SOURCE: The St. Petersburg Times
DATE: Issue #1223 (89), Tuesday, November 21, 2006
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TITLE: Deal on WTO Signed
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia and the United States on Sunday signed the long-awaited bilateral deal that paves the way for Moscow's entry into the World Trade Organization after 13 years of diplomatic wrangling.Economic Development and Trade Minister German Gref signed the deal with U.S. Trade Representative Susan Schwab on the sidelines of an Asia Pacific Economic Cooperation summit in Vietnam's capital, Hanoi.
"This is a historic step — the last step — that marks Russia's return to the market principles of the world economy," Gref said.
Schwab also sounded an optimistic note, calling the agreement "an important milestone." Russia "belongs as a fully fledged member of the WTO," she said.
The agreement, an 800-page document that calls on Moscow to lower import tariffs on a range of goods, including agricultural and technological products, by the time of its accession to the WTO, lifts the biggest remaining obstacle to the country's entry into the 149-member organization.
Yet stumbling blocks remain. The new Democrat-controlled U.S. Congress, which is likely to be less pro-free trade than its Republican predecessor, will have to sign off on the deal with Russia, while WTO members Georgia and Moldova have threatened to block Moscow's bid if it fails to lift sanctions against them.
Gref said he hoped to resolve the issues with Georgia and Moldova — and conclude a required round of multilateral talks with other WTO members — by mid-2007.
Sunday's deal brought an increasingly rare chance for Washington and Moscow to applaud their relations, which have sunk to new lows over disagreements on Iran and U.S. concerns over human rights and energy security under President Vladimir Putin.
U.S. President George W. Bush told Putin during the summit of Asia-Pacific leaders that he would lift sanctions imposed on jet maker Sukhoi for selling restricted goods to Iran, Foreign Minister Sergei Lavrov said in Hanoi.
But no agreement had yet been reached on Rosoboronexport, the arms exporter also slapped with U.S. sanctions in August, Lavrov said.
The sanctions on the two companies were imposed for two years under a U.S. law that bars government agencies from working with firms judged to be aiding Iran in acquiring weapons of mass destruction.
Lavrov maintained a defensive stance on the issue Sunday, saying Russia was "certain that similar sanctions would also be lifted from Rosoboronexport, since it did not supply Iran with anything forbidden."
Some observers have suggested that Washington could link its approval for Russia's entry into the WTO to a more compliant attitude on the issue of Iran. The United States has called on Moscow to halt its aid to Iran's nuclear program, including construction of the $800 million nuclear reactor at Bushehr.
Putin and Bush seized on the bilateral agreement as a sign of good relations.
Speaking to reporters after his meeting with Bush, Putin said: "This document gives a favorable foundation for the resolution of all questions, including the sharpest international problems."
The agreement "will be good for the United States and good for Russia," Bush said.
The bilateral agreement touches on over 100 sectors of the economy, Gref said, and includes liberalization of trade in medicine, medical equipment, electronics and computer technology.
"This agreement can be seen as an agreement between partners. We went forward together and took into account the interests of both sides," Gref said.
The pact will see the country liberalize its automobile, air and banking industries, allowing full foreign ownership of Russian banks and brokerage services upon accession. Foreign insurance companies will be allowed to operate direct branches, while banks will still have to open Russian subsidiaries.
The agreement also builds a framework for Russia to crack down on piracy, setting a timeline for enacting laws on the counterfeiting of pharmaceutical and computer goods in a bid to address the country's poor record on intellectual property rights.
Vneshtorgbank CEO Andrei Kostin said the country's banking sector had a lot to do before accession. "Russian banks must seriously consolidate, get stronger and grow, because for us the WTO presents a serious challenge," Kostin said, Interfax reported.
The Russian delegation also included Basic Element chairman Oleg Deripaska, Gazprom deputy chairman Alexander Medvedev and Rosneft CEO Sergei Bogdanchikov.
Russia must still consolidate its bilateral deals with Costa Rica, Guatemala, El Salvador and Moldova, and renegotiate its entry with Georgia.
A Georgian official said Sunday that Tbilisi would oppose Moscow's WTO bid as long it continued illegal trading with the separatist republics of Abkhazia and South Ossetia.
"Without Georgia's agreement, Russia can't join the WTO," said Vakhtang Lezhava, Georgia's deputy minister for economic and structural reforms, Interfax reported.
Georgia would only give its approval "if Russia fulfills trade agreements with Georgia through legal border points and legalizes the customs points on the Abkhaz and South Ossetian sections of the border," he said.
"If these measures are not fulfilled then there will be no agreement from our side."
Georgia can use its position as a WTO member to protest Russia's ongoing travel and trade blockade of the country, imposed after Tbilisi briefly arrested four suspected Russian spies in October. Moscow also maintains a ban on Georgian mineral water and wine on health grounds.
Tbilisi says the wine and water bans are politically motivated to protest the country's shift toward the West.
Moscow signed a bilateral deal with Sri Lanka on Friday, agreeing to scrap a 5 percent import duty on loose tea, Sri Lanka's main export, within two years of joining the WTO in exchange for the country's approval of its membership.
Under WTO rules, Russia must consolidate all its bilateral deals so the same trade rules apply to all countries and sign a multilateral agreement with all the WTO members.
As well as approving Russia's WTO bid, the U.S. Congress also has to repeal the Jackson-Vanik amendment, a Soviet-era relic that denies normal trade-relations status to Russia over human rights concerns.

TITLE: Kremlin Denies Poisoning Ex-Spy
AUTHOR: By D'Arcy Doran
PUBLISHER: The Associated Press
TEXT: LONDON — A former Russian spy who was poisoned has been moved to an intensive care unit after his condition deteriorated slightly, and a senior Kremlin spokesman on Monday dismissed as "sheer nonsense" allegations that the Russian government was involved in harming him.Former KGB and Federal Security Service Col. Alexander Litvinenko, an outspoken Kremlin critic, was under armed guard at a London hospital after apparently being given the deadly poison thallium — a toxic metal found in rat poison.
Litvinenko "remains in a serious condition but last night there was a slight deterioration in his condition and he was transferred to intensive care as a precautionary measure," University College Hospital said.
Litvinenko, who had been looking into the killing of Russian investigative journalist Anna Politkovskaya, told reporters last week that he fell ill Nov. 1 following a meal at a sushi restaurant in London with a contact who claimed to have details about the murder.
In Moscow, Kremlin spokesman Dmitry Peskov told The Associated Press that any suggestion of Russian government involvement in Litvinenko's poisoning was "nothing but sheer nonsense."
He added that he would not comment on the poisoning itself.
Litvinenko has told reporters that the Federal Security Service, known by its Russian initials FSB, still operates a secret Moscow poisons laboratory dating from the Soviet era. He was one of several former Russian intelligence officers to accuse Moscow of being behind the dioxin poisoning of Ukrainian President Viktor Yushchenko during his 2004 election campaign.
Alexander Goldfarb, who helped Litvinenko flee to Britain in 2000, said it is possible the thallium that sickened Litvinenko was sprinkled into his drink during a meeting at a central London hotel on Nov. 1 before he went to the restaurant.
Goldfarb said the former spy told him more details on Monday morning about the day he was poisoned during a telephone conversation from his hospital bed.
Litvinenko briefly met two men from Moscow — one of whom was a former KGB officer who he knew — for tea at the hotel, Goldfarb said.
"I called Alexander in hospital ... he told me it is true, on that day, before meeting the Italian, he met with two Russians," Goldfarb said, adding Litvinenko had not previously met the second man.
Litvinenko told police about the two men, he said.
Earlier on Monday, Goldfarb told British Broadcasting Corporation radio that the former agent was poisoned because of his opposition to the Russian regime.
"It's very difficult to imagine the president's ordered the killing, it's true, and nobody's saying that [President Vladimir] Putin personally ordered it, though it's very likely," Goldfarb told the BBC.
Oleg Gordievsky, a former senior KGB agent who defected to Britain in the mid-1980s, alleged in an interview with The Times newspaper that those who tried to kill Litvinenko would have had to have obtained permission "from the top" for the operation.
Gordievsky alleged the attack was carried out by a former agent who was recruited from prison by the FSB, the newspaper reported.
Police said a specialist crime unit began an investigation Friday into how Litvinenko may have been poisoned. No arrests had been made, said a Scotland Yard spokesman, speaking on condition of anonymity in line with force policy.
Britain's Press Association identified the Italian contact Litvinenko met at the restaurant as Mario Scaramella, an academic who has helped investigate KGB activity in Italy during the Cold War. Scaramella could not immediately be reached for comment.
Politkovskaya, who had written critically about abuses by Russian and pro-Moscow Chechen forces fighting separatists in Chechnya, was gunned down Oct. 7 inside her Moscow apartment building. Her attackers have not been found.
Politkovskaya herself had alleged that she had been deliberately poisoned to prevent her from covering the 2004 seizure of a school in southern Russia by Islamic separatists. She fell ill, she said, after drinking a cup of tea.
A doctor treating Litvinenko told the BBC that tests showed he had been poisoned by thallium.
Dr. John Henry, a clinical toxicologist who also treated Ukrainian President Viktor Yushchenko after his poisoning in 2004, told the BBC that thallium can cause damage to the nervous system and organ failure, and that just one gram can be lethal.
Litvinenko joined the KGB counterintelligence forces in 1988, and rose to the rank of colonel in the FSB. He began specializing in terrorism and organized crime in 1991, and was transferred to the FSB's most secretive department on criminal organizations in 1997.

TITLE: Talks Turn Toward Iran, North Korea
PUBLISHER: Combined Reports
TEXT: MOSCOW — Russia and the United States, upbeat after striking a breakthrough bilateral deal on Moscow's entry into the World Trade Organization, appeared keen on Sunday to cooperate in handling other tricky issues, such as Iran and North Korea.But Russian officials attending the Asia Pacific Economic Cooperation summit in Hanoi were quick to say Washington should not expect them immediately to change their stand on Iran's nuclear program.
"We talked together about our common interests and about how we are going to work together to solve some of the world's problems, including Iran and North Korea," U.S. President George W. Bush said after talks with President Vladimir Putin.
The two met on the sidelines of the APEC summit in the Vietnamese capital two hours after their trade officials signed the deal on Russia's accession to the WTO.
"This document gives a favorable foundation for the resolution of all questions, including the sharpest international problems," Putin said.
The two did not expand on their discussion, but differences over how to handle Iran's nuclear ambitions have been a key irritant in bilateral relations along with the WTO talks, now defused by the agreement in Hanoi.
Washington accuses Iran of planning to obtain its own nuclear bomb and together with Western allies wants the United Nations Security Council to penalize Tehran with sanctions. A draft resolution drawn up by Britain, France and Germany and backed by Washington demands that nations prevent the sale or supply of equipment, technology or financing that would contribute to Iran's nuclear or ballistic missile programs.
But Russia has submitted amendments that cut roughly one-half of the draft and leave nations to decide which items Iran can buy. Russian officials have said any sanctions should encourage Tehran to more talks, rather than push it into a corner.
After the initial announcement of the WTO deal earlier this month, political analysts speculated that Putin could respond in kind to Bush and become more cooperative on Iran. But Foreign Minister Sergei Lavrov dispelled such suggestions. "The resolution, which will, I think, ultimately be passed by the Security Council, will ... support IAEA [International Atomic Energy Agency] efforts and formulate steps needed to answer questions which IAEA has regarding Iran, no more than that," Lavrov said after the Bush-Putin talks.
He also said the two leaders charged him and U.S. Secretary of State Condoleezza Rice to work on merging their separate initiatives to create international uranium-processing centers that would allow any country to develop atomic energy without triggering suspicions of harboring military ambitions.
"The idea is ripe that a legal framework for the existence of such centers should be worked out," Lavrov said, adding that the centers could be placed under IAEA control.
Speaking on North Korea, Lavrov said Putin and Bush supported the idea of resuming in December six-party talks including North and South Korea, Japan and China.
The talks are designed to persuade Pyongyang to abandon its nuclear weapons.
Lavrov said Bush and Putin had expressed hope that the talks would resume in December, Interfax reported.
Bush on Sunday also sought Chinese President Hu Jintao's help on reining in North Korea's nuclear ambitions. China has shown some support for enforcing UN sanctions enacted against North Korea after it tested a nuclear bomb last month, and was instrumental in persuading Pyongyang to agree to return to the negotiating table.
The threat from North Korea rated a statement by APEC, but one that was only read out loud, falling short of what the United States was seeking. U.S. National Security Council official David McCormick said the statement, read by Vietnamese President Nguyen Minh Triet at the end of the closed-door summit, said North Korea must return to talks and stop developing nuclear weapons, while urging nations to enforce sanctions against Pyongyang.
"The statement was very firm," McCormick said. "What was important was that the members of APEC came together on a common statement."

