SOURCE: The St. Petersburg Times
DATE: Issue #1283 (49), Tuesday, June 26, 2007
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TITLE: Poisons Flooding River Neva
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Fish from the River Neva contain high concentrations of poisonous substances, including arsenic and polychlorobiphenyl, one of the 12 most dangerous organic pollutants, according to recent research carried out by the international environmental pressure group Greenpeace. 
The research also revealed that the levels of copper in the city’s main waterway exceeded the norm by 73 times, and levels of manganese by 26 times. 
Dmitry Artamonov, head of the St. Petersburg branch of Greenpeace, said that the level of public awareness about environmental issues and, in particular, water pollution, remains low as pollution in the waterways of the Neva Delta worsens. 
Greenpeace is this week launching a monitoring and awareness program that would involve sending its own patrol boat along the Neva with crews taking water samples, documenting illegal discharge sites and publicizing the results among city residents.
According to a City Hall annual report, in 2006, 40 percent of untreated sewage and industrial waste in St. Petersburg  — the highest level during the past 15 years — was being pumped directly into the Neva and the Finnish Gulf owing to a shortage in waste treatment facilities. The figure does not include numerous illegal discharges.
By comparison, in 2005, City Hall claimed that only 25 percent of waste was being pumped into the river without treatment.
“If growing amounts of sewage thrown into the Neva can be explained by the ongoing reconstruction of water supply systems, then the likeliest reason behind growing volumes of industrial waste is corruption,” Artamonov said. “Since 2000, the amount of unauthorized industrial discharge has grown despite the fact that this is illegal, and could lead to the temporary suspension of all operations by the company responsible — until they stop or install a proper filtration system.”
Alexei Kiselyov, head of Greenpeace’s toxicology program said that if the fish the activists found in the Neva — with all the contaminants in it — had been caught in the European Union, its sale for human consumption would be immediately stopped.
Fish from the river is regularly sold in city markets.
“A major problem in Russia is that the norms of the concentration of chemicals, heavy metals and other poisonous substances have not been revised in the country for many years,” he said. 
“These norms are too high and do not reflect the results of new research in toxicology.”
City Hall says there are currently 375 drains channeling untreated industrial discharge within the city limits, and more than 1,000 sewage dumping points. Most of these are located in tributaries of the Neva. The River Okhta is the most polluted.
Before 1978, the city had no water-treatment facilities at all. There are now two water-treatment centers maintained by Vodokanal, the city’s water and sewage-treatment monopoly.
When the Southwest Water-Treatment Plant, which was inaugurated in Sept. 2005 by President Vladimir Putin, Finnish President Tarja Halonen and former Swedish Prime Minister Goran Persson with $36 million in foreign investment, started operating, Vodokanal officials claimed that with the new facility would filter out 85 percent of the city’s waste. 
Vodokanal has long been fiercely criticized by local environmental groups for not punishing companies that illegally discharge pollutants into local waters, and for not working to build more water-treatment facilities.
“We could observe those ugly oily spots in the Neva River for weeks, and Vodokanal would do nothing,” Artamonov said.
“Ordinary people don’t seem to have a proper idea of how polluted the Neva is — they swim and fish there carelessly in dirty water, just meters from discharge sites, and they do not react when we try to show them those ugly fluorescent streams of waste bubbling in the water next to their fishing lines,” he said. “Our efforts are not enough to raise public awareness and concern to the necessary level in such a big city.”
Each year, with the arrival of summer, more than a third of the beaches in and around St. Petersburg are declared contaminated and unsuitable for use by the St. Petersburg Center for Epidemic Control. The popular beach by the Peter and Paul Fortress has been on the blacklist for many years. 

Results of the Greenpeace monitoring and photographs of illegal discharge locations can be found at www.saveneva.ru

TITLE: 42 Held Following  Street Clashes
AUTHOR: By David Nowak
PUBLISHER: Staff Writer
TEXT: MOSCOW — Dozens of ultranationalists armed with metal poles and broken bottles attacked people from the Caucasus and Central Asia at two squares near the Kremlin and a third location Friday night, raising fears of an escalation in ethnic violence.
One ethnic Armenian was hospitalized with stab wounds and 42 people were detained in the clashes, city police said.
The attackers consisted of about 50 members of ultranationalist groups, including the Movement Against Illegal Immigration, which sought to carry out a “provocation against the population of Moscow,” police said in a statement, Newsru.com reported.
Alexander Belov, the movement’s leader, called the accusation “some kind of stupidity” Sunday and said he had given police his own version of events when summoned to a police station Saturday.
Arrests were made on Manezh Square and Slavyanskaya Ploshchad, both near the Kremlin, and outside the Fili metro station in western Moscow.
Police arrested a Russian citizen identified as I. Sergeyev, born in 1988, on suspicion of assaulting a D. Aganesyan, born in 1990. The police statement gave no other names or details about the detainees. It was unclear Sunday whether they remained in custody and whether they would face charges.
Police said both ultranationalists and immigrants had broken the law on Friday night. 
They also appealed to leaders of political parties and movements not to “provoke their supporters nor entice youths and minors into committing illegal acts, particularly for ethnic reasons.”
The Movement Against Illegal Immigration posted footage of the clashes on its web site. Young men carrying broken bottles and metal poles were seen clashing on what the web site said was Slavyanskaya Ploshchad.
In other footage, people chanted “Russia for Russians!” and “Kondopoga!” in reference to ethnic violence in the northwestern town late last summer that followed the killing of two local residents during a brawl with Chechens in a restaurant. Locals took to the streets, burning down the restaurant and targeting other establishments owned by people from the Caucasus.
Kondopoga has become something of a cause celebre both for ultranationalists, who claim it serves as a warning to those who tolerate the integration of different ethnicities, and for human rights groups, which call the incident a prime example of the propagation of racism.
Earlier this month, hundreds of people staged a protest in the southern city of Stavropol after two Russian students and an ethnic Chechen were killed in separate incidents there. Protesters called for the banishment of people from the Caucasus from the city.
The Movement Against Illegal Immigration participated in the protests in Stavropol and Kondopoga.
While tensions have simmered in Moscow, with the occasional fight and anti-immigration rally, larger attacks such as Friday’s have been few and far between. Political analysts have speculated that some Kremlin officials are stoking ethnic tensions ahead of national elections to win votes from people worried about an ultranationalist threat.
Belov said Friday’s violence, which began at around 8 p.m. on Slavyanskaya Ploshchad, was provoked by people from the Caucasus.
“We were peacefully guarding Moscow from gay prostitutes when groups of people from the Caucasus approached and provoked a reaction,” he said.
The square is known as a cruising area for homosexuals.
Belov said his group employs people who are always on hand during such events to document — this time with the help of video cameras — what goes on.
Alexander Brod, director of the Moscow Bureau of Human Rights, said quite the opposite was the case. “The work of Belov’s organization is to provoke such fights and strengthen the nationalist mood in the country,” Brod said.
“His organization is gaining momentum, and it is a real threat. Belov travels the country and provokes these fights, this violence, and law enforcement agencies don’t touch him,” Brod said.
“Unfortunately, with the elections coming, these attacks will continue,” Brod said, adding that the Movement Against Illegal Immigration has close ties to Dmitry Rogozin’s Great Russia, a party created in April to capture the nationalist vote.
“One of Russia’s most serious illnesses is xenophobia,” Brod said.
Rights groups lament the apparent reluctance of authorities to act against race-related crimes. 
They complain that prosecutors prefer to hit apparent participants with minor public disorder or hooliganism charges.
Since the start of this year, at least 32 people have died in racist attacks across the country, and 245 others have been targeted by ultranationalists, human rights activists say.
Mayor Yury Luzhkov condemned the most recent violence.
“Any display of chauvinism, xenophobia or nationalism will be harshly put down in our capital, on the basis of the Constitution ... and on the basis of the law,” Luzhkov said in televised remarks.

TITLE: Planning Council Slams Okhta Tower
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: A controversial 400-meter skyscraper to be built for energy giant Gazprom in St. Petersburg’s Malaya Okhta, a district neighboring downtown, could be scaled down or moved further away from the historic city center, after the ambitious plan from Russia’s richest company encountered fierce resistance from city’s Planning Council. 
There could yet emerge a building erected in the district, but it needs to be smaller to fit in, a member of the Council, Yury Kurbatov, said during a Council meeting on Thursday, St. Petersburg’s Construction Weekly, the official publisher of legal statements in the construction field, reported on Monday.  
“The tower is the product of modern technologies, and it is absolutely out of place in Okhta. It might be transferred to a different and more suitable location,” he said. 
Although the Council agreed that the industrial area of Malaya Okhta’s is in need of regeneration, many of its members found the declared height to be inappropriate, according to the weekly publication.
The tower’s height would have to be reduced by 100 meters for it to match the scale of its surroundings, project reviewer Vladimir Linov said.
“The impact of the appearance of a 400-meter skyscraper on Okhta would be equal to us constructing a modern building on every street in the historic city center,” Linov, who is also a senior lecturer at the St. Petersburg State Architectural and Construction University, said.
“The conclusion is that the renovation of the Okhta territory is necessary, but it needs to be done based on a ‘don’t harm’ principle, in this case, a ‘don’t harm the historic center’ principle,” the expert said. 
If the controversial skyscraper is still constructed at its full height it will be visible from 80 percent of the St. Petersburg’s city center views, which in turn will affect the skyline of the entire UNESCO-protected center, Linov said. 
A New York-based non-profit organization, the World Monument Fund, included St. Petersburg’s skyline in its 2008 list of the world’s 100 most endangered sites in its “Economic and Development Pressure category.”
“Often historic sites suffer in the interest of short-term gain that result in long-term losses. New construction often means destruction of historic places,” the fund’s president Bonnie Burnham said in a statement.
According to the note, published June 6, Gazprom’s plans mean that St. Petersburg is facing “encroachment or outright destruction”. 
Burnham called St. Petersburg’s skyline “a center of architectural achievement in Russia” and “now the proposed location for an enormous Gazprom skyscraper that will forever change it.”
The tower’s chief architect Philip Nikandrov said however that his building will not in any way harm the city.
“The tower fits seamlessly into the city’s panorama,” Nikandrov told St. Petersburg Times in April this year, presenting findings of research commissioned by RMJM, the company behind the skyscraper project, earlier this year. 
The study had used satellite navigation equipment and concurred with other research undertaken by the city’s Monument Preservation Committee, which employed a helicopter, Nikandrov said.
“Their findings are the same — the tower won’t spoil the city,” Nikandrov said.
“On the contrary, you can say this is a beautiful addition to St. Petersburg’s landscape, which consists of occasional dominating buildings that overlook St. Petersburg’s regular buildings,” Nikandrov said in a telephone interview in April.
“If you look at the city from Troitsky Bridge or from the Peter and Paul Cathedral, you can see that it is not Smolny Cathedral that dominates the city’s panorama, but rather the Bolshoi Dom  [FSB headquarters] on Liteiny Prospekt,” he said. “Our skyscraper in its present form and shape will be beautifully anchor the city’s panorama if one is looking from the city center.”
Meanwhile, Zhivoi Gorod, a non-governmental organization that aims to preserve the historic buildings of St. Petersburg has gathered more than 6000 signatures against the decision to build the skyscraper in close proximity to the city center, Zhivoi Gorod coordinator Nikolai Smirnov told The St. Petersburg Times on Friday.
“In principal we are not against the skyscraper, we just don’t understand why it has to be built so close to the center [of St. Petersburg],” he said while his organization was picketing in front of Petro Palace Hotel on Maly Morskaya Ulitsa where real estate developers including Nikandrov had gathered on a conference. 
“We strongly disagree with the realization of ambitious, voluntary projects such as the building of the high-rise office block for the Gazprom company in the estuary of the River Okhta, on the location of the former city of Nien and the Nienshants fortress, a historical and archeological monument,” Smirnov said in the statement published last Saturday.
Gazprom Neft, Gazprom’s subsidiary in St. Petersburg, last week launched “Okhta,” a fund to support cultural heritage, and is planning to build a museum about St. Petersburg’s first settlements, Interfax news agency reported.

TITLE: Moscow Backs Greenpeace Plan to Identify GM Foods
AUTHOR: By James Kilner
PUBLISHER: Reuters
TEXT: MOSCOW — Moscow next week introduces a city-wide label to identify GM-free foods, a move ecologists hail as ground-breaking but which foreign producers say is complex and costly.
A handful of individual food producers around the world already use labels certifying their food is free of genetically modified elements — but this is the first large-scale political effort to introduce such a system, Greenpeace says, expecting it to be watched by others as a test-case.
“These labels are important for consumers so they know which companies keep a tight control on ingredients in their products,” Greenpeace’s GM researcher in Russia, Natalia Olefirenko, said.
After an official — voluntary — inspection producers will have the right to carry Moscow’s GM-free label for a year.
The European Union already insists products which contain more than 0.9 percent of GM-enhanced ingredients must say so on the packet, but environmentalists argue that does not go far enough.
“It’s very important for the rest of the world to watch Moscow,” Olefirenko said.
Greenpeace estimates around 80 percent of Russian produce contains no genetically enhanced ingredients, in line with other developing countries, against only about 20 percent in the EU and richer countries.
But Greenpeace said parts of the EU could follow Moscow’s lead if it is a success, although the label should remain voluntary.
Foreign food producers say that is just one of the problems the label brings.
Supermarkets eager to curry favor with Moscow’s government have hinted they will only stock products carrying the GM-free label — and signals from the authorities suggest the label will effectively be obligatory, producer lobby groups say.
“And it’s all extra costs,” said Alexei Popovichev, head of Rusbrand which represents big Western producers such as Nestle and Kraft. “It involves special testing, special packaging and the costs will be passed on to the consumer.”
Small domestic producers will probably feel the burden of the extra costs hardest as they will not be able to spread them through economies of scale, he said.
Western businesses also argue the GM-free label could mislead customers into buying poorer products because the assertion that foods contain no GM-ingredients could be misread as a signal that all the ingredients are of high-quality.
Greenpeace does warn there is a potential flaw in the Moscow GM label, saying the testing system chosen by Moscow is untried even though it says over $2 million has already been spent buying equipment for laboratories owned by a Moscow businessman.

TITLE: Prosecutor to Focus on High-Profile Killings
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Alexander Bastrykin, named Friday as the head of a new investigative committee in the Prosecutor General’s Office, said he would place a priority on investigations into the murders of Alexander Litvinenko and Anna Politkovskaya.
Bastrykin, a deputy prosecutor general and former classmate of President Vladimir Putin, was appointed by the Federation Council to head up the new semiautonomous agency, which is taking over the current investigative powers of prosecutors.
Senators confirmed Bastrykin by a 137-0 vote with two abstentions.
The investigative committee’s first order of business will be to look into the poisoning death of Litvinenko, a former security services officer, in London last November, Bastrykin said after the vote.
He criticized Scotland Yard for pursuing only one suspect in the case: businessman Andrei Lugovoi.
“The rules of criminal law say that all possible versions must be put forth and investigated,” Bastrykin said, Interfax reported.
Britain has charged Lugovoi, also a former security services officer, with Litvinenko’s murder and is demanding his extradition.
Bastrykin said his committee would “not rule out” the possible involvement of self-exiled businessman and Kremlin critic Boris Berezovsky in Litvinenko’s death.
The committee will also explore different scenarios in the murder of Politkovskaya, the investigative journalist for Novaya Gazeta who was gunned down in her Moscow apartment building in October.
“The case is more complicated than we thought it would be,” Bastrykin said, RIA-Novosti reported.
Bastrykin noted that the investigative committee would be authorized to press criminal charges against individuals with special status, including senators, State Duma deputies and “other individuals.”
The law establishing the new committee will go into effect on Sept. 6, at which time Bastrykin will officially assume his new post.
The idea of creating an autonomous investigative agency similar to the FBI had been discussed for several years. But some proponents of such a reform have criticized the bill as half-baked.
It has also sparked criticism from Duma deputies, primarily from the Communist faction, who say it will destroy the unity of the prosecutor’s office and undercut its oversight functions.
Bastrykin, a native of Pskov, attended Leningrad State University with President Vladimir Putin. In June 2006, Putin appointed him head of the Interior Ministry’s branch in the Central Federal District. He was appointed deputy prosecutor general in October.

