SOURCE: The St. Petersburg Times
DATE: Issue #1132 (98), Tuesday, December 20, 2005
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TITLE: City Giant Wins World Heavyweight Title
AUTHOR: By Erik Kirschbaum
PUBLISHER: Reuters
TEXT: BERLIN — Giant boxer Nikolai Valuyev used size to his advantage to dethrone World Boxing Association Champion John Ruiz of the United States on Saturday night and become the first heavyweight champion from Russia. 
Watching the 32-year-old from St. Petersburg, known as the “beast from the east,” step over the ropes and into the ring — rather than ducking through them — must be a daunting sight for all the 43 boxers he has beaten in an undefeated 12-year career. At 2.13 meters tall (7 feet) and 147 kilograms, Valuyev causes not only the ground to tremble when he enters the ring. 
But more than Valuyev’s 25 centimeter height and 45 kilogram weight advantage, it was the Russian giant’s menacing stare and his “that-barely-even-hurt-me” look every time Ruiz landed a punch that appeared to wear the American down through 12 rounds. 
“It was a difficult fight but I deserved to win it,” said Valuyev, who after winning the belt from Ruiz in a disputed majority decision had it stolen away by Ruiz’s sulking manager Norman Stone. 
Stone snatched the belt during a scuffle in the ring right after the fight and briefly waved it above his head before five bodyguards pinned him in a corner and pried it out of his hands. 
“You can’t win in Germany unless you knock them out,” Stone said at a news conference, still fuming hours later about the narrow decision in favor of Valuyev by two of the three judges. The third judge ruled it a draw. 
“We were robbed,” said Stone. 
Valuyev proved to be as unperturbed by Stone’s outbursts both in the ring and at the press conference as he was every time Ruiz pounded at his ribs, jaw or the rest of his head during the match at Berlin’s Max Schmeling arena. 
“All my dreams have come true,” he said. “I’m not thinking at all about becoming the first Russian heavyweight champion right now. My thoughts are on improving further and how I can be even better in my next fight.” 
Valuyev was pretty good against Ruiz, who had perhaps unwisely compared Valuyev to “King Kong” before the match and also bragged the Russian’s head would be easy to hit because “it’s the size of a Volkswagen.” 
Valuyev, who’s been fighting prejudice about his intimidating size and villain-like appearance since he was a teenager, was not amused by Ruiz’s comments before the match. 
“At first I struggled to cope with this body, as I lacked coordination,” Valuyev told Germany’s Stern magazine, which added his main aim is to prove “he is not a monster but a sportsman.” 
He may have lacked style, but Valuyev’s left jab hammered at Ruiz’s face. 
He was slow at times but when he connected, the perspiration of Ruiz’s swollen face was sprayed out of the ring to the spectators in row one. 
As a youth, Valuyev played basketball and later turned to athletics, where he became a junior Russian champion in discus. At 20, he turned to boxing while attending university. 
He has attracted relatively little notice until now because most of his wins had been against obscure opponents. 
That changed on Saturday. He said he stands ready to help unify boxing’s four heavyweight divisions with a tournament for an undisputed champ. 
Although he has trained extensively in Germany, Valuyev is rooted to his Russian home. 
He and his wife Galina, who weighs 100 kilograms less than he does, and their 3-year-old son live in a 50-square-meter apartment in St. Petersburg. 
They are moving into a house, but he wishes he could take all his neighbors with him.

TITLE: Who Will Own The Old Senate?
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: As the Russian State History Archive packs its bags and prepares to leave its current home to occupy new purpose-built premises on Zanevsky Prospekt, politicians have entered into a heated debate about what to do with the building it is vacating — the historic Senate and Synod building located at the heart of the city center.
The spat began Friday following a statement made by presidential property manager Vladimir Kozhin, who admitted that the Russian government may not be able to afford to renovate the 30,000 square meter building, and that it is likely to be offered to investors.
“I need to make it clear: investment means this is not going to be state money,” Kozhin said at a news conference in Moscow, referring to the renovation costs. 
“Naturally, investors would want a return on their money, so there aren’t that many options as to what could be housed in the building,” he said
Although Kozhin stopped short of naming the specific options being considered, the idea of this historic building being passed into private hands caused controversy among St. Petersburg politicians.
“Even discussing the possible use of the Senate and Synod building for commercial purposes mustn’t be allowed,” Governor Valentina Matviyenko told reporters Friday, adding that she will be pushing the federal government to finance the renovations. “The subject is closed. Period,” she said.
Matviyenko’s speech was echoed by a statement of St. Petersburg’s Legislative Assembly which has been sent to Sergei Mironov, speaker of the Russian Federation Council, and Boris Gryzlov, chairman of the Russian State Duma.
“These buildings have always been used for the state’s needs,” reads the statement. “We ask that the commercial use of the property be prohibited.”
The Legislative Assembly also asked the State Duma to allocate funding for the renovations. The Assembly’s speaker, Vadim Tyulpanov, said the complete renovation of the building would require hundreds of millions of rubles in state funding.
Speaking in Moscow on Friday, Mironov called for Russia’s Constitutional Court to be moved from Moscow and housed in the Senate and Synod buildings. He also condemned the notion that the Senate and Synod could be offered to investors. 
The buildings of the Senate and Synod, designed by the Russo-Italian architect Carlo Rossi and located at 1-3 Ploshchad Dekabristov, date back to 1829-1836.
Local real estate experts estimate that the complete renovation of a historic building of this rank would cost up to $2,000 per square meter. The process would be further complicated by the widespread bureaucracy that surrounds Russia’s architectural, historical and cultural treasures.
“To make the slightest change in the interior of the Astoria or the Angleterre — if we change the door handles, say — we need to coordinate it with about thirty different officials,” said Yekaterina Zemtsova, head of PR at the Astoria and Angleterre hotels, located in historic buildings on St. Isaac’s Square. “With each new change of this kind, the whole process begins again.”
Alexei Shaskolsky, a leading analyst with the St. Petersburg Institute for Entrepreneurial Issues, said that the restrictions which would be imposed on potential investors by City Hall’s Committee for the Preservation of Historical Monuments would make the property unattractive.
“It would have been an excellent place for a hotel, but the architecture, with its long lines of interconnecting rooms, makes that impossible,” Shaskolsky said. “On the other hand, for the headquarters of a bank or a large company, these buildings are far too big.”
Boris Vishnevsky, a member of Yabloko’s political council in St. Petersburg, is bewildered by the Kremlin’s attitude.
“The most outrageous thing of all is that the presidential administration regards federal property as something they can toss around any way they want,” Vishnevsky told online bulletin Zaks.ru on Monday. “Tomorrow they could easily decide that they like the buildings of the Hermitage or the State Russian Museum.”
On Dec. 17 2002, then Prime Minister Mikhail Kasyanov signed a decree giving several buildings on St. Isaac’s Square and Dekabristov Square to the presidential administration on the grounds that the administration had the resources to restore them.
At a news conference in February, Kozhin gave assurances that the Senate and Synod building would be used exclusively for the state’s needs.
According to the decree signed by Kasyanov, organizations including the Russian Horticulture Institute, the State History Archive and the St. Petersburg Project Institute No. 1 would have to relocate “in order to effectively accommodate federal administrative offices in St. Petersburg and provide effective state control over the use of unique historic monuments in St. Petersburg.”

TITLE: Police Use Tear Gas to Stop Revelers
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Seventeen people were arrested and about a dozen ended up in local hospitals after a party for sports fans turned into a violent street fight Sunday, with police using tear gas to disperse the revelers.
Local sports fans gathered in Port Club on Pereulok Antonenko on Sunday to celebrate an anniversary associated with the city’s premier soccer club FC Zenit St. Petersburg.
At 11.15 p.m. the duty officer of the Admiralteisky district police station received a telephone call informing him that over 300 soccer fans were staging a drunken party outside the club, with over ten people involved in a brutal fight, the city police press-office told the St. Petersburg Times on Monday.
A member of staff at the club who asked to remain anonymous said the party, which was organized by outside promoters, had ended safely at 11 p.m. and the staff had then locked the premises.
The police press-service said that the first three policemen dispatched to the area saw about 300 youngsters, many of them inebriated, gathered outside the club, opposite the Mariinsky Palace, home to the Legislative Assembly. 
“Fifteen or so people were beating a man who was lying on the ground,” the police spokeswoman said. “After the first policeman got out of the car, he was hit hard on the head, and the driver, who had followed him, was knocked to the ground and kicked.”
Two more police cars were dispatched to the scene, but they were unable to disperse the crowd. At 11.25 p.m. about 180 policemen, including twenty officers from the city’s OMON special task force were sent to provide back-up.
The police used tear-gas and fired several warning shots into the air, the police spokeswoman said. Six policemen were hospitalized with injuries including concussion and severe bruising. 
The nearby Sennaya Ploshchad, Sadovaya and Nevsky Prospekt metro stations were immediately closed following warnings from the police.
By midnight order had been restored, the police spokeswoman said.
Pavel Klinov, director of the Polygon concert agency, which often organizes events at Port, was at the club on Sunday night. 
“The party was fun, there were about 500 people in the club, everything was going well, and there were no serious incidents,” Klinov said. 
“The fight that followed after everyone went outside was just a small thing between a couple of soccer fans, and it would have settled itself without police intervention,” he said.
The Admiralteisky district prosecutor’s office has opened a criminal investigation into the fight. Seventeen people, aged from 17 to 25, remain in custody, the spokeswoman said.
The charges include resisting arrest and grievous bodily harm, which carries a sentence of from five to ten years in prison.

TITLE: Putin Drops Hint That New State Oil Firm Boss Could be Foreign
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: MOSCOW — President Vladimir Putin on Friday said that state-owned Rosneft was likely to be headed by a prominent foreigner, but stopped short of confirming reports that the job had been offered to former U.S. Commerce Secretary Donald Evans.
Media reports first surfaced last week that the longtime confidante of President George W. Bush had met with Putin earlier this month and been offered the post of Rosneft board chairman, currently held by the deputy head of the Kremlin administration.
“I suppose that any of our public companies — and Rosneft is about to become one — ... is interested in attracting a high-class manager regardless of his country of origin or citizenship,” Putin told reporters at his residence in the Black Sea resort city of Sochi, according to the presidential web site.
“Rosneft has every chance to become a world-class company. I am sure it will become one and do not rule out the possibility of invitations for foreign and high-class managers,” he said.
Although Putin did not directly confirm the reports of an offer, sources close to Evans and in the Russian government have also not denied them. Evans ostensibly came to Moscow on the invitation of the American Chamber of Commerce but also paid a visit to Putin.
 “I did not name names,” he told reporters who bombarded him with questions about the candidate’s identity. “I could name any surname at any time. But it is a matter for the negotiations between the company and the managers they are inviting.” 
A high-ranking government official told The Moscow Times last week that only Evans — and no one else — was being considered for the Rosneft job.
The government plans to sell up to 49 percent of the fully state-owned oil company in the coming year. The state wants to use the IPO as a way to repay a loan it took out to buy a majority stake in Gazprom.
A move to bring in a well-connected foreigner would appear to be a Kremlin attempt to make Rosneft attractive to foreign investors by showing that the company is serious about becoming a transparent, Western-style enterprise.
The news of the offer to Evans came just days after Gazprom announced that former German Chancellor Gerhard Schroeder was going to head a Gazprom-led pipeline project under the Baltic Sea.
The question remains open as to whether Evans, who quit his U.S. government job in February 2005, would accept a job at Rosneft.
The decision to take the board chairmanship of the state-owned oil company would be a tough for any well-known foreigner, especially from the United States, said a businessman who knows Evans personally.
Rosneft’s reputation was stained in the eyes of many international observers after it acquired Yuganskneftegaz, Yukos’ largest production unit, after a forced government auction last December.
Yukos shareholders are still trying recover losses through courts in both Europe and the United States.
“I can’t imagine any prominent U.S. figure walking into this with his eyes open and thus becoming a U.S.-based target for the legal battles yet to come,” said the businessman, who requested anonymity because he did not want to speak on Evans’ behalf without permission.
One such threat is a lawsuit that was opened by U.S.-based owners of American Depository Receipts in Yukos. During a visit to the United States in October, Industry and Energy Minister Viktor Khristenko was served with the suit, which accuses the Russian government, Rosneft and Gazprom of fraud in the de facto renationalization of the Yugansk unit.
In November 2004, Yukos’ main shareholder, Group Menatep, filed a $28 billion suit against the Russian government under the terms of the Energy Charter, an international treaty that Russia has signed but not ratified.
A person close to Evans who last week was authorized to speak to the media and confirmed the Putin meeting, declined to comment on the questions about Rosneft’s involvement in the Yukos affair.
Another open question related to the appointment of Evans to the Rosneft board is the fate of current chairman Igor Sechin. 
Sechin is the deputy head of the presidential administration and has been a close Putin ally since the 1990s, when the president was still climbing the career ladder in the St. Petersburg mayor’s office. 
Sechin was appointed Rosneft’s board chairman in July 2004.
Sechin has a reputation for being a powerful player among the siloviki, the Kremlin clan of mostly St. Petersburg security officers who rose to power under Putin.
Former Yukos CEO Mikhail Khodorkovsky, who is now serving an eight-year prison sentence for fraud and tax evasion, has called Sechin “the organizer and motor behind the Yukos affair.”