(Reuters, AP, SPT)

TITLE: S. Ossetia, Abkhazia Moot Terms
PUBLISHER: The Associated Press
TEXT: MOSCOW — The leaders of South Ossetia and Abkhazia said Friday that they would renew talks with Tbilisi if Georgian President Mikheil Saakashvili signed an agreement vowing not to use or threaten force."If Mr. Saakashvili is ready for this, we are ready to meet with him at any moment," South Ossetian leader Eduard Kokoity said at a joint news conference with Abkhaz leader Sergei Bagapsh and Igor Smirnov, leader of the breakaway Transdnestr region of Moldova.
Bagapsh said there could be no talks with Tbilisi until it withdrew its troops and "so-called government" from Abkhazia's Kodor Gorge.
In late July, Georgian forces moved into the upper part of the gorge to root out members of a defiant militia and established a local administration there made of people who fled the separatist fighting in Abkhazia in the 1990s. Abkhaz separatist officials said Georgia's move into the gorge violated cease-fire terms and presaged an attempt to take the rest of Abkhazia by force.
Georgia lost control over South Ossetia and Abkhazia in bloody separatist wars in the 1990s. Transdnestr broke away from Moldova in another war in the early 1990s.
The Foreign Ministry said that in talks with Moldovan envoys Thursday, Moscow emphasized the need for a guaranteed special status for Transdnestr within Moldova — reflecting Russia's reluctance to back Transdnestr's independence drive.
Russia has said the fate of United Nations-administered Kosovo, where many seek independence from Serbia, could serve as a potential precedent for the breakaway regions.
The breakaway leaders tried Friday to keep the issues separate. "Whether or not there is Kosovo has no bearing on our countries," Smirnov said.
Kosovo Prime Minister Agim Ceku is due to visit Moscow, a close ally of Serbia, at the end of November. Russian Deputy Foreign Minister Vladimir Titov said Friday that Moscow would emphasize the importance of finding a solution that was equally acceptable to Serbia and Kosovo.
Georgian Prime Minister Zurab Nogaideli on Saturday accepted the resignation of hawkish former Defense Minister Irakli Okruashvili, and a U.S. diplomat hinted his exit reflected a desire in Tbilisi to seek a resolution of disputes with South Ossetia and Abkhazia.
Nogaideli relieved Okruashvili of his post as economic development minister, one day after Okruashvili tendered his resignation.
Saakashvili had shifted Okruashvili from the Georgian Defense Ministry to the economic post just a week earlier in a move apparently intended to show that the government was softening its policy toward South Ossetia and Abkhazia.
Speaking Saturday in Abkhazia, U.S. Deputy Assistant Secretary of State Matthew Bryza said "to some extent, there is a new mood" in Tbilisi.

TITLE: Kadyrov Foe Shot Dead on Moscow Street
AUTHOR: By Carl Schreck
PUBLISHER: Staff Writer
TEXT: MOSCOW — The former head of security for assassinated Chechen President Akhmad Kadyrov was shot dead Saturday on Leninsky Prospekt during a police operation to arrest him for purported involvement in abductions and killings in Chechnya.Movladi Baisarov, who fell out of favor with Kadyrov's son, Chechen Prime Minister Ramzan Kadyrov, was shot by a Chechen special forces officer after pulling a grenade on arresting officers, City Prosecutor's Office spokeswoman Svetlana Petrenko said Sunday.
Baisarov was pulled over by a group of officers from the city police and the Chechen Interior Ministry at around 6 p.m. near 30 Leninsky Prospekt in southern Moscow, Petrenko said.
As he was getting out of the car, he tried to hurl the grenade at the arresting officers, and "one of the Chechen special forces officers was forced to shoot him," Petrenko said.
Prosecutors are investigating the shooting to determine whether police used an appropriate amount of force during the arrest, she said.
Television footage showed Baisarov's body sprawled out next to the car and clad in a dark leather jacket. His face was bloody, and his face and shoulders lay in a pool of blood.
Baisarov's death came just days after he accused Ramzan Kadyrov of ordering his murder under the pretext of arresting him for abductions and killings in Chechnya.
In an interview published Tuesday in Vremya Novostei, Baisarov said a group of "armed men" close to Kadyrov had arrived in Moscow "with grenade launchers and a full load of ammunition ... to detain me."
"I heard the group arrived with verbal orders," he said.
"If they detain me or if I'm handed over to federal agencies, they will have to destroy me, and make it look as if I had tried to flee or something like that."
Baisarov, a former Chechen rebel who switched sides, headed the Gorets armed detachment that carried out anti-terrorist operations under the Federal Security Service, or FSB, but was disbanded earlier this year.
Several members of the unit surrendered their arms last week, but many others have declined to comply, effectively making them an illegal armed formation.
Ramzan Kadyrov announced in September that Chechen prosecutors had issued a federal arrest warrant for Baisarov on suspicion of participating in the January 2004 disappearance of a family in Grozny. Chechen authorities said last month that a grave containing 10 corpses of members of the family, the Musayevs, had been discovered and that they had information that Baisarov had shot some of them himself.
Human rights groups and ordinary Chechens have accused Kadyrov and his paramilitary security force of kidnapping, torturing and killing civilians as well.
Kadyrov has denied wrongdoing.
As Kadyrov increased the pressure, Baisarov began attacking Kadyrov in interviews in the Russian media.
Political commentator Yulia Latynina said on her weekly radio show on Ekho Moskvy last week that the spat between the two would only end in bloodshed.
"I can't imagine how the conflict between Baisarov and Ramzan Kadyrov could be settled other than with the death of one or the other," said Latynina, who also writes a column for The Moscow Times.
Baisarov had been under FSB protection in Moscow, according to a report in Moskovsky Komsomolets on Friday.
An FSB spokesman declined to comment Sunday.
Novaya Gazeta journalist Vyacheslav Izmailov said Sunday that his newspaper was preparing to publish information linking Baisarov's murder with that of investigative reporter Anna Politkovskaya, who was shot dead by an unknown assailant in her apartment building on Oct. 7.
Izmailov, who worked closely with Politkovskaya on her stories about human rights abuses in Chechnya, said former Grozny Mayor Beslan Gantamirov had come to Novaya Gazeta's offices two weeks after Politkovskaya was murdered and said armed men close to Kadyrov had been sent to Moscow with orders to kill three people: Politkovskaya, Baisarov and Gantamirov himself.
Gantamirov, a Kremlin loyalist who was sidelined by Kadyrov's paramilitary force in 2002, could not be reached for comment Sunday.
Chechen Deputy Prime Minister Adam Demilkhanov denied that Baisarov had served as head of security for Akhmad Kadyrov.
It was in fact Baisarov's brother, Sharani Baisarov, who had worked in the security detail and had been killed in the May 9, 2004 blast that killed the Chechen president, Demilkhanov said.
"We all knew Sharani Baisarov as a loyal, upstanding and brave soldier," Demilkhanov told Interfax. "We respected him and his family. His brother Movladi Baisarov, however, took the criminal path."
Movladi Baisarov has been identified as the head of Kadyrov's security in numerous media reports published over the past half decade. Reports around the time of Kadyrov's death identified Sharani Baisarov as a member of the security force who died in the blast.

TITLE: Officials Investigate Suspected Case of Conscript Buried Alive
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — Defense officials are investigating whether a drunken officer buried a conscript alive, the latest claim of a brutal hazing to rattle the armed forces.Confirmation of the case on Friday came as Defense Minister Sergei Ivanov presented plans to increase public oversight of the army.
The conscript, Yevgeny Ovechkin, 20, was beaten by a drunken commander in March at Air Force Unit No. 31130 in Yekaterinburg, said Pavel Nakoryakov, head of the Ufa branch of the Committee for Social Protection of Military Servicemen and Members of Their Families, a public group. The conscript's parents live in Ufa.
The commander, who held a personal dislike for the conscript, ordered three soldiers to bury him alive, Nakoryakov said. A Yekaterinburg resident witnessed the incident in hiding, dug out Ovechkin and hid him for several weeks, Nakoryakov said. After that, Ovechkin returned to Ufa and told his mother what had happened. "I talked to him in July. ... I believe his story," Nakoryakov said of Ovechkin.
He refused to provide contact information for Ovechkin, saying he was charged with desertion and in hiding.
He said pressure from his group had prompted the opening of the criminal case into the commander. He refused to name the commander, who holds the rank of major, citing the investigation.
The commander has been charged with abuse of authority for beating soldiers repeatedly, said a prosecutor with the military prosecutor's office for the Volga-Urals military district. But investigators have yet to confirm the burial account, said the prosecutor, who refused to give his name. "We are continuing to investigate the case," he said.
A special Air Force commission had been dispatched to Yekaterinburg to investigate the burial claim, Air Force spokesman Alexander Drobyshevsky said, Interfax reported. He also said Ovechkin deserted his unit in March.

