SOURCE: The St. Petersburg Times
DATE: Issue #1265 (31), Tuesday, April 24, 2007
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TITLE: U.S., Russia Hold Talks On Defense
AUTHOR: By Robert Burns
PUBLISHER: The Associated Press
TEXT: MOSCOW — Defense Secretary Robert Gates on Monday urged Russia to drop its opposition to U.S. plans to develop defenses in Europe against long-range nuclear missiles, but the Russians refused to budge.
“We face new threats that require new strategies for deterrence and defense,” Gates said in a prepared statement delivered with Russian Defense Minister Anatoly Serdyukov seated beside him. “We invite Russia to join our defensive endeavor as a partner.”
Serdyukov, however, made it clear that Moscow is opposed.
“The Russian position with respect to this issue remains unchanged,” Serdyukov said.
“We do believe that deploying all the strategic elements of the ballistic missile defenses is a destabilizing factor that may have a great impact upon global and regional security,” he added.
The Bush administration hopes a series of high-level meetings this week will yield the first sign of a crack in Russia’s opposition to a top-priority U.S. defense project — building anti-missile bases in Poland and the Czech Republic.
The bases would be meant to provide protection in Europe from a long-range nuclear missile launched by Iran — a threat that U.S. officials say may be fast approaching but that the Russians say is exaggerated.
The dispute has grown into a major irritant in U.S.-Russian relations.
Gates, on his first visit to Russia since taking office last December, was meeting Monday with Serdyukov, President Vladimir Putin and other senior officials, to gauge their initial reaction to a new set of U.S. proposals designed to soften Russian objections.
“It’s nice that you accepted the invitation and that President Bush sent you so quickly,” Putin said. “We have planned a conversation with him after our meeting.”
Russian-American relations are very important, Gates said, adding, “There is a great deal we can accomplish together.”
The proposals, presented quietly last week in Moscow and at NATO headquarters in Belgium, include sharing data collected by U.S. sensors to provide early warning of ballistic missile launches, cooperation on missile defense research, and joint testing of the building blocks of an anti-missile system, according to an administration official traveling with Gates. Two officials on the trip from Washington discussed the proposals on condition they not be identified because the talks had not yet begun.
One official acknowledged that previous U.S. proposals for such cooperation had fizzled, and that it likely would take time and multiple meetings and consultations to see if the Russians would change their mind.
“I don’t think we expect to solve this problem on this trip or to get even a definitive answer from the Russians necessarily on this trip,” one official said. “I hope we get at least a preliminary response.”
Later this week Secretary of State Condoleezza Rice is due to attend a NATO meeting in Norway that is scheduled to include a session with Russian officials on the missile defense controversy and other issues.
The administration is consulting with Poland on hosting a U.S. base and is talking to the Czech government about hosting a radar system used to track hostile missiles in flight. Russia has long objected to a U.S. military presence on its periphery; Poland and the Czech Republic were part of the old Warsaw Pact that faced off against U.S.-led NATO during the Cold War.
Washington has repeatedly insisted that an anti-missile system in Europe would not threaten the viability of Russia’s vast offensive nuclear missile arsenal and would offer it some protection from a potential Iranian attack.
The Russians not only question the seriousness of the threat from long-range missiles, which U.S. officials say is real and growing, but also the feasibility of U.S. anti-missile technology as a response to any such threat.

TITLE: Former President Yeltsin Dies Aged 76
AUTHOR: By Jim Heintz
PUBLISHER: The Associated Press
TEXT: MOSCOW — Former President Boris Yeltsin, who hastened the collapse of the Soviet Union by scrambling atop a tank to rally opposition against a hard-line coup and later pushed Russia to embrace democracy and a market economy, died Monday at age 76. Kremlin spokesman Alexander Smirnov confirmed Yeltsin’s death, and Russian news agencies cited Sergei Mironov, head of the presidential administration’s medical center, as saying the former president died Monday of heart failure at the Central Clinical Hospital.
The first freely elected leader of Russia, Yeltsin was initially admired abroad for his defiance of the monolithic Communist system. But many Russians will remember him mostly for presiding over the steep decline of their nation.
Mikhail Gorbachev, the last Soviet president, summed up the complexity of Yeltsin’s legacy in a condolence statement minutes after the death was announced. He referred to Yeltsin as one “on whose shoulders are both great deeds for the country and serious errors,” according to the news agency Interfax.
Defense Secretary Robert Gates called Yeltsin “an important figure in Russian history.”
“No Americans, at least, will forget seeing him standing on the tank outside the White House (the Russian parliament building) resisting the coup attempt,” Gates said while on a visit to Moscow.
Yeltsin was a contradictory figure, rocketing to popularity in the Communist era on pledges to fight corruption — but proving unable, or unwilling, to prevent the looting of state industry as it moved into private hands during his nine years in power.
Yeltsin steadfastly defended freedom of the press, but was a master at manipulating the media. His hand-picked successor, Vladimir Putin, has proven far more popular even as he has tightened Kremlin control over both Russia’s industry and its press.
Yeltsin amassed as much power as possible in his office — then gave it all up in a dramatic New Year’s address at the end of 1999.
His greatest moments came in bursts.
After Communist hard-liners tried to overthrow Gorbachev and roll back democratic reforms in August 1991, Yeltsin stood atop a tank to rally resistance to the coup. He spearheaded the peaceful end of the Soviet state on Dec. 25 of that year.
Ill with heart problems, and facing possible defeat by a Communist challenger in his 1996 re-election bid, he marshaled his energy and sprinted through the final weeks of the campaign. 
The challenge transformed the shaky convalescent into a spry, dancing candidate.
But Yeltsin was an inconsistent reformer who never took much interest in the mundane tasks of day-to-day government and nearly always blamed Russia’s myriad problems on subordinates.
Yeltsin damaged his democratic credentials by using force to solve political disputes, though he claimed his actions were necessary to keep the country together.
He sent tanks and troops in October 1993 to flush armed, hard-line supporters out of a hostile Russian parliament after they had sparked violence in the streets of Moscow. And in December 1994, Yeltsin launched a war against separatists in the southern republic of Chechnya.
Tens of thousands of people were killed in the Chechnya conflict, and a defeated and humiliated Russian army withdrew at the end of 1996. The war solved nothing — and Russian troops resumed fighting in the breakaway region in fall 1999.
In the final years of his leadership, Yeltsin was dogged by health problems and often seemed out of touch. He retreated regularly to his country residence outside Moscow and stayed away from the Kremlin for days, even weeks at a time. As the country lurched from crisis to crisis, its leader appeared increasingly absent.
Yet Yeltsin had made a stunning debut as Russian president. He introduced many basics of democracy, guaranteeing the rights to free speech, private property and multiparty elections, and opening the borders to trade and travel. Though full of bluster, he revealed more of his personal life and private doubts than any previous Russian leader had.
“The debilitating bouts of depression, the grave second thoughts, the insomnia and headaches in the middle of the night, the tears and despair … the hurt from people close to me who did not support me at the last minute, who didn’t hold up, who deceived me — I have had to bear all of this,” he wrote in his 1994 memoir, “The Struggle for Russia.”
Yeltsin pushed through free-market reforms, creating a private sector and allowing foreign investment. In foreign policy, he assured independence for Russia’s Soviet-era satellites, oversaw troop and arms reductions, and developed warm relations with Western leaders.
That was the democratic Yeltsin, who in August 1991 rallied tens of thousands of Russians to face down a hard-line Soviet coup attempt. Throughout his nearly decade-long leadership, he remained Russia’s strongest bulwark against Communism.
But there was another Yeltsin.
He was hesitant to act against crime and corruption — beginning in his own administration — while they sapped public faith and stunted democracy. His government’s wrenching economic reforms impoverished millions of Russians — poor people whose wages and pensions Yeltsin’s government often went months without paying.
In the course of the Yeltsin era, per capita income fell about 75 percent, and the nation’s population fell by more than 2 million, due largely to the steep decline in public health.
Yeltsin was a master of Kremlin intrigues, and preferred the chess game of politics to the detail work of solving economic and social problems. He played top advisers off against each other, and never let any of them accumulate much power, lest they challenge him.
Yeltsin is survived by his wife, two daughters and several grandchildren. Funeral plans were not announced.

TITLE: Draft Bill on Euthanasia Questioned
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Sixty-year-old Valentina is gradually dying. She has Hepatitis C. But this St. Petersburg pensioner is not receiving treatment for her condition. Doctors have told her that the available medications would in fact serve to hasten her end. 
Valentina shrugs her shoulders?at the news that Russia’s Federation Council has come up with a draft bill that, if passed, would legalize euthanasia in ‘exceptional cases.’ She believes that many doctors in Russia are already leaving some patients to die when they should be providing medication and care that would allow them to live longer. The law would only formalize a situation that already exists in practice. 
“At least, there is no more hypocrisy. My doctors have essentially left me to die,” she said. “In theory, Russians should be getting free medical treatment from the state but I have to pay for every single thing, even blood tests to evaluate the quantity of the virus in my blood. Doctors are writing me off as though I had already died.” 
For Valentina, euthanasia is not an option. “It is getting more and more difficult for me to look after my two grandchildren,” she said. 
“But I immensely value every single extra moment of life that I can afford, even if I got so weak that I could only manage to look at my nearest and dearest.” 
The brains behind the draft law – which is being debated by the Federation Council this month – are members of the upper house of parliament’s social affairs committee. The head of the committee, Valentina Petrenko, argues that euthanasia, if introduced, will not be widely applied. 
The law, however, does not restrict the use of euthanasia to a specific number of cases per year. It also stops short of setting more detailed limitations on its implementation, other than listing requirements for a patient’s consent, the verdict of a medical consultation and a subsequent review by an expert panel selected by a local municipality. 
Euthanasia has been allowed in the Netherlands since 2001. Doctors in Belgium, Switzerland and the U.S. state of Oregon are also permitted to terminate the lives of their patients on their request and under specific conditions.
In France, the U.K. and Australia “passive euthanasia”, where terminally ill patients are granted the right to refuse treatment, is allowed.
“Euthanasia is meant as a possible solution for those patients who suffer from excruciating pain or live with the severest disabilities and just cannot bear it anymore,” said Valentina Petrenko. “We would like to make it possible for the gravely ill, who are begging their doctors for help, to be relieved of this nightmare of a life they are enduring.” 
Valentina, for one, does not believe that good intentions were what drove the parliamentarians to come up with this controversial plan. Rather, she argues, a lack of resources and cynicism are what lie behind it. She cites an old Chinese proverb which  says that reforms start when the money has run out. 
“It looks to me as if the state cannot cope with masses of sick and feeble people. And so it is cynically hoping to reduce their numbers by offering to help them commit painless suicide, as opposed to granting them a course of therapy to ease the pain, a psychotherapist and plenty of medication to improve the quality of their last days,” Valentina said. “That would certainly be a great bargain for the state.”  
Yabloko politician Natalya Yevdokimova, who chaired the Social Issues Commission at the St. Petersburg Legislative Assembly from 1998 to March 2007, supports the introduction of euthanasia, though she has expressed fears that the law, if it is written vaguely and contains loopholes, could lead to an increase in medical corruption. 
“I am convinced that people need to feel free to end their sufferings,” she said. “It so happens that at the moment one of my closest friends is fatally ill and this person’s condition is rapidly deteriorating. This patient is in a clear state of mind but absolutely helpless, and is undergoing a rapid physical decline. I think everyone in such a condition should have the right to decide for themselves. It is the only merciful way.” 
But the expert goes on to warn that in Russia, where corruption is rife, the trend towards shadowy deals between doctors and relatives of terminally ill patients would be marked. 
“In countries where euthanasia is permitted, there is legislation to protect the patient and to make sure that the medical profession has made every effort on behalf of the patient. Only after all that is the door left open for euthanasia,” Yevdokimova added. “It has to be a last resort.”  
Critics of the draft law also warn that the introduction of euthanasia would ultimately relieve doctors of responsibility for saving the lives of their patients. 
Professor Georgy Novikov, head of the Russian nationwide movement Medicine For the Quality of Life called the plan destructive and said the law would only serve to encourage suicide attempts. 
“Only someone who is not receiving adequate medical care can express a strong desire to end his or her life,” he said in an interview with Rosbalt News Agency. “It is a shame that our country is looking to euthanasia, rather than developing palliative medicine, as well as better psychotherapeutic treatment, and improving conditions in hospices.”  
St. Petersburg’s chief oncologist Alexei Barchuk also opposes the proposal. 
“It is too early for euthanasia to be introduced in Russia,” he said at a news conference in mid-April. “Our medical system is not ready for that. The move, if accepted, would inevitably increase the suicide rate among patients who have lost hope. This death machine would swallow up our weakest and most vulnerable people like a meat-grinder.” 
Over 100,000 cancer patients are registered in St. Petersburg, and nearly half of them are fatally ill with their cancer in its final stages, said Dr. Barchuk. 
The Russian Orthodox Church has condemned the euthanasia plan, calling the initiative “absolutely amoral from the religious point of view.” The Church also suggested that it should be involved in the debate. 
Maria Matskevich, a leading researcher with the Institute of Sociology of the Russian Academy of Sciences, said that the prevalent attitudes towards life and death in Russia do not make for a favorable environment for the introduction of euthanasia, at least for the time being. 
“While there is massive support for imposing the death penalty on certain criminals, people who commit or attempt suicide are viewed with much compassion, but they are condemned for it,” she said. “Methods which are considered humane in the West are judged here from the moral — rather than humane — perspective. Death is seen as punishment or retaliation, not as something that people should be legally allowed to seek themselves. At least that’s what most people here think,” Matskevich said.

TITLE: Ministry Gives Backing To Police Over Response
AUTHOR: By Kevin O’Flynn
PUBLISHER: Staff Writer
TEXT: MOSCOW — The Interior Ministry on Saturday came out in defense of the riot police who broke up the Dissenters’ Marches in Moscow and St. Petersburg on April 14 and 15.
“The police did everything possible not to give in to provocations and acted according to the situation,” ministry spokesman Valery Gribakin told reporters.
Gribakin said protesters had faked injuries to attract the attention of foreign journalists and deliberately provoked the police.
“We truly regret if any innocent civilians or journalists became the victims of provocateurs,” Gribakin said.
Riot police violently dispersed the unsanctioned marches, which were organized by The Other Russia, a coalition of opposition groups. Hundreds were arrested and many beaten in both Moscow and St. Petersburg.
More than 9,000 officers policed the Moscow march, which attracted 2,000 to 3,000 people. A number of journalists were arrested and some beaten as they covered the march.
Gribakin said police had the power to arrest people for taking part in unsanctioned meetings and that they had warned the crowd using loudspeakers before arresting anyone.
The Other Russia had permission for a meeting on Chistoprudny Bulvar. Gribakin said, however, that the group exceeded the maximum turnout specified in its permit from the city. Opposition leaders and human rights groups have criticized the police response.
After initially supporting the police, the Kremlin also criticized the police for “some overreaction.”
“There was only one extremist on the streets of Moscow on April 14 and that was the government and its law enforcement officers,” former chess champion Garry Kasparov said Saturday, The Associated Press reported.
Kasparov’s United Civil Front took part in the march.
“All the police claims about acts of violence, of violation of some rules of law … are totally false,” he said.
Gribakin said the provocateurs had come to Moscow from other cities and even countries, and that “sturdily built” men were specially chosen to cause trouble.
He showed a police video of the St. Petersburg march and another demonstration in Nizhny Novgorod last month to illustrate his points, but the footage drew only laughter from reporters.
Gribakin did not show any footage from the march in Moscow, apart from an excerpt from an NTV television news program in which a man hiding his face said he had been offered $100 to pretend that he had been beaten at the march by smearing his T-shirt with ketchup.
“Their job was to fall down after any contact with police to draw the attention of passersby and the media,” Gribakin said.