TITLE: Kasyanov Leadership Bid Fails Amid Chaos
PUBLISHER: Combined Reports
TEXT: MOSCOW — A bid by former Prime Minister Mikhail Kasyanov to mount a return to politics stalled Saturday when opponents hijacked his expected takeover of the liberal Democratic Party. 
A spokeswoman for Kasyanov said unidentified people had taken over a central Moscow building where his supporters were meeting and prevented them from attending a Democratic Party congress that had been expected to elect him as leader. 
A separate, rapidly organized conference failed to attract enough delegates to secure the leadership, and Andrei Bogdanov, the chairman of the Democratic Party’s central committee, was elected instead at the congress abandoned by Kasyanov and his allies. 
Kasyanov had hoped to use the almost-dormant Democratic Party, Russia’s oldest liberal party, as a springboard for the parliamentary elections in 2007 and his presidential ambitions the following year. 
“We decided not to make a hasty decision,” Kasyanov said after the congress, adding that he would take a week to come up with a new strategy. 
“Life is only just starting, the fight is only just starting,” he said. “We have the possibilities, we have the desire, and, most importantly, we have the conviction. We are free people.” 
Kasyanov supporters said the authorities had split the Democratic Party by bribing delegates to oppose the Kasyanov’s challenge. 
“Bogdanov initially offered me $5,000. I said I wasn’t interested, and the sum doubled. I again refused,” Dzhambul Abesadze, a party delegate from the Altai region, said on Ekho Moskvy radio. 
Our Choice leader Irina Khakamada, who attended the alternative congress, said Bogdanov’s branch of the party would be left as “toys of the Kremlin” and said the split would not deter her. 
The congress, held at the Izmailovo Hotel, was also attended by Union of Right Forces leader Nikita Belykh.
Bogdanov said at the other congress, held at the House of Unions next door to the State Duma building, that the Democratic Party was ready to work with Yabloko, the Union of Right Forces and other liberal parties ahead of parliamentary elections in 2007. 
“If we unite under the Democratic Party, we can really win a right-wing victory in the 2007 elections,” he said, Interfax reported.
Also Saturday, State Duma Deputy and muckraking journalist Alexander Khinshtein said he had information that Kasyanov had tried to bribe Democratic Party members and promised to send evidence to the Prosecutor General’s Office in a few days, Interfax reported.
An earlier claim by Khinshtein prompted prosecutors to open an investigation into whether Kasyanov illegally acquired a former state-owned villa while in office. Kasyanov denies wrongdoing and says the authorities are trying to discredit him.
Meanwhile, Kasyanov, in an interview published Friday, slammed the Kremlin’s record on democracy and expressed regret for laying the economic groundwork for President Vladimir Putin’s rule. “None of us could have thought that political freedoms could shrink that fast,” Kasyanov told Nezavisimaya Gazeta. 
“All this is reminiscent of ... the totalitarian system of the 1970s, when everything was under control,” he added, referring to the rule of Leonid Brezhnev. 
Kasyanov was fired by Putin in 2004 after criticizing the state’s legal assault on Yukos. His time in office coincided with strong economic growth, backed by high oil prices, and a string of market reforms. 
These remain the foundation of Putin’s popularity during a reign that has seen the Kremlin tighten control over mass media and regional authorities. 
(Reuters, MT)

TITLE: U.S. Slams Kremlin’s NGO Bill
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — The U.S. House of Representatives has called for the State Duma bill that would increase government control over nongovernmental organizations to be withdrawn or toned down significantly. 
U.S. representatives passed a nonbinding resolution 405-15 late Thursday, prompting some of the bill’s sponsors in the Duma to bristle and Russian NGOs to welcome the support.
The vote came after President Vladimir Putin, faced with a storm of international and domestic criticism over the legislation, proposed amendments that addressed some of the concerns of international NGOs. 
The Duma postponed a crucial second reading of the bill until this Wednesday.
Sponsored by Representatives Henry Hyde and Tom Lantos, the U.S. resolution urged the Russian government to withdraw or modify the bill because it “would have the effect of severely restricting the establishment, operations and activities of domestic and foreign” NGOs in Russia, “including imposing unprecedented restraints on foreign assistance,” according to the resolution text posted on the House web site.
Russia’s concerns that “foreign interests and intelligence agencies” could use NGOs to undermine the government and national security could “be addressed by more limited and appropriate measures,” the resolution said.
 Putin, while ordering amendments, defended the bill as necessary for preventing foreign funding of political activity in Russia and for fighting terrorism.
The U.S. resolution also said that “Russia’s destiny and the interests of her people lie in her assumption of her rightful place as a full and equal member of the Western community of democracies” but “the proposed measures ... are incompatible with membership in that community.”
Konstantin Kosachyov, head of the Duma’s International Affairs Committee and one of the bill’s sponsors, said the U.S. resolution constituted interference in Russia’s legislative activity and was politically motivated. It was “another strong confirmation that some foreign NGOs active in Russia were really being used for political purposes and ... our bill identified the right problem,” he said, Interfax reported Friday.
Tanyana Kasatkina, executive director of human rights group Memorial, said she hoped the resolution could help rid the bill of unfair restrictions. “If all countries made similar statements, it would be so much better,” she said.
Putin’s proposed amendments include dropping the requirement for branches of foreign NGOs to reregister as separately financed Russian entities. 
However, the amendments proposed by Putin and Duma deputies would leave intact the requirement that Russian and foreign NGOs file reports on their activities and funding with the Justice Ministry. The ministry would not be able to inspect NGOs’ books but could ask tax authorities to do the job, said Sergei Popov, head of the Duma’s Public and Religious Organizations Committee, Interfax reported Thursday. 
The bill would require Russian NGOs to reregister, and the authorities would be able to refuse to register an NGO if its founders included people suspected of money laundering or assisting in terrorism. Putin said these and other criteria for refusing registration should be made clearer.

TITLE: Anti-Fascists March Together in Moscow
AUTHOR: By Kevin O’Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW — One month after far-right nationalists marched through Moscow’s city center shouting “Sieg Heil,” at least 1,500 people marched from the same square in an anti-fascist protest on Sunday afternoon.
“Let them see that we are many and that we are not afraid,” said Garry Kasparov, the former chess champion, who with the liberal parties Yabloko and the Union of Right Forces, or SPS, organized the march under the title, “Moscow Without Fascists.” 
The march was the first organized by anti-fascists that city authorities have allowed since the Nov. 4 far-right march against illegal migration. Attempts to hold an anti-fascist rally on Nov. 27 — first near Belorussky Station, then outside City Hall — were foiled by police, who detained dozens of protesters.
Sunday’s march began near the Chistiye Prudy metro station, a few meters away from where the far-right march, which gathered about twice as many people, began on Nov. 4, the newly created People’s Unity Day. 
The far-right Movement Against Illegal Immigration, or DPNI, organized that march, the biggest nationalist street protest in more than a decade. Marchers then called for an end to illegal migration and carried banners reading, “Russia for Russians.”
 There was probably no symbolism intended by the organizers of Sunday’s march, but instead of beginning from the statue of Alexander Griboyedov, the Russian writer and diplomat who was killed in a Tehran riot in 1829, the anti-fascist march began beside the newly restored Chinese tea store on Myasnitskaya Ulitsa.
Yabloko leader Grigory Yavlinsky and SPS leader Nikita Belykh led the marchers down Myasnitskaya Ulitsa, walking alongside Yabloko deputy leader Sergei Mitrokhin and former SPS leader Yegor Gaidar. 
Instead of marching to Slavyanskaya Ploshchad, where the Nov. 4 march ended, the anti-fascist march wound up opposite Federal Security Service headquarters at Lubyanskaya Ploshchad, where a rally was held in front of the Solovetsky stone, the memorial to victims of Soviet repression that was brought to Moscow from the first gulag camp on the Solovetsky Islands. 
“Fascism is a disgrace, but in the country that defeated fascism it is a disgrace three times over,” Yavlinsky told the rally. 
The anti-fascist march, like last month’s far-right march, brought together a series of disparate groups across the political spectrum — from greens to anarchists to World War II veterans. Although there were some younger marchers on Sunday, the average age was older than in the far-right march, and the atmosphere on Sunday was decidedly more peaceful. 
“There’s no such thing as illegal people,” read one banner, a response to the rhetoric of nationalist organizations. 
At about the same time on Sunday afternoon, about 400 DPNI activists rallied near the Dinamo metro station to protest a proposed statue of the late president of Azerbaijan, Heidar Aliyev.
On Myasnitskaya Ulitsa, an anarchist protester, 23-year-old Tovarishch Krog — real name Nikolai Makas — pointed to the flag he was carrying and said it was the same one used by anarcho-syndicalists when they fought General Franco in the Spanish Civil War. 
Tomatoes and a fake grenade were thrown at Sunday’s march. Police arrested a member of a group called the Slavic Youth Union, Interfax reported.
As the march began moving down Myasnitskaya, the song “Svyashchennaya Voina,” or Holy War, boomed out from loudspeakers. The song was written during World War II to inspire the Soviet Army’s struggle against Nazi Germany.
“We couldn’t not come,” said Nora Rodionova, an elderly woman who was a small girl during the war, looking at her friend, another pensioner. “Now, there are lots of fascists, and nobody is stopping them. There are lots of them, and racially motivated attacks.”
“I remember hearing this song every morning at 6 a.m.,” she said, as she and her friend walked along Myasnitskaya. 
Another marcher, Habty Tesfaye, said his brother Anteneh, 38, was in the hospital after being attacked Thursday near the Griboyedov statue by five skinheads, including one young woman. He said he believed the attack, the third on his brother in Moscow, to be racially motivated.
The Tesfaye brothers moved to Moscow from Ethiopia as boys with their father, a journalist.
His brother was in stable condition Sunday. 
When Tesfaye went to the police precinct nearly five hours after his brother had been stabbed, he said, the police had done nothing to find the attackers. Instead, the police dismissed the attack as hooliganism and asked him why he had come to Russia.
Most of the speeches on Lubyanskaya Ploshchad were long on rhetoric and short on details about how exactly the marchers planned to fight fascism.
“A new fascism is engulfing us,” Belykh said. “It is a sickness that we need to fight. Fascism will not pass. Fascism will never conquer Moscow.”
Veteran human rights campaigner Svetlana Gannushkina took issue with figures on illegal migrants and crime in the city cited by the nationalist Rodina party in a leaflet for this month’s Moscow City Duma elections. While the leaflet claimed that illegal migrants committed 65 percent of all crimes and that Tajiks committed 90 percent of drug-related crimes, the official statistics on the Interior Ministry’s web site on Sunday were less than 4 percent and 1 percent respectively, she said.
Such inflated figures are a staple of far-right nationalist rhetoric and were much-quoted by participants in last month’s march against illegal migration. 
“They say that Russians are repressed, but it is Russia that is not letting Russians into the country, or allowing them to become citizens,” said Gannushkina, referring to ethnic Russians in former Soviet countries who have found it difficult to gain Russian passports or move to Russia. 
“Instead of me, why isn’t Interior Minister Rashid Nurgaliyev here?” she said, adding that the government’s refusal to refute such inflated figures showed they were using nationalist sentiments for their own ends. 
These were the same scapegoat tactics as those used by Nazi Propaganda Minister Joseph Goebbels in Germany, she said. 
“They need people to have fear in their hearts,” she said.

TITLE: IN BRIEF
TEXT: Party Bill Approved
MOSCOW (Reuters) — The State Duma on Friday passed a bill in a second reading that would allow parties that win regional legislative polls to propose candidates for governor that would then go to President Vladimir Putin for nomination. 
The effect of the bill, which still has to pass a third reading, is likely to boost the influence of United Russia, which already dominates the Duma and has scored well in regional polls. 

Putin Prefers Grozny
MOSCOW (AP) — President Vladimir Putin has dismissed a motion by Chechnya’s parliament to rename the republic’s capital Grozny after the late Chechen President Akhmad Kadyrov. 
Putin, speaking Saturday on NTV television, referred to opposition to the motion from Kadyrov’s son, Ramzan, and said that “the issue is closed.” 

25 Years for Blast
MOSCOW (AP) — An court in Arkhangelsk on Friday found a man guilty of setting off an explosion in an apartment building that killed 58 people and sentenced him to 25 years in a maximum-security prison. 
Sergei Alexeichik, a former municipal gas company worker, was found guilty of removing caps from valves carrying natural gas to three apartment buildings in the city of Arkhangelsk in March 2004. 
Prosecutors say he was seeking revenge after being fired. 

Minsk Moves Poll 
MOSCOW (NYT) — Belarus’ parliament voted Friday to hold the country’s next presidential election on March 19, opening an accelerated campaign between President Alexander Lukashenko and a beleaguered opposition movement.
Under the country’s constitution, twice revised by Lukashenko, the next election could have been held as late as July. But with democratic opposition candidate Alexander Milinkevich’s campaign showing signs of winning popular support, according to its own polls, many of his aides had believed that Lukashenko would move to shorten the election cycle.

TITLE: Exporting Excellence
TEXT: Baltika began exporting its beers in 1999, again seizing the initiative among Russian brewers. At present, Baltika is the leading exporter of Russian beer, with the enterprise’s work meeting all the demands of the international ISO 9001:2000 quality control standards. In 2005, Baltika  was recognized as the “Best Russian Exporter” for the fourth year running in a competition held by the Russian Ministry for Economic Development and Trade. The award is given as a recognition of firm’s contribution to the broadening of Russia’s economic links. 
Baltika beers are now exported to 38 countries, including CIS states and further abroad: Germany, Israel, the U.S.A., Latvia, Lithuania, Estonia, Great Britain, Italy, Portugal, Greece, Cyprus, Peru, Japan, Canada, Spain, Iran, Belgium, the United Arab Emirates, Libya, Poland, Cuba, Australia, New Zealand, Taiwan, China, Norway and South Korea. 
In order to maintain this export expansion, the company has founded subsidiaries in Germany, Kazakhstan, Kyrgyzia, Moldova and Ukraine, with branch offices in Belarussia and Latvia. 
The advances made in 2005 not only came in the number of countries where Baltika can now be bought, but also in the volumes being exported. In the first half of 2005 alone, export sales shot up by 24 percent, reaching 71.5 million liters, with a planned total for 2005 of 135 million liters. 
The development of this brand awareness and recognition of Baltika’s quality has seen its beers picking up a host of top awards around the world. In early 2004, Baltika’s wheat beer Pshenichnoe received a bronze medal in the International Special Sorts of Beer category at the prestigious Brewing Industry International Awards 2004. Later in the year, the European Beer Star Awards were held in Nurenburg, with Baltika No.6 Porter receiving a silver medal in the Porter category.
2005 saw the continuation of this award-winning streak. In September, the Brewing Industry International Awards were held in Munich, with Baltika picking up another silver medal, this time for in the strong beer category. At the European Beer Star Award - 2005, also held in Munich, Baltika’s No.6 Porter for the second year running won a silver medal. Another landmark achievement in 2005 was signaled by Baltika being the only Russian participant in the renowned International Beer Festival in Berlin. 
Baltika also demonstrated in 2005 that it was not only capable of winning foreign awards, but also of carving out a sales niche in foreign markets. In three separate national competitions in Kazakhstan, Kyrgyzstan and Belarussia, Baltika was recognized as “Choice of the Year.” 
The rapid expansion of Baltika’s export operations has not gone unnoticed back in Russia. In mid-October, 2005, Business Week-Russia magazine published its rating of the leading Russian brands, carried out by the international consulting firm Interbrand Zintzmeyer & Lux AG. The Baltika brand was valued at $1,701 million, giving it third place in the ratings table. 
2005, then, has been a busy year – while maintaining and further developing its leading position in Russia, Baltika has made huge steps forward in establishing itself as a highly competitive international brand that is renowned for its quality around the world.

TITLE: That Was The Year That Was
TEXT: January

Returning from the rest and relaxation of the Christmas and New Year break, Petersburgers are confronted by flood warnings, with the Neva River and city canals bursting their banks and six metro stations closed.
By mid-January, pensioners have taken to the streets to protest at the introduction of a controversial new program that replaces entitlements to free or discounted services with cash. 
Europe’s top human rights watchdog criticizes Moscow’s handling of the Yukos affair.
Finnish media giant Sanoma pays 142 million euros ($186 million) to acquire Independent Media, the largest publisher of consumer magazines in the country, which owns titles including the St. Petersburg Times and Vedomosti. Market analysts describe it as “the biggest deal” in Russian publishing history.
Crude pipeline monopoly Transneft begins work on one of the country’s priority energy projects, the construction of an 80 million-ton-per-year pipeline to the Pacific coast.

