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Basic Political Developments  Prime-Tass: Nov 27: Russian President Dmitry Medvedev to take part in Eurasian Economic Community (EurAsEC) summit  Itar-Tass: Putin to attend meeting of CIS prime ministers - On the sidelines of the meeting Putin will have talks with his new Kirgiz and Moldovan counterparts – Daniyar Usenov and Vlad Filat. A bilateral meeting with Kazakh Prime Minister Karim Masimov is also scheduled.  24.kg: Kyrgyz PM to attend session of CIS Heads of Government Council  AFP: Putin derides Georgian leader Saakashvili - Vladimir Putin on Friday delivered one of his most searing attacks yet against the Georgian leader Mikheil Saakashvili, saying it may not be safe to wear ties around him.  Russia Today: Teenage Georgian pawns in South Ossetia may be swapped  Interfax: Belarusian foreign minister to visit Moscow next week  Itar-Tass: Aliyev to visit Russia November 24 – Kremlin  News.az: Russia does not bind Karabakh problem to Armenian-Turkish ties - Russia does not see any connection between the processes of the Karabakh settlement and the Armenian-Turkish rapprochement, Russia’s FM spokesman Andrey Nesterenko has said.  APA.az: Andrei Nesterenko responds to Edward Nalbandian’s accusations  The Moscow Times: Nagorno-Karabakh Talks Set - The presidents of Armenia and Azerbaijan will hold talks Sunday on the Nagorno-Karabakh conflict, France said Thursday, with Turkey pressing for progress before it seals a rapprochement with Armenia.  RIA: Ukraine, Russia set to ink new nuclear energy deal  Interfax: Tymoshenko calls for Russia, Ukraine to cooperate in grain trade  RIA: Ukraine seeking part in Russia's Glonass project  Bloomberg: Russia, Ukraine May Swap Minority Stakes in Aviation Companies  Russia Today: Prime Ministers put on smiles to fend off new gas dispute  Itar-Tass: Russia to pay more for Ukrainian transit, charge no fines  Upstreamonline: Putin calls for year without gas ‘shocks’  BBC: Russia gives Ukraine new gas deal  RFERL: Russia's Putin Wants New Year Without Gas 'Shocks'  Nytimes.com: Ukraine: Putin Soothes Disputeover Price of Sending Fuel  WSJ: The Modern Iron Curtain Is Made of Gas Pipelines - One suspects senior executives at some major European energy companies would be secretly delighted if Russia stopped gas deliveries. The reason: they could buy the gas far cheaper on the world market than they are buying it from Russia. – by Stephen Fidler  PRLog: The Russo-Chinese Oil and Gas Agreements Initiate a New Era in Geopolitics of Oil  RIA: Norwegians dump Norilsk Nickel shares over ecology threat  iStockAnalyst: Hydro Tests at Bushehr Nuclear Reactor Start  Reuters: Sojitz aims to expand Russian wheat sales to Asia  Taiwan Today: Taiwan and Russia ready to deepen ties - Recent trade figures lend support to his view. According to Taiwan’s Directorate General of Customs, Ministry of Finance, the volume of Taiwan’s export to Russia rose from US$604 million in 2006 to US$927 million in 2008. Exports from Russia to Taiwan rose from US$1.9 billion in 2006 to US$2.69 billion in 2008 Press Trust of India: India will not sign readmission pact with Russia  Cyprus Mail: €10 billion in Russian money in Cypriot banks  MINA.eu: Agreement reached, Russia to repay debt to Macedonia  RIA: Russia's largest carmaker to elect new board - Shareholders of AvtoVAZ, Russia's largest auto manufacturer, will meet on Friday to elect a new board of directors, as the company struggles amid mounting debt and low sales.  Interfax: Patrushev: a new draft military doctrine, Russia does not exclude the possibility of nuclear strikes, including a pre-emptive  Itar-Tass: New Russian doctrine allows preventive nuclear strike  The Christian Science Monitor: Would Russia really use nuclear weapons against neighbors?  RIA: New outfits for the Russian army: bulletproof clothes and boots  HydroWorld: Bombing at Hydropower Plant in Kabardino-Balkaria Prevented  The Sofia Echo: A special purpose base - If you are wondering where the new Russian emergency situations ministry headquarters will be, the answer is – about 90km west of the Bulgarian border in the Serbian town of Nis. In late October, Serbia and Russia completed an agreement that would enable the establishment of a humanitarian base in the Serbian town, from which Russian aircraft will operate in times of natural disasters, such as forest fires which frequently ravage the region. On the face of it, the concept sounds noble, but some additional details of the deal are cause for concern – the presence of a Russian sapper detachment, for one. More often than not, in many cases Russian "noble ideas" conceal other objectives.  Pravda.ru: China Humbly Launches Serial Production of Stolen Russian Fighter Jets  Axisglobe: Economic security department head of Russian Federal Security Service’s directorate in St.Petersburg resigned  Itar-Tass: Investigators say priest killed for religious reasons  Itar-Tass: Priest Dmitry Sysoyev killed in southern Moscow  Nytimes.com: Russian Priest Killed in Church  Telegraph.co.uk: Russia refuses autopsy for anti-corruption lawyer  Commentary RFERL: Russia And The EU After Lisbon  Interfax: Carl Bildt: In spite of differences we strive for a constructive relationship with Russia - Swedish Foreign Minister Carl Bildt gave an interview to Interfax in the wake of the EU-Russia summit in Stockholm.  RIA: Russian ship breaks out of 'ice prison' in Antarctic  The Moscow Times: United Russia Seeks A Conservative Face - Some 600 delegates will discuss the future of the country's dominant political party this Friday and Saturday, when United Russia calls its 11th convention in St. Petersburg.  Russia Profile: Suspended Sentence - The Court’s Decision Provides a Victory for Opponents of Capital Punishment and Relief for Supporters of Russia’s Relationship with Europe  Georgian Daily: Will ‘Bloggerization’ of Russian Bureaucracy Change Relationship between State and Citizens?

National Economic Trends  RBC: Russia sees drop in foreign investments  Cbonds.info: Russia curbs foreign debt  Interfax: Central Bank to offer banks 5-wk, 1-yr unsecured loans on Nov 23-24

Business, Energy or Environmental regulations or discussions  Reuters: Russian markets -- Factors to Watch on Nov 20  EasyBourse: Russia Sees Positive Fund Flows For 2nd Week But Lags Peers  Bloomberg: Russia Leads World in Company Fraud, State Extortion, PwC Says  The Moscow Times: Russia Ranked No. 1 For Economic Crime  WSJ: Russia Mulls Tax on Cross-Border Trades  The Moscow Times: Kudrin Says VEB Switch Not Costly  Alibaba.com: Jan-Oct. Russia steel output slid by 22%  Reuters: Russia VEB to buy RUSAL stake with own cash-FinMin  Reuters: Polyus Gold shareholders cancel stake sale –source  AFP: Kraft Foods targets Cadbury's Russian division  Alibaba.com: INTERVIEW-UPDATE 2-Packard Bell eyes 10 pct Russia laptop share

Activity in the Oil and Gas sector (including regulatory)  Bloomberg: Rosneft, Lukoil Upgraded at UBS as Urals Crude Forecast Raised  Reuters: TNK-BP keeps Fridman as interim CEO until 2011  The Moscow Times: Barsky to Take Over TNK, But Not Until ’11  Oil and Gas Eurasia: Sovcomflot to Build 2 Tankers to Transport TNK-BP Oil Products  Reuters: UPDATE 1-LUKOIL says to switch focus to dividends  Prw.com: Russia and China mull petrochemicals joint venture

Gazprom  Steel Guru: Gazprom holds meeting with Russian shipbuilding plants  St. Petersburg Times: TV Campaign Against Gazprom Tower Mounts

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Full Text Articles

Basic Political Developments http://www.prime-tass.com/news/show.asp?topicid=0&id=468450 Nov 27: Russian President Dmitry Medvedev to take part in Eurasian Economic Community (EurAsEC) summit

Itar-Tass: Putin to attend meeting of CIS prime ministers http://www.itar-tass.com/eng/level2.html?NewsID=14551011&PageNum=0

20.11.2009, 06.39

YALTA, November 20 (Itar-Tass) -- Russian Prime Minister Vladimir Putin will participate in a meeting of CIS heads of government in the Crimean spa of Yalta on Friday.

“The meeting will discuss measures to overcome the global financial and economic crisis and the draft budget of CIS bodies for 2010,” government deputy chief-of-staff Yuri Ushakov said.

The meeting will produce an action plan to overcome the crisis and innovation cooperation guidelines.

On the sidelines of the meeting Putin will have talks with his new Kirgiz and Moldovan counterparts – Daniyar Usenov and Vlad Filat. A bilateral meeting with Kazakh Prime Minister Karim Masimov is also scheduled.

24.kg: Kyrgyz PM to attend session of CIS Heads of Government Council http://eng.24.kg/cis/2009/11/20/9695.html

20/11-2009 08:15, Bishkek – News Agency “24.kg”, By Anton LYMAR

Daniyar Usenov, the Prime Minister of Kyrgyzstan has left for Yalta to take part in the Commonwealth of Independent States Council of the Heads of Government to be held on November 20, press service of the ministers’ cabinet reported.

Joint efforts of the CIS member-countries on overcoming the world financial crisis will be reportedly one of the main topics on the agenda of the regular session.

As Sergei Lebedev, Chairman of the CIS Executive Committee, CIS Executive Secretary stated, the global recession effects were under control of the CIS leaders.

“Plan of joint actions on liquidation of the world crisis consequences, discussed at the last CIS Heads of States’ Summit, will be expectedly approved by heads of governments in Yalta on November 20,” Lebedev said.

Meantime, the prime ministers plan to consider about 19 documents on cooperation in energy, trade and other spheres. AFP: Putin derides Georgian leader Saakashvili http://www.google.com/hostednews/afp/article/ALeqM5hHLwI6enEdfl4gsawyweqkBNb vTA

(AFP) – 3 hours ago

YALTA, Ukraine — Vladimir Putin on Friday delivered one of his most searing attacks yet against the Georgian leader Mikheil Saakashvili, saying it may not be safe to wear ties around him.

Asked at a news conference to comment on Saakashvili's current visit to Kiev, the Russian strongman premier known for his bad boy image and sharp tongue said the Georgian leader and his host, Ukraine's fiercely pro-Western president Viktor Yushchenko, should meet without ties.

"The two presidents would be better off holding a dinner -- if they are to hold it -- without ties. Ties are pricey these days... Well, you understand what I mean," he said, eliciting laughter from officials and journalists.

"Yushchenko's guest will scarf up his tie."

Putin alluded to the widely-circulated footage in which Saakashvili put a tip of his tie into his mouth and chewed on it as he waited to be interviewed last year.

In 2008, Russia and Georgia went to war over the breakaway region of South Ossetia.

Putin's host, Ukrainian Prime Minister Yulia Tymoshenko, who is Yushchenko's arch foe, sought to play along, quipping: "I would definitely (do it) without ties."

Putin said Yushchenko and Saakashvili would have much to talk about.

"The fighters reminisced about past days and battles that they have lost together," Putin mused.

Putin was in Yalta for talks with Tymoshenko over boosting cooperation in economy. He announced earlier in the day Russia would allow Ukraine to buy less gas next year, staving off the threat of multibillion-dollar fines.

The meeting was a chance for Putin and Tymoshenko to flaunt their strong relations in the runup to the presidential elections in which both Tymoshenko and Yushchenko would run. Neither Putin nor Tymoshenko made any mention of the January 17 election but the Russian prime minister said he felt comfortable working with his Ukrainian counterpart.

"It's comfortable for us to work with the Tymoshenko government," he said. "During the time of our cooperation relations between Russia and Ukraine have become more stable and strengthened."

Tymoshenko agreed, saying Russia and Ukraine have begun to build ties for years to come.

"That is what our peoples want I believe: calm, worthy, pragmatic and equal cooperation... This is true freedom and true partnership."

Putin's protege, President Dmitry Medvedev, in August swore off doing business with Yushchenko, accusing him of pursuing "anti-Russian" policies.

Yushchenko on Thursday sent a letter to Medvedev saying current gas contracts between Moscow and Kiev had to be revised.

Russia Today: Teenage Georgian pawns in South Ossetia may be swapped http://www.russiatoday.com/Top_News/2009-11-20/georgian-teens-ossetia- detained.html/print

20 November, 2009, 10:13

Four Georgian teenagers caught at the South Ossetian border with explosives and grenades have made it to the center of a growing international row, and now could be exchanged in return for South Ossetian detainees.

If an agreement is not made, the teenagers could be held for a further two months.

Tbilisi, however, is demanding the immediate release of the youngsters, saying children must not be used as political pawns.

When the teens were detained, they showed the South Ossetian police where they had hidden their bag, in which, next to loaves of bread and sausages, was something more sinister: trotil and ammonal blocks, Bickford fuse and offensive hand grenades with separated detonators.

The boys, aged between 14 and 17, have been held since November 4 by South Ossetia.

They are accused of crossing the border with Georgia illegally while armed with grenades and explosives.

The youngest, 14-year-old Georgy, says this is not his first trip to South Ossetia and he was simply visiting relatives. ” I don’t know their family name, they live on Kutuzov street,” states detainee Georgy Romelashvili. “I know their names only – Goga and Anzor.”

The eldest, 17-year-old Levan, says he was attempting to visit his home, and his friends were coming with him.

“I wanted to see my house in the village of Khevit,” says detainee Levan Khmisuashvili.

Georgia has been angered by the arrests, accusing authorities in South Ossetia of kidnapping, and Russia of being involved, but its allegations of ill treatment have been dismissed.

“I've talked to the boys. They are healthy and are being looked after,” assures Vitaly Gassiev, South Ossetia’s deputy Interior Minister.

The European Union has also expressed deep concern, and has called on the South Ossetian side to release all four immediately.

Prosecutor’s in South Ossetia say they will continue to investigate whether the frontier was crossed illegally, and if it was part of an attempt to smuggle arms.

”It's intolerable. People have allowed the youngsters to cross into South Ossetia to inflame the situation in the security zone,” bemoans Vitaly Gassiev.

Border tensions show no sign of abating since Georgia launched a war against South Ossetia in the summer of 2008. Russia stepped in to restore peace, and the result was South Ossetia’s declaration of independence.

There was a similar incident in October, when 16 Georgians were detained close to South Ossetia. They were cutting wood and insisted they had no idea they had crossed the border. All were released the same day and sent back to Georgia.

Now the question is who these Georgian teenagers with explosives really are. There are many theories on that, but most likely, local officials claim, Tbilisi is using the boys as cannon fodder for anti-Russian propaganda ahead of the Geneva talks, and in the most optimistic scenario they might be swapped for Ossetians imprisoned in Georgia. Their fate is now in the hands of the South Ossetian authorities.

Interfax: Belarusian foreign minister to visit Moscow next week http://www.interfax.com/3/531112/news.aspx

MOSCOW. Nov 20 (Interfax) - Belarusian Foreign Minister Sergei Martynov is expected to be in Russia on a working visit on November 25, Russian Foreign Ministry spokesman Andrei Nesterenko said. "A joint session of the Russian and Belarusian Foreign Ministries' collegiums will be held in the framework of Belarusian Foreign Minister Sergei Martynov's visit to Moscow on November 25," he told journalists. The text of Nesterenko's reply to the press was posted on the Russian Foreign Ministry's website on Friday. "The practice of conducting regular joint collegiums proves the high level of the foreign policy cooperation between our countries, which is based on the desire to work out common approaches on key issues of the international agenda," the diplomat said. The upcoming session will discuss and adopt a program of joint measures in the Union State members' foreign policy for 2010-2011, he said. The document will set out the priorities in the Russian-Belarusian cooperation both in the bilateral format and in the framework of international organizations, Nesterenko said. "The program of concerted action in the Union State members' foreign policy to be adopted by the Russian and Belarusian Foreign Ministries will be put forward for approval by the Supreme State Council of the Union State in the first half of December this year," Nesterenko said.

Itar-Tass: Aliyev to visit Russia November 24 – Kremlin http://www.itar-tass.com/eng/level2.html?NewsID=14549474&PageNum=0

19.11.2009, 17.04

MOSCOW, November 19 (Itar-Tass) - Azerbaijani President Ilkham Aliyev will make a working visit to Moscow on November 24 at the invitation of Russian President Dmitry Medvedev, the Kremlin press service reported on Thursday.

Medvedev and Aliyev will visit Ulyanovsk to take part in a solemn ceremony devoted to naming a square after Geidar Aliyev.

News.az: Russia does not bind Karabakh problem to Armenian-Turkish ties http://www.news.az/articles/2930

Fri 20 November 2009 | 06:01 GMT

Russia does not see any connection between the processes of the Karabakh settlement and the Armenian-Turkish rapprochement, Russia’s FM spokesman Andrey Nesterenko has said.

According to him, some Armenian mass media stated that Moscow “has changed its position and now it ties the Karabakh settlement to the Armenian-Turkish rapprochement”. “This is a misunderstanding. Russian Foreign Minister Sergey Lavrov has repeatedly voiced country’s position which remains changeless. These are two different processes”, Nesterenko said.

He noted that Russia has a positive attitude towards the bilateral documents signed between Armenia and Turkey “that define further actions of the sides on the comprehensive normalization of the state relations”.

“I’m confident that the establishment of good neighbor relations between Armenia and Turkey will further promote steps ensuring peace and security in the South Caucasus”, the diplomat said.

“As for the Nagorno Karabakh conflict, despite existing differences the sides managed to attain a definite achievement in the coordination of basic principles of its resolution”, Nesterenko said.

According to the spokesman, Moscow considers that Azerbaijanis and Armenians carry the main responsibility for the resolution of the Karabakh conflict.

“Russia will be ready to support the variant of the problem settlement that will be suitable for all the parties involved and to guarantee settlement in case a compromised agreement is reached”, he explained.

