SOURCE: The St. Petersburg Times
DATE: Issue #1145 (11), Tuesday, February 14, 2006
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TITLE: Hungry Cops and a Touch of Chaos at G8
AUTHOR: By Stephen Boykewich
PUBLISHER: Staff Writer
TEXT: MOSCOW — While the cameras were running, there were few surprises at this weekend’s meeting of G8 finance ministers. But behind the scenes, police officers hungrily invaded the press center cafeteria, Britain’s chancellor of the exchequer told his favorite finance minister jokes, and security men vigilantly guarded against sandwiches wrapped in plastic.
The scrutiny was intense for the first Group of Eight event with Russia in charge. 
Europeans, jittery after recent cuts in Russian gas deliveries, came to press for increased energy supplies and diversification. Russia, meanwhile, sought to quell doubts about its place among the world’s richest democracies by playing the trump card of its vast hydrocarbon wealth.
And though ministers were unanimous in calling the gathering a success, some signs of chaos were not far from the surface.
As host, Russia’s Finance Ministry accredited more than 700 Russian and foreign journalists to cover the event, but left many of them scrambling for details about the schedule of events until the delegations arrived on Friday. 
Two telephone hotlines set up by the ministry gave busy signals from morning till night last week, while one spokeswoman said the weekend’s schedule had still not been finalized as late as Thursday.
The ministers gathered in the opulent National Hotel, with views looking out onto the Kremlin — at least from the windows that were not blocked by a huge combined security detail of hotel staff, Federal Security Service officers and security personnel from each national delegation.
The grim faces did not spoil the mood of British Chancellor of the Exchequer Gordon Brown, however, who entertained the other delegates between sessions with “his favorite finance minister jokes,” Canadian Minister James Flaherty said.
Flaherty, who was making his first official trip since his appointment last week, told journalists Saturday that Brown had welcomed him to the club by asking, “What are your two best days as finance minister?”
The punch line: “Your first day and the day you leave.”
The journalists’ laughter was mostly polite.
But few reporters were in joking mood after the trip to the off-site press center, located in Forum Hall — a cold, 20-minute walk from the Paveletskaya metro station in south-central Moscow. After clearing two blocks of police and periodic sidewalk metal detectors — inoperative, it seemed — journalists worked in a computer-filled hall among plasma television screens with a live feed from the hotel.
The feed offered little to work with, however. After the transmission of an unofficial working breakfast at 8:15 a.m., the screens showed U.S. Treasury Secretary John Snow and French Finance Minister Thierry Breton chatting amiably during the break. 
At 10 a.m., Finance Minister Alexei Kudrin appeared on screen amid a flurry of camera flashes from a handful of on-site photographers, and the ministers took their seats for the long-awaited main event: an opening discussion of oil’s role in the world economy.
“This is, of course, the theme that has generated the greatest interest all over the world,” Kudrin said, before the transmission cut away to a shot of the hotel hallway, where a uniformed busboy was wheeling a cart of breakfast dishes.
A groan went up in the press center.
“I guess now we go for a smoke,” one Russian journalist said to a colleague.
Several college-aged press center assistants said there had been “technical problems with the satellite” and suggested calling the hotel’s front desk, before another assistant clarified that due to the G8’s traditionally closed format, the cut in transmission had been planned.
The broadcast resumed during a break in the meetings to show the “G8 family photo,” where the ministers posed with their colleagues from the European Union, World Bank and International Monetary Fund. 
The press center took on a distinctly postmodernist air as photographers snapped shots of the plasma screens, which in turn showed photographers in the hotel shooting the ministers.
Security at Forum Hall grew tighter — in part accidentally — as the ministers wrapped up their G8 discussions and headed to the Kremlin for a working lunch with President Vladimir Putin. Dozens of OMON riot police and regular police officers crowded into the Forum Hall cafeteria, seizing their last chance to grab lunch before the ministers arrived for concluding news conferences.
The heavily armed line wound around the hall, each officer clutching a meal ticket, as a press center administrator pleaded with a senior police officer to limit the meal-seekers to 15 at a time.
In an upstairs banquet hall, plastic-wrapped sandwiches and bottled water were laid out for journalists, but a stern guard at the door stopped several journalists who wanted to have a working lunch from taking sandwiches downstairs.
When asked whether he feared the sandwiches might be used as weapons, the guard shrugged and told one reporter, “You might use a sandwich as a weapon.”
He did not elaborate, but cracked a smile.
As the ministers arrived to hold individual news conferences — with the exception of Britain’s Brown and Japanese Finance Minister Sadakazu Tanigaki, who left Moscow without putting their spin on the proceedings — the mood varied widely from room to room.
Canada’s Flaherty was wide-eyed and jovial at the end of his first official trip, while France’s Breton took on the tone of a harassed schoolmaster as he reiterated thus-far futile calls for Russia to ratify the 1991 Energy Charter. 
Kudrin soberly recounted the meeting’s main conclusions, but turned almost giddy as he repeatedly recounted conversations with other ministers about last month’s Russian-Ukrainian gas dispute. 
When he told his fellow ministers that gas supplies had dropped to Europe because Ukraine continued to siphon off gas even after Gazprom increased supplies to compensate, Kudrin said “at least three ministers” had responded: “Why aren’t you telling people about this? That’s absolutely logical, fair and understandable. The whole world ought to know about this!”
Snow, whom Kudrin named as one of the three ministers, described the exchange somewhat differently.
“We had a discussion in which our Russian colleagues laid out for us their view of the situation,” Snow told reporters. “We found that illuminating, but I am not an authority on these issues.”
Summing up the relative success of the meeting, Kudrin put a twist on the Russian folk saying about always throwing out the first pancake in a batch.
“As they say in Russia, this was the first blin, but it didn’t turn out lumpy. It was a real, well-cooked blin,” he said.

TITLE: Kudrin: Reform For Energy
AUTHOR: By Stephen Boykewich and Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia took a hesitant step toward liberalizing its energy market at the Group of Eight finance ministers’ meeting in Moscow over the weekend, with Finance Minister Alexei Kudrin saying Saturday that Gazprom would eventually lose its exclusive use of gas pipelines.
In an apparent response to European pressure, Kudrin said that independent gas producers, including foreign companies, would have access to the state-controlled export pipelines.
“In the future, access to export pipelines will be equal for all [companies] that win tenders to develop new gas fields. I am not prepared to say when that will happen, but we are readying ourselves for it,” Kudrin told reporters.
While energy dominated the talk at the finance ministers’ official meeting and at their working lunch with President Vladimir Putin on Saturday, most of the action came on the side issues of aid to poor nations and efforts to prevent worldwide epidemics as Russia led the first event of its G8 presidency.
At a meeting with Putin on Saturday, U.S. Treasury Secretary John Snow offered support for Russia’s bid to join the World Trade Organization, saying that talks were “in the home stretch.” Putin predicted that Russia would become one of the United States’ main energy suppliers over the next few years.
“Our trade and economic links have grown at a very quick tempo — more than 40 percent per year. This involves nearly all sectors, including energy,” Putin told Snow, according to a version of his comments posted on the Kremlin web site. 
“I believe that in the next three to four years we will be more than able to reach a level at which Russian power suppliers will occupy third or fourth place on the U.S. market,” Putin said.
Though intellectual property rights and Russia’s refusal to allow foreign banks to set up local branches remain sticking points, Snow said Russia and the United States had deepened their understanding.
“We very much want to conclude these negotiations and see the Russian accession to the WTO completed soon,” Snow told reporters on Saturday. “I think we’re in the home stretch.”
French Finance Minister Thierry Breton pressed Russia to ratify the 1991 Energy Charter, which would help secure energy supplies to Europe.
Kudrin refused to specify when Russia might ratify the treaty. “We cannot set a date at the moment,” he said. 
Under the treaty, supplier countries cannot cut energy deliveries to consumers during price disputes — a provision that would provide protection against the kind of supply shortages Europe faced during last month’s bitter dispute with Ukraine over gas prices.
Europe’s supplies have suffered considerable disturbances, first at the beginning of the year when Russia cut its supplies to Ukraine, then during a prolonged cold spell that strained Gazprom’s export capability.
Underlining European fears over continuity of supplies, Italian oil and gas giant Eni reported a 16.2 percent drop in Russian gas supplies for a 24-hour period on Saturday, The Associated Press reported.
“I will use all my power to move Russia toward” ratification of the Energy Charter, France’s Breton told reporters Saturday. “Based on what happened with Ukraine, we can say that the dialogue between Russian and Europe could be going better.”
A separate French proposal, backed by the British and the Italians, offered Moscow international funding for new gas pipelines in return for allowing independent Russian producers access to European markets. Currently, Gazprom supplies one-quarter of Europe’s gas, although last year independent Russian producers accounted for almost 15 percent of the country’s output of 630 billion cubic meters. Independent producers are not currently allowed access to pipelines to Europe or to produce more than a state-allotted quota.
Meanwhile, more progress was made by ministers on debt relief to the world’s poorest nations and united action to combat epidemics and terrorism. Russia confirmed on Saturday that it would write off $688 million in debt owed to it by 16 African countries, and pushed for guarantees that the $12 billion early debt repayment it plans to make to the Paris Club of creditor nations later this year would be diverted to poor countries in Africa.
The ministers’ final communique, however, made no such guarantees. 
“We welcome that Russia’s improved fiscal position will allow it to seek further prepayment of its eligible debt,” the communique said, but it made no recommendation on how the repaid debt should be used.
German Finance Minister Peer Steinbrßck opposed early repayment to Germany, saying that his country had already issued bonds on the Russian debt. In reply, Putin said the planned $12 billion repayment would not involve Russia’s debt to Germany.
World Bank President Paul Wolfowitz, who also met with the ministers in Moscow, said that a separate initiative to cancel Third World debt had gained further momentum at the meeting and should be implemented by July 1.

TITLE: Local Homeless Moved On For G8 Summit
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: With less than six months remaining until the G8 heads-of-government meeting in St. Petersburg on July 7-13, there have been mixed reactions to the city’s preparations for the high-profile international summit. 
The finishing touches are being put to the program of the Mariinsky Theater’s Stars of the White Nights summer festival — a key entertainment event for visiting dignitaries — and a giant press center is being constructed close to the Konstantinovsky Palace in Strelna, President Vladimir Putin’s St. Petersburg residence. 
More controversially, however, local non-government organizations have reported that the police are already beginning to clear homeless people from tourist attractions and the center of the city. 
There are as many as 8,000 homeless people living on St. Petersburg’s streets, and in cellars and stairwells, according to Maxim Yegorov, a representative of the Nochlezhka (Night Shelter) Fund which gives support to the homeless. 
Yegorov said St. Petersburg’s homeless can be divided into three main groups: former prisoners who have lost their housing registration; citizens who have been swindled or coerced out of their apartments; and others who for various reasons have left or fled their original homes.
There are also many more — over 50,000, according to Nochlezhka — living in the city without having being registered here, often people from other regions, who are looking for work but cannot afford a permanent residence.
“District police are organizing raids on their territory, explaining to the homeless about the summit and directing them to Nochlezhka, but we can’t cope with that many tenants,” Yegorov said in a telephone interview last week. “Our shelter can only accommodate 70 people. I think the police will end up just evacuating the homeless, as they have done before.”
Before the Goodwill Games in 1994, the city administration forcibly removed many homeless people from the city in order to present a favorable image. The move caused outrage among local human rights advocates and charitable organizations.
“Removing homeless people from the city center is a violation of their rights,” said Yelena Korneyeva, an editor with Put Domoi magazine, which is devoted to and distributed by local homeless people, in a telephone interview Monday. “Nobody has the right to deprive them. ... Why don’t they get rid of the disabled, deprived and the elderly as well? They don’t often make for a very attractive picture, either.”
“In Rome, the homeless sit in the sun and dry their pants just across from the famous St. Peter’s Cathedral, and the Italian police don’t try and mask them with shields,” Korneyeva said. “This Potyomkin-village style of pulling the wool over the people’s eyes is just laughable. It makes Russians look ridiculous.”

TITLE: Hamas, Iran Top EU-Russia Talks
AUTHOR: By Paul Ames
PUBLISHER: The Associated Press
TEXT: BRUSSELS — Moscow’s offer to meet with Hamas and its efforts to mediate in Iran’s nuclear standoff with the West are expected to dominate talks this week between Russian Foreign Minister Sergey Lavrov and senior European Union officials. 
Lavrov is scheduled to meet Wednesday in Vienna with European External Relations Commissioner Benita Ferrero-Waldner, Austrian Chancellor Wolfgang Schuessel, and the foreign ministers of Austria and Finland — which share the EU’s rotating presidency this year. 
EU foreign policy representative Javier Solana pulled out of the talks to continue a tour of the Middle East in an effort to calm Muslim anger over the cartoons of the Prophet Muhammad that have appeared in European newspapers. 
The EU and the United States are backing a Russian proposal to shift Iran’s nuclear enrichment activities to Russia, which could help ensure the nuclear fuel would not be used to make bombs. 
However, Iranian presidential spokesman Gholamhossein Elham said Monday that talks planned for this week in Moscow had been postponed indefinitely. 
Lavrov is also expected to discuss Russia’s offer to meet this month with Hamas leaders in Moscow following the Islamic militant group’s victory in Palestinian elections. 
The other members of the so-called Quartet of Middle East peace negotiators, the United States, the European Union and the United Nations, have insisted they would not deal with Hamas unless it renounces violence and recognizes Israel’s right to exist. 
Austrian officials said the talks would also look at European concerns over energy supplies. 
Last month, Russia’s natural gas monopoly Gazprom worried European governments by halting supplies to Ukraine over a gas dispute that led to sharp drops in supplies in several countries. 
Most of the Russian gas that goes to European consumers moves through Ukraine’s pipeline network. 
Some EU nations complain that the flow of gas is still not fully re-established. Russian officials have suggested that some of the gas destined for Western Europe is being syphoned off in Ukraine. 
Lavrov is also expected to raise concerns about the rights Russian-speaking minorities in the EU’s new Baltic members and about Russia’s access through EU territory to its Kaliningrad enclave.