February 

Protests against welfare and benefits reforms continue, with around 5,000 demonstrators taking to the streets, while in Georgia Prime Minister Zurab Zhvania is killed in a suspicious gas poisoning incident at a friend’s apartment.
In Moscow, Prime Minister Fradkov issues a warning to senior police officials, criticizing them for not doing enough to get rid of corruption in their ranks.
Meeting up in Bratislava, Slovakia, U.S. President George Bush tells Russian President Vladimir Putin that he is concerned about the development of democracy in Russia. “I was able to share my concerns about Russia’s commitment in fulfilling these universal [democratic] principles,” Bush said. “I did so in a constructive and friendly way.”
St. Petersburg jewelry expert Valentin Skurlov claims that one of the 15 Faberge eggs bought from the estate of U.S. billionaire Malcolm Forbes by Russian magnate Viktor Vekselberg is a forgery.
In business, the British luxury hospitality chain Orient-Express, best known for its legendary railway tours, buys out a 93.5 percent stake in the Grand Hotel Europe, a city landmark, in one of the largest ever Russian property deals, 
Economic monthly Finance publishes its annual Russia’s Top 500 Rich List. Figures show St. Petersburg doesn’t have a single dollar billionaire. Dominated by service oriented industries, the city’s first entry comes in at 71, with banker Vladimir Kogan’s $360 million.

March

Pensioners are still having trouble collecting their benefits and welfare entitlements, and there are widespread protests. 
In Chechnya, FSB special forces officers kill Chechen rebel leader Aslan Maskhadov. Chechen Deputy Prime Minister Ramzan Kadyrov calls Maskhadov’s death a gift for all Chechen women on Women’s Day, which falls on March 8. Rebels replace Maskhadov with a little-known cleric named Abdul-Khalim Sadulayev.
Chess player Garry Kasparov announces his retirement from the game and that he is entering politics to battle what he calls the “dictatorship” of President Vladimir Putin.
In Moscow, Anatoly Chubais, head of the Russia’s state power monopoly, survives an assassination attempt.
LUKoil sets about dominating the city’s gas market as it wins the auction for 30 new gas station sites in St. Petersburg and also purchases 37 gas stations from Balt Trade Co. 

April 

Visiting Israel, Putin faces down Israeli criticism, saying Russia’s planned sale of anti-aircraft missiles to Syria and supply of nuclear components to Iran does not threaten Israel’s security. Putin is the first Russian president to have journeyed to the state.
In St. Petersburg, two major city projects, the construction of a new soccer stadium and a toll tunnel under the River Neva win final approval from the local government. 

May 

In an ominous move, Federal Security Service Director Nikolai Patrushev tells State Duma that U.S., British and other foreign non-governmental organizations are providing cover for professional spies in Russia.
A massive power outage in Moscow puts electricity chief Chubais back in the firing line, with the Moscow City Prosecutor’s Office summoning him for questioning and Putin personally laying the blame at his door.
The biggest trial in the country’s post-Soviet history is over: Mikhail Khodorkovsky, once one of the nation’s most powerful men, and his business partner Platon Lebedev receive eight years in a prison camp for fraud and tax evasion.

June 

The Kremlin unveils plans to open an English-language satellite television channel to be titled Russian Today. On a similarly upbeat note, police in St. Petersburg announce plans to establish patrols to protect foreigners from pickpockets.
Economic Development and Trade Minister German Gref is less optimistic — he tells us that economic growth is slowing and that President Putin’s goal of doubling gross domestic product by 2010 is unrealistic.
In St. Petersburg, Russia and China sign eight investment agreements worth a total of $1.5 billion, including a construction of a $1.25 billion Baltic Pearl residential complex in St. Petersburg.
The development, which is to house 35,000 people, is China’s biggest investment project in Russia.
The Japanese auto giant Toyota lays the foundation stone of its new assembly plant just outside of St. Petersburg, investing 4 billion rubles ($140.5 million) in the facility and becoming the first Japanese car manufacturer to build a Russian assembly plant.
Swedish retailer IKEA starts construction work on a $500 million investment project to build two family shopping centers and a further furniture store in the city.

July 

A St. Petersburg court convicts Vitaly Akishin of killing liberal State Duma Deputy Galina Starovoitova in the stairwell of her apartment building in 1998, sentencing him to 23 1/2 years in prison.
The Prosecutor General’s Office announces that it is investigating whether Mikhail Kasyanov broke the law when he obtained a government-owned cottage shortly before being fired as prime minister in early 2004. Later in the month, Kasyanov returns from abroad to face the probe.
In St. Petersburg, local opposition leaders take offense when Governor Valentina Matviyenko skips a pre-arranged meeting to visit Leningrad Zoo. 
Eurocypria, Cyprus’s air carrier, breaks Pulkovo airline’s monopoly on the St. Petersburg-Cyprus route beginning one scheduled flight a week. 

August 

The Foreign Ministry summons the U.S. Embassy’s top official and politicians express outrage when a U.S. television network broadcasts an interview with Chechen warlord Shamily Basayev, who has a $10 million bounty on his head and has claimed responsibility for the Beslan school hostage-taking. The Foreign Ministry’s decision not to extend the accreditation of ABC television journalists is seen as a reminder to all foreign journalists not to cross a line when writing about Chechnya and especially rebel leaders. 
Seven Russian sailors are rescued after being trapped for three days in a mini-submarine. 
In Moscow, the Cabinet approves a draft of its 2006 budget, giving the go-ahead for the biggest increase in public spending since the August 1998 economic meltdown.
The State Duma passes a new law that will serve as the platform legislature for state-backed IT parks. St. Petersburg’s first IT park is set to begin construction next year, to be ready for a 2008 or 2009 opening.

September 

In St. Petersburg, Ronald Epasak, a 29-year-old student at the St. Petersburg Forestry Academy is killed while on the way to his rented apartment at night. The city’s African community holds a demonstration in front of the Legislative Assembly, and the head of the city police crime squad Vladislav Piotrovsky announces the case has been solved within days. 
With his appeal pending, Kasyanov  enters a local election in Moscow, a motley crew of prisoners at the Matrosskaya Tishina detention facility where he is being held steps forward to put their names down as candidates at the same election.
Putin travels to St. Petersburg to meet the leaders of Sweden and Finland to inaugurate the $213 million Southwest Wastewater Treatment Plant. 
Gazprom-Media buys a 70-percent stake in the St. Petersburg weekly newspaper Chas Pik. Gazprom-Media vows the move aims to make the newspaper profitable, but market insiders  say the move is politically motivated.
St. Petersburg’s Aviation Enterprise Pulkovo is set to be divided into the airport Pulkovo and the airlines bearing the same name as part of a Russia-wide strategy to separate aviation-carriers and airport-operators.
Gazprom, the world’s leading natural gas producer, agrees to buy a controlling share in Roman Abramovich’s Sibneft for $13.01 billion in the biggest takeover deal in Russian history. The deal will put nearly one-third of the nation’s oil output in state hands and revive Gazprom’s bid to become a global energy giant.

October 

Suspected Islamic militants launch a major attack on police and government buildings in a provincial capital in Russia’s volatile Caucasus region, turning the city into a war zone wracked by gunfire and explosions. At least 49 people are killed, including 25 militants. The disturbances are only quelled days later. Basayev again claims he is behind the attack.
Bird flu warnings continue as the virus is identified in Tula.
St. Petersburg’s Radisson SAS Royal Hotel changes its owners as the equity fund Delta Private Equity Partners sells 100 percent share to the Norwegian holding Wenaas. Experts estimate the sale to be worth about $30 million. 

November 

The Kremlin-backed administration in Chechnya hosts a rock festival in Chechnya’s second-largest city, Gudermes, east of Grozny, while the U.S. Congress passes a bill to protect mail order brides being shipped in from abroad, a significant proportion of them coming from Russia.
Putin reshuffles his Cabinet, making Defense Minister Sergei Ivanov a deputy prime minister. He also names his chief of staff, Dmitry Medvedev, first deputy prime minister. Experts see both figures as potential heirs to the Kremlin throne.  
The construction of St. Petersburg’s dam receives a boost with the announcement of a new manager, together with a massive increase in spending. Thanks to pressure at both local and federal levels the project is now due for completion in 2008.
Chupit Ltd. wins an auction for 48.8 percent of Russia’s St. Petersburg Sea Port with a bid that matches the starting price of 802.5 million rubles ($28 million).
Lenfilm, the legendary St. Petersburg-based film studio is in talks to attract an estimated $50 million worth of investment.  Having changed its legal status earlier this year, the studio is set to sign an investment contract in September 2006. 
The city’s government announces investment competition to develop New Holland Island, one of St. Petersburg’s historical monuments, with planned investment of $500 mln.
Moving up two spots from last year, St. Petersburg tops Expert Ratings Agency’s annual rating of the country’s “least risky” regions for investment, while Moscow comes in 9th place. 
In St. Petersburg, an anti-fascist protestor and student, Timur Kacharava, is murdered in what appears to be a hate crime. Police arrest five suspects in the murder case before a month is out.

December

Former U.S. President Bill Clinton flies in to St. Petersburg, along with celebrity guests and millionaires to attend a charity ball at the Konstantinovsky Palace hosted by British clothing tycoon Richard Caring.
The Kremlin brushes off international criticism of a draft law aimed at tightening state control over non-governmental organizations, saying what it does at home is its own affair.
A toxic spill at a chemicals factory in China slowly heads down the Amur River towards Russia, threatening endangered species and the local population. 
The ailing domestic auto industry looks set to undergo a major overhaul as the maker of the Volga announces the end of the line for one of the enduring symbols of Soviet pride.

TITLE: SPIBA 10th Anniversary General Meeting
TEXT: The SPIBA 10th Anniversary General Meeting took place on Wednesday, November 16, 2005, at the Konstantinovsky Palace which used to be a summer residence of the Russian royal family. The Palace was reconstructed for the official celebration of the 300th anniversary of St. Petersburg, and nowadays it functions as a seaside residence of the President of the Russian Federation and as a congress center.
More than 170 people representing SPIBA members, companies, partners and guests attended the Anniversary meeting.
The event began with a tour around the Konstantinovsky Palace followed by a cocktail reception and gala dinner.
Ms. Natalia Kudryavtseva, SPIBA Executive Director, welcomed the guests. She listed headlines of articles covering SPIBA functions, its achievements and comments on burning business related issues, which have appeared in the mass media from 1995 to 2005.  This list demonstrates that SPIBA, as the voice of business, has played an active role in the facilitation of the improvement of business and investment climate in the region since 1995 and is going to continue protecting business interests.
Then Ms. Ludmila Murgulets, Chairperson of the SPIBA Executive Committee and Vice President of the Stockholm Economic School in Russia, greeted the participants.
Mr. Vladimir Blank, a member of the Government of St. Petersburg, Chairperson of the Committee for Economic Development, Industrial Policy and Trade, congratulated SPIBA.  He stressed that SPIBA made a significant input into the improvement of the investment climate of St. Petersburg and presented SPIBA with a letter of recognition “For SPIBA’s contribution to the development of partnership between authorities and business”. Mr. Maxim Sokolov, Chairperson of the St. Petersburg Committee for Investments and Strategic Projects, joined Mr. Blank in congratulating SPIBA members.
Ms. Ekaterina Belyakova, Head of the Department for Inter-Industrial Cooperation and Informational Support of the Committee for External Relations and Tourism of St. Petersburg , commented: “St. Petersburg International Business Association for North-Western Russia provides significant support to the success of projects implemented by foreign companies, which have just begun their business or have operated in St. Petersburg for a long time.”  She presented SPIBA with letters of recognition on behalf of the Committee for External Relations and Tourism and on behalf of the Governor of St. Petersburg Valentina Matviyenko.
SPIBA also received congratulations from the Government of the Leningrad Oblast.
Mr. Anton Artemiev, President of Baltika Breweries, started congratulations on behalf of SPIBA Members.  He presented SPIBA gifts on behalf of Baltika and Vena Breweries which are merging at the moment.The top managers of YIT Lentek, Salans, Baltic Travel Company, ABONENT business pages, Corinthia Nevskij Palace Hotel and other SPIBA members and partners expressed their gratitude to SPIBA and wished SPIBA every success and prosperity.
After that new SPIBA members, such as Caterpillar Tosno, Coca-Cola HBC Eurasia, Lemcon, DLA Piper Rudnick Gray Cary, FINTRA, Intech, Maris Properties, Panfilov & Partners, The Maestro Temirkanov International Foundation, and Toyota Motor Corporation, were introduced to the audience.  Both new and old SPIBA Members received Certificates of Membership.
Also, the participants of the meeting took part in a contest to create the most interesting headline of a future article  regarding SPIBA and its activities. The winners received special awards established by Mr. Blank and Baltika Breweries.
SPIBA will continue its efforts to act as a voice for the promotion of its members’ common interests and to cooperate closely with local policy making institutions.

SPIBA is pleased to acknowledge all sponsors and supporters of the event:
Leading Sponsors: Baltika Breweries, Vena Brewery 
Sponsor: YIT Lentek
Supporters: Baltic Travel Company, Business Pages ABONENT, SALANS

TITLE: SPIBA ACHIEVEMENTS
TEXT: • 1997, a crowning achievement for SPIBA was the creation of the St. Petersburg Governor’s Investment Advisory Council, which was created following a proposal from the association. The council is composed of members of the administration and the local business community. Its mission is to amend policies and laws in order to provide a favourable investment environment. Through this council government departments and the private sector enjoy a unique opportunity for constructive communication. The first results came quickly, as soon as August 1998 with the development of a package of three investment laws that incorporated recommendations adopted by the council.
• 1998, SPIBA led to the development of the St. Petersburg International Commercial Arbitration Court. It took SPIBA two years of planning and negotiations in cooperation with private businesses to create this arbitration court. Businesses will be able to have disputes solved in St. Petersburg, rather than in far away locations like Moscow or Stockholm.
• 1999, on December 30 the Leningrad Oblast law “On Additions to and Amendments of the Law On Investment Activity in the Leningrad Oblast” was signed into law by the governor. Many of the amendments aimed at improving the business and investment climate in the Oblast were originally proposed and supported by SPIBA.
• 2000, the SPIBA Travel, Tourism and Hospitality Working Group made a significant contribution to the organization of a very successful workshop “The Great Cultural Embassy: St. Petersburg’s Tercentenary Kick-Off” held in New York, USA. 
• 2000, SPIBA conducted a survey to identify the most constraining problems foreign investors faced in St. Petersburg and its surrounding regions. The results of the survey were submitted to the relevant Russian authorities and the press. Later the survey overview was amended regularly to monitor the changing business environment and it was used by SPIBA for effective target oriented lobbying.
• 2001, on February 16 SPIBA hosted the round table meeting “The World Market of Foreign Direct Investments: Trends and Opportunities for the Russian Economy” within the framework of the International Conference “Investment 2001: New Realities - New Opportunities In Northwest Russia” held under the auspices of the Authorized Representative of the President of the RF for North-Western Russia. Federal and Regional government officials, legislators and foreign companies’ executives took part in the dialogue on such crucial issues as tax policy, customs and foreign currency regulations, and administrative barriers. The participants worked out concrete recommendations on the improvement of the investment climate in North-West Russia.
• 2001, SPIBA was appointed as an expert organization to the Expert Council for Economic Development and Investment chaired by the Authorized Representative of the President of the RF for Northwest Russia.
• 2001, SPIBA completed the survey “The Effectiveness of Advertising in Media and Public Targeting” and presented it at the seminar “Mass Media as a Business Tool”.
• 2003, on January 1 the Law of the RF “On the Amendment of article 21 of the Law of the RF On the Basics of the Tax System of the Russian Federation” came into effect. In cooperation with other esteemed organizations SPIBA successfully lobbied for the adoption of the federal law targeted at the proper regulation of the territories’ cleaning dues collected by municipalities. This measure lowered the tax burden on investors.
• 2004, SPIBA’s voice concerning a clause granting corporate property tax concessions to companies that had invested in the main capital was listened to by the city officials.  The law “On Amendments of and Additions to the St. Petersburg Law “On Tax Incentives” was adopted by the Legislative Assembly, and signed by the Governor of St. Petersburg on April 2, 2004.  This law ensured the stability of tax regime for investors in St. Petersburg, and prevented the investors from unexpected costs that they would have faced, if the city had failed to include a clause extending the tax concessions in the law.
• 2005, As a result of lobbying efforts made by SPIBA and other business organizations in cooperation with the St. Petersburg Committee for Economic Development, Industrial Policy & Trade, the law of St. Petersburg “On Amendments of the Law of St. Petersburg “On Tax Concessions”, which granted the right to profits tax and corporate property tax concessions for some categories of investors, came into effect on January 1, 2005.