APA.az: Andrei Nesterenko responds to Edward Nalbandian’s accusations http://en.apa.az/news.php?id=111376

[ 20 Nov 2009 11:10 ]

Moscow – APA. Director of the information and press department of the Russian foreign ministry Andrei Nesterenko responded the accusations by Armenian foreign minister Edward Nalbandian, APA reports. “Moscow doesn’t pass over the sensation made by some Armenian press agencies around the statement of Russian foreign ministry official on November 17. Armenian newspapers said that Moscow supposedly changed its position and was linking the processes of the settlement of Nagorno Karabakh conflict and Turkish-Armenian rapprochement now. This is misunderstanding. Russian foreign minister Sergei Lavrov made a number of statements about the Moscow’s position. It remains unchangeable. The question is about two different processes”, said Nesterenko.

He said Russia positively appreciated the documents signed between Turkey and Armenia. “We believe that friendly neighbor relations between Armenia and Turkey will have objective effect on enhancing of peace security in the South Caucasus. Regarding the Nagorno Karabakh conflict, despite existing discords, the sides achieved certain progress toward the agreement on basic principles of the settlement process. We see our role in this process in promoting of its development, assisting the sides to reach common denominator, but we don’t forcibly suggest any solution recipe to the conflicting parties. Our position is based on that the Azerbaijanis and Armenians are responsible to make last choice. Russia is ready to support any solution option acceptable by all sides and to play a role of guarantor for the settlement in the case of compromise agreement”.

The Moscow Times: Nagorno-Karabakh Talks Set http://www.themoscowtimes.com/news/article/nagorno-karabakh-talks-set/389996.html

20 November 2009 Reuters

TBILISI, Georgia — The presidents of Armenia and Azerbaijan will hold talks Sunday on the Nagorno-Karabakh conflict, France said Thursday, with Turkey pressing for progress before it seals a rapprochement with Armenia.

Fifteen years of mediation have failed to produce a peace deal on the Armenian- populated mountain territory, at the heart of a key transit region for oil and gas to the West.

But a historic thaw between Armenia and close Azeri ally Turkey — which has significance for Turkey’s EU membership bid and landlocked Armenia’s crisis-hit economy — has thrust the conflict back into the diplomatic spotlight.

Turkey says it wants to see progress on Nagorno-Karabakh before it ratifies a deal to open its border with Armenia and establish diplomatic ties, overcoming a century of hostility stemming from the mass killing of Armenians by Ottoman Turks.

The French Foreign Ministry, in a statement posted on its web site, said Armenia’s Serzh Sargsyan and Azerbaijan’s Ilham Aliyev would meet Sunday at the French consulate in Munich. The talks are led by a trio of mediators from the United States, Russia and France working under the Organization for Security and Cooperation in Europe.

The Munich meeting will be the sixth this year, an intensity fueling speculation about a possible breakthrough. Mediators say they are making progress, but diplomats caution that neither side appears ready to commit to difficult concessions and sell them to their people.

RIA: Ukraine, Russia set to ink new nuclear energy deal http://en.rian.ru/exsoviet/20091120/156911369.html

02:0520/11/2009 YALTA, November 20 (RIA Novosti) - Ukraine and Russia have prepared a strategic cooperation contract in the nuclear energy sphere until 2020, Ukrainian Prime Minister Yulia Tymoshenko said.

"Our respective ministries have prepared a strategic contract until 2020, which is ready to be signed," Tymoshenko said after a meeting with Russian Prime Minister Vladimir Putin on Thursday.

"I think that we will soon finalize another important document, which will ensure stability in our cooperation [in the nuclear sphere] for years to come," she added.

Ukraine produces uranium, but has no capacity to enrich it. All nuclear fuel for Ukraine's five nuclear power plants (NPP) and two research reactors is supplied by Russia's TVEL corporation.

The existing contract on nuclear fuel deliveries expires in 2010. A new agreement has not been signed yet, although it was expected to be concluded by July 15.

Interfax: Tymoshenko calls for Russia, Ukraine to cooperate in grain trade http://www.interfax.com/3/531133/news.aspx

YALTA. Nov 20 (Interfax) - Ukraine's Prime Minister Yulia Tymoshenko has offered to Russia to cooperate in supplying grain to third countries' markets. "I think it would be right if we speak not only about market trade and fair competition but also partnership," Tymoshenko said a session of the Russian-Ukrainian economic cooperation committee in Yalta on Thursday. "[This could be] a partnership in supplying grain, of which both Russia and Ukraine have gathered plenty, to the markets in various parts of the world," she said.

RIA: Ukraine seeking part in Russia's Glonass project http://en.rian.ru/exsoviet/20091120/156912992.html

06:3920/11/2009

YALTA, November 20 (RIA Novosti) - Ukrainian Prime Minister Yulia Tymoshenko has offered Russia her country's participation in the ambitious Glonass global positioning project. Glonass - the Global Navigation Satellite System - is the Russian equivalent of the U.S. Global Positioning System, or GPS, and is designed for both military and civilian use. Both systems allow users to determine their positions to within a few meters.

"We have agreed that the Glonass system would be more efficient if Ukraine became an intrinsic part of this project. Ukraine has all resources necessary for this," Tymoshenko said after talks with Russian Prime Minister Vladimir Putin on Thursday.

The 18 satellites the Glonass system requires for continuous navigation services covering the entire territory of the Russian Federation are currently in orbit.

Another six satellites still have to be launched to bring numbers up to the 24 needed to provide services worldwide.

A total of 9.9 billion rubles ($360 million at the current exchange rate) was allocated for Glonass from the federal budget in 2007, and 4.7 billion rubles ($170 million) in 2006.

Putin signed an order on September 12, 2008, providing an additional $2.6 billion to develop the system.

Bloomberg: Russia, Ukraine May Swap Minority Stakes in Aviation Companies http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAN2fnrkJSlk

By Anna Shiryaevskaya and Daryna Krasnolutska

Nov. 20 (Bloomberg) -- Russia and Ukraine may swap minority stakes in their aircraft design companies to jointly produce new planes.

“Should we move our aviation industries closer, to design and produce airplanes, I think we can reach very serious results,” Ukrainian Prime Minister Yulia Timoshenko said late yesterday after meeting with her Russian counterpart Vladimir Putin in Yalta, Ukraine.

Ukraine and Russia want to cooperate in the design and production of An-140, An-148 and An-148-100 aircraft, Timoshenko said, adding that she “welcomes” resuming the An-70 transportation plane project.

Putin said Timoshenko’s proposal to swap minority stakes will be analyzed, taking into account an evaluation of the companies. Russia’s United Aircraft Corp. is estimated to be worth $3 billion, he said.

To contact the reporter on this story: Daryna Krasnolutska in Yalta at [email protected] Anna Shiryaevskaya in Yalta at [email protected]

Last Updated: November 19, 2009 19:55 EST Russia Today: Prime Ministers put on smiles to fend off new gas dispute http://www.russiatoday.com/Business/2009-11-20/ukraine-russia-gas-relations.html/print

20 November, 2009, 10:39

This New Year’s Eve will not be clouded by gas cuts, says an optimistic Vladimir Putin after meeting with Ukrainian counterpart Yulia Timoshenko in Yalta on Thursday.

Stiff smiles and strained relations. The Prime ministers of Russia and Ukraine met in Yalta for talks on gas cooperation – something which has been hard to come by recently.

There will be no sanctions imposed on Ukraine due to the new, lower volumes for the year 2010. Also all the discounts that both sides enjoyed this year will be cancelled, according to Vladimir Putin.

“We agreed on this right away and informed everyone about this – Ukraine kept last year’s level of gas transit and we made a 20% discount, from the European gas price. Next year there will be no discounts and no benefits for gas transits. The price for the gas transit will be more than the gas price itself”.

But ever the diplomat, Yulia Timoshenko explains Russia and Ukraine have no disagreements. Everything, she says, is proceeding according to the contract signed in January 2009, which sets the volumes and transit conditions.

“This year we reached a long-term contract on Russian gas supplies to Ukraine and to Europe via Ukraine until the year 2019. It was a breakthrough in our relations in the gas sector and both countries are complying with that agreement. It is very important that Russia, as the stronger country, is making concessions for Ukraine and bears in mind the crisis situation”.

Ukraine’s President Victor Yushchenko disagrees. In a letter to Dmitry Medvedev he complains that Ukraine is struggling with paying high prices for gas, while only getting a small sum in transit fees.

Ukraine’s political climate may be about to change with January's Presidential election. But, for the time being, Yushchenko is doing his best to make the gas transit issue a key issue in the battle for votes.

From the new year, transit fees are due to be calculated according to a new formula, which both sides have long since agreed to. Aleksandr Morozov – HSBC, chief economist says this makes it a political football in Ukraine.

“According to the formula based on the past levels of gas there are likely to see a hike in gas transit fees. The difference will be 50-60%. As far as Prime Minister's office is concerned, they are quite happy with what's written in the contract – indeed it's a pretty high hike in gas transit fees, they will receive extra money from Gazprom. But there is dissatisfaction from the Presidents office”.

Europe is currently buying Russian gas under long term contracts at a much higher price than the spot market or LNG.

Demand has fallen due to the crisis, creating unfavourable market conditions for energy suppliers. It perhaps stands to reason then, it's in Ukraine and Russia's interest to provide their customers with uninterrupted supplies, so as not to provide Europe with any further incentive to look elsewhere.

Itar-Tass: Russia to pay more for Ukrainian transit, charge no fines http://www.itar-tass.com/eng/level2.html?NewsID=14551015&PageNum=0

20.11.2009, 01.38

YALTA, November 20 (Itar-Tass) -- Russia will agree with Ukraine on new gas volumes to be supplied in 2010, will pay more for the transit to Europe and will drop the 20 percent gas price discount for Ukraine, according to Prime Minister Vladimir Putin.

As for insufficient Ukrainian gas offtake in 2009, Russia will charge no fines.

“Ukraine will raise the transit tariff as is envisaged by the contract which we signed. Next year there will be no (gas price) discount and no transit benefits. The transit tariff will rise some 60 percent. We know it and there is nothing unusual in it. I repeat, it is in the framework of the contract. There is nothing provocative in that,” Putin told reporters late on Thursday after a meeting with his Ukrainian counterpart Yulia Timoshenko.

As for the insufficient gas offtake in 2009, “Gazprom has a direct instruction – no fines shall be charged to Ukraine. I repeat, there will be no fines,” Putin said.

Putin said he and Timoshenko discussed for over two hours the whole agenda of bilateral relations and “clarified positions or agreed on key parameters.”

Upstreamonline: Putin calls for year without gas ‘shocks’ http://www.upstreamonline.com/live/article199620.ece

Wire services

Russian Prime Minister Vladimir Putin said that existing gas deals with Ukraine were a guarantee of stable energy supplies to Europe and he hoped for a New Year without any gas "shocks". In good humour after talks with Ukrainian Prime Minister Yulia Tymoshenko on gas supplies to Europe via Ukraine, Putin said: "We sincerely expect that all earlier reached agreements will be implemented and from our side we guarantee full implementation."

"It would be very good to meet the New Year without any shocks," he told a news conference.

His words seemed likely to relieve the European Union which has anxiously monitored the talks in Yalta, southern Ukraine, for indications of whether a new end-of-year gas conflict endangering supplies to EU consumers was on the cards.

Russian supplies piped across Ukraine provide Europe with a fifth of its gas.

Last January millions of people in southern Europe were left without heating after Russia halted gas deliveries to Ukraine for two weeks because of a pricing dispute.

Putin and Tymoshenko brokered a deal ending that dispute. But relations between Russia and its fellow former Soviet republic have slid further in the run-up to a Ukrainian presidential election on 17 January, and the outcome of the Yalta talks had been difficult to read.

The gas deal has become mired in infighting in Ukraine between Tymoshenko and her rival, President Viktor Yushchenko.

Though Ukraine has so far settled all its bills on time, Tymoshenko has conceded that meeting the monthly payments for gas is a struggle due to the dire state of the economy.

Putin, in a concession to Kiev, said Russia's gas giant Gazprom and Ukrainian gas company Naftogaz would agree a new volume of gas to be imported next year taking into account the economic crisis in Ukraine.

He also promised not to levy fines on Ukraine for using a lower volume of gas than that set out in current contracts.

Earlier Tymoshenko, responding to a warning a week ago by Putin, pledged that Ukraine would scrupulously fulfil its obligations on the transit of Russian natural gas to Europe.

"We will very carefully and distinctly carry out our part in the transit of the gas," she said. "Ukraine has paid and will pay on time."

Putin warned on 11 November that Russia would cut gas deliveries again if Ukraine stopped paying on time, under an agreement worked out last January, or if it siphoned off transit gas.

The upbeat comments and warm words by Putin and Tymoshenko contrasted with an earlier frosty exchange between Moscow and Kiev over the gas deal. Yushchenko, in an open letter to Russian President Dmitry Medvedev, asked him to revise the gas deal which he believes sets too high a price for Russian gas and pitches too low a price for transit fees to Ukraine.

But a Kremlin aide snubbed him, saying Kiev was trying to blackmail Russia and Europe over energy supplies.

Tymoshenko is a front-runner in Ukraine's election next January while Yushchenko, whose pro-Western policies have riled Moscow, trails far behind her in popularity ratings.

Some analysts say that Moscow clearly favours Tymoshenko as president over the other front-runner, the pro-business Viktor Yanukovich, and warm comments by Putin about Tymoshenko appeared to confirm this.

Asked for his views on Ukraine's forthcoming election he said: "It is not my business to give ratings - it is up to the people of Ukraine to give those ratings.

"We find it comfortable to work with the government of Tymoshenko. I think that our cooperation has helped stabilise and strengthen relations between Russia and Ukraine,” reported Reuters.

Friday, 20 November, 2009, 01:54 GMT | last updated: Friday, 20 November, 2009, 01:56 GMT

BBC: Russia gives Ukraine new gas deal http://news.bbc.co.uk/2/hi/europe/8369705.stm

Page last updated at 03:55 GMT, Friday, 20 November 2009

Russia has agreed to ease the terms under which it supplies gas to Ukraine, in a deal which Moscow says should prevent disruption in coming months.

The deal was announced after talks between Russian Prime Minister Vladimir Putin and Ukraine's Yulia Tymoshenko.

It means Ukraine will not be fined if, for using less gas than in its current contract because of the downturn.

In January, many countries in Europe were left short of gas due to a payment dispute between Moscow and Kiev.

Russia provides about a quarter of the gas consumed in the EU and 80% of that is piped through Ukraine. 'Meeting halfway'

The two prime ministers met in the Ukrainian resort town of Yalta on Thursday to discuss the issue of gas supply.

Under contracts signed with Russia earlier this year to end last winter's dispute, Ukraine faced the prospect of huge fines if it did not pay for all the gas it had contracted to buy, regardless of the amount actually used.

Gas consumption in Ukraine has dropped sharply as a result of the economic crisis.

Mr Putin said Gazprom and Naftogaz, the two countries' energy firms, would agree on new volumes.

"We deemed it possible to meet Ukraine halfway and tweak several of our earlier agreements," Mr Putin said.

In a reference to January's dispute, he added: "It would be very good to meet the New Year without any calamities."

Ms Tymoshenko played down the prospect of further disruptions to Europe's gas supply, pledging that Ukraine would meet its obligations to Russia.

"Ukraine has been paying and will continue to pay on time," she said.

In August, the EU and international lending institutions agreed a $1.7bn (£1bn at the time) loan deal for Ukraine to help secure European gas supplies, in return for reforms to Ukraine's gas sector.

RFERL: Russia's Putin Wants New Year Without Gas 'Shocks' http://www.rferl.org/content/Russias_Putin_Wants_New_Year_Without_Gas_Shocks/18 83024.html

November 20, 2009 YALTA (Reuters) -- Russian Prime Minister Vladimir Putin said on November 19 that existing gas deals with Ukraine were a guarantee of stable energy supplies to Europe and he hoped for a New Year without any gas "shocks."

In good humor after talks with Ukrainian Prime Minister Yulia Tymoshenko on gas supplies to Europe via Ukraine, Putin said: "We sincerely expect that all earlier reached agreements will be implemented and from our side we guarantee full implementation."

"It would be very good to meet the New Year without any shocks," he told a news conference.

His words seemed likely to relieve the European Union which has anxiously monitored the talks in Yalta, southern Ukraine, for indications of whether a new end-of-year gas conflict endangering supplies to EU consumers was on the cards.

Russian supplies piped across Ukraine provide Europe with a fifth of its gas.

Last January millions of people in southern Europe were left without heating after Russia halted gas deliveries to Ukraine for two weeks because of a pricing dispute.

Putin and Tymoshenko brokered a deal ending that dispute. But relations between Russia and its fellow former Soviet republic have slid further in the run-up to a Ukrainian presidential election on January 17, and the outcome of the Yalta talks had been difficult to read.

The gas deal has become mired in infighting in Ukraine between Tymoshenko and her rival, President Viktor Yushchenko.

Though Ukraine has so far settled all its bills on time, Tymoshenko has conceded that meeting the monthly payments for gas is a struggle due to the dire state of the economy.

Putin, in a concession to Kyiv, said Russia's gas giant Gazprom and Ukrainian gas firm Naftogaz would agree a new volume of gas to be imported next year taking into account the economic crisis in Ukraine.

He also promised not to levy fines on Ukraine for using a lower volume of gas than that set out in current contracts.

Putin Warning

Earlier Tymoshenko, responding to a warning a week ago by Putin, pledged that Ukraine would scrupulously fulfil its obligations on the transit of Russian natural gas to Europe.

"We will very carefully and distinctly carry out our part in the transit of the gas," she said. "Ukraine has paid and will pay on time."

Putin warned on November 11 that Russia would cut gas deliveries again if Ukraine stopped paying on time, under an agreement worked out last January, or if it siphoned off transit gas.

The upbeat comments and warm words by Putin and Tymoshenko contrasted with an earlier frosty exchange between Moscow and Kyiv over the gas deal.

Yushchenko, in an open letter to Russian President Dmitry Medvedev, asked him to revise the gas deal which he believes sets too high a price for Russian gas and pitches too low a price for transit fees to Ukraine.