TITLE: Charges of Hazing Put Russian Military on Defensive
AUTHOR: By Kim Murphy
TEXT: The Los Angeles Times 
CHELYABINSK, Russia — Just before New Year’s Day, army private Andrei Sychyov called his mother and asked her to come bring him home for the holiday. He had four days’ leave, he said. Please don’t make him spend it in the barracks.
But Galina Sychyova thought of the extra hours she had to put in at the market where she works. Conscripts are not allowed to go on leave unaccompanied, and it would take her 11 hours on the bus each way to travel roughly 200 kilometers along the east side of the Ural Mountains from her village outside of Yekaterinburg. For just four days?
“I explained to him, I said: ‘Andryusha, please understand me correctly, it’s the highest buying season now, and we can’t leave the shop for a minute. And I will come and see you some other time.’ He was very, very upset,” Sychyova recalled. “I felt tears in his voice…. He said, ‘I don’t want to stay here for the new year with these drunken louts.’ “
The next time Sychyova saw her 19-year-old son, it was at a hospital in Chelyabinsk. Doctors had amputated one leg, then the other, then his genitals, then the tip of his right ring finger. On New Year’s Eve, her son said, his army mates tied him and forced him to squat for more than three hours, beating him repeatedly on the legs.
Gangrene had spread through his lower extremities and was threatening his kidneys, lungs and brain. He breathed with a respirator. His eyes only flickered when his mother peered anxiously into his face and repeated his name.
The Russian army is legendary for being almost as dangerous in peacetime as  in war. Last year, 16 soldiers were officially listed as killed in brutal hazing incidents, and 276 others committed suicide.
But many believe those figures are misleading. A number of the 1,064 servicemen who died in various “crimes and incidents” were also victims of abuse, and many cases listed as suicides are faked to disguise fatal beatings, or occur because soldiers can no longer endure the torment, say military analysts and human rights organizations.
The small, two-room office of the Soldiers’ Mothers Committee in Chelyabinsk is lined with files, most of them reports of violence committed against conscripts serving their two years of mandatory military service.
“Do you see those walls over there? They’re filled with complaints. And it’s one-millionth of what’s going on,” Lyudmila Zinchenko said.
Nearly every army in the world has initiation rites and means of informal discipline, some of it violent. In Russia it has evolved into an entrenched system known as dedovshchina, or the “rule of the grandfathers,” in which senior soldiers force new recruits to conduct menial chores, give up their food, money and cigarettes and undergo sleep deprivation and humiliating rituals.
The punishment is beatings or, in a few cases, sexual abuse. So miserable has conscript service become that last year only 9.2 percent of the 1.7 million 18-year-olds subject to the draft were actually inducted. Families with money or connections won exemptions through educational, health or family waivers.
Human Rights Watch in 2004 concluded that “hundreds of thousands” of new recruits faced “grossly abusive treatment” that killed dozens every year.
The organization described a 2002 case in which recruit Dmitry Samsonov wrote his parents and grandmother urgently requesting money and cigarettes to offer senior soldiers during a 100-day period of intense hazing.
“Mama, this is what I need for the next four months: every week a transfer of 40 to 50 rubles, and a small package with Prima [cigarettes]…. Mama, don’t forget to send this immediately. Immediately!”
The letter was followed by another. “Today, the [period] is starting, and I haven’t received anything from you…. I don’t know what to do. It’s 2 p.m. now. It will be lights out in eight hours. I don’t think that I will survive this night…. You just don’t understand how important it was for me.” In any case, both letters arrived too late.
Two months later, Samsonov was hospitalized with a broken wrist. Eleven days after that, the family received a telegram saying their son was dead. He had slit his veins, authorities said.
In Chelyabinsk, an industrial city of 1.3 million in the southern Urals, Zinchenko said her group received about 300 hazing complaints a year, ranging from a young soldier who was hired out to dig graves while his supervisor pocketed his wages to soldiers who were beaten or driven to suicide.
“Here’s a boy who was killed,” she said, picking up a report filed by the parents of Oleg Afanasyev, 20, who was reported to have committed suicide by hanging himself on July 12, 2005, during service in the strategic rocket forces.
“The parents opened his coffin in the cemetery, and we have a list signed by 70 witnesses who saw the signs of beatings on his body,” she said. “There were bruises under his eyes, the nose was broken, there was a stitch on his head, another ugly stitch on his neck, and blood in his right ear.”
In the town of Chebarkul, about 50 miles west of Chelyabinsk, a 24-year-old serviceman was reported to have suffocated from carbon monoxide poisoning in a military garage Oct. 11. “But his uniform was covered with blood,” Zinchenko said. “He was murdered, and the military called it suffocation.”
When her son was drafted, Sychyova’s husband had already drunk himself to death, but his mother and sisters were resigned to seeing “our baby” go, she said. “He accepted this as his duty. And we told him, ‘You are a man, and to be a real man, you need to serve in the army.’”
Sychyov was assigned to a tank academy in Chelyabinsk. His mother visited him in August, when he got a two-day leave, and they strolled through a park together. He talked about his studies, about work details cleaning up the base and washing cars. He was thin, but “he said everything is normal…. He never complained.”
After the conversation about New Year’s Day, she said, she called him again Jan. 4, and found that he was on his way to the clinic. “He said, ‘I have a very bad pain in my left ankle.’ “
By Jan. 6, Sychyov had been transferred to a civilian hospital in Chelyabinsk. A doctor from the hospital phoned his mother the next night.
“He said my son is in extremely bad condition, that his left leg is amputated, and after these words, I went into hysterics,” she said. “And he said to me very sternly, ‘Please, leave your hysterics behind, listen to me.’ He said: ‘I’m giving you the address of the hospital, and you need to come. Because your son may not survive until morning.’ “
Alexander Ionin, assistant chief doctor, said that when Sychyov arrived, gangrene had started in his legs, apparently because his circulation was cut off when he was forced to squat.
Sychyov has improved since then, and his life is out of danger. When he could talk, he said he and others had been beaten by older soldiers, and by one sergeant in particular. Within days, the commanding general of the tank academy was dismissed, and 12 servicemen are facing criminal investigations. President Vladimir Putin, calling the case “horrible,” said the Defense Ministry would take measures to improve discipline in the armed forces.
But at the academy, some servicemen appear defensive.
“Nobody touched Sychyov. Maybe a little bit, but they have just blown it all out of proportion,” said one soldier, who declined to give his name.
“Everybody says, ‘Hazing, hazing.’ What do you know about hazing? You read those horror stories in the paper, but in life, somebody has to teach a young soldier how to serve properly,” he said. “I was taught by older soldiers. And we are not in a kindergarten, after all. It can be a bit rough, but everyone goes through it.”
Anatoly Kucherena, a member of the newly formed Public Chamber, a quasi-governmental civic advisory panel, reported Thursday that soldiers interviewed by a fact-finding committee routinely denied witnessing any wrongdoing. “It seemed as if someone had spent a long time turning the soldiers into zombies,” he said.
Kucherena said he spoke to the sergeant singled out by Sychyov and asked him what had happened. “He replied: ‘I actually only hit him one time. But what happened was that I ordered him to make his bed and he refused. So then I started teaching him how to behave.’” 
“One should understand one very simple thing: Hazing is wild, barbaric, and also the only system of keeping discipline within barrack rooms,” Moscow military analyst Alexander Golts said. “The Russian army simply doesn’t know another system of keeping discipline.
“This hazing at the end of the day is the result of the entire attitude of the army, and the way it fights,” Golts said. “The attitude is that if a soldier is only needed [to live through] one battle, you don’t need a well-educated and well-trained soldier.”
Zinchenko said that if the army would not look after its recruits, their families and the public must. She cited a recent call from a mother who said she had returned her son to the army three times. He had just run away for the fourth time, and disappeared. 
“I told her: ‘Do you want him to come home in a coffin?’’’  Zinchenko said. “I say, ‘Why are you doing this?’ She says, ‘The officers called him, and said they’ll put him in prison.’ I told her, ‘He would be better off in prison than in the army!’ “

TITLE: Police Pull Over Cars During Drivers’ Protest Rally
AUTHOR: By Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — Traffic police stopped hundreds of drivers for document checks and purported traffic violations in western Moscow on Sunday, breaking up a protest of at least 1,000 drivers over the conviction of a fellow driver and the use of flashing blue lights and sirens on bureaucrats’ cars.
In all, thousands of drivers took to the streets across the country over the weekend to denounce VIP cars and the conviction of Oleg Shcherbinsky in the car crash that killed Altai Governor Mikhail Yevdokimov last year, said the rally’s organizer, the Free Choice Motorists’ Movement, a nongovernmental organization. Similar grassroots protests have been rare during President Vladimir Putin’s six years in office.
Shcherbinsky, a railway worker, was making a left turn off a highway in the Altai region in August when the Mercedes carrying Yevdokimov raced up from behind at a speed of 149 to 200 kilometers per hour, or perhaps even more. The Mercedes tried to pass on the left, grazed the car and flew off the road. 
The governor, his bodyguard and his driver died. An Altai court ruled on Feb. 6 that Shcherbinsky should have yielded to the governor’s car and sentenced him to four years in a labor colony.
At least 500 cars, many flying orange and black ribbons and carrying signs reading “Today Shcherbinsky, tomorrow you” and admonishing the “hot rods with sirens” driven by bureaucrats, gathered on Krylatskaya Ulitsa, in western Moscow, at the start of the protest at 12:30 p.m. 
A second convoy of about 500 cars left an hour later. Participants traveled slowly and with their emergency lights blinking to Vorobyovy Gory, in southwestern Moscow.
 The cars, however, became engulfed in surrounding traffic, and many drivers were pulled over by traffic police, who were stationed at every kilometer along the route. One driver in a beat-up van said he had been pulled over after going through a green light. 
A Moscow Times car following the convoy was pulled over and fined 100 rubles after going through a yellow light. 
An unidentified police official told Interfax that officers had broken up the convoy into groups of three to five cars to prevent a traffic jam.
The leader of the Free Choice Motorists’ Movement, Vyacheslav Lysakov, declared the protest a success, despite “minor interferences” by the police. 
“Today’s protest wasn’t only about one man,” Lysakov said of Shcherbinsky. 
“It was a step toward developing civil society in Russia, and I think the powers that be understand this.”
Lysakov said 2,000 to 4,000 cars took part. A police source told Interfax that the figure was closer to 250 — an estimate that Lysakov called “just stupid.”
Lysakov had refused to associate the protest with any political ideology. 
But Vladimir Pribylovsky, head of the Panorama think tank, said it was impossible to completely separate the battle against flashing blue lights and sirens from politics. “It is political in that it is anti-bureaucratic,” Pribylovsky said Sunday. 
“The bureaucrats are the ruling class that have put in place feudal privileges for themselves, including the right to do whatever they want on the road at the expense of the common man.”
Rally participants voiced similar disdain for the lights and said they hoped their actions would help secure a retrial for Shcherbinsky.
Roman Popov, a 28-year-old computer programmer, said sirens should be reserved for police cars, ambulances and fire trucks. 
“Right now anyone who makes it to the feed trough can get a siren and [official] license plates and not give a damn about traffic laws,” he said.
Pavel Shyolkov, 38, a businessman, complained that bureaucrats felt that they were above the law. “Thank God I’ve never been in an accident with someone with a siren, but almost all of us have seen how some car with a siren tries to nudge you out of the way or just drive down the middle of a two-way street,” he said.
Similar protests were to be held in 21 other cities over the weekend. Lysakov said participation figures were still rolling in Sunday evening.
Around 1,000 people attended a protest on Sakharov Square in Barnaul, the capital of the Altai region, on Saturday, NTV television reported.
Meanwhile, the Union of Coordination Councils, a coalition of small NGOs born out of protests over the monetization of state benefits last year, organized rallies in several cities over the weekend to protest rising housing and utility costs. 
About 1,000 people participated in a demonstration in Izhevsk, in the Udmutria region, on Sunday, Interfax reported. 
Andrei Demidov, an organizer, said about 50 people showed up on Pushkin Square.

TITLE: Pro-Putin Youth Movement Pressures Perm’s Governor
AUTHOR: By Francesca Mereu
PUBLISHER: Staff Writer
TEXT: MOSCOW — About 400 members of the pro-Kremlin youth group Nashi converged on Perm last week to stage a protest against the governor, Oleg Chirkunov, for allowing a member of a far-right group to speak at a youth forum.
Political observers, however, said the protest had less to do with fighting fascism than with influencing next month’s Perm mayoral elections, in which a Nashi-backed candidate is running against the governor’s candidate. 
The Nashi protesters gathered Thursday morning in front of the Perm legislature, waving signs with Chirkunov portrayed as Hitler and calling for “fascists” to be “kept away from politics.” They demanded that the governor apologize to veterans who had fought against the Nazis in World War II or resign.
The protest was organized after the governor, who attended the youth forum in Perm on Feb. 3, allowed a member of the People’s National Party to speak, Nashi spokesman Robert Shlegel said Friday. “We gave the governor three days to publicly apologize to the World War II veterans of Perm and other Russian citizens, but he didn’t. So we gathered and went to Perm,” Shlegel said.
The Nashi activists traveled from Moscow, Nizhny Novgorod, Tver, Voronezh and Yaroslavl.
The protest ended after the governor posted a statement on the region’s web site saying that “in the Perm region there will never be space for organizations and movements that call for race and national hate.
“I’m truly sorry if what has happened has offended the feelings of the deeply respected veterans,” the statement said.
After learning that the statement had been posted, Nashi ended its protest, which had lasted about four hours.
At the forum, the People’s National Party member, who also identified himself as a member of the Movement Against Illegal Immigration, told the governor that the group had decided to turn to legal methods of waging its political battles, finding illegal methods ineffective, Novaya Gazeta reported on Thursday from Perm. 
Nikolai Petrov, a regional analyst with the Carnegie Moscow Center, said the Nashi protest should be seen in light of the March 12 mayoral election.
“We should not underestimate the next mayoral election, in which a candidate close to the governor is running against another who is close to Nashi,” Petrov said. 
Acting Perm Mayor Igor Shubin, who has the governor’s support, is running against Vladimir Plotnikov, the head of the Perm Patrioty Prikamya, a group of “patriots” from a region on the Kama River. The movement has close links to Nashi, and last May, when Nashi organized demonstrations all over the country, Patrioty Prikamya organized the demonstration in Perm.
Petrov said Thursday’s protest was also intended to discredit the Union of Right Forces, whose chairman, Nikita Belykh, was at the youth forum. One of the Nashi signs read: “Chirkunov, Belykh — a fascist group.” Belykh is a deputy governor of Perm.
Alexei Titkov, a regional expert with the Institute of Regional Studies, said Nashi had demonstrated against Chirkunov because, even though he was nominated for the post by President Vladimir Putin, he was one of the few governors who was not a member of United Russia.

TITLE: New Ad Regulations Jump Major Hurdle
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: A hotly contested bill on advertising passed the crucial second reading in the State Duma on Friday, provoking strong protests among market players.
Protecting consumers, the new law prohibits the use of children’s images in the advertisement of alcohol, beer, tobacco and gambling. It will also be illegal to feature the processes of alcohol drinking and tobacco smoking, as well as images of doctors and pharmacists. ‘Umbrella’ brand names, which formerly often disguised advertisement of prohibited products, are also now banned.
The most contentious issue concerns television advertising. Since July 1 advertisement can not exceed 15 percent of daily broadcasting and 20 percent of hourly broadcasting. A break for adverts should not last longer than four minutes.
According to the law, only companies and persons are regarded as program sponsors but not particular products and brands.
The sound level of adverts should not exceed that of programs. The law also regulates TV shops, scrolling lines and other advertisement technologies.
The law prohibits all forms of spam distributed against the will of recipients.
Agreeing with the idea of protecting consumers in general, experts spoke out against the particular limitations defined in the law.
The president of Association of Television Broadcasting Companies Eduard Sagalayev speaking about the law on the Vremena talk show Sunday, said it would considerably decrease the total volume of television advertisement and increase fuel prices.
Higher prices would make TV advertisement unaffordable for Russian producers and deprive small independent TV channels of financial resources, Sagalayev said.
In response to the banning of adverts on vehicles from 2008, the Mobile Advertisement Association filed a letter of protest to the State Duma last week saying the law “leads to monopolization of the outdoor advertisement market and threatens its civilized development.”
“In Europe and the United States mobile advertisement on transport vehicles has been in use for a long time and is regulated by law providing thousands of jobs and stable income to the state budget,” Yelena Danielyan, president of the association, said in the letter.
According to the association, over 3,000 people are employed in this sector in Russia.
The association denied allegations that it had prohibited products and created traffic jams, saying 100 dedicated advertising vehicles in a city like Moscow “is not really that much.”
According to association statistics, during the two years that brand-mobiles have been used they have caused no accidents.
Victor Naumov, Head of intellectual property and information technology protection group at DLA Piper in St. Petersburg, said the law is the first attempt to regulate cyberspace advertisement on the legislative level. 
“This concerns remote sales, which include eCommerce, and electronic advertising in general. The latter permits only the opt-in advertisement, when subscription or consent for the receipt of information is required. An important assumption is introduced, according to which, advertisement is deemed distributed without prior consent if the advertiser does not prove that such consent has been obtained,” Naumov said.
The law bans automatic mass mailings and imposes an obligation that advertisement be stopped if an entity or individual has demanded it.
With this law, Naumov said, Russia “could become one of the countries with the most rigorous restrictions on cyberspace advertisement.”
However, he noted, to enforce the new law will be difficult due to the complexity and cost of control compared to the small penalties spammers will be faced with.
Identification of the person who violates the law and proving his guilt is another serious problem.
In order to fight spam, Naumov suggested, amendments would also have to be made to the law “On communication” and to the new edition of the law “On information, informatization, and information protection.”

TITLE: City Retailers Join Rich-List
AUTHOR: By Yevgenia Ivanova
PUBLISHER: Staff Writer
TEXT: St. Petersburg can finally boast its own dollar billionaire, according to an annual rating published Monday by economic weekly Finance. The magazine found Andrei Rogachev, the man behind one of Russia’s biggest supermarket chains Pyaterochka, to be the city’s wealthiest businessman. According to the findings, his fortune amounts to $1.2 billion. 
Not only did Rogachev manage to get into the rating of dollar billionaires but he, together with Rustam Tariko ($1.6 billion, Russian Standard vodka producer) and Sergei Galitsky ($ 1.05 billion, Magnit supermarket chain) represent an unprecedented case in the rating’s history. For the first time the rating featured people who made their billions from scratch rather than from the privatization of state-owned assets.
Alexander Girda, who also owns a share in Pyaterochka, and takes 51st place in the national rating, was the city’s second-richest man with a reported wealth of $975 million. As confirmation that retail is one of the city’s most profitable ventures, Oleg Zherebtsov of the Lenta supermarket chain was third on the city list, with a fortune of around $700 million.  Compared to last year’s list, the Russian rich have become significantly richer, said Oleg Anisimov, the chief editor of Finance speaking with the St. Petersburg Times Thursday. Anisimov attributes this increase in fortunes to the fast growth of business activity in the country in general, a positive shift in stock market evaluation and the process of legalization of capital in Russia.

