are capital outflows rather than inflows.According to Ulyukaev interest rates are now at equilibrium. The current corridor between the deposit and repo rates is 200bp, which is in line with international practice.Our View: Ulyukaev's comments imply that the CBR will most likely keep interest rates unchanged in the summer unless retail lending surges. However, we expect the monetary authorities to start tightening monetary policy again in the autumn, as fiscal spending intensifies ahead of the elections. Ulyukaev's statement on the corridor between the deposit and repo rates suggests that any further moves in rates will be simultaneous.Further hikes in reserve requirements depend, in our view, on liquidity in the banking sector. Excess liquidity has shrunk of late, and hence the CBR is likely to keep the reserve requirements rate unchanged as well.Another reason for the recent hike in the deposit rate could be lingering capital outflows and the recent profit-taking by portfolio investors. Strong portfolio inflows helped partly to offset other capital outflows in 1Q11 and supported the rouble. And rouble appreciation in 1Q11 was probably more helpful to curb inflation along than hikes in interest rates and reserve requirements.Business, Energy or Environmental regulations or discussionsMechel, TMK, Nomos Bank, Wimm-Bill-Dann: Russia Equity Preview Anna Shiryaevskaya - Jun 6, 2011 3:00 AM GMT+0200 The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close in Moscow. The 30-stock Micex Index (INDEXCF) retreated 1.5 percent to 1,633.02. The dollar-denominated RTS Index fell 1.3 percent to 1,858.08. OAO Mechel (MTLR) : Mechel shareholders are scheduled to vote today on buying the Donetsk Electrometallurgical Plant. Russia’s largest producer of coal for steelmaking gained 0.6 percent to 744.70 rubles. OAO TMK (TRMK RX): Russia’s largest producer of steel pipes is due to publish first-quarter financial results. TMK fell 1.4 percent to 128.12 rubles. Nomos Bank (NMOS RX): Nomos Bank, the Russian lender controlled by billionaire Alexander Nesis, is due to publish first-quarter financial results. The bank advanced 0.6 percent to 946 rubles. OAO Wimm-Bill-Dann (WBDF RX): Wimm-Bill-Dann, the Russian producer of juice and dairy products, may buy back bonds with a value of as much as 24 billion rubles ($863 million.) The company, which is being acquired by PepsiCo Inc., fell 1 percent to 3,663 rubles. To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@ To contact the editor responsible for this story: Will Kennedy at wkennedy3@ Energy Ministry against ban on MRSK stake reduction, privatizations DialogJune 6, 2011The Energy Ministry thinks that it is currently unfeasible to ban a reduction in the state's stake in MRSK Holding (MRSKs) to below controlling, but also believes privatizing companies that are part of MRSK Holding is unviable, Interfax reports. This is part of the answers submitted by the ministry to the Duma. The reasons it cited against privatization included: the absence of economic stimulation mechanisms in the subsector; unsettled problems that considerably reduce the value of the power network assets (e.g. cross- subsidization and non-payments); the need to attract large-scale investment; and a lack of qualified local investors in the segment. Still, the ministry's proposal is to attract private investors to take one or several discos under management, to create efficiency benchmarks and attract global best practices. The ministry does not support MRSK Holding's pitch to ban the state from reducing its stakes in MRSKs to below 50%. Troika's view: In March, President Dmitri Medvedev raised the question of discos' privatization or transfer under management as soon as possible. MRSK Holding earlier agreed with ERDF, a subsidiary of EdF, to transfer Tomsk Disco under its management, so this process has started. It is no surprise that the Energy Ministry thinks privatizations would be unfeasible now, as the regulatory framework is being amended and the electricity tariff growth revised, and a few problems have yet to be resolved. However, it is important that the ministry does not support MRSK Holding's proposed ban, so it is not closing the door. Various ministries will have their say on this, we expect, and a decision on whether to privatize MRSKs will be made by the government once the regulatory framework is set in stone and there is clarity on a long-term regulatory period. This will allow for higher market valuations, which is among the key issues mentioned by the Energy Ministry. If the government decides to sell MRSKs, it would aim for an EV/RAB valuation of no less than 1.00, we believe, and MRSKs are currently trading at an average of 0.46. Thus, a decision to privatize would be a very positive trigger for MRSK stocks. To draw a parallel, the privatizations in OGKs and TGKs were preceded by the transfer of North-West CHPP under management a couple of years prior. Alexander KotikovRussia's Global Ports eyes $100 mln from London IPO EDTMOSCOW, June 6 (Reuters) - Russia's Global Ports said on Monday it is seeking more than $100 million from a London Initial Public Offering, joining a host of Russian private issuers seeking to raise funds from capital markets.The company, a unit of a private transportation and infrastructure holding group N-Trans, said it would use the net proceeds of the float to invest in its ports operation.Global Ports has hired Deutsche Bank, Goldman Sachs, Morgan Stanley and Troika Dialog as joint organisers of the offering.