TITLE: Architects Claim Tower Won’t Ruin City Skyline
AUTHOR: By Evgenia Ivanova and Galina Stolyarova
PUBLISHER: Staff Writers
TEXT: The 396-meter tower the state energy giant Gazprom is planning to erect opposite Smolny Cathedral on the Neva will not ruin the St. Petersburg historic skyline according to new landscape studies. 
The designs for the building have led to widespread concerns that the city’s historic landscape will be ruined. In a telephone interview with The St. Petersburg Times on Monday, following a presentation of the results of the studies on Friday, Philipp Nikandrov, head of the architectural bureau RMJM’s St. Petersburg office said, “The tower won’t harm the city.”
The research, commissioned by RMJM, used satellite navigation equipment and concurs with another study undertaken by the city’s Monument Preservation Committee, which employed a helicopter, Nikandrov said.
According to the research, the tower will not be visible from any point within the so-called “Golden Triangle,” an area bounded by Nevsky Prospekt and the Fontanka and the Neva embankments. Nikandrov admitted that “there are some locations in the center from where the top of the spire will be visible.”
Nikandrov said it would be possible to see the tower from Kirochnaya Ulitsa and along the axis of the Fontanka River.
“But it will not ruin the skyline, it will make it look beautiful instead. At the moment the focal point of the skyline [in the Vitebsky Station area]  is made up of four 19th-century smokestacks. Of course, the tower will be a much better motif than the factory’s chimneys,” Nikandrov said. 
The controversial Okhta-Center (formerly Gazprom-City) has been the subject of criticism ever since it was officially announced. 
The St. Petersburg Union of Architects, in a letter sent as early as July 2006 — while the design competition was still underway — to St. Petersburg Governor Valentina Matviyenko, said the tower will destroy the unique harmony of the city’s skyline and may result in St. Petersburg’s exclusion from the UNESCO list of world heritage sites. 
“The low skyline makes the verticals of St. Petersburg especially magnificent… the conservation of the unique silhouettes of its spires and domes is of great importance to town planning and of spiritual importance,” reads the letter from the St. Petersburg Union of Architects. 
The director of UNESCO’s World Heritage Center, Francesco Bandarin, told reporters during his visit to the city in January that the development “is the most visible problem in St. Petersburg,” Reuters reported.
Local architect Dmitry Butyrin, head of the city’s Union of Architects’ Council for the Protection of the Architectural Legacy of St. Petersburg, told The St. Petersburg Times last month that height limitations in the city are being blatantly violated. 
“It is happening more and more often, and the Gazprom building situation is a litmus test for the city,” the architect said. “If we swallow it, more towers will follow shortly afterwards. The tower — in its suggested form and location — will alter the famous historic skyline of St. Petersburg. We have nothing against Gazprom, but we strongly feel that an alternative location should be found.”
A group of local activists led by politicians from the democratic party Yabloko have presented a plan to launch a city-wide referendum on the tower.
The St. Petersburg Legislative Assembly this week will review the group’s proposal to hold a popular vote on the issue. If the parliament confirms that it corresponds to the law, the activists will start collecting signatures. The law allows them 30 days to collect the required signatures of 2 percent of local voters. There are 3.7 million voters in St. Petersburg. 
The activists suggest the inclusion of two questions in the referendum.
“Do you agree that in order to preserve the unique historical image of St. Petersburg the height of the building of the new Gazprom headquarters at the Okhta River should be limited to 48 meters, as stipulated by the St. Petersburg legislation as of Jan 1, 2006?” reads the first question.
The second question is more general, asking citizens whether maximum height limitations must be strictly observed.

TITLE: U.S. NGO Shuts Down
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A U.S.-based nongovernmental organization will halt operations after a police raid on its Moscow office last week.
The Educated Media Foundation — the legal successor of Internews, which trains journalists and works with many media outlets — will temporarily halt its activities after Interior Ministry officers confiscated documents and computers from its office, Manana Aslamazian, executive director of the organization, said Friday.
“We will continue with the seminars we had planned for April, but we will be doing nothing as of May,” Aslamazian said.
About 20 officers from the Interior Ministry’s economic crimes department locked themselves in the organization’s office in the Central House of Journalists for nearly 11 hours Wednesday during the raid, Aslamazian said.
Aslamazian said police were linking the search to her detention at Sheremetyevo Airport in January for failing to declare excess cash, but that she believes it is linked to NGO restrictions.
A new NGO law, which came into force a year ago, increased the amount of paperwork that NGOs must keep and required them to reregister under stringent new guidelines. The law was adopted after President Vladimir Putin said he would not tolerate foreign funds being used by NGOs for political activities. Foreign-connected NGOs played key roles in regime changes in Georgia in 2003 and Ukraine in 2004.
Interior Ministry officials could not be reached for comment.

TITLE: Protest Demonstration
PUBLISHER: The St. Petersburg Times
TEXT: ST. PETERSBURG — Local human rights groups  are organizing a Meeting Against Police Arbitrariness at 5 p.m. next to the Griboyedov monument on Pionerskaya Ploshchad on Friday.
The event, supported by the human rights faction of the liberal party Yabloko, is intended for opposition activists to express their protest against the violation of people’s rights during the recent series of dissenters’ marches in Moscow, St. Petersburg and Nizhny Novgorod.
“This meeting of protest will be an apolitical gathering, where civilians, regardless of their political or religious beliefs and ethnic origins can have their say about what they see as police arbitrariness,” said Yabloko spokesman Alexander Shurshev.

TITLE: Pamela Anderson Upstaged at MTV Awards Night
AUTHOR: By Anna Malpas
PUBLISHER: Staff Writer
TEXT: It should have been Pamela Anderson’s night, but veteran film director Vladimir Menshov stole the limelight at the MTV Russia Film Awards ceremony, dramatically refusing to hand over the Best Film prize to the controversial war drama “Scum,” which he said “disgraced” Russia.
Crowds lined Pushkin Square to catch a glimpse of the blond “Baywatch” star, who co-hosted the annual awards ceremony for Russian film with television presenter Ivan Urgant on Thursday night. Wearing a black raincoat and sunglasses despite the overcast sky, she strode briskly up the red carpet into the Pushkinsky movie theater, pausing only to say that she was “happy to be in Moscow.”
After stripping down to a black top and shorts, Anderson bounded onto the stage to be serenaded by a male singer who praised — in Russian — her “luxuriant breasts.” Fortunately not provided with an interpreter, the actress playfully ruffled his chest hair and said “Privet Moskva.”
The actress took a good-humored approach to the awards, which could not be said of Menshov, who directed the Oscar-winning film “Moscow Does Not Believe in Tears,” and was roped in to present the Best Film award at the ceremony, which was broadcast live on MTV Russia.
Taking the stage with his wife, Vera Alentova, Menshov said he hoped the award — voted for by MTV Russia viewers — would go to a film that they supported.
After opening the envelope, he said: “I am not going to present this award to a film that disgraces my country. Let Pamela Anderson present this one.”
He then dropped the slip on the floor and walked away.
To feeble applause from the audience, a girl in a bikini handed the award to the makers of “Scum,” or “Svolochi,” a film that tells the story of juvenile delinquents recruited by Soviet special forces to go on suicide missions against Nazi Germany.
Director Alexander Atanesyan attracted criticism for the film’s plotline, which was initially promoted as a true story. The Federal Security Service, or FSB, even took the unusual step of issuing a statement regarding a cinematic endeavor. The agency said in the February 2006 statement that it “possessed no materials confirming the existence” of a school run by Soviet security services to train children for such missions.
The agency noted that it had materials that Nazi Germany’s intelligence services used children to such ends.
An FSB spokesman said Friday that the agency had “already said what we think of the movie.”
“What happened at the MTV ceremony is of no interest to us at all,” the spokesman said.
Atanesyan braved a hostile reception Thursday night. “I am not ashamed of this film,” he told the audience.
He told reporters after the ceremony that he had “no particular” attitude toward Menshov.
“He has the right to his own opinion, and he made use of that right,” Atanesyan said. He went on to call the MTV award “the most objective.”
One of the film’s young actors, Alexander Golovin, won the award for Breakthrough of the Year.
Anderson, who did not have an interpreter at any point during the evening, may have thought that Menshov’s throwing the winner’s name on the floor was a quaint Slavic tradition. Billed as the show’s co-host, the actress spent most of the evening sitting in the audience with a male companion, both of them looking slightly bewildered.
She smiled exasperatedly when comedians Olga Shelest and Anton Komolov did a sketch with giant balloons stuffed up their tops, and she looked embarrassed when “Comedy Club” star Pavel Volya attempted to flirt with her in broken English.
“Moscow love you, don’t love Tommy Lee,” he told the actress, referring to her rocker ex-husband.
The president of MTV Networks International, Bill Roedy, joined Anderson to present the award for best non-Russian film, a prestigious category that included “Saw III.”
She read out the winner — “Pirates of the Caribbean: Dead Man’s Chest” — but no one appeared to collect the award, which was finally taken by MTV presenter Alexander Anatolyevich.
“I think we violated every rule in the book tonight,” Roedy quipped.
And that was before Menshov took the stage.

TITLE: Rumored Trip To Moon For Abramovich
PUBLISHER: The St. Petersburg Times
TEXT: KOROLYOV, Moscow Oblast — The Federal Space Agency is prepared to send Chukotka Governor Roman Abramovich on a trip into space for $300 million, Itar-Tass reported Saturday.
Commenting on media reports that the billionaire governor was ready to pay $300 million for a trip around the moon, agency head Anatoly Perminov said: “It’s a good sum; we like it. And if Mr. Abramovich agrees to pay, we’ll send him,” Itar-Tass reported.
Perminov said his agency was “not considering a waiting list of tourists after 2009 for the time being” because the crew of the international space station was expected to be increased to six from that time.
Many professional cosmonauts and astronauts will fly into space, and seats for tourists on Russian spaceships will be made available only if their trips do not disrupt the work of professional crews, Perminov said.

TITLE: CRAMO to Equip Russia’s Builders
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: One of Europe’s leading leasers of construction equipment and module premises, CRAMO, is looking for development opportunities in Russia. A new representative office in St. Petersburg is the beginning of the Scandinavian concern’s expansion into the Russian regions, the company said Friday in a statement.
CRAMO operates in Sweden, Finland, Denmark, Norway, Poland, Netherlands, Belgium, Lithuania, Latvia and Estonia. Last year CRAMO received an impetus for development when it merged with leasing company Rakentajain Konevuokraamo.
As a result of the merger turnover increased to 402.4 million euros ($543 million) last year, compared to 77 million euros in 2005. Net profit was reported at 42 million euros last year compared to 11.9 million euros in 2005.
“The construction market in Russia is surging both in residential and commercial segments, stimulating development of leasing services. This trend will continue for the time being. We see this market as the most promising,” said Vesa Koivula, president of CRAMO.
St. Petersburg is the first region in Russia where CRAMO has started operating. Last year Zenavkaprokat — a former subsidiary of Rakentajain Konevuokraamo — became a CRAMO representative.
At the time of the merger, Zenavkaprokat held about 30 percent of the local market, the company claims. CRAMO has invested about 3.5 million euros to promote the new brand. This year investment will double and keep increasing through 2008.
In September CRAMO plans to establish a second office with equipment site in the city. By the end of 2008 five offices with equipment sites will operate in St. Petersburg.
“In the construction industry in Russia leased equipment accounts for about 30 percent, while in some European countries it accounts for up to 90 percent. We have huge potential for growth in this segment, and Russian construction companies are gradually increasing their share of leased equipment,” said Yevgeniy Kaplan, deputy director of the St. Petersburg Union of Construction Companies “Soyuzpetrostroi”.
Kaplan indicated that over 50 percent of construction equipment in Russia is outdated. “It’s difficult for small construction companies to buy new equipment. For small and medium firms leasing is an opportunity to use modern technologies,” Kaplan said.
Igor Luchkov, director of assessment and analytics at Becar Commercial Property St. Petersburg, also welcomed the new player.
“The booming construction industry has resulted in a deficit of particular materials and equipment. Most of the construction equipment has suffered depreciation, both technologically and physically. Falling cranes clearly illustrate the condition of the equipment and negligence towards the requirements of exploitation,” Luchkov said.
“The new company will increase competition and civilize the market. Modules will, at last, replace carriages, foreign construction equipment will force out the old machines,” he said.
With growing demand for construction equipment, CRAMO has got a good chance to do well in Russia, Luchkov said, “if the company offers a wide range of services, sticks to a moderate pricing policy and exercises a modern approach to clients.”
Konstantin Kovalyov, deputy director of Okhta Group, also evoked the recent accidents with building cranes. 
“The standards for construction equipment will be revised in the nearest future, and demand for high-quality equipment will increase,” he said.
“At the moment in St. Petersburg you can rent only the most expensive equipment, like cranes, while in Finland even hammer drills are rented,” Kovalyov said.
“As the competition grows, construction companies will try to minimize their expenses. General contractors could considerably increase their efficiency by renting out equipment,” he continued. 
Both large and small companies could benefit from the opportunities associated with leasing, he said.

TITLE: Roadshow Reaches Out to the Serviceable
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: A roadshow giving students and young professionals information about internships and careers in the hotel and tourism industry is set to take place at the Hotel St. Petersburg on Wednesday. 
Exhibitors at the roadshow include any of the city’s hotels as well as organizers the Astoria hotel and tourism recruitment company Gold Service. Last summer, the hotel occupancy rate in St. Petersburg was 92.6 percent, while hotels were faced with an extreme shortage of qualified labor.
“St. Petersburg is a true European city with a unique Russian charm that has always been interesting for tourists from all over the world and such interest grows every year,” said Anna Bardashevich, general director of “Gold Service.” 
“The high season of summer is the most tense and dynamic time for city hotels which are normally fully booked and faced with a severe lack of personnel. We believe the roadshow will help potential employers to find temporary and permanent staff.” 
The roadshow includes several professional seminars, among which are “How to write a good resume,” and  “How to become a hotel manager.”

TITLE: EBRD Urges Dialogue At Depleted Forum
AUTHOR: By Douglas Busvine
PUBLISHER: Reuters
TEXT: LONDON — The head of the European Bank for Reconstruction and Development called on Monday for a closer dialogue with Russia after a cast of top speakers pulled out of a major business conference in London.
“We need to engage even more — it’s not by isolation that we make progress,” Jean Lemierre, president of the EBRD, told the opening session of the 10th annual Russian Economic Forum.
The forum, the biggest international event on the Russian business calendar, was hit by a string of last-minute withdrawals amid speculation that the Kremlin had ordered a boycott.
Top executives from state-controlled companies, such as oil firm Rosneft, government officials and senior bankers scratched late last week. Replacements were hastily found by organizers Eventica and speakers put on a brave face.
“Who knows the real reason?” said Roger Munnings, head of auditors KPMG in Russia and the Commonwealth of Independent States.
Russian business newspaper Vedomosti last week cited a source in one company which had pulled out as saying that Putin had given an order not to support “offshore gatherings.”
The Kremlin is keen to promote Russia’s own annual business conference, the St. Petersburg Economic Forum. Putin is expected to speak at the conference this year.
“Whatever the reason … I hope it is temporary. Russia needs to communicate with the rest of the world to tell its success story,” said Munnings, who chaired the opening plenary session before a packed auditorium.
Although a playground for high-spending Russians, London is treated with caution by the political elite because it is the base for a coterie of Kremlin critics led by multi-millionaire Boris Berezovsky.
Berezovsky, once a Kremlin kingmaker, has said he wants to topple President Vladimir Putin and has accused the Kremlin of murdering Alexander Litvinenko, a former Russian agent. The Kremlin has denied involvement.
British newspapers reported on Sunday that police wanted to issue arrest warrants for at least two Russian suspects in Litvinenko’s murder.
Litvinenko died in a London hospital on Nov. 23 last year after being poisoned with a lethal dose of polonium 210, a radioactive isotope.
He issued a deathbed statement accusing Russian President Vladimir Putin of ordering his murder. The Kremlin dismissed the allegations as nonsense. The affair has soured relations between Moscow and London.
Hans-Joerg Rudloff, chairman of investment bank Barclays Capital, took a swipe at the western press for creating a negative image of Russia and failing to take notice of its economic achievements.
“Let’s give Russia the respect it deserves and move away from the cheap criticism by journalists who have no idea of what is going on in that country,” said Rudloff.

TITLE: Hambro Warning
Amid Profit
PUBLISHER: Reuters
TEXT: LONDON — Peter Hambro Mining, which mines gold in Russia’s Far East, said on Monday that 2006 operating profit nearly trebled year, boosting its shares, but warned that higher cost pressures may increase operating expenses.
Russia’s third-largest gold miner also said it expected 2007 total attributable production to increase by 8.4 percent to around 283,000 ounces, after 2006 production rose 5 percent due to a 11 percent gain from its biggest mine, Pokrovskiy.
The company said operating profit rose 182 percent to $49.2 million in 2006, with earnings per share rising 124 percent to 38 cents, buoyed by higher gold prices and cost control.
But it warned of rising cost pressure.
“An appreciation in the U.S. dollar value of the rouble, the group’s operating currency, and inflationary pressures on raw material costs may well cause an upward pressure on operating costs,” the company said.
By 0705 GMT, shares in Peter Hambro rose 3.4 percent to 1,215 pence, on the strong results and firmer gold prices.
On Monday, gold hovered near an 11-month high just below the psychological level of $700 an ounce as funds continued to shift into the metal based on the dollar’s bearishness and strength in energy prices.
“Peter Hambro Mining is continuing to make good progress on its development projects with the first of these, Pioneer, expected to commence production in 2007,” the company said.

TITLE: LUKoil Studies Bigger Port
PUBLISHER: Reuters
TEXT: ST. PETERSBURG — LUKoil may further expand its Baltic Sea terminal of Vysotsk to 17 million tons per year as it hopes to sort out its current problems with railway links, a company source said Thursday.
The source said the port, which last year loaded 9.2 million tons of fuel oil, diesel and vacuum gas oil, would increase shipments of diesel and fuel oil to become the country’s largest refined products export outlet. “A new railway loading facility is being currently designed. If we get funds this year, we will start construction, which will take about 18 months,” the source said.
He said LUKoil wanted to produce 2.5 million tons of fuel oil at its Ukhta refinery using heavy crude from the Yarega field in the northern Komi region and ship the product to Vysotsk for export.
Some 3.5 million tons of diesel will also be delivered to Vysotsk by a new diesel pipeline, which is being built by refined product pipeline monopoly Transnefteprodukt.

TITLE: In Brief
TEXT: <b>Exchange Registered</b>
ST. PETERSBURG (SPT) — International Stock Exchange St. Petersburg closed joint-stock company (IXSP) was officially registered on Friday, Interfax reported.
Authorized capital stock of the new stock exchange is 60 million rubles ($2.35 million). The company is owned in equal parts by Swedish group OMX, St. Petersburg Stock Exchange and RX venture group.
The new stock exchange will start operating in September trading blue chips. 

