SOURCE: The St. Petersburg Times
DATE: Issue #725 (92), Tuesday, November 27, 2001
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TITLE: Oil Slumps as Russia Snubs OPEC
AUTHOR: By Valeria Korchagina
PUBLISHER: Staff Writer
TEXT: MOSCOW - Oil prices fell sharply again on Monday after a Saudi official said Riyadh was disappointed by Russia's lukewarm response to OPEC's demands for a contribution to a cut in world oil supplies next year.
 On Friday, Russia once again frustrated efforts by the oil-producers' cartel to boost prices, offering another symbolic export cut that dashed expectations and drove crude prices lower.
 Deputy Prime Minister Viktor Khristenko said after a meeting between top oil executives and government officials that Russia would cut exports by just 50,000 barrels per day through the rest of the year and delay a decision on any further cuts until next month.
 A senior Saudi official over the weekend described Russia's offer as "too little," but said that it was encourgaing that Moscow intended to review the decision in December.
 "Russia's latest decision to cut production and exports by 50,000 bpd has caused a kind of disappointment in the market. ... Although it is better than the quantity previously proposed, it is considered too little by all standards," said Ibrahim al-Muhanna, adviser to Saudi Oil Minister Ali al-Naimi. 
 Oil prices dropped more than 5 percent on Friday on the news from Mos cow, before rebounding slightly. On Mon day, however, prices continued down. London's Brent crude futures dropped a dollar to $18.28 per barrel Monday, extending Friday's 62-cent fall. U.S. light crude futures slipped $0.59 to $18.37 a barrel.
 But President Vladimir Putin said Friday there was no cause for alarm.
 "There is no need to panic," Putin was quoted by Interfax as saying. "There are always problems - there always have been and there always will be."
 The 50,000 bpd cut includes the 30,000 bpd Russia has already pledged and represents just 1.5 percent of the country's total exports. The cut will be applied immediately and is unilateral, but it will not affect production, since oil will just be diverted to the domestic market. A decision on production cuts won't be made until early December at the earliest and implementing a cut would take two to three months.
 OPEC is demanding a total cut of 500,000 bpd from major non-cartel members before it will cut its own production by 1.5 million bpd. Norway has promised to cut 100,000 to 150,000 bpd if other states joined the effort while Mexico has pledged a 100,000 bpd cut and Oman 25,000.
 But so far Russia has shown little interest in supporting OPEC, even though oil is the country's main source of revenue. Prices have dropped by a third in the last two months, prompting the government to rethink its calculations for next year's budget, which is based on a worst-case scenario of Urals blend averaging $18.50 a barrel.
 Putin's top economic adviser, Andrei Illarionov, took to the airwaves last week and condemned OPEC as irresponsible and "historically doomed." He also dismissed as inappropriate any government intervention in the private sector.
 Putin said that an "intensive dialog" between producers and the government is under way and that the best ways to react [to the market situation] "have been outlined."
 "There must be output cuts, but it shouldn't be done in the manner a scolded cat reacts," said Leonid Fedun, vice president of top producer LUKoil.
 Analysts said Russia was playing a game of cat-and-mouse with the cartel as it buys some time to see how the market reacts.
 "Russia seems to be playing a canny game to test both OPEC and the oil markets' resolve - if the reaction of both is very negative, Russia can make another cut," Renaissance Capital wrote in a research note Friday. "If prices stay robust and OPEC accepts 50,000 bpd as sufficient, then Russia could get the best of both worlds."
 But playing games with OPEC and other interested parties may not necessarily be the best tactic, said Stephen O'Sullivan, head of research at United Financial Group.
 "They didn't even manage to get the PR figleaf of pretending they would be cutting output," he said. "It's reminiscent of the hype before the 30,000-barrel-per-day 'output cut' announced last week, which just made the Russians look silly and unsophisticated."
 O'Sullivan said Russia could have just as easily announced a 150,000 bpd cut that a seasonal drop in exports would probably accomplish anyway. "Agreeing to cut both exports and production is a tactical error for Russia because remaining focused on cutting exports would have allowed more games to have been played with the figures," he said.
 Additionally, O'Sullivan said, the "cut" could be achieved by refining crude either in Russia, Belarus or Ukraine and exporting the end product. This would have bought Russia a couple of months, by which time OPEC would have already cut its own production and the market would stabilize, and talk of a "real" output cut would be over, he said.
 Many Russian producers argue that an actual production cut could be seriously damaging because of the harsh conditions in which most of the oil is pumped. In northern areas, some of them beyond the Arctic Circle, stoppage is irreversible, they say.
 "The average water content of the oil fields in Russia ranges between 60 and 80 percent. If we shut down the wells, many of which are in the north, we will end up with bursting pipes and huge problems related to the water freezing," said LUKoil's Fedun.
 But O'Sullivan said Russia may be exaggerating the problem. Some 1,000 oil wells stop and freeze yearly here, but they just get repaired, he said. "Things like this require funds and are costly, but it is just a part of the business."

TITLE: City Is Set To Receive $150-Million Credit
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: An arm of the World Bank will provide a $150-million loan to St. Petersburg in 2003, City Hall officials said on Monday. The loan will be used to renovate eight local landmarks and to improve the city's financial management in order to improve the local business climate.
 The officials said the city expects that the loan, officially called the Project for St. Petersburg's Economic Development, will be approved by the International Bank for Reconstruction and Development, or IBRD, part of the World Bank group, in September 2002. The money should be disbursed to the city early in 2003 and work on the projects will be completed by the end of 2005.
 "In the very near future, an economic assessment of the project will be conducted and then, in the second half of next year, after all the technical issues are settled, the matter will be discussed at a meeting of the bank's board of directors," said Vadim Voronin, deputy head of the IBRD's Moscow office in a telephone interview on Monday. "This loan looks realistic."
 According to the City Hall Foundation for Investment Projects, which is coordinating the loan for the city, the project consists of two parts. About $50 million will be spent to renovate eight local landmarks, including the Mariinsky Theater, the St. Petersburg Philharmonic Society, the Hermitage, the State Russian Museum, the Peter and Paul Fortress, the St. Petersburg Conservatory and some buildings in the suburbs of Pushkin and Pavlovsk.
 The second part of the loan, $100 million, will be used to reform the city's financial-management systems, to simplify real-estate transactions between the city and private investors and to simplify the process of approving investment documentation.
 "The city will carry out economic reforms, and the bank, for its part, would be willing to provide loans to the local economy," said Olga Melnikova, a spokesperson for the Foundation for Investment Projects, on Monday.
 The city and the federal Construction Committee created the Foundation for Investment Projects in 1998 to coordinate the renovation of the city's historical center and to prepare an economic-development plan.
 IBRD officials said that financial-management reform is one of the main conditions for approving the loan. "The money couldn't be given just like that. In this case, the money could just be spent on food, although food is also a necessary thing," Voro nin said.
 "The bank acts in order to create the conditions for a return on its money," he said. He added that the city would be required to enact policies to improve the business environment in the region and, in particular, to simplify the process of consummating real-estate transactions.
 On Nov. 14, the city announced a tender for projects to renovate the eight buildings covered by the loan. Bids must be submitted by Dec. 28. 
 After the winners are announced, companies will develop detailed renovation plans in the first months of next year. This work should be completed in time for the bank's board meeting in September, City Hall officials said, at which time the loan will receive final approval.
 "We haven't received any documentation yet, but there have been phone calls from foreign and domestic companies interested in the projects, so I don't think there will be a problem with regard to competition," Melnikova said.
 The loan will be used to finance the reconstruction of the Mariinsky Theater stage area and the theater's Small Hall; the renovation of the General Staff Building on Palace Square, which is part of the Hermitage complex; and the renovation of the Georgy Hall of Mikhailovsky Palace, the main building of the State Russian Museum. 
 Also included in the plan is the installation of air conditioning and acoustic equipment at the St. Petersburg Philharmonic Society, the restoration of the former Anglican Church at 56 Angliiskaya Nab. and several other projects in and around the city.
 According to an agreement between the Finance Ministry and the IBRD, the Russian government will also provide partial funding for these projects. That funding has been included in the money that the government intends to allocate for the city's 2003 jubilee.
 "[Such co-funding] is one of the main conditions [for the loan]," Voro nin said. "We all know that in the past various plans to renovate historical objects were drawn up, but no actual money was allocated for them."
 "But [the presence of] such landmarks is an obvious advantage in developing the economy of a city such as St. Petersburg," he said.