(Reporting by John Bowker, Editing by Lidia Kelly) Global Ports eyes $750m London IPO Courtney Weaver Published: June 5 2011 23:48 | Last updated: June 5 2011 23:48Global Ports, the Russian port operator, is to begin marketing a London initial public offering of up to $750m on Monday amid renewed interest in Russian infrastructure, a strategic growth area for?the country.The privately owned company is seeking a valuation of $3bn and plans to sell a 25 per cent stake.Goldman Sachs, Morgan Stanley, Deutsche Bank and Troika Dialog are joint global co-ordinators and bookrunners on the offering.23The company is the latest in a series of Russian groups that have attempted to list on the London Stock Exchange. Since the start of the year, 10 Russian companies have tried to float in the City. Only four have succeeded: Nomos Bank, Russia’s second-largest lender; Etalon, a property group; Rusagro, a pork and sugar producer; and Hydraulic Machines and Systems, a pipe maker. Of those, HMS was forced to lower its price range, while Etalon and Rusagro priced at the very bottom of their targeted range.Emerging markets investors said the Global Ports offering could be easier to bring to market because of the relatively small size of the offering but said it would depend on conditions and the company’s valuation.The management of Global Ports has brought two other transportation assets of its holding company N-Trans to market, a factor that could determine the IPO’s success. Globaltrans, a railway operator, was the last Russian company to float in London before the financial crisis, while Mostotrest, a bridge-building group, raised close to $400m last year.Analysts said Global Ports, which runs oil products and container terminals in the Baltics and Russia’s far east, stood to benefit from a wave of state and private investment in Russia’s infrastructure ahead of the Winter Olympics in Sochi in 2012 and the World Cup in 2018.“If you look at the roads and any other means of transportation, it all needs to be replaced or built from scratch, and the World Cup will require building a lot more roads, rails and passenger?cars,”?said Alexander Kazbegi, transport analyst at Renaissance Capital, the investment bank.As not many transportation groups are listed, investors could view the Global Ports offering as a way of tapping into the industry’s development. “The transportation sector is still fairly thin. There are not 100 companies that you can choose from,” he said.He added that Global Ports stood to benefit from increased use of containers for transporting imports, such as consumer goods, across Russia.While container penetration in Russia is three times lower than in China, Russia’s container market is one of the fastest growing. The industry grew at a compound annual growth rate of 19 per cent between 2000 and 2010, or almost four times the growth of gross domestic product, while the market increased by 44 per cent in 2010.Copyright The Financial Times Limited 2011. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.Nomos Bank Advances Most in Two Weeks as Profit Jumps 20% Jason Corcoran - Jun 6, 2011 9:04 AM GMT+0200 OAO Nomos Bank gained the most in almost two weeks after the Russian bank said net income in the first quarter advanced 20 percent to 2.55 billion rubles ($92 million), according to a statement today. The shares jumped as much as 2.1 percent to 960 rubles, their biggest intraday gain since May 24, and traded 0.6 percent higher at 946 rubles by 10:38 a.m. in Moscow. To contact the reporter on this story: Jason Corcoran at Jcorcoran13@ To contact the editor responsible for this story: Gavin Serkin at gserkin@ June 06, 2011 10:25Nomos Bank posts net profit of 3.2 bln rubles in Q1. June 6 (Interfax) - Nomos Bank (RTS: NMOS) posted a net profit of 3.2 billion rubles in the first quarter of 2011 under International Financial Reporting Standards (IFRS), the bank said in a disclosure posted on the web site of the London Stock Exchange.The bank has not reported IFRS results for the first quarter last year.RTS$#&: NMOSjh(Our editorial staff can be reached at eng.editors@interfax.ru) Russian Railways ups traffic in 5M , 06.06.2011, Moscow 12:07:13.Russian Railways' transported 368.9m passengers in January-May, up 1.2% year-on-year, the railroad operator said in a statement today. Of this total, long distance transportation fell 1.6% to 40.2m passengers and suburban