<b>High-Speed Siemens</b>
ST. PETERSBURG (SPT) — Siemens signed a 30-year agreement with Russian Railways for servicing high-speed trains Velaro RUS, AK&M reported Friday. The deal was worth 300 million euros ($405 million).
Last year Russian Railways and Siemens signed an agreement for the supply of eight high-speed trains for 276 million euros. Projection is underway. The new trains will travel at 250 kilometers an hour between Moscow and St. Petersburg, reaching a maximum speed of 330 kilometers an hour. Each train will consist of 10 carriages for 600 passengers.

<b>Daily Express</b>
ST. PETERSBURG (SPT) — Sky Express Airlines has announced it is to run daily flights between Moscow and St. Petersburg from May 9, 2007, AK&M reported Friday.
Sky Express Airlines was founded in March 2006 as the first Russian low-budget airline, though its flights were limited to European Russia. By the end of 2007 its network will include 20 routes to Russian cities, located from 600 to 3,000 kilometers from Moscow.

<b>Iberian Summer</b>
ST. PETERSBURG (SPT) — Iberia has added St. Petersburg to its list of destinations for this summer. The service will begin on June 2nd, the company said Monday in a statement.
Iberia will operate two direct return flights each week between Madrid and St. Petersburg, using 141-seat Airbus A-319s, with a Business Class section.

TITLE: Money Without Speed
PUBLISHER: Reuters
TEXT: LONDON — Iran’s payments to Russia for building its Bushehr nuclear power station are not sufficient to speed up work on the plant, the project contractor told the Iranian official IRNA news agency in Moscow on Saturday.
Russia is Iran’s closest major-power ally, and has helped water down international sanctions over its nuclear program.
But the two have clashed over payment for Bushehr, in southwest Iran. Russian officials said late last month that Iran had resumed payments, after the Kremlin had delayed nuclear fuel shipments. But they said it was still in arrears.
IRNA said Saturday that the managing director of Iran’s Atomic Energy Production and Development Company, Ahmad Fayyazbakhsh, was in Moscow for talks with Atomstroiexport, which is building the power plant.
“The Iranian side paid part of its due payments in March, but they are not enough for accelerating the completion,” Atomstroiexport spokeswoman Irina Yesipova was quoted as saying.
She did not give an exact time for the commissioning of the plant. IRNA said the Bushehr plant was scheduled to be operational in November, but might be delayed.

TITLE: Top Three Mobile Firms Get 3G Licenses
AUTHOR: By Tai Adelaja
PUBLISHER: Staff Writer
TEXT: MOSCOW — The country’s three major mobile operators, MegaFon, Mobile TeleSystems and VimpelCom, were granted licenses to provide third-generation mobile services Friday in a contest some participants claimed was fraught with irregularities.
Experts believe the new technology will decongest Russia’s saturated market for GSM mobile phones, while offering users an array of new services, such as video-conferencing and mobile television.
MTS chief executive Leonid Melamed said Friday: “The new technology will make communicating more fun and productive for our customers,” adding that the 3G license will allow his company to introduce new and useful products and services to its customers.
3G mobile technology gives operators the ability to transfer voice and other data, thereby allowing consumers to use services such as e-mail, instant messaging and video-telephony on their cell phones.
Melamed said the 3G networks in Russia would complement the existing GSM network, adding that his company will offer 3G services in the largest cities in Russia beginning from the second half of this year.
VimpelCom CEO Alexander Izosimov also expressed satisfaction Friday at what he called “a well-deserved reward” for the buoyant performance of his company in the country’s mobile market.
Speaking to analysts after publication of VimpelCom’s annual results last week, Izosimov said the company planned to invest up to $350 million on a 3G network by the end of 2008.
Mobile operator MegaFon declined to comment Friday, saying only that its “future plans must first be approved by shareholders.”
The Federal Communications Agency opened the way for bid applications in December, stipulating criteria on infrastructure capacity and the financial means required to clear allocated frequencies. Each applicant also had to pay a 2.6 million ruble ($100,000) fee. The operators named Friday are expected to have commercial operations up and running by 2009.
The conduct of the contest has left some of the losing participants seeking redress, however.
The tender committee’s decision drew the ire of two unsuccussful contenders — SMARTS and Network Telecommunications Company — which were dropped after the first stage in early April.
SMARTS general director Andrei Girev said Friday that his company had joined forces with Network Telecommunications Company to file suit against the Federal Communications Agency for placing misleading information about them on its official web site.
Girev said the outcome of the competition was predetermined, adding that his company was now forming a coalition of mobile operators to force the agency to issue a fourth 3G license.
“Countrywide 3G development will suffer if only Moscow-based federal operators are awarded 3G licenses,” Girev said. Deutsche UFG analyst Anastasia Obukhova agreed, saying that even if 3G implementation were hitch-free, operators would mainly concentrate on Moscow this year.

TITLE: The Deformed Professional
AUTHOR: By Anna Shcherbakova
TEXT: “It’s pure ‘commercial fiction’ — the writer is selling me his product,” a successful banker told me when I asked if he liked the new book by Boris Akunin, the successful author of mysteries. 
There is no doubt that over the last five years, publishing has become a profitable business. It’s not comparable to oil or gas, but its profitability is equivalent to the commercial banking sector. And the moneymen were aware of this at the outset and never truly had time to enjoy the enigma and finesse of the plot nor the rich language used to express it. 
Yet another top manager should finish the psychoanalysis he needed so desperately yet gave up on after a couple of sessions. The person lost a member of his family but even in such sorrow suspected that his psychotherapist “was after his money” and could not trust his advice. 
Managing such suspicions is his job. How could he just lose such a skill on leaving his office? What psychotherapist could save him from such a situation and rescue his private life in the process? 
I probably ask too many questions myself but it’s also part of my job. Sometimes it’s even useful — for instance, when visiting the doctor a few questions will open wide vistas of knowledge. 
On the other hand, any relationship can be ruined by such professionalism, for example, when one looks for a second source to confirm some piece of information. 
The diagnosis is professional deformity. 
Professionals see the world through the filter of their highly-developed skills. Business people are looking for a good investment. Managers try to control everything. News-people are looking around the clock for information. 
The well-known approaches are time-saving and efficient. They make lives easier but not necessarily happier. Because a high level of performance has nothing to do with happiness or at least is only a small part of it. 
“Happy families are exceptions on Rublyovka,” according to the psychotherapist Artyom Tolokonin. The main type of power is not power over a huge corporation but power over yourself, he said in an interview published in the business magazine Profile last week. 
Having large amounts of money transforms people more than having none. 
Looking at family and friends through the prism of wealth and power does not bring harmony to the house. 
Another problem associated with very busy and important people is that they use other people instead of communicating and getting personal with them. 
VIPs are surrounded by employees and service-sector workers, like security guards, waiters at restaurants and sales personnel in stores. Again it saves time and effort, but what about relationships? They are the first thing to suffer when a business is going well.
In other words successful and professional people are held hostage by their professions, which is good for business but destructive in terms of life. Good advice could be very valuable indeed. But they usually place little trust in advisors and psychotherapists. 

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

TITLE: Putin’s Record is Cause for Optimism
AUTHOR: By Christopher Weafer
TEXT: More often than not the state’s interaction with the energy sector has created the impression that investment risk is on the rise in Russia. Starting with the Economic Development and Trade Ministry’s plan to raise taxes in the oil sector, unveiled in February 2003, and including the Yukos affair and the Sakhalin-2 production-sharing agreement dispute last year, the news has been about nationalization and state interference.
The concern is that greater state control is bad both for industry and ultimately for the economy. This concern is re-enforced by the fact that state companies were the laggards when industry was boosting production from 2001 to 2005, and that the state has not yet taken steps to develop several major hydrocarbon deposits that have been known of for more than a decade.
So is it the case, as the pessimists would have it, that Russia has been lucky on President Vladimir Putin’s watch, benefiting from nearly three-quarters of a trillion dollars earned from oil and gas exports, but is now poised to squander this opportunity by killing the golden goose and delaying investment programs designed to broaden the economy?
Or can the case be made that the state’s approach to the energy sector, albeit often clumsily implemented and poorly explained, is part of a process of using the leverage afforded by the country’s most important industry to advance the consistently stated goals of achieving a better balance in the economy and more sustainable growth from a globally competitive industrial base? 
In their medium- to long-term investment case for Russia, investors are banking on the second possibility.
In order to substantiate this assumption it is important to consider the state’s involvement in the energy sector in the context of broader changes that have taken place since early 2000. In his inaugural address to the parliament, Putin set out key long-term objectives for Russia, including a more diversified economy and a greater international role both for the country and for industry. But he also made clear that the state would not support major reforms in the strategic industries until it was sure of its control over the process.
As a result, Putin focused on domestic issues in his first term and his government interfered little with industry, apart from the pressure put on oil companies to concentrate less on corporate restructuring and to recover lost production and exports. 
In February 2003, we first heard of the state’s plan effectively to slow production growth in the oil sector by raising taxes, thereby reducing the amount of cash available for new projects and delaying new development licenses and proposed export routes. This meant that production and export growth would slow sharply by 2006, as in fact happened.
This slowdown can be blamed on state interference. But far from being an accident, it fits comfortably into the state’s long-term economic planning. The original plan was to use the extra tax revenue to pay for tax breaks and investment incentives for small and medium-size enterprises and industries that would contribute to economic diversification. Today the expectation is that these taxes will be channeled into projects in strategic industries.
Given the state’s reluctance to pursue major industrial reforms before its control was secure, the emergence of state-owned national champions in the energy sector was an inevitable prerequisite to the next phase — the leveraging off of the state’s key asset to pursue the goals of economic diversification and industrial internationalization.
When the current government came to power, barter was still widely used in the economy. Today, while it is all but extinct as an important economic factor, the Kremlin is using “energy barter” to pursue its goals. The European Union wants an energy deal with Russia and this means securing the Kremlin’s commitment to allocate known hydrocarbon deposits for development. It also means involving European energy companies in joint-venture deals and exporting the products to Europe.
The evidence suggests that the Kremlin has no fundamental objection to this prospect, but only if it secures a new trade deal in return that would end trade barriers that cost Russian exporters billions every year and that would clear the way for increased cross-border investment. 
The issue of energy for trade was highlighted by the EU’s negative reaction to VTB’s acquisition of an equity stake in the European Aeronautic Defense and Space Co., which led to the suspension of talks on developing the Shtokman gas field. The fact that major energy projects like Shtokman remain in limbo has less to do with the government’s indecisiveness than with the attempt to swap foreign participation in these projects for a less restrictive trade and investment relationship.
The Economic Development and Trade Ministry’s vision of the energy sector as a source of tax revenue to sustain investment spending elsewhere has clearly changed. Today, far from capping growth in the oil and gas sector and concentrating on developing other areas, these industries remain at the core of the state’s plan for the economy. The state is bartering new projects in the energy sector to get better trade deals and to clear the way for Russian companies to become more international. “The Russians Are Coming,” declared a headline in the Financial Times recently. Yes they are, and the passage west, in particular, will be paid for with reciprocal deals in energy. 
In addition to promoting international ambitions, the energy sector also has a role to play in diversifying the economy’s growth drivers and, strange as it may sound, in lessening the vulnerability to oil price volatility.
Despite the Yukos affair and Sakhalin-2, the state’s approach to the energy sector has been reasonably consistent. First it pushed the oil companies to build up production and exports; then it raised taxes to build up a substantial financial reserve; then it established a dominant role for itself via Rosneft and Gazprom; now it is bartering both the timing of new developments and foreign access in exchange for international trade and investment deals. 
If this trend continues, we can expect to see several major new gas and oil deposits allocated for development from later this year with up to a 49 percent equity interest in each made available to foreign oil companies — similar to the end result in Sakhalin-2.
At the same time we know that the government plans to promote greater investment into downstream projects, such as liquefied natural gas, refineries and petrochemicals generally, as a means to improve the balance between the export of price-volatile raw materials and less volatile, but higher value-added products. 
It is tempting to point to confusing cases such as Sakhalin-2 and to conclude that the state’s approach to the energy industry, and the economy as a whole, is simply a reaction to events. The state’s short-term strategies appear poorly thought out, but the evidence over the past seven years suggests that it would be wrong to assume that this applies to the macro-management level as well.
The Kremlin has clearly stated long-term goals. The means by which it implements these goals may cast doubt on this assertion, but a sober analysis of the events of the last seven years supports this more optimistic conclusion. 

Christopher Weafer is chief strategist at Alfa Bank.

TITLE: 	Equal Rights: the SAC Shows no Mercy
AUTHOR: By Ivan Smirnov and Vilena Shchekalova
TEXT: The new information letter No 117 of 13 March 2007 of the Russian Federation’s Supreme Arbitration Court resolved, for the first time, a number of fundamental issues. This will allow the introduction of greater contentiousness into arbitration proceedings in cases arising out of administrative and other public relationships and reinstates the principle of equal rights of private entities and individuals and public entities (in particular, in respect of taxpayers and tax authorities) in matters related to the payment of state duty. The major innovations are summed up as follows:
(i) According to the RF SAC instruction, all public entities participate in civil relationships on an equal basis with private legal entities and individuals. As a result of this, the state or any other public authority, acting as a party in civil relationships, for instance, under a leasing agreement, is required to pay state duties in regard to claims related to the ownership, use or disposal of the respective assets, or claims related to the protection of ownership titles related to such property.
(ii) As of 1 January 2007 the tax authorities (as well as other state and municipal authorities) shall bear financial liability for their illegal or unjustified decisions and actions (failures to act):
1. state duties paid by a taxpayer will be collected from the tax authorities in  the event that their decision or action (failure to act) is held to be invalid;
2. state duties paid by a taxpayer shall be subject to refunds at the expense of tax authorities in the event a challenged decision was annulled voluntarily by the tax authorities after the taxpayer filed a respective suit;
3. tax authorities acting as respondents in cases pertaining to challenge their decisions or actions (failures to act) are not relieved from paying state duties for filing appeals and cassations.
Thus, for the first time the RF SAC has indicated that a specific state authority, instead of the federal treasury, is liable for the justification and lawfulness of its actions and the actions of its officials. By doing so the RF SAC aims to stop the abuse and violation of law by state authorities (in particular, tax authorities), to prevent them from filing formal and meaningless appeals against lawful and justified court decisions to higher instances, as well as to reduce the number of illegal and often absurd decisions. Such a practical approach should lead the state authorities and their officials to adopt more balanced and justified decisions. 
(iii) State duties paid by a taxpayer to obtain interim relief measures (in particular, for suspending unlawful decisions and actions) shall be reimbursed by the tax authorities if the following conditions are met: such measures are granted by the court and subsequently the court adopts a positive decision on its merits.  In addition to compensating a taxpayer’s expenses in this way, the RF SAC clarifies that a taxpayer shall not pay state duties for requesting interim measures of relief in upper instances of the arbitration court. 
(iv) New clarifications also state that no state duty shall be paid for requesting to obtain evidence. This measure is aimed at protecting the rights and legal interests of a private party as of a weaker party in an administrative (public) dispute. In practice, this would permit a taxpayer to actively protect its rights by requesting evidence from third parties as well as from tax authorities. 
The recent arbitration practice shows that a tax authority, having received, in the course of mutual audits of taxpayer’s contractors and those of other third parties, documents or information concerning taxpayer’s activities, does not furnish the taxpayer with these documents or data, thus depriving taxpayers of the possibility to familiarize themselves with such documents and information. 
(v) Also of interest is the position of the RF SAC in stating that the arbitration court is entitled, when considering the status of a taxpayer, to reduce the amount of state duty down to a minimal 500 rubles ($20). 
Summarizing the clarifications of the RF SAC, it should be noted that their practical implementation may result in a considerable decrease in the total number of tax disputes submitted for the determination of the arbitration courts, as well as of the total number of formal and unjustified decisions adopted by the tax authorities. Starting from 1 January 2007 each case won by a taxpayer will cause direct financial losses to the respective tax authority.

Ivan Smirnov (ivan.smirnov@dlapiper.com) is Senior Associate, Head of Litigation Practice and Vilena Shchekalova (vilena.shchekalova@dlapiper.com) Associate , at DLA Piper in St. Petersburg.