TO BE CONTINUED...

TITLE: Wishing you a productive and prosperous 2006 filled with happiness and many new clients! SPIBA New Year Party
TEXT: ANCOR
Turnover of ANCOR’s office in St. Petersburg over a 9 month period amounted to 9 million USD. Growth of business volume, if compared with 2004, amounted to 81% in regard to all the directions: professional search and selection, staff leasing and salary survey.
December News: ANCOR Holding opened its new office in Yaroslavl.
Discoverer of Pulkovo Heights celebrated its 10th anniversary. The Coca-Cola plant in St. Petersburg opened on Nov.30 1995 at Pulkovskoe sch., 50. During the plant construction in a total area of 46,000 sq. m all utilities, pipe lines and cables were installed so that the area’s infrastructure was ready for further development. Total investment exceeded $100m.
Now the plant is certified with international standards ISO 9001:2000 and ISO 14001:1996, and supplies more than 13 million inhabitants of St. Petersburg and North-West Russia.
The company also takes an active role in the cultural and social life of the region, sponsoring many interesting projects and supporting charitable events.
Esmerk Russia
Esmerk Russia, part of the international business information provider, in November expanded its local operation resources in production, sales and client support. The change was a result of the growing demand in information services supplied by Esmerk on the local markets.  Now Esmerk Russia will be able to gain a larger market share and strengthen its position on the markets of the CIS.
Official Opening of FINTRA
The official ceremony of opening of the Russian office of Finnish Institute for International Trade (FINTRA) took place in the Consulate General of Finland in St. Petersburg on December, 16, 2005.
There were representatives of Finnish and Russian companies, officials and mass media among the guests - more than 150 participants took part in the event.
The managing director of FINTRA Leena Masalin introduced the personnel of the Russian office.
This event means that top managers of the parent company consider the initial period of Fintra in Russia to be successfully completed and the active operation to be started.
ITM Group
ITM Group (ZAO “INTECH”) is at the final stage of works under city priority-oriented project - Right-bank Thermal Power Plant (TPP -5). ITM Group is the general contractor for electrical equipment and process control systems installation and adjustment.
More than 500 thousand citizens from the south-eastern part of St. Petersburg will be provided with high-quality electricity and heat supply soon.
JT International
Petro forges ahead with new technology as it is the first to install and commission a new-generation line for commercial production, adopting the most modern and high technology equipment.
A new high-speed packing line F8 has put JTI’s Petro at the forefront of industry leadership and provided increased capacity to meet growing demand in its markets and other benefits including improved quality and reduced waste.  The line is a breakthrough because it is the first complete packing line in commercial production capable of packing 1,000 packs of cigarettes per minute - or 20,000 cigarettes.  The project is to leverage competitive advantage in the market while establishing leading edge and flexible technology. 
Kelly Services announces the launch of a new branch - 
Kelly Financial Resources
January 1, 2006 Kelly Services launches new Kelly Financial Resources branch. Recruitment in the sphere of finance and accounting is developing rapidly; it requires professionalism and special knowledge from recruiters. The strategy of Kelly Financial Resources in Russia is “Financial specialists recruit financial specialists”. Kelly Financial Resources is a place for the best financial professionals!
Kelly Financial Resources offers possibilities for permanent and temporary recruitment for professionals of all levels in all spheres of finance from accounting to financial analysis.
Knowledge and Skills
On December 7th, the company “Knowledge and Skills” has operated for 6 months since its foundation. During that short period a number of consulting projects, trainings and the assessment-centers have been completed . The geography of the activity of the company grows very quickly: St.-Petersburg, Moscow, Ekaterinburg, Chelyabinsk, Krasnodar. After 6 months of vigorous activity, the company’s management decided on business priorities: consulting and trainings on the development of administrative skills.
Pepeliaev, Golstblat & Partners, St. Petersburg, 
is Expanding 
and is proud to announce our New Department Heads:
Sergey Spasennov joins us to head our Corporate and Real-Estate Practice.  Sergey comes to us after many years of heading the Legal Department of Caterpillar Tosno.  Adding Sergey to our team accents our commitment to bringing together deep understanding with industry experience.  
Maria Andreeva now heads our Tax Department. Maria specializes in tax litigation and corporate tax planning, tax risk assessment and banking.  Over the past three years, she has litigated many precedent-setting tax cases. 
PricewaterhouseCoopers
Paul Stewart has been appointed Managing  Partner in PricewaterhouseCoopers’ St. Petersburg office, starting  from  January 2006.  He  will also lead PricewaterhouseCoopers’ tax and legal practice in St. Petersburg.  Currently Paul works as a tax partner with PwC in Prague.  Paul has experience in providing advisory services in Australia, Russia, Slovakia and Czech Republic.
News from Sebastian FitzLyon
S.Zinovieff & Co. (Chartered Surveyors) report current valuation work for Volvo and the U.S. Government. Office space has been leased to DLA Piper Rudnick Gray Cary & Alcan Packaging. The Architectural & Building Surveying Department has consulted to the Netherlands Government.
S.Zinovieff & Co. wish everyone a Merry Christmas and a Happy New Year!
YIT Lentek - 2005 retrospectively
YIT Lentek has quite successfully lived through the year of 2005. The volume of housing construction under the YIT DOM brand has increased. The construction of residential houses in Kazanskaya street 58, in Slava avenue (New Europe) and in Sredny avenue 89 (Five Stars) has been continuing.  The residential house “Northern Perl” located in Asafiev Street 5/1 was put in commission. About 2500 apartments are under construction in this year, and 5000 apartments are planned to be under construction for next year. Recently YIT Lentek has signed a contract to construct service premises for Viking Life-Saving Equipment Russia. Commercial edifices will be constructed on the same land plot within the limits of property development program, which YIT Lentek Company will continue to implement in 2006. The best example of successful development of the company is the Honorary Doctorate award of St. Petersburg State Construction University for Managing Director of YIT Lentek Mr. Juha Vatto. This degree is awarded for a significant contribution to the development of the construction complex in Saint-Petersburg.

TITLE: IMF Urges More Investment
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: Russia’s economic growth is becoming increasingly imbalanced and is in danger of slowing down in the near future because of the current low level of investment, a senior International Monetary Fund official said in an interview published Friday.
Following a fact-finding mission to Russia earlier this month, the IMF also warned that problems like inflation, the real appreciation of the ruble and an influx of imports could become more serious in the future.
“Economic growth in Russia is becoming more and more dependent on consumption because investment remains relatively low,” the IMF’s Paul Thomson told Kommersant. “Thus, economic growth ... is becoming increasingly imbalanced,” said Thomson, who headed a weeklong mission to Russia that ended on Dec. 7.
Thomson rapped the government for increasing wages and social expenditures in the budgets for this year, saying the state should first tackle inflation and speed up reforms.
“There remains the question of whether a mere increase in the financing of education and health care, without reforming these sectors, can make them more efficient,” Thomson said.
Under President Vladimir Putin’s plan, the government is to pump an additional $4.6 billion into health care, education, agriculture and housing next year.
 Thomson reiterated that Russia should adopt a greater exchange-rate flexibility if it wants to control inflation. The Central Bank opposes a freer float, opting instead to juggle the tasks of reducing inflation and limiting the real appreciation of the ruble. 
“These two targets are to a certain extent contradictory,” Rory MacFarquhar, a Moscow-based economist at investment bank Goldman Sachs, said Friday.
In a report earlier last week, Goldman Sachs commended Russia for keeping inflation on a downward trend. However, it said, the Central Bank’s “dual-target policy” cannot be sustained indefinitely.
“We believe the expansionary 2006 budget will lead the Central Bank of Russia to choose to tolerate a more rapid real appreciation towards the middle of next year,” MacFarquhar said.
Real ruble appreciation has hit an all-time high of 10 percent this year, while inflation has been hovering around 11 percent. According to Goldman Sachs, inflation is expected to grow to 12 percent next year. The government, meanwhile, is hoping to keep it under 9 percent. 
Russia’s economic growth is expected to accelerate in the first half of 2006, fueled by strong household demand, Goldman Sachs said in another report released last week, Bloomberg reported. 
Gross domestic product growth may accelerate to 6.6 percent next year, before slowing to 6 percent in 2007, the report said. 
The Russian economy will expand 6 percent this year, Finance Minister Alexei Kudrin said earlier this month.

TITLE: Thailand Inks Deal For 12 Fighter Jets
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: Russia has signed a preliminary agreement to sell $500 million worth of military aircraft to Thailand in what would be the first such deal with the traditional U.S. arms client.
“We signed a memorandum for 12 Sukhoi-30MKMs during President Vladimir Putin’s visit [last week] to Malaysia,” a senior official at Irkut, the privately controlled maker of the Sukhoi fighter, said Friday. 
Putin was in Malaysia for a summit of the Association of Southeast Asian Nations.
Thailand originally agreed to buy the jets last year but put off the deal after a tsunami that killed hundreds of thousands of people hit the region last December. 
The Irkut executive, who spoke on condition of anonymity due to the sensitivity of negotiations, said the memorandum of understanding also included delivery of helicopters to Thailand.
“We have gone half the distance and expect to sign the contract in the first half of next year,” said Alexei Fyodorov, Irkut board chairman.
“This is good news for Russia, we haven’t sold a single cartridge to Thailand,” said Konstantin Makiyenko, deputy head of the Center for Analysis of Strategies and Technologies. “It also means that Russia has taken over the region — we have fighter jets in China, Malaysia, Indonesia, Vietnam and now Thailand.” 
Makiyenko estimated that the deal would bring Russia at least $500 million. Rosoboronexport, the state arms sales agency, was not available for comment Friday.
 European Aeronautic Defense and Space, or EADS, on Friday closed a deal to buy 10 percent of Irkut.
EADS has paid $65.3 million for the stake, which Irkut president Oleg Demchenko said would go toward both Irkut’s own programs and joint projects with EADS. 
EADS has already worked with Irkut on the international promotion of its Be-200 amphibious craft. 
Last year, Airbus, which is controlled by EADS, signed a $200 million, 10-year contract with Irkut for the delivery of components for its A320 family of passenger jets.

TITLE: Steelmaker To Start Trading On 2 Bourses
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: Shares of Magnitogorsk Iron & Steel Works, or MMK, will start trading on Russia’s two main bourses by the end of this year, a move analysts labeled as a step toward company liquidity and a set-up for an IPO abroad.
“MMK shares will be listed on the RTS before the New Year,” Zoya Konovkova, spokeswoman for the Moscow-based RTS bourse, said Friday. 
The third-largest steelmaker has also asked the ruble-denominated MICEX to allow MMK’s shares to be included in the bourse’s unlisted section, with a possible transfer to the listed section in a few months, said Leonid Savvinov, head of the listings department at the MICEX.
Managed and partly owned by Russia’s 11th-richest man, Victor Rashnikov, whose fortune Forbes estimates at $3.6 billion, MMK had previously strongly resisted any public trading of its shares.
Tim McCutcheon, an analyst with Aton brokerage, said the firm’s management probably gained confidence in the stock market after solidifying majority control by purchasing the state’s 33.8 percent stake in MMK a year ago.
However, with only up to 2 percent of MMK’s shares left available for outside investors, the chances that listings on the MICEX and the RTS will generate much trading are slim, he said.
“The company needs to issue new shares or the management need to offer some of their stakes on the market. For all intents and purposes, MMK is a private company,” he said.
A more likely interpretation of MMK’s decision to list would be to placate the domestic securities market watchdog before placing a large amount of stock in London, as was the case with Mechel and Sistema, McCutcheon said.

TITLE: Target to End WTO Talks Missed
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: Russia will fail to meet a target date to complete World Trade Organization membership talks this year, Economic Development and Trade Minister German Gref said Saturday.
Joining the 149-member trade club requires negotiating bilateral agreements with member countries, and Russia is still stuck in talks with the United States, Switzerland, Australia and Colombia.
“We will not be able to complete all talks by Jan. 1 as we planned,” Gref said at the WTO ministerial conference in Hong Kong, RIA-Novosti reported. 
He added that Russia hoped to complete the negotiations in the first few months of 2006.
Gref said that deals had been signed with Paraguay, the Philippines, Nicaragua and Canada during the Hong Kong meeting.
But even as the Russian delegation in Hong Kong reaches agreements with most WTO countries, key differences with the United States remain. 
The two sides have come closer and reached an “agreeable formula” on airplane tariffs, intellectual property rights and agriculture, Gref aide Alla Borisenkova told Interfax on Sunday. But the parties failed to hammer out a deal on access to the financial services market, she said.
Gref and U.S. Trade Representative Rob Portman met behind closed doors on Friday. 
 The two were expected to discuss the remaining issues on Sunday night, Interfax reported.
A senior Russian official said earlier this month that Moscow would make no more concessions, especially when it came to allowing foreign banks to open branches in Russia and nixing the 20 percent import tariff on aircraft.
“Russia can play hardball,” said Roland Nash, Renaissance Capital’s chief strategist.
WTO membership is “a good international stamp of approval,” he said, but it will not make a great difference to Russia as long as petrodollars keep flooding into the country.
“The United States is still the 1,000-pound global economic gorilla,” Nash said. It is negotiating from a stronger economic position, he said, so it was not surprising that talks with the United States have gone on longer than those with other WTO members.
In the case of Colombia and Australia, talks are hung up on sugar. “We expect that within two to three weeks we’ll put a full stop,” on talks with Colombia, a member of the Russian delegation, Andrei Kushnirenko, told Interfax.