TITLE: City Attracts ‘Primitive’ Assembly, Producers Take Profits Elsewhere
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: One of City Hall’s most important achievements in 2005 was to nearly double the city budget, Vladimir Blank, chairman of the committee for economic development, industrial policy and trade said last week at a press conference. Analysts said that although economic figures for last year were within the country average they were indicative of certain negative tendencies.
“Despite significant growth in the budget, the tax burden on business did not increase. The increase in treasury income was mainly due to economic growth,” the committee press service quoted Blank as saying.
Last year budget surplus was $212.35 million though city authorities expected a $314.9 million deficit. Total income was $4.9 billion. The surplus was a result of increased tax payments, Interfax cited city vice-governor Mikhail Oseyevsky as saying earlier this month.
Income tax payments increased by 29 percent, while profit tax from commercial companies grew by 57 percent.
Nevertheless, the city budget for 2006 was again approved with an expected deficit of $358.9 million. In 2005 local industrial production grew by 4.2 percent as opposed to 14.1 percent in 2004. 
Anton Struchenevsky, an economist at Troika Dialog brokerage considered such industrial growth to be normal.
“In general, growth in industrial production in St. Petersburg corresponds to the average rate across Russia,” Struchenevsky said.
According to published data, the most significant growth was reported last year in machine and equipment production — 116.8 percent. 
Chemical production grew by a factor of 2.2 Increases in food and drink production included champagne, at 38.4 percent, fruit juices at 24.6 percent, cognac at 22.3 percent, soft drinks at 19.1 percent and confectionery at 18.5 percent.
From January to November 2005 investment in fixed capital reached $3.9 billion and foreign investment in non-financial industries reached $899.3 million.
According to City Hall, over 50 Russian and foreign companies held negotiations about locating production facilities in the city last year. Production at the Russky Standart alcohol plant will be launched in the first half of 2006 and the Izhorsky Pipe Plant and Alcan packaging plant are to start operating in the second half of the year.
In spite of these statistics, local experts were far from optimistic about the city’s rate of industrial development.
“While we hear declarations about increasing our effectiveness and competitiveness on the global market, about developing high technologies, in reality it is quite the opposite,” said Victor Masalov, director for industrial policy at the St. Petersburg Union of Industrial Companies and Entrepreneurs.
“Investors that come to the city set up primitive assembly lines here like the plants they establish in Thailand, Indonesia and Malaysia,” he said.
“Competitiveness means developing scientific and engineering research centers, developing quality management systems for products and production processes,” Masalov said.
But producers that came to St. Petersburg left those activities, which account for up to 75 percent of their profits, in other countries, he said.
Masalov also indicated an “uneven and unfair distribution of profits” between local companies as a serious problem for the city economy.

TITLE: VimpelCom Offers to Buy Up Kyivstar for $5 Billion
PUBLISHER: Bloomberg
TEXT: MOSCOW — VimpelCom, Russia’s second-biggest mobile-phone company, offered to buy Ukraine’s VAT Kyivstar for $5 billion, fueling a corporate governance dispute among its main shareholders.
VimpelCom made the offer for Kyivstar, Ukraine’s second-largest mobile-phone company, to owners Telenor ASA and Altimo, the Moscow-based company said in a PRNewswire statement. 
Telenor, Norway’s largest phone company, owns 57 percent of Kyivstar, and Altimo, Alfa Group’s telecommunications arm, has the rest.
Telenor and Altimo have been in a dispute over their assets in Russia and Ukraine for the past year. Altimo has sought to merge VimpelCom with Kyivstar, which Telenor opposes because it wouldn’t have a controlling stake in the combined company. Altimo holds 32 percent of VimpelCom and Telenor has 26 percent. Oslo-based Telenor Monday said it won’t consider the offer until the existing dispute with Altimo is resolved.
“This bid has everything to do with the conflict,” said Espen Torgersen, an analyst at Carnegie in Oslo. 
“It has to be voted on in the board of directors and Telenor could block it there.”
VimpelCom shares fell 0.3 percent in New York on Friday to $44.74, valuing the company at $9.2 billion. Telenor shares fell as much as 1.75 krone, or 2.5 percent, to 67.25 kroner, and traded at 67.5 kroner as of 2:50 p.m. in Oslo. Kyivstar, which had 14.4 million subscribers on Jan. 31, is not publicly traded.
VimpelCom said the purchase would put it closer to becoming “the number one telecoms company” in the former Soviet Union.
Moscow-based Mobile TeleSystems, controlled by AFK Sistema, is now largest mobile-phone company in the former Soviet Union.
VimpelCom has been seeking to expand in Ukraine, the second-largest country in the former Soviet Union, where subscriber growth rates are higher than in Russia. VimpelCom last year bought Ukrainian Radio Systems, a mobile-phone company that owns the WellCom brand. 
The purchase has been contested by Telenor.
“In the long run, it would be best for all shareholders as it would create synergies for the two companies,’’ said UralSib Financial Corp. analyst Konstantin Chernyshev in Moscow.
“The valuation of Kyivstar looks reasonable. At $350 per subscriber it is above Russian operators’ current $265 per subscriber, though Kyivstar’s growth potential may justify this premium,” Moscow-based brokerage Aton Capital Group said in a note. 
“We see the news as positive for VimpelCom stock.”
VimpelCom is offering an “expensive” price and it’s unlikely Telenor would accept the bid because it would lose control over the Ukrainian asset without gaining control over the merged company, JPMorgan Chase & Co. analysts including Jean-Charles Lemardeley said in a note to investors.
Telenor would own about 36 percent of VimpelCom if it sold its stake in Kyivstar for VimpelCom shares, UralSib’s Chernyshev said. Altimo is unlikely to let Telenor gain control, he said.
“We believe the acquisition of Kyivstar will create significant value for all our shareholders and provide an opportunity to create more value than on a standalone basis,”

TITLE: IN BRIEF
TEXT: Naftogaz Loan
KIEV (Bloomberg) —  Depfa Investment Bank Ltd. agreed in December to loan $220 million to NAK Naftogaz Ukrainy, Ukraine’s state-run oil and gas company, Naftogaz officials said.
The five-year loan was given at 1.75 percentage points over the London interbank offered rate, the news agency Interfax-Ukraine, citing a source in Ukraine’s government.
“We have signed a contract,” Dmytro Marunych, a spokesman for Naftogaz, said in Kiev. He provided no details.
Deutsche Bank AG opened a 2 billion-euro ($2.4 billion) credit line for Naftogaz in March 2005 during Ukrainian President Viktor Yushchenko’s visit to Germany. The company last year drew $600 million of the credit line.
Naftogaz may use part of the Deutsche Bank credit to build a $3 billion terminal on the Black Sea to take imports of liquefied natural gas, Eduard Zvenyuk, a Naftogaz spokesman, said Jan. 17.

Lukoil Acquisitions
MOSCOW (Bloomberg) — Lukoil, Russia’s biggest oil producer, plans to make acquisitions in Europe and the U.S. to make money from selling oil products directly to customers, not just from selling its crude oil to refiners.
“We believe that we’re as close as possible to making large acquisitions in the European and American market,” Lukoil Chief Executive Vagit Alekperov said Monday in a meeting with Russian President Vladimir Putin, which was shown on the state-owned Pervy television channel. He didn’t give more details.
Alekperov told Putin the extra value from fuel sales would keep the company from losing money selling Russia’s Urals blend of crude oil. The extra revenue would stay in the country, he said.

VSMPO-Avisma Profit 
MOSCOW (Bloomberg) — VSMPO-Avisma made a $228.5 million profit on sales of $746.4 million last year, Interfax reported Monday, citing an unidentified company source.
The results are to Russian accounting standards, Interfax said, without giving figures from a year earlier. 
VSMPO-Avisma is the world’s biggest miner of titanium, a metallic element used to make weapons as well as airplanes and golf clubs.
Trading in shares of VSMPO was halted Oct. 13 after a Russian court froze 73 percent of the company’s stock following a claim filed by Russian billionaire Viktor Vekselberg’s  Renova. 
Renova sold a 13 percent stake in VSMPO this year to some of the company’s managers and wanted the sale voided.Trading in the shares resumed Jan. 26. 

Highland Resignation
St Helier, Jersey (Bloomberg) — Highland Gold Mining Ltd., which runs two mines in Russia, said Dmitry Korobov, its managing director, has resigned.
Korobov left the company on Feb. 12 “to pursue other interests,” it said in a Regulatory News Service statement Monday. He will be succeeded by Henry Horne, who joined Highland’s Russian management company in October, the company said.
The shares fell 4 pence, or 1.3 percent, to 311 pence as of 2:10 p.m. in London, valuing the St. Helier, Jersey-based company at $862 million. 

Polyus Loan 
MOSCOW (Bloomberg) — Polyus, the gold arm of Russia’s biggest miner,  GMK Norilsk Nickel, may borrow as much as $1 billion at the end of 2008 or beginning of 2009 to develop existing gold mines.
Decisions on how the money will be raised will be made nearer the time, Polyus spokesman Denis Davydov said in a telephone interview Monday.
Moscow-based Norilsk is spinning off Polyus, a 20 percent stake in Gold Fields Ltd., the world’s No. 4 gold producer, and 10 billion rubles ($352 million) in cash to create Polyus Gold. Aton brokerage values the new company, which will be owned by existing Norilsk shareholders, at as much as $4 billion. 

MTS Talks 
MOSCOW (Bloomberg) — Mobile TeleSystems is in acquisition talks with three companies in former Soviet states, Chief Executive Officer Vassily Sidorov told the Wall Street Journal in an interview published Monday.
Moscow-based Mobile TeleSystems is Russia’s largest mobile phone operator and is interested in buying companies in all the former Soviet states except Latvia, Lithuania and Estonia, Sidorov told the newspaper.
The company would pay a premium for the leading company in each country, or the first entrant into a new market; it likes local partners, and seeks to boost ownership to 100 percent later, Sidorov said, according to the Journal. 
The sale to investors of Russia’s state-owned telecommunications company, Svyazinvest, could open acquisition possibilities at home, the newspaper cited him as saying.

TITLE: Putin Urges Investment in UES
PUBLISHER: Combined Reports
TEXT: MOSCOW — President Vladimir Putin urged the government on Friday to spur upgrades of the power sector and encourage investment in electricity monopoly Unified Energy Systems, warning that the industry was stretched by growing economic demand.
The remarks came as Moscow and a number of other regions in European Russia were recovering from some three weeks of unusually cold temperatures that put the energy supply system under serious strain and forced UES to introduce limits to electricity use for a number of industrial consumers in the capital. The situation, however, only highlighted long-existing problems faced by the nation’s aging power grid.
“Lately, we’ve been talking about the problems of the power sector quite often, and the reason is not only the cold weather,” Putin said at a rare meeting with UES chief Anatoly Chubais and energy officials from the government held in the Novo-Ogaryovo presidential residence on Friday, the transcript on the presidential web site said.
“The deficit in power production could limit economic growth. … I’d like to hear an exact proposal on future steps regarding the modernization of the power sector that would be connected with the creation of appropriate conditions to attract private capital, both domestic and foreign,” Putin said.
Prior to the meeting, Chubais urged Putin to allow stakes in generating companies to be floated on foreign stock exchanges. 
“We are ready to start floating generating companies this year and could raise $3 billion in the next two years,” he said in an interview in Friday’s edition of the Financial Times. 
UES has monopoly control of the electricity market via majority stakes in 73 regional power distribution firms now being broken up under reforms of the power sector that affect every home and business in Russia. 
The breakup of UES is seen as a litmus test of the appetite for reform in Russia. Russia’s coldest winter in 30 years has exposed an acute shortage of generating capacity, Chubais said. 
“The system physically cannot cope with demand,” he said. “Even if we invest today, we are not going to see the result for the next three years.” 
UES calculates that the aging power network needs investment of some 15 billion rubles ($531 million) per year just to keep the heating and lights on in homes and businesses. 
Large cities such as Moscow have long surpassed any consumption forecasts made during Soviet times, when most of the energy production and supply facilities were created. However, the much-needed power sector reform has faltered in recent years as the Kremlin has extended its control over strategic assets, particularly in the energy sector. 
No deadline has been set for the completion of the reform, although in 2001 the government planned that the UES reform would be over by March 31, 2004. Chubais at the time also promised that once the reform was complete he would step down from his job.
UES is lobbying for an increase in electricity prices in Russia, which are regulated by the state. But analysts say the Kremlin is not keen on drastic reforms that would affect people’s pockets ahead of the 2008 presidential elections.
UES shares jumped more than 5 percent on Putin’s comments to 55 cents on a market irked by delays in power sector reforms, the most complicated restructuring ever undertaken in Russia. 
Support from Putin is crucial for reform of the sector, which has suffered years of underinvestment and has stretched to the breaking point to meet rising demand. 
“We regard Putin’s remarks as a vote of confidence. His support is very important,” said Alfa Bank trader Shani Kogan. 
(Reuters, SPT)

TITLE: Mechel CEO Resigns, Sparking Breakup Talk
AUTHOR: By Yuriy Humber
PUBLISHER: Staff Writer
TEXT: MOSCOW — Mechel co-founder and CEO Vladimir Iorikh is to step down in the next 12 months and sell his 42.2 stake in the steel and coal producer, the company said Friday in a statement. 
The move will allow the company’s chairman and other co-founder, Igor Zyuzin, to take control of Mechel, lifting his 42.2 percent stake to at least 51 percent, Mechel said. Zyuzin has an option to purchase Iorikh’s entire stake, currently worth about $1.7 billion, within 12 months. 
The shift in ownership could signal plans to break up the company’s steelmaking and coal businesses, analysts said.
Over the next year, Iorikh’s responsibilities at Mechel, Russia’s fifth-largest steelmaker, will be passed on to chief operating officer Alexei Ivanushkin, the company said. “I will fully cooperate with [Ivanushkin] during the transfer of responsibilities,” Iorikh said in a statement.
“We’re seeing all the steel generals relinquishing control and passing on the company management to others,” said Timothy McCutcheon, a metals analyst at Aton. “And why not? This is a good time. U.S. steel prices are starting to weaken, ... and 10 years is a long time to be in the metals business.”
In a similar move, Evraz Group’s largest shareholder, Alexander Abramov, recently quit as head of the country’s largest steelmaker.
Analysts were surprised by Iorikh’s decision to get out of the $4 billion business he helped set up in the early 1990s. It could be the start of major restructuring, they said.
While half of Mechel’s annual revenues come from steel, that side of the business requires a lot of investment, which cuts into profits, analysts said. “Their steel assets have not been very competitive,” said Rob Edwards, a metals analyst with Renaissance Capital. Last year, the company’s steel output dropped by 5 percent, to 5.9 million tons. 
Analysts said Zyuzin would probably push for the development of Mechel’s coal mining, where he has more experience. Mechel started as a coal mining company with several mines and processing plants in southwestern Siberia. 
But even in coal, the company’s current business strategy is causing concern, analysts said. Mechel raised production of steam coal last year, while cutting its output of more profitable coking coal. That increases its exposure to the energy market, which has different drivers, McCutcheon said. Steam coal is sold to power plants, while coking coal is used in metals processing.
How Zyuzin will finance the purchase of Iorikh’s shares remains unclear. One of the options for Zyuzin is “a strategic partnership,” Mechel said, without elaborating.
Vasily Nikolayev, a metals analyst at Troika Dialog, said Zyuzin would have no problem raising the money through bank loans should he wish to purchase the stake personally.