TITLE: Improving Business Standards in Russia
AUTHOR: By Brook Horowitz
TEXT: As the Russian business community converged on London this weekend for the 10th Russian Economic Forum, there was cause for celebration. In the decade since the first forum, Russia has been transformed from a “transition economy” receiving support and aid from the West to an “energy superpower.” At the same time, there will be plenty of discussion about the challenges of the next 10 years — especially those faced by Russian multinationals looking to find their place in international business and the country. More generally, the country will have to try to integrate into the global economy.
With annual growth at more than 7 percent, Russia has one of the fastest rising economies in the world. According to Ernst & Young, mergers and acquisitions increased by 41 percent to a record level of $71 billion from 2005 to 2006. Russian international IPOs exceeded $18 billion. Direct investment by foreign companies reached more than $13.7 billion, almost doubling the figure for the previous year. More astonishing still, Russian companies have acquired almost as much abroad. Evraz’s acquisition of Oregon Steel Mills, the RusAl, SUAL and Glencore aluminium merger, and acquisitions by telecoms, steel and oil companies in Africa and the former Soviet republics reached $13 billion last year. Russia is now the third largest foreign investor among developing countries.
The country’s business reputation, however, doesn’t match its economic success.
World Bank governance indicators place Russia near the bottom of the pile when it is compared with countries with similar credit ratings. Russian companies are the least trusted in the world, according to the Edelman Trust Barometer 2007. In a survey by the Economist Intelligence Unit commissioned by RusAl, the main concerns on the part of Western executives were the lack of corporate governance, lack of transparency and poor business ethics. Only 10 percent of respondents felt that Russian companies were world-class competitors.
Although it is difficult to estimate the precise cost to Russian business of such perceptions, there is evidence that mega-deals go awry in part because of this poor reputation. The attempted acquisition of Belgian steel giant Arcelor by Severstal and British energy supply company Centrica by Gazprom raised concerns in Western business and political circles about the impact of a Russian presence and might have contributed to their failure. Furthermore, the blurring of business and government interests, heavy-handed and unequally applied bureaucracy, weak legal institutions and accountability and uncertainty surrounding the presidential election in March 2008 all have a detrimental effect on the country’s risk profile. This is no help for businesses seeking to compete on international markets.
While the West may welcome Russia’s new export of petrodollars, there is distaste for some of the business practices that threaten to accompany them. Regardless of whether they are justified, Western perceptions of Russia, combined with the perpetuation of certain stereotypes (well-worn headlines such as “The Russians are Coming” spring to mind), have a potentially adverse effect on companies’ ability to maximize or maintain their value during and after mergers or acquisitions or when listing on an international stock exchange. They can also contribute to the blocking or delaying of access to international markets.
Although it is not often reported publicly, some leading companies really do seem to have gotten the message about the importance of adhering to international standards. Standard & Poor’s reports that 76 percent of the 75 largest companies have an audit committee, 77 percent are publishing financials under international financial reporting standards, independent directors account for 20 percent of the places on their Boards, and disclosure of ownership structures is becoming more widespread.
During a series of roundtables in Moscow titled “Corporate Governance in Practice” organized by the International Business Leaders Forum, and supported by Baker & McKenzie, Ernst & Young and KPMG, there was evidence that good business practices have gone further and deeper within companies than might have been expected. For example, mining giant SUEK has created a comprehensive internal audit management structure. Russia’s third-largest oil major, TNK-BP — 50 percent owned by BP — is introducing an anti-corruption program at all levels of the company. Electricity utility Unified Energy Systems is going after corruption in the supply chain by developing an open and transparent procurement system to manage its 15 billion euros ($20.4 billion) of annual purchases. Alfa Bank, Russia’s largest privately owned bank, and Troika Dialog, the largest private investment bank, have developed clear ethics standards, human resources management systems and internal communication networks with the aim of reducing fraud.
The approach of multinational companies working in Russia is also instructive. The uncompromising position of Alcoa-Russia’s president, William O’Rourke (who is the corporation’s former head of internal audit and environment, health and safety) on how and why he runs his subsidiaries in the Samara and Rostov regions according to international standards and not according to local customs shows clearly that multinationals can work honestly in Russia, even in an environment that is so much at odds with international legislation.
International business standards are beginning to have an impact locally through other channels. Companies are appointing international executives to senior posts. There is also a new generation of young Russian business leaders who are returning from the world’s business schools, and a clear migration of executives from Big Four international financial services companies in Moscow to positions of responsibility in domestic companies, where the new professional class of executives is beginning to influence the management here. Although still a minority, their numbers in these companies are increasing and, for the first time, they are working on the understanding that the long-term benefits of creating a professionally run company with a clear commitment to corporate governance outweighs the costs.
It will take time, of course — the process of introducing international business standards is still in its infancy. But the leading companies, foreign and Russian, have a vested interest in creating a level playing field for competition. By operating according to the highest standards in Russia, they can use their example, influence and purchasing power to insist that their employees, suppliers and customers adopt similar principles.
On the condition that emerging Russian multinationals play by these rules, Western business leaders and opinion makers should encourage them to engage more, not less, in the global economy. Indeed, by listing in London or making foreign acquisitions, companies are far more likely to import international business standards than export Russian corruption abroad. On the assumption that this process will continue and in the hope that future governments will be committed to implementing the rule of law, we can look with cautious optimism toward a 20th Russian Economic Forum, at which Russian companies will be celebrated as fully “emerged” and equal competitors in the global economy.

Brook Horowitz is executive director of the International Business Leaders Forum in Russia.

TITLE: Post-Traumatic Politics
AUTHOR: By Richard Lourie
TEXT: Why would an administration with a 70 percent approval rating resort to rubber truncheons to quash small, marginal political demonstrations? Was the recent suppression of rallies and marches in Moscow, St. Petersburg, and Nizhny Novgorod part of the turn toward authoritarianism or just pre-election jitters?
It was a bit of both, but behind both lies a deeper cause. President Vladimir Putin and his generation were shaped by the traumatic collapse of the Soviet Union, just as previous generations were shaped by revolution, terror or war. Their own personal relationship to the Soviet Union and its demise — their sense of loss, regret and acrimony — is dwarfed by the sheer magnitude of the event itself. Their shock resulted from seeing that something as mighty and gigantic as the Union of Soviet Socialist Republics could vanish so suddenly and so easily. The Titanic of empires, it was the biggest ship of state that ever sank.
Putin’s often quoted and often misunderstood remark that the collapse of the Soviet Union was the “greatest geopolitical catastrophe of the 20th century” should be understood as much psychologically as politically. People will argue for years to come about the cause of its demise, but for people like Putin who were on board the ship of state as it began sinking, the one lasting lesson is that if something so seemingly invincible as the Soviet Union can go down so swiftly, there’s no reason the same thing can’t happen with the new Russia, which is smaller and less fearsome.
A great deal of Putin’s behavior — the brutality in Chechnya, the fear of a Ukraine-style revolution and nongovernmental organizations, the centralization of authority, the control of the media and the beating of demonstrators — makes more sense if seen as a pattern stemming from the trauma of the fall of the Soviet Union. Putin himself said in his book “First Person”: “[My] mission, my historical mission — and this will sound lofty, but it’s true — consisted of resolving the situation in the Northern Caucasus … and Chechnya [which is] a continuation of the collapse of the Soviet Union. … If we don’t put an immediate end to this, Russia will cease to exist.”
Russia has collapsed calamitously twice in the last 100 years, once in 1917 and again in 1991. (It has also rebounded vigorously both times, but success always leaves less of an impression than disaster.)
It’s not only the new Russia that can seem a shaky enterprise — the current administration may not have much faith in itself. A 70 percent popularity rate leaves plenty of room to fall. At least 20 percent of people participating in any poll are probably going to respond positively about the president either because Soviet experience or simple savvy tells them that they have nothing to gain from speaking out against him (especially when dissenters are being clubbed in the streets). Putin and Company may figure they only really have half the country on their side and that this support is contingent on their ability to continue delivering the goods — stability, prosperity and international prestige. Ultimately, that ability is based on the price of gas and oil, which current reasoning says will stay high, but which past history shows to be iffy. Much of Putin’s support is solid and real, and for some has a fierceness that transcends the utilitarian. It is not the actual strength of that support that matters so much as the Kremlin’s fear of how fast it might fade.
The trauma of the Soviet collapse explains but does not excuse the strangulation of the media or the truncheons in the street anymore than the wound of Sept. 11 excuses Abu Ghraib. In fact, both countries are suffering from a form of post-traumatic politics. The presidents Russia and the United States will elect in 2008 will have a better chance of repairing relations if each takes the other’s trauma into account.

Richard Lourie is the author of “The Autobiography of Joseph Stalin” and “Sakharov: A Biography.”

TITLE: Last Chance for Dinner 
On the Mtkvari’s Banks
AUTHOR: By Matthew Collin
TEXT: The meal at the Mingrelian restaurant on the Tbilisi riverbank wasn’t the worst I’ve ever eaten in Georgia — but I still won’t be going back there again. Mainly because the authorities knocked the place down last week as part of a campaign to smarten up the Georgian capital that is intensifying a dispute over property rights.
The restaurant stood amid a strip of popular dinner joints that are all set to be demolished. It wasn’t particularly unattractive — a bit tacky, perhaps — but I would never have imagined it could become the focus of political controversy. The owners of the restaurants on the Mtkvari River claim, however, that they were pressured into handing over their properties to the authorities without compensation. They’ve been offered alternative space in a remote suburb, but say that isn’t good enough.
The protection of property rights has become a fiercely debated issue in Georgia after several shops and street-side kiosks were bulldozed — some of them disappearing overnight. The authorities say they were illegally privatized under the government of Eduard Shevardnadze or built without permission. Some, they insist, were just ugly.
But the Georgian ombudsman, Sozar Subari, who was appointed by the parliament, told me that violations of property rights have increased since Mikheil Saakashvili’s government came to power three years ago after the Rose Revolution and began a crackdown on corruption. Subari cited various cases of businesses being threatened with legal action if they didn’t sell their property for a fraction of its market value or simply hand it over. He compared the situation to the Soviet era, when the Communists expropriated private property, and spoke darkly about the lack of fair courts and an independent judiciary in the country.
The Georgian government has been warned by some allies that foreign companies might think twice about investing if their buildings could be snatched without warning. The International Monetary Fund has urged the government to strengthen property rights. In response, the government has proposed new legislation, but it has yet to be introduced. The authorities, meanwhile, have pledged to continue hunting down corrupt offenders.
When I passed by the remaining restaurants last week, a few forlorn diners were sipping their farewell glasses of wine, while all around them wrecking crews dismantled the neighboring eateries. The authorities are attempting to transform Tbilisi into a modern, European-style capital as part of their Western political ambitions. The restaurateurs, however, would like to know exactly who will be paying the bill.

Matthew Collin is a Tbilisi-based journalist.

TITLE: Kennan’s Advice Still Good
AUTHOR: By Mark H. Teeter
TEXT: It is both appropriate and timely to recall the late George Kennan these days. The Russian-U.S. relationship continues to grind its gears between neutral and reverse as successive denials of a new Cold War ring progressively less true in the absence of concerted efforts by the principals to prevent one. Kennan, of course, was the author of the United States’ successful containment strategy against the Soviet Union in Cold War I. This uniquely firm yet malleable doctrine produced neither victor nor vanquished, but it helped the world skirt self-annihilation while inducing the ignoble Soviet experiment to prove itself as unworkable as it was unjust.
Kennan called politicians’ claims of winning the Cold War “silly and childish,” yet myriad examples of the U.S. victory mentality now extend to a Cold War service medal proposed to commemorate the “triumph.” But the real reasons for recalling Kennan’s legacy lie beyond regret at the myopic triumphalism it has not deterred. Over a half-century ago, Kennan offered prescient counsel for the Russians and Americans of a distant post-Soviet future — that is, the future we are bungling now — and several decades later inspired a model Russian-American institution that continues to serve both countries well today.
In his 1951 article “America and the Russian Future,” Kennan painted a portrait of the two antagonists at peace. The world might expect “a Russian government which … would be tolerant, communicative and forthright in its relations with other states and peoples,” displaying a mentality that could “dispense with paranoic suspiciousness.” With de-ideologized practicality and even good humor, Kennan hoped, “the statesmen of a future Russia could [defend] their national interests as statesmen must, [without] assuming that these can be furthered only at the expense of others.” In domestic affairs, Kennan felt that while Russia’s business was decidedly its own, the West could surely anticipate “that the exercise of governmental authority will stop short of that fairly plain line beyond which lies totalitarianism.”
That today’s Russia does not hew close to much of this vision is both obvious and regrettable; yet Russians quick to infer criticism in it should recall that Kennan’s projections were those of a friend — perhaps their best friend in that time and place — who was both patient and a firm believer in an unquestionable “national greatness” that the Russian people possessed “in high degree.”
Americans, for their part, should recall that Kennan was not an interventionist democracy-builder and did not assume that the American dream was also Russia’s. He felt private enterprise in the post-Soviet state might or might not develop smoothly, but would “never be a system identical to our own.” Similarly, in the arrangement of Russian political life, the West should not expect “the emergence of a liberal-democratic Russia along American patterns.” Russian politicians struggling to supplant the institutions and mindset of the Soviet era would not be aided, Kennan maintained, “by doctrinaire and impatient well-wishers in the West who look to them … to produce in short order a replica of the Western democratic dream.”
Kennan implored his fellow Americans to repress their “inveterate tendency to judge others by the extent to which they contrive to be like ourselves,” and advised calm forbearance: “Let us not hover nervously over the people who come after [the Soviets], applying litmus papers daily to their political complexions to find out whether they answer to our concept of ‘democratic.’”
Fine words, one might object, but the cutthroat maneuvering of 21st-century realpolitik is bound to keep Russians and Americans apart, if not at daggers drawn. Yet another part of Kennan’s patrimony, one that inhabits and analyzes this realpolitik, might suggest otherwise. On Monday night in Moscow, the Kennan Institute’s Russia/CIS Alumni Association was due to hold its annual meeting, bringing together an array of past, present and future grantees that Russia and the United States can be proud of: a cosmonaut, poets and novelists, human rights activists, military whistleblowers, distinguished veterans of the Soviet and Russian diplomatic corps, a host of academicians and a clutch of mere mortals like myself, all united by the experience of study and discourse at the Washington research institute (and its Moscow branch) bearing Kennan’s name.
These scholars, statesmen and practitioners do not agree on everything and would not be there if they did. Indeed, their diversity, openness and commitment to productive debate and scholarship — the kind that seeks to inform viewpoints rather than confirm them — may well be Kennan’s most valuable legacy to us all.

Mark H. Teeter teaches English and Russian-American relations in Moscow.

TITLE: Barclays Clinches Biggest Ever Bank Deal
AUTHOR: By Steve Slater and Reed Stevenson
PUBLISHER: Reuters
TEXT: LONDON/AMSTERDAM — Barclays has agreed to buy Dutch rival ABN AMRO for just over 67 billion euros (46 billion pounds) as it seeks to head off rivals to clinch the world’s biggest ever bank takeover.
Barclays said on Monday it would pay 3.225 new shares for each ABN AMRO share, equivalent to 36.25 euros a share at Friday’s closing price, to create a banking giant with 47 million customers and the world’s biggest institutional asset manager.
The price, which includes the declared 2006 final dividend for ABN shareholders, is slightly higher than many analysts were expecting. But Barclays also said it had also agreed to sell ABN’s Chicago-based U.S. bank LaSalle to Bank of America for $21 billion (10.5 billion pounds), conditional upon its purchase of ABN.
Barclays has been forced to pay more by rival interest for ABN from a consortium led by Royal Bank of Scotland. 
The consortium, which includes Spain’s Santander and Dutch-Belgian group Fortis, will meet ABN’s management later on Monday.
ABN Chairman Rijkman Groenink told reporters the ABN board would hear other offers in line with its fiduciary duties, but said a merger with Barclays was the “best option” for shareholders.
Barclays Chief Executive John Varley told the same conference call: “We have put a good price before ABN shareholders … My confidence is we will succeed.”
ABN came under pressure from investors, including British hedge fund TCI, to consider a sale or break-up to boost shareholder returns after several years of underperformance.
TCI said in a brief statement it was studying the terms of the Barclays/ABN deal and might comment further in due course.
Traders said Barclays shares were set to open down around 1 percent. They closed at 750 pence on Friday, valuing Britain’s third-biggest bank at about 49 billion pounds. ABN shares were indicated up 0.6 percent at 36.5 euros.
Barclays said the combination would result in annual pretax synergy benefits of about 3.5 billion euros by 2010, and that it expected the deal to boost its earnings by 5 percent by the same date.
It said 23,600 jobs could be cut from the combined workforce, including 10,800 positions moving offshore. Barclays shareholders will own about 52 percent of the enlarged company, to be called Barclays.
Barclays’ John Varley and President Bob Diamond will have the same positions in the enlarged group, and ABN’s Arthur Martinez will be chairman.
Britain’s Financial Services Authority will be the lead regulator for the company.
Barclays said its bid was 33 percent above ABN’s closing share price on March 16, the day before the two firms said they were in talks.

TITLE: BA May Make Iberia Bid
AUTHOR: By Emmet Oliver and Tracy Alloway
PUBLISHER: Bloomberg
TEXT: LONDON — British Airways Plc, Europe’s third-largest airline, may make an offer for Iberia Lineas Aereas de Espana SA with a group of private equity investors to protect its interest in the Spanish carrier. 
The airline has not made a final decision about the future of its 10 percent stake in Iberia and is examining numerous options, including selling its holding, the London-based company said in a statement Monday. TPG Inc. said March 30 it may make an Iberia bid. 
Iberia’s Latin American routes make Spain’s biggest airline an attractive target for airlines and private equity groups including buyout firm TPG, Deutsche Lufthansa AG and British Airways, according to Chairman, Fernando Conte. British Airways jointly manages routes between the U.K. and Spain with Iberia. 
“They don’t want to lose their joint venture agreement with Iberia or worse, have it go to a competitor,’’ said Stephen Furlong, an analyst at Davy Stockbrokers in Dublin. “They’re keeping their options open in a situation that was probably forced upon them.’’ 
Shares of Iberia rose as much as 5 cents, or 1.3 percent, and were up 0.5 percent at 9:21 a.m. in Madrid. The stock has risen 44 percent so far this year on speculation of a takeover offer. 
Any bid wouldn’t involve additional capital investment by the airline, British Airways said. The airline declined to name the private equity companies it approached because it’s bound by confidentiality, said Thomas Coops, a company spokesman in London.  
TPG, formerly known as Texas Pacific Group, is considering a 3.4 billion-euro ($4.6 billion) takeover bid for Iberia as trans-Atlantic carriers prepare for more access to routes. A new aviation treaty between the U.S. and the European Union has triggered interest in industry consolidation. 
Lufthansa Chief Executive Officer Wolfgang Mayrhuber said April 18 that the airline, Europe’s second biggest, wasn’t planning any immediate takeovers, though Iberia would fit well with the Cologne, Germany-based carrier. 
“British Airways wants to protect what it’s got and if it can do this without extra cash, that is quite an attractive proposition,’’ said Gerald Khoo, an analyst with Oriel Securities who has a “buy’’ on the stock. 
British Airways said March 30 that it appointed UBS AG to advise it on how to use its Iberia stake. The U.K. carrier has a “right of first refusal’’ on another 30 percent of its Spanish partner, meaning British Airways “speaks for 40 percent of Iberia in a bid situation,’’ and “such a stake would repel a hostile bid, or force a consensual bidder to pay a higher price,’’ Chris Avery, a JPMorgan analyst in London, wrote in a research note March 29.