transportation went up 1.6% to 328.7m people. ??????Passenger traffic rose 2.2% year-on-year to 45.9bn passenger-kilometers in this period. Freight transportation increased 6.9% to 870.5bn ton-kilometers in the reporting period. Russian Railways carried 504.2m tons of cargo in the first five months, up 4.3% year-on-year. Volkswagen Seeks to Double Russian Car Production, DPA-AFX Says Christian Vits - Jun 5, 2011 6:36 PM GMT+0200 Volkswagen AG (VOW) aims to more than double its car production in Russia over the medium-term, dpa- AFX reported, citing a company spokesperson. The company decided to increase output to benefit from tax incentives granted by the Russian government for automakers that produce 300,000 cars domestically, DPA said. Currently Volkswagen produces about 150,000 cars in its Kaluga plant in the south of Moscow, according to the report. To contact the reporter on this story: Christian Vits in Frankfurt at cvits@ To contact the editor responsible for this story: Craig Stirling at cstirling1@ 10:49?06/06/2011ALL NEWSPetersburg’s Nissan plant resumes production after 5-day lull. Tass 130 ST. PETERSBURG, June 6 (Itar-Tass) — The Russian Nissan plant in St. Petersburg resumed production on Monday after a weeklong lull, the public relations director of Nissan Motor Rus, Tatyana Natarova, said. She said the plant suspended production for five working days to synchronize production processes with the schedule of supplies of car components from Japan. The company representative stressed that the decision to stop production was made in connection with suspension of production in Japan at the end of March-early in April. “We hope there will be no such lull periods at the St. Petersburg plant in the future,” Natarova stressed. She said all company plants are quickly getting back to their schedule, and according to specialists it will be fully restored no later than in October. “We will return to the level of production that Nissan had before the tragic events at a Japanese nuclear power plant in March,” she said. The plant of Japan’s Nissan, which opened in June 2009, became the third car production in St. Petersburg. Investments in the project made up 200 million dollars. Last year, the plant produced 24,500 vehicles. The St. Petersburg plant produces Nissan Teana, Nissan X-Trail and Nissan Murano. The plant operates on a three-shift basis. Nissan and Renault plan $2bn investment drive 6, 2011 Nissan and Renault plan to invest up to $2bn into Russia's top carmaker Avtovaz within the next five years or so, according to a report in Japan's Nikkei business daily on Friday which cited the Russian government, reports Reuters. The vaguely credited report claims that the Japanese and French partners will join with AvtoVAZ, in which Renault holds a 25% stake, in a plan to boost combined sales to at least 1.6m vehicles per year by 2015. The move comes amidst a stampede by international carmakers to book a slice of a market predicted to be Europe's largest in the next five years. That rush has been sparked by conditions from the Russian government demanding a boost to production in return for continued special treatment on taxes on imported car parts. Meanwhile, Nissan and Renault are still pondering raising their stake in Avtovaz - which produces Ladas from its gigantic plant in Tolyatti in Southern Russia - since it was suggested in the midst of the crisis, when Avtovaz was on its knees. Carlos Ghosn, chief executive of both Nissan and Renault, said in February that the pair plan to boost their stake to at least 50% in the company, who's fortunes have perked up significantly with help format he government's massive cash-for-clunkers program. In March, the partners announced plans to hike combined annual production of Renault, Nissan, Infiniti and Lada vehicles in Russia to nearly 1.9m units by 2020, according to . This year, Renault and Nissan plan to produce 141,000 and 67,000 cars, respectively, in the country. By 2020, their output is expected to reach 445,000 and 406,000 cars, respectively, with much of the production capacity devoted to smaller, budget-priced models. The pair plans to build up to 30 different models in Russia overall, with many of the more expensive, lower-volume Infiniti cars, including the G25, likely to be assembled from semi-knocked-down kits imported from Japan.Whilst the plans are grand, actual investments are thin on the ground for the moment it seems. Igor Komarov, president of Avtovaz announced on Friday that his company has signed an agreement with Nissan to introduce the Japanese company's standards for plastic production efficiency in Tolyatti over the next three years. Avtovaz says it expects the efficiency of its plastic production to increase by over 30% without significant financial investments.Sibur progresses with construction of US$2 bln petrochemical complex in Sib...?