TITLE: Car Insurance Fraud To Grow Without National Database
AUTHOR: By Yevgenya Ivanova
PUBLISHER: Staff Writer
TEXT: Car insurance fraud continues to increase, and part of the reason is the absence of a unifed information database, said insurance companies at a Mandatory Automobile Liability Insurance event on Thursday.
According to Andrei Sumbarov, the president of the Union of Insurers of St. Petersburg and the Northwest, car insurance fraud rose up to 30 percent this year.
The absence of a unified Russia-wide information database is considered to be the major problem in combating fraud. 
Alexander Kulikov, director of the St. Petersburg branch of Spasskiye Vorota insurance company, who also took part in the press conference, gave an example of the successful implementation of such a system in Canada.
According to Kulikov, in that country car insurance fraud is almost unheard of.
In Russia the situation is very different.
“At present, policy holders can easily conceal information about previous accidents by simply swapping companies,” Sumbarov said.
The formation of a unified database, where the history of any car can be easily traced through in relation to its owners and their accidents, can significantly reduce fraud.
Although such a database exists in St. Petersburg, it is not being updated actively enough to make a substantial difference in the elimination of fraud, Sumbarov said.
Some believe that insurance companies are unwilling to actively share information among themselves because of unhealthy competition in the industry.
“Such information is not being shared between companies because nobody wants to give away information about potential clients,” Sumbarov said.
Sumbarov also noted that, “even if a certain company has certain suspicions that a client is potentially fraudulent, it cannot share this information legally, as only the court can prove such suspicions.” 
Viktor Petrov, chair of the committee for the regional development of the Union of Accident Surveyors, thinks that forming an industry-wide database will not be sufficient and needs to be incorporated into a wider information system.
Fraud can only be reduced significantly if industry databases are consolidated with the records of the State Road Safety Inspectors, the Accident Surveyors and others, he said.

TITLE: IN BRIEF
TEXT: $1 Billion Investment
ST. PETERSBURG (SPT) — Foreign investment in the city could reach $1 billion by the end of the year the president of the St. Petersburg Chamber for Trade and Industry Vladimir Katenev said Monday at an Interfax press conference.
“Internal investment will reach $4 billion. Investment in small companies will be about four billion rubles ($140 million),” he said.
Katenev expects investment into the industrial sector to continue growing in 2006 and “many companies have already declared their plans for the next year,” he said.

Metro Modernization
ST. PETERSBURG (SPT) — The Dedal-Vagony industrial construction company has signed a $100 million investment agreement with the St. Petersburg administration, Interfax reported Monday.
The company is expected to modernize metro carriages and reconstruct one metro line as well as produce trams and trolley-buses for the city.
By 2008 Dedal-Vagony plans to produce 165 carriages, 195 trams and 150 trolleybuses for the city.
Rossiisky Kapital bank will provide $21 million for the project with the rest of the funding coming from other local banks and the Dedal Vagony company.

TITLE: IT Graduates’ Need For Real World Experience
AUTHOR: By Alexey Linkov
PUBLISHER: Special to The St. Petersburg Times
TEXT: While Russia still offers excellent outsourcing opportunities for software development, few large-scale IT firms are ready to tackle what is still lacking in the city’s technical education and integrate today’s students into the “real world” of industry. 
“Educational institutions specialized in computer science are not equipped to deliver what’s needed in terms of qualified resources. They have obsolete programs and elderly staff who are not involved in everyday software development on modern platforms,” said Valentin Makarov, President of the RUSSOFT Association. 
These days it seems that it has become the task of IT firms to assist students in building up their careers. This is because Russian universities have failed in their basic responsibility of providing career guidance for students. 
“It is essential for higher education institutions to participate in  student’s employment,” says  Yevgenya Delnova, Branch Manager of Kelly Engineering Resources & Kelly IT Resources.
 “It can be achieved  only if there is mutual effort  for cooperation between IT companies and the education system,” she said.
Companies do not usually take the risk of employing a person with no practical experience, which means students who graduate with degrees in computer technology often earn their first salaries by working as a waiter or bartender. This is paradoxical, considering the fact that programmers and developers are among the most sought-after specialists in the IT market.
“This is unacceptable,” said Andrei Terekhov, head of the Software Engineering Department of St. Petersburg University and Director of the large-scale IT company, Lanit-Tercom. 
“In order to receive their diplomas, students at Singapore Technical University are obliged to work part-time for a commercial IT company that has an agreement with the university. Why not follow this example?”
Another way to establish cooperation is for IT firms to participate in the development of IT techno-parks, which are based in Russia’s most famous technical universities. In the US, Asia and Europe IT-parks provide start-ups and mid-scale companies with a low-cost infrastructure and talented university graduates.
Following this global trend, the Russian Government has initiated its IT-park development program. As a part of this ambitious project, IT-parks will be created in four regions — St. Petersburg, Moscow, Novosibirsk and Nizhny Novgorod. Nevertheless, despite this step towards cooperation, serious gaps still exist.
One of these problems is that at the present time, there isn’t a system of mentors, who can play a key role in a student’s career. A common practice in leading US technical universities, this individualized approach links each student with a tutor who supervises all aspects of his or her academic career. In Russia IT companies tend to put students in small groups, which are supervised by company specialists. These small groups run projects with real budgets, learn teamwork, management skills and relevant programming skills. 
Another issue is the complaint from Western IT firms that, after they have invested in a student’s education, he or she may “jump ship” and find work in another company after graduation. 
“If Lanit-Tercom invests in a student’s education, where’s the guarantee that he won’t choose another company to work for after graduation? There should be a law that covers this,” Terekhov suggested.
Nevertheless, St. Petersburg may be the first city to go the right way. Right now major Western IT firms like Intel, Nokia, and Motorola already invest in student education in St. Petersburg, but there remains a need for feed-back from the State. 
“15 years of crisis got some of us really confused and frustrated. Adequate social policy and stability that’s all we want from federal State” said Ludmila Nesterenko of Intel Labs.

TITLE: Cell Phone Retailers Equipped For Stability
AUTHOR: By Alexander Yankevitch
PUBLISHER: Special to The St. Petersburg Times
TEXT: Changes in company strategy have forced mobile phone retailers to rely less on operator commission and instead seek new relations with handset producers.
Although at present St. Petersburg has over 20 mobile retailers, six of them control nearly 90 percent of the handset and subscriber market.
If the gap between market leaders and outsiders has effectively been widening for the last eight years, then April 1 saw that process accelerate when all the city’s GSM-operators halved dealers’ commissions for attracting new subscribers.
“The general trend in the Russian market is that profits from attracting new subscribers are on the wane. The mobile subscription market is shrinking correspondingly, and so retailers are switching to the more stable equipment market,” said Dmitry Karmanov, marketing director of the Ultra mobile retail chain.
Bonuses for attracting new subscribers represent 25 percent of the total revenue for Ultra, now compared to over 50 percent last year.
Because of the fall in commissions many small mobile retailers have either had to accept lower margins or have been pushed out of the market completely, while large companies have simply switched to other sources of revenue. Medium-sized players have focused on new areas of development, for example, this summer Telecom Point, KS-Group and Technosvyaz mobile retailers joined the St. Petersburg branch of the federal retail chain Tsyfrograd.
At the same time handset producers became more active, launching joint marketing campaigns including the deals between Nokia and Dixis, Siemens and Tsyfrograd, and Motorola and Svyaznoi. Retailers offer special terms to those who purchase selected products, while handset producers provide a prize fund and advertising.
“Joint actions with equipment producers have been held and will be held regularly in the future. Selling handsets and other equipment remains our core activity and the main source of our revenue. As for the scale of joint marketing activities, it strictly depends on sales figures,” said Kirill Egov, marketing director of Teleforum mobile retailer.
Dealers are losing profits both because of the aforementioned decrease in operator commissions and because these operators’ level of market penetration is close to 100 percent in both Moscow and St. Petersburg. As a result the profit retailers make from every single subscriber is decreasing, as is the very number of newly attracted subscribers.
The joint marketing campaigns that existed between mobile retailers and operators have subsided in line with this.
“Dealers are looking for new ways of earning profits — for diversification, broadening the number of additional services and so on. The handset replacement market is growing fast, increasing revenue from sales of high-price handsets.”
“People replace old phones with the new ones, more functional and more expensive. Selling phones and accessories provides 45 percent of today’s revenue while new subscribers are worth less than six percent of total profits,” said Tatiana Moskalyova, PR department head at Dixis retail chain.
Kirill Egov predicts that eventually the number of handsets sold will be equal in number to the amount of subscriptions, while at present retailers sell two contracts for each handset.
Tatiana Moskalyova added that relations between dealers and producers could undergo other important changes.
“In the second half of this year almost all large-scale producers rejected the services of a mediator and themselves started importing equipment to Russia. This could persist. Retailers will get equipment from warehouses based in Russia, which will solve the problem of illegal imports and guarantee a level playing field for all market participants,” she said.

TITLE: Festive Season Brings Aggressive Mobile Play
AUTHOR: By Michael Lerman
PUBLISHER: Special to The St. Petersburg Times
TEXT: The run-up to New Year is always an active time on the mobile phone market, with neither dealers nor operators wanting to miss out on their slice of Christmas cake. The marketing campaigns of the ‘big three’ operators – MobileTeleSystems, Megafon and Vimpelcom — have explosively aimed at attracting the maximum number of subscribers, as well as strengthening the loyalty of existing clients.
Increased competition before the New Year has led to a considerable reduction in the cost of connecting to a mobile phone operator, with the months of December and January continually breaking all records for new subscribers.
The local market leader, Megafon Northwest, which serves about 40 percent of the city’s GSM subscribers, as far back as November 15 offered connection to its “Winter” tariff instead of its analogous “Summer” offer. It allowed contracted clients to not pay anything for the first six months at a cost of only six dollars for a federal number. Moreover, after connection the subscriber receives for free 25 minutes of calls, 25 SMS and 25 megabytes of GPRS traffic.
“The validity of the ‘Summer’ tariff is coming to an end,”  said Megafon Northwest’s commercial director, Nikolai Demenchuk, “but when this happens we have prepared a pleasant surprise for anyone who wants to save the cost of a monthly fee.”
The provider has not forgotten about corporate clients. From December 15 it started the service “Internet Priority” which allows clients to halve the cost of GPRS traffic. 
Among other bright initiatives, it’s worth mentioning the service “Mobile Television,” literally a television inside a mobile phone, which will become commercially accessible in the not too distant future.
MTS, serving about 32 percent of the region’s subscribers, christened its main festive tariff “New Year.” Its main advantage is local calls between MTS subscribers at two cents per minute.
Any subscribers who connected to the tariff “Jeans” after November 21 can move to the “New Year” tariff free of charge until January 15 2006 – when the validity of the tariff expires.
Vimpelcom, which owns the brand Beeline and serves about one-fifth of the region’s subscribers, launched their own tariff “Zazhigai.” Its main plus is local calls to mobile phones at two cents per minute, and to local landlines at six cents per minute.
According to the press secretary of Vimpelcom’s St. Petersburg office, Yevgeny Aleshko, the Northwest was the first to receive this tariff. 
“It enjoyed such widespread popularity that we decided to offer it in St. Petersburg.” 
It is worth noting that, in my opinion, the tariff is interesting only to subscribers who spend more than $10 a month on calls. This is because of the limited time period in which payments are valid, meaning that one won’t be able to spend less than a certain amount on calls.
Vimpelcom’s main rival on the budget market is Swedish provider TELE2. It lowered the cost of local calls on its flagship tariff “Mechta” to 1.5 cents per minute, thus making sure it lives up to its slogan, “Always Cheaper.”

TITLE: Big Insurers
AUTHOR: By Anna Shcherbakova
TEXT: Our city’s insurance market has never generated a lot of significant news, as far as I can remember. The industry is represented here by several major local companies and a dozen regional offices representing the largest national insurers.The services on offer tend not to depart from the standard. People are not in the habit of insuring anything but their cars, which is obligatory. 
Nevertheless, on Monday, ASK, one of the oldest St.Petersburg insurers founded in 1990, announced it is becoming part of Moscow-based MRSS. ASK’s management sold just under a 75 percent share to the Muscovites. When the company grows to a certain level there are two ways to develop it – go public on the stock exchange, or  sell it, Lev Paneyakh, ASK general director, explained to Vedomosti. According to his colleagues, for years he has looked for a strategic partner, and discussed the deal with another national player, RESO, in 1998.  
On Wednesday, another local company, Progress Neva, introduced Renaissance Strakhovanie as its new shareholder, a company owned by legendary investment banker Boris Jordan who came to St.Petersburg to announce the deal in person. He said that a  merger with another large regional player was likely to happen next year and that he is ready to invest up to $100 million in purchasing other Russian insurance companies. According to Jordan, although in countries like America regional companies can lead a relatively profitable existence, in Russia it is difficult for such companies to develop, or simply survive, without a strong strategic partner. I think ASK and Progress Neva are both ahead of the game. It is pure coincidence that the deals were announced within several days of each other - they were just the first companies to sense the right time for consolidation. Soon the insurance market will change dramatically and become divided among big and very big companies. 
Several years ago the same process of consolidation began in the banking sector. Mergers and acquisitions thinned out the St.Petersburg banking market. Medium-sized banks were sold to bigger ones or united into affiliated groups. The rich became richer. The small banks that were smart enough exchanged their independence for the resources of strategic partners. Other looked for niches they could occupy by themselves. But the margins of such banking are declining dramatically, and the State Duma is going to complicate the rules for banks with capital of less than 5 million euros. Given that the banking sector is larger than the insurance sector there may well be room for niche players, like crumbs that are too small to pick out from the crack. 

Anna Shcherbakova is the St. Petersburg bureau chief of business daily Vedomosti.