TITLE: $5,166 Pays for 2 Cars, the Rent and Grandpa
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: MOSCOW — Cluttering most of the tabletops in Dmitry's apartment are old photos and new appliances — both reminders, in their own way, of his successful grandson, Slava."I bought him the microwave," Slava said, "and the next day he put a metal cup inside and broke the thing. I tried to get him another, but now he says he's scared of them."
Slava has been helping to provide for his grandfather since he was 15. At first, when the grocery shelves were empty in the early 1990s, he peddled yogurt from atop a foldaway chair. Now 28, Slava holds a degree in accounting and works as a financial manager for a chain of car dealerships, earning 137,950 rubles ($5,166) per month.
On Saturdays, he drives to Istra, his hometown northwest of Moscow, and does the shopping for his grandfather.
"The prices go up slow enough that there's no big surprises, at least not for me," Slava said. "They name the price and I pay it. 150 or 200 rubles at every stand. About 1,000 for everything."
Such a calm reaction would be hard to find outside the 20 percent of society that Slava represents: a group known as the core of the middle class. The upper class, which is so small that it is statistically insignificant, may also shrug at the prices. But the 10 percent of Russians who are poor and the 70 percent in the "potential" middle class who are struggling to attain Slava's lifestyle have been hit harder by the growing cost of living.
"If grandpa would do the shopping himself," Slava said, "I'm sure he would be in a constant state of shock."
In the first nine months of this year, fruit and vegetable prices grew by a staggering 21.6 percent, and in August, a month when dacha harvests usually reverse this trend, consumer prices continued to climb.
"This was a real surprise," said Peter Westin, chief economist at MDM Bank. "August is normally a month when we have seen very low inflation."
But the growth of official wages, he said, has helped balance against this trend, because as wages increase, inflation takes less of a toll on people's buying power.
This year, he said, wages adjusted for inflation should increase by 12 percent or 13 percent, a good deal higher than last year's increase of 9.9 percent.
But even though this softens the impact of rising prices, it does not amount to much in terms of extra cash. That is because the average monthly income is only $450 and at the current rate, the average wage grows by about $5 per month, hardly enough for one stop on Slava's weekly shopping trips. Slava's official net income of $1,000 per month is much higher than the national average. But it leaves little after the $700 he pays each month for his Moscow apartment.
What saves Slava is his unofficial income: the "gray" wages paid in cash that keep him and most of the middle class relatively aloof of rising prices.
In Slava's case, the untaxed wage accounts for almost 80 percent of his income, and on the surface it seems to benefit everyone involved. His employer wins by saving money on labor taxes, which stand at 42 percent for Slava's mid-sized company, and the workers win when these savings are discreetly passed on to them.
"The only way our company can possibly pay its workers a decent wage is by not paying its taxes," said Slava, who agreed to disclose his income on condition that his last name not be published. "Everybody understands this."
Indeed, Russians do understand this, according to a survey of 4,000 households by the Carnegie Moscow Center. Roughly 60 percent of them, in fact, endorsed gray wages as benefiting both them and their employers.
"The middle class is traditionally very law-abiding, but it cannot be so in Russia," said Tatyana Maleva, the author of the study, which was released in 2003 and is the latest comprehensive overview of the middle class. Maleva and other people who track the middle class say the findings remain largely unchanged.
"Without the shadow wages, this country would have no middle class," Maleva said.
But she and Westin agreed that these practices have their drawbacks. The state, of course, loses tax revenues, and since unofficial earnings are very seldom kept in banks, the banks have less money to loan to their customers. This is bound to have a negative impact on economic development — and on the consumer.
To this Slava can testify. Three years ago, when he was part of the potential middle class and working at a different company, Slava applied for a $12,000 car loan but could not prove that his income was high enough to make the payments. There were no records, of course, of his unofficial wages and no past loans to back up his claims. So to offset the risk of granting the loan, his lender charged him 25 percent in interest.
"I guess it wasn't worth it," he said. "But taking the metro in the winter was getting to me."
Now, three years down the road, Slava drives a 2005 Volvo jeep that cost him $70,000.
"I go by the old rule: If you spend less than 20 or 25 percent of your income on your car, then you're probably cheap, but if you spend more than 20 or 25 percent, you're probably crooked. So I guess I'm neither one," he said.
This time around, he had repayment papers from a previous loan to show he had a good credit history. His official income was also higher because he had taken the job as financial director. He obtained a five-year loan with an interest rate of 12 percent — almost exactly the national average at the time, according to the Central Bank.
Slava's monthly payments on the loan are about $800, and after the price of insurance and gasoline (about $10 and $100 per month, respectively) his total driving expenditures come to 18 percent of his monthly income — still "cheap" by the rules he likes to follow.
But he has a hobby that helps make up the difference. Inside a sheet-metal garage in his grandfather's yard, he keeps a 1977 Moskvich, a Russian-made "classic," he called it, that is white except for patches of rust. Two Sundays ago he drove it to a mechanic for engine work.
"I put a few hundred dollars into it when I can," he said. "In about a year, it should be in a condition to race, and there are lots of classic car circuits around Moscow that are getting really popular.
"What else am I supposed to spend my money on," he added, "my girlfriend?"
Jewelry for his girlfriend is certainly an option, but more typically middle-class options, such as saving or investing, do not interest Slava. This is often the way it goes for the middle class.
"Right now," Westin said, "people spend as soon as they make their money, more or less."
And any savings tend to be hidden under the mattress, rather than being deposited in the bank. In part, this is because of a lingering distrust of financial institutions left over from the financial crises of the 1990s. But more importantly, banks do not offer much incentive. A one-year deposit in rubles now earns about 7 percent, a whole 2 percent shy of beating this year's projected inflation.
An alternative would be to invest in a fast-growing market — real estate or the oil and gas sectors. But these markets are simply out of reach for the middle class.
"The middle class has no access to the oil and gas sector, to the banking sector," the markets most responsible for the boom of the last eight years, said Maleva, the author of the report on the middle class.
As for his savings, Slava did not want to name a figure. But across from the mattresses in his bedroom stands a testament to where his leftover earnings go: a workstation equipped with a fax machine, a sleek Sony Vaio laptop, scanner and printer — a setup worth about $4,500.
"All this stuff is the first thing I see when I get up in the morning," Slava said, and for price of broadband Internet connection — about $30 per month — he can do most of his work from home.
But this can be more a burden than a freedom. Slava's workday usually lasts at least 12 hours. "I work too much," he said.
But Slava said he was not complaining. He has more than $1,000 left over every month after he pays for food and clothing for himself and his grandfather (35,100 rubles), his Volvo and Moskvich (32,400 rubles), rent (18,900 rubles), electronics and his two cellphones (8,100 rubles), health insurance (4,450 rubles) and utilities (900 rubles).
So far this year, Slava has splashed out $4,000 for two vacations, mainly on the insistence of his girlfriend, he said. One was to Egypt in February and the other was to Prague in May.
The main thing that worries him financially — indeed the only thing, he said — is his company's shadow payroll somehow coming to light.
"The feeling is that there are no protections for business," he said. "If [the authorities] want, they can just pull you in by your ears and take your business. And even if you pay your taxes fair and square, there's no guarantee that they won't come after you.
"The whole Yukos affair makes me very nervous," he added.
His fears are well grounded. "If you enforce the rule of law," Westin said, companies that skirt their taxes will unavoidably have to be shut down — "and that creates a lack of job security, sure."
Still, things are steadily improving. "Increasingly, companies are making their wages white," Westin said. It is a slow process and will most likely require an easing of the tax burden before it makes a difference for shadow wages. But when it does, the threat of the tax inspector will not loom as large as it does for Slava now.
Owning an apartment also looks well within reach for him. Within two years, he plans to take out a $150,000 loan with his girlfriend, who works as a real estate broker. It would be his third loan and her second, and if they get married, he hopes their combined credit history would bring the interest rate to below 10 percent.
"Otherwise," he said, "I'll just move in with my grandpa.
"That is, if I take him," his grandfather said.

TITLE: Russia Urged to Commit Energy
AUTHOR: By Aoife White
PUBLISHER: The Associated Press
TEXT: BRUSSELS, Belgium — The European Union urged Russia and other neighbors Monday to commit to long-term energy contracts that will guarantee them customers and investments while securing affordable oil and natural gas supplies for the EU.The appeal underscored Western Europe's desire to make energy a top priority at a time when its demand is growing, its own supplies are dwindling and world prices are high.
It came at the start of a two-day conference of officials from the EU and oil and gas exporting nations.
EU External Relations Commissioner Benita Ferrero-Waldner said producers and consumers both win by a more structured energy relationship.
Russia was a "key strategic partner for the EU," she said, adding that the revenue Russia earns from energy sales to the EU "has undoubtedly been one of the key factors in Russia's economic revival."
In turn, "the stable flow of reasonably priced energy has been an important factor underlying the EU's economic growth and well-being," Ferrero-Waldner added. "It is this 'win-win' situation which both sides must work to reinforce."
The EU argues this means producer nations must commit to fair trade in energy production and transit so as to secure investor confidence and guarantee environmentally safe, predictable, long-term deliveries for the decades ahead.
Facing the prospect of importing 70 percent of its energy over the next 15 years, the EU wants to shore up relations with reliable energy exporters while looking for new partners and new routes.
Russia now supplies a quarter of Europe's oil and over two-fifths of its gas. But EU-Russia relations are troubled by EU human rights complaints and Moscow's efforts to secure access to Russian oil and gas primarily for Russian companies.
Unless Moscow changes its stance, Poland may veto the start this week of an EU bid to get Russia to commit to fair trade principles in energy. The Polish veto threat also stems from energy supply fears as well as a Russian ban in imports of Polish meat and plant products.
The EU threw open the doors to energy players at the Brussels conference attended by officials from Norway, Ukraine, Nigeria and Azerbaijan, and executives from energy companies Gazprom, E.On Ruhrgas AG, Royal Dutch Shell PLC and BP PLC.
It was the first time the EU has placed itself as the voice of Europe on energy issues, taking over from individual efforts from its 25 member states as they struggle to deal with a more complex international scene.
However, European leaders must still decide next March what powers they will give the European Commission to negotiate on their behalf. The Commission sees clear benefits from taking charge of energy policy.
"As a Union we are a major customer for suppliers and as consumers we have considerable purchasing power," Ferrero-Waldner said earlier. "We should ensure that we work together to get the best deal and the strongest energy security for all Europeans."

TITLE: Evraz to Buy America's Oregon Steel for $2.3Bln
AUTHOR: By Yuriy Humber
PUBLISHER: Bloomberg
TEXT: MOSCOW — Evraz Group SA, a steelmaker partly owned by billionaire Roman Abramovich, agreed to acquire Oregon Steel Mills Inc. for $2.3 billion, the biggest-ever acquisition in the U.S. by a Russian company.Evraz agreed to pay $63.25 a share for all of Oregon's stock to gain a foothold in the U.S. and create the world's largest producer of rail products, the companies said in a joint statement. That's 30 percent more than the six-month average price of the Portland-based company's stock.
Russian steel producers and rivals in India and Brazil are seeking to process more crude steel in North America and Europe to make more expensive products such as rail tracks and pipes.
British-Dutch steelmaker Corus Plc, which Evraz considered buying earlier this year, is the subject of a bidding war between India's Tata Steel Ltd. and Brazil's Cia.
"Oregon offers a unique opportunity to expand in what is one of the largest and most mature markets in the world,'' Evraz Chief Financial Officer Pavel Tatyanin said by telephone from the company's Moscow office Monday.
The deal will allow Evraz to produce 1.5 million tons of track and other railroad products a year, the most in the world, Tatyanin said. Prices for track and other processed steel products are about 30 percent higher in the U.S. than in Russia, said Rob Edwards, an analyst with Moscow-based investment bank Renaissance Capital, via telephone.
Evraz's acquisition will be the largest by far of a U.S. company by a Russian enterprise, a trade official at the U.S. Embassy in Moscow said by telephone Monday, declining to be identified. No other Russian takeover of a U.S. company has approached even $1 billion, the official said.
Moscow-based GMK Norilsk Nickel, the world's largest nickel producer, agreed today to pay $408 million for the nickel assets owned by Cleveland-based OM Group Inc. in cash to expand output of a metal that has more than doubled in price this year.
Norilsk, controlled by billionaires Vladimir Potanin and Mikhail Prokhorov, paid a then-record $257 million in 2003 for Stillwater Mining Co. of Billings, Montana. Later that year, Severstal, controlled by billionaire Alexei Mordashov, bought bankrupt Rouge Industries Inc., a supplier to Ford Motor Co., for $285.5 million. Severstal may now make a bid for U.S. Steel, Russian newspaper Kommersant reported Nov. 17, citing unidentified people familiar with the plan.
With Oregon, Evraz will raise global total steel output 21 percent to 16.8 million tons a year, the company's said.
Oregon makes seamless and large-diameter pipes used mainly in the oil and gas industry. The U.S. company will soon complete construction of a spiral weld mill in Portland, Tatyanin said.
"Pipe-making is an attractive business to be in,'' Tatyanin said.