TITLE: Avoiding Double Trouble : A Taxing Question
AUTHOR: By Larisa Naumenko
PUBLISHER: Special to The St. Petersburg Times
TEXT: Where to pay income tax and how to avoid double taxation are serious questions for any expat. Even when there are double-tax treaties between Russia and an expat’s home country, it can be difficult to work out what they actually mean in practice. 
Russia has double-taxation treaties with more than 60 countries, including Britain, the United States, Canada, Australia, New Zealand, Germany, France and Italy. The treaties aim to determine which country has priority to tax income and how to eliminate double taxation.
If a foreign citizen is in Russia for 183 days or more in a calendar year, then he or she becomes Russian tax resident and must pay tax on worldwide income in Russia.
However, those who are tax resident in Russia may in some cases remain tax resident in other countries at the same time.
“There are typically a series of so-called ‘tie-breaker’ tests to determine the country of residency for treaty purposes,” said Tim Carty, partner at the human capital group of Ernst & Young in the CIS.
The first step in determining tax residency is usually to look at home ownership in either country. If a person has homes in both or neither of the two countries, the next step is where a person lives. If that is unclear, the determining factors are vital interests — including investments, work, family and club membership — then nationality.
A foreigner whose country of residency is not Russia typically has to pay Russian taxes only on Russian-source income.
“For most people, this would mean Russian investments and income derived from working here, even if it is paid outside of Russia, which is a point many people may not focus upon,” Carty said.
When there are treaties between Russia and a country of origin, those foreigners may be eligible for tax credits.
For example, imagine the case of an individual who is tax resident in Russia while also being tax resident of another country, and viewed as a resident of the second country under the tie-breaker clauses in the treaty. He earns 200 rubles, of which 100 rubles is for work done in Russia for a Russian company and 100 rubles is for work done in the second country for a company based there. He pays the 13 percent income tax in Russia. He determines that his tax rate in the other country is 40 percent and that it applies to worldwide income. Under the credit system, he would pay 80 rubles of tax, minus 13 rubles credit for his Russian taxes. Net tax is 67 rubles, and with the addition of the Russian tax of 13 rubles, the total tax paid is 80 rubles.
While citizens of most countries can terminate tax residency, it is impossible for those from the United States.
“U.S. nationals and U.S. green card holders always are liable to tax on worldwide income, no matter what the circumstances are,” said Nancy MacEntee, senior tax manager at Deloitte in Moscow. “Therefore, a U.S. individual will always have to file a U.S. tax return. Depending on a number of factors, he will be able to use a credit of taxes he paid in Russia.”
Ernst & Young’s Carty added that under to the protocol attached to the double-tax treaty between Russia and the United States, U.S. nationals who are tax residents in Russia only pay Russian tax on the income that comes from Russian sources.
Moreover, MacEntee said, even if U.S. citizens pay income tax in Russia, they will still have to pay “top-up” taxes equal to the difference between their U.S. effective tax rate and the 13 percent rate for Russian tax residents.
“U.S. taxpayers may also get to exclude $80,000 of foreign-earned income plus some additional amount related to foreign housing costs, and the interaction of this exclusion and foreign tax credits is a complex area,” Carty said.
Carty added that some countries, including Belgium and Germany, use a system known as “exemption with progression.”
Under exemption with progression, the citizen described in the previous example exempts 100 rubles of income from German tax because it has already been taxed in Russia. So he pays 40 rubles of German tax on the German 100 rubles, and 13 rubles of Russian tax on the Russian 100 rubles. His total tax is 53 rubles, compared with 80 rubles paid under a tax credit system.
Still, even when foreigners are eligible for tax relief under a treaty, it is not automatically granted to them.
“Relief from double taxation under treaty technically has to be claimed with the Russian tax authorities, and this process can often be very complex and administratively burdensome,” Carty said, adding that Russian law imposed a time limit for making a tax relief claims.
Under Russian tax legislation, such claims must be made by Dec. 31 of the year after that in which the money was earned.
Things are more complicated for citizens of countries that do not have double-tax treaties with Russia.
MacEntee said Russia did not give foreign tax credits in the absence of treaties.
However, things are not all bad.
If expats terminate tax residency in their home countries, then they are required to pay only local tax on income coming from those countries.
It is only when people remain residents or continue receiving income as non-residents from foreign countries that they may have to pay double taxes on their worldwide income, unless their home countries give double-taxation relief under domestic laws.
“Close scrutiny of any applicable rules would need to be made to see if anything beneficial exists and would apply,” Carty said.

TITLE: New Subventions Set To Finally Attract Investors
AUTHOR: By Sophia Bezborodkina
TEXT: As a means of attracting investment Russian regional authorities may offer concessions on profit tax. Since the enforcement of Part 2 of the Tax Code, however, their rights have been significantly curtailed, and the maximum incentive that can be offered is a 4 percent reduction in the tax rate. Nevertheless, through the use of subventions the authorities have found an opening that allows tax benefits approaching the same level as in the good old days. 
The right to profit tax subventions has been envisaged for investors in the Leningrad Oblast since the year 2000. However, no one has actually benefited yet from these alleged tax breaks. Throughout this period, subventions have been the subject of numerous discussions concerning their validity, tax practice, etc. So naturally it was a pleasure to see the Russian Supreme Court in April 2005 confirm the right of authorities to provide subventions to commercial legal entities. Perhaps it was this ruling which encouraged Leningrad Oblast lawmakers, in the regional budget for 2006, to approve subventions that compensated investors for the limited reduction in profit tax. It is difficult to overestimate the importance of this fact for investors, but it would also be prudent to be aware of the potential issues and pitfalls.
The right to obtain subventions is provided for by the regional law “On state support of investment activity in the Leningrad region.” Subventions are granted to investors who have entered into an investment agreement with the regional government and have provided a business plan for their investment project; the business plan should be based upon a calculation of the planned payback period and be written or approved by an accredited company.
These subventions may lead to a substantial reduction in the effective tax on profit: it could be 6.5 percent during the payback period and for companies investing more than $50 million it would continue for two years after the payback period.
However, what makes a good saving for the taxpayer is a significant expense for the regional budget. The law on the 2006 regional budget for Leningrad Oblast has set aside 600 million rubles ($20 million) for the payment of subventions to investors, and this may still not be enough to meet investors’ requirements.
Subventions are not granted automatically. To obtain them the investor should submit a number of documents to the Financial Committee of the Leningrad Oblast. These include as a minimum, a calculation of the total amount of subventions, profit tax returns, and reports for the financial year performed by a consulting company accredited by Leningrad Oblast authorities.
However, the new regional budget law does not answer some outstanding questions which could well turn out to be crucial to investors, and may hinder the effectiveness of the subvention mechanism.
As mentioned above, the stipulated amount of 600 million rubles may not be sufficient for the number of investors wishing to claim subventions. This could result in a situation where the funds reserved for subventions are exhausted before all subventions are paid out. It is not clear what the regional Financial Committee could do in these circumstances. Neither the Financial Committee nor the regional authorities are authorized to increase the total amount – this can only be done through respective amendments to the budget law, i.e. by the legislature.
According to the recently amended concept of budget immunity, any monetary claims from the budget can only be resolved in court. As such, if the investor is late in submitting the documents confirming his right for a subvention, it may be impossible to get the subvention without going down such a route.
Furthermore, the law does not stipulate which year’s profit tax may be covered by the subventions — is it only the year immediately preceding the year the subventions were paid (2005 with regard to the subventions in 2006), or any preceding year? 2006 is the first year for which provision of subventions is planned, however there are a number of companies which have paid profit tax in previous years and potentially could have it reimbursed through the subventions mechanism. It is not entirely clear at the moment whether the regional government is keen to reimburse these past payments, nor is the likelihood known of a successful outcome for the investor should a dispute arise.
Another issue is the lack of set procedure for the provision of these subventions. Will an independent decision be made by the Financial Committee and sent to the investor, or will the subventions be automatically transferred to the investor’s account? 
The application processing period is not stipulated either. Moreover, measures should be taken to deal with the contingency whereby an application for a subvention may be fully or partly refused — for instance, if the amount of prospective subventions significantly differs from that provided in the payback calculation, which is a part of the investment agreement; to this end, an exhaustive list of grounds for refusal should be stipulated by law.
Regional authorities have until the end of March (when the 2005 annual profit tax returns are submitted and the profit tax paid) to adopt the appropriate bylaws and resolve these issues.

Sophia Bezborodkina is a tax consultant at Deloitte’s St. Petersburg office.

TITLE: Russia’s Return to World Power Status
TEXT: Agence France Presse
Russia marked its chairmanship of the Group of Eight powers this weekend with a distinct swagger.
Russia has taken a lashing this year over a crackdown on non-governmental organisations, Chechnya, and hard-nosed — some say hostile — energy policies toward neighbouring, pro-Western countries such as Ukraine and Georgia.
But that criticism was water off a duck’s back Friday and Saturday as Moscow hosted the Group of Eight’s finance ministers for talks on improving the global energy supply system.
“Nobody doubts Russia being a full member of the G8,” Finance Minister Alexei Kudrin said to questions over Russia’s place in the elite club alongside Britain, Canada, France, Germany, Italy, Japan and the United States.
As the world’s second biggest oil exporter and owner of a third of world gas reserves, Russia cannot easily be pushed around.
“Western governments are pragmatic and to them energy is more important than democracy,” Vladimir Pribylovsky at the Panorama think tank in Moscow told AFP.
And with oil at about 70 dollars a barrel, President Vladimir Putin intends to play this energy card for all he can — and not in a way that the West will like, Pribylovsky said.
“The Kremlin is in euphoria over the forecasts for high energy prices in the coming years. They feel that methods of energy blackmail used against Ukraine and Georgia can be extended to make Russia a superpower again.”
The decision by Russian gas giant Gazprom in January to cut off supplies to Ukraine temporarily over a pricing dispute, as well as the mysterious sabotage of the main gas pipeline to Georgia prompted accusations of bullying.
Other Western concerns include what human rights organisations say are torture and secret executions in rebel Chechnya, Moscow’s support for authoritarian regimes such as Belarus and Uzbekistan, and a new law seen as curbing the freedom of NGOs.
But at the G8 finance meeting, Russia’s pledge to become a secure energy supplier earned rave reviews.
French Finance Minister Thierry Breton said that a “new phase of dialogue has clearly begun today” and echoed a call by German Finance Minister Peer Steinbruck to cement Russia’s role in the G8.
“Such an important partner must be with us at the table and not excluded,” Breton said.
Certainly, Putin has never sounded more confident.
“No one is against, all are in favour of Russia’s presence in the G8,” he said recently, declaring that his sternest Western critics deserved to be spat upon.
Such self-confidence is increasingly visible on the diplomatic stage, with bold initiatives possibly making Moscow key to mediating two of the world’s thorniest problems — the standoff over Iran and the Palestinian-Israeli conflict.
An Iranian delegation is expected in Moscow on February 16 to discuss the possibility of enriching uranium for Iran’s civilian nuclear programme on Russian soil.
Putin also caught the West by surprise Thursday by announcing an invitation to the Palestinian radical group Hamas for talks in Moscow.
The initiative caused outrage in Israel and bewilderment in the United States, which has refused to acknowledge Hamas as a partner following the militant group’s election victory in elections last month.
However, support soon came from France and on Friday even the United States said that it respected Putin’s “sovereign decision” after Moscow gave assurances it would press the militants to renounce armed struggle against Israel.

TITLE: It’s the Process That Counts
AUTHOR: By Cory Welt
TEXT: “We are not in favor of process for the sake of process itself. We want results.” So said Georgian Foreign Minister Gela Bezhuashvili on Thursday in addressing the lack of momentum for the peace process Georgia launched last year for resolving its conflict with the breakaway region of South Ossetia. For a peace process in its infancy, the foreign minister’s frustration is premature. 
Frustration is, however, understandable in the case of the elaborate peace process next door over the disputed region of Nagorno-Karabakh. In anticipation of the highly touted meeting on Friday and Saturday of the Azeri and Armenian presidents in Rambouillet, France, observers insisted that after years of process it was high time for results. The new Organization for Security and Cooperation in Europe chairman, Belgian Foreign Minister Karel De Gucht, said in January that a “window of opportunity” had opened for the Karabakh conflict to be resolved in 2006. 
While cautioning against hopes for an immediate breakthrough, observers still suggested that the two presidents might sign a short document laying out basic principles for the next stage of negotiations. The meeting ended Saturday, however, with nothing signed, and international mediators said Armenian President Robert Kocharyan and Azeri President Ilham Aliyev had made little progress during their talks.
“Despite intense discussion, the positions of the two parties about some sensitive principles remain identical to what they have been over the past months,” said a joint statement issued by French, American and Russian mediators.
Despite the dashed hopes, the apparent absence of progress at Rambouillet should not be taken to indicate that the Azerbaijani-Armenian peace process cannot succeed. It does, though, underline the fact that it is too soon to hope for a political settlement — which, in the variant most often repeated during the last year, would include the withdrawal of Armenian troops from virtually all occupied Azerbaijani territory in exchange for Azerbaijan’s consent to a future referendum on Nagorno-Karabakh’s independence. 
Azerbaijan is far from ready to sign an agreement that permits Nagorno-Karabakh, ever, to freely determine its political status. Alternatively, it is unimaginable that Armenia could be persuaded to agree to the return of Nagorno-Karabakh to Azerbaijan as part of any formal agreement. Hopes that either of these “minimal” criteria for a political settlement can be finessed are misplaced. Fundamental transformations in Azerbaijani and Armenian perceptions of national identity and security have to occur before their leaderships will agree to one or another of these bases for a political settlement, no matter what other components of a deal there may be. Armenia and Azerbaijan are too far apart in their political ambitions to be able to produce such a compromise settlement. 
But if final settlements to conflict are difficult to imagine, we can conceive of a compromise that is grounded in the process of settlement, rather than a permanent result. Armenia’s return to Azerbaijan of territories outside Nagorno-Karabakh coupled with Azerbaijan’s tacit acceptance of Nagorno-Karabakh’s unrecognized self-governance (and normalization of relations with Armenia) constitutes a realistic basis for compromise. By withdrawing from occupied Azerbaijani territories, Armenia will allow Azerbaijan to recover nearly two-thirds of the territory it has lost, achieve the return of almost all its internally displaced citizens, and gain continued de jure recognition of its territorial integrity. By normalizing relations with Armenia and tolerating a self-governing (if unrecognized) Nagorno-Karabakh, Azerbaijan will enable Karabakh Armenians to retain their security and political identity. Such a compromise will allow both sides to claim victory.
The problem, however, is that this compromise will also leave both sides with a fear that victory is fleeting. By withdrawing from Azerbaijani territories outside Nagorno-Karabakh, Armenia will lose its bargaining chip and outer line of defense, even if it does retain a land corridor to the region. Armenia will thus only have bought Nagorno-Karabakh time until Azerbaijan, flush with oil revenues, again demands the return of the region, this time from a considerably strengthened position. 
On the other side, by normalizing relations with Armenia and allowing Nagorno-Karabakh to develop freely, Azerbaijan will enable both of them to strengthen and consolidate their statehood, and set Nagorno-Karabakh on a trajectory toward independence or unification with Armenia that will be even harder to reverse. 
This is where supporters of the peace process have to come in. To bring the sides ever closer to a compromise of “process without results,” outside mediators must eradicate both Karabakhi Armenian fears of future vulnerability and Azeri fears of political defeat. 
Convincing Armenians that it will be impossible for Azerbaijan to use its liberated territories to threaten Nagorno-Karabakh while getting Azeris to agree that Nagorno-Karabakh’s free development is of no consequence to their national dignity are the tasks that lie before outside mediators, as well as their partners within Azerbaijan and Armenia who are still committed to peace. 
Even this late in the game, progress in the Karabakh conflict must still be defined in terms of process, not results. 

Cory Welt is a fellow at the Center for Strategic and International Studies in Washington and deputy director of its Russia and Eurasia program.