(6-6-2011)$2-bln-petrochemical-complex-in-SiberiaRussian conglomerate Sibur Holding CJSC is progressing with construction of a previously announced US$2 bln petrochemical complex in Siberia. The plant in Tobolsk will have the capacity to produce 1.1 billion lbs of PP homopolymer. As per plasticsnews, early 2013, this plant will triple its polypropylene homopolymer production capacity, with much of that output targeted for export to China. The new facility, called Tobolsk Polymer, will use Innovenne PP technology licensed from Ineos to produce up to 70 grades of the material, and will be Russia’s largest polypropylene plant. About half the homopolymer output will be consumed in Russia, with the balance going mostly to China, though pricing may lead some to find its way to Europe and Turkey.Acron Q1 net profit jumps 120% to 3.8 bln rbls 06/06/2011Acron, one of Russia's largest mineral fertilizer producers, saw first quarter 2011 net profits jump 120 percent year-on-year to 3.81 billion rubles ($136.70 million) to IFRS, boosted by high fertilizer prices and a strong ruble, the company said on Monday."Revenue was up 21 percent due to strong global mineral fertilizer prices. Revenue outpaced costs, boosting the group's operating profit and margin," the company said in a statement."Net profit more than doubled for the reasons mentioned, as well as due to a stronger ruble in the first quarter of 2011, which resulted in an exchange gain of 1.75 billion rubles from revaluation of the group's liabilities in foreign currency."EBITDA soared 93 percent to 4.60 billion rubles, while EBITDA margin increased to 33 percent from 21 debt fell 10 percent to 25.74 billion rubles."We can see the global fertilizer market on the upswing: demand exceeds supply, meaning that producers will be able to maintain high capacity utilization rates and positive pricing dynamics for their products," Acron Board of Directors Chairman Alexander Popov was quoted in the statement as saying.?MOSCOW, June 6 (RIA Novosti)UPDATE 1-Russia's TMK net profit beats estimates in Q1 Jun 6, 2011 7:43am GMT* TMK Q1 net $104 mln, Reuters poll forecast $88 mln* TMK Q1 EBITDA $293 mln, poll forecast $282 mln* TMK Q1 revenue $1.67 bln, poll forecast $1.70 bln* Company sees Q2 EBITDA flat vs Q1(adds details)MOSCOW, June 6 (Reuters) - TMK (TRMK.MM), Russia's largest producer of pipes for the oil and gas sector, on Monday said it swung to a first quarter net profit of $104 million, ahead of forecasts, as it benefited from strong demand.Analysts polled by Reuters had expected the company to post a first quarter net profit of $88 million, compared to a year-earlier loss of $1 million.High oil prices are boosting pipe demand in TMK's home market, while its TMK IPSCO unit is increasing sales by supplying equipment for gas drilling in the Marcellus Shale field in the eastern United States, the largest such field in North America.The firm, controlled by Dmitry Pumpyansky, said in April that first quarter pipe shipments reached 1.08 million tonnes, up 15.4 percent year-on-year. [ID:nWLA8421]On Monday, TMK said first quarter revenues were $1.67 billion, below $1.70 billion forecast in a poll and up 35 percent from the year-earlier period.First quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) totalled $293 million, above the $282 million forecast and up 44 percent from last year.TMK said it expected EBITDA and EBITDA margin to remain flat in the second quarter, and it confirmed its guidance for sales volumes to grow 7-10 percent this year.At the end of the first quarter, net debt was up 4 percent from December 31 to $3.85 billion.(Reporting by Alfred Kueppers; Editing by Lidia Kelly and Jane Merriman) JUNE 6, 2011, 2:56 A.M. ETLagardere Finalises Sale Of Magazine Buinesses In Russia, Ukraine (Dow Jones)--French media and defense group Lagardere SCA (MMB.FR) Monday said it has finalised the sale of its international magazine businesses in Russia and Ukraine to U.S.-based Hearst Corp. Transactions in the Czech Republic and the U.K. are expected to be finalised over the coming days, and in China by the end of 2011, which will complete the overall transaction, the group also said. At end-May, the group had closed the sale of the majority of its international magazine business to Hearst Corporation in the U.S., Italy, Spain, Japan, the Netherlands, Hong Kong, Mexico, Taiwan, Canada and Germany. All of the businesses of this first phase will be withdrawn from the consolidation scope of Lagardere's accounts at the end of June. The assets represent EUR606 million, of which EUR546 million is in enterprise value and EUR60 million in cash. The deconsolidation of the international magazine business is expected to have a negative impact of around EUR35 million on Lagardere Media recurring earnings before interest and tax, or EBIT, before associates in 2011, the group said two weeks ago. -By Geraldine Amiel, Dow Jones Newswires; +33 1 4017 1740; geraldine.amiel@ PRIME-TASS business news agency changes name, carries out rebranding, Jun 6 (PRIME) -- PRIME-TASS Business News Agency is changing its name and carrying out a rebranding. The rebranding is governed by the fact that independent non-commercial organization AG Novosti Moskvy, part of the RIA Novosti media holding, has purchased a 65% stake in closed joint-stock company PRIME-TASS Business News Agency. Under decisions made at an extraordinary general meeting of PRIME-TASS’ shareholders in May, the agency will revert to the name PRIME. The agency carried this name from 1993, when it was established, until 1996, when PRIME-TASS agency was created based on PRIME’s assets and reporter network, with ITAR-TASS news agency gaining a 35% stake.