TITLE: The Fight for Legal Reform Continues
AUTHOR: By Natalia Yefimova
PUBLISHER: Staff Writer
TEXT: MOSCOW - With last week's passage of the Kremlin's judicial reform plan, the State Duma gave the green light for gradual changes to the country's ineffectual court system. But the last-minute haggling that preceded Thursday's vote and remarks by a top judge a day later are highlighting an ongoing tug-of-war between the country's highest judicial bodies, the Constitutional Court and the Supreme Court.
 Speaking to reporters Friday, Ta ma ra Morshchakova, the deputy chairperson of the Constitutional Court, praised the reforms as an important starting point for creating a more independent judiciary. But she voiced cautious criticism of attempts to undermine the power of her court - most recently, the introduction of two restrictive amendments that were pulled at the last moment from the list considered by the Duma on Thursday.
 The 19-member Constitutional Court is authorized to interpret the Constitution, establish the constitutionality of laws or other official documents and resolve jurisdictional disputes between federal and regional authorities. Under existing law, any legislation or agreements deem ed unconstitutional by the court are automatically rendered invalid.
 "The Constitutional Court stands at the crossroads of political disputes ... and it is very rare that both sides are pleased with the court's decision," said Morshchakova, an author of the original judicial-reform plan penned under former President Boris Yeltsin.
 The latest attempt to whittle away the court's power came this month in the form of two proposed amendments to the law on the Constitutional Court. The amendments - which State Duma deputies said had been initiated by the Supreme Court - would have limited the Constitutional Court to giving assessments of constitutionality while stripping it of the right to make recommendations on how the relevant legislation should be changed. Speaking in defense of the restriction, the deputy who submitted one of the amendments said Wednesday that it was unacceptable to allow any 19 people, "even if they are top-rate specialists ... to have the ultimate word on what is right or wrong."
 "The court's decision cannot contain instructions telling government bodies the direction in which legislation should be changed," said Oleg Utkin of the pro-Kremlin Unity faction.
 He added that his amendment would not affect the government's legal obligation either to change or disregard unconstitutional documents, but would simply not allow the court to indicate how this should be done.
 However, on the morning of the vote, the amendments submitted by Utkin and Boris Nadezhdin of the Union of Right Forces faction were withdrawn.
 Deputies close to the decision said the amendments were recalled on orders from the presidential administration after a meeting with Marat Baglai, the chairperson of the Constitutional Court.
 Baglai has blasted the attempts to curtail his court's powers. "Officials in the State Duma and the Supreme Court [regularly] voice intentions or explicit proposals to castrate the Constitutional Court and forbid it from issuing obligatory decisions," he said Wed nesday at the Ci vic Forum, a cong ress of nongovernmental organizations. "This is a very dangerous point of instability in our society that is created by retrogrades and hidden ... by opponents of democracy."
 Morshchakova welcomed the withdrawal of the two controversial amendments from the list of changes passed Thursday in the critical second reading by a unanimous, 404-0 vote.
 While she did not have any major objections to the approved amendments, which included reintroducing a 70-year age limit for judges, she criticized the new provision on federal and local governments' responsibility for implementing the court's rulings as "gratuitous." Since decisions of the Constitutional Court are binding as it is, Morshchakova expressed concern that "this doubling of the mechanism of executing decisions" could undermine the court's legitimacy in the public eye. 
 "All of these government bodies are already obliged to act in accordance with decisions of the Constitutional Court," Morshchakova said.

TITLE: Estonian Airliner Crash Kills 1
PUBLISHER: Combined Reports
TEXT: TALLINN, Estonia - A chartered Elk Airways airliner with 17 people on board plunged into a forested marsh on a Baltic Sea island with virtually no warning, killing one and injuring several others. 
 The accident on Friday evening - the first major plane crash in Estonia since it regained independence from the Soviet Union 10 years ago - occurred just two kilometers before the An-28's designated airport runway on Hiiumaa island. 
 Passenger John Pass, a 38-year-old Canadian of Estonian decent who grew up in Sydney, Nova Scotia, said Saturday that the Russian-built aircraft appeared to be descending normally after a 30-minute flight from Tallinn. 
 But from his seat at the back of the plane, he saw the two pilots at the controls in the cockpit suddenly start frantically flipping control switches and the plane drifted sideways. Within seconds it plowed into the ground. 
 "I've flown on this plane many times and the approach to the airport could always be shaky," he said by telephone from a house he owns on Hiiumaa, some 130 kilometers southwest of Tallinn. 
 "It was only when I saw the pilots doing this that I realized something wasn't right and put my head down. There'd been no warning over the intercom from the captain," said Pass, who was treated for what appeared to be a pulled muscle but was otherwise unhurt. 
 Water poured in from the marsh after the plane, carrying three crew and 14 passengers, crashed. Several children at the front of the plane, the most heavily damaged section, were screaming and crying as the plane slid to a stop, Pass said. Pictures in local newspapers Saturday showed a big hole in the front of the plane, the wings snapped off and other twisted metal wreckage. 
 It was snowing at the time of the accident and temperatures were at or just above freezing, said police spokesperson Indrek Raudjalg. Investigators have visited the scene but haven't yet determined the cause of the accident. 
 A man who lived on Hiiumaa island was killed, while one of the pilots was in a coma and four passengers were in serious condition, Raudjalg said. 
 Most of the passengers were Estonian, besides Pass and a Norwegian woman identified by the Baltic News Service as Anna Helena Gjelstad, who was not badly injured. 
 Investigators said Saturday that they had recovered the flight recorders and hoped to begin deciphering their contents soon. 
 "The deciphering time depends on how soon deciphering equipment is found, but this will take at least a week," said Tonu Ader, an investigator with the state aviation board. 
 On Friday, BNS quoted an official with Elk Airways as saying ice on the wings and steering system may have played a role in the crash. 
 Elk, which other than Estonia Air is the only airline to operate regular flights between Tallinn and Moscow, had leased the plane and its crew from another Estonian firm, Enimex.
 Enimex said Saturday that British aviation specialists had done an audit of the company's planes and crews earlier this year and approved them. 
 "The planes are serviced according to new European technical standards established last year," Enimex said in a statement. "Planes, pilots and personnel have all necessary international certificates."
 
 <i>- AP, Reuters </i>

TITLE: IN BRIEF
TEXT: Another Kursk Funeral
 

ST. PETERSBURG (SPT) - Another crew member from the Kursk nuclear submarine will be buried in the Serafimov Cemetery on Wednesday, Interfax reported Monday.
 Senior Lieutenant Aleksei Korobkov, whose body arrived in the city over the weekend, will be buried at 12 p.m. next to the graves of 13 other Kursk crew members already interred at the cemetery, according to the news agency. He will be accorded full naval honors.
 
 
Bomb Discovered
 

ST. PETERSBURG (SPT) - A bomb was discovered and safely removed on Monday from a gas station in the Vyborg Region of Leningrad Oblast, Interfax reported.
 The homemade bomb, made of 800 grams of explosive, a timer and two electronic detonators, was discovered in the restroom of a gas station belonging to Slavneft. Members of the Federal Security Service's bomb squad removed the bomb to a nearby forest and detonated it, Interfax reported. 
 The news agency cited sources as saying that the incident might be connected to the intense competition among local oil companies. Earlier this summer, unidentified vandals added a chemical substance to a shipment of Slavneft gasoline, which led to numerous complaints from the company's customers.
 
 
Oblast Is 'Calm'
 

ST. PETERSBURG (SPT) - Leningrad Oblast Governor Valery Serdyukov stated that the situation in the oblast is "calm" in the run-up to the Dec. 23 elections for the Leningrad Oblast Legislative Assembly, Interfax reported Monday.
 Serdyukov stated that 297 candidates have registered to vie for the 50 seats in the legislature. He said that "the interest of certain Petersburg structures in the elections" had been noted, but that the presence of "city" candidates did not alarm him, according to Interfax.
 "The voters of the oblast are capable and will chose people whom they know and who can work for the oblast," Ser dyu kov was quoted by Interfax as saying.
 
 
Getting Ship Shape
 

ST. PETERSBURG (SPT) - President Vladimir Putin's official yacht Kavkaz has arrived at the Almaz Shipyard for modernization and reconstruction, Interfax reported Friday.
 The 45-meter Kavkaz will receive a complete overhaul of its engines, as well as new communications and navigation equipment. 
 The yacht was built by Almaz in the late 1970s together with a sister ship, the Krym, which is now the presidential yacht of Ukraine, Interfax reported.
 
 
Cheers, Moscow
 

ST. PETERSBURG (SPT) - Local brewer Tinkoff has invested $4 million to build a brew-pub in Moscow, Interfax reported Monday.
 According to a company press release, Tinkoff will open a 550-seat restaurant and microbrewery in Moscow on Dec. 10. The company's first restaurant, on Kazanskaya Ulitsa, opened in 1998 and was built at a cost of $1.5 million. At present, that brewery produces 300,000 bottles of beer per month. 
 Tinkoff will establish a live hook-up between the restaurants, allowing customers to communicate with one another. Tinkoff is owned by businessperson Oleg Tinkov, who also owns the food company Darya, Interfax reported. 
 
Gorbie Hospitalized
 

MOSCOW (Reuters) - Former Soviet leader Mikhail Gorbachev was admitted to a central Moscow hospital Monday, but a spokesperson said he was merely suffering from fatigue.
 The spokesperson said Gorbachev, 70, had just completed a round of grueling trips and they had taken their toll. He said that Gorbachev had felt unwell, and during the course of a routine medical check-up a doctor recommended he be hospitalized. The spokes person added that it was nothing serious.
 Gorbachev, who resigned as Soviet leader 10 years ago next month, recently presided over the founding congress of the Social Democratic Party - which brings together his own United Social Democratic party with another social democratic grouping run by a prominent regional leader.
 
 
Russian Back In
 

TALLINN, Estonia (AP) - Estonia has rescinded a requirement that candidates for elected office be able to speak Estonian, which critics said discriminated against Russian speakers - a third of the ex-Soviet republic's 1.4 million population. 
 The provision, canceled by the Riigikogu parliament late Wednesday, was seen as an obstacle to Estonia's bid to join the European Union and NATO; officials from both organizations had criticized the requirement as undemocratic. 
 The 101-seat parliament abolished the language provision by a vote of 55 to 21, with one abstention; 24 deputies either weren't present or didn't vote. The yes votes were nearly all cast by members of the three parties forming the government. 
 Marju Lauristin, a deputy from the center-right ruling coalition, said that Estonia mostly receives high marks in democracy building. 
 "This was the one deviation from democratic norms the world community pointed to," Lauristin said.
 
 
Flower Girl Sorry
 

RIGA, Latvia (AP) - A 16-year-old girl who slapped Prince Charles with a flower earlier this month has sent a note apologizing for the incident, her father said Thursday. 
 "I didn't want to offend you personally, and I ask for your forgiveness and hope you understand," Alina Lebedeva wrote in the letter, published in the Chas Russian-language daily. Her father, Nikolai Lebedev, confirmed its contents. 
 Latvian police charged Lebedeva with threatening the life of a foreign dignitary, which carries a maximum penalty of 15 years in prison. A decision about whether she'll be put on trial is expected within several weeks. 
 Her father appealed for leniency. "We have to beg the prince's pardon for what she has done, especially since the prince has shown such a merciful and gentlemanly attitude," he said.
 