TITLE: Morgan Stanley Names Roach as Asia Chairman
AUTHOR: By Cathy Chan
PUBLISHER: Bloomberg
TEXT: NEW YORK — Stephen Roach, the Morgan Stanley chief economist who forecasts U.S. economic growth will halve, will become the firm’s Asia chairman, helping lead a push to handle more takeovers and stock sales in China. 
Roach, 61, will take up his post in June and move to Hong Kong in September, Morgan Stanley said in an e-mailed statement. He replaces Alasdair Morrison, who retired this month. 
A 25-year Morgan Stanley veteran, Roach in past years has repeatedly said the U.S. economy will stagnate, only to be proven wrong as expansion continued. Roach, who forecasts China may overtake the U.S. as the biggest contributor to global growth by 2025, cautioned on April 20 that failure to rein in lending and investment may derail the nation’s economic boom. 
“China is at a critical juncture in its extraordinary development saga — needing to make the transition from an export- and investment-led growth dynamic to more of a consumer-led economy,’’ Roach said in an e-mailed response to questions. 
“I am confident that China is up to this daunting challenge — but it will take both time and determination to pull it off.’’ 
Roach’s task in Asia will be to manage relationships with governments, companies and clients in the region, the release said. Hans Schuettler leads day-to-day operations as Asia Chief Executive Officer. 
Morgan Stanley has been expanding in Asian markets including China, India, Korea and Japan. The firm last month announced it will pay $425 million to buy out its joint venture in India with JM Financial Ltd., opting to go it alone in the world’s second-fastest-growing major economy.  
On April 18, the world’s second-largest securities firm said it hired Blair Pickerell from HSBC Holdings Plc to head its Asian investment funds unit. 
Roach, who has a Ph.D. in economics from New York University ``is an intellectual leader on many global economic issues, including those related to China,’’ Morgan Stanley CEO John Mack said in the statement. ``He will bring a combination of seniority, strategic thinking, and local knowledge to this important role.’’ 
Morgan Stanley ranks second this year in advising on overseas share sales by Chinese companies, up from 10th in 2006, according to data compiled by Bloomberg. It doesn’t have a license to manage domestic stock offerings. 
Morgan Stanley, the first overseas bank to buy a stake in a Chinese securities firm, owns 34 percent of China International Capital Corp. It surrendered management responsibilities at CICC in 2000 following a dispute with the Chinese company’s management, ceding an advantage to Goldman Sachs Group Inc. and UBS AG. 
Goldman won regulatory approval in 2004 to set up an investment-banking venture with Beijing Gao Hua Securities Co. Goldman has management influence over Gao Hua through a loan made to its major shareholder, though doesn’t own a direct stake. 
UBS is close to winning final approval to invest $210 million in Beijing Securities Co.

TITLE: AstraZeneca to Purchase MedImmune for $15.2 Bln
AUTHOR: By Angela Zimm
PUBLISHER: Bloomberg
TEXT: LONDON — AstraZeneca Plc, struggling to develop new medicines, agreed to buy U.S. biotechnology company MedImmune Inc. for $15.2 billion in cash to gain flu vaccines and an antiviral treatment for babies. 
Investors in Gaithersburg, Maryland-based MedImmune will get $58 a share, London-based AstraZeneca said today. That’s 21 percent higher than MedImmune’s April 20 closing price of $48.01. MedImmune put itself up for sale after pressure from Carl Icahn and other shareholders. 
AstraZeneca Monday dropped an experimental heart medicine, the fourth setback for its laboratories since February 2006. The company will gain MedImmune’s FluMist influenza treatment, and Synagis for infant respiratory infections. Synagis, MedImmune’s best-selling product, brought in $1.1 billion last year, and the biotechnology company said April 9 that first-quarter sales of the medicine increased 9 to 10 percent. 
“That’s a hell of a premium and it’s going to take quite some time until they make some money on their investment,’’ said Romain Pasche, who manages about $800 million in drug stocks at Vontobel Asset Management and holds AstraZeneca shares. 
“Astra really needed to plug the gap they have in their late-date pipeline and this acquisition doesn’t solve that problem.’’ 
Including net cash of about $340 million, the purchase price is about $15.6 billion, AstraZeneca said. 
“What makes things even worse is that this all-cash deal means we won’t be seeing any share buybacks and they have lost their fire power regarding future acquisitions,’’ Pasche said. 
Shares of AstraZeneca fell 44 pence, or 1.5 percent, to 2,909 pence at 8:01 a.m. in London. They’ve risen 6.2 percent this year, beating the 3.2 percent gain in the Bloomberg Europe Pharmaceutical Index. The shares fell 3 percent last year, making the company the fourth-worst performer in the 16-member index. 
AstraZeneca is reliant on its top three drugs, Nexium, Seroquel for schizophrenia and the Crestor cholesterol medicine, for profit growth. The company, which also reported first-quarter results, said Monday that it will drop the experimental heart treatment AGI-1067 after the product failed to meet goals in a study. 
The U.K. drugmaker, formed in a 1999 merger of Astra AB and London-based Zeneca Plc, shelved blood thinner Exanta in February 2006, and later stopped work on Galida for diabetes and NXY-059 for strokes. 
“They’re saying ‘We need more products, we’ve just had four failed experimental products come through. We need more products, we need more revenue if we’re going to stay and play,’’’ said Philip Manduca, managing partner at Titanium Capital Ltd. In London. 
The company said Feb. 1 that it will buy closely held Arrow Therapeutics Ltd. For $150 million in cash to boost research into compounds that fight bacteria and viruses. 
AstraZeneca said Monday that net income rose to $1.56 billion, or $1.02 a share, from $1.43 billion, or 90 cents, a year earlier. That beat the median estimate of $1.52 billion, or $1 a share, of 10 analysts surveyed by Bloomberg. Revenue rose to $6.97 billion, beating analysts’ estimate of $6.74 billion. 
The company said it expects full-year earnings per share of between $3.89 and $4.14 after Toprol XL contributed about 13 cents a share in the first quarter, and about 4 cents a share was charged to cost of sales from the company’s supply chain improvement program.

TITLE: Royal to Battle Sarkozy in French Elections
AUTHOR: By Angela Charlton
PUBLISHER: The Associated Press
TEXT: PARIS — Conservative Nicolas Sarkozy holds an advantage over his Socialist rival Segolene Royal after the two advanced to the second round of France’s presidential election, narrowing the vote to a choice between the tough-talking former interior minister or the first woman with a chance of becoming the country’s leader.
Royal and Sarkozy planned rallies Monday night with an eye on voters who deserted the left and right in favor of farmer’s son and lawmaker Francois Bayrou, who placed third on Sunday in one of the big surprises of the campaign.
Both candidates had scoffed at Bayrou, saying he would be incapable of forming a government with ministers drawn from left and right, or gaining a parliamentary majority. But with 18.5 percent of the vote, Bayrou won the support of voters who could hold the key to victory for Sarkozy or Royal when the French elect a new president in two weeks.
Bayrou’s centrist Union for French Democracy has traditionally voted with the right in parliament and has often had ministers in conservative governments. But Bayrou the candidate drew leftists as well as conservatives to his camp, both Sarkozy and Royal need those votes back.
“The door is naturally open,” Sarkozy’s top lieutenant, Brice Hortefeux, said Monday on France-Inter radio, adding that he felt Sarkozy best embodies the values of the center. But he said that Sarkozy and his governing party, the Union for a Popular Movement, would appeal directly to voters, not to Bayrou’s political apparatus.
With nearly all votes counted, Sarkozy had 31.1 percent, followed by Royal with 25.8 percent and Bayrou. Turnout was 84.6 percent — the highest in more than 40 years and just shy of the record set in 1965.
Royal is the first woman to get this close to the helm of this major European economic, military and diplomatic power. Sarkozy would be likely to push his anxious nation toward painful change.
Either way, France will get its first president with no memory of World War II to replace the 74-year-old Jacques Chirac, who is stepping down after 12 years.
Sunday’s first round of voting shut out 10 other hopefuls, from Trotskyists to far-right leader Jean-Marie Le Pen. Le Pen had hoped to repeat his shockingly strong showing of 2002 but instead finished a weak fourth with 10.5 percent.
Both Sarkozy, a Hungarian immigrant’s son, and Royal, a military officer’s daughter who beat Socialist heavyweights to win her party’s nomination, are in their 50s and have traveled long, arduous roads to get to this point.
The winner’s task will be tough: France is a troubled nation, still haunted by the riots by young blacks and Arabs in poor neighborhoods in 2005.
Decades of stubbornly high unemployment, increasing competition from economies like China’s, and a sense that France is losing influence in the world made this a passionate campaign. Both Royal and Sarkozy have promised to get France back on its feet — but offer starkly different paths for doing that.
Sarkozy would relax labor laws and cut taxes to invigorate the sluggish economy, while Royal would hike government spending and preserve the country’s generous worker protections.
Royal, too, champions change but says it must not be brutal.
“I extend my hand to all those women and men who think, as I do, that it is not only possible but urgent to abandon a system that no longer works,” she said.
The runoff offers “a clear choice between two very different paths,” she said.
Outside Socialist Party headquarters in Paris, her supporters chanted “We’re going to win!”
Sarkozy told cheering supporters Sunday night that by choosing him and Royal, voters “clearly marked their wish to go to the very end of the debate between two ideas of the nation, two programs for society, two value systems, two concepts of politics.”
Despite his lead, the former interior minister faces a powerful “Anything But Sarkozy” push by those who call him too arrogant and explosive to run a nuclear-armed nation. He once called young delinquents “scum,” a remark that outraged the residents of poor neighborhoods and has dogged him politically.
Royal, a lawmaker and feminist who says she makes political decisions based on what she would do for her children, shot to popularity by promising to run France differently. But she has stumbled on foreign policy. In one gaffe, she praised the Chinese during a trip to Beijing for their swift justice system.
Many voters question whether she is “presidential” enough to run France.
Sarkozy should be able to count on votes from the far right, whose champion Le Pen suffered his second-worst showing in five presidential elections.
Royal’s score was the highest for a Socialist since Mitterrand in 1988. But closing the gap with Sarkozy could be a struggle in round two. Candidates to her left together scored about 11 percent. They immediately swung behind her after their elimination, but their votes alone will not be enough to put Royal in power.
With results for the nearly 1 million French voters registered abroad still trickling in early Monday, turnout fell just short of the record of 84.8 percent for a first round, set in 1965. That year, modern France held its first direct presidential election, with World War II Gen. Charles de Gaulle and Socialist Francois Mitterrand reaching the runoff that de Gaulle went on to win.

TITLE: Lel Wins Second London Marathon
AUTHOR: By James Ludden
PUBLISHER: Bloomberg
TEXT: LONDON — Martin Lel, the 2005 champion, won the London marathon as race favorite Haile Gebrselassie quit after 18 miles. China’s Chunxiu Zhou took the women’s event in her first attempt. 
Kenya’s Lel kicked for home in the final straight to complete the 26 miles, 385 yards from Blackheath to Pall Mall in two hours, seven minutes, 41 seconds. Morocco’s Abderrahim Goumri, in his first race, was second and Felix Limo, last year’s champion from Kenya, was third. Six runners were in contention with 600 yards remaining. 
“It was one of the most tactical races I have run, there were several champions running so I am proud,’’ said Lel, 29, who lost out in a sprint finish to Limo in 2006. “I corrected the mistake I made last year.’’ 
Zhou, the only woman competing today with a personal best time below 2:20 hours, finished outside that mark in 2:20:38, more than a minute ahead of Ethiopia’s Geta Wami and Romania’s Constantina Tomescu-Dita. 
Zhou, 28, said she’s keen to take on Britain’s world record holder Paula Radcliffe at this year’s world championships in Osaka or next year’s Olympics. 
“She’s an amazing runner who I look up to and I would like to run against her in Osaka or Beijing,’’ Zhou said. “It would be nice to break her world record in my home country.’’ 

No Breeze 
With temperatures climbing toward 25 degrees Celsius (77 Fahrenheit) and no breeze to ease the conditions, several racers wilted. Gebrselassie quit clutching his stomach and Ethiopia’s Berhane Adere, winner of the Chicago marathon, was reduced to jogging pace. 
“I could not continue. I don’t know why,’’ Gebrselassie, who has never won in London, told the BBC. “I cannot breathe. I don’t know what is going wrong.’’ 
Dave Bedford, race organizer, said today’s field was the best he’d ever put together. Much of the buildup had focused on the rivalry between the 34-year-old Gebrselassie and Kenya’s 37- year-old Paul Tergat, the world record holder and five-time world cross-country champion. Sunday was their 26th race together and their first in five years. 
Although Gebrselassie led their personal rivalry 22-3, the margin of victory has tended to be slim. 
He edged Tergat into second place 10 times — notably in the 10,000-meters final at the Sydney Olympics when the Ethiopian won by nine hundredths of a second. Tergat holds the record at 2:04:55 and finished sixth today. 

Majors Series 
The London race is the second stage of the World Marathon Majors series, also comprising Berlin, Chicago, New York and last week’s Boston marathon. Runners get points for as many as four top-five finishes over a two-year period. 
Other races in the series include the World Championships and the Olympics. The program ends with the 2007 New York marathon when a $1 million purse will be split between the top male and female finishers. 
Britain’s David Weir retained his title in the men’s elite wheelchair race in a time of 1:30:51. Shelley Woods, also from the U.K., won the women’s race. 
First held in 1981, the London event has developed into what organizers say is the world’s biggest annual fund-raising event. Last year’s race generated 41.5 million pounds ($83 million) for charity, bringing the total raised to about 315 million pounds since its inception. 
More than 35,500 runners took part on Sunday.

TITLE: Russia Beats Spain To Reach Fed Cup Semis
PUBLISHER: The Associated Press
TEXT: LONDON — The United States, Russia, Italy and France reached the semifinals of the Fed Cup on Sunday with two matches to spare. 
The United States ended up beating Belgium 5-0 to guarantee a spot in the last four, defending champion Italy did the same to China, Russia shut out Spain, and France blanked Japan. 
The United States advanced when Vania King, playing for a sidelined Serena Williams, beat Kirsten Flipkens 4-6, 6-4, 7-5 to give the Americans an insurmountable 3-0 lead in the best-of-five match in Delray Beach, Fla. 
After King won, Venus Williams beat Yanina Wickmayer 6-1, 6-2. King and Lisa Raymond closed it out in doubles by beating Tamaryn Hendler and Caroline Maes 6-1, 6-2. 
The Americans will play Russia in the semifinals July 14-15 at a U.S. site to be determined. 
Serena Williams pulled out a few hours before she was to face Flipkens, citing slight inflammation in the right knee. A team spokesman said the move was precautionary, and the inflammation was unrelated to a groin muscle she injured April 10, when she retired from a match in Charleston, S.C. 
Fifth-ranked Svetlana Kuznetsova beat Anabel Medina Garrigues 6-3, 4-6, 6-0 on clay in Moscow at the Luzhniki indoor arena to give Russia its win over Spain. 
Kuznetsova, the 2004 U.S. Open champion, easily won the first set but struggled in the second. 
“I completely lost the second set,” Kuznetsova said. “I do not know what happened to me. I could not go in for the ball at all.” 
Anna Chakvetadze, who replaced ninth-ranked Nadia Petrova, then beat Nuria Llagostera Vives 3-6, 7-6 (5), 6-2 in the second reverse singles match, and Petrova and Elena Vesnina downed Laura Pous-Tio and Lourdes Dominguez-Lino 6-1, 4-6, 6-2 in the doubles. 
Kuznetsova and Petrova are the two highest-ranked players competing this weekend in World Group I. Both won their opening matches Saturday. 
Italy got its deciding point when Tathiana Garbin beat Zhang Shuai 3-6, 6-2, 6-4 at home on clay in Castellaneta Marina. 
Zhang was playing for Peng Shuai, who had three match points against Flavia Pennetta on Saturday, but withdrew with a hamstring injury while trailing 3-0 in the third set. 
Mara Santangelo beat Sun Tian Tian 6-4, 6-2 in the final singles match, and Santangelo and Roberta Vinci downed Sun and Sun Sheng Nan 6-2, 6-4 in doubles. 
Italy, which beat Belgium in last year’s final for its first Fed Cup title, will face France in the semifinals.