TITLE: Nato, Russia Class Over Missiles
AUTHOR: By Irina Titova
PUBLISHER: The Associated Press
TEXT: NATO’s chief and a top Russian lawmaker on Monday clashed over a U.S. plan for a missile defense system in Eastern Europe.
The comments were the latest episode in a bitter monthslong dispute that has soured Russia’s relations with the West.
Moscow says it does not believe Washington’s contentions that a planned U.S. radar in the Czech Republic and missile interceptors in Poland are aimed against potential threats from Iran, arguing the shield could be used against Russia instead.
“Who is this aimed against?” Sergei Mironov, speaker of the Federation Council, the upper chamber of parliament, said during a debate with NATO Secretary General Jaap de Hoop Scheffer that was broadcast on Ekho Mosvky radio. “When there are missiles at our borders ... it is already a threat.”
Scheffer disagreed, saying the plan represented no danger to Russia.
“If it were true — and in my opinion it is wrong — that they are directly aimed against Russia, but even under those circumstance it would have no effect on Russia,” Scheffer said.
Scheffer said Russian President Vladimir Putin’s recent proposal for shared use of a Russia-rented early warning radar in Azerbaijan as an alternative to the plan demonstrated that Moscow also saw a threat from rogue nations, such as Iran.
“There is a threat — and let’s call a spade a spade,” Scheffer said. “For me the positive thing about this proposal is that Russia also perceives this threat as a threat.”
Russian officials have insisted, however, that the threat from Iran was only hypothetical and that Putin’s offer was made in order to ease tensions and avoid a new arms race, not because of concern over Iran’s intentions.
Putin made the proposal to President Bush after months of bitter criticism of the U.S. plans. Bush agreed to consider the initiative, but the U.S. administration made it clear it was not abandoning plans for the project in Poland and the Czech Republic — former Soviet satellites that are now NATO members.
Russian officials have warned that if Washington were to snub Moscow’s proposal, it would strengthen Russia’s belief that it is the real target of the U.S. system.
Putin and Bush have agreed to discuss the issue further at talks next month at the Bush family vacation home.
Mironov also expressed Russia’s concern over NATO’s possible further eastward expansion to include some ex-Soviet states. Georgia and Ukraine have actively campaigned for NATO membership.
While Mironov said Russia recognized each country’s right to join any group or alliance of its choice, he said “an enlargement in the absence of a real adversary is a seriously provoking factor, which lowers the level of mutual trust.”
Russia has watched with growing concern as NATO has expanded to include former Soviet bloc nations such as the three Baltic states, Poland and Hungary. Moscow’s relations with Western nations have cooled noticeably in recent months over issues such as the U.S. missile plan and Western criticism of Russia’s democratic backsliding.

TITLE: Putin Backs Luzhkov For Another Term in Moscow
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Vladimir Putin has asked the City Duma to confirm Mayor Yury Luzhkov for another four years, the Kremlin web site said Friday.
The City Duma — dominated by United Russia deputies — is expected to approve the nomination at a special meeting Wednesday.
Luzhkov, 70, will give a speech and answer questions at the meeting, before the deputies retire to vote, Interfax reported.
“There is no doubt that 28 people in the Moscow City Duma will vote for their leader,” City Duma Speaker Vladimir Platonov said Saturday, Interfax reported.
Of the 35-member Duma, 28 are from United Russia, four are Communists and three represent the liberal Yabloko party.
Putin’s nomination comes after the popular mayor asked the president for his blessing for a new term. Under a 2005 law that abolished gubernatorial elections, incumbents can seek the president’s approval for a new term or wait until their mandates end and see whether the president nominates them. Moscow’s mayor is considered a governor.
Luzhkov was elected to a third four-year term in 2003, and his current term expires in December.
Putin earlier this month hinted that he wanted Luzhkov to stay on, telling the mayor on June 5 that he needed to find ways to provide young families with affordable housing before he left office.
Opposition politicians in the City Duma and State Duma have said the Kremlin wants to keep Luzhkov in office to help deliver votes in State Duma elections in December and in the March presidential vote.
Luzhkov has overseen an unprecedented economic boom in the capital since being appointed mayor by President Boris Yeltsin in 1992. At the same time, he has come under fire over the demolition of historical buildings and the growing wealth of his wife, Yelena Baturina, 44, whom Forbes ranks as Russia’s richest woman, with $3.1 billion. Luzhkov also has a passion for beekeeping and an aversion to gay parades, which he has banned as “satanic.”

TITLE: Police Officer Detained In Moscow in Wiretap Probe
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — A police officer has been detained on suspicion of tapping telephone calls and selling the transcripts of the conversations, police said Friday.
A second officer has resigned in connection with the case, city police spokesman Yevgeny Gildeyev said. He declined to provide further details, citing the ongoing investigation.
Interfax identified the detained officer as Mikhail Yanykin, deputy head of the police department responsible for wiretapping and covert videotaping operations. Interfax, citing an unidentified law enforcement official, said the second officer, Nikolai Orlov, deputy head of the city police’s criminal investigations department, had been dismissed.
Yanykin and Lavrov are suspected of bugging the telephone conversations of politicians and businessmen and selling the transcripts to their rivals, Kommersant reported Friday.
Investigators with the Federal Security Service and Interior Ministry found a large number of transcripts of illegally recorded conversations during a recent search of Yanykin’s and Orlov’s offices, the report said.
Under the law, police officers must obtain a court order to wiretap telephone conversations. FSB investigators said Yanykin and Lavrov skirted the law by merely penciling in additional names to court-approved wiretap lists, Kommersant said.

TITLE: Food Poison Hits 271 Workers
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A total of 271 foreign workers constructing the long-awaited Sheremetevo-3 airport terminal have been hospitalized with food poisoning after eating a meal of fried potatoes and ground meat, prosecutors said.
Moscow regional prosecutors said Saturday that they had opened a criminal investigation into the mass food poisoning last Tuesday.
No one had been charged with wrongdoing as of Sunday. The sick workers are from Turkey, Kyrgyzstan and Uzbekistan and employed by Turkish construction firm Enka, Solnechnogorsk district prosecutors said in a statement.
The statement said doctors diagnosed them with salmonella poisoning, a bacteria in contaminated food that causes abdominal pains and violent diarrhea.
Work on Sheremetevo-3 began in 2001 but was stalled for several years due to an ownership dispute. It is meant to replace the Sheremetevo-2 international terminal, which was built for the 1980 Olympic Games.

TITLE: Russia to Lift Ban on Moldovan Wine
PUBLISHER: Reuters
TEXT: MOSCOW — President Vladimir Putin said Friday that Russia would lift a ban on imports of Moldovan wine, which had dealt a blow to the country’s economy.
After a meeting at his Novo-Ogaryovo residence outside Moscow with Moldovan President Vladimir Voronin, Putin emphasized a thaw in the chilly relations between the leaders.
“In general, our ties have been progressing pretty well, especially economic ties. Our mutual trade turnover has grown by 99 percent since 2005 to reach nearly $1 billion,” he told reporters.
“The Russian government has sent appropriate instructions about the delivery of Moldovan wine to the Russian market,” he said.
After Russia imposed the ban last year citing the poor quality of the wines, Moldova complained that Moscow was using economic sanctions as a political weapon following its adoption of a more independent, pro-European foreign policy. 
Putin’s ties with Voronin soured in 2003 when Moldova bowed to Western pressure and nationalists at home, refusing to sign a Russian-brokered deal to settle a conflict with rebels in its breakaway Transdnestr region.
At the time, Putin cancelled a scheduled visit to Moldova at the last minute, a decision seen by many in Moscow as a humiliation by the tiny nation.
Putin said Friday, “I believe we have much to discuss on other issues, including political ones, primarily settlement in Transdnestr.”
Russia previously accounted for 60 percent of Moldova’s wine exports, worth a quarter of the country’s entire foreign trade, before it imposed the ban. 
Georgia has also faced a yearlong Russian ban on wine exports after it took steps to leave Moscow’s orbit, saying would seek NATO and European Union membership.

TITLE: In Brief
TEXT: <b>Spy Suspect Gets Home</b>
MOSCOW (SPT) — Vladimir Vozhzhov, the space agency official arrested by Austrian police on spy charges, is back in Russia, the Russian Embassy in Vienna said Friday.
“Russian citizen Vladimir Vozhzhov flew out to Moscow and is now located in the motherland,” said embassy spokeswoman Tatyana Kupalova, Interfax reported.
Vozhzhov, a senior official at the Federal Space Agency, will soon resume his duties, space agency spokesman Igor Panarin said, Gazeta.ru reported.
Vozhzhov was arrested June 11 in Salzburg. Austrian media reported that he offered 20,000 euros ($26,600) to an Austrian military helicopter technician for classified information, possibly from German-based Eurocopter. He was freed Thursday after the United Nations informed Austria that he had diplomatic immunity because he had been in the country for a UN conference. 

<b>Diplomat Shot Dead</b>
BUJUMBURA, Burundi (AP) — A Russian diplomat traveling in an embassy vehicle was fatally shot on the outskirts of Burundi’s capital when he tried to force his way through a roadblock twice, the Burundi army said Saturday.
Vladimir Rushtiko was killed at dawn as soldiers shot at his car to flatten the tires and force him to stop, said Burundi army spokesman Adolphe Manirakiza.

<b>3 Years for Slave Labor</b>
MOSCOW (SPT) — An army officer was sentenced to three years in prison Friday for forcing a soldier under his command to work as a slave laborer, a stint during which he lost a leg.
The Chita Military Garrison Court sentenced Lieutenant Nasim Nazarov to three years in a penal colony for selling soldier Andrei Rudnenko to a businessman for slave labor, Interfax reported.
Rudenko had a leg amputated following a road accident in August while working for the businessman.
Nazarov was convicted and given a suspended sentence in February. But military prosecutors appealed the verdict and forced a retrial. 

<b>2 Held in Stranglings</b>
MOSCOW (SPT) — Prosecutors have detained two Uzbek citizens suspected of strangling two young women on the shore of a Moscow region lake popular among swimmers and sunbathers.
Nadirbek Mamashoyev, 21, and Alisher Khaitov, 22, are suspected of murdering the two women, aged 17 and 20, on the shores of Lake Senezh, near the town of Solnechnogorsk, 60 kilometers northwest of Moscow, regional prosecutors said in a statement Friday.
Investigators believe the suspects met the two women at Leningradsky Station and went out to the lake to relax, but got involved in a fight.
If charged and convicted, they could face up to life in prison.  

<b>Pilot Missing</b>
MOSCOW (AP) — Emergency workers were searching Sunday for the pilot of a helicopter that crashed on the shores of the Gulf of Finland outside St. Petersburg, leaving three people injured, officials said.
The AS-355 helicopter belonging to Balt Avia went down around 6:30 p.m. Saturday about 75 kilometers west of the city, said Viktor Beltsov, spokesman for the Emergency Situations Ministry.
A crewmember and two passengers were injured and rescuers were searching for a pilot. One passenger was unharmed, Beltsov said.
The cause of the crash was being investigated. 

<b>Nightclub Killing</b>
BEIJING (Reuters) — A foreigner was killed near a nightclub in Beijing and has been tentatively identified as a Russian, media and diplomatic sources said Sunday.
The victim, a heavyset European man, was found at 6:40 a.m. Saturday not far from the Banana Club, a nightclub near Beijing’s diplomatic quarter. Two foreigners had run out of the club chased by four other men, one of whom beat the victim to death with a traffic bollard, the Beijing News reported.
“A European man was killed on Saturday, but police have not identified him. He is probably Russian, but we are waiting to receive information from the Chinese tomorrow or the next day,” a Russian diplomat said Sunday. 

<b>Human Trafficking </b>
MOSCOW (Bloomberg) — The Federal Security Service said Friday that it had arrested six people and seized forged documents as they broke up a gang involved in trafficking people to Western Europe.
More than 200 Russian passports, some of them fake, were recovered after officers raided three “laboratories” used to produce false documents, an FSB spokesman said. 

<b>Kasparov Sees Anger</b>
NEW YORK (AP) — Opposition leader Garry Kasparov said that despite polls showing strong support for President Vladimir Putin, there is slowly growing public anger at the leader as the country heads into its election season.
Troubled by the effects of media control and anti-extremist laws used to stifle dissent, an increasing number of Russians are disheartened with Putin’s government and are sympathetic to the country’s opposition movement, Kasparov said Thursday at a New York event hosted by the Washington-based Hudson Institute. Kasparov was in Canada and the United States this week seeking financial support for his opposition campaign.

<b>Azeris in ‘State of War’</b>
BAKU, Azerbaijan (AP) — Azeri President Ilham Aliyev declared Friday that the country was in a “state of war” and pledged continuing increases in military spending to put pressure on Armenia in the two countries’ territorial dispute over Nagorno-Karabakh.
In an address to officers graduating from a Baku military school, Aliyev said the country’s military budget had quadrupled in the past four years and would reach $1 billion this year.
Aliyev also said Azerbaijan would soon have the capability to manufacture its own military hardware — possibly by the end of the year. 

<b>Chechens Held </b>
ANKARA, Turkey (AP) — Istanbul police have detained five people with possible links to al-Qaida in a sweep ahead of a summit that President Vladimir Putin attended Monday.
The five — including an unspecified number of Chechens — were detained in a sweep against suspected al-Qaida militants ahead of the summit of leaders of Black Sea nations, the Dogan news agency reported Sunday. Police would not comment on the report. 

<b>For the Record</b>
The U.S. planned talks with Poland on Monday about its PRO missile defense system, U.S. officials said. (AP)</b>
Georgian lawmakers gave preliminary backing Friday to legislation authorizing the repatriation of Meskhetian Turks, a long-persecuted largely Muslim minority who were deported en masse to Central Asia in the 1940s. (AP)

TITLE: Securing a Nework Nationwide
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Reax security agency has launched a national project for unifying medium-sized security agencies across Russia. At the moment the chain operates in three regions. By the end of the year the company expects to sign franchise agreements in 14 cities with populations over million people.
In November last year the chain was launched in Moscow and in the first half of 2007 in St. Petersburg and Nizhny Novgorod.  It offers its members access to more resources and modern equipment.
“St. Petersburg and Leningrad Oblast are ahead of other regions in that they use panel security systems where clients are connected directly to off-site security. We think this type of security is the most effective because it combines technology and human resources,” Nikolai Krayushenko, chairman of the directors’ board of Reax, said at a press conference last week.
“Demand for security guards exceeds available personnel by 30 percent. As clients find out more and more about security services, they start choosing panel security systems because of their efficiency and lower cost,” Krayushenko said.
At the moment Reax partners’ network has 118 cars and about 700 security guards, including 30 cars and 180 guards in St. Petersburg. Sergei Mnatsakanov, general director of Reax St. Petersburg, claimed that they effectively cover all districts and reach any client in ten minutes.
A security network would be attractive for clients that have offices and other property in a number of different regions, Krayushenko said. The Perekrestok retail chain and Avto-49 dealership are among the companies that have recently signed contracts with Reax.
“It’s important for them to order services in one place. It’s would be easier to file claims against one company,” Krayushenko said.
By 2009 Reax expects its turnover to reach one billion rubles ($38.5 million). In St. Petersburg Reax unifies seven partners together serving about 100 clients. The chain attracts about ten new clients a month, Mnatsakanov said. He expects the growth to speed up after the first 200 clients.
Besides traditional automatic security systems and alarms, Reax also promotes its own innovation — a mobile alarm gadget, which sends a GSM signal from wherever the client is.
According to Industria Bezopasnosti association, 26,000 security agencies operate in Russia employing over 700,000 licensed security guards. 1,500 agencies operate in St. Petersburg. The commercial departments of state security bodies employ 300,000 people. This year the total market for security services is expected to amount to $5.9 billion.
“In terms of turnover the Russian market for security services is comparable to the largest European markets. Panel security systems will beat the competition. The European market proved this,” said Igor Filonenko, president of Industria Bezopasnosti association.
Panel security systems allow the client to be reached in three to four minutes, Filonenko said, because cars are always patrolling the streets. “One car could service up to 100 clients,” he claimed.
In Europe such services are offered by large companies employing 30,000 to 50,000 guards.
“Security services are developing towards networks. The Reax initiative is an attempt to create an alliance in Russia. It’s a positive step,” Filonenko said.
Krayushenko claimed that his main competitors are state security bodies that offer similar services across Russia. However large local security agencies were doubtful that the alliance had potential and that their plans were feasible.  
“30 cars is not enough to control the whole city. We have 25 cars that are routing through the city daily, and we cover just about a half of its territory,” said Oleg Bondarenko, deputy director of Titan security agency.
“You need about 100 cars to control all the districts. Besides, we have information that not all of their cars patrol through the city. Some of them are simply parked,” he added.
Titan employs over 300 people. A monitoring station receives alarm signals in real time, and Titan guarantees that its security guards reach a client in three to seven minutes, Bondarenko said.
Both Titan and Aris security agencies attract up to 70 new clients a month.