TITLE: Europe Stands By The Wisdom of Trading Favors
AUTHOR: By Peter Mandelson
TEXT: It suits some members of the World Trade Organization to pretend that all that is needed to unblock the current round of trade talks — which began in Doha, Qatar, in 2001 and continue now in Hong Kong — is for the European Union to make meaningful concessions on agriculture.
The best that can be said about this self-serving argument is that it reflects well-intentioned but oversimplified views on the relationships among agriculture, trade and development. In reality, it is wrong on several counts.
First, the European Union has made significant concessions on agriculture on several occasions. The EU is reducing support to European farmers, a major reform begun after the Doha meeting that others conveniently overlook. While the United States was busy increasing its farm subsidies last year, the EU broke a taboo by offering to end all its agricultural export subsidies if others would match it in their comparable programs. Barely a month has passed since the EU put forward new proposals to lower its average agricultural tariff by almost 50 percent; only two weeks ago it also radically reformed the European sugar market, lowering prices by more than a third.
It’s true that the European Union needed to reform its agriculture policies. But any farm sector can absorb only so much reform at once. Unlike the nongovernmental organizations calling so vociferously for cuts in subsidies, governments have responsibilities to the citizens who elect them. The changes the EU has already begun are having an extensive impact on Europe’s farm regions. As a result of the sugar reforms, producers in Ireland and Finland may well go out of business.  There has been no comparably bold action by any other major WTO member, the United States included.
As the talks began yesterday, our fellow negotiators should have been in no doubt that all the European Union’s governments agree that there is no reason to move further on agricultural tariffs. They all agree that the time has come for others to respond in other areas of the Doha agenda, like lowering industrial tariffs and liberalizing service industries, to the moves the EU has already made.
And they are right. The actions the EU is taking and the proposals it is making in agriculture will cost a lot of jobs. Our governments need to be able to show that a global trade deal will create other, better and more jobs in Europe too.
A Doha deal will work only if everyone benefits. If the EU is to open its agricultural markets further, its companies need to find new opportunities to invest and trade in other markets and in other economic areas — including real market openings in industrial goods and services in rapidly growing countries. Those countries need cheaper, more competitive goods and services, too, for their own development.
Brazil, for example, should offer to reduce import tariffs on industrial goods. Brazil should also offer greater access to foreign providers of services and help establish a more fruitful process for international negotiations on services in the future.
India should improve the tariff reductions it is offering on industrial goods. Both Brazil and India should recognize that there are differences between the needs of developing countries: They should consider what they can do to improve trading conditions for the poorest, for example, by moving themselves toward duty- and quota-free access.
The United States also needs to improve its agricultural proposal by reducing domestic subsidies and food aid programs that distort trade. It needs to improve its offer of market access for providers of services. The European Union would be delighted if Rob Portman, the U.S. trade representative, followed Europe’s example by granting duty- and quota-free access for imports from the least-developed countries, and lowering America’s cotton subsidies. Europe could also use American support as it seeks to stem the progressive abuse of anti-dumping suits by tightening WTO rules.
If our WTO partners take serious steps in these areas, they might have the credibility to ask Europe to revisit its agricultural policies. Until then, Europe will stand fast in the belief that at this moment it is not another move by the European Union that is needed to ensure the success of the Doha Round.

Peter Mandelson is the European Union’s trade commissioner. This comment first appeared in The New York Times.

TITLE: IN BRIEF
TEXT: Curbing Inflation 
MOSCOW (Bloomberg) — The Russian government should limit increases in housing-service charges and utilities prices next year to help curb inflation, President Vladimir Putin said at a meeting with the cabinet in the Kremlin on Monday.
Russia’s lower house of the parliament approved a law Monday that allows the government to curtail the increases, which rose by a third this year, said Deputy Prime Minister Alexander Zhukov at the meeting, broadcast by Rossiya television. The law is yet to be approved by parliament’s upper house and signed by the president.
The government will probably fail to bring down annual inflation below 10 percent for a second consecutive year. Next year’s target will probably be 8.5 percent next year, compared with a rate of more than 11 percent expected this year, Finance Minister Alexei Kudrin said on Nov. 16.
“The increase in tariffs was one of the key reasons for a rise in the inflation rate this year,” Putin told the government. 
“We shouldn’t let such a situation occur next year.”
 
Avto-VAV Revival 
MOSCOW (Bloomberg) — Russia’s government will help revive AvtoVAV, the country’s biggest automaker, after it takes control of the company later this week, the Vedomosti newspaper reported on Monday, citing a government document.
AvtoVAZ needs as much as $3 billion to develop new models, including a minivan, and the government should finance part of it, Federal Industrial Agency chief Boris Alyoshin said in the document, Vedomosti reported.
Russia should make development of the auto industry a priority and use protectionist measures such as government-guaranteed loans to help companies, the document said. Russia is boosting control of industries, including oil and machine production, a decade after it sold them at auction to pre-chosen buyers for a fraction of their market value. 

Bank Rating Raised
MOSCOW (Bloomberg) — Russian Bank for Development, a state-owned lender, had its rating raised to investment grade by Standard & Poor’s less than a week after the ratings service raised Russia’s rating by one step.
S&P improved the long-term foreign and local currency ratings on the bank, which provides credits to small businesses, to BBB-, the lowest investment grade, from BB+. The outlook is stable, indicating S&P isn’t inclined to alter its judgment.
The decision reflects “continuous state capital injections, a clearly defined and strategic public policy role assigned to the bank by the Russian government,” S&P said in a statement on Monday.
The ratings company also raised the rating on the bank’s $170 million of bonds due 2008, which were issued by RBD Capital SA, to BBB- from BB+.
 
Turkish Refinery
ST. PETERSBURG (Bloomberg) — Koc Holding AS may buy Russian crude next year to supply the Tupras Turkiye Petrol Rafinerileri AS refinery, Interfax said, citing Koc board member Rahmi Koc.
Koc didn’t say how much Russian oil the company may buy, saying only that Tupras has a capacity to refine 26 million tons of crude a year, the Russian news service said. 
Koc told reporters on Monday in St. Petersburg that most oil refined at Tupras now comes from Syria, Interfax said.
The company won a tender in September for the government’s 51 percent stake in Tupras. Koc, based in Istanbul, agreed to pay $4.1 billion for it. 

No Gas Agreement 
MOSCOW (Bloomberg) — Russian Prime Minister Mikhail Fradkov and his Ukrainian counterpart Yuri Yekhanurov failed to reach an agreement on natural-gas prices in a meeting in Moscow on Monday, Interfax said, citing an unidentified Russian official.
Ukraine hasn’t agreed to pay more for Russian gas from Jan. 1, the Russian news service cited the official as saying. Negations will continue, Interfax said.
State-owned Gazprom wants to more than quadruple prices for gas deliveries to Ukraine next year, Gazprom Deputy Chief Executive Alexander Medvedev said Dec. 14. 

Telecom Tax Bill
KRASNODAR (Bloomberg) — Southern Telecommunications, a unit of national fixed-line telephone holding OAO Svyazinvest, was served with a 917 million-ruble ($32 million) bill for unpaid taxes, the company said on its Web site on Monday.
The Krasnodar-based company, the dominant fixed-line telephone provider in Krasnodar and other southern Russian regions, said most of the bill, for the years 2002 and 2003, related to transactions between operators for international and long-distance calls.
Southern Telecom is one of seven regional operators controlled by Svyazinvest, the national fixed-line holding company. The government plans to sell its 75 percent stake in Svyazinvest as early as next year.

TNK-BP Minority
MOSCOW (Bloomberg) — TNK-BP Holding, BP Plc’s Russian venture, said minority shareholders own about 5.1 percent of the company following consolidation of its subsidiaries.
Minority shareholders of the subsidiaries TNK, Sidanco and ONAKO got about 2.6 percent of TNK-BP Holding on Dec. 13 after the subsidiaries were folded into the parent company, TNK-BP said in a statement on Monday.
Minority shareholders in 14 other TNK-BP subsidiaries got about 2.5 percent of the company in September after 70 percent of them exchanged their shares, the company said in a statement e-mailed to news agencies.

Vietnam Oil Tax 
HANOI (Bloomberg) — Vietnam’s government has increased the corporate income tax rate on the country’s biggest oil producer, a joint venture with a Russian company, to 50 percent from 40 percent, the Vietnam Investment Review reported, citing a government official.
The increase was made to bring the tax rate on Vietsovpetro, owned by Vietnam Oil & Gas Corp. and Russia’s Zarubezhneft, in line with other foreign investors in Vietnam’s oil and gas industry, Deputy Finance Minister Truong Chi Trung told the newspaper. 
The government also eliminated a profit remittance tax, the report said.
Vietsovpetro may contribute a net additional $100 million to the state budget next year because of the adjustments, the Vietnam Investment Review said.

TITLE: Persian Fire
AUTHOR: By Chris Floyd
TEXT: So now we know: Next time the fire will come in Iran. The blow will be delivered by proxy, but that will not spare the true perpetrator from the firestorm of blowback and unintended consequences that will follow. Even now, the gruesome deaths of many innocent people in many lands are growing in futurity’s womb.
The Rubicon of the new war was crossed on Oct. 27. Oddly enough for this renewal of the ancient enmity between the heirs of Athens and Persia, the decisive event occurred on the edge of the Arctic Circle, at the Plesetsk Cosmodrome, where a Russian rocket lifted an Iranian spy satellite, the Sinah-1, into orbit. This launch, scarcely noticed at the time, has accelerated the inevitable strike on Iran’s nuclear facilities: Israel is now readying an attack for no later than the end of March, The Sunday Times reports.
The order, from embattled Prime Minister Ariel Sharon, puts Israel’s special forces at the “highest stage of readiness” for the strike. While Iran’s plan to begin enriching uranium — which will give it the capability of building a nuclear bomb — is the precipitating factor, the budding Iranian space program is a “point of no return” for Sharon, and that is what is driving the actual timing of the strike. The Sinah-1 is just the first of several Iranian satellites set for Russian launches in the coming months. 
 Thus the Iranians will soon have a satellite network in place to give them early warning of an Israeli attack, although it will still be a pale echo of the far more powerful Israeli and American space spies that can track the slightest movement of a Tehran mullah’s beard. What’s more, late last month Russia signed a $1 billion contract to sell Iran an advanced defense system that can destroy guided missiles and laser-guided bombs, the Sunday Times reports. This too will be ready in the next few months.
There is of course another “precipitating factor”: the Israeli elections on Mar. 28. Sharon, who has left the Likud Party to form his own cult-of-personality party, faces a fractious electorate, with his former comrades guaranteeing an attack on Iran’s nuclear sites if Sharon is too “weak” to do it before the vote. He may well decide to rally the nation — and stave off this lunge from the right — with a blow against Tehran. Such a move would doubtless be popular at home; everyone agrees that Iran cannot be allowed to have the kind of nuclear weapons that Israel itself possesses in such bristling abundance.
The move will be popular in Washington as well. Only a fool would believe that the fools in the Bush Regime have abandoned their bloody-minded ambitions for “full-spectrum dominance” in the Middle East, just because Iraq has turned to goo in their hands. To these schemers, Iraq has always been merely a stepping-stone toward the “far enemy,” Iran. Indeed, they used Saddam himself for years as a useful stick to bash the Iranians, until he stepped out of line with his attack on the Bush family’s longtime business partners, the Kuwaiti royals. Murder, torture and military aggression are always welcome in the service of Washington’s power elites, but defiance is not allowed.
Saddam’s defiance lasted only a few months before he was broken in the first Gulf War, but Iran has thumbed its nose at Washington for 25 years. To the Potomac power-junkies, Iran has never been properly punished for dumping their puppet, the Shah, and seizing the U.S. Embassy in Tehran. (The 600,000 Iranians killed by Saddam’s U.S.-backed armies don’t count in this brutal calculus; the Tehran regime still stands, unrepentant.) Yes, these things matter to those who seek to mask their inadequacies and magnify their importance by identifying their own psyches with some mass, abstract entity — the nation, the volk, the ummah, the tribe, etc. Like Osama, still smarting from the Crusades, the Bushists are equally willing to kill innocent people to assuage the psychic pain of past “humiliations.” 
But while this endemic lunacy of our human kind plays its part, the real bottom line for the Bushists is, well, the bottom line. Iran itself is but a stepping-stone to the ultimate goal: putting U.S.-controlled hands on the spigots of Middle Eastern and Central Asian oil, thus providing a brake to control the political rise of China and India, and ensuring a “new American century” of unchallenged profit and privilege. For the elite, of course; as always, the suckers back home will get stuck with the bills and the body bags from these geopolitical games.
A nuclear-armed Iran would lie athwart this golden road to glory like a mighty Persian rampart, so the scaffolding must be swept aside soon, before the walls are complete. The Bush regime has already begun a “low-intensity” covert war against Iran, using the Mujahadeen el-Khalq terrorist group to map potential targets and carry out bombings, Common Dreams reports. MEK is a bizarre Iranian militarist cult that once murdered American officials, then allied with Saddam in the 1980-1988 Iran-Iraq War. Afterwards, they remained in Saddam’s employ, acting as brutal enforcers in his crackdowns on Shiites and Kurds; the cruelty of their tortures was legendary. Yet Bush has eagerly taken these Saddamite terrorists into his service, Newsweek reports.
With hardline Iranian President Mahmoud Ahmadinejad — yet another made-to-order goon ripe for demonizing — as frontman for an odious regime, Bush and Sharon will have little trouble whipping up war fever for the attack. In the next few months, we’ll see the usual charade of “diplomacy” as military plans are finalized. But the fire is coming; the future is already groaning with death.

For annotational references, see Opinion at www.sptimesrussia.com.

TITLE: What Are the Russians Buying?
AUTHOR: By Anne Applebaum
TEXT: Even here in Washington — a city populated by lobbyists who once held political office and government officials who once worked as lobbyists — it’s hard to top the story of Gerhard Schroeder. Last week the former German chancellor announced that he’d accepted a job offer from Gazprom, the state-controlled Russian energy mega-company. As one of his last acts in office, Schroeder signed an agreement to build a diplomatically and environmentally controversial Baltic Sea gas pipeline from Russia to Germany. Now he’s working for the company that will build it. It’s as if Jimmy Carter had negotiated the return of the Panama Canal to Panama — and then signed a lucrative contract to manage the shipping lanes.
But there’s more here than just the former German chancellor’s quest for personal enrichment — or funds to pay alimony to his three ex-wives. The story also reflects the growing international power of Russian money. Much like the Saudis, who spent the 1970s buying up London real estate, the Russian tycoons spent their first decade of billionaire-hood sunning themselves in southern France and crowding the slopes at Gstaad. And just as the Saudis eventually learned to make more fruitful use of their money — putting prominent Americans on lucrative boards, donating money to their favorite causes, even befriending their wives — the Russians, too, have now realized that petrodollars go a long way.
What they’ve been seeking so far is respectability of the sort that will help Americans overlook their murky origins and will win Russian companies coveted listings on Western stock exchanges. Mikhail Khodorkovsky, the oil tycoon in prison in part because he got too good at this sort of thing, gave big chunks of money to the Library of Congress. In return, the Librarian of Congress hosted a party for his foundation. 
This year the Woodrow Wilson International Center for Scholars even gave a “Corporate Citizenship” award to Vagit Alekperov, chairman of LUKoil, another energy mega-company. Alekperov, a man who with amazing speed acquired 10 percent ownership of a company whose reserves may match those of Exxon Mobil, got his credibility. The Wilson Center raised some $400,000, mostly from U.S. oil companies, at that dinner. Fred Bush, chief fundraiser for the center, says of the new Russian billionaires that he’s “happy to have their money” and wishes they’d give more.
Others point out that it’s better for Russian moguls to support Russian scholars than to fritter their money away buying lift tickets. The suggestion of influence does cause some discomfort, particularly since many Russian companies aren’t exactly independent of the Russian state. Last week Paul Saunders, executive director of the Nixon Center, furiously denied a report in Kommersant of Kremlin plans to set up a think tank, funded by the Russian government and Russian oligarchs, in conjunction with the center, which is affiliated with the Richard Nixon Library and Birthplace. Saunders admits that the Nixon Center accepts “small” amounts of money from Russia, but he issued a statement calling the Russian journalist who wrote the story a “specialist in black PR.” Blair Ruble, director of the Kennan Institute, also worries that some might think his scholars are influenced by Russian money, and he admits to having doubts about donations from LUKoil and other Russian companies. He says he doesn’t allow donors to have any influence over research. 
Generalized paranoia is probably the least attractive attribute of Russian political culture, and I’m not going to indulge in it here. But Schroeder’s new job should raise awareness that there may be some mixed motives out there: If nothing else, Russian companies, like their Saudi and indeed American counterparts, have now made it known that they’ll reward their friends.