But a Kremlin aide snubbed him, saying Kyiv was trying to blackmail Russia and Europe over energy supplies.

Tymoshenko is a front-runner in Ukraine's election next January while Yushchenko, whose pro-Western policies have riled Moscow, trails far behind her in popularity ratings.

Some analysts say that Moscow clearly favours Tymoshenko as president over the other front-runner, the pro-business Viktor Yanukovych, and warm comments by Putin about Tymoshenko appeared to confirm this.

Asked for his views on Ukraine's forthcoming election he said: "It is not my business to give ratings -- it is up to the people of Ukraine to give those ratings.

"We find it comfortable to work with the government of Tymoshenko. I think that our cooperation has helped stabilise and strengthen relations between Russia and Ukraine."

Nytimes.com: Ukraine: Putin Soothes Disputeover Price of Sending Fuel http://www.nytimes.com/2009/11/20/world/europe/20briefs-UkraineBrf.html?_r=1

By CLIFFORD J. LEVY Published: November 20, 2009

Prime Minister Vladimir V. Putin of Russia took a more conciliatory stance toward Ukraine on Thursday in negotiations over the transit of Russian gas through Ukrainian territory. Mr. Putin suggested that Russia would be willing to renegotiate transit agreements so that they would be more favorable to Ukraine. He made his comments after a meeting in the Ukrainian city of Yalta with his Ukrainian counterpart, Yulia V. Tymoshenko.

The two countries have repeatedly feuded in recent years over pricing for the transit of Russian gas, and in January, the gas was shut off for roughly two weeks, depriving parts of Europe of heat. Mr. Putin and other senior Russian officials had warned in recent weeks that Ukraine would create another dispute by not adhering to its contracts.

NOVEMBER 20, 2009

WSJ The Modern Iron Curtain Is Made of Gas Pipelines http://online.wsj.com/article/SB125867400068856569.html?mod=googlenews_wsj

The prospect of shivering through another January without gas for heating fills many people in Eastern Europe with understandable horror. Yet, a fight is shaping up between Russia and Ukraine that could leave them without vital Russian gas supplies. Asked this week whether he believed Moscow would again cut off gas to Ukraine and therefore to much of Europe this winter, Andris Piebalgs, the European energy commissioner, said he thought it a "realistic probability." Some 80% of Russian gas supplies to the European Union pass through Ukraine and gas to Ukraine can't be interrupted without also stopping flows further west.

But not everyone views this prospect with the same dread as East European householders. One suspects senior executives at some major European energy companies would be secretly delighted if Russia stopped gas deliveries. The reason: they could buy the gas far cheaper on the world market than they are buying it from Russia.

In fact, this has the makings of a serious longer term challenge for OAO Gazprom, the state Russian gas monopoly that supplies 40% of the European Union's gas. The gas giant has short-term worries too. Gas demand has collapsed in Europe with the economic slowdown. Gazprom's sales to big European buyers such as E.On, BASF, Eni and GDF Suez have fallen to minimum contract levels, probably about 80% of contracted amounts, energy specialists say.

Unlike last winter, gas storage is full -- though there remain EU countries such as Bulgaria with almost no storage. The buyers would love to take even less from Gazprom but they can't because, under their so-called take or pay contracts, they would have to pay fines if they do.

Contract details are confidential but prices of Gazprom contracts are linked to oil prices with a lag of several months. Energy experts reckon that contract prices are probably around $10 per million British thermal units -- and because oil prices started climbing earlier this year, Russian gas prices will soon follow. Meanwhile, you can pick up liquefied natural gas on the world market for around $4 per million Btu.

The main reason for this gaping differential is a rapid expansion in output from North America. Developers have exploited new technologies to get gas out of the ground that was previously locked in. The growth of this so-called unconventional gas output has encouraged the prediction from the Paris-based International Energy Agency this month of "an acute glut of gas supply in the next few years."

"Gas suppliers to Europe and Asia-Pacific will come under increasing pressure to modify their pricing terms and cut prices to stimulate demand," it forecast in its World Energy Outlook.

But while at the moment Western Europe can bring this international gas into its networks, Eastern Europe can't. This divide, an affront to the idea of a single European market, is a "new iron curtain" that splits East from West, Pierre Noël of the European Council on Foreign Relations told a Brussels audience this week.

West of the divide, gas flows in two directions. East of it, the legacy of the past means that the pipelines allow gas to flow only from East to West, bringing gas from Russia but not allowing gas from the West. Last year's interruptions of supply have prompted renewed efforts to increase storage in Eastern Europe -- Poland's for example is due to double by 2012 -- and also to permit a reverse-flow capability.

One giant obstacle, however, is that Gazprom owns some of the key pipelines bringing Russia gas to the West. Why would it allow the building of so-called interconnectors that will allow competitors' gas to enter Eastern Europe from the West?

How long this new iron curtain will last depends in part on how soon the EU can get its act together to push forward a single market in an environment where, as one senior EU adviser said this week, the bloc "doesn't address this with a strategic view."

A reason for that, said Charles Grant of the Centre for European Reform, is that "national energy champions" -- by which he means the likes of Eni and E.On -- have persuaded national governments to keep the European markets segregated.

Gazprom can help accelerate the progress to a single market by continuing to cut off gas supplies to paying customers. For lots of reasons, therefore, another bitter Russia-Ukraine gas dispute is the last thing Gazprom, as a business, needs.

Gazprom, though, is more than a business. It is also an arm of Russian foreign policy.

Ukraine, whose economy has been among the hardest hit in the world by the global economic crisis, faces a presidential election Jan. 17. If Ukraine can't pay for its gas, the Kremlin may not be able to resist teaching President Viktor Yushchenko a lesson by cutting off his country's gas supplies.

Vladimir Putin met Ukraine's prime minister, Yulia Tymoshenko, on Thursday to discuss their energy relations. On Wednesday, Ms. Tymoshenko sought to ease concerns about Ukraine's reliability as a transit nation, saying it hasn't missed a payment in the 10 months since signing a deal with Russia.

But watch out for this around Dec. 7 and Jan. 7, when Ukraine's payments are due. The people of Eastern Europe and European energy executives certainly will be.

Write to Stephen Fidler at [email protected]

PRLog: The Russo-Chinese Oil and Gas Agreements Initiate a New Era in Geopolitics of Oil http://www.prlog.org/10421086-the-russochinese-oil-and-gas-agreements-initiate-new- era-in-geopolitics-of-oil.html

Russia agreed to supply oil to China for 20 years in lieu of a $25 billion loan to OAO Roseneft, a state run oil company and OAO Transneft, a state run pipeline company FOR IMMEDIATE RELEASE

PRLog (Press Release) – Nov 20, 2009 – In October 2009, Russia and China signed multiple oil and gas agreements to strengthen their collaboration in the energy sector. In 2009, they signed oil agreements worth $100 billion. Russia agreed to supply oil to China for 20 years in lieu of a $25 billion loan to OAO Roseneft, a state run oil company and OAO Transneft, a state run pipeline company. Gazprom, the Russian oil and gas giant, aims to build two gas pipelines to deliver 80 billion cubic metres of gas annually to China. This will give Gazprom an opportunity to penetrate into new markets beyond its traditional European markets. China also plans to offer a $10 billion credit to the Shanghai Cooperation Organization (The group comprises of Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan, Russia and China). Further, Chinese sovereign wealth fund will invest $300 million in Nobel Holdings Investments (a Russian oil producing company).

With the global financial crisis affecting the Russian oil and gas sector, Chinese oil agreements have revived optimism. To safeguard its economic growth, China has invested in major oil and gas companies worldwide since December 2008, and Russia, with its huge oil and gas reserves, has been an attractive investment destination for Chinese oil and gas companies. By becoming a major supplier to China, Russia plans to reduce its risk of overdependence on oil and gas revenues from Europe.

This analysis was taken from a research paper published by GlobalData, to download the full Research Paper for free, click below: http://www.researchviews.com/energy/oil-gas/exploration- ...

RIA: Norwegians dump Norilsk Nickel shares over ecology threat http://en.rian.ru/world/20091120/156910700.html

00:2720/11/2009

MOSCOW, November 20 (RIA Novosti) - Shares of the Russian metals giant Norilsk Nickel have been excluded from the portfolio of the Government Pension Fund of Norway, the country's Finance Ministry said in a statement.

The decision has been made under the ethical guidelines outlined by the fund's Ethical Council due to extensive environmental degradation related to the company's activities on the Taymyr Peninsula.

The council said Norilsk Nickel facilities on the peninsula emitted unacceptable amounts of sulfur dioxide and heavy metals in the atmosphere. Norway's Finance Ministry sold Norilsk Nickel shares held by the Government Pension Fund of Norway by October 31.

The Fund does not announce exclusions until it has completed sales of its positions, so as not to affect the share price at the time of the transaction.

Norilsk Nickel accounts for more than 20% of global nickel output, more than 10% of cobalt production and 3% of copper.

The company said on October 19 that its net profit under International Financial Reporting Standards declined 84%, year-on-year, in January-June 2009 to $439 million. iStockAnalyst: Hydro Tests at Bushehr Nuclear Reactor Start http://www.istockanalyst.com/article/viewiStockNews/articleid/3651568

Wednesday, November 18, 2009 2:51 PM

(Source: Daily News Bulletin; Moscow - English)MOSCOW. Nov 18 (Interfax) - Atomstroyexport has started hydro- testing of the primary coolant circuit of the reactor at the Bushehr nuclear power plant in Iran fully in line with the authorized schedule, Sergei Novikov of the Rosatom state nuclear corporation told Interfax.

"Pressure [in the primary circuit] is to be increased to 250 kilos per square centimeter next week," he said.

"The hydro-testing phase will be followed by the reactor's cold and hot operational testing, after which the equipment is to undergo examination. In other words, the testing and commissioning operations are proceeding without any deviation from the schedule agreed upon between the Iranian client and the Russian contractor," Novikov said.

Rosatom is currently preparing power unit 2 at the Rostov nuclear power plant for physical launch. Its hydro-testing was started in August and the hot and cold operational testing in October. The unit is currently undergoing equipment examination, and then the Russian technical standards watchdog Rostekhnadzor is supposed to authorize its loading with nuclear fuel.

If the operations on the Bushehr nuclear power plant proceed in a similar manner, its physical launch is expected in February or March 2010.

At the same time, Bushehr is a unique project with equipment integrated in it from another project, and therefore there is a risk that the equipment that was installed on the site 30 years ago by another contractor may perform unpredictably, which may require longer testing and commissioning operations, Atomstroyexport told Interfax.

Bushehr is the first Iranian nuclear power plant, whose projected capacity is 1,000 mWt. Atomstroyexport is acting as the general contractor in the project. (c) 2009 Daily News Bulletin; Moscow - English. Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.

Reuters: Sojitz aims to expand Russian wheat sales to Asia http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUST306616200911 20

Fri Nov 20, 2009 12:18am EST

TOKYO, Nov 20 (Reuters) - Japanese trading house Sojitz Corp (2768.T: Quote, Profile, Research, Stock Buzz) said on Friday it has signed a strategic partnership with the Russian Grain Union to help expand its sales of Russian wheat throughout Asia.

Sojitz currently imports a limited amount of wheat from Russia for marketing samples.

It handles some 4 million tonnes of wheat imports a year for Asian markets, accounting for about 3 percent of wheat traded globally, mostly from the United States, Australia and Canada.

"We plan to expand the sale of Russian wheat at full force from next year, hoping to bring the total volume we handle to 5 million tonnes by 2012," said a spokesman for the company, the nation's sixth-largest trading house.

Ultimately, Sojitz plans to ship some of the wheat secured through the strategic partnership with the Russian grain industry body to Japan, which now imports 5.5 million tonnes of wheat per year, the spokesman said.

Japanese trading firms are stepping up efforts to secure grain supplies, aiming to use the sheer volume they trade in the global market as a bargaining tool to secure grain for Japan, as supplies are expected to tighten due to voracious demand in China and emerging economies. (Reporting by Chikako Mogi; Editing by Michael Watson)

Taiwan Today: Taiwan and Russia ready to deepen ties http://www.taiwantoday.tw/fp.asp?xItem=79742&CtNode=427

 Publication Date：11/20/2009  Source： Taiwan Today  By Allen Hsu Since the fall of the Soviet Union, Russia has eagerly embraced the capitalist free market. The Kremlin is always on the lookout for ways to further expand Russia’s commercial ties with nations from around the world.

Like Russia, Taiwan, dubbed one of Asia’s four “little dragons” because of its impressive economic performance for several decades, seeks international business opportunities wherever they can be found.

It was thus to be expected that businessmen from the two nations would find each other, and as a result of these contacts trade relations between the two nations are now flourishing.

“The relationship between Taiwan and Russia is strong, and getting stronger by the year,” as Sergey Gubarev, the head of the Moscow-Taipei Coordination Commission on Economic and Cultural Cooperation, noted during a recent speech in very fluent Chinese.

Recent trade figures lend support to his view. According to Taiwan’s Directorate General of Customs, Ministry of Finance, the volume of Taiwan’s export to Russia rose from US$604 million in 2006 to US$927 million in 2008. Exports from Russia to Taiwan rose from US$1.9 billion in 2006 to US$2.69 billion in 2008.

“Even though there are no formal diplomatic ties between Taiwan and Russia, bilateral unofficial or private exchanges are still very dynamic,” said Gubarev.

When the two nations first started trading with each other in the early 90s, trade was mostly one way, with Taiwan importing timber in particular from Russia. But as trade volume has increased, the types of goods being traded has become increasingly diversified.

On the whole, Russia exports mostly raw materials to Taiwan, things such as iron, steel, mineral fuels, oils, and petrochemical products. Taiwan, on the other hand, exports finished goods to Russia—computers, cell phones, bicycles, auto parts and machinery.

“We are very impressed with how Taiwanese companies are able to come up with new products so quickly,” said a Russian consumer to the authors of a recent report prepared by the Taiwan External Trade Development Council, the nation’s main non-profit trade promotion agency better known as TAITRA.

“Taiwanese products can really awaken the shopping impulse in Russian consumers,” said another consumer quoted in the TAITRA report.

For trade volume between the two nations to flourish even more, however, some difficulties still have to be overcome, observers commented. Chief among these are the lack of direct flights between Taipei and Moscow and St. Petersburg, double taxation and lack of investment protections. All these will require the efforts and wisdom of governments on both sides. Another difficulty noted by Taiwanese businessmen working in the area is a lack of understanding of the Russian market on the part of the Taiwanese.

As the TAITRA report notes, a good local agent can not only help exporters market their goods. He or she can also put them in touch with contacts and opportunities that they did not even know existed.

All things considered, it is reasonable to expect that Taiwan and Russia will continue to deepen their trade and mutual understanding, for the economies of the two sides are mutually compatible and complementary. Without a doubt both sides can continue to benefit one another.

“An increasing number of Taiwanese products are being exported to Russia, where they generally sell very well,” Gubarev said. Russian goods, he might have added, sell equally well in Taiwan.

—Allen Hsu is a free-lance writer based in Taipei Copyright © 2009 by Allen Hsu

Press Trust of India: India will not sign readmission pact with Russia http://www.ptinews.com/news/385953_India-will-not-sign-readmission-pact-with-Russia

TAFF WRITER 14:33 HRS IST

Vinay Shukla

Moscow, Nov 20 (PTI) India will not sign a readmission pact with Russia to check the inflow of alleged illegal immigrants as demanded by this country as a condition for easing the visa regime, a senior Indian diplomat has said.

"There is no question of signing a re-admission pact as we don't have a common border with Russia and there is no problem of illegal immigrants entering into this country," Deputy Chief of the Indian Mission here, Satbir Singh said at a news conference.

"All the Indians coming to Russia travel on valid Indian passports and Russian entry visas," he said.

Russia, which has signed a re-admission pact with European Union as a pre-condition for easing EU visas for its nationals, is seeking a similar pact with India, which along with China has been clubbed into the category of countries posing threat of illegal immigration.

Cyprus Mail: €10 billion in Russian money in Cypriot banks http://www.cyprus-mail.com/news/main.php?id=48926&cat_id=1

By Anna Hassapi THERE IS currently €10 billion in Russian money sitting in Cypriot banks, it emerged yesterday.

“Of the €16 billion that is deposited in Cypriot banks by foreigners, €10 billion comes from Russians,” said Russian Ambassador to Cyprus Vyacheslav Shumskiy . “It is very significant that a large part of this amount will be re-invested in Russia. These investments enjoy privileged legal provisions, including the current agreement to avoid double taxation as well as the other benefits offered by Cyprus as an international business centre.”

Shumskiy mentioned the figure during a panel discussion in Limassol titled ‘Emerging Challenges & Opportunities for Expanding Business Relations Between Cyprus and Russia’, organised by the Cyprus International Institute of Management (CIIM).

In the field of investments, Cyprus (mainly through Russian companies based on the island) is among the top foreign investors in Russia, with $56.7 billion, representing approximately 23.4 per cent of all foreign investment in the country.

“Investment is one of the special characteristics of financial and commercial relations between the two countries, and Cyprus is consistently among the leading foreign investors in the Russian economy,” said Shumskiy.

The Russian ambassador also highlighted the significance of the Russian market for Cyprus’ tourism, and the improvements brought about by recent government measures to ease the inflow of Russian tourists.

“One of the most profitable directions in the cooperation between the two countries is tourism. The innovation of issuing preliminary passport viewing to Russian nationals has been appreciated by Russian travel agents. From January until August, a total of 105,000 Russian tourists have visited Cyprus,” he said.

He said the next step in attracting Russian tourists would be the opening of Cypriot consulates in Krasnondar, Samara and other towns.

“Russia is the most significant trading partner for Cyprus and the Cyprus government is taking all necessary measures to maintain and further strengthen this position,” Finance Minister , Charilaos Stavrakis told the panel.