TITLE: Progressive Ingosstrakh Looks for New Premiums
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Ingosstrakh insurance company increased net profit over twofold last year compared to 2005 up to 1.9 billion rubles ($73 million). Insurance premiums accounted for 34.1 billion rubles — a 20.3 percent increase on 2005 figures. The managers expect to increase the company’s market share, which currently stands at 7.5 percent, they said at a press conference Friday.
“In retail services the company aims to become the market’s most profitable. In corporate insurance the goal is to occupy one of the leading positions and increase the share of clients from medium-sized business. And we are also aiming at active regional development,” said Vyacheslav Scherbakov, president of Ingosstrakh.
“In the health insurance market our goal is to be among the top three companies. We hope to increase the share of life insurance to 10 percent of the portfolio. We think these goals are realistic. Considering our huge experience we are confident that we’ll manage to attain our goals,” Scherbakov said.
According to the Federal Service for Supervision of the Insurance Market, last year total volume of insurance premiums in Russia increased by 23.2 percent up to 602.6 billion rubles. Insurance payments increased by 26.7 percent up to 123.2 billion rubles.
“Ingosstrakh was always a source of qualified professionals for the Russian insurance market. It is one of the undisputable leaders,” said Kirill Mikhailevsky, head of the Inspection for Supervision of Insurance Market in the Northwest region.
“This company is introducing progressive types of insurance. This company is competing with international insurance companies in the core markets,” Mikhailevsky said.
By the end of 2006 Ingosstrakh’s total assets accounted for 43.7 billion rubles. This year assets increased to 46.54 billion rubles, Shcerbakov said.
Most of Ingosstrakh’s premiums came from property insurance (61.9 percent). Reinsurance accounted for 15.8 billion rubles. Ingosstrakh’s network includes nine regional centers, 87 branches and covers 214 cities.
Ingosstrakh was registered in 1992. However, managers claim that the company was based on the former soviet insurance organization founded in 1947 — 60 years ago.
In St. Petersburg, Ingosstrakh employs over 60 people, said Andrei Alexandrov, director of the St. Petersburg office. He claimed that last year was extremely successful.
According to primary data, since January till May 2005 Ingosstrakh premiums in St. Petersburg accounted for 745.8 million rubles (including 524.1 million rubles from retail services), payments accounted for 469.5 million rubles.
Up until 2002 Ingosstrakh did not introduce retail services, only corporate insurance. At the moment the company tries to balance both types, Scherbakov said.
Insurance premiums collected in St. Petersburg and Leningrad Oblast exceed the premiums collected in all other regions of the Northwest federal district combined.
In St. Petersburg about 90 percent of industrial enterprises and shopping centers are insured while in other regions only 50 percent.
This year the main goals are to make compulsory third party liability car insurance profitable, improve the quality of service and stabilize the market share, Alexandrov said. The company also expects to increase its presence in other regions of the Northwest.
In St. Petersburg in the first half of 2007 the company increased premiums by 25 percent. Alexandrov expects growth of 30 percent by the end of 2007.
By the end of 2007 Ingosstrakh will increase the number of sales offices in St. Petersburg from 10 to 16. “We will also open sales offices in remote districts. It will satisfy the needs of St. Petersburg completely,” Alexandrov said.
Last year Standard & Poors increased Ingosstrakh’s credit rating up to BB+, Moody’s – to Ba1.
According to a report by Princeton Partners Group, the top four insurance companies in Russia are Rosgosstrakh, Ingosstrakh, Reso-Garantia and Rosno. 
Experts forecast that by 2010 the four leading companies will control 55 percent to 60 percent of the market.

TITLE: UES Makes Plans for Controlling Spinoffs
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: State utility Unified Energy System, which is being broken up and privatized by next July, has cemented plans to maintain control over the power sector from the grave.
The Economic Development and Trade Ministry will be put in charge of policing the new owners of the companies spun off from UES after it ceases to exist. The ministry’s goal will be to make sure the planned expansion of those spin-off companies gets carried out in full, whether the new owners like it or not, UES chief executive Anatoly Chubais said during a conference call late Friday.
Critics said the move went against the free-market spirit of the sector’s reforms, which embody the largest-scale liberalization seen under President Vladimir Putin.
“To make the obligations of the shareholders more binding ... it has been decided, with the insistent backing of the president and the government ... that the shareholders’ agreement will also be signed by the Economic Development and Trade Ministry,” Chubais said. He did not elaborate on how the ministry would be able to enforce the agreements, but analysts speculated that it could hand out fines or revoke licenses. 
The step to bring the ministry in as an arbiter comes amid an escalating war of words between UES and one of its largest stakeholders, Norilsk Nickel. 
After buying control of major power producer OGK-3 in March, Norilsk said it could amend the generating company’s expansion plans if they proved too large and too costly. Chubais rejected this, saying that the plans had to be carried out in full to help meet the nation’s growing energy needs.
Until Friday, Chubais looked to be on the losing side of this debate. Russian law tends not to interfere in the rights of a controlling shareholder to spend a company’s money at will.
“But if [the ministry] wants to, it can really crack the whip,” said Dmitry Tsaregorodtsev, electricity analyst at CIT Finance. For instance, if Norilsk decides to spend its money on a nickel mine when it is supposed to be building new power stations, the ministry could step in and revoke the license for that mine until Norilsk keeps its promise to the electricity sector, Tsaregorodtsev said.
UES board member Alexander Branis said such meddling would be a flagrant violation of free-market principles.
“If Norilsk is ready to invest all this money, that’s great,” said Branis. “But those who are not ready, they must have the freedom to make that choice, without [the ministry’s] interference.”
Branis also said that UES had indeed overestimated demand when drawing up the expansion plans, which will need to be adjusted as the sector matures.
“We don’t need this much new supply, but the state is twisting investors’ arms to carry out these projects,” he said. “More than likely they will be carried out in the end.”
- UES has set a ceiling on the size of an additional share issue by TGK-10 at $1.23 billion, it said in a statement Friday.

TITLE: Insurer Finds IPO Is No Easy Sell After All
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: The market finally doled out some wisdom last week to a Russian firm going public: If your head swells up too big, you won’t fit through the door. The company had no choice but to listen.
Like so many of its peers that have held initial public offerings, RESO-Garantia, a small but dynamic insurance provider, seemed to think that it could strut onto the market on little more than promises and be met with a shower of cold hard cash. 
The price it sought for its emission, as much as $500 million for a 20 percent stake, was high pretty much any way you sliced it, except in the one sense that such firms most often like to cite — their growth. “The company is very fast-growing and works in one of the fastest-growing sectors in the market,” a RESO spokeswoman said repeatedly Friday when asked to justify the placement price.
Sure, it’s growing pretty fast. First-quarter revenues on all of its products shot up at least 50 percent year on year, and as the first insurer ready to go public, it would have been the only point of access to the industry, which saw an average of 47 percent annual growth from 2001 to 2005.
Like most Russian firms headed to market, RESO also did a good job garnishing the IPO: It brought in two European directors in April and hired a trio of top Western bookrunners. The firm even sold the European Bank for Reconstruction and Development a 10 percent stake for $150 million to attract what it called “a vote of confidence.”
But its net profits, the one thing you can really see, came to a mere $26 million in the first quarter of this year, and that was a company record.
“All those growth numbers are projected, not real,” said Kim Iskyan, co-head of research at UralSib. 
“Of course it may all go swimmingly, but what if they don’t keep growing as fast as they say and I get shafted? People are just hesitant to buy something they can’t see.”
In their hurry to get exposure to the Russian market, Western investors have not always been as wary as they should have been, Iskyan said, allowing some Russian firms to get away with blatant overpricing.
The first six months of this year saw $26 billion worth of public offerings, compared with the $17 billion raised in all of 2006. More than half of the companies that held local IPOs are now trading below their offer price.
And with the 20 IPOs that took place in the last 12 months, including VTB’s $8 billion sale, “there was a bottleneck of paper coming onto the market,” said Andrei Burlinov, head of investment banking at Troika Dialog, which helped place more than $12 billion in Russian equity last year. 
“Even going into July there is a very packed schedule of emissions. Of course investors have gotten more demanding.”

TITLE: In Brief
TEXT: <b>Pertsovsky Renaissance</b>
MOSCOW (Bloomberg) — Renaissance Capital Group named Alexander Pertsovsky to lead its investment banking business. 
Pertsovsky will oversee mergers and acquisitions, equity and debt and derivatives in Renaissance Capital’s main markets, including Russia, Ukraine, Central Asia and Sub-Saharan Africa, the Moscow-based brokerage said in an e-mailed statement Monday.
Before joining Renaissance Capital in 2002, Pertsovsky was chief executive of Rinaco Plus brokerage, which he founded in 1992 in Russia. Prior to Monday’s appointment, Pertsovsky was deputy chief executive of Renaissance Capital.

<b>Hungry X5</b>
MOSCOW  (Bloomberg) — X5 Retail Group NV, a Russian food retailer, has bid for Ramstore, the Russian supermarket chain owned by Turkey’s Koc Holding AS, Vedomosti reported Monday, citing an unidentified banker familiar with X5 plans.
Koc, which is selling its Migros Turk retailing unit, may dispose of the Turkish and Russian stores separately, the newspaper said, citing Koc’s Chief Executive Bulent Bulgurlu. 
Ramstore has 53 supermarkets and 11 shopping centers in Russia and generated $592 million in revenue last year, according to the newspaper. 

<b>PwC Pulls</b>
MOSCOW (Bloomberg) — PricewaterhouseCoopers LLP’s Russian unit withdrew a decade of audited financial reports for bankrupt Yukos Oil Co., saying Yukos managers may have provided inaccurate information.
The accounting firm received new information recently that “may have affected’’ its audits for 1995 through 2004,  PricewaterhouseCoopers Audit said in an e-mailed statement Monday. The reports “should no longer be relied on or associated with Yukos’s financial statements.’’ 

<b>Fridman Theater</b>
ISTANBUL (Bloomberg) — Russian billionaire Mikhail Fridman’s Alfa Group plans to buy a majority stake in Turkish movie-theater chain operator AFM Uluslararasi Film Produksiyon Ticaret & Sanayi AS, the Turkish company said.
Istanbul-based AFM, which operates 157 cinemas in Turkey, signed a letter of intent to sell a majority stake to Alfa Group last week, AFM said in a filing with the Istanbul Stock Exchange on June 22, correcting media reports that said the buyer was a U.S. company called AI Group.

<b>Aeroflot Undecided </b>
MOSCOW (Bloomberg) — Aeroflot, eastern Europe’s largest airline, said it may still bid for Italy’s state-owned carrier Alitalia SpA.
Aeroflot’s board met Sunday and no decision was taken to abandon a bid, spokeswoman Irina Dannenberg said Monday by phone from Moscow. Interfax reported Sunday that Moscow-based Aeroflot had abandoned the bid.
Aeroflot and Italy’s Air One are competing for the Italian state’s 49.9 percent stake in Rome-based Alitalia. Binding bids are due July 12.

<b>Gazprom Blocks</b>
MOSCOW (Bloomberg) — Gazprom, Russia’s state-controlled natural-gas producer, agreed to pay 2.65 billion rubles ($102 million) for licenses to explore and develop two hydrocarbon blocks in the eastern Siberian Krasnoyarsk territory.
Gazprom won the licenses in separate auctions on June 22, Tamara Gaidukova, a spokeswoman for the subsoil resource agency’s Krasnoyarsk divisions, said by telephone Monday.
Gazprom beat out Rosneft, the state-run oil company, and billionaire Oleg Deripaska’s United Oil Group with a bid of 1.9 billion rubles for the Yudokonsky block, Gaidukova said.

<b>Rusal Plant</b>
MOSCOW (Bloomberg) — United Co. Rusal, the biggest aluminum producer, started building a $2 billion aluminum plant in Russia’s Irkutsk region as part of a plan to expand capacity near the border with China, the largest user of the metal.
The Taishet smelter will add 750,000 tons of aluminum a year to Rusal’s 4 million-ton annual output, using the company’s latest RA-400 technology, Moscow-based Rusal said in an e-mailed statement Monday. Production will start in November 2009 and reach capacity by 2012.

<b>Hidden Charges </b>
MOSCOW (Bloomberg) — Russia’s central bank toughened rules for lenders to protect consumers from hidden loan charges such as mandatory insurance and notary payments, a central bank official said Monday.
The new rules will come into effect July 1, Alexei Simanovsky, head of the Bank of Russia’s regulation and oversight department, told reporters in Moscow Monday.
Consumer lending growth will slow to about 60 to 65 percent this year from 75 percent last year, Simanovsky said.

TITLE: Putin at the Center of Expansion
PUBLISHER: The Associated Press
TEXT: ISTANBUL, Turkey — Leaders and officials from 12 Black Sea countries discussed relations with the European Union and regional energy routes during their annual summit on Monday in Istanbul.
The Black Sea Economic Cooperation, or BSEC, founded 15 years ago, is aiming to boost its energy sector, particularly as the EU seeks to diversify its energy routes and supplies.
Many BSEC countries are also in the EU, while others such as Turkey are negotiating membership. The BSEC members’ combined oil and gas reserves are second only to those of Persian Gulf countries, it says.
This year’s summit was the first to which the European Union sent a representative.
“Common projects with the European Union and the reforms by the organization are the two most significant successes of this summit,” Greek Foreign Minister Dora Bakoyannis said.
The EU is encouraging BSEC projects to build a highway around the Black Sea to connect member countries and increase regional trade, as well as several pipeline projects to bring Caspian Sea oil and natural gas to the West.
Later Monday, Russian President Vladimir Putin was joining the summit meetings, which also included officials from Turkey, Greece, Ukraine, Azerbaijan, Serbia, Albania, Armenia, Bulgaria, Georgia, Moldavia and Romania. On Tuesday, the bloc’s energy ministers open a three-day energy conference.
Turkish Prime Minister Recep Tayyip Erdogan said he supported cooperation with other international organizations, and that the “dialogue with the European Union is encouraging.” Erdogan’s comments, made at a closed-door meeting, were provided to journalists by BSEC officials.
A founding BSEC member, Turkey has initiated pipeline projects to become an energy corridor between the oil- and gas-rich Caspian region and energy-hungry Western markets. An oil pipeline from Baku, Azerbaijan, through Georgia and on to Ceyhan, Turkey’s Mediterranean oil hub, was opened last year.
Construction of another pipeline that will carry Kazakh and Russian oil from the Black Sea coast to Ceyhan started in April and is expected to be operational in 2009.
However, Turkey’s energy projects face financial questions and steep competition from Russia, which has assumed a central role in energy supply to Europe. Russia has projects or studies under way linking energy sources from the Black Sea and Caspian Sea to the European Union through Bulgaria, Serbia, Macedonia and Hungary.
The EU imports more than 40 percent of its natural gas, and almost half of this comes from Russia. Some central and eastern European countries depend almost entirely on Russian gas.
The United States applauded the Black Sea group’s efforts to expand its energy sector and build new routes for exporting supplies to the West.
“Diverse energy sources will be good for economic growth and security of energy supplies,” U.S. Ambassador Ross Wilson said, attending the summit as an observer.
The combined population of BSEC countries is some 350 million.