Anne Applebaum is a columnist for The Washington Post, where this comment first appeared.

TITLE: Should Politicians and Pipelines Mix?
TEXT: The buzz in Berlin last week about the ethics of former German Chancellor Gerhard Schroeder taking a job on Gazprom’s Baltic pipeline was highly critical. In Moscow, on the other hand, Schroeder’s involvement has been welcomed as likely to improve EU-Russia energy relations and bring more transparency to Gazprom, which has been criticized over the use of murky middlemen in its gas sales.
Let’s assume, for argument’s sake, that Schroeder’s motives are entirely honorable: As a firm believer in the pipeline, he wants to ensure that Germany and Western Europe have a secure supply of gas over the coming decades, and believes that he has the ear of his good friend, President Vladimir Putin, to that cause.
He will also aim to look after the interests of the German shareholders in the Swiss-registered pipeline company to keep the $5 billion project more or less on budget.
Yet how much Schroeder - a lawyer, not an energy executive, by profession - will be able to influence anything apart from the pipeline’s construction is not clear.
Gazprom’s use of various intermediaries to sell its gas has historically resulted in the company, and the Russian state, not getting the full market price for its gas. These arrangements would be outside Schroeder’s purview, as would anything involving transparency in Gazprom itself.
For Gazprom, getting Schroeder on board looks like a canny way to get access to Schroeder’s still-current contacts book of top European decision-makers.
But it is not clear that Schroeder brings much to the table here, either. As the company that controls Europe’s gas tap for the foreseeable future, what kind of introduction does Gazprom need?
And if Schroeder’s appointment is part of the drive to clean up Gazprom’s image in the West ahead of the company’s share liberalization, the way it has been handled is more likely to raise suspicions with investors than reassure them.
Perhaps all we are left with, then, is the tawdry picture of a retiring politician engaged in a spot of ill-advised nest feathering, while tying his reputation to Gazprom’s. Strange, too, as Schroeder could presumably take his pick of any number of lucrative jobs.

TITLE: The Best Laid Plans
AUTHOR: By Vladimir Gryaznevich
TEXT: What’s on the cards for the coming year? Well, we could start by taking a look at the new General Plan for St. Petersburg, which will finally be passed by the Legislative Assembly in the next few days.
The Plan regulates the spatial development of the city — the format for the use of territories and what their functional purpose will be. This is the twentieth plan of its kind for the city, and it’s created something of a revolution in St. Petersburg town planning. For the first time in the history of the city the plan will have recognized legal status and, on top of that, it will not only serve the authorities, but also the city’s inhabitants. 
By giving the Plan legal status, it’s hoped that the ramshackle nature of town planning in the city, which has plagued St. Petersburg over the last three centuries, will be a thing of the past.
A second feature of the General Plan is perhaps even more ideologically important than the first. According to Valentin Nazarov,  who played a key role in drawing it up, for the first time the Plan was drawn up not only as an instrument for administrative control, as it always has been in the past, but also as a way of reaching agreement between  all the interested parties among the population of St. Petersburg. In essence, this is the key function of the new General Plan. 
Different social groups, including the authorities, have their own different resources, whether they be human, financial, material or intellectual . Only one is universal — the territory of St. Petersburg. For this reason it’s absolutely essential for the harmonious development of society that agreement be reached on the use of this common resource. 
According to Mikhail Amosov, chairman of the Legislative Assembly’s City Maintenance Commission, a lot of effort has gone into making this consultation process constructive. Following the first reading of the Plan in the Legislative Assembly, discussions were held in the city with all interested parties invited.
Nevertheless, achieving a compromise for all these different points of view hasn’t been an unqualified success. Only developers and those working in the transport sector actively participated in the discussion process, and not even all of them at that. A majority in the city’s business sector have shown little interest in the General Plan. 
The fact that when we tried to find out what members of the business community thought about the new Plan we couldn’t find a single industrial company that could formulate a well-argued position on the subject is indicative. Everyone whom we asked honestly admitted that they hadn’t read the draft law and hadn’t taken part in the discussion process. In a city of five million, only 20 companies could be found to suggest workable amendments to the draft law, according to Amosov. 
Nevertheless, the bulk of the interests of the local community have been taken into account thanks to the various committees lobbying the interests of their sectors. According to Amosov, the bureaucrats proved entirely capable of this task, even where they didn’t concern business interests. 
The Ecology Committee, for example, brought about significant amendments that will assist in the preservation and expansion of recreation zones, while safeguards have been set up to preserve historical and cultural monuments. The Sports Committee did much to counteract attempts to build over sporting facilities with housing projects. Needless to say, builders and developers proved capable at lobbying their interests while the Committee for Economic Development, Industrial Policy and Trade managed to expand the territories of future industrial parks on the outskirts of St. Petersburg. The deputies of the Legislative Assembly itself played an important role in lobbying the interests of the average man in the street.
For citizens, however, there is one unfortunate oversight in the Plan. According to participants in the discussion process, too much time was devoted to specific plots and sites. There was no radical move on serious problems that have long been in existence. It’s already clear to all that the city’s port can’t develop sufficiently to meet market demand which amounts to a 300 percent rise in cargo volume by 2015. The answer to this problem — moving the port outside the confines of the city — has been staring us in the face for quite some time. 
For now, those who drew up the General Plan don’t want to take responsibility for that. Decisions of this scale, requiring vast expenditure, much of it coming from the state, are taken at a federal level and require considerable political backing, both from the city authorities and from the local community in general. The latter, however, has shown little initiative on this matter.
That lack of initiative has prevented other radical decisions from being taken, such as removing the industrial zones close to the center of the city, such as those south of the Obvodny Kanal and on the Vyborg Side. That means, instead of turning these eyesores into housing zones, they will continue to fester. 
Despite Smolny’s declarations, it seems that the city has decided to expand outwards, rather than through a rejuvenation of neglected areas that lie within its boundaries. This is being done in spite of the extra costs involved in construction and in piping in new communications lines. 
If society was prepared to demonstrate a greater interest in all this, it seems entirely possible that some of these hard decisions could be taken. Unfortunately, the inhabitants of St. Petersburg are proving slow in attending to their own interests. We only have ourselves to blame, then, if there are any oversights in the General Plan. And despite all its drawbacks, the Plan has one undoubted advantage — the fact that it will cover such a long period of time, reaching far beyond current state programs or the strategies of companies. This will make it a basis for the creation of our plans in the shorter term. 

Vladimir Gryaznevich is a political analyst with Expert Severo-Zapad magazine. His comment was first broadcast on Ekho Moskvy in St. Petersburg on Friday.

TITLE: Former-Nazi Found Not Guilty
AUTHOR: By Stephen Graham
PUBLISHER: The Associated Press
TEXT: MUNICH, Germany — A former Nazi commander was acquitted of murder in three massacres in Slovakia after a court said Monday there was no reliable evidence he was involved in the killings. 
Ladislav Niznansky, 88, sat stone-faced as his acquittal on 164 counts of murder was announced in the Munich state court.
The charges against him were filed in connection with the slaughter of 146 men, women and children in two Slovak villages and the later killing of 18 Jewish civilians after a failed uprising against Slovakia’s Nazi puppet government.
Presiding Judge Manfred Goetzl cited contradictory evidence from witnesses as a reason for the acquittal, noting that some withdrew testimony given when Niznansky was convicted in absentia by communist Czechoslovakia in 1962.
Prosecutors leaned heavily on evidence from that trial, but several witnesses sought out by the court this time either contradicted or withdrew their previous testimony.
The court said evidence from the 1962 trial was suspect because Communist-era documents show officials had planned it “from start to finish.”
“A judgment can’t be based on this,” Goetzl said.
Prosecutors said Niznansky was an active commander and sought the maximum sentence of life imprisonment in what likely was one of the last trials dealing with Nazi-era crimes. Prosecutor Konstantin Kuchenbauer promised an appeal.
Niznansky, a former Slovak army captain who at first supported the 1944 revolt, changed sides after he was captured and took charge of the Slovak section of a Nazi unit, code-named Edelweiss, that hunted resistance fighters and Jews.
He was convicted of the massacres and sentenced to death in absentia by Czechoslovakia in 1962.
By then, he had moved to Germany, where he retired. He became a German citizen in 1996.
Niznansky was arrested in Germany in January 2004 after a Slovak request, but the court released him from police custody, citing contradictory testimony from a key witness in the old trial.
Niznansky acknowledges fighting partisans after being forced to join the Nazi unit to avoid incarceration in a concentration camp, and he admits participating in the bloody operation against two villages in central Slovakia on Jan. 21, 1945, as punishment for local support of Soviet-backed rebels.
The defense said Niznansky and his men were in nearby hills but not in the villages when German troops and allied Slovak irregulars carried out the executions. 
The court said testimony from survivors showed that the Edelweiss unit was not present.
Judge Goetzl said it was unclear who carried out the third massacre — of 18 Jewish civilians discovered hiding in underground bunkers at Ksina on Feb. 7, 1945.
Niznansky appeared exhausted as the judge explained the verdict and awarded him compensation for the months he spent in custody, bowing his head and closing his eyes.
“I always hoped it would come to a fair verdict,” Niznansky told reporters afterward. “I’m relieved after these two years of mental torture.”
Although it was not at issue in the trial, Niznansky said during the proceedings he was present during the 1944 capture in Slovakia of U.S. agents and an American war correspondent, who later were executed. 
The captives included members of the U.S. Office of Strategic Services and Associated Press correspondent Joseph Morton, 33, the only war correspondent known to have been executed during World War II. 
Niznansky said he played a subordinate role during the capture, which he said was led by a Nazi major.

TITLE: Tsunami Brought Waves Of Money and Problems
AUTHOR: By Emma Batha
PUBLISHER: Reuters
TEXT: LONDON — As the world marks the first anniversary of the Indian Ocean tsunami, millions of people who dug into their pockets in an unprecedented outpouring of generosity will be wondering how their money has been spent. 
Some may be surprised to discover that 12 months on, the vast majority of the 1.8 million people who lost their homes in the Dec. 26 disaster are still in temporary accommodation.
But if the pace of reconstruction has been disappointing, the initial relief effort went far better. Basic needs were met promptly, helping prevent an epidemic that could have killed thousands in a second disaster.
“The world’s response to the tsunami was the best ever,” UN emergency coordinator Jan Egeland said. “Governments, the private sector, and individuals around the world opened their hearts and their wallets. Private donations for the tsunami eclipsed anything seen before,” he told Reuters.
By comparison, Egeland said disasters like Hurricane Mitch which ravaged Central America in 1998 and the Bam earthquake in Iran in 2003 had only received half the money promised.
Dozens of governments, the World Bank and Asian Development Bank pledged more than $7 billion. They have so far allocated over $6 billion, according to Reuters research. The public donated another $5 billion plus.
The medical charity Medecins Sans Frontieres, which did not even launch a tsunami appeal, received so much money in the first few days it took the unprecedented decision to stop accepting funds and asked people who had already given donations if they could be diverted to other crises. More than 99 percent agreed.
“We had people insisting on giving money and they were very angry when we said we did not need it. In our Hong Kong office they had to close the door — they had people coming with envelopes of money,” MSF Holland’s head of emergencies, Marcel Langenbach said.
Of the $110 million MSF received, about $25 million was spent on the tsunami. The rest has gone to the Pakistan quake and emergencies including Niger and Darfur.

TOO MUCH AID?
Although the massive volume of aid helped overcome severe logistical problems after the tsunami, which killed more than 230,000 people in a dozen countries and smashed up towns, ports and roads, it also contributed to a lack of coordination.
Flush with funds, aid agencies made individual assessments and distribution arrangements rather than coordinating through the United Nations.
This led to a fragmented picture of what was needed and where. Some communities were overwhelmed with aid, others were overlooked. Nearly 500 groups set up shop in Aceh alone.
“The big nongovernmental organizations, the ones with which we work all over the world, understood the value of coordination,” the UN’s Egeland said. “The same cannot be said about all the newer players on the ground.”
Turf wars between competing agencies also discouraged cooperation.
“It’s like the Wild West out there,” said one consultant for the International Federation of Red Cross and Crescent Societies (IFRC) in Aceh. “The aid groups all have plenty of money and they’re racing to stake out their ground.”
Bad co-ordination did not just waste cash but in some cases endangered the very communities agencies were trying to help.

TITLE: IN BRIEF
TEXT: ‘Dr. Germ’ Let Go
BAGHDAD, Iraq (AP) — About 24 top former officials in Saddam Hussein’s regime, including a biological weapons expert known as “Dr. Germ,” have been released from jail, while a militant group released a video Monday of the purported killing of an American hostage. 
The first results of Thursday’s parliamentary election were released, with officials saying the Shiite religious bloc, the United Iraqi Alliance, got about 58 percent of the votes from 89 percent of ballot boxes counted in Baghdad province.
An Iraqi lawyer said the 24 or 25 officials from Saddam’s government were released from jail without charges, and some have already left the country.
“The release was an American-Iraqi decision and in line with an Iraqi government ruling made in December 2004, but which hadn’t been enforced until after the elections in an attempt to ease the political pressure in Iraq,” said the lawyer, Badee Izzat Aref.

Bolivia Elects Morales
COCHABAMBA, Bolivia -— Socialist Evo Morales appears assured of becoming Bolivia’s next president, according to unofficial results Monday, an outcome that would solidify South America’s shift toward the political left. 
Morales, who has promised to end a U.S.-backed crusade to eliminate coca, the crop used to make cocaine, may have won a clear majority in Sunday’s vote, which would avoid having Bolivia’s congress choose among the top two vote-getters in January. His closest challenger among seven other candidates received only about 30 percent, independent counts showed.

Irish Lesbians Marry
BELFAST, Northern Ireland — The United Kingdom’s first gay couple to win legal recognition under a new civil partnership law drove past protesters Monday to make their vows inside Belfast City Hall. 
Grainne Close of Northern Ireland and her American partner, Shannon Sickels, walked hand-in-hand from a black taxi for a 20-minute ceremony that featured an exchange of matching platinum and diamond rings and a recording of Dolly Parton’s “Touch Your Woman.”
“We just want to say that this is a very privileged position we are in this morning, and for us this is about making a choice,” said Close, 32, who wore a black suit with a white scarf.
“This is about making a choice to have our civil rights acknowledged and respected and protected, and we could not be here without the hard work of many queer activists and many individuals from the queer community,” said Sickels, a 27-year-old playwright from New York, who wore a white trouser suit.