TITLE: Reid: Bush Is in a State Of Denial
AUTHOR: By David Espo
PUBLISHER: The Associated Press
TEXT: WASHINGTON — With a veto fight looming, Senate Majority Leader Harry Reid said Monday that President Bush is in a state of denial over Iraq, “and the new Congress will show him the way” to a change in war policy.
Reid, D-Nev., said the Democratic-controlled House and Senate will soon pass a war funding bill that includes “a fair and reasonable timetable” for the withdrawal of U.S. combat troops. In a speech prepared for delivery, he challenged Bush to present an alternative if, as expected, he vetoes the measure.
Asked to react, White House deputy press secretary Dana Perino said, “I fear that they are talking themselves into believing that we are not facing a determined enemy — a sworn enemy of the United States, and they do this at our peril.”
“It’s important that everyone understands that this is an enemy determined to kill innocent Americans, innocent Iraqis to destabilize the region,” she said. “Short of understanding the seriousness of that, the consequences could be dire.”
Reid’s office released excerpts of the speech a few hours before Bush was scheduled to make a statement on the war following a meeting with Army Gen. David Petraeus, commander of the Iraq war.
The Senate majority leader drew criticism from Bush and others last week when he said the war in Iraq had been lost.
He did not repeat the assertion in his prepared speech, saying that “The military mission has long since been accomplished. The failure has been political. It has been policy. It has been presidential.”
Congress is expected to pass legislation this week that contains a nonbinding timetable for the withdrawal of U.S. combat troops from Iraq by spring of 2008.
In addition, Democratic officials have said the measure will require the military to meet its own standards for equipping, training and resting troops who are sent to Iraq. Bush would be able to waive the requirements.
Officials also say the measure will set standards for the Iraqi government to meet as it tries to establish itself as a democratic society.
Bush has pledged repeatedly to reject any bill that includes a timetable for a troop withdrawal, and there is no doubt that Republicans in Congress have the votes to sustain his veto.
That would require Congress to approve a second funding bill quickly to avoid significant disruptions in military operations.
Reid’s speech blended an attack on Bush, an appeal for patience to the anti-war voters who last fall gave Democrats control, and an attempt to shape the post-veto debate.
“I understand the restlessness that some feel. Many who voted for change in November anticipated dramatic and immediate results in January,” he said.
“But like it or not, George W. Bush is still the commander in chief — and this is his war,” Reid said.
Reid said Democrats have sought Republican support for their attempts to force Bush to change course. “Only the president is the odd man out, and he is making the task even harder by demanding absolute fidelity from his party.”
Looking beyond Bush’s expected veto, he said, “If the president disagrees, let him come to us with an alternative.”

TITLE: Suicide Bombers Kill 27 in Iraq
PUBLISHER: The Associated Press
TEXT: BAGHDAD — Three suicide bombers launched attacks in different parts of Iraq on Monday, killing at least 27 people and wounding nearly 60 on Monday, police and politicians said.
A parked car bomb also exploded outside the Iranian Embassy in Baghdad, killing one civilian, and a drive-by shooting wounded two guards at Tunisia’s Embassy in the capital, police said.
Monday’s first suicide car bomb attack occurred near the northern city of Mosul at 10:10 a.m. when a suicide attacker detonated his car in front of an office of the Kurdistan Democratic Party of Massoud Barzani, leader of the autonomous Kurdish region in Iraq, an official with the group said. At least 10 people were killed and 20 wounded in the attack in Tal Uskuf, a town nine miles north of Mosul, said Abdul-Ghani Ali, a KDP official.
Ghanim Hazim, 37, a shop owner in Tal Uskuf, said dozens of people rushed past his store to the site of the blast to help the wounded, who “were screaming and asking for help as they lay buried under big pieces of debris.”
He said residents of the predominantly Christian town were in deep shock because it was the first terrorist attack in their tight-knit community since the Iraq war started.
“This attack shows that no place in Iraq is free from the terrorists and their evil deeds,” Hazim said in an interview as firefighters and police began removing the dead and wounded.
A suicide car bomber also struck a police station in Baqouba, 35 miles northeast of Baghdad, at about 11 a.m., killing at least 10 people and wounding 23, police said.
In central Baghdad, a bomber wearing an explosives belt blew himself up in an Iraqi restaurant in the mixed Shiite-Sunni neighborhood of Karradah Mariam, killing at least seven people and wounding 16, police said.
The attack occurred at about 11 a.m. less than 100 yards outside the heavily fortified Green Zone, home to the U.S. and British embassies and the Iraqi government’s headquarters. At the time, Ryan Crocker, who became the new U.S. ambassador in Iraq about a month ago, was giving a news conference in the Green Zone.
The Iranian Embassy also is located in Karradah Mariam, and a parked car bomb exploded in a parking lot near it at about 12 noon, killing one civilian and wounding another, said Iraqi police.
At about 11:30 a.m., drive-by shooters opened fire on guards outside the Tunisian Embassy in the mostly Sunni district of Mansour in western Baghdad, wounding two of them, police said.

TITLE: Schumacher Wins Amstel
PUBLISHER: The Associated Press
TEXT: MAASTRICHT, Netherlands — Stefan Schumacher of Germany broke away from the peloton three kilometers (2 miles) away from the finish Sunday to win the Amstel Gold race.
Schumacher, who won his first classic since making his UCI ProTour debut last year, won in 6 hours, 11 minutes, 49 seconds.
Davide Rebellin finished second, 21 seconds behind Schumacher, and Danilo Di Luca was third a further second behind.
Schumacher, who won the 2006 Tour of Benelux, was stronger in the last seven kilometers (4 miles), outpacing a group of five riders.
Defending champion Frank Schleck of Luxembourg fell 46 kilometers (29 miles) from the finish and briefly needed medical treatment before returning to the race. He finished eighth.
Michael Boogerd, a 1999 champion riding in his last race, was fifth.

TITLE: America Finds Its Romeo
PUBLISHER: The Associated Press
TEXT: VALENCIA, Spain — American entry BMW Oracle Racing posted its third straight win as the Louis Vuitton Cup racing series resumed Sunday after five of the previous six days had been postponed due to a lack of wind. 
BMW Oracle Racing improved its record to 3-0 by defeating Shosholoza of South Africa. Also remaining undefeated was Italian boat Luna Rossa, which won against United Internet Team Germany. 
 The Louis Vuitton Cup, which runs through June 11, will decide which of the challengers will sail against America’s Cup champion Alinghi in the final from June 23-July 4. 
Shosholoza led before losing a kite when rounding the second wind marker. A poor tack allowed the Americans a chance to cross and establish a starboard course and take the lead for good on the third lap on the northern “Romeo” course. 
Victory Challenge of Sweden won its second race of the first round-robin stage on “Romeo,” beating winless China Team. 
On the southern “Juliet” course, Emirates Team New Zealand rebounded from an opening-flight loss to Italian team Mascalzone Latino with a convincing victory over winless +39 Challenge, which was racing with its repaired mast for the first time. 
Desafio Espanol of Spain appeared to lose a spinnaker pole as it rounded the second marker before losing the lead and the race to Areva Challenge by 2 minutes, 6 seconds.

TITLE: India Launches First Commercial Satellite
PUBLISHER: Agence France Presse
TEXT: India’s space agency successfully launched an Italian satellite into orbit Monday in the country’s first commercial space mission.
The Polar Satellite Launch Vehicle (PSLV), on its 11th flight since 1993, put the Agile satellite into its intended orbit about 550 kilometers (325 miles) above the earth 20 minutes after blastoff.
“It’s a historic moment for the entire space community: an Italian satellite being placed in precise orbit by a totally Indian-built vehicle,” Indian Space Research Organization chief G. Madhavan Nair said on state-run TV.
“We have proven the reliability of the PSLV, its cost-effectiveness and given on-time delivery,” he added from the Sriharikota spaceport, 80 kilometers north of Chennai in southern India.
The success of the mission is a boost for Indian efforts to commercialise its 44-year-old space program.

TITLE: Intelligence Agent Killed in Afghanistan
AUTHOR: By Amir Shah
PUBLISHER: The Associated Press
TEXT: KABUL, Afghanistan — Assailants abducted and beheaded an Afghan intelligence service employee and struck one of the agency’s vehicles with a remote-controlled bomb in a separate attack, killing six employees and wounding three, officials said Monday.
Another roadside bomb attack in the south killed two policemen, while a large car bomb was found and defused in the capital, Kabul.
On Monday, in Laghman province’s Alingar district, an intelligence service vehicle driving from neighboring Nuristan province was hit by a remote-controlled bomb, said provincial police chief Abdul Karim. He said six of the agency’s workers were killed, while three others were wounded.
An intelligence service vehicle was also bombed in the same province on Sunday, in an attack that killed two intelligence service officers, a soldier and a driver in the provincial capital Mehtar Lam.
In Ghazni province, southwest of Kabul, an intelligence service employee was invited into a home, then kidnapped and beheaded Sunday by the Taliban, said deputy governor Mohammad Kazim Allayar. He said the owner of the house is currently under investigation. In southern Zabul province, a roadside bomb hit police Monday as they were patrolling in Shamulzayi district, killing two policemen and wounding five others, said district chief Wazir Mohammad Khan.
Intelligence officers in Kabul discovered a large car bomb Monday in a battered, old taxi parked in a crowded civilian area where NATO and U.S. convoys often drive past.
Authorities found inside the car a tank of gasoline, three gallons of explosive chemicals, three grenades and a mortar, an official said on condition of anonymity because of the agency’s policy.
“Fortunately the intelligence service discovered it, otherwise it would have caused an enormous calamity in the area,” the official said.
There have been at least three suicide bomb attacks in Kabul this year, but the areas worst plagued by violence are the southern and eastern provinces.
There have been 39 suicide attacks in the first three months of 2007, a threefold increase compared to the same period last year, according to the Afghanistan NGO Safety Office.
On Saturday, a suicide bomber blew himself up in the eastern city of Khost, killing six civilians and wounding 40 others, officials said.
NATO and Afghan troops, meanwhile, pressed ahead with their largest-ever offensive launched last month in southern Afghanistan.

TITLE: Nadal Continues Clay Control
PUBLISHER: The Associated Press
TEXT: MONTE CARLO, Monaco — Roger Federer seems no closer to figuring out how to beat Rafael Nadal on clay.
The top-ranked Swiss star lost his fifth straight match to Nadal on clay Sunday at the Monte Carlo Masters, 6-4, 6-4, and the second-ranked Spaniard extended his winning streak on the surface to 67 matches.
“I lost four times against Rafa,” Federer said. “I’d rather have that than lose against four different guys.”
Nadal won the title at Monte Carlo for the third straight year. The two-time defending French Open champion is 14-0 in clay-court finals, and 4-0 against Federer.
But despite his latest setback, the 10-time Grand Slam champion believes he’s still on the right track to win the only major that eludes him.
Federer has four Wimbledon titles, and three at both the U.S. and Australian opens, but still needs the French Open to complete the sweep.
“I feel this match gave me some information,” Federer said. “I’m absolutely in the mix with him on clay. I feel like I’m in good shape for the rest of clay-court season, and it’s going to come down to the French Open to see who wins.”
Nadal beat Federer on clay last year in the finals of the Monte Carlo Masters, the Rome Masters and the French Open. He also beat Federer in the 2005 Monte Carlo semifinals.
Only at the Rome Masters did Nadal have to save a match point against Federer on clay.
“Today’s match was very close. For sure, it’s a surprise to win in two sets against the No. 1,” Nadal said. “I was confident because I was playing my best tennis this week.”
Nadal is the first player to win three straight Monte Carlo titles since Ilie Nastase (1971-73), and only the fourth in the Open era to have won it three times. Bjorn Borg and Thomas Muster also did so.
Federer, who won his previous two meetings with Nadal on other surfaces, missed two chances to break Nadal in the eighth game of the first set. Nadal saved the first with a strong serve, and the second when Federer’s forehand went wide.
“I should have used my chances when I had them early on,” Federer said. 
“Unfortunately, it turned around with a few mistakes.”
It was Federer’s third loss of the season — with the other two coming against Guillermo Canas last month at Indian Wells and Key Biscayne.
Federer made 38 unforced errors — half on his forehand — and Nadal won on his second match point when Federer sent a backhand long.
“I will try again to beat him in Rome, Hamburg and here in Monte Carlo next year,” Federer said.
“Let’s not forget he’s an excellent player on clay,” Federer said.

TITLE: United In
Relief As Chelsea Fail To Close In
PUBLISHER: Reuters
TEXT: LONDON — Chelsea missed their chance to slash Manchester United’s lead in the Premier League to a single point on Sunday when they were held to a 0-0 draw at Newcastle United.
Manchester United handed the initiative to Chelsea after drawing 1-1 at home with Middlesbrough on Saturday and will breathe a huge sigh of relief at the champions’ scrappy draw at St. James’ Park.
With four games left, United are top on 82 points and Chelsea, who host Alex Ferguson’s men in a potential title decider at Stamford Bridge on May 9, have 79.
Neither side created clearcut chances on Sunday, with Newcastle’s defence keeping a tight rein on the Chelsea attack led by 31-goal Ivorian striker Didier Drogba.
Chelsea, who had won nine consecutive league games, had their best chance deep in stoppage time when a flick by substitute Joe Cole ran wide of the far post.
Coach Jose Mourinho played down the day’s missed opportunity and highlighted a penalty appeal rejected when the ball hit Newcastle United defender Stephen Carr’s arm.
In comments that could land him in trouble, Mourinho said penalty decisions were favoring Manchester United and going against Chelsea.
Sheffield United had a strong penalty appeal waved away in last week’s defeat by United, as did Boro in the closing stages on Saturday.
“We are in conditions to fight for the Premiership, even against new football rules,” Mourinho told Sky Sports News.
“One rule is that penalties are not allowed against Man United and another is penalties are not allowed in favor of Chelsea.
“You are speaking about three big decisions that can cost, that are directly related to points.”

TITLE RACE
Asked if Chelsea had missed a chance in the title race, he said: “It depends on your point of view. Our target for many many weeks was to finish this period… in a situation where we could do it.
“We have three matches at home and one away, and Man United have one match at home and three away.”
“If you’d told me 10 weeks ago we’d be three points (behind)… I’d be very happy with that. If you told me this morning, then ‘no’ — I wanted to finish one point behind.”
Just below the title rivals, Liverpool sealed their place in the Champions League qualifiers with a 2-0 win on Saturday over Wigan Athletic that kept them third on 67 points.
Arsenal are fourth on 63 after conceding a stoppage-time equaliser to draw 2-2 with Tottenham Hotspur in the north London derby, while at the bottom of the table Watford were relegated.
Aston Villa drew 0-0 at home to Portsmouth in Sunday’s other game.

TITLE: Virginia Tech Students Back in Class
AUTHOR: By Justin Pope
PUBLISHER: The Associated Press
TEXT: BLACKSBURG, Virginia — Virginia Tech students returned to class Monday after paying solemn tribute to the victims of last week’s massacre — pausing for a moment of silence and holding tearful remembrances for the 32 people slain by a student gunman.
Students and faculty gathered at several spots around campus to remember the victims, one week after classes were suspended when gunman Seung-Hui Cho opened fire before killing himself.
“I thought last week as time goes by that I could forget this tragic incident,” graduate student Sijung Kim said. “But as time goes by I find I cannot forget.”
Students and faculty gathered at about 7:10 a.m. near the dormitory where the first victims, Ryan Clark and Emily Hilscher, were killed. They also gathered on the main campus lawn and held several impromptu memorials as the smell of scented candles filled the morning air.
In front of the dorm, a small marching band from Alabama played “America the Beautiful” and carried a banner that read, “Alabama loves VT Hokies. Be strong, press on.”
By the time the moment concluded, more than 100 people had gathered to remember the dead. Afterward, a group of students and campus ministers brought 33 white prayer flags — one for each of the dead, including the gunman — from the dorm to the school’s War Memorial Chapel. They placed the flags in front of the campus landmark and adorned them with pastel-colored ribbons as the Beatles’ song “The Long and Winding Road” played through loudspeakers.
“You could choose to either be sad, or cheer up a little and continue the regular routine,” said student Juan Carlos Ugarte, 22. “Right now, I think all of us need to cheer up.”
Ugarte, senior from Bolivia, wrote a message on a yellow ribbon for one of the victims, Reema Samaha. “God will forever be with you. I will always pray for you, and remember.”
At 9:45 a.m. — when Cho killed 30 students and faculty members in a classroom building before committing suicide — the university planned a moment of silence, with a single bell tolling from the tower of the main administration building. A minute later, the bell will toll 32 times — once for each of Cho’s victims — as 32 white balloons are released from the field below.
Andy Koch, a former roommate of the gunman, planned to mark a moment of silence Monday. “Last night, I didn’t sleep much,” he said.
On the main campus lawn stood a semicircle of stones — 33 chunks of locally quarried limestone to remember each person who died in the rampage.
Someone left a laminated letter at Cho’s stone, along with a lit purple candle.
“Cho, you greatly underestimated our strength, courage and compassion. You have broken our hearts, but you have not broken our spirits. We are stronger and prouder than ever. I have never been more proud to be a Hokie. Love, in the end, will always prevail. Erin J.”
University officials were not sure how many students planned to be back Monday. Virginia Tech is allowing students to drop classes without penalty or to accept their current grades if they want to spend the rest of the year at their parents’ homes grieving last week’s campus massacre.
But whatever decisions they make academically, many students say they will do their mourning on campus — and that they can’t imagine staying away now.
“I want to go back to class just to be with the other students. If you just left without going back to classes, you would just go home and keep thinking about it,” said Ryanne Floyd, who returned to campus after spending most of last week with her family and avoiding news coverage of the tragedy. 
“At least here, being with other students, we can get some kind of closure,” she said.