TITLE: Crime and Punishment on the Roads
AUTHOR: By Masha Gessen
TEXT: Driving in this country, one may be forgiven for wondering just why one is expected to get out of the way whenever a car with government plates and a single blue flashing light appears — and, as a rule, approaches at extraordinary speed — in the rearview mirror. 
Traffic laws don’t really spell out the special rights accorded to such cars; in addition, we know that many of the flashing lights and accompanying rude-sounding horns are installed by car owners without the requisite permits. But now there is a very good reason for getting out of the way of such cars: If you don’t, you could face jail time.
Oleg Shcherbinsky, a driver in the Altai region, was sentenced to four years in a labor settlement for the crime of not getting out of the way fast enough when a car carrying the regional governor approached. The governor’s Mercedes tried to pass Shcherbinsky’s Toyota at a reported speed of 200 kilometers per hour, but sideswiped him and flew off the road. Three people, including the governor, were killed. Whose fault was this? According to the court, it was Shcherbinsky’s.
How is it possible that a driver who was stopped (he was waiting to turn) in his own rightful lane was guilty of causing the death of people traveling in a car going twice the speed limit? The court ruled that the governor had a right to exceed the speed limit because he was in a rush to make it to a previously scheduled event. That is the incomprehensible legal reasoning. But what’s really fascinating is the philosophy behind this reasoning, and this sentence.
Russian officials believe they are immortal. They can drive at 200 kmph down bad roads, wearing no seatbelts, swerving in and out of oncoming traffic, and expect to survive. Or they can order pilots to fly in inclement weather — as Governor Alexander Lebed reportedly did the day he died in a helicopter crash (the pilots were sentenced to three and four years in prison). And if one of these officials dies in spite of all his special privileges, then it must be someone else’s fault — and that someone must be punished.
This country has seen this phenomenon before. Back in the early 1950s, when Stalin began to show signs of aging and ill health, it was the doctors who had to be punished: So was hatched the Doctors Plot, a supposed conspiracy of Kremlin doctors who poisoned their patients. It would have been heresy to suggest, much less imagine, that the Soviet generalissimo may one day die. Now it is heresy to suggest that any one of the many generals, ministers, governors and others equipped with a special blue light may be mortal.
Contrast this with another society in which some people believe death to be optional. Americans in the middle and upper classes are firmly convinced that death may be avoided. All you have to do is wear your seatbelt, eat your vegetables, do your exercises and avoid smoking. It is easy to run afoul of all the living-right rules: You do have to keep up to date on the latest medical discoveries, keep all your belts and helmets in order, and generally be ever vigilant. But the payoff is great: The New York Times, for example, reported last year that slightly overweight people “have a lower death risk than people of normal weight.” And here you thought risk of death was the same for everyone.
It is instructive to compare the different approaches to immortality in Russia and the United States. Americans believe the trick is in following rules, making rules into laws and following those even more stringently. Russians, on the other hand, believe that the trick is in doling out punishment. That sums up broader differences between the two cultures, too.

Masha Gessen is a contributing editor at Bolshoi Gorod.

TITLE: Goodbye Babylon
AUTHOR: By Chris Floyd
TEXT: That White Mule of Sin. Black Diamond Express to Hell. Woke Up This Morning With My Mind on Jesus. There Ain’t No Grave Gonna Hold My Body Down. 
The titles roll out like pulpit thunder, the ghostly rumble of a world long gone: the gospel songs and sermons of America’s rural poor, black and white, from the great outpouring of folk culture that rose in the Deep South during the first half of the 20th century. Emerging in the wake of cataclysmic upheavals — slavery, civil war, industrialization, dispossession, pandemic — these multivarious works together embody a spirit of death-haunted wisdom and transcendent longing, a deep and urgent yearning for liberation, for transformation, for joy and jubilee.
The essence of this profound spirit — one of the historic peaks of human creativity — can now be found in “Goodbye, Babylon,” a stunning compendium of 135 songs and 25 sermons put together by Dust-to-Digital in Atlanta. For those who know American religious faith only in the hideous guise it takes today — a degraded goon-show of nationalism, greed, partisan power-lust, wilful ignorance, sexual panic and bellicose self-righteousness — the collection will come as a revelation. For those of us lucky enough to have known firsthand the last, trailing ripples of that great wave — to have grown up in enclaves that were still steeped in those cadences, those yearnings — the work calls us back to a cultural home that has been destroyed, both by the inevitable ravages of time — and by deliberate perversion at the hands of ruthless hucksters, blinkered extremists and cynical elites.
The collection — six CDs packaged in a cedar box, with a thick booklet containing background notes on singers and preachers, and full printed lyrics and texts — was put together by a team of musicologists led by producer Steven Lance Ledbetter. It was actually released in 2003, but is now reaching a wider public, thanks in part to endorsements from the likes of Bob Dylan and Neil Young. The earliest song collected here goes back to 1902, while the latest trickles in on the dying wave in 1960, but the majority were culled from the remarkable quarter-century, roughly 1925 to 1950, that was the heart of American roots music, sacred and secular: the seedbed of the blues, country, soul, folk, gospel and rock-and-roll. 
Captured by then-new technologies of sound recording — in studios, churches, fields and prisons — then spread by word of mouth through isolated regions or else cast nationwide by big-city record companies and radio stations, these voices limned a vibrant religious faith that was unschooled but heart-subtle, filled with a fiery compassion for others and a bone-deep humility before the fact of one’s own sins and shortcomings. It was a faith both individual and universal, centered on the quest for personal salvation, for light in the turbulent darkness of the soul, and on overcoming estrangement from your fellow sojourners in a hard world.
There was nothing nationalistic in it, no “focus on the family,” that money-raising fetish of today’s pulpiteers. Nations rose and fell, families could be good or bad: It’s the individual who stands alone before God. “You’ve got to walk that lonesome valley, you’ve got to walk it by yourself,” as the old spiritual said. Neither the family nor the nation were seen as vessels of truth or righteousness.
Today’s nationalist Christians often claim descent from the rural-based “old-time religion” represented in “Goodbye, Babylon.” And indeed, liberal opponents of the nationalists’ repressive, aggressive ideology usually paint them as goobers from the backwoods, knuckle-dragging cretins with a chaw of baccy dribbling onto their overalls. But of course, in reality the nationalist Christians now ascendant are overwhelmingly suburban: clean, comfortable professionals, white-collar workers, political operatives, business owners and government officials. They drive fat cars to glitzy “megachurches,” they sit in front of wide-screen televisions and sleek computers feeding their sense of self-righteousness and aggrieved privilege through a multibillion-dollar right-wing media system that flatters their prejudices, titillates them with slavering obsessions about “aberrant sex,” deadens them with pallid music lamely copied from commercial pop, and seals them in a carapace of exclusion and hostility.
What has all this slick, garish malevolence to do with the old faith’s raw and vibrant beauty? With the street-honed growl of Blind Willie Johnson, the full-throated Kentucky mountain gallop of Brother Claude Ely, the driving, supple rhythms of Roosevelt Graves, or the strange, unearthly sweetness of Washington Phillips? Where is the bursting joy of Bessie Jones and the Sea Island Singers in the dawn-greeting shout “Yonder Comes Day?” The sophistication in the swinging blues of Sister Rosetta Tharpe, jumping to “Strange Things Happening Every Day”? The lonely courage of Rev. Anderson Johnson staring implacable reality in the face with his chilling vision, “Death in the Morning?” You could walk a million miles in the new kingdom of America’s Christian Right and never catch the slightest glint of this deep, abiding light.
Of course, the old faith did contain volatile seeds, capable of bearing good fruit or ill. Tend them well, grafting their offshoots onto a wider vision of the world, and you get Martin Luther King; tend them badly, starving them, choking them with trash, and you get the bloated arrogance of Jerry Falwell, the simpering poison of Pat Robertson. But in “Goodbye, Babylon,” the dross and error that inevitably encumbered traditional faith — as they encumber all of our limited and provisional understandings of reality — have been burned away, and only the shining essence remains, as rich and moving and universal as Aeschylus or Mozart. “You don’t need no ticket, you just get on board.”

TITLE: Saddam Forced Into the Dock
AUTHOR: By Hamza Hendawi
PUBLISHER: The Associated Press
TEXT: BAGHDAD, Iraq — Saddam Hussein was forced to attend his trial Monday, looking haggard and wearing a robe rather than his usual crisp suit as he shouted “Down with Bush.” His top co-defendant struggled with guards bringing him in and sat on the floor, his back to the judge, for much of the session.
After the stormy start, prosecutors put on the stand two members of Saddam’s regime for the first time and produced documents trying to link the former Iraqi leader directly to torture and executions that allegedly took place in a 1982 crackdown in the Shiite town of Dujail.
The two witnesses — Ahmed Hussein Khudayer al-Samarrai, the head of Saddam’s presidential office, and Hassan al-Obeidi, an intelligence officer — complained they were being forced to testify.
Al-Samarrai, who held his post from 1984-1991 and then again from 1995 until the fall of the regime in April 2003, insisted he knew nothing about the events in Dujail.
“I am not fit to be a witness in this case,” al-Samarrai told the court, bringing a smile from Saddam.
Prosecutors produced a 1984 document in Arabic allegedly signed by al-Samarrai stating that Saddam ratified “the execution of the Dujail detainees.”
Asked whether the signature was his handwriting, al-Samarrai said he could not be sure. “I don’t remember,” he said. “I don’t remember anything at all.”
Al-Obeidi, who worked as a manager in the Mukhabarat, or intelligence agency, from 1980-1991, said guards had forced him to testify then argued with the prosecutor over his role, bringing laughter from Saddam. 
After the three-hour session, chief judge Raouf Abdel-Rahman adjourned the court until Tuesday.
Twenty-six prosecution witnesses have testified since the trial began Oct. 19, many providing heart-wrenching accounts of torture and years of imprisonment in the crackdown launched in the wake of a 1984 attempt on Saddam’s life in Dujail. But none directly linked Saddam to their ordeal.
In an apparent attempt to speed up the proceedings, investigating judges read short affidavits by 23 more witnesses Monday rather than having them take the stand.
Another document the prosecutors produced was a 1987 memo from the presidential office’s legal department saying two people sentenced to death in connection with Dujail had not been executed and suggesting those responsible for the “negligence” be investigated.

TITLE: Iran Nixes Moscow Talks, Enriches More Uranium
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran  — Iran has started small-scale enrichment of uranium — a process that can produce fuel for nuclear reactors or bombs, diplomats said Monday. 
The move reflected Tehran’s defiance of international pressure meant to ease concerns it wants to build nuclear arms that led to its recent referral to the UN Security Council.
“Uranium gas has been fed into three machines,” one senior diplomat familiar with Iran’s nuclear file said on condition of anonymity because he was not authorized to speak on the matter. Another diplomat confirmed that limited enrichment had begun at Iran’s Natanz site.
To produce significant amounts of enriched uranium, gas must be fed into hundreds of such machines. Uranium enriched to a low degree can be used for nuclear reactors, while highly enriched uranium is suitable for warheads.
Iran is years away from running the 50,000 centrifuges it says it wants to operate as a source of fuel for its Russian-built nuclear plant at Bushehr.
Even small-scale enrichment is significant, however, because it represents symbolic determination on the part of Tehran to go ahead with a technology that most nations want it to give up because of fears of misuse.
Further piling on tensions, a senior Iranian official announced Monday that talks with Moscow scheduled for Thursday on moving Iranian enrichment to Russia as a way ensuring Iran has no direct control were on indefinite hold. And the official, presidential spokesman Gholamhossein Elham, reiterated that his country may reconsider its adherence to the Nuclear Nonproliferation Treaty if it judges that goes against its interests.
North Korea — the world’s other major proliferation concern — quit the Nonproliferation Treaty in 2003, just a few months before U.S. officials announced that Pyongyang had told them it had nuclear weapons and may test, export or use them depending on U.S. actions.
Iran had warned it would resume work large-scale enrichment of uranium after it was reported Feb. 4 to the UN Security Council by the 35-nation board of the International Atomic Energy Agency. The resolution passed at that meeting indirectly linked referral to breaches of the Nonproliferation Treaty and concerns Tehran’s activities represented a threat to world peace.
The IAEA is due to issue a report on Iran at its March meeting, after which the Security Council is expected to consider taking steps against the country.
Tehran repeatedly has stressed the nuclear arms control treaty allows it to pursue a nuclear program for peaceful purposes and says it will never give up the right to enrich uranium to produce nuclear fuel. The U.S., its European allies and Israel believe Iran is seeking to develop atomic weapons — a belief shared by an increasing number of nations as Tehran shrugs of international pressure to return to negotiations on its nuclear ambitions and instead opts for measures that raise tensions.
Reacting to the news that Iran had resumed small-scale enrichment, a diplomat from the European Union, which backed Iran’s referral, said the move “makes it more difficult to resume negotiations.”
“The Iranians are once again ignoring the will of the international community and creating further obstacles to a negotiated settlement” of the crisis, he said, demanding anonymity.

TITLE: Iran Nixes Moscow Talks, Enriches More Uranium
PUBLISHER: The Associated Press
TEXT: TEHRAN, Iran  — Iran has started small-scale enrichment of uranium — a process that can produce fuel for nuclear reactors or bombs, diplomats said Monday. 
The move reflected Tehran’s defiance of international pressure meant to ease concerns it wants to build nuclear arms that led to its recent referral to the UN Security Council.
“Uranium gas has been fed into three machines,” one senior diplomat familiar with Iran’s nuclear file said on condition of anonymity because he was not authorized to speak on the matter. Another diplomat confirmed that limited enrichment had begun at Iran’s Natanz site.
To produce significant amounts of enriched uranium, gas must be fed into hundreds of such machines. Uranium enriched to a low degree can be used for nuclear reactors, while highly enriched uranium is suitable for warheads.
Iran is years away from running the 50,000 centrifuges it says it wants to operate as a source of fuel for its Russian-built nuclear plant at Bushehr.
Even small-scale enrichment is significant, however, because it represents symbolic determination on the part of Tehran to go ahead with a technology that most nations want it to give up because of fears of misuse.
Further piling on tensions, a senior Iranian official announced Monday that talks with Moscow scheduled for Thursday on moving Iranian enrichment to Russia as a way ensuring Iran has no direct control were on indefinite hold. And the official, presidential spokesman Gholamhossein Elham, reiterated that his country may reconsider its adherence to the Nuclear Nonproliferation Treaty if it judges that goes against its interests.
North Korea — the world’s other major proliferation concern — quit the Nonproliferation Treaty in 2003, just a few months before U.S. officials announced that Pyongyang had told them it had nuclear weapons and may test, export or use them depending on U.S. actions.
Iran had warned it would resume work large-scale enrichment of uranium after it was reported Feb. 4 to the UN Security Council by the 35-nation board of the International Atomic Energy Agency. The resolution passed at that meeting indirectly linked referral to breaches of the Nonproliferation Treaty and concerns Tehran’s activities represented a threat to world peace.
The IAEA is due to issue a report on Iran at its March meeting, after which the Security Council is expected to consider taking steps against the country.
Tehran repeatedly has stressed the nuclear arms control treaty allows it to pursue a nuclear program for peaceful purposes and says it will never give up the right to enrich uranium to produce nuclear fuel. The U.S., its European allies and Israel believe Iran is seeking to develop atomic weapons — a belief shared by an increasing number of nations as Tehran shrugs of international pressure to return to negotiations on its nuclear ambitions and instead opts for measures that raise tensions.
Reacting to the news that Iran had resumed small-scale enrichment, a diplomat from the European Union, which backed Iran’s referral, said the move “makes it more difficult to resume negotiations.”
“The Iranians are once again ignoring the will of the international community and creating further obstacles to a negotiated settlement” of the crisis, he said, demanding anonymity.

TITLE: Buy Yourself a Valentine’s Gift
AUTHOR: By Miho Yoshikawa
PUBLISHER: The Associated Press
TEXT: TOKYO, Japan — It used to be that Japanese women gave men a gift of chocolates on St. Valentine’s Day, which is celebrated worldwide on Tuesday.
These days, they’re more likely to buy pricey chocolates costing up to $200 a box as a treat for themselves.
“It’s a small luxury that I allow myself,” said 39-year-old Reiko Nozawa, who usually buys champagne truffles for herself and a few other chocolates to share with her husband.
Nozawa is not alone.
Makers of 60 premium chocolate brands have set up special booths at Takashimaya Co., a department store in central Tokyo, where boxes of chocolates costing as much as 10,000-20,000 yen ($84-$168) are selling briskly, helped by Japan’s economic recovery.
“There’s been a trend the past two or three years for women to buy chocolates for themselves, as a sort of pat on the back for having worked hard,” said Takashimaya spokeswoman Yoko Yanagisawa. That can be on top of what they spend on others.
“I think I’ll buy some premium chocolates for myself,” said Yoshiko Okajima, a fashionably attired working mother, as she checked out chocolates for herself after spending 7,000 yen on her husband and 8-year-old son.
Tokyo is filled with St. Valentine’s Day chocolate ads in the days leading up to Feb. 14, and some manufacturers rake in about 20-30 percent of their annual sales in a few short weeks.
Until recently, most Japanese women bought cellophane-wrapped sweets in bulk from drugstores to give to colleagues or school friends as an “obligatory chocolate” on St. Valentine’s Day.
A month later on “White Day” men return the favor by giving women gifts — usually sweets but sometimes lingerie.

TITLE: IN BRIEF
TEXT: Army Abuse Arrest
LONDON (Reuters) — One person has been arrested after the release of a video apparently showing British soldiers savagely beating Iraqi teenagers in 2004, the Ministry of Defense said on Monday.
A spokesman said the arrest was made on Sunday night but declined to give further details.
The video has been shown widely on British television as well as Arabic news stations and shows a group of soldiers dragging Iraqi protestors behind a wall while a demonstration is under way, beating them with batons and kicking them. 