“During this period we expect the signing of the final agreement on the avoidance of double taxation by the Duma, which will widen investment opportunities between the two countries. Our government will maintain the low taxation regime in force today, and besides being an EU member, our country possesses a stable macroeceonomic environment,” added Stavrakis. Also attending the event was former Finance Minister Michalis Sarris, Phidias Pilides President of the Cyprus-Russian Business Association and CEO of PricewaterhouseCoopers, Yuri Pianykh President of the Association of Russian Businessmen in Cyprus and the General Manager of the Russian Commercial Bank (Cyprus). Copyright © Cyprus Mail 2009

MINA.eu: Agreement reached, Russia to repay debt to Macedonia http://macedoniaonline.eu/content/view/9761/2/

Thursday, 19 November 2009

Russia will return the $60 million clearing debt to Macedonia with the realisation of a gasification project, Vice PM and Minister of Finance Zoran Stavreski said Thursday upon returning from the Russian Federation.

Russia has agreed Macedonia to obtain highest support from Gazprom in the execution of this vital project, stated Stavreski, who together with his Russian counterpart Alexei Kudrin harmonized the text of the document. It needs to be approved by the government and parliament before its planned launching in 2010.

Stavreski informed that the total value of the gasification project was estimated at $200 and 300 million depending on the route. - Given the fact that $60 million are not sufficient for the project to be completed, Macedonia will co-finance the portion which will be built together with Russia and the portion which will completely financed by Macedonia in a bid the gas line network to be constructed, Stavreski stated.

He stressed that the agreement with Russia to pay the debt was of great significance because it settled a major issue with a realisation of one of Macedonia's capital projects and because the total debt of $60 million would be covered.

RIA: Russia's largest carmaker to elect new board http://en.rian.ru/business/20091120/156913772.html

08:5620/11/2009

MOSCOW, November 20 (RIA Novosti) - Shareholders of AvtoVAZ, Russia's largest auto manufacturer, will meet on Friday to elect a new board of directors, as the company struggles amid mounting debt and low sales. The Togliatti-based company, known abroad for its Lada brand, saw its sales fall by 44% in the first half of this year to 179,000 cars. Its net loss according to Russian Accounting Standards during the period was $492 million.

Russian Deputy Prime Minister Igor Shuvalov said on Sunday that the government would support a takeover by Renault-Nissan, which currently holds a 25% stake in AvtoVAZ.

/Google translation/

20.11.09 09:04 Patrushev: a new draft military doctrine, Russia does not exclude the possibility of nuclear strikes, including a pre-emptive http://www.interfax-russia.ru/main.asp?id=56132

November 20. Interfax-Russia.ru - Security Council Secretary Nikolai Patrushev said the willingness of the new draft military doctrine of Russia, which, inter alia, provides for the use of nuclear weapons.

"In general, the draft military doctrine on nuclear weapons issues in the spirit of the conservation status of Russia's nuclear powers, able to implement the nuclear deterrence of potential adversaries from aggression against it and its allies," - he said in an interview with Rossiyskaya Gazeta, published on Friday .

"It is envisaged the possibility of using nuclear weapons depending on the conditions of the situation and possible enemy intentions. In critical to national security cases not excluded by drawing on the aggressor of a nuclear strike, including a pre-emptive", - said N. Patrushev.

However, he stressed that "we are adamantly opposed to any solution of conflicts by military means, not to mention the possible use of nuclear weapons."

"Russia has always been consistent and reliable partner in the field of disarmament and nuclear non-proliferation. During the course of the START Treaty, Russia and the United States has already significantly reduced the existing arsenals. We affirm that we are ready to move forward, striving towards the idea of a nuclear-free world" - he said.

"But for this it is necessary that not only Russia and the United States renounced nuclear weapons, but their example was followed by other countries - members of the nuclear club, while on the fence", - said N. Patrushev.

Talking about the extent to which a draft of a new military doctrine, he stated that "in the apparatus of the Security Council created an interagency working group, comprising representatives of federal authorities, the State Duma, Federation Council, envoys of President vehicles in the federal districts, Russia Academy of Sciences, Academy of Military Science, research and public organizations. "

"The project is ready" - stressed the secretary of the Security Council.

N. Patrushev recalled that the project has already been discussed during retreats in all federal districts. "There were very sensible proposal heads of the regions that we analyze and take into account", he said.

Itar-Tass: New Russian doctrine allows preventive nuclear strike http://www.itar-tass.com/eng/level2.html?NewsID=14551013&PageNum=0

20.11.2009, 05.03

MOSCOW, November 20 (Itar-Tass) -- Russia views its nuclear arsenal as deterrence, but may deliver a preventive strike in a critical situation, according to the draft of a new national military doctrine.

“The possibility of using nuclear weapons depends on the situation and intentions of the potential adversary. In critical situations for the national security a nuclear strike at the aggressor, including preventive strike, is not ruled out,’ Security Council Secretary Nikolai Patrushev said in an interview published by Rossiyskaya Gazeta on Friday.

At the same time he stressed Russia is categorically against resolving any conflicts by military way, to say nothing about the use of nuclear weapons.

He said Russia views its nuclear arsenal as deterrence from aggression, first and foremost, from nuclear powers. “A potential adversary shall comprehend the futility of unleashing aggression with the use of nuclear and conventional means of destruction. Inevitability of retaliation is a sobering factor for any potential aggressor. Such an understanding is based on the ability of nuclear forces to inflict unacceptable damage to the aggressor in any situation,” Patrushev said.

He recalled that Russia had always been a reliable partner in disarmament and nuclear non-proliferation. “We confirm that we are ready to progress and promote the nuclear- free world idea. However it is necessary that not only Russia and the United States reject the nuclear weapons, but other member-countries of the ‘nuclear club’ that currently occupy a wait-and-see attitude follow their suit.”

Patrushev said military threats to Russia continue to exist.

“The results of the analysis of military-strategic situation in the world and prospects of its development up to 2020 demonstrate that potential military threats to our country have not been dropped,” he said. Among the threats he listed NATO expansion to Russian borders and mounted military activities of the alliance. He cited as an example the exercises of US strategic forces to train control of the use of nuclear arms that resumed after a nine-year break.

Other destabilizing factors include proliferation of nuclear, chemical and biological technologies, production of weapons of mass destruction and international terrorism.

Patrushev said conflict potential is growing in border areas, including in the Arctic region, due to the struggle for energy and other natural resources. Besides, territorial claims to Russia intensify from such states, as Japan.

The situation in Iraq and Afghanistan, conflicts in the Middle and Near East, in some African and southern Asian countries, on the Korean Peninsula will negatively affect the international situation in the mid-term, Patrushev predicted.

Domestic military threats also exists and mostly come from North Caucasus, he said.

The ongoing military conflict in Afghanistan affects Russian national security, as it triggers illegal migration in close proximity to Russian borders and results in threatening production and spread of illegal drugs.

Last year “senseless policy and unmeasured ambitions of Saakashvili unleashed hostilities in South Ossetia that directly affected the life and security of our citizens,” Patrushev said.

It will be the third variant of the military doctrine in the history of modern Russia. The 1993 document excluded military conflicts. The 2000 variant said the doctrine was defensive.

“Life is changing. Developments in the world showed that conflicts, even large-scale, are possible,” Patrushev said.

The Christian Science Monitor: Would Russia really use nuclear weapons against neighbors? http://georgiandaily.com/index.php? option=com_content&task=view&id=15710&Itemid=132

November 19, 2009

A new Russian doctrine – which says it can use nuclear weapons preemptively against small regional adversaries – is seen either as a sign of aggression or bluster to mask insecurity.

By Fred Weir, Correspondent of The Christian Science Monitor MOSCOW - The Kremlin is drafting a new military doctrine, due by year's end, that may authorize the armed forces to use nuclear weapons not only to counter a massive conventional attack but even to launch a preemptive strike against a small regional adversary – such as neighboring Georgia or Ukraine – that might be deemed a threat to Russia. Or so declared the new doctrine's main author, Kremlin Security Council chief Nikolai Patrushev, in a newspaper interview that sent shock waves rolling around the world last month and generated a storm of controversy among military analysts. Experts divide between those who see the new, forward-leaning nuclear doctrine as a sign that the Kremlin is becoming more menacing toward its post-Soviet neighborhood, and those who view it as an expression of extreme vulnerability at a moment when the Russian military is undergoing its most radical reorganization in almost a century. What Mr. Patrushev said, speaking to Moscow's biggest daily newspaper, Izvestia, was that, in a big change over the previous doctrine adopted in 2000, "We have corrected the conditions for use of nuclear weapons to resist aggression with conventional forces not only in large-scale wars, but also in regional or even a local one." A WARNING OR EXPEDIENT? Even more explosive, Patrushev added that Russia might strike first against an enemy whom it suspected of harboring belligerent intentions. "In a situation critical for national security, we don't exclude a preventive nuclear strike at the aggressor," he said. Some critics say it seems almost bizarre to lower the threshold for using atomic weaponry at a time when Moscow is trying to negotiate radical reductions in strategic warheads with the United States and President Dmitry Medvedev has signed on to the "Global Zero" campaign for a world free of nuclear arms. These critics also warn that the new doctrine, which Mr. Medvedev is due to sign in December, could have a chilling effect on Russia's relations with other post-Soviet states if the final version includes those provocative points. "It seems that even in the case of small conflicts, such as the war Russia had with Georgia last year, where there is a fear that the US or NATO might intervene," says Pavel Felgenhauer, a military expert with the opposition weekly Novaya Gazeta, "we are now going to invoke nuclear deterrence. Nobody is really intending to use nuclear arms, but the point here is to warn other big powers to stay away in the event of conflicts in our own neighborhood," such as a hypothetical crisis with Ukraine over Crimea, or with Georgia over the breakaway state-lets of South Ossetia and Abkhazia, he says. Other experts suggest the bombastic – and very public – nuclear talk might be a temporary expedient, to cover Russia's extreme weakness as it undergoes a quiet reorganization of its armed forces. According to Vitaly Shlykov, a former Soviet war planner who now serves as a civilian adviser to the Russian Defense Ministry, the military reform will abolish the old "mobilization" army that Russia has maintained for more than a century and replace it with a much smaller and streamlined force, but one whose brigades are fully staffed and combat ready. "Naturally, the Army is weakened, temporarily weakened, by these very radical changes," says Mr. Shlykov. "It's natural that we would rely more on our nuclear deterrent during this transition, though it's debatable whether that should be done in the loud fashion that Patrushev did." SCALING BACK RUSSIAN ARMY Under the military reform, the number of officers in the armed forces will be slashed from 355,000 to 150,000, while overall manpower will fall from around 1.2 million to 1 million. The most dramatic change will be the abolition of hundreds of "phantom" divisions, with officers but no troops, which were meant to be filled out in wartime through the mobilization of millions of reservists. Plans call for cutting the number of Russian Army units from the present 1,890 to just 172 by 2012. "The day of no return for the military reorganization is coming up fast, Dec. 1," says Shlykov, a former deputy chair of Russia's State Defense Committee. "At that point, Russia will have a totally new army, at least on paper. Of course, it will take a few years to bring it up to speed. Until then, we have only our nuclear weapons to rely on." Russia currently deploys about 2,780 strategic nuclear warheads – though negotiations for a new arms-reduction deal with the US could bring that down to around 1,500 – plus another 2,000 tactical weapons. Russia's Strategic Rocket Forces will be only slightly affected by the ongoing reform, and remain in full operational shape during the current transition, experts say. Russia began to shift to reliance on nuclear weapons after the collapse of the Soviet Union and the evaporation of its military alliance, the Warsaw Pact. As more and more Eastern European countries joined NATO over the past decade, and Russia's once- massive conventional forces dwindled and decayed, the Kremlin began to regard the nuclear option as the key guarantor of national security in a crisis. 'WE ENVISAGE ONLY SMALL, REGIONAL WARS' Experts say the old Cold-War equation, in which numerically overwhelming Warsaw Pact legions prompted NATO to emphasize its tactical nuclear options, has been reversed since the USSR and its alliance disbanded. "In earlier times, when we had conventional superiority," says Gen. Makhmud Gareyev, president of the official Academy of Military Sciences in Moscow, "we didn't need nuclear weapons so much. But their importance has been growing. We need to preserve the strategic parity that we had in the past." But this moment of strategic vulnerability for Russia, though potentially dangerous, will probably only last a few years, says Shlykov. "The reality is changing drastically, and Russia is no longer thinking in terms of large- scale conventional conflicts with NATO," Shlykov says. "In future, we envisage only small, regional wars. And soon we will have completely modern conventional armed forces to deal with them."

RIA: New outfits for the Russian army: bulletproof clothes and boots http://en.rian.ru/video/20091120/156915252.html

12:1020/11/2009

This exhibition of modern army equipment in Moscow features fire-resistant clothes for tank crew, grenade-proof boots and vitamin bars for special forces. HydroWorld: Bombing at Hydropower Plant in Kabardino-Balkaria Prevented http://www.hydroworld.com/index/display/news_display/137971769.html

NALCHIK. Nov 18 (Interfax) - A terrorist attack has been prevented at the Aushiger Hydropower Plant in the Cherek district of Kabardino-Balkaria.

"Cherek district police officers prevented a terrorist attack at the Aushiger Hydropower Plant," the information center of the Kabardino-Balkarian law enforcement agencies reported on Wednesday.

"A cache containing four kilos of plastic explosives, seven grenades of various models and detonators for them, four MUV detonators, and an SZ-4 projectile were discovered in a forest 200 meters away from the hydropower plant's building," it said.

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The Sofia Echo: A special purpose base http://www.sofiaecho.com/2009/11/20/818515_a-special-purpose-base

Fri, Nov 20 2009 10:01 CET by Tsvetelina Manolova, Panayot Angarev

If you are wondering where the new Russian emergency situations ministry headquarters will be, the answer is – about 90km west of the Bulgarian border in the Serbian town of Nis.

In late October, Serbia and Russia completed an agreement that would enable the establishment of a humanitarian base in the Serbian town, from which Russian aircraft will operate in times of natural disasters, such as forest fires which frequently ravage the region. On the face of it, the concept sounds noble, but some additional details of the deal are cause for concern – the presence of a Russian sapper detachment, for one. More often than not, in many cases Russian "noble ideas" conceal other objectives.

The awkward thing in this case is both countries’ decision to open a joint base. Usually countries sign treaties on bilateral assistance, or private companies set up logistic centres from which governments hire aircraft in cases of emergency.

Earlier, a Bulgarian company Air Sofia wanted to establish a base at the same location, but the plan eventually collapsed, Lilyan Todorov, one of the company’s owners said. He said that the company had seven aircraft, of which one was always on standby and could have been redirected to firefighting duties at any time if necessary. The plan did not come to pass because the company’s aircraft were taken out of use. As for whether the planned Air Sofia base and the Serbian-Russian humanitarian base were the same thing, answers were not given, despite their similarity.

According to Russia’s ambassador in Serbia, Alexander Konuzin, construction of the joint base will start by summer 2010, within the perimeter of the current Nis airport. The idea is for it to evolve into a regional centre for humanitarian activities in which other countries, Bulgaria, Croatia, Greece, and Macedonia will also participate.

"Russian forces are employed every year in combating wild forest fires in this region, so us having a well-equipped base there will facilitate our operations and make our work more effective," according to Russian emergency situations minister Sergei Shoigu.

Regardless of these attempted reassurances, Serbian media came up with conspiracy theories about the Russian base. One was that the facility’s primary objective is to protect the South Stream natural gas pipeline.

"This is not just a fire fighting station, nor is it a classic military base. This is an example of one of those bases that goes hand-in-hand with major geopolitical and/or energy projects, such as linking gas pipelines," Serbian journalist Dimitrije Boarov said.

It is possible that Moscow will attempt to secure the pipeline through this base, as the pipeline itself is intended to pass through Nis.

Notably, two years ago an idea was circulated in Bulgaria that the Bulgarian secret services and its Russian counterpart would create a joint task force specialising in pipeline security for the Bourgas-Alexandroupolis oil pipeline project. The idea, supported at the time by then Bulgarian interior minister Roumen Petkov, was met with a barrage of public opposition and had to be subsequently scrapped. Still, it is well known that the Russian legislation allows gas companies like Gazprom and Transneft to raise their own "private security armies" for protection.

Serbian military analyst Alexander Radic said that the construction of the Nis base and the construction of South Stream were inter-connected, but not exclusively. This theory is supported by the actions of Russian sapper detachment earlier in May when they secured areas around Nis.

"Officially, this was presented as a humanitarian operation, with sappers helping the local authorities clear up ordnance left over from the last Nato bombardment. In reality it turned out that Russians were only interested in the corridor – the area which will be occupied by the pipeline, and from the Nis airport," Radic said.

Accordingly, the very idea that the base and the pipeline are intertwined has raised suspicion that the arrival of Russian military units in Serbia could be in the offing.

"In some cases, the security meant to protect the project arrives, but the project itself doesn’t get carried out – and this is precisely what I am worried may happen," Boarov said. Nis has always been a desired location for the Russian forces, as the town is near to Kosovo where the largest American military installation in the Balkans is also positioned – Camp Bondsteel. Moreover, a future Russian military base in Nis will assist them in monitoring activities in the two passes of vast strategic importance for the Russians, the Bosporus and the Dardanelles.

Serbian media said that in 2001 there were talks between Serbian and Russian officials on the construction of a Russian base in the region, but its implementation was eventually shattered by the assassination of Serbian prime minister Zoran Dindjic in March 2003. The American analysis agency for Strategic Forecasting, Inc., more commonly known as Stratfor, recently said that once the base in Nis is complete, it could easily evolve from a humanitarian installation into a military one. Stratfor argues that the purpose of Russia’s emergency situations ministry is not solely for environmental disaster relief but also for military operations in the Caucasus. It also controls the work of civil protection services which have a paramilitary status.

It is clear that the construction of this base will raise even more questions in the future on the Balkans. One question will be how the presence of a Russian base corresponds to Serbia’s declared military neutrality in the region.