TITLE: Attractive Returns for Stock-Piling Finns
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: A combination of high returns and general stability is making the Finnish financial market one of the most attractive in the world for both domestic and foreign investors, a group of experts said earlier this month at a Finnish Financial Market 2006 conference in Finland.During the first nine months of the year, equity market return in Finland was 15 percent — that compared to 12 percent in Europe, six percent in Asia, 0 percent in USA and minus six percent in Japan.
In 1996-2005 the average return in Finland was 16 percent, in Europe and the U.S. 10 percent, in Asia two percent, in Japan minus four percent.
Such a performance has resulted in a bias of Finnish pension funds toward the home market.
"Recently domestic pension funds have increased their equity exposure and tend to have large domestic equity investments," said Timo Loyttyniemi, managing director of The State Pension Fund (VER).
"The international diversification of Finnish companies reduces the need for investors to diversify their international equity," he said.
About 30 percent of the top 50 Finnish companies have foreign shareholders. Between 60 and 80 percent of sales of the top 50 companies are made outside Finland.
The Finnish market is increasingly exposed to Russia, Loyttyniemi said. He spoke of the high share of international corporations (owners, boards and businesses), strong EU and Nordic integration and Nokia effects as the unique positive features of the Finnish financial market.
Among the advantages of Finnish bonds, Loyttyniemi indicated "low spreads, if any" and "one of the best run state treasuries."
In terms of corporate governance Finland is ranked 9th in the world, ahead of the U.S. and just behind Sweden and Hong Kong.
The Helsinki Stock Exchange is a part of The Nordic Exchange that also comprises the stock exchanges in Copenhagen, Stockholm, Tallinn, Riga and Vilnius. Reykjavik is soon to join.
Around 1.1 million households in Finland are holders of some kind of securities, which is almost 50 percent of all the country's households. Around 730,000 people own shares directly, with about 800,000 owning mutual funds.
"Finnish households are increasing their financial investments in securities," said Sirkka-Liisa Roine, President of The Finnish Foundation for Share Promotion.
"The largest proportion of their financial assets are in bank deposits, followed by direct share investments, and then insurance savings and mutual funds," Roine said.
"Savings in mutual funds are growing more quickly than investments. Directly private individuals buy mainly domestic shares then invest abroad through mutual funds," Roine said.(Angelina Davydova contributed to this story).

TITLE: Gazprom Boosts Gas Price for Poles by 10%
AUTHOR: By Katarzyna Klimasinska
PUBLISHER: Bloomberg
TEXT: WARSAW — Gazprom, the world's largest natural gas producer, boosted the price it charges Poland for the fuel by 10 percent.Polskie Gornictwo Naftowe i Gazownictwo SA, the Polish natural-gas monopoly, will pay about 6.7 billion zloty ($2.3billion) a year in a contract that accounts for about 50 percent of its total supply, it said in regulatory statement Nov. 18. The higher price takes effect this month, Tomasz Fill, a company spokesman, said by phone today.
The company also signed a three-year contract with RosUkrEnergo AG, a Swiss-registered company 50 percent owned by Gazprom and 50 percent owned by two Ukrainians. RosUkrEnergo will deliver 2.5 billion cubic meters of gas for about 2 billion zloty annually.
"It's too early to say how the increase will influence the company's financial results,'' Fill said by phone from Warsaw.
"We will now update our request for a gas price increase for next year.''
Polskie Gornictwo filed a request with the Polish regulator last week to increase gas prices next year in an effort to offset the higher cost of imported fuel. The company asked for a 10 percent price boost, Gazeta Wyborcza reported today, without citing anyone.
The regulator decides by how much the company can increase prices for customers in part based on import costs. Last week's filing didn't include the higher price set by Gazprom, Fill said. PGNiG will file its amended request this week, he added.

TITLE: Magna, GAZ to Form Joint Car Ventures
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Canadian car parts maker Magna International announced Saturday that it would form joint ventures with Oleg Deripaska's GAZ Group and would soon sign cooperation deals with AvtoVAZ.The Magna-GAZ ventures would make car parts in Russia and help adapt Chrysler cars for the Russian market, Magna and GAZ said at a news conference Saturday.
Next month, Magna is also set to announce deals with state-run AvtoVAZ on product engineering, vehicle assembly and organizing a supply chain, Magna executives and a senior Russian official said. "We are proud that we are in such contact with the two major Russian carmakers," Magna co-CEO Siegfried Wolf said.
As leading international carmakers move to build assembly plants in Russia, domestic automakers are looking for ways to shape up. Last December, state arms trader Rosoboronexport took control of AvtoVAZ in an attempt to turn the ailing carmaker around.
Earlier this year, GAZ bought British van maker LDV as well as licenses and equipment from U.S. carmaker Chrysler to make Sebring and Dodge Stratus sedans under the GAZ name.
"In some ways, this is what Russia needs," said Stanley Root, partner and automotive analyst with PricewaterhouseCoopers in Moscow, referring to the Magna deals.
"It helps build cars without being a competitor."
Magna has signed preliminary agreements with AvtoVAZ to help it with product engineering, vehicle assembly and a "state-of-the-art supply chain for the vehicles," Wolf told reporters.
Boris Alyoshin, head of the Federal Industry Agency, told the news conference that Magna and AvtoVAZ are currently discussing possible investments "along those three directions," adding that the two firms would announce a deal in mid-December.
Hubert HÚdl, a Magna Europe vice president, confirmed on the sidelines of the briefing that Magna would help AvtoVAZ develop a "complete family of cars. That always requires a new platform."
Magna also signed preliminary agreements to build a plant in Nizhny Novgorod to make large plastic parts for the Chrysler Sebring and Dodge Status models, as well as other vehicles.
A GAZ facility will be modernized to make metal car parts.

TITLE: Gazprom Deal In Vietnam
AUTHOR: By Todd Prince
PUBLISHER: Bloomberg
TEXT: HANOI, Vietnam — Gazprom, the world's largest natural gas producer, signed an agreement with Vietnam's state oil and gas company as President Vladimir Putin called for greater involvement in the Asian country's energy industry.Gazprom Chief Executive Alexei Miller attended a meeting between Putin and Vietnam's President Nguyen Minh Triet Monday in Hanoi. Putin said that he wanted the countries to co-operate in the nuclear power sector. Gazprom and PetroVietnam's accord may lead to Gazprom's involvement in more gas projects, company spokesman Sergei Kupriyanov said.
Gazprom's participation may help Vietnam exploit its natural gas deposits as record economic growth boosts energy demand. Vietnam, which is hosting this week's meeting of the Asia Pacific Economic Cooperation forum, hasn't got the necessary distribution network to deliver gas from its offshore fields to power stations or homes.
Vietnam is of interest "because it possesses significant proven reserves,'' Miller said after the meeting.
"Of course, with the increase in gas production, the issue of developing gas transportation infrastructure becomes important.''
Moscow-based Gazprom drilled its first well at Vietnam's block 112 in 2003 and will start a second well later this year, Kupriyanov said. Gazprom will sink five exploratory wells before production begins.
The agreement between Gazprom and PetroVietnam may allow for sales of gas they produce to third countries, the spokesman said. The companies may work together in countries outside Vietnam, he said.

TITLE: LUKoil Sees Gazprom Leading New Projects
PUBLISHER: Combined Reports
TEXT: MOSCOW —LUKoil will cede majority control of a planned joint venture for new projects on national territory to state-controlled giant Gazprom, LUKoil CEO Vagit Alekperov said Friday.Alekperov said giving Gazprom the controlling stake in the venture would not mean LUKoil would lose control of its existing oil fields, but it appeared the development could further strengthen the state's growing grip on the lucrative petroleum industry.
"Gazprom is our big brother. The big brother must have 51 percent," Alekperov told journalists.
Alekperov said the venture with Gazprom's oil arm, Gazprom Neft, would focus on new projects in various regions including western Siberia, the Timan-Pechora area in the north, the continental shelf and off the country's eastern coast. He also said it would look for acquisition opportunities in "European downstream," suggesting it could seek stakes in anything from refineries to retail operations.
Gazprom has said it aims to expand its presence in European retail markets, sparking concern among some Europeans about the growing clout of the company, which Kremlin critics see as an instrument of Russian policy.
President Vladimir Putin has strengthened state control over the oil industry during his time in office. The dismantling of Yukos and imprisonment of its former chief Mikhail Khodorkovsky was widely seen as aimed in part to boost the Kremlin's clout in the lucrative industry.
The announcement of the joint venture this week came as Alexander Ryazanov was fired from his position at the head of Gazprom Neft, making him the most senior executive to leave the company in five years. Alekperov said he did not think the loss of Ryazanov would affect the ability of the companies to work together.
Alekperov also said that LUKoil has "come to an understanding about assets that are interesting to our company and to ConocoPhillips," the company that owns just under 20 percent of LUKoil.
"Our relationship with LUKoil has proven very successful and we're confident it will continue to flourish," Conoco CEO James Mulva said Friday.
"However, it's not an exclusive relationship and we're interested in seeking partnerships with other Russian companies, regardless of the specifics of the particular deal."
"By the end of this year we will have invested over $9 billion in our Russian relationship," Mulva said.
"Then we expect to retain our 20 percent ownership in LUKoil for a very long period of time. We have no interest in selling our 20 percent interest."
Alekperov also said Friday that he will travel to Iraq early next year in a bid to revive a Saddam Hussein-era contract to develop a major oil field, Interfax reported. Vagit Alekperov said he plans to make the trip after Iraq adopts a law governing the oil industry, which he said is expected by the end of the year, Interfax reported.
(AP, Reuters)

TITLE: Aeroflot to Merge Far East Operations With 2 Carriers
PUBLISHER: Bloomberg
TEXT: MOSCOW — Aeroflot, eastern Europe's largest airline, will merge operations with two carriers in the Russian Far East to make a larger and more competitive company.Aeroflot decided to create a Far Eastern company together with Dalavia and Sakhalin Aviatrassi, the Moscow-based airline said Monday in an e-mailed statement.
State-controlled Aeroflot, which joined the SkyTeam alliance of Air France-KLM Group and Delta Air Lines Inc. in April, is looking to take over some of Russia's 185 airlines to boost its share of the domestic market.
"Consolidation of regional airlines on the basis of Aeroflot seems to the participants of this accord as the only realistic way to ensure competition and the financial and technical overhaul of regional carriers,'' Aeroflot said in the statement.
Aeroflot, which flies to 89 cities in 47 countries, carried 6.8 million passengers last year.
State-owned Dalavia and Sakhalin Aviatrassi served 576,000 and 111,500 passengers respectively last year.