TITLE: Afghan Parliament Swears in Members
AUTHOR: By Sayed Salahuddin
PUBLISHER: Reuters
TEXT: KABUL, Afghanistan — Former warlords, ex-communists, Taliban defectors and women activists were sworn in on Monday as members of the first Afghan parliament in more than 30 years amid hopes of national reconciliation after decades of bloodshed. 
The inauguration was peaceful despite threats by Taliban guerrillas and was greeted with tears of emotion although there is disappointment that many in the parliament are accused of serious rights abuses and links to the drugs trade.
“This meeting is a sign of us regaining our honor,” President Hamid Karzai said after swearing in the 351 lower and upper house members.
“This homeland will exist for ever!” he declared, prompting tears from many delegates.
Karzai urged national reconciliation after almost three decades of warfare and reiterated a call to the Taliban to abandon their insurgency, which has intensified in the past year despite his efforts to encourage defections.
Parliament has to endorse Karzai’s ministers, and government officials said after the inauguration he was considering reshuffling his cabinet and cutting the number of ministries.
The officials, speaking anonymously, said the reshuffle would affect at least two ministries, including foreign affairs. Defense Minister Abdul Rahim Wardak confirmed the plan: “Yes, there will be some changes,” he said, but gave no details.
Analysts say Karzai appears to have enough support in parliament to avoid major problems, but could face difficulties with appointments, given disappointment at his administration’s failure to improve people’s lives and carry out crucial reforms.
The inauguration was the culmination of a U.N.-backed plan to bring democracy to Afghanistan, drawn up after U.S.-led forces overthrew the Taliban in 2001.
“It means a lot,” Karzai said. “It means progress, it means achievement, it means togetherness.”
U.S. Vice President Dick Cheney, who attended the inauguration after a visit to Washington’s more troubled front in Iraq, called it a “historic day” and said the United States was committed to supporting Afghanistan for the long term.
In Washington, U.S. Secretary of State Condoleezza Rice said in a statement: “The extremist elements who threatened to disrupt Afghanistan’s electoral process and democratic institutions have failed.
“The seating of the National Assembly is the final step in the process begun four years ago with the assistance of the international community to create Afghanistan’s democratic institutions.”
Security was tight after a Taliban suicide attack near parliament on Friday and a vow by the guerrillas for more attacks on “a symbol of American occupation.”
While the inauguration passed peacefully, the guerrillas killed three policemen early on Monday on the Pakistani border.
The former Afghan king, Zahir Shah, — overthrown in 1973 by his cousin Daud Khan, who dissolved the last parliament — delivered the first speech to the new one.
“I thank God that today I am participating in a ceremony that is a step toward rebuilding Afghanistan,” said the frail 91-year-old. “The people of Afghanistan will succeed!” 
Shukria Barakzai, one of two women among more than a dozen MPs bidding to head the lower house, called it a “momentous day.” 
Sixty-eight lower house seats were reserved for women but critics have doubts about parliament’s overall composition. 
Human Rights Watch says up to 60 percent of deputies are warlords or their proxies, boding ill for efforts to account for abuses and to stamp out a massive drugs trade. 
Malalai Joya, a 27-year-old MP, told reporters she was upset by an assembly of “warlords, war criminals and drug lords” and vowed to reveal their crimes, or resign. 
Yunus Qanuni, a former factional official whose forces have been accused of abuses, called the term “warlord” outmoded. 
“The vote of people should be respected,” he said, appearing to underline fears that some MPs will try to block efforts to bring war criminals to justice.

TITLE: Bush Justifies Homeland Spying Ops
PUBLISHER: Reuters
TEXT: WASHINGTON  — U.S. President George W. Bush vowed on Monday to authorize more eavesdropping on Americans suspected of ties to terrorists and said he believed a probe was underway into who committed “the shameful act” of revealing the covert program. 
Bush, struggling with low approval ratings and wide public discontent with the rising U.S. death toll, also defended his decision to invade Iraq, saying “it wasn’t a mistake.”
At a year-end White House news conference he faced a barrage of questions about his decision to authorize eavesdropping on international telephone and other communication by Americans suspected of links to al Qaeda and other terrorist organizations.
“As president of the United States and commander in chief I have the constitutional responsibility and the constitutional authority to protect our country,” he said.
Several Republican and Democratic lawmakers have backed plans by Senate Judiciary Committee Chairman Arlen Specter, a Pennsylvania Republican, to hold a hearing on the issue. Many have questioned whether spying on Americans violates the U.S. Constitution.
The spying program, under which the National Security Agency was given the authority to intercept the communications without court approval, was first disclosed by the New York Times last Friday. A 1978 law, the Foreign Intelligence Surveillance Act, makes it illegal to spy on U.S. citizens in the United States without court approval.
“There’s a process that goes on inside the Justice Department about leaks. I presume that process is moving forward,” Bush said. “My personal opinion is it was a shameful act for someone to disclose this very important program in a time of war.”
U.S. Attorney General Alberto Gonzales said earlier on Monday the U.S. Congress’ authorization of military force after the September 11, 2001, attacks also gave Bush the right to order the eavesdropping.
Bush said the program had been effective in disrupting terrorist acts, but gave no details.
“I’ve reauthorized this program more than 30 times since the September the 11th attacks, and I intend to do so for so long as the nation faces the continuing threat of an enemy that wants to kill our American citizens,” he declared.
Bush noted that he had sworn to uphold the law. “Do I have the legal authority to do this? The answer is ‘absolutely.”
On Iraq, Bush pointed to the country’s election last Thursday as a sign of progress in the war, which is costing taxpayers $6 billion a month and in which more than 2,100 U.S. troops have died.
“It wasn’t a mistake to go into Iraq,” he said. “It was the right decision to make. I think that there’s going to be a lot of analysis done on the decisions made on the ground in Iraq ... History will judge.”

TITLE: Israel’s Sharon Suffers Minor Stroke
AUTHOR: By Ori Lewis
PUBLISHER: Reuters
TEXT: JERUSALEM — Israel’s Prime Minister Ariel Sharon rested in hospital on Monday after a minor stroke that raised questions over his political future, but doctors said he should recover fully. 
The hefty 77-year-old former general, battling for re-election after pulling Jewish settlers from the Gaza Strip and remaking Israel’s political landscape, was rushed to hospital on Sunday.
Doctors said Sharon would stay for further tests and if all went well would be discharged on Tuesday, though an aide said it would take longer to return to full working capacity. The blood clot on his brain went without causing any lasting damage.
“There is an excellent chance this will not repeat itself,” said chief neurologist Tamir Ben-Hur. “I think after he rests he will be able to return to normal activity.”
A parliamentary election is due in March and some commentators had suggested that the health scare could damage the prospects of Sharon’s new centrist party Kadima.
“Kadima’s existence depends on one man,” wrote Nahum Barnea in the mass-market Yedioth Ahronoth daily. “It is reasonable to assume that the stroke ... damaged his party in electoral terms.”
Aides rushed to assure Israelis that Sharon was in no danger and that there was no need for even a temporary transfer of his powers. Sharon is very much a one-man show and his exit from the scene would inevitably mean a major upheaval.
“He is still the prime minister,” Sharon’s chief of staff, Ilan Cohen, told Reuters. “It might be a few days before he returns to his full work level ... his 20-hour day.”
Sharon has been a central figure in shaping the Middle East for decades. Once the archetype of the Israeli hawk, he won praise at home and abroad for this year’s Gaza withdrawal.
He told Israeli media overnight that he was fine.
“I guess I should have taken a few days off,” he said. “There are people who are already interested in a replacement? Well, maybe it’s too soon. I’m still here, no?”
Sharon’s role has never been more critical than after pulling settlers from the occupied strip this year and quitting his right-wing Likud party to form a new movement with a promise to pursue peacemaking with Palestinians.
Israeli markets weakened on the news of Sharon’s mild stroke, with share prices down as much as 0.7 percent and the shekel dipping slightly against the dollar.
Strokes are caused by a loss of blood flow to the brain. A study published this year showed that anyone suffering a minor stroke had a 40 percent chance of another, potentially fatal stroke, within 10 years.
Ben-Hur said Sharon’s clot had been caused by a minor heart problem, which he said was not uncommon in otherwise healthy people.
Sharon’s illness overshadowed Monday’s vote to succeed him in what remains of his Likud party, now trailing at third place in the polls behind Kadima movement and leftist Labor.

TITLE: Romania Hands Over World Title
PUBLISHER: Combined Reports
TEXT: Russia hammered Romania 28-23 in the final of the Women’s Handball World Championship on Sunday in St. Petersburg to regain the crown they lost to France two years ago. It was also Russia’s fifth world title, bettering the record they shared with Germany at four wins each. 
The outcome was never in doubt after Russia recovered from a slow start to gradually pull away. After falling 0-2 behind in the opening minute, Russia, cheered on by an 8,500-strong home crowd, took complete control of the match, never allowing the Romanians to come closer than four goals after taking an 8-4 lead at 9:35.
"It was not our best match at the championships but it was a title match," Russia head coach Yevgeny Trefilov said.  
Leading 17-12 at half-time, they extended their advantage to seven goals shortly after the break despite playing short handed early in the second period. Although Romania closed the gap in the final minutes Russia comfortably held on for their 10th consecutive victory in the 24-team, two-week tournament. 
The Russians were paced by Lyudmila Postnova with seven goals while Valentina Ardean also scored seven for Romania. 
The Romanians were bidding for their first world title since winning on home soil in 1962. They also reached the final in 1973, losing to the former Yugoslavia. In the earlier match, Hungary came from behind to beat three-times Olympic champions Denmark 27-24, winning the bronze. 

(AP, Reuters)

TITLE: Liverpool Robbed of Worldwide Club Title
AUTHOR: By Robert Millward
PUBLISHER: The Associated Press
TEXT: YOKOHAMA, Japan — Mineiro fired Sao Paulo to its third global title in a 1-0 victory over Liverpool in the Club World Championship on Sunday. 
Winner in 1992 and ‘93 when the competition was known as the World Club Cup, Sao Paulo now has a 3-0 record in finals while this was Liverpool’s third loss without a single triumph. 
Mineiro’s 27th minute strike was the first time in 12 league and cup games that Champions League holder Liverpool had conceded a goal. 
Rafa Benitez’s Liverpool created plenty of chances in front of 66,821 fans at Yokohama’s International stadium and had three goals disallowed. Luis Garcia squandered four opportunities and Sao Paulo goalkeeper Rogerio Ceni made several standout saves. 
The victory sparked wild celebrations among the Sao Paulo fans in the crowd while the Liverpool followers fell silent. Liverpool was an overwhelming favorite to win the title for the first time. 
Benitez sprang a surprise before kickoff by leaving Peter Crouch on the bench. The 2-meter striker scored twice in the 3-0 semifinal victory over Costa Rica’s Deportivo Saprissa. 
Liverpool’s players wore black armbands as a mark of respect to Benitez’s father, Francisco, who died on Thursday, and the players and fans stood for a minute’s silence before kickoff. 
The game had only been going 90 seconds when it was held up for four minutes because a fan got onto the field and became tangled in the net. After he had been removed, the net and its support had to be repaired. Meanwhile the players kept running around to keep warm in temperatures close to the freezing mark. 
Fernando Morientes, who started ahead of Crouch, headed wide in the second minute but it was Sao Paulo who went ahead in the 27th. 
Talented rightback Cicinho, who is set to move to Real Madrid next month, played a through ball to Aloisio who pushed it down the middle to Mineiro. The Liverpool defense appealed for offside but the flag didn’t come and Mineiro ran clear to sidefoot past goalkeeper Pepe Reina and become the first player to score against Benitez’s team in 12 games. 
In reply, Luis Garcia’s header hit the crossbar and the Spaniard also nodded the ball wide from eight meters out after a good Liverpool move. He could have scored again with a header just before halftime but goalkeeper Rogerio pushed his effort round the post. 
Rogerio made an acrobatic save to push a curling Steven Gerrard free kick round the post early in the second half. But he almost handed Liverpool an equalizer when he palmed a cross from Harry Kewell onto his own crossbar. 
Liverpool continued to make chances and the busy Rogerio pushed another angled Luis Garcia shot over the bar. Sami Hyypia also had a goal disallowed because the cross had floated out of play. 
Crouch finally made an appearance five minutes from the end for Morientes and Liverpool had the ball in the net for the third time, but it was again disallowed. 
In the match for third place, Ronald Gomez fired home a free kick with a minute to go as Costa Rica’s Deportivo Saprissa scored two late goals to beat Al Ittihad of Saudi Arabia 3-2.

TITLE: Sports Watch
TEXT: Russia Takes Rosno Cup

MOSCOW (AP) — Russia beat the Czech Republic 3-1 in the Rosno Cup on Sunday, taking the lead in the four-leg European Hockey Tour a day after clinching its second consecutive cup title.
Earlier, Finland downed arch-rival Sweden 2-1 to finish the leg in second place with 5 points, followed by Sweden and the winless Czech Republic.
Yevgeny Malkin gave Russia the lead against the world champion Czechs on a slap shot at 4:09. Three minutes later, he scored from close range on an assist by Alexander Kharitonov to make it 2-0. Anton But poked the puck into the goal with 67 seconds left in the first period. Jaroslav Kudrna scored for the Czech Republic at 44:02.

Ice Dancing Champs

TOKYO (AP) — Russian world champions Tatyana Navka and Roman Kostomarov won the ice dance at the Grand Prix for the third year in a row. 
The pair turned in a dramatic perfor-mance to “Carmen” that earned them the top scores in the free dance and 165.72 overall. Their performance put them far ahead of second-placed Yelena Grushina and Ruslan Goncharov with 154.53.

Gretzky Goes on Leave

LOS ANGELES (AP) — Wayne Gretzky took an indefinite leave as coach of the Phoenix Coyotes on Saturday night to be with his mother, who has lung cancer. 
Gretzky left the National Hockey League team before the Coyotes played the Kings in Los Angeles and went to Ontario, where his parents live. 

’05 Tennis Winners

LONDON (Reuters) — Switzerland’s Roger Federer and Belgian Kim Clijsters were named 2005 world champions by the governing body of tennis (ITF) on Monday. 
World number one Federer is the sixth man to win the award for two consecutive years after Bjorn Borg, John McEnroe, Ivan Lendl, Pete Sampras and Lleyton Hewitt, the ITF said in a statement. 
He won 11 titles including Wimbledon and the U.S. Open in 2005. 
Clijsters finished the season ranked second behind Lindsay Davenport after a superb comeback from a wrist injury. 
She won the U.S. Open, her first grand slam title, after starting the year ranked outside the top 100. 

Pakistan Beats England

RAWALPINDI, Pakistan (Reuters) — Pakistan clinched the one-day cricket series against England by winning the fourth match by 13 runs on Monday. 
Pakistan took an unassailable 3-1 lead in the five-match series as their bowlers battled hard to successfully defend a total of 210 runs, eventually bowling England out for 197 in 48.1 overs. 
England were also beaten 2-0 in the test series and have now lost their last three one-dayers after winning the first in Lahore by 42 runs. The last match will be played on Wednesday.