Kapital weekly, Issue 45

Pravda.ru: China Humbly Launches Serial Production of Stolen Russian Fighter Jets http://english.pravda.ru/world/asia/19-11-2009/110601-china_russia-0

19.11.2009

China has launched the serial production of J-10, J-11 and FC-1 fighter jets, which are rip-offs of Russia’s Su-27/30 and MiG-29 aircraft. The nation intends to build and sell not less than 1,200 planes at the prices which will be much lower than those of the Russian planes.

The report is not the news for the Russian defense industry. In 2003, China refused to prolong the license for the production of Su-27CK planes and started working on the construction of its own jet – a copy of the Russian analogue. China will put competitive pressure on Russia on the market of spare parts too.

Beijing plans to challenge Russia on its traditional defense industry markets and become the maker of inexpensive and efficient air materiel. Malaysian military officials have already expressed their readiness to cooperate with China at this point. A senior official of Malaysia’s Air Force said that his nation was going to purchase a batch of spare parts to Russian fighter jets from China. Malaysia ’s Royal Air Force has 18 Russian-made Su-30MKM aircraft. Their technical servicing is the corner stone of Russia’s entire arms export. There were a number of serious incidents when Russian manufacturers could not execute their contracts with delivering spare parts to Malaysia. Malaysia had to refuse from the exploitation of MiG- 29 planes. The promised technical center in India was never materialized either.

Russia has delivered 76 Su-27 fighter jets to China since 1992. In 1995 Moscow granted a license to Beijing to assemble 200 more of those planes. As a result, Russia’s renowned Su-27 fighter jet was “cloned” in China as J-11. Russia was originally delivering spare parts to China, but Beijing refused to prolong the license in 2003. By 2008, China had designed its only analogues of the Russian engine, radar and other equipment.

Chain started the licensed and non-licensed production of analogues of Soviet planes a long time ago. The nation’s J-6 and J-7 fighters were created on the base of MiG-10 and MiG-21. H-6 bombers were copied from Tu-16; Y-5, Y-7 and Y-8 are rip-offs of Russia’s An-2, An-24 and An-12.

The military cooperation between Russia and China has had a 62-percent reduction since 2007. There are practically no new contracts between the two countries.

The Pentagon traditionally evaluated China’s defense technologies in its recent report about the level of the nation’s defense power. US officials believe that China’s level of technological development in the defense industry was much lower than that of the United States. Nevertheless, the Pentagon acknowledged that China’s defense budget was growing faster than the nation’s economy.

China is going to start the production of large vessels and develop a new generation of arms and military hardware for its navy. Priority will be paid to the construction of superships, a new type of submarines, supersonic jets, missiles and other arms.

After 2020, Beijing plans to build two nuclear-powered aircraft-carriers in addition to two other conventional vessels which are going to be launched in 2015. When it happens, China will establish control over the entire western part of the Pacific Ocean.

Izvestia

Pravda.ru: Caucasian Servicemen Use Slavic Soldiers' Bodies to Spell 'Kavkaz' http://english.pravda.ru/hotspots/crimes/19-11-2009/110602-kavkaz-0

19.11.2009

A scandal is gathering pace in Russia’s Baltic Fleet. The scandal is connected with army hazing between army conscripts of a military unit in Russia’s Kaliningrad region. Several servicemen – nationals of Dagestan – humiliated their comrades of Slavic origin. The servicemen from Dagestan managed to find a common language with each other very quickly in spite of the fact that Dagestan men are traditionally hostile to each other in their native land. There is even a saying in the republic: “Every mountain in Dagestan has its own way.” Nevertheless, the Caucasian men united and began to terrorize conscripts from Russia.

They would take away Slavic soldiers’ money, cell phones and food. They would also make the Slavic soldiers perform traditional Caucasian dancing and singing. In the long run, the Caucasians decided to do something original. They beat the Slavic soldiers and made them lie down on the ground and configure the word ‘KAVKAZ’ with their bodies. For some reason, they made them form the word with Latin characters.

One of the torturers climbed a boiling house and took a picture of the scene.

An investigation filed by the local military attorney department into the case of hazing proved that the incident had taken place in the town of Pionersky, the Kaliningrad region of Russia. Seven criminal cases have been filed.

Axisglobe: Economic security department head of Russian Federal Security Service’s directorate in St.Petersburg resigned http://www.axisglobe.com/article.asp?article=1950

19.11.2009 The head of Economic Security Service of the Russian Federal Security Service directorate in St.-Petersburg and Leningrad region Colonel Vladimir Bakhtin submitted the official report on resignation, online paper Fontanka.ru reports. The FSB directorate confirmed the report, having told that labour contract with the Colonel was not prolonged due to achievement of the pension age by Bakhtin. However, according to Agency of Journalist Investigations, Bakhtin himself wrote the application on resignation by results of work in the division of the commission of FSB entrusted to him. According to unconfirmed information, mentioned by Fontanka.ru, after check carried out by inspectors from Moscow, the chief of contraband department of the FSB directorate’s Economic Security Service Colonel Sergei Kharitonov, the employee of this department, supervising customs services, Lieutenant Colonel Bugayev, the assistant to the chief of Northwest customs, Colonel Chernokrylov, and also the assistant to the head of the Baltic customs, Colonel Yakovlev have also written official reports on resignation. The FSB of the Russian Federation commission inspected the work of the regional directorate within the framework of investigation of case on possible connection of St.Petersburg customs officers and security forces members with illegal deliveries of goods which were sold at Cherkizovo market of Moscow.

Itar-Tass: Investigators say priest killed for religious reasons http://www.itar-tass.com/eng/level2.html?NewsID=14551014&PageNum=0 20.11.2009, 01.53

MOSCOW, November 20 (Itar-Tass) -- Investigators said the priest who was shot dead in Moscow late on Thursday was most likely killed for religious reasons.

“All possible motives of the crime are being investigated. The main one is the religious reason,” head of the Moscow Investigation Committee Anatoly Bagmet told reporters.

A masked gunman reportedly of Caucasian origin shot and killed the father superior of St Apostle Thomas's Church in southern Moscow and wounded an accompanying regent. Bagmet said the regent was hospitalized and there was no danger to the life.

Itar-Tass: Priest Dmitry Sysoyev killed in southern Moscow http://www.itar-tass.com/eng/level2.html?NewsID=14551164&PageNum=0

20.11.2009, 03.34

MOSCOW, November 20 (Itar-Tass) -- Police identified the priest who was killed in Moscow on Thursday as Dmitry Sysoyev and said he was shot dead in his church from a pistol with a silencer.

A masked gunman burst into the St Apostle Thomas's Church in southern Moscow at 22:40 hours local time and opened fire. “As a result, father superior of the church Dmitry Sysoyev was killed and regent Vladimir Skryabin was wounded. He is currently undergoing a surgery,” head of the Moscow Investigation Committee Anatoly Bagmet told reporters.

“All the necessary efforts are made to find the criminal,” Bagmet said.

“All possible motives of the crime are being investigated. The main one is the religious reason,” he added.

Nytimes.com: Russian Priest Killed in Church http://www.nytimes.com/2009/11/20/world/europe/20moscow.html

By SOPHIA KISHKOVSKY Published: November 19, 2009

MOSCOW — The Rev. Daniil Sysoyev, a priest in the Russian Orthodox Church who was known for promoting missionary work among Muslims, was shot and killed in his parish church late Thursday night, the RIA Novosti news agency reported. Father Sysoyev, 35, died at a Moscow hospital of gunshot wounds to the head and chest, RIA Novosti said. The Web site of the Moscow patriarchate confirmed his death. The parish’s choir director was wounded in the shootings at the Church of St. Thomas by the unidentified assailant.

A Moscow Patriarchate official called Father Sysoyev a “talented missionary” whose work among Muslims, including Tatars, might have been the motive for the shooting.

“I don’t exclude that the murder is connected to the fact that he preached among and baptized those who belong to Muslim culture,” the official, who spoke on the condition of anonymity because he was not authorized to talk with the news media, said in a telephone interview.

Father Sysoyev had spoken out in opposition to Islam and had warned Russian women against marrying Muslim men.

Anatoly Bagmet, an official of the prosecutor’s office, said there was reason to believe that the shooting took place “on religious grounds,” the news agency reported.

Kirill Frolov, a prominent Orthodox missionary activist, said that Father Sysoyev had said that he had been receiving threats for several years.

“Over the course of two, three years Father Daniil, who was famous for his active missionary work, periodically received e-mails stating that if he didn’t stop his theological polemics with Islam, then he will be dealt with like an infidel,” Mr. Frolov told the Interfax news agency.

Missionary work and outreach to young people and non-churchgoers has become a keystone of the Moscow Patriarchate since Patriarch Kirill I became its leader 10 months ago. The church has been organizing rock concerts and trying to reach out to people through blogs.

Officials of the Russian Orthodox Church have complained in recent years about violence directed against churches and priests.

Telegraph.co.uk: Russia refuses autopsy for anti-corruption lawyer http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6608505/Russia- refuses-autopsy-for-anti-corruption-lawyer.html

Russian authorities have refused to release the body of Sergei Magnitsky, the lawyer campaigning against fraud and corruption who died in a Moscow jail this week, for an independent autopsy.

By Philip Aldrick Published: 6:40PM GMT 19 Nov 2009 According to friends, the authorities rejected several requests and are only releasing the body for burial. Mr Magnitsky's funeral will be held at noon today at Moscow's Preobrazhensky cemetery.

Friends had hoped for clarity on the cause of death because, according to Mr Magnitsky's lawyers, the authorities originally claimed he died from a rupture to the abdominal membrane before changing it to a heart attack.

A rupture of the abdominal membrane would be consistent with pancreatitis, a condition Mr Magnitsky developed in prison and for which he claimed to have been refused treatment.

His death also came just days before he was due to be released. Under Russian law, defendants can not be held in custody for longer than a year without bringing them to trial – a deadline that expired on November 24. He died on Monday, November 16.

Mr Magnitsky, a 37-year-old married father of two, was charged with participating in R500m (£10m) tax evasion at two subsidiaries of Hermitage Capital Management, the hedge fund managed by Bill Browder.

However, in evidence in court, he claimed to have been the victim of a "personal vendetta" for testifying against a senior police officer, whom he argued was central to an alleged $230m (£140m) tax fraud he had uncovered that implicated the police, members of the judiciary, tax officials, bankers and the Russian mafia.

The senior police officer was later seconded to the investigation into the same alleged fraud.

In a 40-page affidavit sent to Russia's general prosecutor, Mr Magnitsky, Hermitage's tax lawyer, recorded his mistreatment and the squalid conditions of the prison in which he was kept for 11 months. At times, he was detained in a 8.2 square metre cell with three fellow inmates. "Rats run freely along the sewer system... and at night you can hear them squeaking," he wrote.

The toilet was "simply a hole in the floor in a corner of the cell" and "in order to use a toilet without exposing yourself to the others you had to use the bed sheets". On one occasion, "sewage started to rise from the drain under the sink" until the "floor was covered with sewage several centimetres thick". "It was impossible to walk on the floor and we were forced to move around the cell by climbing on the beds like monkeys," he recorded.

At another point he was denied a shower for two weeks and "for the 10 months I have been under arrest, the investigator has not let me meet with my wife, mother or any other relative". "Isolation from the outside world exceeds all reasonable limits," he wrote. The conditions took a toll on his health. "Since June my health deteriorated," he wrote. He was diagnosed in July with "gall bladder stones, pancreatitis and calculous cholecystitis". "Prior to confinement, I didn't have these illnesses or at least there were no symptoms," he wrote.

Originally, he was given medical care and "surgical treatment was planned". However, after being moved to the notorious Butyrskaya prison, he was denied his drugs for more than a month. He recorded: "On August 24, the pain became so acute I was not even able to lie down. My cellmate started to knock on the door demanding for me to be taken to a doctor."

The treatment breached Russian law and his human rights, Mr Magnitsky claimed.

Jamison Firestone, managing partner at Firestone Duncan – the Moscow law firm where Mr Magnitsky worked, said: "They took a healthy guy, imprisoned him without cause, put him in such horrific conditions that he got a severe illness. Then they denied him medical care."

Irina Dudukina, spokesman for the prosecutors' investigative committee, said earlier this week: "He was a key witness and his evidence was very important. The tragic news about his death came as a complete surprise. He had complained about the conditions of his detention but never his health."

Commentary

RFERL: Russia And The EU After Lisbon http://www.rferl.org/content/Russia_And_The_EU_After_Lisbon_/1882830.html

November 19, 2009 By Irina Severin Just last month not very many people either in the European Union or anywhere else really seemed to believe the Lisbon treaty would be ratified. And the bloc’s prickliest neighbor, Russia, also seemed in denial about the treaty’s prospects until the very last moment. After all, the situation with the referendum in Ireland seemed to be playing out exactly as it did in 2008, when the “Yes” camp’s slight edge was swamped by a surprising surge of “No” voters on the day of the vote.

A lack of preparation may explain Moscow’s contradictory reaction: the strangely prompt and overly enthusiastic Foreign Ministry statement that impelled Russian analysts to wonder why Moscow was so interested in the EU reform treaty.

The same day, some normally well-informed Russian media reported speculation that Foreign Minister Sergei Lavrov would be replaced before the end of the year. Analysts noted that such rumors had never touched Lavrov before, but they seemed to fit in with the old Soviet tradition of punishing officials for setbacks in the areas they oversee.

Of course, it is unlikely that Lavrov was responsible for the setback, despite persistent speculation that Moscow may have provided hidden financing to the anti-Lisbon campaign in Ireland. Rather it was an emotional reaction to unexpected developments, and the rumors about Lavrov’s purported departure were quickly quashed.

Although experts in the West generally agree that the Lisbon treaty won’t change the dynamic of relations between the EU and Russia, analysts in Moscow differ. The prevailing view in Russia is that the treaty could ultimately thwart Russia’s tactic of dealing with EU countries separately and of playing them against one another to promote its own interests. The biggest fear in Moscow is that EU consolidation will mean that Russia will have to play by the EU’s rules in the future.

The Lisbon treaty is the first EU accord containing a section on an energy policy that sets common ground rules for the functioning of the energy market. This innovation, if it becomes reality, will restrict Russia’s ability to take advantage of conflicting interests among EU members.

Spirit Of Solidarity

Another novelty of the Lisbon treaty is its so-called solidarity clause, stipulating joint action in the spirit of solidarity if any member state is the target of a terrorist attack or the victim of a natural or man-made disaster. The clause could be invoked in the event of a Russian gas shutoff that affected EU members.

The solidarity clause also throws up an obstacle to the idea of a pan-European collective- security treaty that has been assertively promoted by Russian President Dmitry Medvedev. The clause virtually replicates NATO’s Article 5, making senseless Medvedev’s appeals to EU countries “as individual countries leaving aside any allegiances to blocs or other groups” and his insistence that “national interests stripped bare of any distorting ideological motivations” must be the starting point for his proposed treaty. It seems that solidarity is exactly what Moscow has in mind when it speaks of “distorting ideologies.”

The solidarity clause would also make further EU enlargement the same kind of “red line” for Moscow that NATO expansion has been. Russia’s harsh reaction in May to the launch of the EU’s Eastern Partnership, which is labeled as an attempt to set up a “sphere of influence” in the former Soviet bloc, clearly demonstrates Moscow’s sensitivity in this area.

If the Lisbon treaty had failed, the already fractured EU would have been demoralized and disoriented, unable to accept or even to attract new members. Its “soft-power” attraction as a successful model for post-Soviet countries and the Balkans states has been on the wane in the last year, the Eastern Partnership notwithstanding. This has been accompanied by a proportional strengthening of Russian influence. With the Lisbon treaty in place, the EU at least has a fighting chance to challenge Russia as the regional power in Eastern Europe and the Balkans.

After the Lisbon treaty passed last month, Moscow froze its negotiations on an EU Partnership Agreement. The Kremlin had intended for that accord to be largely symbolic -- a short declaration of good intentions, with all the real issues being shifted to the level of bilateral talks with individual member states. The EU insisted that the agreement cover energy cooperation, but Russia prefers to deal on energy issues with each country separately.

Waiting For A President

Another reason to pause the negotiations was to await the announcement of the new EU president. Russia has repeatedly declared its preference for less “ideological” and more “pragmatic” relations. The current Swedish EU presidency -- with its emphasis on democratic values and human rights -- does not fit the Kremlin’s model. Moscow is not just passively hoping for more a compatible presidency under Lisbon, but is acting behind the scenes, using its “soft power” of money and promises in a bid to secure a “pragmatic” EU presidency.

For instance, the name of veteran British diplomat Chris Patten was dropped from the list of potential foreign-minister candidates, in large part because he is seen as “too tough on Russia.” British Foreign Secretary David Milliband, who has withdrawn from contention, is also clearly not “pragmatic” enough for Moscow’s taste.

In recent days, the name of British cabinet secretary Peter Mandelson has increasingly come to the fore. The powerful and mysterious Mandelson has been associated with Kremlin-connected Russian oligarch Oleg Deripaska, admitting that he has met with Deripaska repeatedly since 2004 while refusing divulge the content of those meetings.

If the key posts in the reformed EU are filled by people with “pragmatic” approaches to Russia, what can be expected? Russian analysts have already begun pointing to the weaknesses of the Lisbon treaty. They predict that the treaty’s “enhanced cooperation” potentially is a very divisive force for the EU and could lead to a “two-speed” Europe.

While informally lobbying for the position of EU foreign minister this week, Italian Foreign Minister Franco Frattini stated that “post-Lisbon Europe needs a European army.” The treaty’s provision for “reinforced cooperation” provides for this, if at least nine members agree to participate. Frattini said Italy would push for this option. (Italy’s Prime Minister Sylvio Berlusconi has close personal ties to Russian Prime Minister Vladimir Putin.) Such a division would open up the possibility of forming an “energy- based” alliance of the “first-speed” core European countries with Russia, weakening Euro-Atlantic ties and strengthening Russian influence across the continent.

The decisions Europe makes this week could be decisive for the bloc’s future and for the future of its eastern neighbors. If the EU wishes to remain a values-based community, it must choose leaders who are committed to those values rather than to “pragmatic” relations with Russia. The EU’s strength is not in its army, but in its unity and its moral authority. Only a united Europe committed to democratic values and human rights can help Russia overcome its authoritarian complexes and become a modern, European country.