Finns Post Cartoons
HELSINKI (Reuters) — An anti-immigration Finnish group has published on its web site the controversial Danish cartoons of the Prophet Mohammad after a similar site in neighboring Sweden was shut down last week.
Suomen Sisu, which calls itself “a revolutionary Finnish nationalist movement” and has around 400 members, said on the web site the publication was “the expression of an opinion” prompted by the Swedish site being closed.
The cartoons were first posted on the site on Friday, and a spokesman for the organization said on Monday the Finnish authorities had not contacted Suomen Sisu about the pictures.

Haiti Election Chaos
PORT-AU-PRINCE, Haiti (Reuters) — Former President Rene Preval fell further below the 50 percent he needed to win the Haitian election outright as the counting of ballots continued on Monday and allegations of manipulation mounted.
With 89.9 percent of ballots counted, Preval’s share of the vote in last Tuesday’s largely peaceful but chaotic election had slipped to 48.7 percent by Monday, the Provisional Electoral Council said on its web site.
When initial results were announced several days ago, Preval held 61 percent of the vote, comfortably over the 50 percent plus one vote needed to avoid a runoff on March 19.
Thousands of protesters marched in the capital on Sunday demanding Preval be named president, and slumdwellers poured out into the streets again on Monday, vowing to shut down Port-au-Prince.

Aussie Smugglers Jailed 
BALI, Indonesia (AP) — Two Australians were sentenced to life in prison Monday for trying to smuggle heroin from the Indonesian resort island of Bali to their homeland, judges said. 
They were the first verdicts for nine Australians standing trial for allegedly trying to traffic more than 18 pounds of the drug last April.
The case has been closely watched in Australia, where Indonesia’s stiff sentences for drug offenses have provoked sympathy and outrage. Australia’s drug laws are more liberal than those in most Asian nations.
Renae Lawrence, 28, the only woman in the group dubbed the “Bali Nine,” was sentenced to life after judges dismissed claims that she strapped more than 5 pounds of heroin to her body only after receiving a death threat.

Mardi Gras Celebrated
NEW ORLEANS (Reuters) — New Orleans’ Mardi Gras season came to life on Saturday as thousands of revelers lined the streets for a parade that eased the pain of Hurricane Katrina with a dose of satirical humor and debauchery.
In the best traditions of the irreverent carnival, the first parade — “C’est Levee” — skewered politicians and bureaucrats blamed for failing to confront the country’s worst natural disaster, which killed 1,300 people after the city’s levees buckled and caused massive flooding last August.

Chinese Act on AIDS 
BEIJING (AP) — China issued its first official regulations on how to prevent and control the spread of the AIDS virus Sunday, mandating free testing and medication for the country’s poor.
The statute issued by the State Council, China’s cabinet, protects HIV carriers and AIDS patients from discrimination and criminalizes intentionally spreading the disease, the official Xinhua News Agency said.
The law, which takes effect March 1, holds local governments responsible for providing free medication to impoverished patients. Local governments also must offer free consultations and treatment to infected pregnant women, Xinhua said.

TITLE: Vice President Cheney Shoots Man By Mistake
AUTHOR: By Lynn Brezosky
PUBLISHER: The Associated Press
TEXT: WASHINGTON — A 78-year-old hunting companion of U.S. Vice President Dick Cheney was recovering in stable condition Monday after Cheney accidentally shot him during a weekend quail hunting trip, a hospital official said.
Harry Whittington “rested well last night,” said Peter Banko, hospital administrator at Christus Spohn Hospital Memorial. The hospital listed Whittington’s condition as “very stable,” he said.
Whittington, an Austin attorney, was flown to the hospital after Cheney accidentally shot him late Saturday afternoon at the Armstrong Ranch, hitting him with birdshot.
“It’s not critical. It’s not serious. It’s just stable at this time,” Banko said at a morning briefing. 
He said admitting Whittington to the trauma-intensive care unit was “a fairly common procedure” for a patient hit by a spray of the small pellets.
“I don’t know how much spray he has got,” Banko said. “My understanding from the physicians is that after you get peppered, sometimes they need to do exploratory surgeries if it gets lodged in a little deeper. Sometimes it’s tweezers. I can’t really comment on how extensively he was sprayed.”
Banko said he did not know when Whittington would be released.
The vice president visited Whittington and his wife before returning to Washington on Sunday. Cheney “was pleased to see that he’s doing fine and in good spirits,” said Cheney spokeswoman Lea Anne McBride.
Whittington sent word through a hospital official that he would not comment out of respect for Cheney.
Ranch owner Katharine Armstrong said the vice president was using a 28-gauge shotgun, and Whittington was about 30 yards away.
Armstrong said Whittington had gone to retrieve a bird he shot while Cheney and a third hunter, whom she would not identify, walked to another spot and discovered a second covey of quail.
Whittington “came up from behind the vice president and the other hunter and didn’t signal them or indicate to them or announce himself,” said Armstrong, who was in the car.
“The vice president didn’t see him,” she said. “The covey flushed and the vice president picked out a bird and was following it and shot. And by god, Harry was in the line of fire and got peppered pretty good.”
“He was talking. His eyes were open. It didn’t get in his eyes or anything like that,” she said.
Each of the hunters was wearing a bright orange vest, Armstrong said.
The accident was not reported publicly by the vice president’s office for nearly 24 hours, and then only after the Corpus Christi Caller-Times reported it Sunday.
McBride said the vice president’s office did not tell reporters about the accident Saturday because they were deferring to Armstrong to handle the announcement of what happened on her property.
Armstrong said Cheney is a longtime friend who comes to the 50,000-acre ranch, about 60 miles southwest of Corpus Christi, to hunt about once a year and is “a very safe sportsman.” 
She said Whittington is a regular, too, but she believed it was the first time the two men hunted together.
Cheney purchased a hunt license in November, Texas Parks and Wildlife Department spokesman Steve Lightfoot said.

TITLE: Northeast U.S. Buried in Snow
AUTHOR: By Ula Ilnytzky
PUBLISHER: The Associated Press
TEXT: NEW YORK — Road crews scrambled to clear highways for Monday’s commute and travelers stranded at airports still waited to get home as the Northeast dug out from a record-breaking storm that dumped two feet or more of snow.
Utility workers were restoring power to tens of thousands of homes and businesses blacked out when wind gusting to 80 kilometers-per-hour knocked down power lines.
The weekend storm blanketed the Eastern Seaboard from the mountains of western North Carolina to Maine, dropping 68.3 centimeters of snow in Central Park — the heaviest since record-keeping was started in 1869, the National Weather Service said. The old record was 67 centimeters in December 1947.
While the storm was bad, it would have been worse on a weekday.
“It was good timing for a storm of this magnitude,” weather service meteorologist Patrick Maloit said.
Fairfield, Connecticut, got 76.7 centimeters of snow and Rahway, New Jersey, had 76.7 centimeters, according to unofficial observations reported to the weather service. Just west of Philadelphia, 53.3 centimeters of snow was recorded in West Caln Township; the average snowfall for an entire winter in Philadelphia is about 53.3 centimeters. On Massachusetts’ North Shore, Salem measured 45.7 centimeters, and some areas of the state had 90-centimeter drifts.
Children were thrilled to dig out their sleds, little used this winter until now.
“We’re hoping for 365 days off from school,” said 9-year-old Reagan Manz, playing in Central Park with friends. “We could go sledding the whole time and not get bored.”
Numerous schools canceled Monday classes from parts of West Virginia to Massachusetts, although New York City kids were told it was no holiday for them as city streets reopened and subways kept running.
All three major New York-area airports — Kennedy, LaGuardia and Newark — had reopened with limited service by Monday morning after hundreds of flights were called off Sunday. A Turkish Airlines flight skidded off a runway at Kennedy when it landed late Sunday but none of the 198 passengers was injured, said Steve Coleman, a spokesman for the Port Authority of New York and New Jersey.
Airlines also canceled flights Sunday at major airports from Washington’s Reagan National to Boston’s Logan International.
The Northeast airport closures and grounded planes stranded travelers across the country. About 7,500 people were stuck at Florida’s Fort Lauderdale-Hollywood International Airport, spokesman Steve Belleme said.
“Our car’s in Newark. We can’t even get close to there,” said Maria Martinez, whose flight from Miami International Airport was canceled. “We can’t even get to Philadelphia or D.C.”
Some passengers also were stranded on the Long Island Rail Road east of New York City, where trains got stuck on snow-covered tracks, officials said. One train was marooned for five hours. Service into Penn Station in Manhattan resumed Monday morning.

TITLE: American TV Ratings Hit by Crumbling U.S. Olympic Team
AUTHOR: By Tim Dahlberg
PUBLISHER: The Associated Press
TEXT: TURIN, Italy — Michelle Kwan went down fast. Apolo Anton Ohno nearly did, too. 
Bode Miller and Daron Rahlves had a different problem. They didn’t go down fast enough. 
Think Sunday wasn’t a good day for fans of the U.S. Olympic team? All the wine in Italy couldn’t be enough to perk things up among NBC executives. 
Their star is gone, their mouth is muted. Worse yet, there’s nearly 400 hours of television time left to be filled. 
Medals are one thing. In television, ratings are the only thing. 
One minute they’re issuing a press release bragging that 47 million Americans watched the first night of competition on the network. 
The next they had to be worrying whether any Americans will be left to watch before the next two weeks are over. 
Anyone planning to stay up Friday night for a good Norway-Germany cross-country skiing duel? 
Kwan’s withdrawal and the downhill failures of Miller and Rahlves weren’t the only bad news on a shaky opening weekend for the U.S. Olympic team. Ohno lost his chance to defend his gold medal in the 1,500 meters and Tony Benshoff barely missed his bid for the country’s first-ever singles luge medal. 
A day earlier, the women’s moguls team was shut out in the freestyle despite fielding what was regarded as its deepest squad ever. 
Kwan’s departure, though, hurt the most. She was the most recognizable face on the U.S. team, a star with the power to draw the largely female audience NBC so covets for these games. 
The American response was to quickly book a plane ticket for the 17-year-old sister of 2002 gold medalist Sarah Hughes. Some good lineage can’t hurt, but there was a reason Emily Hughes wasn’t brought to the games in the first place. 
Outside of dressing Chad Hedrick in sequins and teaching him a quick triple-triple, though, there wasn’t much else the USOC could do. 
Hedrick wasn’t promoted much before the games, but he may end up being the star NBC needs so desperately to manufacture to stave off the “American Idol” juggernaut and win ratings during sweeps time. 
He won the first U.S. gold of the games on the opening day of competition, will be favored in two other races and has a chance to medal in yet two more. 
Best of all, Hedrick is as brash as he is good. Think you’d ever hear this from any figure skater? 
“I didn’t come here to win one gold medal,” Hedrick said. “You’re going to see this face around a lot more.” 
Get used to seeing a lot of speed skating. The Dutch do it a lot, and they seem to enjoy it. 
Besides, sequins or not, Hedrick is a star just waiting to be born. 
Even a Hedrick sweep, though, won’t get the United States close to the 34 medals it won on the home ice and snow of Salt Lake City. There’s a reason athletes win more medals at home. It’s because it’s, well, home. 
Turin, if you hadn’t noticed, is a lot different than Salt Lake City. 
Sure, the pizza’s better. And Miller and Hedrick can get a beer pretty much any time of the night. 
But the beds in the Olympic Village are hard and there’s no room service. That alone may be enough to throw figure skater Johnny Weir off his game. 
Of course, Weir dresses as a swan for his short program so he looks at things a bit different than the average athlete. 
“I am very princessy as far as travel is concerned and having a nice room and things like that,” Weir said. 
Miller shouldn’t have a problem with that. He travels the European skiing circuit in his own motor home, which he has parked up near the mountain resort of Sestriere. 
The night before the men’s downhill he went out and had a few beers, which wasn’t all that bad. This is a guy, after all, who rattled both his sponsors and U.S. Olympic officials by proclaiming his love for drunk skiing. 
Still, this was supposed to be the best U.S. ski team ever, and it wasn’t a smashing start. But it was only the start. 
“These Olympics aren’t over for us,” U.S. men’s coach Phil McNichol vowed. “We still have four events to go. We’ll get it done.” 
Maybe. U.S. Olympic officials hope so. 
And NBC is certainly rooting them on. 
On the day Kwan made a graceful exit, she was wrong about one thing. She said she learned it’s not about the gold, but the spirit of the event and the sport itself. 
That’s admirable, but it doesn’t pay the rent. 
In America’s eyes, the only thing that glitters is the gold.

TITLE: Designers Declare Kazakhs Olympic Fashion Winners
PUBLISHER: Reuters
TEXT: Kazakhstan came to the Winter Olympics with few hopes of winning a medal but they have already scooped one of the highest accolades in Italy. 
Top fashion designers Dolce & Gabbana voted the Kazakhs the most stylish team to parade at the Olympics opening ceremony and said they would happily cast them on their catwalk. 
“We would hire the athletes from Kazakhstan in a second, so stylish in their black coats and Borsalino hats, so Dolce & Gabbana,” the designers wrote in Italian daily La Stampa. 
The French were fanciest, although “a little too perfectly tailored”, the Russians looked “all Christmas in white jackets that somehow managed to make them look slimmer and taller”, and the Italians were, of course, “glamorous.” 
So who were the losers? 
“The Chinese wore the kitchiest, clad in long down jackets that made them look like sandwiches and even shorter than they already are,” Dolce & Gabbana wrote. 
The Germans’ tangerine and lime outfits were dubbed an “overdose of vitamin C”, the Danes’ hats were likened to horrible “waffles” and the Americans’ “flabby berets ... looked like upside down underwear”. 

More Olympic news on pages 19 and 20.

TITLE: Sports Watch
TEXT: Canada Routs Russia
TURIN, Italy (AP) — After shutting out its first two opponents in the women’s Olympic hockey tournament, defending champ Canada is still on the defensive. 
Coach Melody Davidson received critical e-mails after the Canadians opened with a record-setting 16-0 victory over host Italy. Sunday’s 12-0 rout of Russia raised more questions about running up the score. 
“The Russians easily could have scored three or four goals on us if it wasn’t for great goaltending,” Davidson said. 

Isinbayeva Does It Again
DONETSK, Ukraine (AP) — Russian Olympic champion Yelena Isinbayeva broke her indoor world record in the pole vault Sunday, clearing 16 feet, 1 1/4 inches. 
In her first competition this season, Isinbayeva bettered her mark of 16-0 3/4 set last spring at the European Indoor Championships in Madrid, Spain. She cleared the height on her second attempt at the Pole Vault Stars, an annual event organized by pole vault great Sergei Bubka. This was the 19th world record set by Isinbayeva. 

Davis Cup Victory
AMSTERDAM (Reuters) — Russia eased into the Davis Cup quarter-finals on Saturday with Mikhail Yuzhny and Igor Andreyev beating Raemon Sluiter and John van Lottum in the doubles to hand the 2002 winners an unassailable 3-0 lead. 
The Russian pair won 6-2 3-6 6-4 6-4 to follow up Friday’s wins in the singles for Dmitry Tursunov and Nikolai Davydenko.