 
Official Called In
 

KIEV (AP) - Ukrainian President Leonid Kuchma said Friday that a top government official will be interrogated by prosecutors about the murder of a journalist that sparked a political scandal in Ukraine.
 Transport Minister and former Prime Minister Valery Pustovoitenko "will be invited for questioning," Kuchma said during a trip to the town of Ostroh, Interfax reported.
 Earlier in the month, Pustovoitenko said he will reveal new information on the killing of Internet newspaper editor Georgy Gongadze after parliamentary elections next March. Kuchma said Pustovoitenko's statement was groundless and politically motivated, Interfax said.
 Gongadze, known as a critic of alleged high-level corruption, disappeared in Kiev more than a year ago. International investigators have concluded a beheaded body found later in the woods near the Ukrainian capital was his.
 
 
Ambassador Honored
 

KIEV (AP) - A top Cossack commander has awarded Russia's ambassador to Ukraine the title of Cossack General for his work in strengthening ties between the countries' Cossack forces, a government newspaper said Friday.
 The Supreme Ota man, Dmytro Sahaidak, also awarded Ambassador Viktor Chernomyrdin the Cossack Pride Order on Thursday in Kiev, the Uriadovyi Kurier daily said.
 Chernomyrdin was honored for encouraging and fostering contacts among Cossacks of Russia, Ukraine, Belarus and Kazakhstan. 



TITLE: Putin: Russia Not Seeking To Join NATO
AUTHOR: By Megan Twohey
PUBLISHER: Staff Writer
TEXT: MOSCOW - President Vladimir Putin praised NATO Secretary General George Robertson for the &quot;dynamic&quot; tempo of discussions aimed at drastically changing the relationship between Russia and the Western alliance, but he said Moscow was not seeking to join NATO or win the right to veto its activities.
 &quot;I am sure that your visit will be a positive development for security in Europe and throughout the world,&quot; Putin told Robertson during Kremlin talks Friday. &quot;The dialogue between NATO and Russia is developing dynamically.&quot;
 Putin added: &quot;On the one hand, Russia is not standing in line to join NATO, but on the other hand, it is ready to develop relations as far as the alliance is prepared.&quot;
 Robertson said at a news conference that NATO and Russia would consider with &quot;some urgency&quot; a proposal by British Prime Minister Tony Blair to set up a new Russia-North Atlantic Council.
 Under the proposal, NATO's North Atlantic Council, the main policy-making body, would merge with a Russian security and political team to form the Russia-North Atlantic Council.
 The council, which would meet once every two weeks in Brussels, would allow Russia the same status as NATO's 19 member states in voting on some security issues.
 The North Atlantic Council would continue to meet once a week as an alliance-only forum, but the Russia-North Atlantic Council would take on an increasingly influential role when it comes to decisions on key issues such as counterterrorism, peacekeeping operations and other security matters.
 There are many ways that both NATO and Russia could win should this new framework take shape, analysts said.
 NATO members, especially the United States, will be able to receive more help from Russia in the fight against their new common enemy - terrorism.
 &quot;We have a common threat,&quot; Robertson said, drawing parallels between Russia and the West's battle against Nazi Germany six decades ago and the battle today against international terrorism.
 Through closer ties, NATO members, namely the United States, hope to continue to receive from Russia the support that Moscow is now offering, such as access to intelligence and a green light to use air bases in central Asia.
 And the closer Russia gets to the West, the less incentive it will have to do business with Iraq and Iran, analysts said.
 Among other things, a closer relationship may help open up more markets for the sale of weapons from Russia's struggling industrial-arms complex, said Sergei Markov, a political adviser with close ties to the Kremlin.
 If it gets help selling arms to other countries, &quot;Russia will stop protecting Iraq,&quot; he said.
 But agreement in some arenas in the Blair proposal, such as peacekeeping, could prove difficult.
 Just last week, for example, as France, Germany and Britain were sending or preparing to send troops into Afghanistan, Defense Minister Sergei Ivanov voiced concern about the presence of peacekeeping troops there.
 &quot;The question of sending peacekeeping troops to Afghanistan has to be approached with extreme caution,&quot; Ivanov said. &quot;This is not Kosovo.&quot;
 Russia and NATO currently communicate through the Permanent Joint Council, which was created in 1997 to give Russia a voice in the alliance but not a vote.
 This arrangement has suited NATO members who feared that, should Russia have veto power, it would cripple the alliance's decision-making capabilities. NATO and Russia are often at odds over issues like NATO enlargement and the presence of peacekeeping forces in Kosovo.
 In his remarks in Moscow, Robertson signaled that those fears have not disappeared and that for Russia to gain more authority in NATO, it would have to agree to be cooperative.
 &quot;A new attitude is going to be required on both sides if this is going to work,&quot; he said Thursday.
 On Friday, he said he had won assurances from Putin that Russia did not want to throw a wrench into NATO's activities.
 Robertson's visit, which began with a tribute in Volgograd to the huge Soviet losses there in World War II and included a stop at a Moscow elementary school Friday, capped a series of recent steps to thaw long-frosty feelings between NATO and Russia.
 The flurry of activity started earlier this month when U.S. President George W. Bush and Putin released a joint statement during their U.S. summit saying that the United States and Russia will work together with NATO and other NATO members to develop new, effective mechanisms for consultation, cooperation, joint decision making and joint action between NATO and Russia.
 Then on Nov. 9, just as the summit ended, Blair sent the four-page proposal to Putin, Bush, Robertson and the heads of government of NATO members calling for the new joint policy-making body. The proposal was sent with Bush's blessing. The next day, Putin called Blair to discuss his plan.
 The Robertson visit was announced as Putin headed off for Washington for his summit with Bush.

TITLE: Russian Humanitarian-Aid Operation Begins in Kabul
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW - Twelve Il-76 cargo planes from Russia landed near Kabul on Monday, marking the beginning of Russia's humanitarian operation in Afghanistan.
 Emergency Situations Ministry spokesperson Marina Ryklina said the planes had delivered ministry staff, construction workers, diplomats, sappers and security guards to the airport in Bagram, about 40 kilometers north of the Afghan capital.
 &quot;In the next few days, mobile hospitals will be opened in Kabul and Health Ministry medical teams will go to work there,&quot; she said, adding that about 200 aid workers and security personnel will soon be posted in Kabul.
 The planes also carried supplies for a humanitarian aid center in Kabul, and more humanitarian cargo is to come to Afghanistan this week, Ryklina said.
 President Vladimir Putin on Monday praised the operation, which was coordinated by the Emergency Situations Ministry and conducted in cooperation with U.S. troops and &quot;at the request of the Islamic State of Afg ha ni stan,&quot; an apparent reference to the Afg han government of President Burhanuddin Rabbani.
 Ryklina said a group of ministry experts was sent to Afghanistan to evaluate the humanitarian situation and the need for aid, which would be distributed in cooperation with international agencies operating in Afghanistan. She also said Russia was establishing a helicopter base.
 &quot;There will be a helicopter base equipped with civilian personnel in Bagram to help us with shipping cargoes to Kabul,&quot; she said.
 The Foreign Ministry said the sappers would help to clear mines from the road leading from the airport in Bagram to the site of the planned humanitarian center, the Associated Press reported. Officials said that by the end of the week, 88 Russians would be in Kabul working to develop the center.
 Last week, several media outlets carried reports that Russian elite military troops, or spetsnaz, were landing in Afghanistan to establish search and rescue teams there. The Defense Ministry denied the reports.