Irina Severin is a journalist and political analyst based in Chisinau. The views expressed in this commentary are his own, and do not necessarily reflect those of RFE/RL.

Carl Bildt: In spite of differences we strive for a constructive relationship with Russia http://www.interfax.com/17/530995/Interview.aspx Swedish Foreign Minister Carl Bildt gave an interview to Interfax in the wake of the EU- Russia summit in Stockholm.

Question: Mr Bildt, Russian officials have said that the decision to attend the Russia-EU summit in Stockholm was difficult to make because Swedish politicians, yourself included, have been making anti-Russian remarks in public statements. What do you think of Russia’s decision and do you think the summit will be constructive and successful?

Answer: It’s incorrect that we have been making anti-Russian statements, but certainly correct that we have been making statements critical of Russian policies in different respects. These have reflected the opinion of the European Union and have to a large extent related to questions of human rights and democracy. But in spite of these differences we strive for a constructive relationship with Russia on a large number of issues. I have had a number of open and good meetings with Minister Lavrov [Russian Foreign Minister Sergei Lavrov] during these months were we have been able both to move forward on our constructive agenda and discuss the points were our views differ.

Q.: How is work advancing on the new Russian-EU strategic partnership agreement? Can the draft document be prepared by the end of the year? What provisions, you think, must be included in it?

A.: The talks on the new agreement are proceeding, and we will take stock of progress at the summit. There are a number of issues outstanding, and the key uncertainty that must be resolved relates to the not entirely clear position of Russia concerning its membership in the WTO. We are fully supportive of this, and hope that there will be clarity on this issue shortly.

Q.: What concerns do you still have with regard to Russia? You sharply criticized Russia’s actions in the conflict with Georgia. How has Sweden’s attitude changed since the Tagliavini commission established that it was Mikheil Saakashvili who started the war in the Caucasus in August 2008? Do you still think that Russia is not standing by the Medvedev-Sarkozy plan?

A.: It is the opinion of the European Union Russia has not yet fully implemented its commitment according to the August 12 agreement, and this remains a problem in our relationship. The Tagliavini report is worth reading in full. It is critical of Georgia, but no less so of Russia. In fact, it considers as invalid or illegal all the arguments advanced by Russia for its actions, and naturally sees the recognition of South Ossetia and Abkhazia as contrary to international law. As you know, this is the position of practically all of the rest of the world. As I have remained Russian friends, we are as committed to the territorial integrity to the South of the Caucasus as we have been and remain to the North of the Caucasus. This is a region where one should be very careful in opening up the Pandora’s box of new borders. Issues of respect for different nationalities and cultures – difficult as they can be – must be resolved within the internationally recognized borders. The EU firmly supports the security and stability of Georgia, based on full respect for the principles of independence, sovereignty and territorial integrity recognized by international law, including the Helsinki Final Act.

Q.: A year ago Sweden together with Poland came up with the initiative of Eastern Partnership for six former Soviet republics that did not make Russia very happy. Are you satisfied with the progress of the initiative? There is a widely-spread opinion that it is meant to alienate these countries from Russia.

A.: The Eastern Partnership is progressing very well. We have had a very positive response from all the countries concerned, and are now busy setting up its different structures. This initiative answers to the aspirations of these countries themselves to increasingly align themselves with the different processes of European integration. But it also demands that they respect the rule of the law, honors human right commitments and work towards good governance in all relevant areas. There are of course possibilities for involvement of third parties such as Russia in activities and projects within the multilateral dimension of the Partnership. Sweden is open to involve Russia where appropriate and where it contributes to the objectives of the partnership.

Q.: How timely was Sweden’s consent to the stretching of Nord Stream gas pipeline in its waters? Don’t you think the decision-making process was too long?

A.: No. The timeline for the decision process was determined by the speed at which the consortium provided Sweden with necessary documentation for the environmental impact assessment. And it’s worth noting that the environmental permission process was concluded in Sweden before it has been concluded in Russia. RIA: Russian ship breaks out of 'ice prison' in Antarctic http://en.rian.ru/russia/20091120/156913286.html

07:3220/11/2009

VLADIVOSTOK, November 20 (RIA Novosti) - A Russian icebreaker that had become stuck in the Antarctic ice has finally managed to leave the heavy ice zone, a spokesman for Russia's Far Eastern shipping company said on Friday.

The Kapitan Khlebnikov, with over 100 tourists, scientists and a BBC television crew on board, has been inching its way towards open water - about 5 nautical miles (9 kilometers) away - covering approximately 1.5 nautical miles since Sunday.

"The low tide has started allowing the ship to finally break out from the ice prison," the official said.

The ship had to stop some 100 meters (330 feet) from open water on Wednesday evening, due to unfavorable weather conditions.

The icebreaker is currently located at some 780 nautical miles (over 1,400 kilometers) from the Argentinean port of Ushuaia where the passengers are expected to disembark.

"It is about two-and-a-half days of travel with cruising speed and under good weather conditions," the source said.

The Moscow Times: United Russia Seeks A Conservative Face http://www.themoscowtimes.com/news/article/united-russia-seeks-a-conservative- face/389990.html

20 November 2009 By Nikolaus von Twickel

Some 600 delegates will discuss the future of the country's dominant political party this Friday and Saturday, when United Russia calls its 11th convention in St. Petersburg.

Party officials have said the convention's main task will be to bring ideological coherence to United Russia, which critics say is more a bundling of bureaucrats wanting to keep political power than a proper party that aggregates political demands.

The convention's most prominent participants will be two men who have conspicuously decided not to join the party and whose ideological positions have appeared to be increasingly divergent recently: Prime Minister Vladimir Putin and President Dmitry Medvedev. Putin, who despite his nonmembership is party chairman, will see his name receding somewhat when delegates vote to install "Russian Conservatism" in lieu of "Putin's Plan," a much-mocked brochure that has served as the party's semiofficial program since 2007.

State Duma Speaker Boris Gryzlov, who heads the party's Supreme Council, has said setting Russian Conservatism as the party's ideology would allow it to consolidate society and reflect the party's position in the political spectrum.

But he has also said delegates would discuss Medvedev's state-of-the-nation address, delivered last week, and his "Go, Russia!" article from September.

Gryzlov has even committed the party to implement the proposals from the presidential address. "We will do everything to enact them very quickly," he said last week.

United Russia commands a two-thirds majority in the Duma, enabling it two make constitutional changes. The party also dominates most regional assemblies.

Yet Medvedev's ideas contain decidedly liberal proposals, like reducing the state's role in the economy and reforming the political system, leaving commentators wondering how this squares with the advent of conservatism as United Russia's guiding principle.

United Russia officials and analysts close to the party are adamant that there is no contradiction.

Mikhail Rogozhnikov, a leading member of the 4. November Club, a faction within United Russia, said differences between Putin and Medvedev were "nuances," while the party's basic ideology is broadly centrist. He told The Moscow Times that United Russia would definitely remain committed to social policies while being open to both liberal and patriotic ideas.

"We're talking about liberal conservatism," he said, adding that there was no room for an ideology like that of former British Prime Minister Margaret Thatcher, who is seen as a conservative icon worldwide.

"She was a modernizer but we would not see her as a role model when it comes to the treatment of miners," he said. "Russian conservatism is very peculiar."

His words were echoed by Vladimir Pligin, head of the Duma's Constitutional Affairs Committee and a top United Russia official, who said last week that Medvedev's speech was "consistent with a liberal-conservative spirit."

But Alexei Mukhin, an analyst with the Center for Political Information, said United Russia's talk about ideology was just window-dressing and that it was really trying to shed its image as being exclusively Putin's party. "So far, their ideology consisted of one word: Putin. Now they are adding one more: Medvedev," he said.

The convention will also seek to widen the party's international cooperation, with more than 40 foreign delegations are expected to attend, Gryzlov said Thursday, Interfax reported.

Bertrand Malmendier, the representative to Europe of the Center for Social-Conservative Policy, another political club within United Russia, said positioning the party as a European Christian democratic movement was an important strategic goal.

"The convention will be governed by internationalization and Europeanization," Malmendier said by telephone from Berlin.

United Russia has been pushing for more international recognition for some time, but success has been mixed.

Last year, officials announced that the party joined the Centrist Democratic International, a loose global grouping of parties associated with Christian Democracy.

It later turned out, however, that United Russia had been accepted by the organization's Asia-Pacific chapter, whereas the Centrist Democratic International's headquarters in Brussels denied that the party has membership.

Officials in West European parties have cited United Russia's lack of a clear ideology and questions about its democratic bona fides as handicaps for its acceptance.

November 19, 2009 Russia Profile: Suspended Sentence http://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1258655696

By Roland Oliphant Russia Profile

The Court’s Decision Provides a Victory for Opponents of Capital Punishment and Relief for Supporters of Russia’s Relationship with Europe

The Russian Constitutional Court has ruled to extend the moratorium on the death penalty until it is formally abolished by ratification of article six of the European Convention of Human Rights. But there is still strong public support for capital punishment, and the State Duma is doing all it can to avoid ratifying the European treaty.

The death penalty as written into Russian law has always – that is, since the creation of the Russian Federation – been subject to strict controls. It is reserved as an “exceptional measure” for aggravated murder, attempted murder of government officials, law enforcement officers or investigators, and genocide. Even in these cases, the law suggests that imprisonment is usually preferable. And, in a nod to chivalry, it is only applicable to males between the ages of 18 and 65.

This limited application of capital punishment has been effectively suspended – but not abolished - since 1996, when then-President Boris Yeltsin issued a decree calling for a phasing out of the death penalty in order to fulfill Russia’s commitment for entry into the Council of Europe.

In 1999, the Russian Constitutional Court gave Yeltsin’s de-facto moratorium a legal footing. The Russian Constitution entitles those facing the death penalty to trial by jury. In 1999, however, many regions of Russia did not have jury courts, and in response to an appeal from a defendant facing a capital charge, the Constitutional Court ruled that the lack of jury courts in even a single region would make executions illegal anywhere in the Russian Federation.

Since then, jury courts have been introduced in every federal subject except Chechnya, where anti-terrorist operations held back the process. Juries are meant to be introduced there by January 1, 2010.

As that date loomed closer, the debate about what to do with the death penalty grew louder. Supporters of capital punishment argued that it would automatically lift the moratorium. Opponents prepared a counter argument: simply enacting a law that says jury trials should exist is not the same as having a functional jury-based court system, they said. That is especially true in the North Caucasian republics like Chechnya, where populations are small and clan ties are strong. “It can be difficult if not impossible to find jury members not connected in someway to either the prosecution or the defense,” argued one lawyer who asked not to be named. “There are possible solutions for that; you could combine, say, Chechnya and Dagestan into a single district, so you have a bigger population to select a jury from,” said the lawyer. “But it could have prolonged the moratorium until those changes were made.”

In the event, however, opponents of the death penalty did not have to resort to wrangles over when a jury is really a jury. The Constitutional Court instead went back to Yeltsin’s original reason for suspending the death penalty – Russia’s commitments under international agreements. But the core of its finding centered on the status quo that had evolved in the ten years of the moratorium. “During this time, a stable guarantee of the right not to be subjected to capital punishment has been formed, and a legitimate constitutional and legal regime has been formed, under which - in the light of international legal trends and liabilities assumed by Russia – there is an irreversible process, directed at the abolition of the death penalty…” said the court’s statement.

Genrikh Padva, the defense lawyer who made the appeal to the Constitutional Court in 1999, welcomed this unequivocal language. “I have always been for a complete cancellation of the death penalty, and I am extremely happy that the Constitutional Court has now gone further than it did in 1999.” The court ruled that the moratorium on capital punishment will remain in place until it is formally struck from the statute books by ratification of article six of the European convention on Human Rights, the main “international obligation” referred to in the court’s statement. This pretty definitively torpedoes the hopes of anyone, like Liberal Democrat Party Leader Vladimir Zhironovsky, who wants it reinstated, but ratification is a long way off. Boris Gryzlov, the speaker of the State Duma, said last week that Parliament would not ratify it any time soon. “While there is no consensus in society, we should not start ratification of article six,” he told the Nezavisimaya Gazeta daily.

Actually, until just a few years ago there was an extremely strong consensus in society in favor of the death penalty, if not specifically against article six. In 2004, the state-owned pollster VTsIOM found that some 70 percent of the population supported capital punishment. “For specific crimes it was higher. Around 90 percent supported the death sentence for terrorists,” said Olga Kamenchuk, a VTsIOM spokesperson. That was, of course, the year of the Beslan school siege, when the threat of terrorism was worst. “The threat of terrorism has receded since, which is probably why public support for the death penalty has also fallen. But there is still an absolute majority in favor,” said Kamenchuk.

But only a slim majority. In a survey this June the Levada Center, an independent pollster, found that 53 percent of Russians supported either the restoration of the death penalty as it is currently described in law (as an “exceptional punishment” reserved only for murder or genocide), or its expansion. Thirty four percent were in favor of prolonging the moratorium or cancelling it altogether.

In leaving the decision to the Constitutional Court, the Duma deputies avoided the unenviable task of either overcoming their distaste and public opinion to ratify the protocol, or finally rejecting it and seeing Russia ejected from the Council of Europe. If current trends continue, perhaps society will present enough consensus to compel the Parliament to finally do its job – whether Gryzlov and the deputies want to or not.

Georgian Daily: Will ‘Bloggerization’ of Russian Bureaucracy Change Relationship between State and Citizens? http://georgiandaily.com/index.php? option=com_content&task=view&id=15714&Itemid=72

November 20, 2009

Paul Goble

Following the example of President Dmitry Medvedev, an ever- increasing number of Russian officials and politicians are creating their own blogs, but the hopes of some observers that their use of this communication channel, still the freest of any in Russia, will by itself lead to the formation of civil society there are overstated and at least premature. In a commentary on the Chaskor.ru portal today, Vladimir Tuchkov argues that the reasons for that lie both with officials, many of whom are extremely uncertain how to function in this new environment, and with the population, many of whom fear that officials will track them down using their IP-addresses if they say anything critical. But despite those limitations and the fact that Russians remain far behind much of the developed world in terms of Internet use, the Chaskor.ru commentator suggests, “the bloggerization of the apparatus” can provide opportunities for both officials to present themselves to the population and for the population to respond. Tuchkov discusses several cases, including the appearance of MVD Major Aleksey Dymovsky on YouTube and the “symmetrical” response of Col.Gen. Viktor Ivanov, the director of the Federal Narcotics Control Service, who invited suggestions for a policy in that area that has already largely taken shape ( www.chaskor.ru/article/bloggerizatsiya_apparata_12578). The general’s approach, of course, suggests he is more interested in appearing to be responsive to the population than in actually taking the views of Russian citizens into consideration. And as Tuckov notes, anyone writing to an FSB general has got to be concerned that he will identify and perhaps act against those who write anything critical. But however that may be, Tuchkov continues, at least Ivanov’s blog attracted some comments from visitors. Many of the new blogs put up by officials have attracted no comment – or at least those who have put them up or their staffs have decided against posting whatever messages they have received. Many of these new blogs, the Chaskor.ru commentator says, contain interesting information about the blogger, including his judgments about public events and so on. And consequently, as this form of media spreads, three things are likely to happen. First, as officials try to attract attention to themselves or to win support for their ideas, they will have to become more open. Second, even if the official bloggers have no interest in being more open, the large number of officials who appear likely to go online – many in the Duma, a significant share of the governors, and other officials – guarantees that the blogs wholesale if not retail will tell a lot about opinion within the bureaucracy. And third, because these officials will be operating within the far larger community of non-official Russian bloggers, they will likely converge on the latter both in style and content if not in attitude or position, a process that could over time have the effect of changing the way in which officials think. None of these things is going to have an immediate impact in most cases: The Internet and even the more limited blogosphere – or “Live Journal,” as the Russians call it – are simply not going to transform Russian political life or Russian culture as quickly as many of the partisans of the world wide web have suggested. But as Tuchkov points out, these new blog sites contain “useful information,” and that, in the increasingly restricted media space in Russia, is not unimportant. Indeed, it may be one of the few hopeful signs that Medvedev’s entrance onto the Internet will play a positive role there if not now then a few years hence as ever more officials decide they too must blog. Monitoring this diverse set of sites will not be easy – the number is likely to overwhelm any individual analyst – but keeping track of at least those offered by the most senior officials and politicians is likely to be the focus of attention not only in the traditional media but also by individual Russians and, one hopes, by all those who care about the direction Russia is going.

National Economic Trends

RBC: Russia sees drop in foreign investments http://www.rbcnews.com/free/20091120123928.shtml

RBC, 20.11.2009, Moscow 12:39:28.Russia's economy received a total of $54.7bn in foreign investments in January-September 2009, 27.8 percent less than in the corresponding period of the previous year, the Russian Federal Statistics Service (Rosstat) reported today. The amount of redeemed foreign investments stood at $50.6bn, showing an increase of 5.3 percent compared to January-September 2008. Accrued foreign capital in Russia's economy (the total amount of investments calculated from the time of investment, including redemption and assets and liabilities' revaluation) stood at $262.54bn, 4.4 percent greater than in the first nine months of 2008. Russia's main investors were Luxembourg, the Netherlands, Cyprus, Germany, the UK, France, the USA, Ireland, Virgin Islands, and Japan. These countries account for 83.7 percent of accrued foreign investments. Meanwhile, Russia's investments in other countries amounted to $65.6bn as of the end of September 2009.

20.11.2009 - RBC

Cbonds.info: Russia curbs foreign debt http://www.cbonds.info/all/eng/news/index.phtml/params/id/448676

Russia's foreign debt (including the liabilities of the former U.S.S.R. assumed by Russia) amounted to USD 38.36bn as of November 1, 2009, or EUR 25.655bn, the Russian Finance Ministry announced today. With this in mind, Russia's foreign debt shrank USD 33.7m, or less than 0.1 percent from October 1, 2009 when it stood at USD 38.7bn, and 6.3 percent compared to the figure as of January 1 of this year.