TITLE: ‘Tot and Max’ Dominate on Olympic Ice
AUTHOR: By Barry Willner
PUBLISHER: The Associated Press
TEXT: TURIN, Italy — Two-time world champions Tatyana Totmyanina and Maxim Marinin skated in perfect unison to win the short program Saturday at the Turin Games. They were so good the crowd was hushed for much of the performance, the near silence broken only by the sound of their blades majestically cutting through the ice. 
And while U.S. champions Rena Inoue and John Baldwin landed the first throw triple axel in Olympic history to finish sixth, St. Petersburg-based duo Totmyanina and Marinin easily were the class of the event. They earned 68.64 points, with the highest totals for both technique and components. 
The free skate was late Monday, when “Tot and Max” looked certain to become the 12th straight Russian or Soviet pair to win this Olympic title. 
“Unbeatable, I would like to believe they’re unbeatable,” coach Oleg Vasilyev said. “But figure skating depends on many things — ice, judges, political situations.” 
It was the first Olympic event under the code of points created in the wake of the 2002 pairs judging scandal. Totmyanina and Marinin skated as one to “Snowstorm” by Russian composer Georgy Sviridov. Their side-by- side triple toe loops were flawless, and they finished with a superb string of combination spins. 
“I think it was the best performance of our short program this season,” Totmyanina said. 
“I felt the atmosphere inside the ice rink was going up, so it was like a stone fell off my shoulders when we finished,” Marinin said. “It was just more concentration on the skating. Maybe that looks like I am really nervous, but it is not that.” 
Inoue and Baldwin’s triple followed the one they did last month at U.S. nationals and helped get them 61.27 points. 
In second place were China’s Zhang Dan and Zhang Hao, whose routine to Led Zeppelin’s “Kashmir” rocked the nearly full arena. Then came Russians Maria Petrova and Alexei Tikhonov, and China’s Pang Qing and Tong Jian, and Shen Xue and Zhao Hongbo. 
Zhang and Zhang began with an intricate one-armed lift that led to a big throw triple loop, energizing the crowd. The Zhangs, who are not related, closed with a huge double twist that could have been a quad if it was permitted, and a complex combination spin. The 2005 world bronze medalists slapped hands at the end, then saw a personal-best 64.72 points go up on the board. 
That put them ahead until almost the end, when “Tot and Max” took the ice. 
“We both have one aim,” Zhang Dan said. “We wanted to perform our best in the Olympic Games.” 
Their countrymen, two-time world champions and Salt Lake City bronze medalists Shen and Hongbo, were happy simply to skate at all. 
Zhao has made an amazingly quick comeback from a torn Achilles’ tendon in August. He only began triple jumps last week, but he hit his triple toe loop while Shen was touching her hand to the ice Saturday night. 
“The power is not sufficient, but the performance I am happy for,” he said. 
Russia’s Maria Petrova, skating on a sore ankle, and Alexei Tikhonov were third with a clean performance including a complex lift during which he swung her between his legs and into the air, followed by a neat twisting dismount. 
That got the red-and-white uniformed Russian athletes in the crowd excited, but they booed when they heard the marks for the world silver medalists.

TITLE: City Set For Faster Access
AUTHOR: By Alexander Yankevich and Anna Tumakova
PUBLISHER: Special to The St. Petersburg Times
TEXT: The St. Petersburg internet market is on the verge of a broadband boom,  with it soon to become the main mode of access in the private sector. Last year broadband use effectively doubled, and, if any further proof is needed, the fact that the main universal operators, along with the local telephone monopoly, have all woken up to this coming trend should speak volumes about the way the market is headed.
According to the Information Technology and Communications Ministry, there were 22 million internet users in Russia in 2005, an 18.9 percent rise on the year before. The sector’s regulator is now predicting that in the next four years the market for internet services will almost double, accounting for 8 percent of the entire communications market in Russia. The bulk of that growth is expected to come in broadband technologies. In St. Petersburg, according to Top Opinion, the number of households hooked up to the net rose by 27 percent from the autumn of 2004 to the autumn of 2005, and 20 percent of Petersburg’s inhabitants now regularly use the internet. 

The High-Speed Trend
The main trend in the local market is the fast-paced growth of the broadband sector. In absolute terms, the figures are still low, with Web Plus putting broadband use at just 5-7 percent of private subscribers in the city. Comparatively, however, the picture is far rosier, with the sector having doubled over the last year, at least in terms of the number of players and subscribers on the market. 
What do we mean by broadband here? The term refers to all the technologies that allow subscribers to use high-speed channels, such as streaming video. The starting point is commonly taken to be 128 k bit/second. The key technologies are ADSL, which employs existing telephone lines (with the lines divided, allowing telephone calls to be made while online), so-called home networks (networks that cover neighborhoods in the city and employ the same Ethernet technology that’s used in office systems) and, finally, cable networks (TV cable networks that have been adapted to provide two-way channels, including internet access). For subscribers, ADSL differs from home networks in that the latter gives access, within their own networks, to other resources such as games, films and music. 
Providers offering these services have already noted impressive rates of growth. In the ADSL sector, until the end of last year, only Web Plus was operating across the whole city. In 2005 alone, 20,000 of its 28,000 current subscribers were hooked up to the new technology. Another operator providing ADSL, albeit across a more limited territory — Vasilievsky Island — is PeterStar, which also experienced a 100-percent growth rate. 
“Because of our territorial limitations, we can’t be used as an indicative example, but we are seeing a growth in interest in high-speed access to the Internet among our private subscribers,” said Alina Karpichenko, Advertising and PR Manager at PeterStar.
As far as home networks and the closely linked cable television operators are concerned, the market in this sector is far more divided and the big players are reluctant to divulge the number of their subscribers. The number of major players on the market, however, is growing. If, only a couple of years ago, you could only find ten networks on the market, there are now at least 50, while the number of illegal private networks, according to some, is already over 100. New players include Z-Telecom, which has revealed that it is planning to develop right across the city. Another noted tendency is that investors operating in related fields — IT companies, for example, such as Nienschants-Home and construction firms — have developed an interest in the market. The latter group includes Miran, part of Bekar, which operates in the business centers run by Bekar. 
In addition, 2005 saw a marked restructuring of the market. Various players formed alliances, and home networks began to develop marketing strategies. “The last couple of years saw a fall in prices and the introduction of new services from all the market participants. The technologies are developing — previously, the equipment couldn’t cope with all the offers that were being made by almost everyone, including unlimited use. So, the changes in rates aren’t just a result of competition and a general fall in prices across the market, they’re also a result of significant progress in networking equipment,” said the commercial director of Matrix Network Solutions, Olga Mokina. 
Some analysts estimate that there are 30,000 broadband subscribers in the city. Interactive cable television, in comparison, has not developed as fast. Riko-TV is one operator that began offering Internet access services. The existing operators developed their territorial coverage, with the inevitable result that they began to overlap, with conflicts arising. PAKT, for example, entered territory traditionally held by Telix in the neighborhood of the Grazhdansky Prospekt metro station. 
The growth in this segment is linked by many to the ambitions of the largest player — St. Petersburg Cable Television — which operates all the city’s cable and antenna facilities. At the beginning of this year, the company announced that it would finally be offering internet services, although it began mooting the idea back in 2001. 

Major Players Enter the Market
Market analysts are predicting that the broadband market will develop at a brisk pace in the near future. At Web Plus, there is talk of 500,000 households in the next three years, while PeterStar is more modest in its predictions, estimating 400,000 at the most. The appearance of key players on the market, however, suggests that many believe the market is about to take off. A key event last year, in the view of many, was that the Petersburg Telephone Network — a branch of North-West Telecom and the owner of the majority of telephone exchanges equipped with Web Plus’s ADSL equipment — is preparing to launch ADSL technologies across the city.

A Business That Never Sleeps 
PeterStar announced back at the beginning of last year that it would be tackling the broadband market, mainly through the creation of home networks, although it provided few details at such an early date. Pyor Akulyshin, PeterStar’s commercial director, said that the company is now planning to use several options in its work in this market, including the creation of its own independent network, to be operated by other companies, and partnerships with established players on the market. 
“The main difference will be that the services will be marketed under our own brand and, irrespective of the location in the city, the cost of hooking up and the rates will be the same for everyone,” Akulyshin said. PeterStar is now preparing to launch two home networks, in the city’s Vyborg and Moskovsky districts, though the partners and details for the two projects have yet to be announced.
Metrocom and Golden Telecom are another two major players that could have an impact on the market. Metrocom is now getting down to business in the private sector, having recently begun issuing internet cards. 
“We have a fiber-optic network, which covers almost the whole city and the nearest suburbs, and we’re planning on entering the home network over the next year or so. The technical base for that move is already almost entirely in place. It’s possible that by the end of the year we’ll have mapped out its real potential,” a spokesman for Metrocom’s marketing department said. Golden Telecom, meanwhile, is playing its cards close to its chest, though rumors that it will soon be entering this sector of the market are rife. Analysts note that the motivation for the big players wanting to get into the home network business is clear. 
“In the big cities, where the telecommunications infrastructure is well developed, the market for business clients has effectively already been carved up,” said Tatyana Tolmacheva, an analyst with iKS-Consulting.

TITLE: International Lines Open For Business
AUTHOR: By Alexander Yankevich and Viktor Loginov
TEXT: This year has become a turning point for the communications market in Russia. Since Jan.1 a new law has come into effect breaking up the monopoly of long-distance call provider Rostelecom. Before the change only this company was allowed to provide services supporting international and intercity telephone traffic. 
Nevertheless, in spite of the fact that owners of the new licenses number over ten, at present only the familiar face of Rostelecom is available to St. Petersburg residents. According to the forecasts of analysts the majority of other providers will only arrive in the spring.
At the beginning of this year a new “Communication Law ” came into force though the elaboration of some of its bylaws still continues. They apply not only to fixed lines of communication but also to mobiles. It can be observed that demands related to Russia’s entrance into the WTO encouraged authorities to abolish the monopoly of half state-owned Rostelecom.
Companies began to receive licenses as early as last year. In addition to Rostelecom there are now another 16 licensed companies, which, on the whole are universal operators with a presence across most of the country, for example TransTeleCom, Interregional Transit Telecom, Golden Telecom or Ekvant. Others include IP-operators which work in Russian cities independently or through partners such as Zebra Telecom, Arctel or Coorporatsia OCC.

Prefix competition
The most obvious change for telephone subscribers will be the possibility of choosing a provider of long-distance calls through the dialing of a prefix. When subscribers previously dialed the number “8” they automatically (and probably unwittingly) used the services of Rostelecom. Now, after dialing “8” a subscriber will need to dial a prefix corresponding to an operator of long-distance calls. 
At present one may use Rostelecom and dial 8-55 to access an interurban connection and 8-10 for international calls, or MTT, dialing 8-53 and 8-58 respectively. At the same time the latter’s services are limited only to Moscow, hence the advantage conferred to Rostelecom by an established infrastructure. 
In fact at present the only observable change for subscribers is that on telephone bills it will be specified that the company Rostelecom provided the interurban or international service. But the names of other companies may appear there soon. MTT plans to launch itself in St. Petersburg by the end of February. 
“We have already received prefixes and according to the law we are obliged to provide our services as quickly as possible to all groups of citizens,” said MTT’s director of marketing Ekaterina Kononova. 
In all likelihood the third operator of long-distance services in St. Petersburg will be Golden Telecom. Though yet to receive prefixes, the company has already started to make contracts with partners, using a so-called ‘preselect’ service, which means subscribers use services not through prefixes but under contract. Nevertheless, the company plans to receive its own prefixes in the near future with which to start large-scale provision of its services. 
“According to our estimates we should receive prefixes in February and a month after that we will start to provide our full-scale service. At the moment we are working with some operators on the subject of providing ‘preselect’ services,” said Golden Telecom’s director of public relations Anna Chin-Go-Pin. 
Other operators, especially those lacking their own infrastructure, will arrive in due course. 
“We plan to finish the building of our network in the fourth quarter of 2006 and start providing services from 2007,” reported the General Director of Zebra Telecom, Viktor Kaledin.
State authorities view the delays with a degree of calm.
“Whenever licenses are issued a time is fixed for services to begin and we expect that by the end of the year the number of operators will increase considerably. The overall result will be the development of competition and a fall in tariffs. This is why we can’t rule out that some companies will have to leave the market. At the same time for the state, business will become more transparent and bring more tax revenue,” said the head of the press service of the Ministry of Informational Technologies, Aleksander Parshukov. 
“We have already inspected the networks of existent providers of long-distance services — Rostelecom and MTT.  Next in line is Golden Telecom and TransTeleCom, with whom we are working at the moment,” revealed the press secretary of the Federal service of supervision in the sphere of communication, Rossvyaznadzor, Olga Dyukova.
Nevertheless, St. Petersburg operators who work directly with subscribers have already started to sign contracts with long-distance service operators. The principal provider of public telephone services is Northwest Telecom. Flat-rate subscribers on Vasilievsky Island are served by PeterStar and a number of new buildings are served by the company LANCK Telecom. 
“We have already concluded a contract with Rostelecom and negotiations with MTT are underway. In the near future Golden Telecom and TransTeleCom will join the aforementioned operators,” said Natalya Nazarova, the head of North-West Telecom’s public relations department. 
As far as PeterStar is concerned, this company will also provide an international telephone service by means of the companies Rostelecom and MTT and it is negotiating with Golden Telecom. 
The company LANCK Telecom chose a slightly different strategy having first concluded a contract with Golden Telecom (on the ‘preselect’ principle) and only afterwards turning to Rostelecom and MTT. 

Cards to remain for the present 
It should be noted that the regulators who on the one hand broke up Rostelecom’s monopoly, on the other began to destroy the IP-telephony market, which was worth a considerable part — about $3 billion dollars a year — of the long-distance service market.
According to the old law this service belonged to ‘telematic’ services — as ordinary access to the internet. However, according to the new rules, which regulate relations between long-distance service providers and other market participants, IP Providers will have to obtain fully-fledged telephone licenses with all the issues that that entails, in particular investment in infrastructure (see insert above). 
Some companies which work on the telecommunications market consider this step against the background of coming competition between the providers of long-distance calls as potentially dangerous for the market of IP-telephony, which in the end may lead to the mass exit of market participants. 
Nevertheless, it’s worth mentioning that in contrast to the expectations of analysts and the anxiety of providers, the market has not suffered in a huge way. All card service providers work in the former regime and at present are not hurrying to conclude agent agreements with new long-distance service operators. 
This can be explained by the postponement of negotiations. However, sooner or later card providers will have to play according to the new rules. Representatives from the Ministry for Information and Communication are already calling their activities illegal. But in the law one can find a quite legitimate loophole: IP-providers can cooperate with public providers of internet-telephony like Skype or its Russian equivalent SipNet. A subscriber can use this service and on the side of the operator this service will be qualified not as the provision of a long-distance service but of a content-service. 
As a result the only problem for an operator will be how to create its own program and conclude a contract with existing services. The first to look closely at this possibility was Zebra Telecom, which at the end of last year introduced its product ‘Zebra Soft Phone.’

TITLE: Software Developers Making Global Impact
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Last year a number of leading analytical agencies, Gartner Group and Forrester Research among them, included Russia in their lists of the world’s leading markets for IT outsourcing — only a few years ago it was hard to foresee the country receiving such recognition. 
Over the last two years the average growth rate among Russian offshore software developers has been 30 percent to 50 percent. Some companies have performed even better — Reksoft turnover, for example, grew by 87 percent in 2005.
Recognition by international analysts “is a major step forward in the marketing of services provided by Russia-based export-oriented software development companies,” said Svetlana Vronskaya, director for corporate communications at Reksoft.
“2005 was marked by $1 billion of market volume and we expect the 30 percent growth trend to continue into this year,” she said.
According to the association of Russian software developers RUSSOFT, in 2005 the country’s software export companies have been establishing representative offices in key regions.
Every third Russian company has a sales & representative office in the U.S. or Canada. Over one third of software developers have got sales offices in different parts of Western Europe: 12 percent in Germany, Austria and Switzerland, 12 percent in Scandinavian countries. These figures will most likely rise in 2006, according to RUSSOFT’s annual survey. By improving foreign perceptions of Russia the credibility of Russian IT firms on the global market is increased and allows them to participate in tender lists, Vronskaya said. At the moment about 20 percent of Reksoft turnover comes from Germany, but it took the company around four years to establish its presence in that country, she added. Another sign of international recognition is that from the autumn of 2005 until the beginning of 2006 a number of Russian software service providers have either been acquired by another larger company or invested in by a third party, Vronskaya said.

Choosing the way
Mikhail Zavileisky, COO of DataArt’s St. Petersburg office, divided Russian outsourcers into three groups.
“The first group has chosen the ‘Indian way’ - make a stake on large size, low prices and adequate quality. This way was tried out and is understandable to foreigners. The main problem is that the labor force in Russia is significantly smaller than that of India or China,” Zavileisky said. Companies belonging to this group are a mixed bunch, occupying various niches on the global market, and are likely to open offices in the CIS, Eastern Europe and Asia to overcome the limits of the national labor market, Zavileisky said. Companies of the second group follow the ‘Irish way’ — integrating into the world system through outsourcing and the realization of complicated, science-intensive, informal and ‘impossible’ projects.
“Specialization in applied fields and close, focused ties with a limited number of clients is typical of such companies,” Zavileisky said. Despite the attractive correlation between risks and returns, this approach often results in the company being acquired by a strategic client.  The third group of companies follows the ‘Russian way’ of trying to increase sales in the Russian market.  
However, low prices and under-developed IT infrastructure leads to smaller return on investment than in other approaches, Zavileisky said.