TITLE: Uranium Reserves Top
One Million
Tons
PUBLISHER: Reuters
TEXT: ANGARSK — The country has about 850,000 tons of uranium in reserves and resources and more than 1 million tons if joint ventures abroad are included, Federal Atomic Energy Agency chief Sergei Kiriyenko said Friday.
Kiriyenko said Russia was producing slightly more than 3,200 tons per year of yellowcake, a uranium-based commodity used to fuel nuclear power reactors.
“Our confirmed reserves and resources are about 850,000 tons within Russia,” Kiriyenko said on the sidelines of a conference. “Our reserves are more than 1 million tons if we include our joint ventures abroad, including our joint venture in Kazakhstan.”
Russia has plans to become the world’s third-largest holder of uranium ore in the next few years as it looks to almost double nuclear power generation by 2030. Analysts have ranked its reserves between the third- and seventh-largest currently.
Uranium prices have soared this year to their highest since the 1970s as nuclear power returns to vogue amid high oil prices and efforts to cut carbon dioxide emissions. Most of Russia’s uranium is produced at the Priargunsk field in the Chita region, close to the border with China and Mongolia.

n A U.S. labor union said Friday that it was calling on the U.S. Commerce Department to keep in place a 15-year-old agreement limiting the imports of Russian uranium. The United Steelworker’s Union warned that failure to do so could open the floodgates for more Russian imports, forcing the shutdown of U.S. production and costing more than 1,000 U.S. jobs.

TITLE: Putin Offers to Help Balkans on Energy
PUBLISHER: The Associated Press
TEXT: ZAGREB, Croatia — President Vladimir Putin on Sunday pledged to help the Balkan region meet its energy needs and assume a greater role in the safe supply of oil and gas to mainstream Europe. 
Speaking at a one-day energy conference of southeast European leaders, Putin said Russia was prepared to help develop local infrastructure and boost cooperation over the oil and gas that passes through the region’s nations en route to the European Union. 
“Russia is a world-leading factor in energy supply,” Putin told a news conference, adding that Moscow was committed to international agreements in the energy field, including “investment, cooperation and interaction with the Balkans.” 
Putin listed projects or studies under way linking energy sources from the Black Sea and Caspian Sea to the EU through Bulgaria, Serbia, Macedonia and Hungary, as well as a Black Sea pipeline deal announced Saturday between Italy’s Eni and Gazprom. 
“Russia is committed to participation in joint energy projects and meeting the highest environmental standards,” Putin said, adding that Moscow “is open to dialogue, but also ready to protect its national interests.” 
Croatian President Stipe Mesic said that countries in the region were “an important hub of energy routes and have all the potential to develop into an even more important hub in the future.” 
“We can only achieve this through mutual cooperation in the region,” he added. 
The EU imports more than 40 percent of its natural gas, and almost half of this comes from Russia. Some central and eastern European countries depend almost entirely on Russian gas. 
Leaders from Albania, Bulgaria, Bosnia, Greece, Macedonia, Serbia, Slovenia, Romania and Montenegro also took part in the talks, on issues ranging from the diversification of energy sources and its secure transport to market deregulation, environmental concerns and privatization. 
Several countries in the region are collaborating on energy projects designed to diversify gas sources and reduce their dependence on Russia. Earlier this year, Croatia and Hungary agreed to strengthen cooperation in developing a liquefied petroleum gas terminal on the Croatian coast. 
The terminal is scheduled to begin distributing gas from mostly North Africa and the Middle East to central Europe as of 2012. 
Signaling Russia’s efforts to reassert its presence in the Balkans, Putin expressed interest in expanding capital investments, power networks and pipelines. He also supported the idea of an “energy ring” in the Black Sea region, which he said could help outline the parameters of a common power grid in Europe. 
Putin was also expected to touch on Serbia’s breakaway province of Kosovo and other international issues during bilateral talks on the sidelines.

TITLE: Venezuela Targets Eight Russian Submarines
AUTHOR: By Henry Meyer
PUBLISHER: Bloomberg
TEXT: MOSCOW — Venezuelan President Hugo Chavez said that he will discuss the purchase of eight Russian submarines when he meets President Vladimir Putin this week.
Chavez, in an interview broadcast late Sunday on Russian state network Channel One, said that the vessels were needed to protect Venezuela’s territorial waters from the U.S.
“Until recently, it was just a rumor that Venezuela plans to buy eight Russian submarines, but it is better to hear these things first-hand,’’ Chavez said in comments translated from Spanish into Russian. “This will be one of the topics we will discuss with President Putin.’’
Chavez, who is using his country’s oil wealth to promote socialist policies across Latin America and counter U.S. influence, is continuing an arms buildup that has cost his nation more than $4.3 billion since 2005.
Russia is negotiating a sale of as many as nine diesel- powered submarines that are worth about $2 billion, the Kommersant newspaper reported June 14.
Chavez wants the vessels to break a potential U.S. blockade of Venezuela’s offshore oil fields. The sale may become a new source of tension in Russian-American ties, the Moscow-based newspaper said.
Chavez begins an eight-day trip at the end of this week to Russia, Belarus and Iran, where he is expected to sign a series of energy and defense cooperation accords, courting allies who are also at odds with the U.S. Belarus and Iran are both subject to current U.S. sanctions, and Russia has clashed with the U.S. over President George W. Bush’s plan to build a missile-defense shield in eastern Europe. Putin plans to meet Bush in Maine on July 1, days after his talks with Chavez.
Venezuela spent $4.3 billion on arms in 2005 and 2006, more than China, Pakistan or Iran, according to a U.S. Defense Intelligence Agency report. More than $3 billion of that was spent in Russia, where Venezuela has signed contracts to buy 100,000 Kalashnikov rifles, 50 military helicopters and 24 Su-30 jet fighters, the report said.
The U.S. last year warned that quantity of fighter jets “exceeded Venezuela’s defense needs’’ and could destabilize the region. It suspended arms sales to the country in May 2006.

TITLE: Chaika to Create New Unit To Fight Money Laundering
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Prosecutor General Yury Chaika said Friday criminal businesses and money laundering posed a threat to the country’s economic development and announced the creation of a special anti-corruption unit that will soon be set up within his office, Interfax reported.
“Money laundering conducted through the conclusion of deals and financial operations allows organized-crime groups to infiltrate the legal economy and even carry out illicit activities by producing new schemes for it,” Chaika said at a meeting of law enforcement chiefs.
The anti-corruption unit would draw on experience from similar units in Spain, Chaika said.
“It wasn’t incidental that I went on a recent trip to Spain,” Interfax quoted Chaika as saying. Spain’s efforts have won praise from the Council of Europe and the experience is now being applied in other European countries, he said. Last year, the number of money laundering related crimes brought to light increased by 7 percent, and those committed by organized crime groups rose by one-third,” Chaika said.
Almost 7 billion rubles ($270 million) in illegal incomes were laundered last year, Interfax reported, citing data from the prosecutor’s office. 
A total of 3,500 such criminal cases were sent to court, yet only few more than 500 people have been convicted, the statement said.
The authorities in charge of the investigations had not shown sufficient “initiative in exposing such crimes,” it said.
Transparency International said in a report last month that Russian authorities had increased their influence over the country’s judicial system over the past few years and had done little to tackle corruption in the courts.

TITLE: Former Dissident Returns With Charitable Intent
AUTHOR: By Olga Kalashnikova
PUBLISHER: Special to The St. Petersburg Times
TEXT: The number of charitable organizations has exploded in recent times — each has its own history and that is often predetermined by a number of particular events. The emergence of the foundation Open the World to Children was and remains bound to the life of its President and co-founder Herman Obuhov. 
The establishment of such an organization can be seen as a logical progression of Obuhov’s own destiny, of everything that he has endured and overcome throughout his life.
Obuhov was born in 1949. His father was a scientist. Although initially he followed in his father’s footsteps and got an engineering diploma, Obuhov soon understood that a career as an engineer was not for him. Instead he threw himself into the sphere of social activities. A member of the Komsomol organization, he was soon elected deputy secretary of international relations but Obuhov was not in a rush to join the Communist party. 
“My job gave me an opportunity to go abroad several times. Many nice talented people called at our house. Thus I quickly understood what was happening in reality and saw that side of the Soviet life that the majority of citizens could only imagine,” said Obuhov.
Ultimately though, it was only when he miraculously survived a car accident that his life really began to change. 
 “I began to think more critically and as a result my next trip to Scandinavia was cancelled by the authorities.”
Obuhov started researching the roots of Communist thought, and began considering the meaning and the essence of the Soviet one-party system. 
His analysis of Communist and Socialist ideas and of their practical realization was expressed in a book, where he concluded that the totalitarian system had no future. 
“I communicated with foreign tourists, to American professors and even western journalists. Moreover, I had contact with people who were considered enemies of the Soviet Union. In the West they published one of my outspoken articles about Soviet life,” said Obuhov.
“I only dared to contact them a few times, but it was enough to become a potentially “troublemaking” person for KGB.”
When he tried to take his manuscript to Moscow to Ania Chevallier, a representative of French publishing-house Gallimard, he was arrested and charged with “anti-soviet agitation and propaganda.” It was 1981.
“And so I found out what a Gulag was.”
He spent four years in the labor camp and then two years in exile. 
“When I came back to Leningrad I was forced to leave the country,” said Obuhov.
“U.S. President Ronald Reagan had promised political asylum for Soviet dissidents. My name appeared on the U.S. Congress list of those eligible for asylum.”
In 1988 he arrived in New York as a political refugee. In the U.S. Obuhov worked at Yale Medical Center as an engineer working on medical equipment, helped launch the Russian-American Council for Economic Development, and worked at Hewlett-Packard. But Russia was never far from his thoughts and in 1997 he finally returned after having been naturalized as a U.S. citizen.
“I saw children suffering, especially the poor.”
There are 1.5 million disabled children and orphans in Russia. In St. Petersburg and Leningrad Oblast alone there are 15,000 children who are capable of study but who for various social and economic reasons are denied an education. 
“The government and political parties are not addressing this problem. There are no other organizations in the city that focus on educating disadvantaged children.”
“But children need a good education to feel as if they belong. Then they can find their place in this life and their physical restrictions will be of no importance.”
Although the beginnings of such an organization was launched in 2002 in the U.S. in 2006 Obuhov created an analogue in St. Petersburg, also called Open the World to Children, in association with the St. Petersburg Union of Entrepreneurs and three other organizations.
The aim of the project is to promote the education, self-development and adaptation of disabled children and orphans by supplying them with computers and special programs. The foundation has a unique agreement with Microsoft Corporation and has already set up two computer classes for orphanages in St. Petersburg and Leningrad Oblast and supplied a few PCs for disabled children. 
Obuhov believes he and his team are fated to be successful. 
“These are the same human rights that were undermined in Soviet times and I paid a high price for it. Here it is the rights of children, the rights of our smallest citizens, that are being abused and there is practically no one to protect them.”
Obuhov believes that while education gives a person everything they need, it is especially important for disabled children or orphans. 
“One has to rectify the situation. The more education we can give to such children, the more we make headway towards a democratic society.”
Obuhov still finds time to write and publish books and articles related to the problems facing Russian children as well as more general political issues.
www.otwtc.org

TITLE: Economic Experiments at the Border
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The North West region of Russia, with St. Petersburg at its center, is set to become the test ground for new forms of direct inter-regional cross-border agreements between Russia and the EU that it is hoped will boost trade and investment between the two economic blocs.
In May, Russia’s Ministry for Regional Development signed its first agreement with the European Commission that would help to establish and support direct contacts between the Russian and EU regions, bypassing national governments. 
Small regional towns in Russia do not yet have the authority to sign direct agreements with foreign cities across the border. Regional governments have been seeking to increase their powers but without little success: Russia lacks the legislation that would frame and regulate these contacts. The very term “cross-border cooperation” does not exist in Russian law.
“The economic gap between various regions in Russia is great and still increasing, and therefore general memoranda do not make much sense because what is most needed is tailor-made partnerships in specific areas where particular needs are great,” said Pedro Henriques, a counsellor  of the Delegation of the European Commission to Russia. “The agreement can be used as a good starting point to look for a common ground between different regions.”
Henriques attended a conference about cross-border cooperation held in Moscow at the end of May. The event, focusing on the prospects and obstacles for co-operation between Russian and its Baltic and Nordic neighbors, attracted politicians, businessmen and academics from Russia, the Baltic region and the Nordic states.
Speaking at the conference, Slava Khodko, chairman of the board of the St. Petersburg-based Northwestern Agency for Investment and Development, suggested that the city of St. Petersburg or the whole of the North West region is experimenting with possible models of cross-border cooperation that could be applied to other regions in Russia.
“If they prove successful, then it can be safely used in the other regions,” Khodko said.
Across Russia, 49 regions have borders with foreign countries but the North-West region is widely considered a champion of cross-border collaboration.  In May, an ambitious new project with a budget of 508.693.39 euros was launched in St. Petersburg. Titled BEN-East (the Baltic Euroregional Network), the project, aimed at promoting cross-border ties between regional authorities, is funded by the Nordic Council of Ministers and the EU and will run for two years.
“The largest and most significant component in our cooperation with Northwest Russia is our program for mobility and network activities that officially began this year,” said Halldor Asgrimsson, Secretary General of the Nordic Council of Ministers. “Through this at least 500 Russians will be able to participate in study programs in Nordic countries each year. The priorities of the program will be public administration, research and education, the private sector and civil society.” 
Russia’s trade with the EU has rocketed over the past five years. Fifty-five percent of Russia’s export go to EU states and Russia is the EU’s third-largest exporter, after the U.S and China. Russia also holds fourth place among importers of products produced in the EU. At present, the annual EU budget for projects in Russia amounts to 30 million euros. Priority spheres include transport, energy, environment, tourism and culture. 
Cross-border cooperation was discussed during a politically tense Russia-EU summit in Samara in May, when Russia pledged to allocate 200 million euros to fund joint cross-border projects with the European Union, in addition to 300 million euros assigned by the EU for seven cross-border programs to run between 2008 and 2013.
Russia has been trying to shift its relations with the EU into the sphere of “equal partnership” on all stages, with joint funding, joint planning and joint implementation. Russian officials have argued it is time to end what they call “the era of donors and recipients.” But the idea of equal partnership does not equally appeal to all EU member states, and Russia is criticized for failing to adhere to democratic standards.
Pekka Jarvie, a counsellor with the regional development department of Finland’s Interior Ministry warned against political considerations influencing or dictating the policies of economic cross-border cooperation. And he said it is high time to end the practice of wasting huge sums of money in vague projects launched in the name of improving cross-border ties.
“What is missing and what should become a top priority, is a stock of efficient control tools over the funds involved in joint projects,” the Finnish official said. “For example, if there is a case of misappropriation of money by a regional or another authority, then there has to be a detailed scheme stipulating the rules of paying it back.”
Earlier this year, Vasily Likhachyov, deputy chairman of the International Affairs Committee of the Federation Council criticized relations between Russian parliamentarians and delegates of the parliaments of EU states within PACE (Parliamentary Assembly of the Council of Europe), and blamed the organization for failing to push forward any initiatives on developing legislation that would facilitate cross-border activities. 
“Our delegates treat each other worse than some divorced spouses,” he said. “At times, it seems they completely ignore each other’s existence, or even behave as if they are unaware of any common goals, interest or ground.” 
In the meantime, Vitaly Shipov, deputy minister of regional development and former mayor of Kaliningrad said that even in the absence of coherent legislation, political will can work wonders at a single frontier point.
“About a month ago I was driving my car to Kaliningrad, passing the Lithuanian and Belarusian borders,” Shipov recalls. “In Lithuania, the whole process was quick and painless, coming down to about ten minutes of sorting out the formalities. But crossing the border with Belarus took over the whole of six exhausting hours. We were hopelessly stuck there for no obvious reason.” 
Shipov felt the key to the efficiency he saw in Lithuania was in a modest-looking advertisement for an anti-corruption hotline that people can call to report unnecessary procrastination, the extortion of money, discrimination and hate speech of any kind.
“I have no idea how often that line is actually used but the presence of the advertisement does what it should do,” Shipov said.