The outstanding debt to member states of the Paris Club amounted to USD 1.8bn (EUR 728.6m), which is 22.84 percent lower than as of the beginning of this year. Meanwhile, debt to non-Paris Club creditors remained virtually unchanged at USD 1.858bn (EUR 1.253bn).

Eurobond debt inched down 5.4 percent to USD 26.24bn or EUR 17.698bn. Interfax: Central Bank to offer banks 5-wk, 1-yr unsecured loans on Nov 23-24 http://www.interfax.com/3/531146/news.aspx

MOSCOW. Nov 20 (Interfax) - The Central Bank of Russia will hold auctions on November 23 and 24 to offer banks 5 billion rubles in one- year unsecured loans and 35 billion rubles in five-week unsecured loans, the bank said in a statement. The minimum interest rate will be 12.0% annually for the one-year loans and 11.25% for the five-week loans. The funds will be provided on November 25. The five-week loans must be returned on December 23 and the one-year loans on November 24, 2010. Banks may make up to three bids. The minimum bid amount is 1 million rubles.

Business, Energy or Environmental regulations or discussions

Reuters: Russian markets -- Factors to Watch on Nov 20 http://www.iii.co.uk/news/? type=afxnews&articleid=7637052&subject=markets&action=article

MOSCOW, Nov 20 (Reuters) - Here are events and news stories that could move Russian markets on Friday.

You can reach us on: +7 495 775 1242

STOCKS CALL (Contributions to [email protected]):

OTP Bank: "In the medium-term, if the correction continues, a double-top figure could form on the MICEX. In this case, the target of the fall should be marked at 1,060."

Olma: "Today the correction downwards could deepen. The external backdrop does not allow talk of buyers becoming more active."

EVENTS (All times GMT):

YALTA, Ukraine - CIS Prime Ministers' meeting

MOSCOW - U.S. Transport Minister Ray Lahood holds press conference at Marriott Grand Hotel - 0500

MOSCOW - First Deputy Prime Minister Igor Shuvalov is expected to hold a meeting of the government anti-crisis committee on the car market MOSCOW - Russia's Federal Tariff Service to discuss electricity output and supply in 2010

MOSCOW - International banking forum attended by Russian bankers. LINK: http://www.arb.ru/site/action/list_anons.php?id=3028

MOSCOW - Vedomosti daily to hold a conference on Russian car market. LINK: http://events.vedomosti.ru/description.shtml?avto9

MOSCOW - AvtoVAZ extraordinary general meeting of shareholders to elect a new board of directors

IN THE PAPERS:

Inteco, the real estate-focused company of Russia's richest woman, Yelena Baturina, wife of Moscow mayor Yuri Luzhkov, is struggling to attract affordable funding from banks despite having secured state guarantees worth 10 billion roubles ($348 million), Vedomosti reports. The business daily says other firms in the sector are facing the same problem.

Norway's sovereign wealth fund has sold its 0.4 percent investment in Norilsk Nickel, saying that its activities are harmful to the environment, Vedomosti also says, citing the Norwegian Finance Ministry.

TOP STORIES IN RUSSIA AND THE CIS: TOP NEWS: Putin wants New Year without gas "shocks" Russia may buy into RUSAL IPO for $20bn valuation Rouble eases after c.bank steps up rhetoric COMPANIES/MARKETS: Severstal posts strong Q3, outlook improved LUKOIL says to switch focus to dividends Packard Bell eyes 10 pct Russia laptop share Polyus Gold shareholders to sell 5 pct in co ECONOMY/POLITICS: Russia, on alcohol war path, eyes min vodka price Grocer X5 plans higher 2010 capex ENERGY: COLUMN-Gas glut casts doubt on S.Stream pipeline COMMODITIES: Russia govt buys 70,200 T wheat via intervention

MARKETS CLOSE/LATEST:

RTS 1,455.17 +0.27 pct MSCI Russia 816.12 -2.99 pct MSCI Emerging Markets 967.17 -0.13 pct

Russia 30-year Eurobond yield: 5.33 pct

EMBI+ Russia 229 basis points over

Rouble/dollar 28.8251 Rouble/euro 42.9250

NYMEX crude $77.89 +$0.44 ICE Brent crude $78.08 +$0.44

For Russian company news, double click on

Treasury news Corporate debt Russian stocks Russia country guide All Russian news Scrolling stocks news

Emerging markets top news

Top deals European companies ($1=28.71 Rouble) Keywords: RUSSIA FACTORS/

([email protected]; Tel: +7495 7751242, Reuters Messaging: [email protected])

EasyBourse: Russia Sees Positive Fund Flows For 2nd Week But Lags Peers http://www.easybourse.com/bourse/actualite/russia-sees-positive-fund-flows-for-2nd- week-but-lags-peers-FR0000120628-763997

MOSCOW -(Dow Jones)- Russia saw positive fund flows for the second straight week but lagged its peers as money poured into emerging markets, Uralsib said in a research note Friday, citing Emerging Portfolio Fund Research. The country saw $42 million in positive flows for the week to Nov. 18, while China saw $575 million, India saw $135 million and Brazil, $84 million. "Factors influencing the perception of Russia's investment risk will remain positive, or improve, into 2010. This offers significant scope for these fund investors to continue adding to Russia exposure beyond the current neutral weight," Uralsib wrote. Company Web site: www.uralsib.com -By Ira Iosebashvili, Dow Jones Newswires; +7 495 937 8445; [email protected] -0-

Publié le 20 novembre 2009 Copyright © 2009 Dowjones

Bloomberg: Russia Leads World in Company Fraud, State Extortion, PwC Says http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agFHAGr7jB38

By Alex Nicholson Nov. 19 (Bloomberg) -- Russia is the worst country in the world for companies in terms of employee theft and extortion by officials, a PricewaterhouseCoopers LLP survey showed.

Seventy-one percent of domestic and foreign companies in Russia were victims of fraud in the past year, double the rate reported in fellow BRIC countries Brazil, India and China, PwC said in a report released today. That’s a “shocking” increase of 12 percentage points from 2007, when the last survey was conducted, PwC said. In Japan, the figure is 9.6 percent.

Theft and bribery hit Russia’s financial, energy and mining industries the hardest, according to the survey of 3,000 executives from 55 countries, including 86 Russians. “The nature of these industries means that they are particularly exposed to both asset misappropriation and corruption, the two most prevalent types of economic crime,” PwC said.

President Dmitry Medvedev has called graft the biggest threat to the country’s national security, saying in September that “corrupt officials run Russia.” Transparency International this week ranked Russia 146th on its annual corruption list, even with Zimbabwe and just behind Pakistan and Nigeria. Corruption in Russia is a $300 billion “market,” the Berlin-based organization said on its Russian Web site.

PwC said the prevalence of government graft in Russia is twice the global average, with 48 percent of all companies surveyed reporting an instance of bribery or corruption in the last 12 months.

The problem has been exacerbated by the country’s record economic contraction, which has lowered the “morale” of employees and made “asset misappropriation” more tempting, PwC said. The economy shrank 10.9 percent in the second quarter, the most on record, and 8.9 percent last quarter.

More people are feeling “real pressure to ‘cross the line’ or to look the other way,” PwC said.

The least corrupt countries in the world are New Zealand, Denmark, Singapore, Sweden and Switzerland, while the most corrupt are Somalia, Afghanistan, Myanmar, Iraq and Sudan, according to Transparency International.

To contact the reporter on this story: Alex Nicholson in Moscow [email protected]

Last Updated: November 19, 2009 03:09 EST The Moscow Times: Russia Ranked No. 1 For Economic Crime http://www.themoscowtimes.com/business/article/russia-ranked-no-1-for-economic- crime/389976.html

20 November 2009 By Alex Anishyuk

Companies in Russia experienced more economic crime this year than anywhere else in the world, according to a report released Thursday, which underscores the difficulties facing an ambitious Kremlin plan to curb corruption and lawlessness.

Of 86 companies surveyed in Russia, 71 percent said they had been subjected to at least one major economic crime in the past 12 months, according to a report released by PricewaterhouseCoopers.

“This is a shocking 12 percentage-point increase compared with our 2007 research (59 percent), and is well above the global (30 percent), Central and Eastern Europe (34 percent) and BRIC countries (34 percent),” the report said. The BRIC countries are Brazil, Russia, India and China. The figures also exceed results in South Africa, where 62 percent of firms reported economic crimes, and Kenya, with 67 percent.

PWC polled executives from more than 3,000 companies working in 55 countries, including 86 representatives of Russia’s biggest companies in various sectors. The poll was anonymous and no companies were identified.

“Imagine when 70 percent or more companies are suffering an increase in economic crime amid recession. No particular industry can be spared from these effects,” said John Wilkinson, a partner with PWC who helped conduct the survey.

Sixty-four percent of companies operating in Russia reported cases of asset misappropriation, while another 48 percent complained of bribery and corruption among their staff.

“If we say bribery, we do not necessarily mean cash in an envelope. We see it as a broader concept,” said Irina Novikova, PWC director of accounting, fraud risks and controls. “Bribery, in our view, includes unjustified discounts, compensations and coverage of business trips and expenses to third parties, including officials and their family members.” Twenty-eight percent of respondents experienced fraud with financial statements, the report said.

“The distortion of financial results is because of the pressure banks put on companies, and it’s also because of the top management’s desire to meet the expectations of investors,” she said.

The growing number of economic crimes dealt large financial blows to companies operating in Russia, with 47 percent of respondents saying their losses topped $1 million. Official statistics tend to focus more on successful prosecution than the volume of crimes reported, but they nonetheless show the size of the problem.

Interior Minister Rashid Nurgaliyev said last month that there was an 11.3 percent increase in white-collar crimes in the first nine months of 2009. And in July, Investigative Committee head Alexander Bastrykin said a dozen corruption cases causing damages of more than 896 billion rubles ($31 billion) were sent to court in the first half of the year

PWC’s report found that many companies were suffering from illegal activity within their own ranks.

Sixty-two percent of companies said fraud was carried out in collusion with criminals outside the company, while 34 percent blamed violations on “wholly internal fraudsters.”

Wilkinson said the high rate of crime was related to employees’ personal readiness to break the rules.

“We see incentive, pressure and opportunity as the essential factors, but when it comes to committing a crime, each person asks himself whether he should do it,” he said. “We assume opportunity and pressure are always there, but if a person is motivated correctly, he or she will not break the law.”

The main task for executives, he said, is to strengthen the “attitude and rationalization” in their staff to avoid crime.

The report was released days after Transparency International listed Russia 146th in a world corruption rating — tied with Ukraine and squeezed between the African nations Kenya and Sierra Leone. It was a one-step improvement from Russia’s previous listing.

President Dmitry Medvedev has made the fight against corruption a central goal of his administration.

He called corruption the “main problem of the Russian economy” and promised a further clampdown during a Wednesday news conference as part of a Russia-European Union summit in Sweden.

NOVEMBER 20, 2009

WSJ: Russia Mulls Tax on Cross-Border Trades http://online.wsj.com/article/SB10001424052748704204304574545660157346506.html By IRA IOSEBASHVILI

MOSCOW -- Russia is considering measures such as a tax on cross-border currency transactions to discourage speculative traders from driving up the ruble exchange rate, a central bank official said Thursday.

Such a plan, which hasn't yet been approved, would put Russia in league with other commodity-exporting economies including Brazil and Indonesia. Both countries also have been seeking to discourage the inflow of speculative money, which boosts the local currency and reduces the profitability of their raw-material exporters.

"We need to develop an effective way of controlling cross-border transactions, something similar to the Tobin tax," said First Deputy Central Bank Chairman Alexei Ulyukayev. Russia would only enact such measures after extensive discussions, Mr. Ulyukayev said at a conference on the ruble in Moscow.

Nobel-winning economist James Tobin proposed a tax on foreign-currency transactions in order to reduce exchange-rate volatility after the 1971 collapse of the Bretton Woods exchange-rate system. Since then, Mr. Tobin's original intent has been broadened in policy debate to include wider taxes on financial transactions of other types.

The broader definition of the levy was aired at a summit of the world's 20 leading economies earlier this month, when Russian Finance Minister Alexei Kudrin criticized British Prime Minister Gordon Brown for proposing that leading economies apply a global financial-transactions tax.

To slow the ruble's appreciation, Russia's central bank has bought around $21 billion of foreign currency in October and the first half of November, and it has also lowered the country's refinancing rate by 3.5 percentage points this year to an all-time low of 9.5% -- still many times the level seen in developed economies.

But the measures have done little to stop the ruble, which has risen by 10% against the dollar since September.

Brazil last month imposed a 2% tax on foreign portfolio investments into fixed-income and equity accounts, reducing upward pressure on the local currency. An Indonesian central banker said this month that the country would consider similar controls. In November, Taiwan banned foreign funds from investing in time deposits in an effort to deter currency speculation.

In September, Prime Minister Vladimir Putin, hoping to encourage investment, said the country wouldn't reintroduce capital controls, which were abandoned in 2006. Officials and economists have warned that such tools come with their own set of dangers. "Measures designed to limit risk are necessary, but there is no need to go overboard, because then you risk distorting the pricing mechanism," Konstantin Korishchenko, the head of Russia's largest stock exchange, Micex, said at the same conference.

It's improbable that any country would unilaterally introduce a Tobin tax, as financial transactions would simply migrate to another tax jurisdiction, said Rory MacFarquhar, chief economist at Goldman Sachs in Moscow.

"But the CBR [Central Bank of Russia] does have the tools to make it more expensive for banks to borrow abroad, which might well be a good idea over the longer term," Mr. MacFarquhar said.

On Wednesday, Central Bank Chairman Sergei Ignatyev discussed several "soft" strategies for dealing with speculative capital, including limiting foreign borrowing by state-owned companies.

Capital is unlikely to stop flowing into Russia anytime soon, as investors' concerns about oil prices and Kremlin policy dissipate, said Uralsib chief strategist Chris Weafer.

"Russia is now in a favorable position, and funds are moving to increase their exposure to a more substantial overweight," he said.

— Katie Martin and Will Mauldin contributed to this article.

The Moscow Times: Kudrin Says VEB Switch Not Costly http://www.themoscowtimes.com/business/article/kudrin-says-veb-switch-not- costly/389973.html

20 November 2009 The Moscow Times

Turning Vneshekonombank into a joint-stock company is possible, but any change in status won’t require 1 trillion rubles ($34.6 billion) as claimed, Finance Minister Alexei Kudrin said Thursday.

“We haven’t appropriated this money in the budget for next year. I think that such a large sum will not be needed,” Kudrin said at a news conference, Interfax reported.

VEB head Vladimir Dmitriyev said Saturday that the bank was ready to change its status as ordered by President Dmitry Medvedev but that it needed to raise about 1 trillion rubles in order to make its activity compatible with banking legislation. Kudrin said the Finance Ministry had not received Dmitriyev’s assessments. Central Bank First Deputy Chairman Alexei Ulyukayev said Thursday that the government was considering different options for VEB, the most probable being to turn it into either a financial agency or a joint-stock company.

“Transforming VEB into a commercial bank is only one of the options,” Ulyukayev said, adding that the government would make a final decision on the bank’s new status.

Medvedev’s economic aide Arkady Dvorkovich said earlier this month that Vneshekonombank and two other state corporations, Russian Technologies and Rusnano, would likely lose their status as state corporations as early as 2010.

“As far as state corporations are concerned, I think they have no prospects in the current environment,” Medvedev said in his state-of-the-nation address.

“Those that work on commercial, competitive terms should become modern, open joint- stock companies controlled by the state. In the future, they shouldn’t be held in the public sector and should be opened to private investors.”

As a state corporation, VEB is subject to neither the capital requirements that banks are obliged to keep nor the financial reporting standards that joint-stock companies are bound by.

Alibaba.com: Jan-Oct. Russia steel output slid by 22% http://news.alibaba.com/article/detail/metalworking/100204091-1-jan-oct.-russia-steel- output-slid.html

Published: 19 Nov 2009 23:34:06 PST Nov. 20 MetalBiz--Rosstat stated that in the first ten months this year, Russia’s crude steel production dropped to 48.3mln tons, down by 21.7% year on year. However, crude steel yield in October rose by 14.6% year on year, also up by 3.5% month on month.

In the first ten months of 2009, rolled steel production decreased by 17.5% on an annual basis, reaching 41.8mln tons; while the output in October hiked by 21.2% year on year, also with a 0.8% increase month on month.

In the first ten months, pipe production glided by 23.3% on a yearly basis, to 5.3mln tons. The pipe products’ yield edged down by 0.3% year on year, with a reduction of 0.7% month on month.

It is learned that during the January-October period, Russia’s iron ore production plunged by 16.3%, reaching 75.5mln tons. Reuters: Russia VEB to buy RUSAL stake with own cash-FinMin http://www.forbes.com/feeds/afx/2009/11/20/afx7144057.html

11.20.09, 02:21 AM EST

YALTA, Ukraine, Nov 20 (Reuters) - Russia will let state bank VEB keep the profits from investing government cash, and it will spend some of the money on a stake in indebted aluminium giant UC RUSAL, Finance Minister Alexei Kudrin said on Friday.

VEB is prepared to buy up to 3 percent of RUSAL, which plans to float shares this year or next, for 4-18 billion roubles ($488-627 million), valuing the world's biggest aluminium producer at between $16.3 billion and $20.9 billion, a government source said on Thursday.

The state bank has been a key agent in the government's anti-crisis programme and, among other things, was last year given 175 billion roubles from the National Wealth Fund to invest in stocks and bonds to support the Russian market.

But Kudrin said that money would not be used to help RUSAL.

'RUSAL's IPO will be bought into not from the National Wealth Fund's (NWF) money, but from VEB's own funds,' Kudrin told reporters.

He said that the Finance Ministry had given the NWF cash to VEB to manage in return for interest of 7 percent a year.

'We were planning to change these terms ... But we agreed that we will remain within the confines of a 7 percent deposit, and the profits earned will go to VEB,' he said.