TITLE: Eurobond Payment Brings Higher Profile
AUTHOR: By Kirill Koriukin
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia is scheduled for redemption Tuesday.
 That is when the government has ordered its foreign finance agent, Vnesh ekonombank, to make good on the country's first sovereign bond issued since the days of the tsars.
 By paying off in full, and on time, the $1 billion it borrowed in 1996 in the form of a five-year Eurobond, Russia moves further into the good graces of the international investment community, which was badly burned in the devaluation and default of 1998.
 In the wake of the economic collapse that August, Russia defaulted on nearly every obligation it had. Tens of billions of dollars owed to foreign creditors were restructured, and efforts to restructure tens of billions more continue. Russia is even being sued for bonds issued before the 1917 Revolution.
 For the government, however, Eurobonds have always been a sacred cow - the standard of international creditworthiness. Even in the tempestuous months following the crisis, when many were expecting a default, Russia continued to service its dollar-denominated Eurobonds, which now total 11.
 Now Russia is going to be rewarded.
 Analysts say the repayment of the bond is bound to be followed by upgrades to Russia's sovereign rating by international agencies, which will further boost other Russian debt markets and make it easier and cheaper for the government to borrow.
 Hardly anyone in the market doubted the 2001 Eurobond would be redeemed, but &quot;there is a difference between an expectation and a fact,&quot; said James Fenkner, chief economist at Troika Dialog investment bank. &quot;A birthday doesn't make you older, but it's a cause for celebration. It's a date,&quot; he said.
 Demand for Russian debt, especially sovereign bonds, has been growing steadily for the past few months. 
 In August, for the first time since the crisis, Russian Eurobonds outperformed the emerging market benchmark index, EMBI+.
 &quot;Until September the market was depressed, although it was still growing, but then it was like a dam bursting,&quot; said NIKoil fixed-income analyst Sergei Konstantinov, adding that $1.44 billion &quot;has reportedly poured into the [Russian] Eurobond market in the past two weeks&quot; and a comparable amount has been injected for the past few months. 
 &quot;It's a very positive statement that Russia is able to make the payment without the need to refinance the debt. There are not many countries which pay down a $1 billion bond without coming back into the market immediately to refinance it,&quot; said ING Barings economist Philip Poole. 
 &quot;[Redeeming the debt] will stand out in this somewhat difficult credit environment, which is the result of concerns about global growth and the impact of Sept. 11 on markets generally,&quot; Poole said.
 Analysts are reluctant to predict how soon rating agencies may raise Russia's sovereign ratings. Some have said that they may go up almost immediately after Tuesday's payment, while others expect a decision in weeks or months.
 &quot;In our opinion, Russia is still at least one notch underrated,&quot; said Poole.
 Fenkner noted that Russia's rating by Standard & Poor's, currently &quot;B,&quot; is two notches lower than it was when the bond was issued five years ago (BB-). &quot;This is a significant mismatch,&quot; Fenkner said. &quot;I would be surprised if the rating doesn't get upgraded to 'B+' or even 'BB-' by the end of the year,&quot; he said.
 Analysts also expect Russia's weight to increase in emerging-market indices on the back of the Eurobond repayment.
 One worry, however, is that Russia's ongoing feud with OPEC, which has caused considerable instability in the price of oil, Russia's main hard-currency export, may stall rating agencies.
 &quot;We may be a bit of price softness in the short term, but generally there's a firm tone to the market even despite the hiccup with OPEC,&quot; said Letitia Rydjeski, an analyst with Aton. The dispute prompted some players on the Russian debt market to adopt a holding pattern, but may lead to no price drop even in the short term, she said.
 Konstantinov said the market has already factored in the oil dispute.
 Rydjeski said the corporate-debt market is still too small for analysts to perceive a definite trend. However, regarding corporate Eurobonds, he said: &quot;We hope to see a takeoff in 2002.&quot; 
 And the future for ruble-denominated corporate bonds also looks promising.
 &quot;Negative interest rates and the absence of a banking sector have catalysed a fledgling corporate debt market,&quot; Renaissance Capital says in its research.

TITLE: New Gazprom May Open Up New Options
PUBLISHER: Combined Reports
TEXT: MOSCOW - Gazprom, Russia's largest company, was awarded its first credit rating on Monday by ratings agency Standard & Poor's. 
 S&P said in a statement it had assigned the energy giant's foreign-currency debt a single &quot;B&quot; rating, which gives it a positive outlook on a par with other well-regarded and managed Russian energy companies such as LUKoil. 
 &quot;The ratings reflect the company's role as the owner and operator of essentially all exploration, production, processing, transportation and export assets in Russia's highly developed natural-gas sector, and its privileged position as a supplier to the large and growing Western European market,&quot; S&P said. 
 Gazprom accounts for a quarter of the world's natural-gas reserves with 29.9 trillion cubic meters of proven reserves at fully owned subsidiaries. 
 &quot;The outlook on Gazprom reflects to a large extent that on the Russian Federation,&quot; S&P said. &quot;It also reflects, however, Standard & Poor's expectations that the company will withstand any pressure to divest parts of either its production or transmission operations and that it will stabilize debt levels within the next few years despite sustained capital spending,&quot; the rating agency said. 
 &quot;The rating will probably give a necessary boost for Gazprom to move on with issuance of Eurobonds,&quot; said Alexander Ovchinnikov, fixed income analyst with Troika Dialog. No figure has been confirmed for the size of a Gazprom Eurobond, but estimates range from $750 million to $7 billion.
 
 <i>- Reuters, SPT </i>

TITLE: Secretary's Visit Stirs Pipeline-Deal Hopes
PUBLISHER: Combined Reports
TEXT: MOSCOW - A new spirit of collaboration between Moscow and Washington in the wake of the Sept. 11 attacks may end their traditional rivalry over how to pipe the Caspian Sea's vast oil reserves to markets, analysts said Monday.
 U.S. Energy Secretary Spencer Abraham arrived in Russia on Monday, to act as the official representative of the U.S. government at a ceremony marking the completion of the Caspian Pipeline Consortium (CPC) route from Kazakhstan to the Black Sea.
 But the visit will also give him the chance to meet his Russian counterpart, Igor Yusufov, and further cement the cozy U.S.-Russian relations established at the summit between presidents George W. Bush and Vladimir Putin.
 &quot;Better U.S.-Russia relations mean the desirability or necessity of having pipelines that do not go through Russia is much reduced,&quot; said Stephen O'Sullivan, head of research at United Financial Group. &quot;One of the main tenets of [former U.S. President Bill] Clinton's policy was energy independence for central Asia and the Transcaucasus, so we saw a lot of American diplomatic push aimed at making sure pipelines out of central Asia did not pass through Russian territory.&quot;
 The CPC line carries oil from Kazakhstan's huge Tengiz field to the Black Sea port of Novorossiisk.
 Abraham was due in Novorossiisk on Tuesday for the official launch of the CPC, in which U.S. companies have invested more than $1 billion. He is scheduled to return to Moscow later that day and then hold talks with CPC and various officials Wednesday, Interfax reported. On Thursday, the secretary will be meeting Nuclear Power Minister Alexander Rumyantsev for talks that will focus on nuclear nonproliferation issues, the Nuclear Power Ministry said.
 Sergei Glazer, chief strategist at Alfa Bank in London, said Russia and the Central Asian countries' roles as secure producers compared to Middle Eastern OPEC members could speed long-stalled Caspian agreements on status and territory.
 &quot;I think that we can expect to see a more aligned position towards the development of oil reserves in the Caspian,&quot; he said. The Caspian Sea, with reserves estimated at equivalent to those in Europe's North Sea, has yet to be divided between the five states surrounding it.
 Tensions flared in July when an Iranian gunboat ordered an oil-exploration ship, licensed to explore Azeri waters, out of what it regarded as the Iranian sector. &quot;But now we have a good political environment where we can go for some kind of comprehensive development of the reserves, which could be high enough to counterbalance OPEC countries and keep their influence under control,&quot; he said.
 Iran wanted oil to move across its territory, and a $3-billion, U.S.-backed pipe from the Azeri capital, Baku, to the Turkish port of Ceyhan, bypassing Russia altogether, had been gaining support.

TITLE: FSC Opens Rules for Offerings Abroad
AUTHOR: By Victoria Lavrentieva
PUBLISHER: Staff Writer
TEXT: MOSCOW - Russia's stock-market regulator has approved a new set of rules that would allow companies to both list shares and place initial public offerings abroad.
 &quot;With the new ruling, we wish to act as a filter for Russian companies willing to go abroad, and to adjust our standards to Western requirements, which means also to tighten control over financial flows,&quot; Federal Securities Commission spokesperson Ilya Razbash said in an interview Friday.
 Currently, Russian companies are only allowed to tap foreign markets by either issuing corporate bonds or American Depositary Receipts - a package of individual shares kept in the vaults of a U.S. bank that normally trade at a steep premium and are costly to prepare.
 Such restrictions will be lifted once the Justice Ministry gives its approval to the new rules, which the FSC expects within the next few weeks.
 &quot;This was one of the questions discussed by [FSC chief] Igor Kostikov and his counterparts from the U.S. Federal Securities Commission in early October,&quot; Razbash said.
 The existing rules, which came into force in April 1998, are too general and don't address many important details, Razbash said. The most basic question - whether or not to give a company the right to list its stocks abroad - couldn't be determined because the criteria for making such a decision is too ill-defined.
 The FSC has never actually had to deal with the problem because not one Russian company has ever applied, as interest in Russian shares plummeted after the government's default and ruble devaluation in August 1998, Razbash said. But with foreign capital returning and Russia's stock market outperforming all but China's this year, the FSC is expecting more domestic companies will seek additional options for attracting foreign capital.
 ADRs have been the most popular instrument, and companies have issued them in good times and bad. But placing ADRs is much more expensive than placing normal shares, in which Western exchanges are showing a growing interest.
 The Vienna-based New Europe Exchange, or NEWEX - a central and eastern European exchange that is a joint venture between the Deutsche and Vienna bourses - is one of the most interested. Established last year to provide investors direct access to the region's markets, NEWEX now trades 91 securities from the Czech Republic, Hungary, Poland and Russia.
 From the beginning, it planned to trade non-ADR Russian shares, but problems with FSC rules have prevented it. Average trading volume at NEWEX is around 300 million euros ($263 million) per month, of which 90 percent is accounted for by 34 Russian securities.
 The moves toward listing abroad were applauded by most market watchers. &quot;This is good news for those Russian companies looking to attract Western money,&quot; said James Fenkner, chief strategist with investment bank Troika Dialog. &quot;New issues will trade abroad much higher than on the local market because that's where the pockets of money are,&quot; he said.
 &quot;There will be at least several Russian companies who would like to tap foreign markets with initial placements - for example, MTS and Vimpelcom have every reason to do that, as most of the trading in their ADRs is currently done abroad,&quot; Fenkner said.

TITLE: IN BRIEF
TEXT: Bank Privatizing Rules
 

MOSCOW (Vedomosti) - Prime Minister Mikhail Kasyanov has ordered the development of common rules for privatizing the government's blocking stakes in 62 banks.
 The commission responsible for drawing up the rules, which was formed this summer, includes officials from the Finance Ministry, the Central Bank, the presidential administration, the Antimonopoly Ministry and the Economic Development and Trade Ministry.
 Kasyanov last week told the Finance Ministry "to speed up the preparation of proposals on the expediency of governmental participation in the capital of credit organizations ... not to allow the exclusion of certain banks and to use a single approach" and report back by Dec. 15. 
 In addition, Kasyanov ordered the Finance Ministry, the Property Ministry and the State Property Fund to review proposals submitted by State Duma deputy Gennady Raikov on managing and selling off the government's stakes in banks by Dec. 10.
 