TITLE: 2nd Black Sea Line For Gazprom, Eni
PUBLISHER: Combined Reports
TEXT: ROME — Gazprom and Italian oil firm Eni unveiled a plan Saturday for a big new pipeline to take Russian gas under the Black Sea to Europe, undermining an earlier plan to extend a Turkish route.
The 900-kilometer South Stream pipeline would come ashore in Bulgaria and then branch to Austria and Slovenia in one spur and southern Italy in another, Eni CEO Paolo Scaroni said at a news conference with Gazprom deputy CEO Alexander Medvedev and the two countries industry ministers.
Scaroni said the project would now go through feasibility studies and that construction might start as early as next year. 
It will carry 30 billion cubic meters of gas per year, enough to supply Greece and Bulgaria, Industry and Energy Minister Viktor Khristenko told Vesti-24 television.
The new pipeline will provide a direct route into Italy and mirrors Gazprom’s project with E.ON and BASF to build the Nord Stream pipeline to Germany. South Stream will avoid having to send gas through Ukraine and Belarus, while Nord Stream bypasses the Baltic states — all of which often have tense political relations with Russia.
“Gas is a political commodity nowadays; economically speaking, this project is not really justifiable,” Vladimir Matias, managing partner of Asset Capital Partners, said by telephone from Vienna.
Saturday’s agreement “underlines that Italy is playing ball with Russia” to secure future gas supplies, Matias said.
At least some of the gas will come from fields previously operated by bankrupt oil firm Yukos. 
South Stream will come online three years after getting the necessary approvals, with the project costs shared equally by the two companies, the firms said.
“The cost of the project and the distribution of stakes among the partners will be decided after the feasibility study, which is currently being done by Italy’s Saipem,” Gazprom spokesman Denis Ignatyev said. Saipem was also the contractor for the Blue Stream pipeline from Russia to Turkey, also jointly owned by Gazprom and Eni. Gazprom has previously talked of expanding Blue Stream to southern Europe and Israel, but that would conflict with the new South Stream plan.
“We’re going to continue to work with Turkey on plans to supply our gas across its territory and onward to Israel,” another Gazprom spokesman, Sergei Kupriyanov, said.
He declined to say where that would leave the idea of expanding Blue Stream to southeastern Europe.
South Stream is also likely to dash hopes of Gazprom joining the Nabucco pipeline project, a 4.6 billion euro ($6.2 billion) plan led by Austria, to carry Caspian and Middle Eastern gas to Europe via Turkey and the Balkans.
Eni’s existing dominance of the Italian gas market may make winning regulatory approval for the southern route more difficult. Only one of the two proposed pipelines within Europe may be built, and the Nord Stream route has a higher priority, Scaroni said on the sidelines of the briefing.
The newly proposed pipeline also carries political risk, some investors said.
“The gas will have to cross through eastern European countries, and eastern Europe hasn’t reached the level of political stability that makes for a good investment environment,” said Giorgio Mascherone, chief investment officer at Deutsche Bank in Milan, who helps manage 32 billion euros ($43 billion).
Apart from Germany, Italy is Gazprom’s second biggest customer outside the former Soviet Union, relying on Russia for around 22 billion cubic meters of gas per year.
The companies signed an agreement last year that lets Gazprom sell gas directly on the Italian market, a key part of its strategy to control all revenue from its gas to avoid losing most of the value to end-user suppliers.
For Eni, South Stream is a chance to export gas from assets it bought at auction earlier this year, when Russia forced the breakup and sale of Yukos. With Gazprom holding a monopoly on exports, that opportunity is a rare one.

TITLE: Gazprom Gets Kovytka Gas Field on the Cheap
AUTHOR: By Miriam Elder
PUBLISHER: Staff Writer
TEXT: MOSCOW — Gazprom bought TNK-BP’s stake in the troubled Kovykta gas field for a knockdown price Friday in a landmark deal that ends years of wrangling over BP’s flagship project in Russia.
The buyout underlines the Kremlin’s determination to consign foreign oil firms to the role of secondary partners in the country’s energy sector. Plans for an investment partnership among Gazprom, BP and TNK-BP, which were signed as part of the deal, could help Gazprom overcome Western resistance to its ambitions abroad.
TNK-BP agreed to sell its 62.9 percent stake in Rusia Petroleum, which holds Kovykta’s development license, to Gazprom for just $700 million to $900 million — a paltry sum for a majority share in a project due to be worth some $20 billion when it is completed.
The agreement was signed at a Kremlin ceremony overseen by First Deputy Prime Minister and Gazprom chairman Dmitry Medvedev, who is a leading contender to succeed President Vladimir Putin.
Neither Putin, who has made scathing remarks about TNK-BP’s acquisition of the Kovykta license and stewardship of the field, nor BP’s new chief, Tony Hayward, attended the signing.
Buoyed by record high oil prices, Putin has stepped up the drive to bring oil and gas reserves back into the folds of the state as his presidential term nears its end in March 2008.
Friday’s deal left the ultimate fate of TNK-BP, a 50-50 joint venture formed between BP and a trio of Russian oligarchs in 2003, undecided.
The Russian shareholders — Mikhail Fridman’s Alfa Group, Viktor Vekselberg’s Renova and Len Blavatnik’s Access Industries — can opt out of the partnership at the end of this year. Gazprom has said it would like to buy them out, but TNK-BP publicly denies any negotiations on the issue with the state-run gas giant.
“This historic agreement lays the ground for powerful cooperation between BP, TNK-BP and Gazprom,” Hayward said in a statement released after Friday’s signing.
The deal gave TNK-BP the option to buy back a blocking stake of 25 percent plus one share in Rusia Petroleum at an independently verified market price. 
The call option will come into force once the final sale agreement is signed within three months, and will be valid for one year.
In addition to Kovykta, a giant field in eastern Siberia estimated to hold 1.9 trillion cubic meters of gas, Gazprom also formed a strategic alliance with BP that should ease its entry into the British market.
The two companies and TNK-BP signed a memorandum of understanding to look for investment opportunities of at least $3 billion, in Russia and abroad.
Robert Wine, a BP spokesman in London, said the joint venture would involve “a probable asset swap somewhere around the world,” but provided no further details.
Gazprom would likely look at BP’s downstream assets in Britain and elsewhere, analysts said. Putin has stressed the principle of “strategic reciprocity,” saying that Russian companies should be rewarded with equity in other countries in exchange for allowing foreigners to operate in Russia.
“We are happy to be in Russia,” Wine said. “An important part of our future strategy is to make the most of what we can in Russia.”
The country is key to BP’s growth, with TNK-BP accounting for one-quarter of its output and one-fifth of its reserves.
“The rules of the game are very clear now in Russia and BP understands that,” said Joseph Stanislaw, an independent senior adviser to Deloitte & Touche.
“A piece of a very big field is better than no piece at all,” he said.
Putin has made it clear that foreign involvement in the strategic energy sector will be limited to 49 percent. A much-delayed law enshrining the concept is due to be passed by the end of the year.
“Now there are no big projects that are in violation of the new subsoil [bill] and we can expect to see progress” on it being passed, said Chris Weafer, chief strategist at Alfa Bank.
The dismantling of Mikhail Khodorkovsky’s Yukos, once the country’s largest oil firm, and Gazprom’s entry into Sakhalin-2 last year, have decisively swung the balance of power in the energy sector back toward state ownership.
Friday’s deal also appeared to put to rest the licensing troubles surrounding Kovykta. 
The Natural Resources Ministry had accused TNK-BP of producing too little gas at the field. TNK-BP argued it could not produce the 9 billion cubic meters per year stipulated in the license since Gazprom had blocked construction of a pipeline to China and local demand was insufficient. TNK-BP had lobbied for years for the license to be amended.
A ministry spokesman said Friday that the body was ready to review the Kovykta license and could change the terms by the end of next week.
“As the ownership of the field has changed, we are ready to consider changing the license,” spokesman Rinat Gizatulin said. “We are ready to listen to Gazprom.”
In December, Shell ceded its controlling stake in the Sakhalin-2 project to Gazprom after ministry officials threatened to revoke its license over purported environmental violations.
At a Kremlin meeting announcing the sale in December, Putin declared that all environmental problems had been resolved.
The Kovykta field did not fall under TNK-BP’s publicly traded holding, but was seen as a bellwether of the company’s future activities in Russia.
BP and TNK-BP went to some lengths to put a positive spin on the loss of Kovykta, which is expected to be a key source of gas supply to the lucrative Chinese market.
“This is an important development in the future growth of TNK-BP,” the company’s CEO, Robert Dudley, said in a statement. “We look forward to broadening our working relationships with Gazprom and BP and to further developing our Russian asset base.”
BP had long been seeking to appease the government in a bid to hold on to Kovykta. 
It sank $1 billion into state-controlled Rosneft’s initial public offering last July and was criticized for agreeing to take part in auctions of Yukos assets earlier this year.
The $700 million to $900 million price tag is well below the stake’s value, analysts said. 
TNK-BP has already put $450 million into the field, which is at the earliest stages of development, producing less than 1 bcm per year.
“There is disappointment with the valuation [of Kovykta], but it’s been very difficult to be precise as to how much the project is actually worth,” Alfa Bank’s Weafer said. “For BP, they will view this as the cost of getting better entry into the game.”
BP initially bought into the field in 1997, paying $571 million for a 10 percent stake in Sidanco, which in turn held a 60 percent stake in Rusia Petroleum and was eventually folded into TNK-BP.
In a briefing with foreign media representatives earlier this month, Putin attacked international and private Russian oil firms for using illegal means to acquire production licenses in the country.
“I am not even going to talk about how they obtained this permit,” Putin said of TNK-BP’s license for Kovykta. “We will let it rest in the conscience of those who did this at the beginning of the 1990s.”
Referring to Shell’s agreement to develop Sakhalin-2, signed in 1994, he said it was one example of “situations that were clearly beyond the pale of the law.”
Gazprom and Rosneft have emerged as the biggest winners in Putin’s strategy of retaking control of key energy reserves.
A Gazprom spokesman said Friday the company was not in talks to buy out Rusia Petroleum’s other two shareholders, Vladimir Potanin’s Interros holding and the Irkutsk regional government.
TNK-BP also sold Gazprom its 50 percent stake in East Siberian Gas Company, the company carrying out Irkutsk’s re-gasification in conjunction with the regional government, as part of Friday’s deal.
Weafer said the agreement played out well for both BP and Gazprom.
“This deal will allow Gazprom to grow its international presence without running into the political slack and negative reaction it has faced in recent years, especially in the U.K.,” he said.
Earlier this month, outgoing British Prime Minister Tony Blair warned that increasingly frosty relations between Russia and the West would harm foreign investment in the country.
Tim Lambert, vice president at British energy consultancy Wood Mackenzie, said Russia’s image would have been harmed more if the Natural Resources Ministry had followed through on threats to revoke TNK-BP’s license.
“It’s good that it has been resolved without revocation of the license,” he said. “That would have been a blow.”
Representing TNK-BP at Friday’s meeting were Dudley and Vekselberg, who also heads TNK-BP’s gas business. James Dupree, a BP vice president, also attended.

Staff Writer Anatoly Medetsky contributed to this report.

TITLE: Gazprom Ups Stake in Oil
PUBLISHER: Reuters
TEXT: MOSCOW — Gazprom Neft, the oil arm of Gazprom, will raise its stake in a joint venture with U.S. oil major Chevron to 75 percent later this year, Interfax reported Friday.
“In the next two to three months Gazprom Neft will gain 75 percent of the joint venture with Chevron. It is also planned that property and licenses will be transferred to this venture in the near future,” Interfax quoted Gazprom Neft president Alexander Dyukov as saying.
Gazprom Neft now has only 30 percent of the Northern Taiga NefteGaz venture, set up at the start of this year with the aim of producing hydrocarbons in western Siberia.
Gazprom Neft already said it had agreed with Chevron that it would raise its stake to over 50 percent, but at the outset Chevron had contributed more to the venture so it had a bigger share.

TITLE: PwC Withdraws Yukos Audits
PUBLISHER: Bloomberg
TEXT: MOSCOW — PricewaterhouseCoopers said it withdrew a decade of audits of financial reports for bankrupt oil firm Yukos on the conclusion it may have inaccurate information, the Wall Street Journal reported Sunday.
The decision to withdraw the audits for 1994 through 2004 may aid the case against former Yukos CEO Mikhail Khodorkovsky, who is accused of fraud and money laundering at Yukos, the paper said, citing a company statement.
The accounting firm said it had received new evidence during the past few months that led it to believe it may have received inaccurate information from the company’s former management, the newspaper said.
PricewaterhouseCoopers, which has appealed a Russian court decision that found the auditor guilty of helping Yukos avoid taxes, may face the loss of its license in Russia if it is ultimately found guilty, the Journal said.

TITLE: The Cost Of A Local Daughter
AUTHOR: By Anna Shcherbakova
TEXT: St. Petersburg largest bank, PSB, or Industry and Construction Bank, no longer exists. The end had already been predicted when the state-owned giant Vneshtorgbank, or VTB, purchased 75 percent plus three shares of the bank in late 2005. It became obvious when VTB president Andrei Kostin said that his bank was going to acquire PSB. And it was still not in doubt even when VTB postponed its acquisition for a while because of its own IPO. 
Earlier this year PSB shareholders decided to change the bank’s name to Bank VTB North-West. And last week bank officials announced that that PSB was to be rebranded — a regional advertising campaign in July and August is set to promote the bank’s new name through billboards, the press and television and will cost 30 million rubles (about $1,15 million). The same amount will be spent on the external and partial internal refurbishment of 150 PSB sales points and 700 ATM-machines. 
30 million rubles is not a huge amount according to advertising industry experts. Vneshtorgbank spent much more when it launched its global brand VTB for a dozen of its ‘daughter’ banks though it did not publish its spending. On the other hand, VTB’s previous campaign and certain other activities has made it well known in the region, where it is going to promote its local ‘daughter.’ 
However, an advertising budget of more that $1 million is still pretty big for the St. Petersburg market. Among local banks, PSB has spent the most on advertising.  Last year PSB spent 84 million rubles (about $3 million) and in 2005 188 million rubles (over $7 million) for the same end, according to the bank’s financial data. Some of this money, spent on billboards and other image-building outdoor ads, was completely wasted — what is the point of promoting a bank, whose name will soon be changed. 
The new name and status of PSB may cause some problems. Traditionally, St.Petersburg clients prefer local banks. The roots of this patriotism goes back to the 1990s when Moscow-based banks first launched their branches and then went bankrupt after the financial crisis of 1998. 
Another problem for PSB is the long transition period. The rumors of VTB’s acquisition started in 2003. About a year later the negotiations received their first official confirmation from Vladimit Kogan, controlling shareholder and head of PSB supervisory board. Then VTB announced it was to purchase 25 percent plus one share of PSB. Before the deal was closed and VTB got full control over PSB Kogan and his partner David Traktovenko admitted they owned shares directly (not through offshore companies). That should lower the amount they spend in taxes, experts say. 75 percent plus three shares were purchased for $577 million, VTB said in its Eurobond memorandum. Throughout the whole of this period PSB employees have been in the dark about their future — something that could be bad for business, especially the part based on client relations. At the same time some accounts were transferred to retail bank VTB24. As a result the bank’s development slowed, PSB assets grew only 4.9 percent in the first quarter of 2007, while top-eight of St. Petersburg banks increased their assets by 10.8 percent and top-100 Russian banks by 12.8 percent. 
Farewell PSB, the city’s largest bank! 