“The 15-year history of PRIME-TASS’ existence has proven the efficiency of a public and private partnership on the economic information market,” said PRIME Director Oleg Ananyev, one of its founders. “With the development of the Russian economy and plans to create an international financial center in Russia, the tasks of providing information support for these processes are becoming more large-scale,” he said.The rebranding is expected to be fully completed by the end of 2011. The integration of the editorial processes of PRIME and RIA Novosti is expected to be carried out in several stages. The first stage, connected with changing the agency’s name, is almost finished. New documents will be signed on behalf of PRIME once the state registration of changes in the agency’s charter is completed. All agreements earlier concluded by PRIME-TASS, as well as the agency’s former obligations, will continue to operate without restrictions. Moreover, PRIME is keeping all trademarks and domain names that were previously registered at PRIME-TASS. “PRIME will operate in close contact with international information agency RIA Novosti, but without losing its editorial independence,” said Maxim Filimonov, RIA Novosti’s first deputy editor-in-chief and a member of PRIME’s board of directors. “After the integration of the editorial teams new specialized products for financial and corporate markets are expected to be developed. In particular, there are plans to develop mobile products and develop applications for the integration of both news information and services for financial markets,” he said. Over the coming months, PRIME will be responsible for producing the majority of the economic information that is to be used in products of both agencies, according to Filimonov. Editorial teams of both agencies, which prepare business information, are expected to be united into a single editorial staff and consolidated based on PRIME. In the future, PRIME and RIA Novosti are expected to be transferred to a single technological platform for news production to unify the editorial process and increase the synergy effect from the two agencies’ joint work.In connection with the information given above, the new name PRIME instead of PRIME-TASS and the new logotype should be used while citing the agency’s news starting from Monday.RIA Novosti is a leading Russian media company with a rich 70-year history. At present, the RIA Novosti media holding includes the eponymous multimedia Russian Information Agency, the Russian Agency of Legal and Judicial Information, the R-sport news agency, the Moscow News Publishing House, which publishes newspapers in English and Arabic, a press center, as well as more than 70 Internet resources in 14 languages. RIA Novosti’s websites are visited by 17 million unique users each month.Independent non-commercial organization Novosti Moskvy, affiliated with RIA Novosti, purchased a controlling stake in PRIME-TASS business news agency in the spring.PRIME-TASS business news agency was established in June 1996 by Russian state information agency ITAR-TASS and private information-publishing agency PRIME. The agency produces a wide range of information products: online news, analytical surveys, databases, specialized themed bulletins, and is actively conducting research in the information technologies sector. In particular, the agency has created a number of information-trading systems: software for securities trading, a set of programs to organize trading on the Forex market, and a terminal for trading on the Moscow Interbank Currency Exchange (MICEX). PRIME-TASS cooperates with the leaders of the foreign information market. In particular, it has developed a number of joint real-time projects on the Forex, stock, and commodity markets with the world’s largest news agency, Dow Jones Newswires. Moreover, PRIME-TASS has for many years been publishing and distributing official publications of the Central Bank of Russia and has been also serving as the Federal Service for Financial Markets’ mandated agent for disclosing information on the securities market. End 06.06.2011 12:11Russia’s Anisimov Plans to Sell Up to $4.7 Billion of Property, RBC Says Ilya Arkhipov - Jun 6, 2011 7:46 AM GMT+0200 Russian billionaire Vasily Anisimov, co-owner of metals producer Metalloinvest, plans to sell his real estate holdings