TITLE: The Fight Against Brand Squatting
AUTHOR: By Roman Golovatsky
TEXT: The opportunities available to the owners of exclusive rights are a constant source of temptation, not least for those seeking an unfair advantage over the competition.It seems that one of the most problematic is the issue of trademark protection. The aforementioned persons would register someone else's, perhaps renowned, trademark in their name, using different sorts of gimmicks to take advantage of oversights committed by the trademark's actual owner.
These problems exist in almost every country alert to the issues of intellectual property protection. The international practice refers to this phenomenon as brand squatting. Exclusive rights give notable advantages in entrepreneurial activity, being the basis of economic policy, allowing the holder to dictate certain conditions to the market. This is why brand squatting is so rife in our country.
By occupying the intellectual property of others, brand squatters often pursue different objectives. In some cases, such activity is performed to eliminate competition from the market or to significantly decrease its market share. In other instances, a trademark is registered with the purpose of its subsequent resale to the actual owner or to the party offering the greater reward.
In Russia, squatting manifested itself mainly in relation to foreign companies, although Russian companies are often targeted as well. The reasons for this vary. One of the main reasons is that foreign companies entering the Russian market do not take adequate measures to protect their means of individualization, their intellectual property.
Thus, according to press sources, a number of famous brands such as IKEA, FORBES, FUNAI, AKAI and many others have been registered in our country without their actual owners knowing anything about it. The registration may be made in the name of Russian companies or foreign companies specially registered for these purposes.
Quite often a foreign company does not plan initially to enter the Russian market directly. Therefore, company products are delivered to Russia in small shipments through intermediaries. When company analysts realize just how attractive the Russian market is, the company's trademarks turn out to be registered in the name of one of its suppliers. Usually this is done to control the shipments of products to Russia and keep the competition away from similar activities.
This illustrates just how pressing this problem is. Russian legislation provides quite a variety of protective measures against squatters.
A common method not related to contesting the registration of a trademark is the filing of an application by an interested party with the Chamber for patent disputes, Rospatent, for an early termination of the protection of a trademark due to its non-use. Granting the exclusive right to a trademark, the state is at the same time interested in it being actively used in commercial transactions, contributing to the development of the economy. This is why, in order to make sure that registered trademarks do not "collect dust," thus blocking its use of third parties, the state, as well as granting exclusive rights also establishes corresponding responsibilities. One of them is the responsibility to use a trademark. The failure to fulfill such responsibilities causes unfavorable consequences in the form of termination of protection of a non-used trademark.
Another method of fighting squatting is to contest the registration of trademarks made in the name of squatters.
In accordance with Article 28 of the Law on trademarks, the granting of protection to a trademark may be contested or deemed invalid in the event where the trademark has been registered in violation of Articles 6, 7 of this law. Therewith, the handling of this category of cases is laid upon the Chamber for patent disputes, which initiates proceedings based on a duly filed objection to the granting of protection to a trademark.
Item 3 Article 6 of the Law on trademarks prohibits registration of trademarks representing or containing elements which are false or may mislead the consumer as regards the product or its manufacturer.
A rather common case of squatting is the registration of a trademark, reproducing the trade name of a successful commercial firm. According to Article 138 of the Civil Code of the Russian Federation, a trade name and a trademark are "equal" means of individualization. Protection of trade names is no less significant for the development of competition than protection of trademarks, since they too contribute to recognition of a commercial entity in commercial transactions and are an integral part of its status.
In accordance with item 3 Article 7 of the Law on trademarks, a mark identical to a trade name (or its part) protected in the Russian Federation in relation to homogenous goods may not be registered as a trademark, if the right to the trade name arose prior to the priority date of the trademark being registered.
Talking about squatting in the context of competition issues, one should also note the protection granted on the basis of antimonopoly legislation. The majority of squatting cases are related to bad faith competition among commercial entities, this is why the procedures stipulated by antimonopoly legislation may turn out to be the last chance for the actual owner to recover their rights on intellectual property.
The antimonopoly legislation prohibits any actions related to acquiring or using exclusive rights for the means of individualization of a legal entity, its products, works or services aimed at unfair competition.
Issues related to the violation of antimonopoly legislation are handled by the federal antimonopoly authority, whose functions are currently performed by the Federal antimonopoly service of the Russian Federation, acting through its territorial subdivisions. Having established bad faith competition as fact, the antimonopoly authorities forward their decision to Rospatent to terminate, early, the registration of the given object of exclusive rights or to recognize its registration as invalid, in accordance with the procedure established by the trademark law.
Therewith, according to sub-item 4 item 1 Article 28 of the Law on trademarks, protection of a trademark may be contested and recognized as invalid in full or in part during the whole term of protection, if the actions of a rightholder related to trademark registration have been duly recognized as an act of bad faith competition.
In the event of a squatter filing a suit, the actual owner of a trademark or a person, to whom the bad faith demands were addressed may base their defense on Article 10 of the Civil Code of the Russian Federation. This article prohibits any actions by individuals or legal entities performed with the sole purpose of bringing damage to others, nor does it allow the use of civil rights for the purpose of limiting competition.
Summarizing the above, we may conclude that Russian legislation provides diverse protective measures against squatting, different in their implementation but having the same objective — not to allow the obtainment of exclusive rights to a trademark by an unrelated person or entity. An effective defense against squatting resulting in minimal losses for the actual rightholder is only possible with clear strategic planning, choosing legal instruments for the recovery of occupied intellectual property depending on the given case.Roman Golovatsky is an Associate at DLA Piper in St. Petersburg.

TITLE: WTOCan Make Economy More Competitive
AUTHOR: By Yaroslav Lisovolik
TEXT: The bilateral agreement with the United States on Russia's accession to the World Trade Organization is an achievement on par with the repayment of Russia's Paris Club debt and the practical elimination of debts to Western countries. Russia has ceased to be a debtor nation, and can now open a new chapter in foreign relations. From now on, the country will compete not for loans, but for increased trade. And this will require Russia to use every possible means to increase its economic competitiveness, including entry into the WTO.Among the various mechanisms of external economic liberalization, WTO entry occupies a particularly important place. Such an enormous country will find it hard to integrate fully into regional alliances. The global nature of Russia was noted by British historian Arnold Toynbee, who held that Russia was composed of so many different peoples that it amounted to a model of the world as a whole. For a country as big and diverse as Russia, an exclusive focus on regionalism in trade and economic policy would inevitably tie its hands. In this situation, domestic products are best promoted abroad within the liberal, multilateral framework of the WTO.
The WTO has done much to liberalize Russia's foreign economic policy even before accession. The business climate has already improved noticeably as a result of steps taken to smooth WTO entry, including the removal of contradictions between federal and regional laws, the optimization of import tariffs, the gradual elimination of numerous export restrictions and the recognition in the business community of the necessity to compete with foreign companies.
None of the these achievements would have been possible if accession to the WTO did not hold out the prospect of truly significant advantages, such as access to institutions that regulate trade disputes, which would make Russia less vulnerable to other country's protectionist policies. Another plus would be the chance to begin influencing the movement toward liberalization of trade on the multilateral level, which would strengthen Russia's hand as it negotiates regional and bilateral free trade agreements.
At the same time, a number of factors make it difficult for Russian foreign policy to focus exclusively on the WTO. First among these is the weakness of international institutions, including the United Nations and the WTO itself. Reliance on international institutions alone could lead to isolation on the international stage. Another limitation is Russia's vulnerability under WTO rules and standards, particularly concerning intellectual property rights and government subsidies for businesses.
Despite the long debate over the need for Russia to join the WTO, there is still no agreement on the subject in Russian business circles. Perhaps more attention should have been paid to the losses suffered as a result of isolation and the stagnant growth of Russian trade with WTO member countries. It's enough to note the stability of the share of Russian exports sold to the founding members of the WTO. For eight years running, 70 percent of exports have gone to these countries. The rising share of Russian exports sold to WTO members is largely a function of the admission of new members to the organization.
This suggests that Russia has suffered restrictions and losses because it has not been a full-fledged WTO member. If this is true, then accession should definitely yield dividends for the economy.
Research into this issue shows that in the long term, Russian exports could increase by 50 percent after accession. Membership could also lead to growth in direct foreign investment, which would improve the business climate. But it's not that simple. The big pay-off of increased trade and foreign investment will only come our way if companies and the business elite are prepared for greater openness toward the outside world, increased competition both at home and abroad, and more active cooperation with Western companies in the form of joint ventures, alliances, and so on.
The is why raising corporate management standards is the central issue as Russia enters the WTO, and the one that would maximize the benefits derived from integration into the world economy. Whatever progress might happen at the macro level, it is significant change at the micro level, within individual companies, that could open the floodgates and allow direct investment to begin flowing into the country.
In other words, Russia would benefit significantly more from WTO membership if the groundwork for investment were laid beforehand in the form of greater transparency, increased professionalism of managers, and improved reporting standards to company shareholders. The latter is especially important, as it would do much to encourage foreign companies to cooperate with their Russian partners.
During the liberalization of the Russian economy, the government must take pains to protect consumers — the same consumers who have suffered repeatedly from currency reforms, fraudulent pyramid schemes, default, "minor" banking crises and the like. Consumers' interests are served when they can choose from a wide selection of products and acquire them at lower prices because of competition among producers. This would be the most important result of WTO membership for Russia.
Speaking before the British Parliament, Winston Churchill said that protectionism was the art of doing business at a loss. His use of the word art was not accidental. At times, politicians need remarkable talent to convince the public that for all the benefits of trade liberalization, the national interest demands a rise in import tariffs to protect domestic producers. The argument for protectionism in such cases refers to economic security, the need to develop new sectors of the economy or the diversification of foreign trade. In the end, protectionism is an art for special interest groups, not for ordinary consumers.
The time has come for Russia to consider the role it might play within the WTO. After accession, Russia should not focus exclusively on building any single alliance. It could join any number of blocs and groupings within the organization, which would give it added weight.
Entry into the Cairns Group, which unites leading agricultural exporters such as Canada and Australia, could prove difficult if it requires wide-scale liberalization of Russia's agricultural sector. The Cairns Group countries were among the most uncompromising during negotiations on Russia's entry into the WTO. At the same time, Russia may be interested in joining groups that unite countries with transitional economies, as well as new WTO member countries. Alliances with developing countries are also possible within the Group of 20, although it might somewhat contradict Russia's growing focus on cooperation with the G8. Russia could initiate new regional alliances within the WTO, including members of the Commonwealth of Independent States.
Building such alliances within the WTO would undoubtedly stimulate development of bilateral and regional alliances with Russia. It should be noted that the negotiation process has already to talk about the possibility of bilateral agreements on trade liberalization. EU representatives announced in 2006 that Europe was ready to enter into negotiations on the creation of a free trade zone with Russia after it joined the WTO. Following accession, Russia can expect a flurry of activity on bilateral and regional alliances, which would in turn do much to allow the country to overcome the remnants of its isolation on world markets.

Yaroslav Lisovolik is chief economist for Deutsche UFG. This comment was published in Vedomosti.

TITLE: Chukovsky Shows Little Has Changed
AUTHOR: By Alexei Bayer
TEXT: The communist system, as George Orwell noted, was not just different from the rest of the world. It was upside down and back to front.Take Soviet literature. Official works seemed to be written for teenagers. Socialist realist writers produced simple, highly accessible prose and poetry, with two-dimensional characters and easily discernible moral lessons.
But when you think about it, the Soviet Union was a vast kindergarten. People were not supposed to question the rules, but divide into boy-girl pairs and march into a bright future. Building communism was like assembling a nationwide Lego set using instructions provided by Marxism-Leninism.
Children's literature, meanwhile, sparkled. A refuge of nonconformists, it provided leeway for artistic expression, although some writers, such as poet Daniil Kharms, did not escape persecution.
Children's literature also produced the most subversive writing in the Soviet Union. Its criticism of Soviet reality was far more subtle than conventional dissident literature, which often operated on the same socialist realist plane.
Widely read children's poet Kornei Chukovsky excelled in mordant satire of the Soviet regime veiled by a naive facade. His "Big Bad Cockroach" depicts a red mustachioed insect terrorizing the animal kingdom. Perhaps the only reason Chukovsky wasn't shot outright was because the caricature was too brazen. Just recognizing Josef Stalin in the self-important cockroach would have spelled a death sentence for his accusers as well.
The famous "Moidodyr," which literally means "wash till you make holes," tells the story of a walking washstand that cleans up the young narrator when he refuses to wash himself. It pokes fun at the communist social transformation project, whereby the state sets out to turn individuals into a healthy, altruistic and happy community.
Like the Bible, which some believe to contain references to all events, Chukovsky seems to have a poem for every turn of Russian history, even very recent ones.
His "Mukha-Tsokotukha" (Buzzing Dung-Fly) can be read as a tongue-in-cheek commentary on post-Soviet Russia. The "gilt-bellied" dung-fly happens upon a coin while walking in the field, very much like Mother Russia with its oil wealth. The dung-fly uses its good fortune to pay for a consumption spree for her close friends.
The good times, however, are interrupted by the appearance of a spider, who — like Mikhail Khodorkovsky and other oligarchs of the 1990s — intends to suck out our heroine's lifeblood. She is rescued by a youthful gnat, who slays the spider and declares his wish to marry the dung-fly. The "gnat in shining armor" is obviously President Vladimir Putin, whose remarkable love affair with Russia may last well past the end of his second term in 2008.
Finally, Chukovsky's "Krokodil" works well as a parody on the recent anti-Georgian blitz. The protagonist, a foreign-born crocodile, walks the streets of St. Petersburg speaking Turkish, and is taunted by the locals, including a policeman. Because he harms the interests of the natives, the crocodile is sent back to Africa in an airplane.
One problem is that Chukovsky, who died in the 1970s, wrote his poems not only before the collapse of communism; many he wrote before the Revolution. This is not unheard of, however. The German Expressionists, too, seemed to foresee the horrors of World War I in their pre-war art. In Chukovsky's case it also means that, for all the outward changes of the past century, underneath it all Russia has changed very little.