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

TITLE: A Conservative Approach to Projections
AUTHOR: By Ilya Sokolov
TEXT: In May, the State Duma approved the government’s three-year budget for 2008 to 2010 on first reading. This type of planning is designed to increase the predictability of budgetary and tax policies, decrease the risk of influence of factors like political jockeying ahead of the presidential election in 2008, and to provide a clear understanding of the government’s intentions. In this sense, it is a welcome change.
It is difficult, however, to provide a simplistic assessment of the budget after just the first reading. It is not really a conservative budget, as it calls for a departure from a number of policies of recent years, including channeling surplus oil and gas revenues into the stabilization fund and restraining growth of budgetary expenses. This budget includes considerable increases for social investment and an active reduction of infrastructural barriers to economic growth. This is an evolutionary rather than a revolutionary transition. Increased expenditures are tied to anticipated economic growth and improvements in the quality of life over the medium-term. It is also based on obvious expenses related to the transition to the new budgetary model, and playing it safe while increasing spending to the maximum allowable level to satisfy a number of demands.
The character of the proposed changes is clearer when compared to that of recent budgets.
In 2005 and 2006, revenues were just less than 24 percent of gross national product. This has fallen to 18 percent of 19 percent. The sharp fall is attributed to a projected fall in world oil and gas prices, a slowdown in the growth of mining and coal exports, and a strengthening of the ruble. Oil and gas revenues, a major part of budget income, are expected to fall to less than half of current levels — from 10.9 percent of GNP in 2006 to 5.2 percent in 2010.
Spending is expected to rise significantly at the same time, from around 16 percent of GNP between 2004 and 2006 to more than 18 percent for 2008 to 2010. The result is that budget surpluses, which reached 7.5 percent in 2005 and 2006, fell to 2 percent in 2007 and will hit zero in 2009. 
This growth in expenses and the departure from previous budget policies stem from the implementation of two groups of initiatives presented during Putin’s annual state-of-the-nation address.
The first group involved increased social spending, including raises for public sector employees and those in the military, higher pensions, and support for measures to improve the demographic situation in the country.
The second consists of government investment in the economy, primarily in transportation and energy, along with stimulation of economic innovation in industries like nanotechnology, civil aircraft construction and shipbuilding.
These initiatives will increase social spending from 2 percent of GNP in 2005 and 2006 to 2.5 percent of GNP from 2008 to 2010. Spending in the second group will also rise, from 1.2 to 1.3 percent of GNP to between 2 and 2.1 percent of GNP.
So the new three-year plan sets out to accomplish the difficult maneuver of increasing spending sharply during an expected decline in revenues as a percentage of GNP. This should stimulate development in areas outside the oil and gas sector and decrease economic dependence on world demand for energy resources. 
Success here depends on the accuracy of revenue projections. We already know that oil and gas income made up 40 percent of all revenues in 2005 and 2006. Official projections anticipate a drop in the price of Urals blend oil from $55 per barrel at present to $50 in 2010 — a figure below that of most independent projections. The U.S. Energy Department predicts a price of $57 per barrel in 2008, higher than Russia’s budget forecast of $53. But the U.S. forecast calls for a range of from $41 to $58 per barrel in 2010, yielding a mean price of $50, which matches the estimate from the Economic Development and Trade Ministry.
Given the volatility of oil prices and their importance to budget revenues, tax revenues take on added importance — particularly those taxes not generated from fluctuating raw materials markets. Here, the government’s predictions are less than convincing.
The budget foresees reduced profit tax revenues, which were from 1.8 percent to 1.9 percent of GNP between 2005 and 2007, to 1.4 to 1.5 percent of GNP from 2008 to 2010. This trend is based on projected reductions in energy export revenues, but will be partially offset by an increase in Value Added tax revenues, from the current 5.7 percent of GNP to 6.2 percent of GNP in 2008, and not less than 7 percent of GNP for 2009 and 2010.
The introduction of amendments to tax legislation in recent years has meant a fall in VAT revenues. In 2004, the minimum rate was lowered from 20 percent to 18 percent, a list of real estate and other land-related transactions not subject to taxation was introduced. The first four months of 2007 have shown these changes to have had a lasting influence on budget revenues, and not a one-time effect as earlier expected. 
There has also been a reduction as a result of a new, faster procedure introduced in 2007 for reimbursement of VAT duties paid. Additionally, revenue projections have not accounted for the probable transition in 2008 to a special system of registering legal entities and individual businesspeople as VAT payers. The discrepancy between actual VAT revenues and projected revenues, according to our calculations, could reach 1.5 percent of GNP. This represents about 8 percent of planned budget revenues for 2008.
Other factors will also play a role in determining whether the three-year project is successful. Because many companies in the oil and gas sector will exhaust current deposits, with a resulting rise in extraction costs, there will be a drop in profits and tax revenues in the sector. Medium-term growth in the manufacturing sector is also likely to be slower, while that in construction and services will pick up pace. This represents expansion in economic sectors in which it has traditionally been more difficult to collect taxes.
Finally, given the long-term character of the numerous “priority” social projects and investment projects, and the difficulty the government has already run into in bringing them into being — the national health services project is a good example — it is likely that costs will be higher. This is the case with most transportation infrastructure projects targeted for investment fund support and with deadlines of from three to seven years. It is also unlikely that cost projections will be indexed, and likely rises in costs will only become clear once the projects are underway. This will mean higher spending.
The conclusion from all of this is the following: Increased expenditures can only be covered if world energy prices exceed budget projections and oil and gas revenues account for a larger portion of revenues than budgeted. Further, expenditures have only really been projected for the short term and are tied to the identification of priority projects from the top. The projections do not fully take into account the effect hidden expenses associated with each will have on the economy. Finally, given the volatile nature of world commodities markets, spending increases may merely serve to postpone additional spending or stand in the way of reduced expenditures relative to revenues forecast for 2010.

Ilya Sokolov is the head of the Budgetary Policy Laboratory at the Institute for Economy in Transition. This comment appeared in Vedomosti.

TITLE: All Under One Roof
AUTHOR: By Konstantin Sonin
TEXT: One of the reforms touted by President Vladimir Putin when he came to office was “deregulation”: decreasing the administrative burden on small and medium-size businesses. But despite the fact that this was clearly needed, it soon became apparent that success on this front was unlikely. The main task — to decrease the role of bureaucrats and ease the lot of private entrepreneurs — soon seemed to run counter to a broader policy of increasing the state’s role in the economy. Even though laws to underpin the reform were enacted from August 2001 to June 2003, the advent of the “Yukos affair” soon thereafter seemed to mark the beginning of a shift to a more statist approach to getting things done.
The recent release of a study of the results of administrative reforms, conducted over the last four years by the Center for Economic and Financial Research and Innovation, showed that improved conditions for small and medium-size businesses can be scored as an improvement achieved during Putin’s presidency.
The study, led by Yekaterina Zhuravskaya, focused on 20 different regions, and 100 companies within each. The center asked the heads of small businesses detailed questions about difficulties they’d encountered. The replies registered improvement on nearly every front. State organizations are strictly observing the laws. Licenses are being issued more quickly and are good for five years, as stipulated by legislation. There are fewer and fewer arbitrary audits and reviews, and it is easier and cheaper to register ownership and rental of property. On paper, the laws were designed to lighten the burden on small firms, and the practice seems to be close to the letter of the law.
This really is an achievement. Putin’s much-lauded “dictatorship of the law” — his constant emphasis on the letter of the law, if not its spirit — which appeared hypocritical against the backdrop of the Yukos affair and to the replacement of direct election of governors with a system based on appointments — appears to have been the right approach when the issue was the formal implementation of a progressive law. 
This deregulation success stands in contrast to the abstract achievements in strengthening the system of governance or victories on the gas front that official and unofficial propagandists love to talk about. 
The entrepreneurs answered questions about the number of hours they spent standing in line at the Federal Tax Service, the number of unwarranted — in their view — inspections they faced and the size of the bribes they paid to register rental property. These results are more than mere television news spin.
Not everything, of course, is rosy. A large percentage of businesspeople complained that they faced problems with the tax authorities. Businesspeople everywhere complain about taxes, but not as often about the people collecting them.
Economists Andrei Shleifer and Robert Vyshny once proposed what could be called the “one krysha” theory of corruption. They took the traditional slang meaning of krysha — literally “roof,” but used to describe criminals running extortion schemes by offering businesses “protection” — and applied it to bureaucratic bribe-takers. 
The idea is that when the bribe-taking process is totally decentralized, and the health inspector, the fire department, and all the other inspectors act without any coordination, then the burden on companies ends up being greater than when all the officials on the take operate as a single krysha. 
This idea likely offers the best explanation for the deregulation success. In order to decrease the burden on small business, there had to be a decrease in the number of kryshas, that is, the state agencies taking bribes from entrepreneurs for the right to do business. In theory, laws should be passed that would regulate the work of officials. In practice, actions only had to be taken to organize the way they are implemented.

Konstantin Sonin is a professor at the New Economic School/CEFIR.

TITLE: No Place for Nuclear Secrets
AUTHOR: By Cristina Chuen
TEXT: A brouhaha began brewing in the Arctic a couple of weeks ago, as the Norwegian public was buffeted with news of a new scientific study pointing to nuclear dangers at an old Russian naval base located on the Kola Peninsula, about 50 kilometers from the Norwegian border. Some Russian officials responded by labeling the study a “provocation.”
In fact, the risk of a nuclear accident at the Andreyeva Bay base is very small but not nonexistent. Assurances by State Duma Deputy Valentin Luntsevich that control systems “provide a 99.9 percent guarantee that no explosion can take place” are cold comfort when the 0.1 percent remainder represents the chance of a grave nuclear incident.
The real issue is not simply whether Russia’s nuclear legacy is still dangerous. It is whether Russia will finally share all of the information necessary to make wise decisions on handling the problem. Promises Norwegian Prime Minister Jens Stoltenberg received during a four-day visit to Russia at the beginning of June that the removal of spent nuclear fuel from Andreyeva Bay would begin in 2010 leave open the question of whether the information needed to repackage the fuel safely is available. A further question is what will happen to the nuclear fuel after it is moved.
The Soviet Union built 250 nuclear-powered submarines and 14 other nuclear-powered vessels; more than 200 of these vessels have already been taken out of active service. Russia also inherited huge quantities of radioactive wastes and nuclear fuel. There are over 1 million metric tons of radioactive equipment containing over 80 million Curies in total radioactivity in Northwest Russia alone (the Chernobyl accident, by comparison, reportedly released some 50 million Curies of radioactive substances). Much of this material is at Andreyeva Bay, where nuclear fuel from about 100 submarine reactors has been stored for decades. Given its proximity to the Norwegian border, it is no wonder that for more than a decade Oslo has been trying to get information about Andreyeva, improve site security and safety, and stop the continuous release of radiation into the environment.
Although a lot of work has been done and there are more data on Andreyeva available than for any other nuclear site in Russia, foreign experts assisting at the site still do not have enough information to be sure that projects are being undertaken in the safest possible way and risks minimized to the maximum possible extent. Someone looking for success stories might point to a $800,000 Norwegian project from 1999 to 2000 to divert a brook so that it no longer flowed under a leaking spent nuclear fuel storage site, carrying radioactive materials toward the sea. But there are no hard data to be sure that the project actually succeeded in preventing contamination from entering the local fjord. Even the detailed map of the area that the Murmansk governor personally gave Stoltenberg during this month’s visit — a map of radiation levels that Norway paid for some years ago but that was never transferred to Oslo—leaves many questions unanswered.
The Andreyeva cleanup is now a major focus of the group of eight global partnership against the spread of weapons and materials of mass destruction, and as such is receiving a great deal of attention and money. In addition Norway, Britain, Italy, Sweden and the European Bank for Reconstruction and Development have been cooperating with Russia to secure the site, improve nuclear safety and repair infrastructure so that they can tackle the immense task of removing the nuclear fuel and radioactive wastes — a job likely to take until 2023. There are about 21,000 nuclear fuel assemblies in Andreyeva that were stored in unsafe conditions, including some out in the open air, for decades. According to the new study by leading Russian nuclear institutes published in Atomic Energy, recent examinations of the nuclear fuel storage tanks at Andreyeva indicate that they have been contaminated by salt water, accelerating corrosion of the fuel assemblies inside and increasing risks of a criticality incident — an uncontrolled nuclear chain reaction.
Russia’s foreign partners have long been concerned about this danger and have carried out criticality studies in cooperation with Russia to try to minimize this risk. The recent Atomic Energy article, though, appears to be based on additional data to which Russia’s partners have not had access. Asking for this information is not a “provocation,” but the result of genuine concern. The consequences of a criticality incident — venting radiation into both the surrounding territory and the Barents Sea — would have to be dealt with for decades to come. Any measures that could further minimize this risk should be taken.
Russia’s commitment to remove the fuel is welcome, but the process should not be rushed. The highest risks will come when the fuel is moved. Furthermore, careful consideration must be given to what to do with the fuel after it leaves Andreyeva: The reprocessing facility at Mayak is not yet ready to handle the fuel. If Mayak is ordered to accept the nuclear assemblies before a program is in place to put them in safe storage, the fuel is likely to sit in a storage pond there, endangering the already badly damaged local environment. Moscow needs to make a decision on the long-term disposition of this fuel, and share that decision with its partners so that they can help ensure that removing it from Andreyeva is helping to solve — and not just hide — the problem.
As President Vladimir Putin, who is often blamed for resurrecting old Soviet traditions of secrecy, himself said a few years ago, it is important to “ensure national security interests and maintain the necessary secrecy regime, [but] excessive bureaucratization [and] spy mania” only hinder this work. Thankfully, Moscow recently decided to give its Norwegian counterparts the map of radioactivity at Andreyeva. To further enhance cooperation, and make it possible to honor Moscow’s commitment to begin safely removing nuclear fuel from the site by 2010, the Russian authorities need to engage in a full-scope study of the fuel, including methods for its safe transport and storage post-Andreyeva. It is in the interest of everyone in the Arctic region that the Soviet nuclear legacy be eliminated in the safest possible manner, without triggering either political or nuclear incidents.

Cristina Chuen is a senior research associate at the Monterey Institute Center for Nonproliferation Studies in California.