for as much as $4.7 billion, RBC Daily reported, citing unidentified people familiar with the matter. St. Petersburg-based LSR Group is interested in the Moscow development’s of Anisimov’s Coalco Development property company, the Moscow-based newspaper said. To contact the reporter on this story: Ilya Arkhipov at iarkhipov@ To contact the editor responsible for this story: Brad Cook at bcook7@ Investors flee Russia despite oil revenue boom Dmitry Zaks (AFP) – 1 day agoMOSCOW — The billions of investor dollars fleeing Russia each week offer a stark counterpoint to Moscow's aspirations of soon becoming a global financial centre linking London with Hong Kong.The world's leading oil exporter finds itself in the odd position of being flooded with petrodollars and seeing remarkable ruble strength -- two prime conditions for local investment -- while also bleeding capital at record rates.The outflow of investor money abroad reached $30 billion by the end of April to nearly match the 2010 total. The May figure is expected to approach $8 billion and a slowdown is not anticipated for some months."It is difficult to give a simple and clear explanation as to why this is happening," Russian Central Bank chairman Sergei Ignatyev acknowledged."But the main reason is a rather unfavourable Russian investment climate."Investors may argue that Ignatyev was gilding over a graft problem so blatant it saw Russia rank 154 out of 178 countries on last year's Transparency International Corruption Index.The World Bank says Russia is the world's second-most difficult country in which to get a construction permit while local entrepreneurs often treat law enforcement authorities and the courts as a part of the same system."When you talk to investors, that really is one of their biggest points," said chief UralSib strategist Chris Weafer."They say look, the Russians are taking their money out of the country. Why should I come to Russia when the Russians are coming out?"The real mystery is why this scramble to get out of Russia is getting more frantic at precisely the moment when the government is pursuing one of its most market-friendly programmes in years.President Dmitry Medvedev is now courting Westerners with a $10 billion joint investment fund and hoping to put meat on the bones of his modernisation effort by dislodging state appointees from their seats on company boards.Both measures fold into a broader $60 billion privatisation programme aimed at giving Moscow its coveted status of being a centre of global finance.Uncertainty over whether Medvedev or his mentor and predecessor, Prime Minister Vladimir Putin will head the Kremlin next year, may be one of the factors behind investors' latest spell of jitters.But analysts note that Putin's return has been rumoured since the final day of his second term in 2008 and can hardly explain why the outflow of currency has nearly tripled in recent months.There are other more technical factors also at play.Russia's inflation expectations are rising and squeezing holders of local currency bonds. But the help these investors have been getting from a stronger ruble will expire once oil prices climb off their recent highs."I think most of the capital flight is associated with this," said Renaissance Capital economist Ovanes Oganisyan in reference to ruble bond sales.Other factors may be the record dividends -- sometimes as much as 90 percent of profits -- paid by such local giants as the British joint venture TNK-BP.But analysts say that behind all these immediate variables is buried a more fundamental investor doubt about Russia as a future growth market.The government is gradually raising tax rates on energy producers to cover the tens of billions of dollars in outlays it has promised ahead of the approaching elections.Manufacturing growth slowed to just above stagnation level last month while Gross Domestic Product growth has barely reached half the rate seen before the global slump in 2008."People are starting to realise that the levels of growth we have seen in the past decade are not sustainable without major reforms and major investment," UralSib's Weafer said.An Oliver Wyman financial service partner who recently compared Moscow to other financial centres, showed the Russian capital ranking behind cities such as Manila and Jakarta.The survey recommended "strengthening regulatory requirements and oversight, improving disclosure ... and modernising corporate governance standards," the agency's Robert Maciejko wrote in the Wall Street Journal."In the absence of efforts on the part of the Russian government to reduce the risks of investments in Russia, one can hardly expect private capital inflows into the country," the Gaidar Institute said in an annual report.Analysts said the only silver lining was that capital flight was putting the breaks on runaway ruble appreciation."This is a comfortable situation for the government -- they like the fact that something is keeping the ruble from