 
Oil Saga Ends
 

MOSCOW (SPT) - Tyumen Oil Co. will finally transfer the Cherno gor neft production unit to the Sidanko oil company, Prime-Tass reported. 
 The agreement between the two companies, signed Monday, is expected to put an end to a two-year saga that has left investors bewildered by the behavior of Russian businesses. 
 TNK and its main shareholder, Alfa Group, woke up to controversial worldwide fame in November 1999 after they bought Chernogorneft - at the time a Sidanko subsidiary located near TNK's operations on the Samotlor oil field - for $176 million at a much-criticized bankruptcy auction.
 Chernogorneft accounted for much of Sidanko's crude output.
 BP, which owns 10 percent of Sidanko, cried foul, and the dispute made international headlines.
 Last summer, TNK went on to purchase a 44-percent stake in Sidanko from the Interros holding and another 40 percent from a Cyprus-based company to reclaim Chernogorneft's assets. 
 
 
UES Reaches Level 1
 

MOSCOW (SPT) - In line with efforts to attract more investment and increase transparency, Unified Energy Systems announced Monday the successful listing of its Level 1 ADR program on the Vienna-based New Europe Exchange, or NEWEX. 
 Trading will start Dec. 1.
 The company also plans to list American Depositary Receipts on other major stock exchanges like London and New York, said Alexander Ko les nikov, a UES board member.
 UES already was available on NEWEX's unregulated market through its Global Depositary Receipt program. 



TITLE: Oil Majors Discovering the Art of Refining Is a Crude Business
TEXT: Little of Russia's vast oil wealth ends up in the country's gas tanks. But the oil industry is no longer ignoring opportunities lurking downstream, and competition for refineries and gas stations is heating up. </i><strong>Anna Raff </strong><i>reports. </i>
 RYAZAN, Central Russia - Simon Kukes, president of Tyumen Oil Co., calls it his weakness.
 An eight-story column trimmed with a maze of tubing and red railing towered above a group of dignitaries and TNK's Ryazan refinery employees on a cold and wet morning earlier this month. Everyone had gathered to celebrate the completion of this new catalytic cracking unit, whose purpose - as Kukes so wryly explained it - was to &quot;break big molecules into little ones.&quot;
 This step in the refinery's upgrade is the crest of what looks to be a wave building up in Russia's downstream sector: that is the refining and distribution of crude oil.
 
 <strong>Against the Current
</strong> Even during Soviet times, Russia's strength was in the upstream - exploration and extraction - sector. Because personal automobile use took a backseat to the country's military and industrial demands, government officials didn't make deep refining a priority. Crude exports supplied the Soviet Union with hard currency and most of the complex refining took place in Europe.
 Russia's refining and distribution capabilities were neglected as overall industrial output fell in the 1990s. Billions of dollars in investment are needed to make Russia's refining competitive, a disadvantage illustrated by a long-standing industry adage: It's cheaper to export crude and import refined oil products than to do the refining at home. This is what experts call &quot;negative value.&quot;
 Over the past 10 years, there has been a change in the refining slate, or the percentage that different kinds of crude products make up of total output, said Valery Nesterov, an analyst with the Troika Dialog brokerage.
 &quot;In the mid-1990s, the government tried to engage the industry,&quot; Nesterov said. &quot;And then realized that refining should be a private-sector affair. But the government is still pro-active.&quot;
 For example, the Finance Ministry provides guarantees to Russian companies that use foreign firms and banks to modernize refineries.
 The high oil prices of the past two years have deepened oil majors' pockets, and with narrowing profit margins in crude production, companies are looking downstream to diversify and offset the risks of a crude-oil-price plunge. Multimillion-dollar refinery upgrades and plans for new plants may soon make this &quot;negative value&quot; positive. 
 
 <strong>Down the Creek 
</strong> TNK's refinery upgrade has attracted the most attention because much of its financing comes from a $500-million credit line granted by the U.S. Export-Import Bank. In 1999, then U.S. Secretary of State Madeleine Albright blocked the loan package from going ahead after oil major BP had a falling out with TNK over the Chernogorneft production unit. The nine-year loan was eventually approved in April 2000.
 &quot;American taxpayers can sleep well knowing that their loan is safe with us,&quot; Kukes said. Refinery renovation is estimated to cost $394 million, $241 million of which will come from Eximbank loans.
 Refineries are graded on their conversion rate. Before the new cracking unit, the Ryazan refinery had a crude oil conversion of 59 percent. This means that for every 100 barrels of crude oil that goes in, 59 barrels of refined oil come out. The conversion rate will increase to 68 percent with the new unit and to 82 percent by 2003, after additional construction.
 While the addition of the catalytic cracker will transform the Ryazan refinery from an average Russian refinery to an average European refinery, it still trails behind Sibneft's flagship Omsk refinery, which analysts consider to be Russia's most modern.
 The race to modernize is on, and at stake are Russia's fledgling consumer market and - perhaps - Europe's. In October, LUKoil strengthened its grip on the Volga region when it acquired 86 percent of the Norsi Oil holding, including the 35,000-barrel-per-day Norsi refinery, in a privatization auction.
 LUKoil won Norsi for $26 million, a price industry analysts called &quot;cheap&quot; despite Norsi's debts of 6 billion rubles $200 million). Sibneft was the only other contender, and soon after the envelopes were opened, some assumed that LUKoil had cut a deal with its rival.
 The details of that deal became clear last week, when Sibneft said it was close to completing the acquisition of LUKoil's downstream operations in the Moscow region. According to the United Financial Group brokerage, this includes a 40-percent stake in the Moscow refinery as well as a 45-percent stake in Mosnefteproduct, the successor to the Soviet oil-marketing monopoly.
 &quot;The Moscow refinery - although not very sophisticated - is favorably located in the most lucrative domestic market,&quot; UFG said in a research note. &quot;Even though the plant does not deliver as high netbacks as Sibneft's Omsk refinery, it is the best refinery Sibneft could buy.&quot;
 LUKoil has yet to confirm this information.
 In turning its attention to Central Russia, LUKoil announced that it would invest &quot;substantial sums&quot; in the Norsi refinery. As well as being Russia's largest producer of crude, LUKoil is also the largest refiner, with a throughput of 32 million tons in 2000.
 
 <strong> Race for Khabarovsk 
 </strong>As both independent and oil company-owned refineries rush to upgrade their facilities, foreign companies are offering technology and advice. Shell Global Solutions and Germany's Sued-Chemie won a $10-million tender last month for the reconstruction of the Far East Khabarovsk refinery.
 In this case, the foreign firms offered the best &quot;quality for the price,&quot; said Renat Khuramshin, the refining director at the Alyans group, which owns 52 percent of the Khabarovsk refinery.
 &quot;The market dictates its own conditions,&quot; Khuramish said. The project, which aims to increase the refinery's output of high-octane gasoline, is expected to justify itself financially in five years.
 Alyans admits that its hand was forced by Rosneft, whose competing refinery in the Khabarovsk territory added a catalytic reforming unit in April. Catalytic reforming is a process used to produce high-octane gasoline.
 Built in 1942, the Komsomolsk plant is gunning to become the biggest and most efficient refinery in the Far East, with Rosneft's planned $678-million overhaul to be completed in 2004. The refinery's current conversion rate is 60 percent, and the company says that is set to reach almost 100 percent once the expansion is completed.
 Rosneft has plans to bring all phases of refining up to Western standards. This includes hydroprocessing, which further breaks down hard-to-get-to heavy oil components under high pressure and temperatures of about 350 degrees Celsius.
 &quot;By the time this refinery is done, it will be the most modern in Russia, unless, of course, Surgutneftegaz beats us at Kirishi,&quot; said Rosneft President Sergei Bogdanchikov.
 
 <strong>The 'Biggest' Refinery 
</strong> With $4 billion sitting on its balance sheet, Surgutneftegaz has been criticized for not using its resources to expand the company. After losing a string of government tenders for oil-field development, Russia's third-largest oil producer has turned to refining. But the benefits will be mixed at best. The Kirishi refinery is located only 320 kilometers from the Estonian border, making crude or fuel-oil shipments to European refineries cheap because of low transport costs, leading some analysts to believe that the modernization of Kirishi will add little value to the company.
 Last December, Surgutneftegaz awarded the modernization contract to ABB Lumus Global, which was also general contractor for TNK at Ryazan and for the Nizhnekamsk refinery in Tatarstan. The plans call for a $800-million hydrocracking unit that, once built, will be the first one in Russia. During this first stage, scheduled for completion by 2004, Kirishi's conversion rate will reach 75 percent, and it will produce 60,000 barrels a day of light-oil products. Light-oil products will increase from 46 percent to 62 percent of the refinery's output.
 Surgutneftegaz president Vladimir Bogdanov says that Kirishi &quot;will be the biggest refinery in Europe&quot; - no small claim for a company whose strengths lie upstream. In addition to the hydrocracking unit, Surgutneftegaz plans to construct a $500-million catalytic cracker.
 