Alexei Bayer, a native Muscovite, is a New York-based economist.

TITLE: Milton Friedman Was a Giant of Our Time
AUTHOR: By Thomas Sowell
TEXT: Milton Friedman, who died last Thursday at age 94, was one of the very few intellectuals with both genius and common sense. He could express himself at the highest analytical levels to his fellow economists in academic publications and still write popular books such as "Capitalism and Freedom" and "Free to Choose," that could be understood by people who knew nothing about economics. Indeed, his television series, "Free to Choose," was readily understandable even by people who didn't read books.Friedman may well have been the most important economist of the 20th century, even if John Maynard Keynes was the most famous. No small part of Friedman's achievement was rescuing economics from the pervasive and virtually unquestioned Keynesian orthodoxy that reigned in many places.
Ironically, Friedman began his career as a believer in both Keynesian economics and in the liberals' vision of the world with which it was so compatible. Yet, in the end, no one did more to dethrone both. It is doubtful whether Ronald Reagan could have been elected president in 1980 without the changes in public opinion produced by Friedman's work in the previous decades.
The Keynesians' belief that government policy could wisely make trade-offs between rates of inflation and rates of unemployment was epitomized in the Phillips Curve, which seemed to lend empirical support to that belief. Friedman dealt that analysis a body blow when he argued that it was not the rate of inflation that reduced unemployment, but the fact that inflation exceeded expectations.
In other words, even a high rate of inflation would not reduce unemployment if inflationary policies became so common as to be expected. The "stagflation" of the 1970s — with simultaneous double-digit inflation and double-digit unemployment — validated what Friedman had said in a way that no one could ignore.
Unlike so many intellectuals who have aspired to positions of power, Friedman preferred to remain outside of government and independent of politicians.
His influence was nevertheless great because his ideas moved others, whether in the economics profession, in the general public or among policy makers.
Friedman's many contributions to economics, recognized by the Nobel Prize he received in 1976, were only part of his contributions to society at large. His decades-long campaign to promote school vouchers in the United States has been enshrined in the foundation named for him and his wife, the Milton and Rose D. Friedman Foundation for Educational Choice. He was a compassionate conservative long before that term was coined, for the rich obviously do not need vouchers to get a decent education for their children.
Friedman's own personal background made him familiar with the problems of those who begin life without the privileges of the elite — and of the importance of education as a way to advance beyond their beginnings.
Born in Brooklyn in 1912 to immigrant parents, he grew up in New Jersey, living over his family's store, and worked his way through Rutgers University. Later, he went on to postgraduate work at the University of Chicago. The rest, as they say, is history.
As the central figure in the "Chicago School" of economists, and an outstanding teacher, Friedman over the years sent forth into the world — overseas as well as in the United States — a stream of economists who influenced the thinking, and in some cases the policies, of countries all around the world.
These students, along with his writings, are part of his enduring legacy. His popular writings, speeches and television appearances spread his ideas through successively wider circles of people, who passed these ideas on to others, many of whom might never have known where these ideas originated.
As one of those privileged to have studied under Friedman, I felt a special loss at his death but also a sense of good fortune to have learned from him, not only when I was at the University of Chicago, but also in the years and decades since then. He was a tough, no-nonsense teacher in the classroom, but a kind and generous human being outside.
Students were not allowed to walk into his classroom and distract others after his lecture had begun. Once, I arrived at the door just minutes after Friedman had begun speaking and had to turn around and go back to the dormitory, wondering all the while whether what he taught that day would be on the next exam. After that, I was always in my seat when Friedman entered the classroom. He was also a tough grader. On one exam, there were only two B's in the whole class — and no A's.
The other side of Friedman was his generosity with his time to help students, and even former students. In later years, long after I had left the University of Chicago, he helped me with his criticisms and advice on my work, but only when asked. When I was offered an appointment to the Federal Trade Commission in 1976, he was asked by the White House to urge me to accept, but he declined to do so. It was the best non-advice I ever got. I would have been miserable at the commission.
Although in recent years we were both members of the Hoover Institution at Stanford University, we each lived miles away and neither of us was physically present there with any great frequency, so the chance that we would both be there on the same day was virtually nil. The last time I saw Friedman in person was in 2004, when we were jointly interviewed on television. Afterward, he gave me a ride in his little sports car over to the Stanford faculty club, where we joined a group for lunch. Then he drove back to his home in San Francisco, 48 kilometers away, though he was at the time in his 90s.
More recently, I happened to chat briefly with Friedman on the phone a few days before his death, and found his mind to be as clear and sharp as ever. That will always be a special memory of a very special man, one of the giants of our time — intellectually, morally, and as a human being.Thomas Sowell is the Rose and Milton Friedman Senior Fellow at the Hoover Institution at Stanford University. This essay appeared as a comment in The Wall Street Journal.

TITLE: Blake Comeback Puts Him Within Federer's Orbit
AUTHOR: By Christopher Bodeen
PUBLISHER: The Associated Press
TEXT: SHANGHAI, China — Two years ago, James Blake was sitting at home recovering from illness and loss and wondering if he'd ever play tennis again.On Sunday, the 26-year-old American capped the best year of his career by reaching the final of the Tennis Masters Cup in Shanghai, losing in straight sets to top-ranked Roger Federer 6-0, 6-3, 6-4.
"Obviously it's been an incredible year for me," said Blake, who entered the season-ending tournament ranked No. 8, but will finish the year at a career-high No. 4.
"Nothing I would have expected at the beginning of the year, especially nothing I would have expected two years ago. So I'm thrilled about that."
After the big year, he again recalled "a rough 2004." He fractured vertebrae in his neck, lost his father to cancer, and contracted Zoster, a shingles-like condition which affects hearing, sight and caused paralysis on one side of his face.
"It was probably three things that I would never wish on my worst enemy," Blake said.
"Those all made me question whether I'd ever play tennis again. So to be sitting on my couch dizzy and feeling like I couldn't get up to get anything to eat two years ago, to being No. 4 in the world now... It's something that I never thought was possible."
Now he's looking ahead, vowing to get stronger still in the offseason and take advantage of the better draws afforded by his higher ranking.
He said age and experience have mellowed him and prepared him for the pressure.
"I'm proud to have done it," Blake said.
"But I feel like I'm up to that now, being a little older, more mature, learning a lot from the guys who come before me, and I think I do have a chance at the Grand Slams."
When those chances come along, it's a pretty sure bet Federer will be on the other side of the net at some point.
In Shanghai, Blake had already beaten No. 2 Rafael Nadal and No. 3 Nikolai Davydenko in the round-robin phase and ousted defending champion David Nalbandian in the semifinals.
But on Sunday he faced a whole other level of competitor. The top-ranked Swiss standout steamrolled Blake in the first set on his way to claiming his third Masters Cup title.
Blake, now 0-6 in his career against Federer, upped his game in the second set, holding serve and picking up a chance for a break in the third game, when he rifled a deep return at the baseline. But Federer picked up the half-volley on his backhand side and turned it into a winner, leaving Blake shrugging at the net.
"Obviously, we're all chasing Roger. It's no secret. He's playing head and shoulders above the rest of us," said Blake, who only converted one of his 11 break chances.
Federer has been ranked No. 1 since Feb. 2, 2004, and already has enough points to ensure he'll break Jimmy Connors' record of 160 consecutive weeks atop the ATP rankings next year. Only two players (Rafael Nadal, Andy Murray) beat Federer this year.
He finished the year with 12 titles and 16 finals appearances in his 17 tournaments, setting a record with $8.34 million in prize money this season.
"To finish it off by winning the Masters Cup, the world championship so to speak, it's the perfect ending to an incredible season," Federer said. "There's not much more I could have done."
Second-ranked Jonas Bjorkman and Max Mirnyi won the doubles title 6-2, 6-4 over Mark Knowles and Daniel Nestor.

TITLE: Bush Undecided About Iraq Troop Levels
AUTHOR: By Jennifer Loven
PUBLISHER: The Associated Press
TEXT: BOGOR, Indonesia — President Bush said Monday that he hasn't decided yet on whether to send more U.S. troops to Iraq or to begin bringing them home, saying he is awaiting recommendations from the military. He also shrugged off heavy demonstrations that greeted him in Indonesia, saying it was a sign of a healthy democracy."I applaud a society where people are free to express their opinion," Bush said of the protests that accompanied his visit to the world's most populous Muslim nation.
Bush held a joint news conference in Indonesia's presidential palace with Indonesian President Susilo Bambang Yudhoyono.
The Indonesian leader, a close ally in Bush's war on terror, called for other nations to do more in helping to find ways to ease the Iraq conflict. "The global community must be also responsible for solving the problems in Iraq," not just the United States, Yudhoyono said.
Bush was asked about proposals by some members of Congress, including 2008 presidential hopeful John McCain, to send more troops to Iraq in an effort to stabilize the country.
"I haven't made any decisions about troop increases or troop decreases, and won't until I hear from a variety of sources," Bush replied.
McCain on Sunday called for sending 20,000 more U.S. troops to Iraq in addition to the roughly 140,000 there now to help curb rising sectarian violence.
The president noted that General Peter Pace, the chairman of the Joint Chiefs of Staff, was at work on a thorough review of options for Iraq, a war that figured heavily in the loss earlier this month of control of Congress by Bush's Republican party.
His Indonesian host, however, said he favored working toward "a proper timetable" for "withdrawal and disengagement of U.S. forces from Iraq." Although many Democrats in Congress have called for Bush to begin bringing troops home, Bush thus far has resisted establishing anything resembling a timetable for withdrawal, saying it would only embolden the enemy.
Bush's unpopularity in Indonesia made security jitters and angry protests the hallmarks of his six-hour trip to court Indonesian favor.
Through sheets of sometimes heavy rain, Bush flew by helicopter from the capital of Jakarta to this lush hilltop suburb for talks with the Indonesian leader.
"It's to Indonesia's credit that it's a society where people are able to protest and say what they think," Bush said. He noted that it wasn't the first time he had drawn protests.
"That's what happens when you make hard decisions," Bush said.
He praised Yudhoyono's leadership and called Indonesia "an example of how democracy and modernization can present an alternative to extremism."
Yudhoyono, asked about the U.S. dilemma in Iraq, said any long term solution would depend on other nations stepping forward and helping.
"Indonesia believes very strongly if we could work together, if we share and exchange our ideas, then there must be a proper and realistic solution...for Iraq," he said."We have to involve other parties," he added.
The two leaders said they discussed Iraq and broader Middle East issues, nuclear programs in Iran and North Korea, ways of combatting avian flu, and educational issues.
Bush told the Indonesian leader: "You lead a large and diverse nation with a very bright future."
Commenting on Indonesia's ethnic diversity and size, Bush said, "I don't think the American people understand how big Indonesia is."
It was the second Indonesian stop of his presidency. Neither time has he spent the night, nor more than a few hours, the result of safety concerns in a place where emotions run hot about the Iraq war and his staunch support of Israel.
On Monday, Bush was not interacting with the general populace or doing anything outside the palace confines.
Braced for the local reaction to the visit, thousands of police and rifle-toting soldiers patrolled Bogor's streets, jammed mobile phone signals and deployed water cannons.
Demonstrations by Islamic hard-liners, students, housewives and taxi drivers alike have been staged every day this month, including a march by nearly 13,000 through Jakarta on Sunday, when Bush was denounced as a "war criminal" and "terrorist." Thousands more marched Monday, carrying posters showing victims of violence in Iraq.
Anti-Bush protesters tried to seal off American-owned restaurants in two Indonesian cities, witnesses said, and demonstrations were held in at least 10 cities.
For Bush, the risks of the trip were worth it to bolster Yudhoyono's anti-terror cooperation, celebrate the country's democratic advances and try to dent anti-American sentiment.