gaining too much," said Oganisyan.FACTBOX-Russian companies seeking IPOs Jun 6, 2011 2:55am EDT June 6 (Reuters) - Russian companies are launching a freshwave of IPO attempts, mostly in London, as the high oil priceand growing Russian economy lure private issuers back to equitymarkets. Analysts had earlier predicted private issuers could raiseas much as $30 billion this year given the right marketconditions, up from around $5.5 billion last year, though aseries of recent flops has tempered expectations. The total raised in 2011 to date is just $3.4 billionincluding the blockbuster $1.4 billion Nasdaq IPO of Russia'smost popular search engine Yandex (YNDX.O), of which just over$2 billion has come from London. Below is a list of IPOs in the pipeline for 2011, includingthe successful and postponed placements: DONE DEALS IN 2011 ISSUER PROCEEDS TIMING ========================================================== *Yandex $1.4 bln May Russia's most popular search engine raised $1.43 billion inthe biggest internet IPO in the United States since Google Inc(GOOG.O) nearly seven years ago, including an over-allotmentoption. [ID:nLDE74Q0N1] Investors sought to buy 17 times as many shares as Yandexand its owners made available and its shares rose 55 percent intheir trading debut. [ID:nN24252642] *Nomos NMOSQ.L $718 mln April The mid-size bank became the previous biggest private issuerof the year to date when it announced plans to raise at least$718 million in London and Moscow. The company priced the IPO at just above the middle of theindicated range, despite pledging little more than a quarter ofthe proceeds to development of the business. [ID:nLDE73H1YF] *Etalon ( HYPERLINK "" ETLNGq.L) $575 mln April The real estate developer priced a London IPO at the bottomend of its price range to raise $575 million. Most of theproceeds came from the sale of new shares, while the company'sexisting shareholders accepted $75 million -- about half theamount they wanted. Etalon needs cash to fund expansion in Russia's recoveringreal estate market. [ID:nLDE73E0CH] *Rusagro ( HYPERLINK "" AGRORq.L) $330 mln April The sugar and pork producer priced a London IPO of newshares towards the lower end of its price range to raise $330million for business expansion. The shares jumped 6 percent ondebut. *Hydraulic ( HYPERLINK "" HMSGq.L) $360 mln Feb The pumps manufacturer was forced to cut the price and scaleof original plans to raise up to $652 million from a London IPO,the only member of a quartet of February candidates to get away.[ID:nLDE7170TR] IN THE WORKS ISSUER PROCEEDS TIMING =================================================== *Global Ports $100 mln plus June The ports company is seeking more than $100 million from aLondon IPO and will invest the proceeds back into its portsnetwork. The company is 90 percent owned by N-Trans, themajority shareholder in publicly traded freight operatorGlobaltrans Investment ( HYPERLINK "" GLTRq.L) and road and bridge builderMostotrest (MSTT.MM). POSTPONED ISSUER PROCEEDS TIMING ========================================================== *Domodedovo up to $1 bln Moscow's Domodedovo airport operator dropped its plannedstock market listing on May 30, thwarting its owner's attempt tocash in, with investors put off by political risks.[ID:nLDE74T07G] DME Ltd had planned to sell about 20 percent of its existingshares in a London IPO that could have raised between $700million and $1 billion for the airline tycoon DmitryKamenshchik, sources had told Reuters. [ID:nLDE74I1QL] *SUEK c.$1 bln spring/summer Russia's largest steam coal producer said on May 24 it didnot plan to list its shares until market conditions improve,playing down an earlier report that it planned to revive a 2010plan to hold an IPO in London in June. [ID:nLDE74N1BW][ID:nLDE7320BZ] *Russian Helicopters $500 mln The state-controlled company scrapped plans to raise $500million in a potentially ground-breaking London IPO in May afterfailing to get the value it wanted from investors. The IPO would have given investors a rare chance of exposureto Russia's defence and arms sector while its cancellation cameas an early blow to the Russian state's privatisation plan.[ID:nLDE74A073] *Euroset $1.52 bln Russia's biggest mobile phone retailer scrapped plans toraise up to $1.52 billion in April, citing market volatility. The company, which has nearly 4,500 bright yellow frontedstores in Russia and the CIS, had wanted the vast majority ofthe proceeds to go to owner Alexander Mamut. [ID:nLDE73C0B4] *EuroSibEnergo c. $1 bln Russian billionaire Oleg Deripaska's power company said itsaw no need to raise funds for the remainder of 2011, pushingback its planned $1 billion Hong Kong listing to later this yeardue to volatile markets. [ID:nL3E7EM0VO] *KOKS c.