TITLE: Faithful Ruslans
AUTHOR: By Alexei Bayer
TEXT: What surprised me about Alexander Litvinenko’s poisoning is how many of my American friends in New York, generally so ignorant of Russia, have taken the trouble to learn about the case.
Of course, it is probably the first nuclear terrorist act in history. But I’ve noticed greater awareness of other murky things going on in Russia, as well, such as the murders of maverick journalists. A lot more attention is being paid by the public to President Vladimir Putin’s bellicose pronouncements and Russia’s squabbles with its neighbors. I’ve been getting calls from people I haven’t heard from in years, wanting to know, in essence, what’s going on in Russia.
I find that Russia’s political reality can be best understood through Russian fiction. Today’s Russia, for instance, calls to mind “Faithful Ruslan,” a novella by dissident writer Georgy Vladimov.
Written more than 40 years ago and circulated clandestinely in the Soviet Union, it is a story of a Great Terror labor camp told from a guard dog’s viewpoint. Ruslan, a smart, ferocious German shepherd, finds himself at loose ends after Stalin’s death, when the gates of the camp are thrown open and the prisoners are set free.
Naturally, Ruslan hates the new world, where people can do whatever they want and go anywhere they please. He pines away for the time of blind obedience and recalls fondly the power he used to have over the inmates.
The book ends with the arrival of a party of construction workers. As they walk from the train station, former guard dogs spontaneously begin to escort them. The workers turn upon the dogs once they realize that they are being formed into a column, and Ruslan is killed. A similar incident, supposedly, did take place in the mid-1950s on the site of a former labor camp. Writing at the start of Brezhnev’s era, Vladimov no doubt meant his book as a warning against a return to Stalinism. The novella — and especially its prophetic ending — works wonderfully, however as an allegory for Putin’s Russia.
The Soviet system was murderous and misguided, but it was based on an ideology and, however vile the crimes it committed, everything was done in the name of that ideology and followed an internal logic. The Communist Party gave the marching orders and employed the state security apparatus to make sure everybody marched.
Since Putin came to power, his former colleagues from the security services — those who, to use the Russian expression, wore the epaulets — have come out on top. They have appropriated the state and have renationalized lucrative resource industries for their own benefit and profit. They have re-introduced many of the features of the old Soviet Union — from the tightly controlled media to a poor man’s version of the Communist Party, in the form of United Russia. The rhetoric and the pervasive spy mania of the Soviet era are back, and even the Young Pioneers are being revived.
What the system lacks is a bona fide ideology at its core. The nation is being gradually formed into a column, but in the manner you would imagine a pack of guard dogs going about this task — all form but no content. This explains cruel, senseless acts like the botched hostage rescues at Dubrovka and in Beslan. Or Litvinenko’s grotesque murder. Or Russia’s foreign policy, which brings to mind Ruslan snarling at Kiev or Tallinn rather than civilized diplomacy.
Vladimov died in 2003, just as the arrest of Yukos founder Mikhail Khodorkovsky marked the end of the 1990s’ liberalization. It would have been interesting if he could have extended “Faithful Ruslan” along the lines of George Orwell’s “Animal Farm” — how the dogs would have handled the situation had they overpowered the workers and locked them up in the barracks. I suspect it would have looked much like Putin’s vertical of power.

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

TITLE: Triangle of Tolerance?
AUTHOR: By Ali Nassor
TEXT: The formation of a foundation aimed at going global to fight intolerance has sent shock waves through ethnic minority groups because the key figures behind the international institution, which was founded in St. Petersburg last month, have questionable histories on the exact topic they are supposed to address. 
Questions are rife as to whether the Tolerance Foundation for Humanities Research, chaired jointly by Russia’s ambassador to Ukraine, Viktor Chernomyrdin, Prince of Jordan Hassan Al-Talal and Italian banker Giovanni Bazoli, can possibly be an effective tool to fight intolerance on a global scale. More questions are being asked about these key players and if they are genuinely committed to the course they vowed to pursue when the foundation held its opening session.
“There was a time when we went to Darfur [the genocide-stricken region of Sudan] but the natives did not want to talk to us,” said Prince Hassan, a world famous campaigner for inter-cultural and inter-religious dialogue who is also involved in the peaceful settlement of problems in Sudan following an armed conflict believed to have been fueled by cultural, religious and ethnic differences between warring factions. 
The 60-year-old member of one of the world’s most conservative monarchies, and a sophisticated Oxford University graduate, was responding to a question as to why his campaign seemed to sideline members of the very target groups of intolerance for whose rights he claims to fight. 
Taken to task over the foundation’s blueprint — which appears to limit its activities to Europe and the Middle East with a focus on the Arab World, contrary to its loudly trumpeted universal humanitarian objective — the Prince said “the areas referred to in the context are only symbolical, but we actually deal with the whole world.” 
But this seemingly nationalist approach should be expected from the Prince who is the chairman of a 25-year-old Pan-Arab think-tank called the Arab Thought Forum, widely known for its campaign against the Jewish State of Israel. Although he has never gone public with siding with Palestinian party Hamas in calling for the outlawing of Israel in its entirety, he accuses the United States and Western powers of “playing double standards in the region,” citing their failure to recognize “the elected government through the ballot box” and making a farce of “Iran’s non-existent nuclear capabilities, but turning a blind eye to the ‘proven’ Israeli nuclear capabilities.” 
The prince was speaking before Palestinian president Mahmoud Abbas dismissed Palestine’s Hamas-led government earlier this month.
Despite the rhetoric, he is a man Western democracies count on to settle conflicts in the world’s most troubled region, perhaps, thanks to his rebellious nature — manifested in his insider fight against Jordan’s monarchy.
A younger brother of the late King Hussein, who ran his kingdom as an absolute monarchy for 22 years until 1989, the Prince is believed to have crossed swords with his old-fashioned brother. On Hussein’s deathbed in 1999 he declared his son Abdullah heir, instead of Hassan who had been Crown Prince since 1965.
But, in the newly-formed institution, the Prince is serving as comrade-in-arms with Chernomyrdin, the longest serving post-Soviet Russian prime minister, who critics say is a proponent of xenophobia, racial extremism, anti-Semitism and a political loser attempting to recapture lost glory in new guises.
“He is an awkward and indecisive politician,” said Slate magazine of Chernomyrdin, who was co-chairman of the U.S.-Russia Gore-Chernomyrdin Commission, a biannual talking shop during the 1990s that “addressed much but solved little.” He was also once the “all-powerful and extremely wealthy head of Gazprom with his personal wealth estimated at $5 billion” in 1999, a year after he was fired from the premiership, said Slate.
Despite his wealth, Chernomyrdin was never labeled an oligarch, a negative moniker. This is because, according to Jerusalem Viewpoints’ Internet edition, the term is given disparagingly only to Russian men of Jewish heritage who are extremely rich and involved in politics.
The main reason why Chernomyrdin dodged the tag is because he was an anti-Semite himself, says this source. It quotes him as saying, “two Jews have clashed, and now the whole country has to watch this farce,”  in reference to a high-profile feud between media mogul Vladimir Guzinsky and industrialist Boris Berezovsky back in 1999 when Chernomyrdin was president of Gazprom.
In its August 1998 edition, the London-based New African magazine also quoted Chernomyrdin as saying, “Who the hell do you think I’m... wanna me toil like a nigger.”
When Russia waged a xenophobic campaign against Georgians that included deportations and deaths in response to political feuds between the two countries last year, Chernomyrdin called the international human-rights outcry “prattle and insults” against Russia, according to a Ukrainian weekly digest, The Day. Georgian children were evicted from schools as part of the campaign, but Chernomyrdin said “there is no need to pay attention to this,” implying this unusual violation had nothing to do with intolerance, the paper says.
Yet Chernomyrdin, according to his supporters, was the politician who kept the Russian political machine steady for an unusually long time as a prime minister from 1992 to 1998. Critics have hit back, alleging that “when he was fired in March 1998, Russia’s economy was on the brink of collapse.” (Slate magazine.)
But Chernomyrdin is tolerant and moderate, argue his supporters, because he successfully negotiated the release of 1,200 hostages taken by Chechens led by Shamil Basayev in a hospital in southern Russia in 1996. His opponents counter by arguing that he later failed to define Russia’s relationship to Chechnya, leading to war.
Both camps agree that Chernomyrdin is still remembered as the man who managed to backpedal Russian military involvement in support of Serbia’s anti-NATO line in the Kosovo crisis at a time when an overwhelming majority of Russians — including President Boris Yeltsin — took a nationalistic stance in support of their Slavic brothers.
Chernomyrdin was courageous enough to issue a stern warning against the U.S. bombing of Belgrade.
But he did not stop short of blaming the West for not annihilating the Albanian paramilitaries, which he called “terrorists and drug traffickers,”  according to The Washington Post.
The least controversial among the co-presidential trio of the new intolerance-fighting group is Italian professor-cum-banker Giovanni Bazoli.
The 74-year-old Italian philanthropist is reputed for pouring funds to revive the Vatican Bank following a financial scandal that tarnished the image of Catholic church in the 1980s. He has no record of direct involvement in fighting intolerance either in Italy or beyond its borders.
Giovanni and Chernomyrdin were missing at the two-day inaugural conference of the foundation over which they preside. Chernomyrdin had a message read in absentia at the event that was entirely dominated by politicians and scholars from Russia, Western Europe and the Arab World — who noted the absence of other nationalities inside Russia and beyond the Arab World. 
The question as to why St. Petersburg was chosen as the appropriate venue for a conference on tolerance seemed to bother no one. The city’s governor, Valentina Matviyenko, had a message read in her absence which unveiled the city’s five-year Tolerance Awareness Program in a manner akin to someone being defensive about a city that the press has branded Russia’s capital of hate violence following a series of brutal hate-related murders.

Ali Nassor is a freelance contributor to The St. Petersburg Times and a lecturer at the African Department of Oriental Studies at St. Petersburg State University.

TITLE: ‘Chemical Ali’ Sentenced to Hang in Iraq
AUTHOR: By Ross Colvin
PUBLISHER: Reuters
TEXT: BAGHDAD — Saddam Hussein’s cousin, widely known as “Chemical Ali,” was sentenced on Sunday to hang for masterminding a genocidal military campaign that used poison gas against Iraq’s Kurds in the 1980s.
Ali Hassan al-Majeed, looking frail and wearing traditional Arab robes, stood silently as the judge read the verdict. As he was escorted from the Baghdad courtroom, he said: “Thanks be to God.”
“This is judgment day for the aggressors against the Kurdish people,” said Namiq Horamy, as he handed out sweets to colleagues in Kurdistan’s Ministry of Martyrs, which looks after victims of the campaign.
Majeed, whose very name once sparked fear among Iraqis, directed a military campaign against the Kurdish north in which chemical weapons were used, villages demolished, agricultural lands destroyed and tens of thousands of people killed.
The court also sentenced to death Saddam’s defense minister, Sultan Hashim, and a former military commander for their roles in the campaign. Two other commanders received life in prison. Charges were dropped against the former governor of Mosul.
Saddam was the seventh defendant, until his execution in December in a separate trial for crimes against humanity.
Kurds have long sought justice for the so-called Anfal or “Spoils of War” campaign that has left lasting scars on their mountainous region. Prosecutors say up to 180,000 people were killed in the seven-month “scorched-earth” operation in 1988. In a packed visitors gallery overlooking the court, Deputy Prime Minister Barham Salih, a Kurd, and leaders of the largely autonomous Kurdish region watched the verdict being delivered. A witness described their reaction as one of “quiet satisfaction.”
Kurds are a powerful political force in post-Saddam Iraq. They have the presidency and ministers in Shiite Prime Minister Nuri al-Maliki’s cabinet and Kurdistan enjoys a large degree of autonomy from Baghdad.
“As soon as I heard Ali Hassan al-Majeed and Sultan Hashim had received the death sentence I was ecstatic and I began to scream. But the bigger joy would be to see Majeed executed in Kurdistan,” said Shaheen Mahmoud, a Kurdish civil servant, in the northern city of Sulaimaniya.
The International Center for Transitional Justice, a New-York based legal rights groups, said while the trial was a historic day for Kurds it was marred by political interference and fell short of international fair trial standards.
Those convicted can appeal against the verdicts.
Majeed was viewed as Saddam’s main enforcer, a man with a reputation for brutality who was used by the president to crush dissent. He also played a leading role in stamping out a Shi’ite rebellion in the south after the 1991 Gulf War.
During Anfal, thousands of villages were bombed and razed. Thousands of villagers were deported, many executed. Mustard gas and nerve agents were used to clear villages, earning Majeed his grim nickname “Chemical Ali.”
Majeed, now in his mid-60s, admitted during the trial he ordered troops to execute Kurds who ignored orders to leave their villages but not to the use of poison gas.

TITLE: It is Adieu to Arsenal for Thierry Henry
PUBLISHER: Agence France Presse
TEXT: BARCELONA, Spain — French striker Thierry Henry was set to be officially unveiled as a Barcelona player on Monday as he finalizes his transfer from English Premiership side Arsenal.
The 29-year-old underwent medical tests on Monday morning before he was due to be formally presented to the public at the Nou Camp wearing Barcelona’s dark blue and red jersey for the first time.
“It means a lot to come here and play with some of the best players in the world,” Henry told the club’s television station after he arrived in Barcelona on Sunday night on a private flight from London.
“Barca is more than a club. Everybody knows about Barca. The most important thing that has made me come is the way Barca plays, the fans and the support they give,” he added.
Barcelona are believed to have agreed a four-year deal worth $32 million  for Henry who will join stars Deco, Ronaldinho, Samuel Eto’o and Lionel Messi.
The club said on its web site that there were still some loose ends to tie up before Henry’s move could be finalized.
“There are still a few minor details to be sorted out between the three interested parties: Arsenal FC, FC Barcelona and Thierry Henry,” it said.
Barcelona is looking to strengthen its squad after finishing runner-up in the Spanish league this season behind archrivals Real Madrid. It completed the La Liga and Champions League double in 2006. Henry’s signing would give Barcelona coach Frank Rijkaard more attacking options in addition to Eto’o, Messi and Ronaldinho whose run of form this season was spotty.
Messi was among the first to hail the arrival on Henry, who is Arsenal’s leading all-time scorer with 226 goals in 369 games since moving to Highbury from Juventus eight years ago.
“Henry is a great player and for that reason he is coming to Barca,” he told reporters.
Currently sidelined with a leg injury, Henry said that he hoped to resume full training in two weeks and be ready for Barcelona’s start to their preparations for the new season on July 20.
He also said he hoped to continue to play a full part in France’s campaign to reach the Euro 2008 finals in Austria and Switzerland. Henry has played 92 times for his country and scored 39 goals.
Barcelona tried to snare Henry last year but he opted to sign a new four-year contract with Arsenal that would have seen him stay at the club through 2010.
But the departure from the London club of vice-chairman David Dein and the doubts swirling around the future of coach Arsene Wenger led the player to consider moving to Spain.
“Arsene has been part of my life for as long as I can remember,” he wrote in an open letter to fans published in British daily The Sun on Saturday. “I cannot take the chance to be there without Wenger and Dein,” he added.

TITLE: Media Scrum Awaited as Paris Hilton’s Release Nears
AUTHOR: By Sandy Cohen
PUBLISHER: The Associated Press
TEXT: LOS ANGELES — Dealing with jail time for driving offenses was difficult, but now Paris Hilton faces the aftermath. The 26-year-old heiress is expected to be released from a Los Angeles County women’s jail early this week, and she professes a desire to shift her life’s course. But unlike most newly released inmates, Hilton has a trail of photographers in constant pursuit and a career based largely on partying and posing for pictures.
Hilton insists she’s a changed woman after serving time behind bars.
“I would like to make a difference,” she told Barbara Walters. “God has given me this new chance.”
Saying it is one thing and doing it is another, said Dorian Traube, a professor of social work at University of Southern California.
“If this indeed has changed her, then the transition will be very difficult because she’ll have to find a new purpose in life” beyond being queen of the party scene, Traube said. “Her life will have to change drastically, which is going to be tricky because she’s going to be in the public eye more than ever.”
So long as she keeps her driver’s license current and doesn’t break any laws, Hilton will complete her probation in March 2009. She can reduce that time by 12 months if she does community service or records a public-service announcement, the city attorney’s office said.
But Hilton and her family have hardly shied away from the media during her time behind bars. That constant attention, along with society’s “sick fascination with failure,” will make Hilton’s transition more challenging, Traube said.
“She has almost set herself up to fail because there’s been so much talk about how she’s a changed person, how she found religion and she prays all the time,” she said. “People are bitter for the notoriety she has for having done very little other than party, so they’re standing around waiting for her to fail.”
Abandoning her party-girl image, stamped by her appearance in a sex video, in favor of a philanthropic one will bring emotional costs, too, said psychologist Jeremy Ritzlin, who ran a halfway house for recently released federal prisoners.
Hilton will be frustrated as she learns “whether she can rein herself in or not without it making her too crazy,” he said. “She’s not going to have an easy time adjusting because she’s led a hedonistic life of escapism where she doesn’t have to deal with who she is and what her problems are in the world.”
Making a public service announcement against drinking and driving would be a good move for Hilton, said David Brokaw, a longtime Hollywood publicist.
“That would say she’s serious” about changing, he said.
“The American people don’t hold a grudge if somebody genuinely says ‘I was wrong, I made mistakes, I’m sorry,’” Brokaw said. “If she says that and it’s verified by what she does, then she’s on her way to maybe even better acceptance and interest than ever before.”
Hilton told E! News last week that she plans to build a “transitional home” to help recently released inmates readjust to freedom.
“These women just keep coming back (to jail) because they have no place to go,” Hilton said. “It’s a really bad cycle and if we stop it now, we can make our community a better place.”
She said she is “much more grateful” after spending time in jail.
“I appreciate everything now and I think there was a lot of bad people that I was around,” she told E! “I don’t want to surround myself with those types of people anymore.”
Only time will reveal whether Hilton has really changed, said veteran publicist Michael Levine.
“The soap opera, where it’s been filled with drinking and drugs and porn videos, is very, very popular and compelling,” he said. “If she turns the story to another, will it remain popular?”