 <strong>Selling the Stuff
</strong> Refinery modernizations are sweeping the country because oil companies have realized that their product mix - favoring heavier products such as fuel oil - doesn't correspond to the needs of the markets and consumers.
 Foreign oil companies such as BP, which has 33 gas stations in Moscow, have successfully made inroads in Russia's consumer market.
 &quot;This network has more throughput per site than any other BP network in the world,&quot; said BP spokesperson Peter Henshaw.
 In August, the American oil giant Texaco announced that it wanted to control 20 to 30 percent of Moscow's gas- station market in two to three years. Texaco, which has about 40,000 Star Marts, created a joint venture with TNK to produce motor oil as well as to develop Texaco's distribution market in Moscow.
 &quot;Investment will be comparable with BP's capital expenditure on gas stations - between $1 million to $4 million each,&quot; Alexei Pavlyk, general director of the Texaco-TNK joint venture, said at the time.
 Since then, however, Texaco has merged with Chevron to become ChevronTexaco, and all plans have been put on hold while the new company evaluates its interest in Russia, Kukes said.
 Shell East Europe Co., a division of Royal Dutch/Shell, plans to open its sixth gas station in St. Petersburg by year's end. Another 25 stations could be opened after a &quot;careful analysis of all existing stations,&quot; said Steve Devon, head of Shell East Europe's representative office.
 Russian companies have expanded abroad as well. No. 1 retailer LUKoil made waves last year when it bought 72 percent of the U.S. Getty Petroleum Marketing, which operates 1,300 gas stations along America's east coast. LUKoil expects a profit of $26 million from its U.S. operations, which include 17 oil terminals as well as the Getty chain. Ralif Safin, head of LUKoil's Evropa Holding, said that this year LUKoil sold 4 million tons of oil product in the United States, equivalent to 9 percent of the U.S. market.
 Domestically, oil companies are expanding their distribution chain just as aggressively as their refining capacity. LUKoil wants to add 1,400 new stations to the 1,100 already operating across Russia. Yukos this year allocated 5 billion rubles ($164 million) for marketing, some of which will be used to modernize a portion of the 1,200 gas stations it owns throughout Russia. In addition, Rosneft wants to establish a distribution chain in the Far East. During a $30-million first stage, the company would build 35 to 40 stations in the Kha ba rovsk territory and would later extend its reach to Sakhalin Island, the Primorsk territory, the Amur Region and the Chitin Region.
 
 <strong>Trouble at the Pump
</strong> Industry officials say there is still excess demand for quality gasoline that comes from a reliable brand.
 &quot;Customers want to know that they can drive their car out of the station,&quot; remarked Vladimir Kapustin, TNK's vice president for refining.
 After conducting an investigation entitled &quot;Alchemists,&quot; the Federal Tax Police discovered that up to 25 percent of Moscow's gasoline is of bootleg quality. Producers mix low-octane gasoline with chemicals to avoid excise taxes, and then sell it as high-octane gasoline at some stations.
 And some companies have had problems with foul play. In August, drivers who filled up at Slavneft's St. Petersburg gas stations discovered that the gasoline had damaged their engines. Slavneft paid for any damage done, and the company's security service later discovered that someone had tampered with gasoline as it was making its way from the Yaroslavl refinery to St. Petersburg by rail.
 To have any hope of exporting oil products - and not just oil - to Europe, these and myriad other problems must be resolved. The European Union has issued a directive laying out tougher standards for gasoline and diesel, most notably in its reduction of the acceptable sulfur content.
 Diesel and gasoline exported to the European Union must have a sulfur level of not more than 50 parts per million, and regulators are now considering lowering that figure to zero. Gosstandart - one of Russia's regulatory bodies - set the sulfur limit of Russian diesel meant for cars at 2,000 ppm, and if producers want their diesel fuel to be labeled &quot;ecologically friendly,&quot; they must lower the sulfurr below 50 ppm.
 While Europe's standards might be just a little more stringent, the difference is in the execution. Many European countries have stopped selling leaded fuels. In Russia, only a handful of refineries have the capabilities to produce unleaded gasoline. Diesel, like gasoline, is sold bootleg.
 TNK's Ryazan refinery will be able to produce European-standard fuels by the time its modernization is complete. But this gasoline and diesel won't make it to the local market any time in the near future. Recently, a Moscow law that penalized buyers of low-octane gasoline through taxes was repealed, making gasoline cheaper overall with the expected effects on air quality.
 This is typical, said Sergei Borisov, president of the Russian Fuel Association. The government levies excise taxes on quality refined products but doesn't stop the influx of bootleg gasoline.
 &quot;This homemade gasoline first and foremost affects the environment,&quot; Borisov said earlier this year. &quot;It's a plague. They throw out emissions, the level of which our chemists and ecologists can only guess and lead to mutations that they can hardly comprehend.&quot;

TITLE: Dow Jones Flirts With 10,000
PUBLISHER: The Associated Press
TEXT: NEW YORK - Wall Street extended its advance Monday with a moderate rally that boosted technology stocks but ultimately failed to take the Dow Jones industrials above 10,000.
 Analysts attributed investors' tentativeness to their worries that stock market might be rising too much, too quickly. The Dow has been flirting with the 10,000 level and bull market territory during the last several sessions. A report from the National Bureau of Economic Research confirming that the United States is in a recession added to the debate.
 &quot;There's a tug-of-war between the bears and the bulls here,&quot; said Brian Belski, fundamental market strategist at US Bancorp Piper Jaffray. &quot;I think the market is in pretty good shape. The problem, I think, though, is that many investors are having a hard time diagnosing when earnings will start to turn positive. And we don't see positive earnings, positive growth until the latter half of 2002.&quot;
 The Dow closed up 23.04, or 0.2 percent, at 9,982.75, rebounding from a deficit of 55 points earlier in the session. Although the Dow crossed the 10,000 mark twice last week, it has not closed above that level since Sept. 5, six days before the terrorist attacks.
 Broader stock indicators also advanced. The technology-laden NASDAQ composite index was up 38.03, or 2.0 percent, at 1,941.23, while the Standard & Poor's 500 index rose 7.08, or 0.6 percent, to 1,157.42.

TITLE: WORLD WATCH
TEXT: Begging for Calm
 

BUENOS AIRES, Argentina (Reuters) - Unpopular President Fernando de la Rua pleaded with business, politicians and unions on Monday not to rock the boat as Argentina tried to convince creditors and the IMF to halt its slide toward default.
 But investors said that as Argentina takes offers this week on a massive debt swap aimed at reducing its interest costs, it faces an uphill task persuading the International Monetary Fund to forgive its fiscal sins and release urgently needed cash.
 With the steady decline in tax revenues since mid-year and many industries in crisis, Argentina said last week it expected to post a $7.8 billion budget deficit target this year, exceeding the IMF target of $6.5 billion.
 Without the fresh IMF cash, many analysts say Argentina could be pushed to the brink of bankruptcy, heightening the prospect of a massive debt default or a devaluation of the the peso currency from its decade-old parity with the U.S. dollar.
 
 
Coin Careful
 

FRANKFURT, Germany (Reuters) - A Dutch vending-machine federation said on Monday the country's vending machines could distinguish the two euro coin from other coins, after reports that the piece could be substituted by a Thai 10 baht coin.
 "The 10 baht coin problem has been solved in the Netherlands," said Aad Kobus of the V.A.N. federation of vending-machine users.
 "Dutch machines can easily be adjusted to be more accurate when they are activated to accept euros in January," he said.
 Media reports said that Dutch vending- machine firms were worried that the two euro coin could be substituted in machines by a 10 baht piece worth just one eighth as much - around $0.25.
 Asked if other eurozone countries faced the same problem with vending machines, Kobus said: "It goes without saying that in other European countries the vending machines have to be very accurate."
 
 
Deadline Rolled Back
 

BRUSSELS, Belgium (Reuters) - European Union countries may be allowed to continue providing emergency war-risk insurance aid for their airline companies until the end of March, rather than, as originally planned, lifting it at year-end, a senior EU official said on Monday.
 When commercial insurers slashed their level of cover for airlines' war and terrorism risks in the wake of the Sept. 11 attacks on the United States, governments stepped in to provide the cover needed to keep airlines flying.
 In October, the EU's Executive Commission said this should be allowed, but only until the end of 2001, when airlines should return to the market for their insurance.
 But the director general of the Commission's transport and energy department said similar interventions by the U.S. and Japanese governments meant the market would still be unlikely to offer sufficient cover by early 2002.
 "We are in favor of prolonging until March," Lamoureux said after addressing the European Parliament's transport committee. Such a decision would need to be approved by a meeting of the top level of the commission, he added.
 

 Deficit Quandry
 

MADRID, Spain (Reuters) - European Commissioner for Economic and Monetary Affairs Pedro Solbes said on Monday that European finance ministers remain undecided on what to do about mechanisms that allow EU states to increase budget deficits in tough times.
 The topic was likely to concern finance ministers at the upcoming Ecofin meeting in Brussels on Dec. 4 and beyond, he said.
 "The future debate in Ecofin is what value should we give to cyclically adjusted deficits ... to finally reach a political decision as to the value we want to give these figures," Solbes told reporters on the sidelines of a conference in Madrid.
 Governments across the 12-country eurozone are restrained from boosting growth through their own spending by a fiscal discipline pact they signed before the launch of monetary union in January 1999.
 
 
Deficit Quandry, Part 2
 

BERLIN (AP)-The German government on Monday confirmed that the economic slowdown has blown a hole in public finances, raising sharply its estimates of the public-sector deficit for this year and next.
 Germany's deficit as a percentage of gross domestic product will be 2.5 percent this year and 2 percent in 2002, the Finance Ministry said. It had previously forecast shortfalls of 1.5 percent and 1 percent, respectively.
 The revisions, stemming from lower tax returns and bigger outlays on items such as jobless benefits, were expected, but underline the problems stemming from a sharp slowdown in Europe's biggest economy.
 The new deficit targets also aren't far below a European Union-imposed annual deficit limit of 3 percent
 Despite the higher countrywide deficit targets, the federal government is sticking to its own long-standing limits on new borrowing.
 But Finance Minister Hans Eichel is having to draw on proceeds from the sale of state-owned assets to meet a pledge to borrow no more than 22.3 billion euros ($19.6 billion) this year and 21.1 billion euros ($18.6 billion) in 2002 under a plan to balance the federal budget by 2004.
 