$520 mln The pig iron and coking coal producer was hoping to raisemore than $500 million for around 20 percent of its shares to besplit between its owners and the business itself. The companypulled the IPO on Feb. 4 citing market conditions in the wake ofviolence in Egypt. [ID:nLDE7110P9] *ChelPipe up to $688 mln The steel pipe maker was seeking up to $688 million from newand existing shares in London and Moscow to pay down debt andraise cash for its owner. It postponed the IPO on Feb 10. *Nord Gold $1 bln The gold miner had been looking to raise $1 billion in aLondon float of a 25 percent stake to repay debts to its Russianmining parent Severstal (CHMF.MM), but postponed plans afterrefusing to cut its price range. [ID:nLDE71A0BZ] *Vital Development $22 mln The biochemical company had been planning a small float onMoscow bourses but postponed plans until the second half due tocompetition from bigger IPOs. [ID:nLDE73B05B] WIDER PIPELINE ISSUER PROCEEDS TIMING ========================================================== *Phosagro $500 mln June The fertilizer producer is planning to push ahead with plansfor a London stock market float in June, a source close to thedeal told Reuters, and aims to raise at least $500 million.[ID:nWLA9223] *UTV Media c.$250 mln Q2/Q3 2011 The media holding company is looking to raise $250 millionin London before the autumn, according to a source.[ID:nLDE71E26K] *Centrobuv TBC 2011 The Russian shoe retailer is planning a London float laterthis year and has chosen Morgan Stanley and Renaissance Capitalas organisers, sources told Reuters. [ID:nLDE71A1D4] *Yug Rusi TBC 2011 Russia's biggest vegetable oil producer has picked ING andMorgan Stanley to organise a London listing this year, twofinancial market sources told Reuters. [ID:nLDE70K1L7] *Alrosa $1.5-3.0 bln 2012 The state-owned diamond miner could raise $1.5 billion to $3billion in a share sale next year, Chief Executive FyodorAndreyev told Reuters. [ID:nLDE72H1BK] *Metalloinvest c. $1 bln 2011 Alisher Usmanov, co-owner of the iron and steel firm, hassaid he is prepared to float up to 20 percent of the company'sshares this year if market conditions are right. [ID:nLDE61G2B1] *Kamchatka Gold TBC 2011 Tycoon Viktor Vekselberg is targeting Hong Kong for an IPOof his Kamchatka Gold mining firm as its assets are dependent onChinese demand. Vekselberg last July postponed the float untilat least 2011, but insisted it would still go ahead.[ID:nLDE61E1PX] [ID:nLDE66E0AB] *Transaero $200 mln 2011 Russia's second-biggest airline was planning a $200 millionIPO in the autumn of 2010, but a source said in October itsplans had been pushed back until 2011. [ID:nLDE64K1DD][ID:nLDE69C0TY] (Compiled by John Bowker and Maria Kiselyova; Editing by DavidHolmes)Activity in the Oil and Gas sector (including regulatory)Jugba-Sochi gas pipeline launched has launched the Jugba-Lazarevskoye-Sochi pipeline to providegas for the Olympic Games.The naval and land sections of the pipeline were connected in May.The Jugba-Lazarevskoye-Sochi is part of the state program of Olympicconstruction and the development of Sochi as a ski resort. It willboost expansion of the gas network in Sochi and the TuapsinskyDistrict and reduce the energy deficit on the Black Sea coast of theCaucasus. Gazprom head Alexey Miller said earlier that the gaspipeline would cost 25 billion rubles.The pipeline will be 177 km long, with 159.5 km running under the sea.The pipeline will run 4.5 km from the coast to the Kudepstadistribution station near Sochi.It will have links Jugba, Novomikhailovsky, Tuapse and Kudepsta. Theautomatic gas distribution stations Jugba-1, Jugba-2,Novomikhailovskaya and Tuapse have already been built.The pipelinediameter is 530 mm and annual capacity is 3.8 billion square meters.GazpromEquipment for Badra oil field arrives, 06 Jun 2011Russian Gazprom company has announced the arrival of all equipment related to Badra oil field east of the province.Mr Majid Al Attabi media director of the province said that the company started work before 2 months which covered civil and laboratory works. It is expected that the extraction of oil shall be at the beginning of the next year.The oil contract was given to a group of companies including Gazprom Korean Kogas, Turkish TBO and Malaysian Petronas with a cost of USD 2 billion.The duration of the contract is 20 years liable to be extended for another 5 years. The company should coordinate with the Iranian side because it is a joint oil field. Gazprom has 40%, TBO 10%, Kogas 30% and 20% for Petronas.(Sourced from Aswat Aliraq)Russia’s Gazprom puts eye on Germany energy market 4, 2011 15:32 Moscow TimeRussia’s Gazprom has expressed interest in the sales of shares by German energy companies and is ready to consider respective offers?if it receives any, the head of the gas giant Alexei Miller told German reporters.He said that the concern wants to expand its share on Germany’s energy market after the Fukushima accident which triggered anti-nuclear energy policy in the country.Still, he noted that Russia will shift its supplies to Asia if it is not happy with European prices. ................
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