TITLE: Jacquelin Goes Wire To Wire to Win Asian Open
PUBLISHER: The Associated Press
TEXT: SHANGHAI, China — Raphael Jacquelin of France led from start to finish to win the Asian Open by two strokes Sunday for his second European Tour victory.
Jacquelin shot a 1-over 73 in the storm-affected final round to finish at 10 under for the tournament, co-sanctioned by the European and Asian tours. The win is redemption for last week’s China Open, also in Shanghai, where Jacquelin seized the lead after the second round only to let it slip.
Denmark’s Soren Kjeldsen finished second at 8-under after also shooting a 73 in the final round, while Australian Scott Hend (75) and Scotland’s Simon Yates (74) were another shot back.
“It is a fantastic moment,” said Jacquelin, whose maiden tour victory came at the 2005 Open de Madrid in Spain after 238 tour starts. “When you are in a position to win it is always difficult to finish, but to be a winner you have to finish.”
Despite the start of the round being moved up to 6:30 a.m. to avoid a forecast thunderstorm, players still battled rain and fierce winds on the Tomson Shanghai Pudong Golf Club’s reconfigured 7,326-yard course. Jacquelin was fortunate to start strongly before the wind and rain blew in, picking up three birdies on the front nine. With the changing weather playing havoc with his approaches, he conceded bogies on four of the last six holes.
“We had a lot of chances on the front nine and that is what I did,” Jacquelin said. “Then the wind picked up and the rain, and it was tough. My shots were not so good, so I played for the good side of the green to try and save par.”
Still chasing his first win of the season, South African Ernie Els shot an even-par 72 to finish tied for fifth at 6 under. Els who won the tournament by 13 strokes in 2005, was undermined by patchy putting.
“I hit the ball from tee to green pretty well, but my putter let me down most of the week,” Els said.

TITLE: Families Believe ‘Ghost Yacht’ Sailors Still Alive
PUBLISHER: The Associated Press
TEXT: BRISBANE, Australia — Relatives of three Australian yachtsmen whose catamaran was found drifting off the Great Barrier Reef vowed Monday to continue searching for the missing men, as theories about their mysterious disappearance emerged.
On Sunday, police called off their search for skipper Des Batten, 56, and brothers Peter and James Tunstead, aged 69 and 63, saying the men had probably been swept overboard nearly a week before, and were unlikely to be found alive.
Relatives of the missing men said they planned to use charter boats to search the islands near the spot where the men are believed to have fallen into the ocean, hoping they might have swum to safety.
“That’s our hope. That’s where we’re going to concentrate today,” Shane Webber, son of James Tunstead, told Australian Broadcasting Corp. radio on Monday.
The three sailors were last seen leaving the northeastern town of Airlie Beach on April 15, the first leg of a two-month trip around Australia’s north coast.
Three days later, a coastal patrol plane spotted the Kaz II drifting some 95 miles offshore. Rescuers who boarded the vessel found the engines running, a laptop computer charging, even food and cutlery laid out on the table — but no sign of the crew.
The men’s clothes were found folded in neat piles on the rear deck.
Investigators who reviewed the vessel’s global positioning system said the boat had been drifting with the wind and currents since Sunday, when the trio may have hit rough seas. But the Bureau of Meteorology has said the men would have faced moderate southeast winds up to 22 mph that day, nothing out of the ordinary for this time of year.
The yacht’s headsail was shredded, but there was no other sign of damage. An emergency beacon, three life jackets and a dinghy were found on board.
Detective Warren Webber said the case remained a mystery, but police were preparing a report for the coroner based on the available information. He said police had ruled out foul play.
“We can all come up with various … hypotheses and theories as to what may have happened,” he told Nine Network television. “There’s certainly nothing that’s come forward at this stage that would indicate anything other than a tragic accident.”
Several local newspapers have suggested the men may have been attacked by pirates, noting photographs showing that some of the catamaran’s rubber fenders were hanging over the side.
Sailors use the rubber fenders to protect the side of their boats when they are pulling into a dock or alongside another boat on the open water. The newspapers have suggested the presence of the fenders indicates the men may have been forced to board another boat.
But police have ruled out this theory, saying it was not unusual for some small-craft sailors to leave their fenders out at sea. There was also no sign that the vessel was ransacked.
Others have suggested a sudden gust of wind may have pushed the men overboard.

TITLE: ‘Jihadist’ Prison Group Broken Up
AUTHOR: By Michael Perry
PUBLISHER: Reuters
TEXT: SYDNEY — A group of murderers and rapists who converted to Islam in Australia’s Super Max prison has been broken up and its leader moved to another jail as officials feared they were using religion as a cover for a possible escape.
The 12 prisoners in Australia’s highest-security jail were nicknamed the “Super Max Jihadists,” authorities told local media, and had placed pictures of al-Qaeda chief Osama bin Laden on cell walls, shaved their heads and grown long beards.
Authorities said murderer Bassam Hamzy, a devotee of bin Laden, paid the men to convert to Islam in order to form a gang of Muslim prisoners inside the Super Max facility at Goulburn jail, southwest of Sydney.
Prison authorities had seen some converts kneel before Hamzy and kiss his hand.
Hamzy was taken under tight security to another maximum security jail on Sunday, where he will have only non-contact visits and must speak English during visits and telephone calls.
New South Wales Corrective Services Commissioner Ron Woodham vowed on Monday to break up the gang and translators were examining the telephone conversations of the group.
“These people have never had any contact or interest in religion before and all of a sudden they’re converting to Islam, and Hamzy is the powerbroker or the organizer, as if he’s forming a gang,” Woodham told Australian radio.
Woodham said prisoners had received regular payments of about A$100 ($83), a lot of money inside jail. The payments were organized by Hamzy through his outside contacts.
Woodham said he thought some of Hamzy’s converts would abandon their new religion now that they were out of contact with the ringleader. “It’s nothing to do with religion in their minds. But they play the game, Hamzy’s game,” he said.
New South Wales state Justice Minister John Hatzistergos said prison authorities were not targeting Muslims.
“A lot of inmates find religion when they come to prison and in many ways we support that because it might assist them in their rehabilitation,” Hatzistergos told reporters on Monday.
“Where we draw the line is where that conversion or embracement of religion is just a camouflage for other activity which threatens the good order and security of the system.”
Australian authorities have in the past split up prisoners fearing they were forming gangs based on ethnicity or crime-related links.
Hatzistergos said jail officials were concerned the Muslim gang may have believed Hamzy could orchestrate a jail break.
“I don’t think the potential for escape came from the Super Max, but you can’t rule out what they had in their mind long term,” he said, adding the real danger was if the gang members were moved to other prisons with less security.

TITLE: Russia’s Local Boys Find The Going Tough Against Sweden
PUBLISHER: The Associated Press
TEXT: MOSCOW — Olympic champion Sweden beat Russia 4-2 on Saturday in the second leg of the European Hockey Tour final to win the title 7-4 on aggregate. 
Sweden won 3-2 win in the first leg in Gavle, Sweden, on Thursday. 
Fredrik Bremberg scored at 6:02 and Johan Davidsson added his second goal in two games at 28:32. 
Sergei Mozyakin narrowed the gap 29 seconds later, but Alexander Steen restored a two-goal margin 46 seconds into the third period. 
Three minutes later, Alexei Morozov put two-time defending champion Russia close to an equalizer, but Martin Thorenberg hit an empty net with 21 seconds remaining. 
The match was played at the Khodynskoye Pole arena, one of the two arenas where the International Ice Hockey Federation world championship will start on April 27. The Czech Republic edged out Finland 2-0 in overtime to claim the third place in Prague. 
Petr Sykora scored at 38:07 to send the series into overtime as Finland won the first leg 1-0 Thursday in Helsinki. Jaroslav Hlinka scored the decider with 1:30 left. 
The Euro Hockey Tour is a four-leg event in which four teams — the Czech Republic, Finland, Sweden and Russia — compete during the season.
Russia had won three of four legs on the Euro Tour, finishing first in the Czech Republic, Finland and Moscow. It’s only loss came to world No. 1 Sweden in Stockholm.
Obviously coach Vyacheslav Bykov would have preferred to go into the World Championship in Moscow on the back of a Euro Tour Final victory.
Nevertheless, he will not be unduly concerned by the loss, as, with NHL players allowed to take part, next week’s squad will look  very different from the domestic-based one that lost out to Sweden here.

TITLE: SPIBA Annual Meeting and Awards Ceremony 2006
TEXT: The SPIBA Annual Meeting and Awards Ceremony 2006 took place on April 18, 2007, at the A.S. Popov Central Museum of Communications. 
Over 90 SPIBA members and guests attended the meeting. They enjoyed a very interesting tour around the museum, discovering the history and development of communications technologies that provide businesses with effective and reliable tools for communication, which is a must for successful operations.
Ludmila Bakayutova, Director of the A.S. Popov Central Museum of Communications, greeted the participants and told them about projects and programs deve-loped and implemented by the Museum.
Then Ludmila Murgulets, Chairperson of the SPIBA Executive Committee, took the floor and spoke about SPIBA marketing strategies. “Our association is, first of all, its people, who can exchange their experience here, share information and build up business contacts. SPIBA is the voice of business – a voice that can be heard only in a dialogue, that aims to listen and be heard, be independent, member-oriented, open, flexible and efficient. The goal of this dialogue is to widen opportunities and improve the environment for private and fair business,” Ludmila said. She also introduced new members of the association. 
Nikolai Asaul, First Deputy Chairman of the St. Petersburg Committee for Investments and Strategic Projects spoke about the significant achievements in the attraction of investments to the city economy and the plans of the St. Petersburg Government to further improve the investment climate. He emphasized the important role of SPIBA in the facilitation of a dialogue between business and the authorities, which is aimed at creating favorable conditions for investors, and expressed a wish to continue our mutually beneficial cooperation in this area.
The meeting featured the SPIBA Awards Ceremony 2006. We congratulate the winners!
This year SPIBA established a special SPIBA award for Efficient Work to Create a Favorable Investment Climate in St.?Petersburg and presented it to the St. Petersburg Committee for Investments and Strategic Projects. Nikolai Asaul received the award on behalf of the Committee.
THE MOST INTERESTING SPIBA GUEST-SPEAKER 
OF THE YEAR 2006
Winner: Oleg Kolomijchenko, Head of the Department of the Federal Antimonopoly Agency for St. Petersburg and the Leningrad Oblast, who spoke at the SPIBA breakfast briefing The New Law of Russian Federation “On Protection Of Competition” on September 26, 2006.
The Award was presented by Christian Courbois and Sergey Spasennov, members of the SPIBA Executive Committee.

THE BEST SPIBA EVENT MODERATOR 
OF THE YEAR 2006
Winner: Ludmila Murgulets, Vice-President of the Stockholm School of Economics in Russia. 
THE MOST ACTIVE SPIBA EVENTS SUPPORTER 
IN 2006
SPIBA is grateful to all the sponsors, partners, and supporters who helped SPIBA organize its events which proved to be informative and productive.
ITM Group was SPIBA Sponsor 2006. Sergey Semkin, General Director of ITM Group, received a special SPIBA award on behalf of the company. In 2007 Technopolis took the stage and became SPIBA Sponsor 2007. 
Peter Coachman, General Director of Technopolis St. Petersburg, greeted the participants and announced the winner in the category THE MOST ACTIVE SPIBA EVENTS SUPPORTER IN 2006, which is DLA Piper St. Petersburg
THE MOST ACTIVE SPIBA LEGISLATION AND LOBBYING COMMITTEE MEMBER IN 2006
Active members of the SPIBA Legislation & Lobbying Committee in 2006 were Pavel Andreev, Ernst & Young; Eduard Zadobrovsky, PricewaterhouseCoopers; Elena Zaitseva, DLA Piper; Elena Safonova, PricewaterhouseCoopers; Marina Sidorchuk, St. Petersburg Young Lawyers Association. 
The Committee members recognized Elena Zaitseva, Senior Associate, Tax Practice, DLA Piper St. Petersburg, as the most active member of the SPIBA Legislation & Lobbying Committee in 2006.

THE MOST ACTIVE SPIBA HR COMMITTEE MEMBER 
IN 2006
Active members of the HR Committee in 2006 were Marina Grinevskaya, Farmos/ Lumene; Anna Gurevich; Vitaly Ivanov and Tatiana Minaeva, Concept; Oksana Pochtivaya, Ancor St. Petersburg; Karina Khabacheva, School of Management of the St. Petersburg State University; Elena Eibshits, Fintra.
The Committee members recognized Marina Grinevskaya, HR Director of Farmos/ Lumene, as the most active member of the SPIBA HR Committee in 2006.
THE MOST ACTIVE SPIBA MARKETING COMMITTEE MEMBER IN 2006
Active members of the Marketing Committee in 2006 were Evgenia Alekseeva, KPMG; Nadezhda Ermishina, Marris Properties; Irina Galieva, JT International; Anton Rassadin, School of Management of the St. Petersburg State University.
Irina Galieva, PR Manager of JT International, received the award as the most active member of the SPIBA 
Marketing Committee in 2006.
The award was presented by Glenn Kolleenny, a member of the SPIBA Executive Committee.

Special thanks to supporters of the SPIBA Annual 
Meeting and Awards Ceremony:

TITLE: SPIBA welcomes its new members!
TEXT: • Globus-Leasing
• InterIS (International Insurance Services)
• Manpower CIS
• STEP Construction
• STM Pro
• RUSSIA CONSULTING
• Volvo Technical Service Centers

Globus-Leasing Company Ltd. was established and registered in St. Petersburg in 1999.
Since its inception and to the present day the Company has been a universal leasing company.
Leasing activities cover the following areas: 
• Process Equipment; 
• Cars; 
• Trucks; 
• Special Equipment; 
• Real Estate. 
The basic principles of the company are: openness, reliability, professionalism.
Globus-Leasing Ltd. has eight successfully functioning and actively developing subsidiaries – in Moscow, Veliky Novgorod, Kaliningrad, Murmansk, Nizhny Novgorod, Novosibirsk, Petrozavodsk and Pskov. 
Globus-Leasing Ltd. is a founder and an active member of the North-West Association of Leasing Companies.
The General Director of the company is Boris Kurtsman.

Founded in 1948, with more than 4,400 offices in 73 countries, Manpower is the largest staffing and employment services company in the world, serving 95 percent of Fortune 500 companies and providing solutions to over 400,000 clients worldwide. Manpower Russia & Region has been successfully operating in Russia since 1994, rendering services in most regions of Russia, with established operations in Ukraine, Belorussia, and Kazakhstan. Manpower Russia & Region has been offering custom business service solutions to its broad client base for over 12 years, with local knowledge and expertise. Our services are designed to specifically meet each client’s HR and business needs and include: a permanent placement service, contract -staffing, temporary staffing, on-site management, regional recruitment projects, outplacement services, professional testing, call center staffing, skill building programs, and HR consulting.

RUSSIA CONSULTING supports international clients from all business sectors during business set-up and expansion on the Russian market, offering consulting and implementation services in the following areas: 
• Market Research and Business Consulting Services 
• Accounting, Tax Complicance and Management Reporting 
• Provision of Legal or Business Address 
• Specialized Recruiting in Accounting, Finance and Admin 
With years of experience in the market and currently more than 90 multilingual experts in our offices in Moscow, St. Petersburg, Kiev and Hamburg, RUSSIA CONSULTING is one of the leading advisers for sustainable and successful business activity in Russia.

STEP Construction is a Russian company, specializing in construction projects management. 
STEP operates as a General Contractor at the construction of industrial and civil objects, both in the Northwest region, and on the territory of the Russian Federation, as a whole. 
The STEP Company was founded in 1993. Over the years since then we have constructed and reconstructed hundreds of sites. Now, STEP implements extremely varied projects, from common storage premises to “intellectual” business centers and factories of a high-degree of difficulty.
Our customers are Russian and western investors, investing their capital in the creation of new or expansion of already existing businesses in Russia. It is encouraging to see that over the last few years the proportion of Russian customers, oriented to construction by way of enlisting companies specialized in construction project management, has vastly increased.
We appreaciate the weight of responsibility for the obligations taken and for everything we do. Our reputation is our main capital.

Volvo Technical Service Centers
At the end of September 2005 the first Volvo Center was opened in Russia. Investments in the project amounted to EUR 11 mn.
Today Volvo Trucks has 29 authorized technical service centers on the territory of Russia.
The new enterprise is located in the southern part of St. Petersburg on the E105 Moscow-St. Petersburg highway and is an integral part of the transport infrastructure which includes the by-pass highway, Moskovskoe Shosse and adjoining roads.
Today Volvo Technical Service Center employs 150 people (technicians and administrative staff). In the short term, it is planned that staff will be increased to 200 people.