TITLE: Wimbledon Gets Off to Soggy Start
PUBLISHER: The Associated Press
TEXT: WIMBLEDON, England — At Wimbledon, it’s Rafael Nadal’s turn to try and make some history.
Only two weeks after beating top-ranked Roger Federer in a second straight French Open final, the Spaniard will get another chance to win a Grand Slam title away from Roland Garros.
“Clay, hard or on grass,” the second-ranked Nadal said. “Every Grand Slam I would love to win on any surface.”
Nadal reached the Wimbledon final last year but lost to Federer in four sets. The top-ranked Swiss, who is trying to win his fifth straight title at the All England Club, was due to play Teimuraz Gabashvili of Russia on Monday.
But that match and all others were delayed by rain at the start of the day.
Andy Roddick, Tim Henman and Marat Safin were also due to play Monday. On the women’s side, two-time Wimbledon champion Serena Williams was scheduled to face Lourdes Dominguez Lino of Spain, and French Open champion Justine Henin, third-ranked Jelena Jankovic and 1997 Wimbledon champion Martina Hingis were also expected to play.
Nadal, who faces Mardy Fish of the United States in the first round, admits that Federer is again the man to beat at Wimbledon, and part of the reason is because the 10-time Grand Slam champion gets to make the transition from clay to grass.
“It is difficult to adapt and change lot of things in just one week and a half,” said Nadal, who played a warm-up tournament on grass at the Queen’s Club but lost to Nicolas Mahut in the quarterfinals. 
“Its more difficult for me because if the change is to the other surface, for example, grass to clay in one week and a half, for me going to be easier, no, because clay is my surface,” the Spaniard added.
If Nadal does win the title in two weeks, he’ll be the first man to complete a French Open-Wimbledon double since Bjorn Borg in 1980. Borg, who did it four times, is also the last man to win five straight Wimbledon titles.
Defending champion Amelie Mauresmo will start her tournament against Jamea Jackson of the United States.

TITLE: Brown 
To Review Policy On Terrorism
AUTHOR: By Rob Harris
PUBLISHER: The Associated Press
TEXT: MANCHESTER, England — Gordon Brown, Britain’s next prime minister, on Sunday promised a foreign policy that recognizes that defeating terrorism is as much a struggle of ideas as a military battle — a lesson he said was drawn from Iraq.
As he took control of the governing Labour Party from Tony Blair, Brown said Britain would “learn lessons that need to be learned.”
Britain’s future foreign policy will “reflect the truth that to isolate and defeat terrorist extremism now involves more than military force,” Brown told a conference of party members in Manchester, northern England.
“It is also a struggle of ideas and ideals that in the coming years will be waged and won for hearts and minds here at home and round the world.”
The unpopularity of the Iraq war, and Britain’s role in it, has dogged Blair through the last years of his leadership. The woman elected Sunday as Brown’s deputy, Harriet Harman, has called for the government to apologize for mistakes over the Iraq war.
Iraq had “been a divisive issue for our party and our country,” Brown said, adding that he would strive to work for a Mideast peace settlement that “becomes daily more urgent.”
Brown has dismissed claims he would seek to loosen ties with President George Bush to appease rank-and-file party members angered over the Iraq war, saying it is in Britain’s national interest to have a strong relationship with the U.S. president.
Brown, a 56-year-old Scot who has been waiting in the shadows to take over from Blair, received a ringing endorsement from the outgoing prime minister. Blair, smiling and measured throughout a speech to introduce Brown, said his successor and “friend of 20 years” had every quality to make him a “great prime minister.”
“I know from his character that he will give of his best in the service of our country, and I know from his record as chancellor that his best is as good as it gets,” Blair said.
The men vied to lead the party in 1994 — but Brown was persuaded to stand aside, sparking an often turbulent relationship at the pinnacle of British politics for 10 years.
Several hundred people gathered close to the conference venue to stage an anti-war protest and denounce Blair’s record. “We are here to wave goodbye to the most dangerous and warmongering prime minister in modern British history,” said Andrew Murray, chairman of the Stop The War coalition.
Brown and his new party deputy will likely face a first national election test in 2009 or 2010.

TITLE: Zenit Edges To Top of League
PUBLISHER: Reuters
TEXT: MOSCOW — Zenit St. Petersburg scored a nervy 4-3 victory over lowly Spartak Nalchik on Sunday to move to the top of the Russian premier league.
Russian internationals Vladislav Radimov and Alexander Anyukov scored two late goals to break a 2-2 deadlock and although Nalchik pulled one back in added time, Dick Advocaat’s team held on for their sixth win from 14 games.
Zenit, on 24 points, lead Spartak Moscow by a point.
Champions CSKA Moscow failed to join Zenit at the top of the table, going down 1-0 at Krylya Sovietov Samara.

TITLE: European Union Agrees On Foreign Policy Treaty
PUBLISHER: The Associated Press
TEXT: BRUSSELS, Belgium — European Union leaders agreed Saturday on the key points of a treaty meant to strengthen the bloc’s foreign policy role and eliminate unwieldy bureaucracy.
The treaty would replace the constitution that Dutch and French voters rejected two years ago. German Chancellor Angela Merkel, the summit host, said the drafting of the treaty would begin soon and all countries should ratify it by June 2009.
It would allow more decisions to be taken by a majority, rather than unanimous, vote, removing the threat of national vetoes. The European Parliament and national assemblies would get more say over decision-making, strengthening the EU’s democratic credentials. The EU’s executive arm — the European Commission — would be trimmed from 27 to 17 seats. The post of EU president — with a maximum term of five years — will be created to replace the system of rotating national leaders into the job. And the role of EU foreign policy chief will be strengthened, to give Europe a bigger voice in the world.
“This deal gives us a chance to move on,” British Prime Minister Tony Blair said.
European leaders said the expected new treaty will allow the EU to tackle the institutional gridlock threatened by its larger membership, which recently grew by 12 nations.
“We have achieved what we set out to do,” Merkel said. “This shows that Europe came together at the end.”
The EU, with 27 member nations, now represents 490 million people.
The new treaty is meant to allow the bloc to react more quickly to global crises, although it still requires agreement among members. That was impossible when the EU split on the eve of the Iraq war.
Charles Grant of the Center for European Reform, a London-based think tank, says that under the new treaty neither the new EU president nor the foreign policy chief — to be known as a High Representative — will have any executive power.
“Their authority would depend on their powers of persuasion and the force of their personality,” he said.
The 30 hours of tough negotiations were overshadowed by Poland’s insistence that Germany accept its demand that Poland get EU voting powers disproportionate to its size because of its heavy loss of life during World War II.
The deal finally agreed sees the switch to a new voting system based on population entering into force in 2014, with extra safeguards in place for Poland until 2017.
“This is a success for Poland,” Polish Prime Minister Jaroslaw Kaczynski said in Warsaw, adding the EU summit agreement had left the country in a “strong position.”
Britain, too, claimed success, winning opt-outs on EU social and labor rights that it feared would hurt jobs, and limiting the scope of EU powers in justice and police issues.
Critics said, however, that Blair ceded ground elsewhere — notably on French demands that open business competition not appear as one of the EU’s guiding principles.
Merkel had made it a priority of her country’s six-month EU presidency to come up with a viable plan to replace the defunct charter, and had sought to salvage key parts of it aimed at streamlining EU decision making.

TITLE: Gay Speeds Ahead Of Sprint Rivals
AUTHOR: By Pat Graham
PUBLISHER: The St. Petersburg Times
TEXT: INDIANAPOLIS, Indiana — Tyson Gay could’ve sworn he heard heavy breathing coming up on him as he flew down the home stretch.
So Gay’s fear mode kicked in and he moved even faster. As it turned out, the heavy breathing was only coming from himself.
No one else was even close as Gay completed an impressive sprint double by running the second-fastest 200 meters ever Sunday on the final day of the U.S. track and field championships. He finished in 19.62 seconds, breaking Michael Johnson’s U.S. meet record of 19.66 set at the Olympic Trials in 1996.
Gay also won the 100 in 9.84 seconds on Friday. The 24-year-old sprinter’s 200 time was second only to Johnson’s world record 19.32 set at the Atlanta Olympics in 1996.
“It was probably as perfect as it’s going to be in these conditions,” Gay said of the rainy weather.
His fear mode came in handy.
“Anytime I’m in a race with Wallace Spearmon, I want to try to run away from him,” Gay said. “I heard some heavy breathing — I don’t know if it was Wallace or me — but I think it was probably Wallace.”
It wasn’t. Spearmon, the defending U.S. champion and Gay’s training partner in Fayetteville, Ark, said he wasn’t even near Gay. Spearmon rounded the corner and was amazed at Gay’s lead.
“I was like, ‘Wow, he’s pretty far ahead,”’ said Spearmon, who finished second in 19.89. “I couldn’t keep up.”
It’s hard to say what was faster: Gay’s performance in the 200 or the speed at which he was whisked away from one demand to the next after the race. There were interviews to do, autographs to sign and hands to shake.
The sprinter was worn out. But quite content.
“The time was excellent. The race was excellent, too,” Gay said.
Yet it wasn’t a perfect day for Gay. Not after what happened to Xavier Carter in Sunday’s semifinals. Carter, the Prefontaine Classic champion in the 200, was carried off the track on a stretcher after injuring his right leg.
Carter clutched at his right thigh just after rounding the turn, staggered a few steps and then dropped to the track. He lay there for several minutes before being carried away.
A later examination revealed that Carter’s kneecap had popped out of place and then back in.
“It’s sad to see him so upset,” said Mark Block, Carter’s agent.
The 200 was the billed as the crown jewel of the meet, and scheduled to have four of the six fastest runners in the event’s history. However, only two of them were in Sunday’s final — Spearmon and Gay. In addition to Carter’s absence, Florida State’s Walter Dix didn’t show up for Saturday’s preliminary round.
“I’m sorry for Xavier, it’s really been on my mind,” Gay said. “I want everyone to get healthy.”
Defending world champion Allyson Felix won the women’s 200 in 22.34. Sanya Richards was second at 22.43 and Torri Edwards, the 100-meter winner on Friday, was third in the 200 at 22.55.

TITLE: Schwarzenegger Visits Hometown
PUBLISHER: The Associated Press
TEXT: GRAZ, Austria — California Governor Arnold Schwarzenegger returned to his Austrian hometown Sunday for the first time since severing official ties with the city two years ago after a flap over the death penalty.
The actor-turned-governor was welcomed at the airport in the southern city of Graz by friends and current and former local politicians, including Alfred Gerstl, a former leader of the upper house of parliament often described as his mentor, the Austria Press Agency reported. APA reported that Schwarzenegger would attend Gerstl’s 84th birthday celebration Sunday evening. He will also visit Britain and France as part of his short European tour.
Schwarzenegger, accompanied by his daughter Katherine and one of her friends, did not take questions from journalists and disappeared into a limousine after his welcome.
The spat between Schwarzenegger and the city began in 2005, when Graz authorities stripped the governor’s name from the city’s soccer stadium after he refused to block the execution of a convicted California gang founder.
Schwarzenegger returned Graz’s highest award, its ring of honor, which was given to him by city officials in 1999. In a letter to the city two years ago, Schwarzenegger said the ring had “lost its meaning and value to me.”
Graz officials also removed all references to Schwarzenegger on the city’s web site.
Schwarzenegger was born in 1947 in the village of Thal, just outside Graz, where he began his bodybuilding career. He emigrated to the United States in 1968 and became a naturalized U.S. citizen in 1984, but has retained his Austrian citizenship.

TITLE: Sarkozy Convenes Darfur Crisis Meeting
AUTHOR: By Jenny Barchfield
PUBLISHER: The Associated Press
TEXT: PARIS, France — French President Nicolas Sarkozy urged swift international action Monday toward speeding up deployment of troops in Darfur, as key world players met to try to consolidate efforts and resources for the ravaged Sudanese region.
Sudan was not invited to the one-day Paris conference, organized by a new French government that has made the four-year conflict in Darfur a top priority. The meetings come after Sudan agreed — under international pressure — to allow the deployment of a joint African Union-United Nations peacekeeping force in the region.
Sarkozy pledged an additional $13.4 million to the existing — and cash-strapped — African Union force. “Silence is killing,” in Darfur, Sarkozy said in greeting participants to the conference.
“The lack of decision and the lack of action is unacceptable,” he added.
He praised Sudan for agreeing to the hybrid force but insisted, “We must be firm toward belligerents who refuse to join the negotiating table.”
Stepping up pressure for progress, Secretary of State Condoleezza Rice said Sunday night that the international community has fallen down on the job in Darfur.
“I have seen firsthand the devastation and the difficult circumstances in which people live in Darfur, and I will be very frank,” Rice said after meeting French Foreign Minister Bernard Kouchner in Paris. “I do not think that the international community has really lived up to its responsibilities there.”
Rice welcomed the fresh energy France’s new conservative-led leadership has put to the Darfur cause. She and Sarkozy met Tuesday morning, their first face-to-face talks since Sarkozy took over last month from Jacques Chirac, who often had prickly relations with the United States.
French officials said they hope to mobilize the international community at what they called a “pivotal moment,” following the Sudanese government’s agreement earlier this month to allow the deployment of a joint African Union-United Nations peacekeeping force in the region.
Details about the composition, mandate and timetable of the joint force are expected to top discussions at Monday’s meetings.
Sarkozy praised Sudan for agreeing to the new hybrid force but insisted, “We must be firm toward belligerents who refuse to join the negotiating table.”
“There are now 19 rebel groups in Sudan and we must exert important pressure so they return to the negotiating table,” Koucher added.

TITLE: U.S. Tourist Killed by Wild Romanian Bear
PUBLISHER: The Associated Press
TEXT: BUCHAREST, Romania — A bear attacked a group of U.S. tourists on a remote trail in the Carpathian Mountains, killing a woman and injuring two other people, authorities said Sunday.
The group of six tourists chased off the bear when it tried to approach them near a cabin about 75 miles north of Bucharest, but the bear reappeared on a trail and attacked the group around 10 p.m. Saturday.
The bear attacked a 26-year-old woman. After she fell down and tourists threw stones at the bear, it turned its attention to a man, biting him on the leg. The bear then mauled to death a 31-year-old woman, despite more attempts to distract it by throwing stones.
Officials did not immediately disclose the victims’ identities or hometowns.
The 31-year-old died from her injuries shortly after the arrival of rescuers, state news agency Rompres reported, citing local police officials. The bear had earlier bitten a Romanian tourist on the shoulder and attacked sheep, Andi Mihai, one of the members of the rescue team, told Realitatea TV news. Authorities are searching for the bear to euthanize it.
Romania is home to about half of Europe’s brown bear population, but attacks on humans are rare. Three years ago, two men died after they were attacked by a rabid bear.