As such, VEB could get around 100 billion roubles, a source close to its supervisory board said. Only a fraction of that is needed to buy the RUSAL stake, and some of the rest will be spent on supporting the Russian mortgage market.

RUSAL, owned by indebted industrial magnate Oleg Deripaska, is striving to complete Russia's biggest ever debt restructuring deal before raising up to $2 billion in a Hong Kong and Paris stock listing.

'VEB will buy (the stake in) RUSAL at market price. We are taking part in the smaller share of this deal ... the bigger part will come from market participants,' the source said.

'Private investors will see that we are supporting this deal and I think that is a good signal. We are interested in RUSAL sorting out all its financial issues and coming out of the crisis.' VEB has already thrown a lifeline to RUSAL, supplying an unprecedented $4.5 billion loan to avoid margin calls on Western credit and extending the facility until 2010 to help out one of the country's biggest employers.

($1=28.71 Rouble)

(Reporting by Darya Korsunskaya; Writing by Toni Vorobyova) Keywords: RUSAL VEB/

([email protected]; Tel: +7495 7751242, Reuters Messaging: [email protected])

Reuters: Polyus Gold shareholders cancel stake sale –source http://www.forbes.com/feeds/afx/2009/11/20/afx7144151.html

11.20.09, 02:46 AM EST

MOSCOW, Nov 20 (Reuters) - The two main owners of Polyus Gold have decided not to sell a 5 percent stake in Russia's largest gold miner after failing to collect enough bids from investors, a market source told Reuters on Friday.

'The deal did not take place because of a weak market and very aggressive pricing. There was demand for around $400 million but they were aiming for roughly $530 million,' the source said, on condition of anonymity.

The shareholders did not want to sell less than 5 percent.'

Polyus said on Thursday its main shareholders, tycoons Mikhail Prokhorov and Suleiman Kerimov, were prepared to sell up to a total of 5 percent of the company in the form of shares and/or American Depositary Receipts.

(Reporting by Olga Popova; Writing by Toni Vorobyova) Keywords: POLYUS/

([email protected]; Tel: +7495 7751242, Reuters Messaging: [email protected])

AFP: Kraft Foods targets Cadbury's Russian division http://www.google.com/hostednews/afp/article/ALeqM5jTZ6J2ZWDw1JrWICgkoFiXd m64bw

(AFP) – 9 hours ago MOSCOW — US-based food producer Kraft Foods Inc. is seeking Russia's permission to acquire Russia's Dirol Cadbury company, owned by Britain's Cadbury Plc, the national anti-monopoly agency said Thursday.

It said Kraft Foods, which proposed to buy Dirol Cadbury for 16 billion dollars, has applied "to be awarded rights to determine Dirol Cadbury's business policies," the RIA Novosti news agency reported.

The agency responded by putting off a decision by two months to allow "interested parties to provide information on the impact this deal will have on competition" in the food industry.

US chocolate maker Hershey and Italian peer Ferrero said Wednesday they are considering a bid for British confectioner Cadbury, in a move which would whip up a takeover war with Kraft Foods.

The news could remould the chocolate sector with a takeover costing more than 10.0 billion pounds (11.2 billion euros, 16.8 billion dollars).

Dirol Cadbury is a major sweets producer on the Russian market, producing Dirol, Stimorol and Malabar chewing gum, Halls and Dirol soothing drops, and Cadbury, Picnic, Compliment and Golden Fund chocolate.

Alibaba.com: INTERVIEW-UPDATE 2-Packard Bell eyes 10 pct Russia laptop share http://news.alibaba.com/article/detail/technology/100203570-1-interview-update-2- packard-bell-eyes-10.html

Published: 19 Nov 2009 17:29:20 PST

* Acer-owned laptop maker currently has 1-1.5 percent share

* Sees Russian sales tripling to $100 million in 2010

* Aims to mass distribute through national retailers

MOSCOW, Nov 19 - PC-maker Packard Bell, owned by Taiwan's Acer, aims to manufacture one in every 10 laptops sold in Russia by 2012 in a sales drive helped by the country's low PC and Internet penetration.

"Russia is still a country where there are first-time buyers, and Internet and PC penetration has yet to come," Raphael de Perlinghi, who oversees the firm's Russian sales, told Reuters in an interview. He said Packard Bell, which entered the Russian market a year ago, would have 1.0-1.5 percent of the laptop market in 2009, equating to $25-30 million of sales against expected total group revenue of over $1 billion.

"The target set by the management is that Packard Bell has to reach 10 percent (Russian) market share," de Perlinghi said.

"In 2010... definitely 5 percent is where we want to be. And 10 percent will be the target after maybe two (more) years," he added.

According to industry research firm Gartner, the Acer brand led the Russian laptop market in the third quarter with a 28.7 percent share, followed by Asus, Hewlett-Packard, Samsung Electronics and Lenovo.

De Perlinghi said Packard's growth had been hampered during its first year in Russia by the economic crisis, which resulted in increased competition and price wars.

"The strategy will be mass distribution... through national and regional retail chains," de Perlinghi said.

NATURAL EXTENSION

Russia will this year account for less than 5 percent of the overall Packard Bell business, but this share is set to rise to 10 percent next year when the company expects to generate revenues of more than $100 million from Russian sales, he said.

"It is still very small. But one thing is sure that in Western Europe it's very difficult to grow. Russia will be the region where the growth will come for Packard Bell."

Russia is one of the company's three focuses of effort in Eastern Europe, along with Poland and Turkey, de Perlinghi said.

"These countries have already emerged for us as fast growing in terms of revenue... And also, with high population, these countries are a natural extension from Western Europe."

Acer, which surpassed Dell to become the world's second biggest PC maker in the third quarter of 2009, aims to boost revenue by more than 70 percent over the next three years.

Activity in the Oil and Gas sector (including regulatory)

Bloomberg: Rosneft, Lukoil Upgraded at UBS as Urals Crude Forecast Raised http://www.bloomberg.com/apps/news?pid=20601095&sid=ai4k_t80V97k

By Stephen Kirkland Nov. 20 (Bloomberg) -- OAO Rosneft and OAO Lukoil, Russia’s largest oil companies, had their price estimates upgraded at UBS AG, which increased its forecast for Urals crude to $79.30 a barrel from $74.30.

OAO Tatneft was upgraded to “neutral” from “sell,” while OAO Gazprom Neft, OAO Surgutneftegaz and OAO TNK-BP Holding also had their price estimates increased by the brokerage.

“We estimate that Rosneft, due to export tax duty relief, and Gazprom Neft, due to higher refining coverage, will benefit the most from higher oil prices in the Russian oil universe,” UBS wrote in a report dated today. “Rosneft remains our top pick.”

Last Updated: November 20, 2009 02:14 EST

Reuters: TNK-BP keeps Fridman as interim CEO until 2011 http://www.reuters.com/article/marketsNews/idUSWLA866320091119

Thu Nov 19, 2009 10:05am EST

MOSCOW, Nov 19 (Reuters) - Oil major BP (BP.L: Quote, Profile, Research, Stock Buzz) and its four billionaire partners in Russia's TNK-BP (TNBPI.RTS: Quote, Profile, Research, Stock Buzz) oil venture have agreed to keep Mikhail Fridman as interim chief executive of TNK-BP until 2011, the firms said on Thursday.

BP and AAR, a consortium representing the billionaire co-owners, has also decided to appoint Maxim Barsky, TNK-BP's executive vice president for strategy and business development, as TNK-BP's future CEO, effective January 1, 2011.

(Moscow Newsroom, + 7 495 775 12 42)

The Moscow Times: Barsky to Take Over TNK, But Not Until ’11 http://www.themoscowtimes.com/business/article/barsky-to-take-over-tnk-but-not-until- 11/390000.html

20 November 2009 Reuters

BP said the candidate proposed by its oligarch partners to lead their Russian joint venture, TNK-BP, had won out over BP’s candidate and that oligarch Mikhail Fridman would stay at the helm until 2011.

BP and AAR, a consortium representing the billionaire co-owners, said Thursday that Maxim Barsky, currently TNK-BP’s executive vice president for strategy and development, would become CEO, effective Jan. 1, 2011. Analysts said Barsky’s appointment, which has been expected for weeks, highlighted how the Russian partners, previously largely sleeping partners in TNK-BP, had wrested operational control of the company from BP.

The last permanent head of the company, Robert Dudley, left Russia with a number of other expatriate workers at the height of a battle for control of TNK-BP between BP and AAR in summer 2008. That row ended with BP agreeing to give its billionaire partners more control at TNK-BP. When Dudley stepped down late last year, Tim Summers, until recently the firm’s chief operating officer, became acting CEO.

Under the terms of the shareholder agreement between the two sides, BP has the right to nominate TNK-BP’s CEO.

BP nominated Pavel Skitovich, who ran gold miner Polyus Gold for five months in 2007 and worked as a Soviet diplomat in Uganda early in his career.

19.11.2009

Oil and Gas Eurasia: Sovcomflot to Build 2 Tankers to Transport TNK-BP Oil Products http://www.oilandgaseurasia.com/news/p/0/news/6134

Sovcomflot plans to place an order for building of 2 tankers to transport TNK-BP oil products, as reported to the Agency of Oil Information a TNK-BP representative. TNK-BP reviews the possibility of cooperation with the Sovcomflot group of companies in construction by Russian shipbuilding companies of commercially efficient sea and river vessels to ensure an integrated system for transportation of oil products from SNPZ with their transshipment and storage in the Black sea ports, he clarified. To meet TNK-BP demand Sovcomflot group of companies plans to place an order for construction of 2 Suezmax class tankers by new shipbuilding companies of Obyedinennaia Sudostroitelnaia Korporatsia. “The parties consider this cooperation not only as mutually beneficial activity but as significant contribution to development of Russian shipbuilding sector and ensuring environmentally safe transportation of liquids”, said the TNK-BP representative. - TNK-BP

Reuters: UPDATE 1-LUKOIL says to switch focus to dividends http://www.reuters.com/article/marketsNews/idUSLJ46888520091119

Thu Nov 19, 2009 12:06pm EST

* Says to target higher cash flow, not production

* To use extra cash for dividends, buy-backs

(Adds analyst comment, detail) MOSCOW, Nov 19 (Reuters) - Russian oil major LUKOIL (LKOH.MM: Quote, Profile, Research, Stock Buzz) is to switch its focus from higher production to an increase in free cash flow, and will use the extra revenue to buy back shares and pay dividends.

The company, Russia's second biggest oil producer, said on Thursday it would change its strategy for 2010-2019 in light of the global economic crisis which has caused a drop in demand for oil.

It said it would boost cash flow via the spin-off of less efficient assets, geographical diversification and modernising oil refineries, among other measures.

It added that dividends and buy-backs were a priority. LUKOIL paid out 42.5 billion roubles ($1.48 billion) to shareholders as part of its 2008 results -- 19 percent higher than the previous year.

"The company acknowledges that the era of growth is over and it is time to reap the profits of past years while capping investments," analysts from Metropol brokerage said in a note.

LUKOIL, 20 percent owned by U.S. producer ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz), said it would report the full details of the new plan next month.

Its shares closed down 2.4 percent on Thursday. ($1=28.71 Rouble) (Reporting by John Bowker; Editing by Jon Loades-Carter)

Prw.com: Russia and China mull petrochemicals joint venture http://www.prw.com/subscriber/headlines2.html?cat=1&id=1258640176

By Richard Higgs Posted 19 November 2009 2:16 pm GMT Russian oil and petrochemicals company OAO Rosneft is considering partnering China’s state oil corporation Sinopec Group in a project to build a 5 million tpa petrochemicals plant in Russia’s Far East.

The two groups are reported to be discussing linking up to establish a jointly funded refining and petrochemicals complex in the Primorsky Region of eastern Russia. The complex, expected to be completed in two stages by 2014, would be capable of processing 20 million tpa of crude oil, Bloomberg News agency quoted Sinopec as saying.

The overall investment of up to $22m, will also cover the construction of related infrastructure including pipelines, a power station and oil-loading port. In October, a team of Sinopec managers were said to be evaluating the project which would be located in Primorye. The scheme would benefit both Russia and China. Russia, the world’s biggest energy exporter, wants foreign capital to help it develop its sparsely populated Far East and east Siberian regions. China, the globe’s fastest growing economy, needs Russian resources to help meet its rapidly rising energy demand.

In 2007, Rosneft and Sinopec Group signed an agreement to develop natural gas and oil deposits off Sakhalin Island in eastern Russia.

Rosneft is a leading oil producer in Russia with seven refineries spread across the country. Its main plastics manufacture is carried out at the Angarsk refinery in southern Siberia. The Angarsk Polymer Plant produces a range of products including ethylene, propylene and polyethylene and had an overall output of 401,000 tpa in 2008. The firm also produces petrochemicals at some other sites.

A modernisation programme for Angarsk plant was drawn up last year to include raise ethylene/propylene capacity, the installation of new units for polypropylene, high density and linear low density polyethylene.

Gazprom Steel Guru: Gazprom holds meeting with Russian shipbuilding plants http://steelguru.com/news/index/2009/11/20/MTIxNTE1/Gazprom_holds_meeting_with_ Russian_shipbuilding_plants.html

Friday, 20 Nov 2009

Gazprom has announced that the Company Headquarters hosted a meeting moderated by Mr Alexander Ananenkov Deputy Chairman of the Gazprom Management Committee on the issue of Gazprom orders placement with Russian shipbuilding plants.

Participating in the meeting were Mr Vasily Podyuk Member of the Gazprom Management Committee, Head of the Gas, Gas Condensate and Oil Production Department, heads and specialists of the relevant structural units of Gazprom as well as the Company’s subsidiaries Gazflot, Gazprom dobycha shelf and Giprospetsgaz.

The meeting addressed the need to maximally engage Russian shipbuilding enterprises including those located in the Far East in manufacturing the marine equipment to be used by Gazprom during Russia continental shelf development and sea-borne transportation of LNG.

The meeting participants were tasked to elaborate the respective proposals.

St. Petersburg Times: TV Campaign Against Gazprom Tower Mounts http://www.times.spb.ru/index.php?action_id=2&story_id=30336 By Sergey Chernov Staff Writer The controversial Gazprom Tower found itself under harsh attack last week on Russia’s main state television, Channel One, for the third time in the past four weeks — and its supporters struggled to offer any good reason to back the 403-meter-tall skyscraper in close proximity to the city center.

First slammed by the Kremlin-controlled channel in its primetime weekly news roundup on Oct. 18, the Okhta Center, as the building is officially known, was derided in the comedy show “Prozhektorperiskhilton” (Paris Hilton’s Spotlight) a week later, and last week became the subject of “Sudite Sami” (Judge for Yourself), a political talk show hosted by Maxim Shevchenko.

This time Okhta Center representatives — communications director Vladimir Gronsky and the project’s chief architect Filipp Nikandrov of the British firm RMJM — were given a chance to present their case for the skyscraper, which is planned to house state energy giant Gazprom’s headquarters and was described by Bloomberg News critic Colin Amery as “just another global corporate monolith — banal, dull and inappropriate.”

The unsuspecting Okhta Center team, which enjoys full administrative support in St. Petersburg, arrived at the studio to discover that the show was to be called “The Tower Against the City.” They were then refused the opportunity to show their presentation of the project, and were instead confronted with a barrage of questions — including ones they had ignored or mocked during the heavily policed public hearings held in St. Petersburg.

With no backing from City Hall, OMON special-task police or menacing individuals scattered around the room pushing and kicking opponents, as there were at the public hearings, the Okhta Center’s representatives appeared helpless and confused.

“During the past 80 years, no architectural masterpieces have been created in the city,” said Nikandrov, following one of the lines of the Okhta Center’s publicity campaign, to which the presenter Shevchenko asked whether Nikandrov considered the project to be a “masterpiece.”

“I think that this tower is a masterpiece,” Nikandrov replied.

“So we have a list like this: Rastrelli, Rossi, Falconet, Nikandrov. A great list,” Shevchenko summed up with irony.

Professionally, Nikandrov’s reasoning was confronted by Andrei Bokov, president of the Russian Union of Architects, who gave examples of Soviet architecture in St. Petersburg.

“I don’t know you, and I am shocked that a man whom I, the president of the Union of Architects, see for the first time, has taken responsibility for such a complex undertaking,” Bokov said. “This project is na?ve and aggressive; it is dull, it is archaic. Chinese cities are being built with buildings that are vastly more interesting and better than what you are offering. Your brains haven’t been turned on.”

Advocates of the tower who were present in the studio struggled to come up with good reasons to support the project. The arguments they made frequently sounded eccentric.

Film director Vladimir Bortko claimed that the tower would be an “adornment” to St. Petersburg. When Grigory Revzin, Kommersant’s architecture critic, asked him to specify with what it would adorn St. Petersburg, Bortko replied, “With beauty!”

“You mean there’s no beauty [in St. Petersburg]? Not enough?” Revzin asked.

“Not enough,” Bortko responded.

Boris Nadezhdin, one of the leaders of the pro-Kremlin “liberal” party Pravoye Delo, touched on the political meaning of the tower, implying that it would symbolize the growing power of Russia.

“This tower is a symbol that Russia is rising from its knees, among other things,” he said.

“In clear weather it should be visible from the NATO Headquarters in Brussels!”

Gronsky applauded his own remarks, as if giving a sign to the pro-tower rent-a-crowd used at hearings in the past two years, but there was no rent-a-crowd to back him among the show’s audience.

At one point during the 45-minute show, film director Bortko, who appeared to be verging on hysteria for most of the program, rushed out of the studio, failed to find the exit and circled the speakers again before managing to leave.

Summing up the debates, Valery Fadeyev, editor of Expert magazine, said that the planned tower should be thoroughly discussed on a national level.

“We should return to the first phase of this project,” he said.

“The project has now gone outside of St. Petersburg. This problem has become national.”

The national uproar and Channel One’s campaign against the tower began after City Governor Matviyenko signed a decree exempting the Okhta Center from the height regulation law on Oct. 6. Some media suggested a rift in the Kremlin over the project and even took it as a sign that the project may soon be cancelled by the Russian authorities.

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