SPIBA EXECUTIVE COMMITTEE MEMBERS:

Ludmila Murgulets, Stockholm School of Economics,
Executive Committee Chairperson
Christian Courbois, Westpost
Sebastian FitzLyon, S.Zinovieff & Co.,
Honorary Consul of Australia in St. Petersburg
Irina Galieva, JT International
Glenn Kolleeny, Salans
Sergey Spasennov, Pepeliaev, Goltsblat & Partners
Ruslan Vasutin, DLA Piper
Elena Marchenko, BSH Bosch und Siemens Hausgerate GmbH (affiliated member)
Natalia Kudryavtseva, Executive Director

TITLE: SPIBA Events Snapshots
TEXT: What happened since January 2007

24.01.07
SPIBA General Meeting: 
Investment Ratings of Regions of Russia’s North-West: Current Situation and Trends
Guest speaker: Grigory Marchenko, Director of the Regional Projects Division, Chief of the Regional and Municipal Ratings Department of the rating agency Expert RA.
Supported by the Corinthia Nevskij Palace Hotel.

07.02.07
St. Petersburg Entrepreneurship Group in partnership with the US – Russia Center for Entrepreneurship
Raising Capital: New Leasing Alternatives and Specifics of Private Equity Investment

21.02.07
SPIBA Seminar in partnership with the 
St. Petersburg Times and the North-Western International Cleaner Production Centre:
Resource-Conserving Environmental Plant Modernization Projects in Private Sector. Crediting Opportunities

06.03.07
SPIBA-RBCC Business Networking Reception in partnership with DHL International.

07.03.07
SPIBA Get-Together Event – a festive concert at the St. Petersburg Rimsky Korsakov State Conservatory.

22.03.07
Presentation of the project: Rules of the Game in the Regions of North-Western Russia
Organized by the Technologies of Development foundation with the support of SPIBA

28.03.07
SPIBA Round Table in partnership with The St. Petersburg Times and RUSSOFT: Special 
Economic Zone for R&D Operations in St. Petersburg: Current State and Perspective
Guest speaker: Yury Mikhailov, Head of the Territorial Department of the Federal Agency for Special Economic Zone Management for St. Petersburg.
Supported by the Corinthia Nevskij Palace Hotel.

03.04.07
Conference: Development of the Construction Complex of the Leningrad Oblast: 
Investment Potential of the Region
Organized by the newspaper Kommersant with the support of SPIBA

04.04.07
SPIBA Round Table in partnership with the Consulate General of the Kingdom of the Netherlands and NS Inform Group: 
Unfriendly Takeovers: How to Change the Situation
Guest speakers: Yevgeny Lukyanov, Acting Deputy Plenipotentiary Representative of the President of the Russian Federation in the North-West Federal District;
Yury Rakov, First Deputy Chairman of the St. Petersburg Committee of Economic 
Development, Industrial Policy and Trade; 
Aleksandr Gaidukov, President of the 
NS Inform Group.

10.04.07
Conference: Leasing for Business: 
Dialogue on Advantages of Cooperation
Organized by the North-West Leasing 
Association with the support of SPIBA

18.04.2007
SPIBA Annual Meeting and Awards 
Ceremony 2006
Supported by the Plumar Advertising Agency and Lenconcert

Forthcoming Events
24.04.07
Seminar: Trademark: Live Issues and 
Answers
Leading sponsor – ARS-Patent Intellectual Property Law Firm
Supported by the Corinthia Nevskij Palace Hotel

17.05.07
Round Table: Personnel Recruitment: 
Cooperation Between Companies and High Schools
Supported by the Graduate School of Management of the St. Petersburg State University

We are planning a lot of events in the future. Keep an eye on SPIBA information to be 
distributed by e-mail and announced.

TITLE: SPIBA Companies News
TEXT: Representatives of the agency of patent attorneys ARS-Patent will participate in the Annual Meeting of the International Trademark Association (INTA), which will take place in Chicago (the USA) from April 28 to May 2, 2007. The program of this respected event includes discussions, round tables, master classes and seminars on related issues. Among the key topics to be discussed this year are: legislation and politics in the sphere of internet advertising, international aspects of legislation, advertising rights, business ethics and others. More than 80 participants will present their new products in the framework of the exposition. INTA is the only place, where more than 7,500 colleagues can at once communicate and exchange their experience.

Baltic Travel Company (BTC) has been selected as the service-purveyor for the XI St. Petersburg International Economic Forum, to be held from June 8 to June 10, 2007. BTC will provide excursions and a scheduled service to the participants and guests.
BTC will also play a major role in Shanghai Week in St. Petersburg in June during Russia’s celebration of “China Year”. 
The St. Petersburg Administration and BTC have worked so closely together that it’s become a tradition. Last year, for example, BTC was the official transportation company for the G8 Summit.

Mr. John Stuttard, the Lord-Mayor of the City of London visited St. Petersburg on April 4, 2007. In cooperation with the Committee for Investments and Strategic Projects, and the  British Consulate, Deloitte St. Petersburg 
arranged a seminar covering all the City’s current major investment projects and the development of public private partnerships. Business leaders and City authorities attended the seminar where the City’s major projects were showcased. All guests received a commemorative Russian matryoshka with a flash-card inside which contained all the presentation materials.

DHL International, a leader in express delivery and logistics, announces that a new Service Point in the center of St. Petersburg, at 161 Moskovsky Prospekt will be opening very soon, on May 25. At the end of last year, DHL also opened a Service Point at 65 Ligovsky Prospekt.
The number of clients trusting their correspondence to DHL is continually growing, which is why there is a need to enlarge the total number of Service Points. In 2007, DHL plans to open approximately 21 departments in large Russian cities. Moreover, DHL wishes to invest more than 15 millions euro into chain development all over the country. Two points in Moscow and one in Novosibirsk will be opened on May 25 of 2007.

DLA Piper in St. Petersburg is delighted to announce that Anna Kostyra, an attorney-at-law with profound experience in commercial disputes resolution, has joined our Litigation team. Being head of the St. Petersburg office of one of the leading law firms of the North-West for 3 years, Anna became a recognized expert in various types of litigations: from disputes with tax and customs authorities to disputes with bad faith contractors and borrowers. Her arrival has strengthened the DLA Piper Litigation group, the largest team among international law firms in the North-West of Russia.

Ernst & Young announced the beginning of the national Entrepreneur of the Year 2007 contest in Russia. This is the fifth year in a row the contest is being held in Russia under Ernst?&?Young’s international Entrepreneur Of The Year Award program. It is aimed at recognizing the outstanding achievements of entrepreneurs in the development of global and national economies. The terms and conditions of participation may be viewed on the Internet at www.eoy.ru. Candidate applications will be accepted until May 18. 

The European University at St. Petersburg completed the development of a new program, Executive Master of Philosophy. Courses within the program pertain to a wide range of issues: from the history of the Russian denunciation to the analytics of everyday life. The program proceeds on the assumption that successful businessmen will be able to invest knowledge and skills received during their education into their professional career. Designed according to Executive MBA principles, it offers quality education on a part-time basis.

Farmos Russia, the leading supplier and manufacturer of hygiene solutions for industrial users, is happy to announce that we have a new team member. Mr. Igor Pesin has joined the company as our new managing director.

April 6, 2007 Globus-Leasing Ltd started to finance a project supplying equipment for a plant that will produce wooden houses. The company has opened a documentary letter of credit for a sum of 4.5 billion euros.
The project initiator is the closed joint-stock company Lenobldomstroy which is among the Promushlenno-Stroitelnoe Tovarishestvo group of companies that has already had some very successful projects with Glodus-Leasing Ltd. The contract for the supply of the equipment was signed with the company Weinmann Holzbausystemtechnik GmbH (Germany), parge of the Homag Group concern. The latter  is one of the largest and most famous manufacturers of equipment for the timber industry.
Equipment supply will begin in the summer and the plant is planned to be put into operation in December 2007. 
This project is very important since the state program of mass house-building in Leningradskaya Oblast is about to commence

On March 21, the Advisory Board of the Graduate School of Management, St. Petersburg State University, held its first meeting. The Board chaired by the Russian First Deputy Prime Minister Sergey Ivanov discussed GSOM’s development strategy up to 2015 and the concept of the campus presented by the GSoM Dean Valery Katkalo. The Board includes Ministers German Gref and Andrey Fursenko, Governor Valentina Matvienko, deans of the world’s leading business schools, representatives of leading Russian and international businesses (Basic Element, Gazprom, Interros, AFK Sistema, VTB, IBM, L’Oreal, Microsoft, Procter&Gamble, SAP and others). GSOM is being created to become a world-class Russian business school aimed at educating the national managerial elite.

Rocco Forte’s Hotel Astoria is finishing its refurbishment program, converting 20 rooms into 10 new Ambassador Suites. They comprise 60 sqm, with designs by Olga Polizzi. The bathrooms have natural light and a separate shower. New suites are located on the Bolshaya Morskaya wing of the hotel and overlook a quiet courtyard.
As part of this upgrade, we have replaced all of our televisions with new larger, interactive LCD flat-screen TV’s including video-on-demand and internet to complement the iBAHN broadband.

This July, St. Petersburg will be invaded by a horde of Citroen Traction cars participating in the Kozak Rally. Their route will take them from France to St. Petersburg, where they will spend three days from the 17th  to the 19th.
InterIS is supporting this event from an insurance point of view and Peter Davies Frank, partner in Interis, is himself an old car insurer and collectier in France.
InterIS (International Insurance Services) is a Russian based insurance broking company that was created in 2006 to service corporate clients in all lines of insurance.
We are involved in many kinds of international events from yachting, industrial shows to art exhibitions and are proud to be associated with the Kozak Rally event.

ITM Group (Joint-Stock Company INTECH) has set up a contract with Japanese motor-car corporation Toyota on the installation of processing equipment for the Assembly Shop and Seats Shop (seats manufacturing) at a new factory which is being constructed in the industrial area of Shushary, St.Petersburg.
ITM Group is the constant contractor of TGK-1 on installation of electric equipment and instrumentation and automated control systems at the power stations of St. Petersburg. At present, the company is taking part in the final stage of construction and erection works in the installation of a new turbo unit at one of the major power stations of the Northwest region – Thermal Power Station-15 (Avtovskaya).

Kelly Services is launching a new advertising campaign with a new slogan in April. The campaign also introduces 15 new advertising images that illustrate four key Kelly Services competitive advantages in the market: the largest database of available jobs and candidates, narrow specialization by sphere, wide regional coverage and one of the best recruitment schools in the country. Starting form April, 2007, new advertising messages will appear in the largest business-media in the country; indoor and outdoor advertising will be engaged as well.

Konsu Group is an international financial management company operating in Finland and in Russia (Moscow, St.Petersburg).
High quality services are guaranteed by 15 years’ experience in Russia and the expert organization of 110 employees.
Konsu is a fast growing company belonging to the international Accountor Group with 1,300 people.
Konsu Moscow is opening a new branch office in Obninsk in April. The new office will render start up services as well as legal, accounting, auditing and tax planning services in the Kaluga area.

KPMG has been appointed General Partner of ‘The day When Opportunities Open Up’, the Second Annual Students’ Conference organised by Vedomosti and planned for April 25, 2007. The following speakers from KPMG in St. Petersburg will give talks at the conference: Palle Harring, Partner; Oksana Kuklina, Audit Manager; Ekaterina Bourliand, Tax Manager and Ekaterina Shandybina, a recently appointed HR Manager. In 2007 KPMG is planning to significantly increase its presence in St. Petersburg by investing in training and career development of students and graduates.

On January 25, 2007 Mannheimer Swartling officially opened an office in Moscow. The office renders a full range of legal services in the areas of commercial law and dispute resolution. On February 1, 2007, Mannheimer Swartling commenced activities in Shanghai and Hong Kong through two full-service offices.

After two years in St. Petersburg, Xavier Monard moved into a new position in Moscow. He will now develop the business of Steelcase in the Russian regions (Ekaterinburg, Novosibirsk, Sakhalin). His new email address will be xmonard@steelcase.com.
Julien Gebel will start on June 1 as Regional Manager for St. Petersburg, where he will be based.
Steelcase St. Petersburg –	+7 (812) 346 81 12
Steelcase Moscow –	+7 (495) 935 70 64

STEP Construction and FOSP (the Factory of Clothes of St. Petersburg) signed a contract on the construction of an A-level business center for the FOSP central office. The office will be situated in the Admiraltejsky district of St. Petersburg, at Grivtsova Per. 4. The total area of the central office building is 10.5 thou. sq.m.
The central office location is in a historical and cultural part of the city, a consolidated conservation zone of monuments in St. Petersburg’s central districts. The facade of the building will be completed in keeping with the general architecture of old Petersburg: a central arched staircase, balconies with columns, decorated with a stucco molding; jutting pilasters; high statues in the Atlas’ style. The appearance of the building is coordinated with the adjacent site development and fits organically into the neighborhood’s panoramic view
A skeleton-type eight-storeyed building with monolithic reinforced concrete columns and floors is to be constructed. An architectural feature of the building is an open-air recreational terrace on the fifth floor with a view over the city center.

Sebastian FitzLyon of S.Zinovieff & Co (Chartered Surveyors) reports that his company is diversifying its operations and opening a new firm Zinovieff Services for providing top quality maintenance and cleaning services in St.Petersburg. The Appraisal Department has carried out a large-scale valuation of a chain of shops in several locations across Russia. Real Estate Sales and Leasing Department reports successful completion of work for the international software company EMC: a lease of 4,200 sq. m in the Ostrov commercial complex (Vasilyevsky Island).

OOO Tekhtsentry Volvo (Volvo Technical Service Centers) reports that the company has invested into additional equipment from the firm JOSAM. This equipment is meant for postaccident restoration repairs of trucks and semitrailers by different manufacturers.
Usage of JOSAM equipment ensures that the cab and car frame can be fixed simultaneously, which allows us to shorten the repair time by half and thus raises efficiency in meeting our customer’s demands.

TITLE: SPIBA Legislation & Lobbying Committee Up-date
TEXT: We are pleased to provide you with a brief up-date on the activities of the SPIBA Legislation & Lobbying Committee, and encourage you to take part in the Committee.
The Committee has been opera­ting within SPIBA since its foundation in 1995, and provides a significant input into the implementation of the SPIBA mission as the voice of business in a dialogue with the Russian authorities. Its major functions are as follows:
• Addressing issues of concern to Russian authorities, both regional and federal, and lobby the improvement of business environment;
• Providing an excellent platform for SPIBA members to exchange their views and experience.
In 2006 the Committee conti­nued its active work targeted at the improvement of the legal frame of the business environment in North-West Russia.
The Committee held its meetings regularly. The Committee’s members met with officials from St. Petersburg and the Leningrad Oblast, representatives of the Federal authorities and the legislature. In addition, we sent letters addressing issues of concern of SPIBA members to various regional and federal authorities and received their response.
The Committee organized seminars with participation of tax officials, as well as initiating a few SPIBA meetings devoted to various business related issues, which proved to be productive and informative.
The agenda of the Committee covered a wide range of issues, such as taxation, tax incentives for investors in both St. Petersburg and the Leningrad Oblast, obstacles to the procedures for registration of legal entities, special economic zones, changes to the Labor Code of the RF, a new law “On Protection of Competition”, corporate law reform, and some issues related to customs regulation.
As a result of continued efforts of the Committee, some of SPIBA proposals on the improvement of the St. Petersburg legislation regulating tax incentives for investors were accepted. The law “On Additions to the Law of St. Petersburg “On tax Incentives” # 432-66 of October 9, 2006, which grants tax incentives to strategic investors in St. Petersburg, now includes some provisions that were designed by the SPIBA Legislation & Lobbying Committee.
We also provided our suggestions to the Leningrad Oblast Legislative Assembly, which were aimed at the creation of more favorable conditions for investors in the region.
In 2007 the Committee continues its active work. Currently, the agenda of the Committee includes such issues as:
• Customs Payment Security in Importing Goods as In-kind Contribution to Charter Capital.
• Obstacles to the registration of legal entities. 
• List of chemically dangerous plants that are to be moved outside the territory of St. Petersburg, which is stipulated by the Law “On General Plan of St. Petersburg and Boundaries of Safety Zones of Cultural Heritage Objects on the Territory of St. Petersburg” # 728-99 of 21.12.2005.
• Special Economic Zone in St. Petersburg: opportunities and regulatory problems.
• Tax incentives for investors in St. Petersburg and the Leningrad Oblast.
• The implementation of the regime of destruction for fully depreciated equipment that was imported to Russia as in-kind contribution to the charter capital with VAT and customs duty concessions.
• Customs preferences and challenges for industrial assembly of cars and components thereof.
At the latest meeting of the Committee held on April 3, 2007 members met with Tatiana Tikhomirova, Head of the Indirect Tax Department of the Federal Tax Agency for St. Petersburg. She answered questions regarding VAT taxation in 2007. The discussion proved to be informative and productive. The Committee plans to continue holding meetings with representatives of various Russian authorities devoted to practical issues related to business operations.
The next meeting of the SPIBA Legislation and Lobbying Committee is scheduled for Tuesday, May 22, 2007, at 8:30 a.m.
SPIBA members are welcome to take part in the Committee and send us their issues of concern to be included in meetings’ agenda.

For more details, please contact Natalia Kudryavtseva, SPIBA Executive Director, 
at nak@spiba.ru, or by telephone at 
+7-812-325-9091, 579-1815.

Chairpersons of the SPIBA Legislation & Lobbying Committee:
Elena Zaitseva, DLA Piper;
Dmitry Babiner, Ernst & Young.