TITLE: Johnson Takes First NASCAR Crown
PUBLISHER: The Associated Press
TEXT: HOMESTEAD, Florida — Not long ago, Jimmie Johnson and Chad Knaus were considering a split.The driver-crew chief combination worked well during the regular season — better, in fact, than almost any other — but when NASCAR's playoffs got going, something wasn't right. They couldn't carry their success through to the finish.
So car owner Rick Hendrick sat them down and made them decide if the relationship should continue.
They chose to stick it out. And this year, they worked it out.
No bad luck, no ill-timed wreck, no gremlin in the machinery was going to deny Johnson his long overdue Nextel Cup title Sunday.
"It was a decision we had to make — they really had to make — did they want to be together?'' said Hendrick. "They made that decision, and when things got tough this year, they cinched it up between the two of them. They're as good of a combination as I've ever had in racing."
They proved it with a banner season.
A Daytona 500 victory. A win at the prestigious Indianapolis Motor Speedway. All but four of the 22 regular-season weeks on top of the points standings.
But the No. 48 team was used to those kinds of accomplishments.
A first NASCAR championship? For the driver and team who had everything but, nothing could have come as a bigger relief.
"It's going to take a little bit of time for this to soak in, just to think what this team has accomplished and the year we've had," Johnson said. "Being a champion, it's the only thing I ever wanted to be."
He finally got his wish via a ninth-place finish at Homestead-Miami Speedway that sealed his championship by 56 points over Matt Kenseth, who finished the race ahead of Johnson, in sixth.
Greg Biffle won the Ford 400 for the third straight season, beating rookies Martin Truex Jr. and Denny Hamlin to the finish line. Kasey Kahne was fourth and Kevin Harvick rounded out the top five.
Juan Pablo Montoya, making the first Nextel Cup start of his budding NASCAR career, ran as high as 13th, but his race ended in a fiery wreck 16 laps from the finish.
When this Chase got rolling 10 weeks ago, few thought Johnson would win it. The most dominant driver of the regular season had wrecked out of the first Chase race, dropped to ninth in the standings and knew he'd need a furious rally.
"I think we knew in our hearts we could do it all along, we just got into some bad luck at the beginning," Johnson said. "That's what let us get the momentum, let us sleep well at night, is because we knew this team was capable of winning a championship. We just had to have some good luck."
But even with a little luck, it still looked bleak: He was 165 points out after the third Chase race.
That's when Johnson and his Hendrick Motorsports crew turned it up a notch, reeling off five straight finishes of second or better. It moved them back on top of the leaderboard — where they spent 22 of 26 weeks of the regular season — and sent them into Homestead poised to win the title.
He didn't need to be perfect to do it, either. To lock this one up, Johnson needed only to finish 12th or better.
Sounds easy enough. But in typical Johnson fashion, it was anything but.
Flying debris ripped a hole in the grill of the No. 48 Chevrolet a mere 15 laps into the race, then his team couldn't find the tape to patch it. He almost pulled out of his pit with a loose lug nut, but crew chief Chad Knaus noticed it and frantically stopped Johnson from pulling away.
Then he had to avoid Robby Gordon's spinning car.
"We've been ducking them all day," Knaus sighed after Johnson scooted past Gordon.
But on Sunday, the little things that sunk Johnson in the past turned out to be mere annoyances.
"I knew we had a good team. I knew we'd be able to do things right. But you just can't control the outside variables," Johnson said. "Today I was around three or four wrecks and had a piece of debris go through the front of the race car, which we had to fix on pit road.
"There was a lot of crazy stuff going on, and luckily we missed all those problems."
Problems that used to turn into heartbreak: Johnson was twice a championship runner-up, and a cut tire caused him to fall to fifth in last season's bid.
For this one, he was made to wait just a little longer.
The race was delayed nearly eight minutes to clean the track after Montoya's wreck, briefly postponing Johnson's long-awaited celebration. But with the title right in front of him, he wasn't too worried — he'd worked all that out of his system long before the race even began.
"Once I fired the car off, I was in my element and my place to be, and things really mellowed out for me," Johnson said. "My mind really played games with me in the hours leading up to the race."
How he stayed calm — considering all his issues — is a mystery.
"It was such a long day to get here," he said in Victory Lane. "There were times when we were down and out, and in the back, and had to come back through. This just means the world to me, it's the most amazing day of my life."
Jeff Gordon, the four-time series champion who befriended Johnson and convinced Hendrick to give his new protege a ride, celebrated on the cool-down lap by bumping into the side of Johnson's car.
"I don't like to take much of the credit because Jimmie is a heck of a race car driver," Gordon said. "Somebody was going to pick him up, and I'm just really thankful that the opportunity presented itself to us. I think he'll be one of the best champions we've ever had because he cares so much about it."
Knaus received a celebratory hug from Hendrick, who won his sixth championship as a car owner, and another from Ray Evernham, the championship crew chief turned rival car owner who taught Knaus much of what he knows.
"This team has really come into its own over the last year," Knaus said. "I just couldn't be prouder. We had to battle back from a lot of weird stuff this year, and they held strong."
It started with the season-opening Daytona 500, when Knaus was caught cheating in race preparations. He was sent home and forced to watch Johnson win the biggest race of the season on TV. And he was still at home, finishing up his four-race suspension, when Johnson scored his dramatic win in Las Vegas. They finally reunited in late March.

TITLE: Madonna Ruling Held Up by Judge
PUBLISHER: The Associated Press
TEXT: LILONGWE, Malawi — A High Court judge on Monday postponed his ruling on a challenge to Madonna's plans to adopt a Malawian baby.Judge Andrew Nyirenda was unavailable to give his ruling as he was attending a conference, Lilongwe High Court registrar Ken Manda said.
Manda said the ruling was now expected Monday or Tuesday of next week.
Nyirenda was to rule on a challenge to the adoption proceedings by a coalition of human rights and child advocacy groups.
Nyirenda on Oct. 12 granted Madonna and her filmmaker husband Guy Ritchie an "interim order" allowing them to take away 14-month-old David.
The rights groups argue that the government cut legal corners to "fast-track" the adoption because of Madonna's celebrity status.
Yohane Banda, the 32-year-old biological father of David, has said he wants the boy to stay with Madonna.
Banda surrendered the child to an orphanage after his wife died last year. The couple's two other sons both died in infancy from malaria.
Banda remarried on Friday to a woman who is three months pregnant.

TITLE: Tom Cruise Weds Katie Holmes in Italian Castle
AUTHOR: By Jake Coyle
PUBLISHER: The Associated Press
TEXT: NEW YORK — The lavish weekend wedding of Tom Cruise and Katie Holmes bore many symbols of the singular 18-month relationship between the two stars.The decorous, romantic setting of a 15th-century castle in Bracciano, Italy, was reminiscent of the fairy-tale quality of the actors' courtship. The much younger Holmes, 27, had once remarked that she grew up wanting to wed the "Risky Business" star.
"I used to think I was going to marry Tom Cruise," Holmes told Seventeen magazine before she and Cruise, 44, began dating.
But the young-girl fantasy theme to TomKat has never been the dominant one. They have instead been renowned for extreme publicness and perceived peculiarity. In short, it is not a relationship that anyone has ever really understood.
After exchanging vows before a Scientology minister Saturday, Cruise and Holmes engaged in a "never-ending kiss," according to Giorgio Armani, who attended the wedding outside Rome and designed the outfits of the bride, the groom and their baby, Suri.
That kiss could be seen as a sweet gesture or as a reminder of the hyper-love the couple (or at least Cruise) has openly displayed since they first announced their relationship in April 2005 in Rome. Just a month later, Cruise was hopping on Oprah Winfrey's couch.
"I can't be cool. I can't be laid-back," a starry-eyed Cruise said on "The Oprah Winfrey Show." "Something happened and I want to celebrate it."
Many were skeptical of the over-the-top emotion, suspicious that it was an act to help publicize each star's then-current movies: "War of the Worlds" and "Batman Returns." But those critics were temporarily silenced when, in June 2005, the couple became engaged at Paris' Eiffel Tower — happily posing for photographers and reporters immediately afterward.
The relationship, People magazine deputy editor Larry Hackett remarked at the time, "was presented fully baked for public consumption."
In stark contrast, the couple did not provide the public a peek of Suri until 4 1/2 months after her April 18 birth, leading to fevered speculation that she didn't even exist. The couple finally unveiled her, true to megastar form, on the cover of Vanity Fair.
Many celebrities attended the Cruise-Holmes nuptials, but the most symbolic attendee was Brooke Shields. Cruise had very publicly criticized Shields for taking antidepressants after the birth of her first daughter; he apologized to her in person a few months ago.
The actor's perspective on antidepressants echoes that of Scientology, and Cruise became more vocal about his religion after firing longtime publicist Pat Kingsley. Cruise's sister, Lee Anne DeVette, took over as his publicist in March 2004, but was replaced last November after Cruise's image seemed in decline.
The practices and beliefs of Scientology — a religion many other celebrities practice with less scrutiny — are unfamiliar and strange to much of the public.
The birth of the Cruise-Holmes baby, Suri, was surrounded by reports that the couple would have a "silent birth," in which no one surrounding the mother speaks. And the couple's vows Saturday included certain Scientology fundamentals, such as promising never to go to bed without communicating about any differences.
The legal circumstances of the couple's Italian wedding weren't clear, since it was performed by a Scientology minister. Cruise's publicist, Arnold Robinson, said the couple had "officiated their marriage in Los Angeles before their departure for Italy."