Unique offer
One could forgive Russian outsourcers for repeating a joke told by the head of Intel in Russia, Steve Chase — “large projects we make in India, urgent — in America and impossible — in Russia.”
The large number of science students in Russia (up to 50 percent of all university students, according to UNESCO) results in highly-qualified IT personnel. Most Russian IT employees hold  IT Masters (seven years of higher education) or IT Specialist (five years) degrees.
“Russia possesses a unique intellectual capital and is known for its pool of well-educated talent that is constantly increasing in terms of quantity and quality. 
According to RUSSOFT’s report, although the availability of Russia’s IT personnel and skills rose in 2005, in terms of the effectiveness of these skills Russia is still behind its competitors. The Gartner report suggests that the effectiveness of programming and project management skills belonging to US external service providers (ESP) is 100 percent. In Ireland ESP has 90 percent effectiveness, in India — 76 percent, in Russia — 74 percent, in China — 31 percent.  According to DataArt’s Zavileisky, between 10 and 20 Russian outsourcers are known abroad, increasing turnover by 20 percent to 100 percent in a year, though it is still debatable whether this growth results from the quality of services or the small size of the companies. Russia’s presence in high-end offshore outsourcing is still rather insignificant, Vronskaya said. Russian software developers are mostly known in niche markets like anti-virus software or among companies specifically interested in the outsourcing topic.
However Russian developers are “noted for their ability to solve complex software engineering tasks,” Vronskaya said. “We will be seeing more and more software development tasks with a stress on R&D, entrusted to Russian companies,” she predicted.

TITLE: New Rules End Cheap VoIP
AUTHOR: By Ilya Shatilin
PUBLISHER: Special to The St. Petersburg Times
TEXT: New rules concerning data transfer could lead to an end in Voice over Internet Protocol (VoIP) scratch-card services, and force providers to look for new market segments.
The rules, which are due to come into force on July 1, clearly separate voice transfer and data transfer as different systems of communication, it being possible to carry out the transfer of data without the aim of transferring voice information, and vice versa.
“Offers of one ruble per minute to call Western Europe, which some companies propose, will most likely disappear — either they will have to leave the market, or increase prices. Working with such prices will already be illegal,” said the technical director of city IP operator Master IT, Kirill Nosov. 
Another large IP operator, Zebra Telecom, has already received a license to supply an interurban and international telephone service. The license will let the company unite the existing fragments of the network and expand its presence elsewhere. 
Another obvious tendency is an abandonment of Public Switch Telephone Network (PSTN) for making VoIP calls. As such the oldest VoIP player, Tario Communications, has launched a new project called Sipnet, an analog to the widely available Skype program. Network Sipnet uses an alternative numeration of subscribers, who would possess a personal telephone number independent of city telephone networks.
At the same time connections between fellow subscribers of the Sipnet network are free of charge. Sipnet also supports extended voice services such as voice mail, telephone answering machines, multilateral audio conferences, voice chats, systems of intellectual voice menus and audio email. Of course it is possible to use Sipnet to make calls to any phone number, but for a fee. 
However, Yekaterina Pankratova, director of the oldest and biggest Russian SIP-operator Telfin, worries that dishonest users will be able to resell (for money) free traffic making a profit out of an operator’s market initiative. Telfin has itself introduced a new product Softphone Tel-me, which was created first of all for business people, who use notebooks and other mobile equipment. 
Tel-me is loaded in the form of a program for a PC connected to the internet and allows savings to be made on calls abroad and within Russia. A similar product was previously introduced by Zebra — Zebra Soft Phone. When using the program one receives an additional discount of 10 percent on current company tariffs. 
Popular in the West, more and more people are using VoIP in conjunction with Wi-Fi. With a mobile phone supported by Wi-Fi or a special Wi-Fi phone at the point of access, one can make a call to almost any place in the world or make a call to any subscriber, choosing from a great number of SIP-networks. This project was recently launched by the internet-provider Quantum Communications and omnipresent Telfin.
Additional software is not necessary and most forms of communication supported by Wi-Fi are equipped with SIP. 
Nevertheless, the limited development of Wi-Fi in Russia as a whole and St. Petersburg in particular (in the whole city there are only about 40 points of access) is a serious restriction to expanding this service. 
To tackle this problem the company ZyXEL has developed a special Wi-Fi phone with which one can use the service. 
“The idea itself of the telephony over Wi-Fi is not new — this technology is widely spread all over the world, but for contemporary Russia it is seen by most users as something ‘unreal,’” commented the technical director of Telfin, Alexander Krasnikov. Furthermore, demand for GSM phones with Wi-Fi support is still not at all widespread, Krasnikov said.
“Our work is to demonstrate the possibilities of contemporary telecommunication technologies and arouse the interest of potential clients,” he added.

TITLE: Companies Look Forward to Growth
TEXT: Oleg Popov, Commercial Director and Deputy General Director of North-West Telecom, talks about the company’s plans to launch an ADSL operator.

You’re now coming to the end of the testing period for the launch of your ADSL system. How many subscribers does it cover and in which regions of the city? What preliminary conclusions have you reached?
During the implementation of the pilot project we mailed invitation coupons for hooking up to ADSL Internet access services. There were special offers for participants and special rates plans on offer during the period of the promotion — one plan with 64 kbit/second and another with 128 kbit/second with limited traffic. We should remember that the pilot project has not yet been finished, and within that project we’re checking the technical and organizational capabilities of our services and bedding in the business processes and technologies for the provision of services.
As far as preliminary conclusions go, above all, the company is ready to commercially exploit these services, although we had to correct what we’d developed. In terms of the quantity of subscribers, bearing in mind the long holidays and the short working month that we had in January, the 250 additional agreements that we’ve signed is not a bad result. 

When will the ADSL services become commercially available? How much of the city will be covered during the first stage, and what are the plans for the future?
In terms of launching onto the mass market, North-West Telecom is planning to cover 98 percent of St. Petersburg’s territory by the second quarter of this year. The implementation of the product en masse is planned for mid-February 2006. The services will be accessible on 30 platforms (where there are varying quantities of telephone stations). The rates will be competitive, and we’ll be informing our potential clients about them in advance. We’re planning on developing a range of tariff plans, including internet access at speeds over 128 kbit/second, and we’ll also be having rates based on the amount of traffic. Those who visit the North-West Telecom stand at the Norvek exhibition will see some interesting offers. It’s also worth noting that payment for services — the monthly fee — will be carried out on a credit basis, with payment being made for all services on the basis of one bill. 

What are your predictions for the development of the broadband market in Petersburg? At what rate is the subscriber base going to grow?
For 2006, experts are estimating that the user market for broadband access in Petersburg will reach up to 150,000 subscribers. As far as our year and two-year plans go, we’re pretty much in line with the experts — over the next year or two, the market for broadband access is going to see continual growth. 

How do you rate home networks, and do you see them as potential competitors?
It looks very much like St. Petersburg is following in the footsteps of Moscow, where there are already dozens, if not hundreds of home networks. A couple of years ago there were two or three providers of this kind in St. Petersburg, hooking up multi-apartment buildings to the internet. Now there are far more. We hope that our competitive advantages — a broad catchment area, our investment capabilities, round-the-clock technical support at our existing call centers — will also us establish ourselves as one of the leaders in the broadband access sector.

TITLE: Have We Seen the Back of the Hard Copy Reader?
AUTHOR: By Sergey Dmitriev
PUBLISHER: Special to The St. Petersburg Times
TEXT: I use the metro both in St. Petersburg and during my occasional trips to Moscow. On it I have seen people reading books and newspapers for as long as I can remember. Over the last few years, however, the category of ‘reading material’ has been supplemented by several other quite interesting groups — occasionally glossy and ‘less bright’ magazines, popular thematic “wonder-issues” such as Apelsin, and the free paper ‘Metro’ (a brilliant idea!), which has a commanding lead over all other material. 
Another new category is content consumed by means of pocket computers, and already on mobile telephones  —the yearly increase in screen size of the latter can now satisfy some metro-readers, using a Java application.
Statistics: I noticed the first handheld computer (Palm m100) on the St. Petersburg metro in 2001. Last year on average I noticed two during my twenty to thirty minute-ride a day. Now, three — sometimes five.
There is yet another, almost unnoticeable, but growing segment of the reading market — audio books in MP3 format. They can be listened to not only with Flash, HDD players and mobile telephones, but also with Discmans which support this format. 
It’s interesting to note that in Russia in general audio books are of a legal variety. In the U.S. they use a popular fee-paying service using which one can download articles from newspapers and magazines in MP3 format — in this way one could catch up with the latest issue of Fast Company at the wheel of one’s car. Press releases on Cisco’s website are not only in a form of a text, but now, thanks to podcasting, one can receive new content in the form of speech automatically (as opposed to simply dowloading it each time). 
Following the trend for telephone screens to increase in size, the screens of MP3 players are getting bigger and now available in color. With the possibility of displaying photographs, and in advanced models of playing videos, it is possible they will soon be another means of reading text. Screens based on OLED, or electronic ink technologies, can help them with that task. 
Flash and mini-HDD MP3 players are interesting devices, but their potential is not yet fully clear. 
All of this means that the market of e-content (that at present basically means mobile content) is one of high growth potential. The hard-copy format is doomed to fall in its share of the market. The Internet University of Informational Technologies gives a few of its courses in the traditional way, despite their complete accessibility on the web site. The university’s administration believes that free publication on the web in no way influences book sales, because those who read books and those who read books on a computer are different categories.
It’s true that for many one can justly affirm that to get along with complicated technologies (program languages) the means of acquiring material should be simplified, and so a well published book still beats any electronic medium (particularly portable ones). Meanwhile the total number of printed copies of newspapers published in the U.S. falls every six months by about one to three percent. And Business Week announced December 7, that it was stopping paper editions of its European and Asian version so as to be able to concentrate on its customized web edition and printed versions for the developing markets of China, Russia and Poland. 
The reason? The audience is leaving for internet-mass media, and now to blogosphere. Personally I can’t imagine an offline edition which can replace the news line I get on cnews.ru
The quantity of people passing their time in the metro with the help of publications such as Apelsin sincerely saddens me. The contents of such products consists of a selection of jokes, fables, pictures and photo montage. One sees with such reading material citizens who, judging by their appearance, one wouldn’t have said were interested in fables, fiction and “zany” pictures.
But if one looks at this as a business case, one could suggest that such an audience, most likely, would happily swap to similar content on a mobile device. Without the need for paper and physical delivery the costs will fall.
At the same time one can make ‘cool’ things richer in design, adding sounds and interactive elements, for example, using Macromedia Flash. Telephone ring tones and wallpapers are, in any case, only temporarily profitable. 

Content Providers
A couple of years ago I expressed doubt concerning the rosy future of mobile networks based on GSM/3G technology — then the situation of content providers wasn’t obviously under forthcoming threat. 
Now it is easier to suggest that changes to the market of mobile communications (disruptive technologies and globalization) will seriously infringe content providers.
Traditional companies connected to the mobile business are for the moment still feeling OK, but harmful changes in technology and business models are becoming increasingly obvious.
Wi-Fi, forthcoming WiMax, Voice over IP (e.g. Skype available for Microsoft mobile platforms) — the functionality of mobile devices is constantly enriching itself. This is happening because of an increase of the hardware base and program components. This in turn is related to the fact that mobile devices fully understand standard computer language — JPEG, MP3 and MIDI files, are connected by the USB-interface, by wireless interfaces (IrDA, Bluetooth) and with the help of memory cards. 
The time is over when the only way to copy something new to the memory of your telephone was through its service operator. The various systems of protection against copying were always ineffective, for example, zonal DVDs, tied files from iTunes to iPod, and the probability of the new system DRM protecting content does not appear high. 
Sooner or later open source will settle down in the mobile world. Motorola released a mobile with Linux, and Nokia is already selling a  Linux-based internet tablet. On such platforms the installation of DRM systems is pointless.
A similar thing occurs with information as text. From sites such as lib.ru or fictionbook.ru one can download a significant amount of books in Russian. A library of CDs and DVDs are also easily accessible, costing between 60 and 100 rubles. In most cases such content is a pirated version.  English books are less accessible, but the project Gutenburg.org legally presents the classics of world literature, where authors’ rights do not exist. 
In due course much can be expected from the much-hyped Google project called ‘Print.’ It can therefore be said that there is plenty of similar, accessible content. Moving the text to pocket computers and mobile phones by oneself is less and less complicated.
A shift in our system of values is now taking shape. When a new generation that now downloads illegal music from the internet and uses open source software will age, it will more likely change the law than its way of thinking, namely its attitude towards digital content in particular and intellectual property in general. Namely, “if it’s possible to independently make a copy and use it for a personal and non-commercial end, there is no need to pay for the copy.” 
In the near future the attempts of media companies to change the attitude of users toward copying — adverts and law suits against people who have “downloaded” music — have not been convincing to say the least. 
It means that content in itself is not recognized as a good. And of interest to the market, from a commercial point of view it can only be as a contextual part of a more complicated service. Such thinking, and its corresponding business model, is clearly visible in such companies as Google: on one hand their services are impossible to copy, on the other for end users they are free.

TITLE: From Call Center to Top Boss
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: It took only seven years for Nikolai Demenchuk to build a career at MegaFon.  Having joined the company as a call center operator, he rapidly worked his way up the corporate ladder to become appointed deputy director and commercial director at its Northwest branch.
Born in 1974 in Leningrad, Demenchuk said that he had never planned a career in business. 
“As a child I had trivial boys’ dreams to become a sailor, a fireman or an astronaut,” he said.
Having entered St. Petersburg State University of Aerospace Instrumentation to study radio engineering and technology, Demenchuk always managed to combine study with work. In order to make some money and gain work experience, he never hesitated to accept different jobs, working as a driver, an electric equipment adjuster, and even a remover-layer operator.
Eventually having graduated in 1996, Demenchuk joined MegaFon Northwest, then known as NWGSM, where he started working as an operator in their technical support service. 
“At that time, ten years ago, it was not yet a real call-center. There were just 5 to 6 phone lines to take the calls of clients,” said Demenchuk. 
“Anyway, it was the most rapidly developing department in the whole company where, besides a competitive salary and an interesting professional environment, there were lots of opportunities for professional growth.”
Just three years later he was promoted to call center manager. Demenchuk said that, besides gaining practical work experience, he never refused the chance to participate in different training courses and seminars, including several internships at Nokia in Finland, and at Call Center Management in England.
In 2000, wanting to satisfy his growing thirst for knowledge he entered the International Management Institute of St. Petersburg to study for an MBA degree. 
“It was a very good course that enabled me to systematize everything I had learnt before as well as to find out lots of new stuff.”
It was only then that Demenchuk thought of changing jobs and even left MegaFon for three months. 
“I grew professionally as the company was growing. And having worked as call center manager for a few years, I realized that I had the desire for further professional development but at that time there were no opportunities within the company’s call center,” he explained. 
“That’s why I accepted an offer to run an interesting project at Telecom Design. However, in 2003 I returned to my ‘native’ company in the position of commercial director.”
Now, as deputy director and commercial director at MegaFon Northwest, Demenchuk is in charge of  commercial services, the company’s largest department with over 450 staff working in marketing, sales, advertising, public relations and client servicing divisions. 
Besides checking reports, discussing issues with the company’s other top managers and dealing with urgent problems, Demenchuk said that most of his time is devoted to negotiating with his team in order to reach decisions by way of consensus. 
“I think that logical, systematic thinking and strong communicative skills are a must for all top managers who are constantly facing a variety of choices and must coordinate the work of their subordinates,” he said. 
Having started his career from the bottom, Demenchuk said that he does not understand many of today’s graduates who immediately expect good positions with decent salaries just after graduation. 
“The labor market in St. Petersburg is saturated. There are only a few good specialists with sound work experience available,” he said. 
As a piece of advice for those who want to achieve professional success, Demenchuk said that instead of mainly aiming for a career, it is important to think of gaining work experience in a good company, be purposeful and never stop self-development.
“To become a good manager, you  need to elaborate a systematic approach to work,” he said.
Demenchuk’s strong work ethic is highly appreciated by his colleagues. 
“Nikolai is a top manager of a European, Western breed, a high-level professional who not only has a detailed knowledge of the company’s work but also applies a completely systematic approach to management. Moreover, he is just a nice person to work with,” said Yevgeny Vasilyev, general director at Petersburg Transit Telecom.
After busy work days Demenchuk likes to relax by playing tennis, diving or going alpine skiing.