 
Extended Holiday
 

PRAGUE, Czech Republic (AP) - Czech automaker Skoda Auto AS plans to extend by three days a previously-planned holiday production shutdown to adjust its output to the global economic slowdown, an official said Monday.
 Skoda wants to suspend production from Jan. 2 to Jan. 4, following the company's normal holiday breaks, spokes person Milan Smutny said. The move still has to be approved by the unions.
 The company's holiday break begins Christmas Eve and ends New Year's Day.
 Last month, the company stopped production to cut the output by 3,800 vehicles, and three Friday afternoon shifts are to be curtailed in December to cut production by another 1,800 automobiles.
 Skoda Auto, a unit of Germany's Volkswagen AG, originally had planned to produce 460,000 cars in 2001, up from the 435,000 produced in 2000.
 The company is the country's largest exporter. 



TITLE: St. Petersburg: A Great Tourist Destination?
TEXT: Editor,
 </i>On Wednesday, Nov. 7, I went to a great bar near the intersection of Nevsky and Canal Griboyedova. What a great way to celebrate Revolution Day! Around 3 a.m. on Thursday morning, I headed down Griboyedova in the direction of Nevsky Prospect to catch a cab home. Alone and very sober. 
 I noticed a militia jeep drive past me on Griboyedova. I was on the other side of the canal, and I was glad that the militia guys just drove by. Only 50 meters from Nevsky. 
 Then what happens? That militia truck pulls up beside me, and four tough-guy militia-types get out. They surround me. The first word: <i>&quot;Dokumenti.&quot; </i>So I get out a photocopy of my passport and business visa. The tough guy to my front-left growls &quot;Where are your documents? These are not documents.&quot; Smart guy. Of course they know that the documents are being registered at OVIR (for those of you unfamiliar with this process, for some reason known only to God and the Russian government, you must register a visa, which means leaving your passport at a government office, which means walking around with no passport). 
 He then asks &quot;Do you have any drugs?&quot; No. Then the tough guy rear-left starts shoving his hands into my pockets. The tough guy front-right then takes my wallet.
 Now, I am not sure why, but I reacted to this whole situation rather calmly. I think it's because I understood, having lived in Russia for several years, exactly what these &quot;protectors of law and order&quot; were going after. For a hint of what I mean, just let me say that I made sure of two things during this &quot;raid.&quot; 
 First, I did not attempt at all to defend my rights. I don't think I need to explain what the tough-guys might have done if I had started reacting to their physical aggressiveness. But let's just say it would have been &quot;expensive&quot; to get out of jail that night. 
 Second, I kept a very, very close eye on my wallet. When tough guy front-right took my wallet, I told him very clearly: &quot;I know exactly how much money is in that wallet.&quot; Tough guy front-left kept waving the photocopies, demanding I look at them. I kept my eyes glued to my wallet.
 Anyway, they finally assessed the situation and decided that there was nothing else to be done (or had?). So they left. And I, having up to this point fixed my attention exclusively on my wallet, suddenly realized that 200 rubles were gone from my front left pocket (a small loss compared to the 2,000 rubles in my wallet).
 Anyway, I flagged down a taxi. Some friendly Russian guy gives me a ride for 100 rubles across town. All in all a great night, except for those few minutes with the tough guys.
 At this point let me stress one thing: I am <i>not </i>complaining about what happened. I have been here several years, so I know what can happen in St. Petersburg. And I am not trying to get the attention of the administration of the St. Petersburg police. They already know that this stuff goes on, and they could stop it pretty easily if they wanted. And I am not trying to warn foreigners about the dangers of visiting Russia (I think they have already heard enough about Russia). 
 What I <i>am </i>trying to do is figure out where the Russian press gets the idea that after the Sept. 11 destruction of the World Trade Center in New York, Russia might get some noticeable chunk of the tourist business that previously went to other countries. 
 My trip last month to St. Petersburg was my first in over a year. And I must say, things have improved a lot in the city. It's better than ever. Locals have more cars, money and clothes. Great cafes everywhere. It has become much more like a Western city. I feel more comfortable in St. Petersburg now more than ever. 
 But it's still Russia. And that's something you should not forget. Three years ago, I would have never have left a club at 3 a.m. alone. But this last time, I saw all the nice stores, cars, etc. I figured it would be O.K. Stupid move.
 My experience with the police is not unique. It is just one of the many told by me and other victims to friends and co-workers in the West. Do you really think that some well-off fat Westerner is going to come to a place where the cops behave like this? And well-off and fat are the attributes of the best tourists (Russia is not going to get rich off the $10-a-day backpacking adventure-seeking crowd). 
 Besides, this idea that Sept. 11 made America (and the West in general) more dangerous and therefore people will go to other places is true to only a very limited extent. Let's assume that on a scale of one to 100 the United States as a tourist destination was 95 and Russia was five before Sept. 11. After Sept. 11, the United States is, maybe, a 90, but Russia is still a five. So, a lot of Germans might now decide to stay on this side of the Atlantic, but I doubt they will head to Russia. Even wanderlust has its limits. And I doubt that anyone who wanted to go to the West will change their plans. I myself traveled to Chicago from Europe with a connection in Washington-Dulles in mid-September. And I felt quite safe and relaxed.
 O.K., maybe it is true that some who were planning to visit Arab countries have reconsidered. And some Europeans might be afraid of flights in U.S. airspace. So where then will the tourists go? Where I did this summer ... to places like Bulgaria. Why Bulgaria and not Russia? For me (and most of the potential tourists I know) the following are the biggest reasons:
 1. Crime (government). In Bulgaria, I was not afraid of the police. No hassles at the border, although I must admit that the border crossings this year in Russia were almost pleasant. I didn't even notice the police.
 2. Crime (non-government). The crime rate in Bulgaria is much lower than in Russia. Plus anti-Western attitudes are much less common.
 3. No visa required (for one month). The Bulgarians need a visa to visit the West, but Westerners may go to Bulgaria without a visa. That may hurt the pride of Bulgarians a bit, but at least it's an acceptance of reality. Just because the West feels it must restrict the access of Bulgarians, there is no reason for Bulgarians to restrict access of Westerners. But in Russia it is difficult for a Westerner not only to get a visa (invitation required), but also to register it.
 I myself have asked my (rather numerous) relatives to come and visit Russia for several years now without a single one taking me up on it. And none of my Russian friends want to take a vacation in Russia because of security concerns after Sept. 11. The problems with the Russian tourism industry are like the problems in other industries: An enormous potential that hasn't been realized due to home-grown problems. It will not take such drastic external events such as Sept. 11, but rather drastic internal improvements in a few key sectors within Russia itself to improve Russia's chances in the tourism industry. 
 <i>Terry Taylor
 Berlin, Germany
 </i>
 <strong>I Want the Option
 </strong><i>Editor,
 </i>What makes me angry is that I feel as if Hitler and his gang have come back in disguise. Everything that the United States stands for is slowly being taken away without most Americans even knowing because this administration keeps us on &quot;full alert.&quot; They're unaware of what's becoming law under their noses.
 The government has made it impossible to voice your opinion without being stoned in public. There isn't any open discussion in any news forum. It seems that 99 percent of newspapers, television media and cable only print or show what they are told to. No truth is being told to us. Information is being withheld and only one side is being told. I read European papers to try and find out what the hell is going on.
 As a people who lost 5,000 of our own on Sept. 11, we have the right to know what's going on on the home front and abroad. We are in the dark on both fronts. We are Americans and can handle the truth, whether we are winning or not.
 I think it's like the question of &quot;Is my spouse cheating on me?&quot; Some want to know and some don't. But I want the option to read and see, so that I can make up my own mind.
 <i>Nick Dale 
 Dover, New Hampshire
 </i><strong>Hand in Hand
 </strong><i>In response to &quot;A Summit That Is Not All About Concessions,&quot; a comment, Nov. 16.
 </i>
 <i>Editor,
 </i>As an American, I agree with the position taken in this comment that &quot;integrating Russia into the West economically and politically would do more for U.S. security than any deal on NMD.&quot; After eight years of neglecting Russia under U.S. President Bill Clinton's administration, I believe the United States under George W. Bush recognizes Russia's value as a potential political and economic ally. I believe it is in both countries' best interest to develop stronger ties. I have always felt that, from a cultural and historical standpoint, Russia has more in common with the West than with other parts of the world. It will take time for old tensions to be replaced by trust and cooperation, but hopefully the recent warming in relations between the two countries will be the start of increased understanding and partnership. Both countries stand to benefit.
 <i>Blair Petersen 
 Winfield, Illinois</i>
 <i>Editor,
 </i>An excellent comment! Let's stop talking about giving and taking, concessions and all the other Cold War garbage. The current situation between Russia and the United States has the makings of a win-win situation for both countries and peoples. Forget about NMD being an obstacle between us. Mark my words that, at the end of the day, Russia is going to be an integral part of our NMD, which I see turning into a regional-defense program that will include all of NATO, Russia, the Baltics and other countries that share our common causes and apprehensions. As for NATO - Russia will become a most integral part, if not a full member, and this is where our regional missile-defense (formerly NMD) system will come in.
 Let's also consider the economic exchanges and investments that I see on the horizon. LUKoil's recent U.S. expansion plans are only one small example. Russia's military and political elite need to come up to speed very fast on President Vladimir Putin's 21st-century vision, but I am afraid they are 40 years out of step.
 <i>Curtice Mortrud 
 Chicago, Illinois
 </i>
 <strong>Toward True Peace
 </strong><i>In response to &quot;Pushing Through Our Masks,&quot; Nov. 13.
 