TITLE: Woods Can Relax at Hawaii Tourney
AUTHOR: By Mark Lamport-Stokes
PUBLISHER: Reuters
TEXT: LOS ANGELES — Holder Tiger Woods will be bidding for his 10th title of the year at this week's PGA Grand Slam of Golf in Hawaii, a tournament he effectively owns.The American world number one has a near-perfect track record on the Poipu Bay Golf Course on Kauai's southern shore, having sealed victory there six times in seven starts.
"You play enough times here, you get very familiar with the golf course," Woods said after cruising home by seven shots with an eight-under-par 64 in last year's event.
"Most of the holes really suit my eye. For some reason, I've just kind of put it together every time I've come here. I feel comfortable on this golf course," added Woods, who finished second when he made his debut in the elite four-man tournament in 1997.
"I've played it in different wind conditions: the Kona, the Trades. I've played in stroke play, I've played in match play."
The 30-year-old will be eager to return to the winner's circle after losing out to Ireland's Padraig Harrington in a sudden-death playoff for the Dunlop Phoenix tournament in Japan on Sunday.
Chasing his third consecutive title in Miyazaki, Woods wasted a three-shot lead with six holes to play before the Irishman sealed victory with a birdie at the second extra hole.
"I had my opportunities but I was struggling all day with my swing," the 12-times major champion told reporters.
"I was just trying to hang in there but I gave myself a chance to win and that's a nice positive."

TITLE: Blair: Afghanistan Is Key To War On Terror
AUTHOR: By Sophie Walker
PUBLISHER: Reuters
TEXT: CAMP BASTION, Afghanistan — The security of the world will be decided on the desert battlefields of Afghanistan, British Prime Minister Tony Blair told his troops on the frontline of an increasingly bloody war on Monday."Here, in this extraordinary desert, is where the future of world security in the early 21st century is going to be played out," Blair said in remarks barred from publication until he flew out of Camp Bastion in Helmand province.
Afghanistan's western allies say the Taliban is on the run, despite a resurgence, but Blair's long-planned visit has been kept in strict hour-by-hour secrecy due to security fears.
"You may not know this, but people back home are very proud of what you do, regardless what they think of political leaders," he told troops in the desert province that is a Taliban stronghold and the opium capital of the world's main producer.
Fighting in Afghanistan this year is the bloodiest since U.S.-led forces ousted the Taliban's hardline government exactly five years ago. The British troops in Helmand and other NATO troops in the south have been at the forefront of the combat.
British military chiefs say their troops face the bloodiest fighting since the Korean War and are six times more likely to die in Afghanistan than in Iraq.
"We want to be here. We want to be doing our job," sergeant Chris Hunter, 31, from Swansea, told Blair. "It's a point that's lost back home."
Blair met President Hamid Karzai in Kabul at the presidential palace before flying back to Pakistan, where he said Kabul's allies must stick by it for the long term.

TITLE: Pope To Make Historic Trip to Turkey
AUTHOR: By Brian Murphy
PUBLISHER: The Associated Press
TEXT: ATHENS, Greece — When Pope Benedict XVI goes to Turkey this month for his first papal visit to a Muslim nation, he will in effect be making two distinct journeys.The global spotlight will be on what efforts he makes to win back the respect of Muslims angered by his remarks on religious violence and the Prophet Muhammad. The other will be a pilgrimage to one of Christianity's last toeholds in Turkey.
Together they represent a test of Benedict's diplomatic finesse as he tries to calm Muslim ire while being pressed to make a forceful statement in defense of the rights of Christian minorities in Muslim lands.
The scheduled Nov. 29 meeting in Istanbul between the pope and Ecumenical Patriarch Bartholomew I, the spiritual leader of the world's Orthodox Christians, will be the latest display of fellowship between the two ancient branches of Christianity and reinforce the dream of ending their nearly 1,000-year estrangement.
No breakthrough is expected at Bartholomew's walled compound in Istanbul, formerly the Christian Byzantine capital Constantinople before falling to Muslim armies in 1453.
Instead, the visit may highlight the weak links in efforts to heal the East-West divide in Christianity, which was sealed in 1054 after centuries of feuds over papal authority and differences in the liturgy.
Bartholomew is called the "first among equals" among the Orthodox leaders, but he wields little real power over the world's more than 250 million Orthodox. That power rests with the patriarchs of the various self-governing churches, the largest of which is the Russian Orthodox Church of Patriarch Alexy II, who rebuffed overtures by the late Pope John Paul II for a groundbreaking trip to Moscow.
Alexy is at the center of one of the main Orthodox complaints: the growth of Eastern Rite churches, which follow many Orthodox rites but are under the Vatican's jurisdiction. Orthodox fear the churches are expanding Vatican influence and luring away followers in Ukraine and other traditional Orthodox regions. The Vatican denies it is trying to poach Orthodox believers.
Benedict has had a better reception than John Paul among Orthodox leaders because of his affinity for the traditions of early Christianity and his respected theological scholarship. Alexy has suggested he might consider meeting Benedict, perhaps in a neutral third country, if there is progress on the Eastern Rite quarrels and other issues.
On Friday at the Vatican, Benedict said the four-day Turkey trip beginning Nov. 28 "will be a further sign of consideration for the Orthodox churches and will act as a stimulus to quicken the steps toward re-establishing full communion."
His remarks did not address the furor stoked by his Sept. 12 speech, in which he quoted a 14th century Byzantine emperor's description of Islam as a religion spread by the sword. But the Turkish officials he will meet include the head of religious affairs, Ali Bardakoglu, a top Islamic cleric who has said the pope's words threatened world peace.
On the Orthodox front, Benedict acknowledged, much still needs to be done.
The Orthodox leadership, too, is facing internal struggles over how to deal with a lopsided equation: Their fragmented structure versus the central authority that holds spiritual sway over 1.1 billion Roman Catholics.
"The issue of papal primacy remains a very difficult one for the Orthodox," said the Rev. Igor Yevgeniyevich Vyzhanov, a Russian church spokesman. "This meeting with the pope should be just seen in terms of bilateral relationship between the Vatican and the ecumenical patriarchate. It cannot be seen as talks between the pope and the entire Orthodox world."
But Bartholomew's struggles still resonate far beyond his tiny enclave in Istanbul.
His pleas for minority rights carry particular sensitivity in Turkey, whose bid for European Union membership hinges on expanding religious and cultural freedoms.
In early November, Turkey's parliament passed a law allowing properties confiscated in the 1970s by the state to be returned to Christian and Jewish minority foundations. The decision, however, did not specifically address Orthodox demands to reopen a theological school shuttered 21 years ago.
"This trip could reinforce what many Orthodox already feel — that Pope Benedict is interested in making a real effort at healing the differences," said Thomas FitzGerald, dean at the Holy Cross Greek Orthodox School of Theology in Brookline, Massachusetts.

TITLE: Kerry May Run Again in 2008
PUBLISHER: Reuters
TEXT: WASHINGTON — Massachusetts Democratic Senator John Kerry said on Sunday he was still considering a second run for the White House in 2008, despite public criticism of what he has called a "botched joke" about the Iraq war.In an interview on "Fox News Sunday," Kerry was asked if he had given up on a presidential run after the flap over his comment to students that they could "get stuck in Iraq" if they did not study hard enough.
"Not in the least. I am looking at it in the same way. The people that I have talked to across the country, my team's confident and strong. I don't know what I'll do.
"I've apologized and we have to move on to the real issues that face this country."
Kerry apologized to U.S. troops for his remarks, and said he misspoke in comments that were intended to be a joke aimed at President George W. Bush's handling of the war in Iraq.
Still, Kerry, who lost to Bush in the 2004 presidential race, drew a firestorm of Republican criticism and riled fellow Democrats in the last days of the congressional campaigns. He was forced to cancel campaign appearances on behalf of Democratic candidates.

TITLE: Free Viagra?
PUBLISHER: Reuters
TEXT: BRASILIA, Brazil — The mayor of a small Brazilian town has begun handing out free Viagra, spicing up the sex lives of dozens of elderly men and their partners."Since we started the free distribution of sexual stimulants, our elderly population changed. They're much happier," said Joao de Souza Luz, the mayor of Novo Santo Antonio, a small town in the central state of Mato Grosso.
Souza Luz said 68 men over the age of 60 had already signed up for the program, which was approved by the town's legislature and has been dubbed "Happy Penis," or "Pinto Alegre" in Portuguese.
But the program has also had the unforeseen consequence of encouraging some extra-marital affairs, Souza Luz said.
"Some of the old men aren't seeking out their wives. They've got romances on the side," he said.

TITLE: Wii Floods New York Toy Store, Gamers Go Wild
AUTHOR: By Nicole Maestri
PUBLISHER: Reuters
TEXT: NEW YORK — Nintendo's new Wii video game console debuted on Sunday as thousands of die-hard fans, some of whom camped out for several days, welcomed the final entrant in the three-way scramble for dominance in the $30 billion global game market.At the Times Square Toys "R" Us store in New York, a line snaked around the block, with more than 1,000 gamers vying for first rights to take the new machine home, while more than 900 enthusiasts gathered for the West Coast release at the GameStop store at Hollywood's Universal City Walk.
At midnight, Isaiah "Triforce" Johnson, 29, purchased the first Wii as Toys "R" Us employees cheered and Nintendo of America President Reggie Fils-Aime helped ring up the sale.
"I had to get it first," said Johnson, who was dressed in a black leather Nintendo coat and "Legend of Zelda" sweatshirt. He immediately took the Wii out of its box and had Fils-Aime autograph it.
The Nintendo Wii launch comes two days after Sony's PlayStation 3 hit the U.S. market, setting the stage for a three-way video game console showdown this holiday season between the Wii, the PS3 and Microsoft Corp.'s already available Xbox 360.
Instead of trying to steal hard-core gamers from Microsoft and Sony, Nintendo hopes to expand the traditionally male video game audience by luring new players.
Nintendo priced the Wii at $250, compared with the $600 premium PS3 and the $400 top-end Xbox 360.
The Kyoto-based Nintendo, which created video game characters Super Mario and Donkey Kong, has hooked girls and seniors with its "Nintendogs" pet training games and its "Brain Age" cognitive fitness title for its hand-held DS machine that is a break-out hit.
The device offers touch-screen and voice recognition capabilities that allow users to "pet" and speak commands to their dog or to write and speak answers to brain teasers. Nintendo has taken a similar approach with the Wii.
The console's computing power is dwarfed by the Xbox 360 and the PS3 and the Wii does not offer the lifelike, high-definition graphics that its bigger rivals boast.
Still, the Wii has captivated cynical gamers with its one-handed, motion-sensitive controller that lets users simulate fishing, playing tennis or shooting a bow and arrow.
"That's what makes you feel in the game," said Sergio Gonzalez, 18, who along with friends Anton Stockton and Tulgat Vandandorj, has been at the front of the Wii line at a Los Angeles Best Buy store since Friday afternoon.
While the PS3 quickly sold out at its debut, Nintendo said it was well stocked for the Wii launch.
"We have enough product to satisfy the demand that's anticipated," Fils-Aime told Reuters.
Many gamers who purchased a Wii said they would not immediately sell the consoles on Internet auction site eBay.com — where people are selling reserved Wiis at an average price of $605, according to eBay Market Research.
Some who got their hands on the PS3 early sold the system on eBay, reeling in more than four times its retail price.
"This is strictly for me," said Kwabena Ampofo, holding a bag with a Wii. "It's not being sold at all."
But not everyone was holding on to the new console. Outside of Toys "R" Us shortly after the system went on sale, Mike Smith, 22, held a Wii that he said he paid $350 in cash to buy from someone who had just left the toy store.
Nintendo's last console, the GameCube, sold 21 million units globally to land in third place, behind Sony's PlayStation 2 and Microsoft's Xbox. The company sold 11 million GameCubes in the United States and intends to double that number with the Wii.
Nintendo expects to ship 4 million Wii consoles globally by Dec. 31, double the number of PS3s expected by year end.
Video game analyst David Cole, president of DFC Intelligence, said Nintendo is offering a one-two punch at launch with its games "The Legend of Zelda: Twilight Princess" and "Wii Sports."