 Editor,
 </i>I am the rector of an Episcopal congregation that was recently formed by the consolidation of two old parishes, one predominantly &quot;white-American&quot; and the other, &quot;African-American.&quot;
 I believe that what Mark Scheflen is really developing is the language of diplomacy that could go a long way toward achieving true peace. What diplomats and other political leaders don't do is speak the language of the heart. If they did, they would begin communicating with each other at a much deeper level, where the deepest human longings and aspirations for peace and fulfilment - shared by everyone - are given true expression and are truly heard by everyone. 
 I commend Scheflen and pray that this exchange will truly become a global effort. I pray that some of the young people from Russia, Africa, the United States and all over the world who participate in this experience with Mark will someday become our political and diplomatic leaders. 
 <i> Reverend Canon Lloyd Casson
 Wilmington, Delaware
 </i>
 <strong>Watching Kosovo
 </strong><i>In response to &quot;Rugova Claims Victory in Kosovo Vote,&quot; Nov. 20.
 
 Editor,
 </i>The recent election in Kosovo was the first national-level vote here since the conflict of 1999, and the first election here in many years that could be called inclusive, free and fair. Most notable was the fact that the Serbian community of Kosovo took part in it. Thanks to the United Nations and the Organization for Security and Cooperation in Europe, more than 1 million Kosovans - the majority Albanian and the minority Serb, Turkish, Romanian and others - went to the polls to elect the first-ever national assembly. Now the UN will encourage this assembly to exercise limited self-government until the international community decides whether Kosovo should become totally independent from Belgrade.
 According to preliminary polling data, more than 30 percent of registered Serbian voters voted, an encouraging sign of realism and reconciliation. 
 Also encouraging was the fact that the leading vote-winner in the election, the LDK of Ibrahim Rugova, was also the most experienced and moderate of the Albanian choices on the ballot. Kosovo will need both qualities in abundance to cope with the difficulties ahead. 
 With all the questions and challenges to Kosovo's Albanian and Serbian communities, we may nevertheless take heart at all that is positive compared to just two years ago. At that time, we should recall, hundreds of thousands of Kosovan Albanians, who had survived Milosevic's repression and murderous forced exile, returned to their communities to find their homes burned by retreating Serbian troops. By the time international peacekeepers had spread out across the countryside, many of these same Kosovans took vengeance indiscriminately against their Kosovan Serbian neighbors.
 As a member of OSCE's election mission, I had the opportunity to gauge also the role that the international community, the official custodians of Kosovo, has played over the past two years. Helping a population of 2.1 million have been more than 40,000 troops from NATO and other countries, 2,000 international police, hundreds of specialists and experts and, during the past two weeks, some 2,000 election supervisors, selected from the 54 countries of the OSCE.
 The estimated cost of these elections ($29 million) may seem high, but we should keep in mind that it is but a fraction of the cost that would occur should the efforts of the international community fail. As in all such efforts to resolve conflict peacefully by international organizations, peaceful efforts may seem on occasion costly and inefficient - and indeed, they often are. But when they can persuade or simply inhibit the outbreak of violence between communities that are disposed toward the use of force, we should be thankful that they exist at all. 
 <i>Mark Dillen
 Kosovo </i>

TITLE: One Giant Leap for U.S.- Russian Relations
AUTHOR: By Alexander Vershbow
TEXT: MORE than a week has passed since the conclusion of the meetings between presidents George W. Bush and Vladimir Putin in Washington and Crawford, Texas. These meetings were the culmination of an historic period in U.S.-Russian cooperation that may well be viewed as a watershed in our relations.
 Although the Cold War ended officially a decade ago, U.S.-Russian relations over the last 10 years were still colored by the suspicions and mistrust of the past. Russia of course, was going through a difficult period of transition and turmoil, with many false starts and missed opportunities on the path to democracy and a free-market economy. Internationally, Russia remained in a kind of no man's land - seeking integration with the West, but not always capable of shedding the zero-sum thinking of the Soviet era. While there were many positive gains in Russia's relations with the United States and other Western countries, including major steps to reduce the risk of nuclear war, the decade ended with a sense of disappointment and uncertainty.
 Things began to change this year. Russia's reform process finally began to gain traction, with a solid economic turn-around after the 1998 crash and an impressive package of reform legislation enacted by the Duma. U.S.-Russian relations got back on a positive track with the first Bush-Putin meetings in Ljubljana in June and Genoa in July. These led to intense consultations on strategic arms and missile defense, along with high-level U.S. efforts to expand the economic and trade relationship.
 But it was the terrorist acts of Sept. 11 that gave the relationship an even stronger impetus. They served as the catalyst for the transformation of the relationship announced by the American and Russian presidents at Washington and Crawford. 
 The strategic choice by President Putin to give Russia's full support to the anti-terrorist coalition had a dramatic effect on the Bush Administration leadership and the American public. That choice made clear that our two countries, together with other Western democracies, were now operating on the basis of shared interests and shared values and not on the basis of tactical necessity alone. 
 The common mission - to destroy the terrorists and those who harbor them - led to unprecedented forms of political and military cooperation and the sharing of the most sensitive intelligence information between Washington and Moscow. The epic nature of the new threat also helped to put some of the still-contentious issues on the U.S.-Russian agenda into their proper perspective and gave both sides a greater incentive to look for constructive solutions. 
 In making his strategic choice, President Putin proved himself to be a man who has grasped that the Cold War is truly over, that the United States and Russia are no longer rivals but friendly powers pursuing many of the same goals. The meetings in Washington and Crawford confirmed that our two countries have embarked on a new relationship for a new century. They strengthened our joint commitment to cooperate on a wide range of issues and highlighted the extraordinarily warm personal relations between the two leaders. And on those issues where our countries still differ, such as Iraq and Iran, the meetings showed our ability to address our differences frankly, but without allowing them to overshadow our common interests.
 At the top of the list of the summit's major achievements was the agreement by the two leaders to carry out dramatic reductions in U.S. and Russian strategic nuclear forces. President Bush announced that the United States will reduce to a level between 1,700 and 2,200 warheads over the next decade (down from over 7,000 today). President Putin announced that Russia will make comparable reductions. The next step is to codify these reductions, to include measures for verification, without the multi-year negotiations that used to be necessary in Cold War days.
 As to ballistic-missile defenses, we will keep working on this issue. The ABM Treaty prohibits the testing that the United States must conduct in order to develop effective, but limited missile defenses against rogue-state threats. But whether or not we find a solution, both presidents made clear their determination to develop a new strategic framework for the long term, one that is more in keeping with our new relationship and takes account of the changes in the strategic situation since the ABM Treaty was signed 29 years ago. A new framework should enable our two countries to meet future threats together.
 The summit also highlighted our cooperation to prevent or counter the proliferation of weapons of mass destruction. This includes continued efforts to improve the physical security and accounting of nuclear materials so that terrorists and those who support them can never acquire such weapons. Of special importance was a joint statement on &quot;bioterrorism&quot; - especially timely after the recent anthrax incidents in the United States. Russian and American officials and experts will work together to prevent terrorists from acquiring biological weapons and on related health measures to protect our populations.
 The two presidents devoted considerable time to Russia's relationship with NATO. They declared that Russia and NATO are increasingly acting as allies against terrorism and other new threats and that the NATO-Russia relationship should reflect this alliance. Our common task is to devise new mechanisms for cooperation, coordinated action and joint decisions that can integrate Russia more closely into NATO's work.
 Beyond these security questions, presidents Bush and Putin also addressed ways to expand our dynamic economic relationship and promote Russia's full integration into the world economy. We will work to accelerate Russia's accession to the World Trade Organization, based on the standard conditions which other countries have followed. The Summit also announced steps to support the expansion of small and medium-sized business in Russia and a &quot;Banking Dialogue&quot; to help close one of the gaps in the Russian reform process.
 Our presidents also discussed human rights, religious freedom and the independent media. They welcomed the initiative of Russian and American media executives, journalists and independent organizations to convene a &quot;Media Entrepreneurship Dialogue&quot; aimed at improving the conditions necessary for media to flourish as businesses in Russia. 
 In short, the Washington/Crawford Summit showed that the United States and Russia are taking giant steps to transform their relationship. In the future, we will act as genuine partners - indeed, as allies. Moreover, unlike our alliance in World War II, we are united not just by a common enemy, but by common values of democracy, liberty and the rule of law.
 
 <i>U.S. Ambassador to Russia Alexander Vershbow was a member of the U.S. delegation at the Washington/Crawford Summit. He contributed this comment to The St. Petersburg Times. </i>

TITLE: Starovoitova Still Shrouded in Mystery
TEXT: LAST week, we quietly marked the third anniversary of the murder of State Duma Deputy Galina Starovoitova, who was gunned down in the staircase by her apartment on Canal Griboyedova on Nov. 20, 1998.
 The investigation of the assassination continues, but there have been no results so far.
 A lot of people, including me, are pretty convinced that the local branch of the Federal Security Service, or FSB, which is handling the investigation, has not discovered anything. The only comment that you can get from them on this matter is that &quot;the case is still under investigation and all possible motives are still being looked into.&quot;
 &quot;For us, she's still alive,&quot; said Rimma Starovoitova, Galina's mother, at a press conference last week. &quot;Sometimes I think that she'll call again after another trip to Moscow, but we know that she won't.&quot;
 For three years now, Starovoitova's family has not been able to learn any more about the investigation than the rest of us have. The FSB stubbornly says that, according to the law, information about the investigation can be given to the family only after the investigation has been completed. But the FSB keeps extending its inquiry: Just last week, it announced the work would continue at least until May 20, 2002.
 &quot;[This decision] raises many questions, the most important of which is whether they have done anything at all to resolve this case,&quot; said Yury Shmidt, the local human-rights lawyer.
 As a result, on Nov. 20, Sta ro voi to va's parents announced that they were suing the FSB for information about the case. On the same day, members of the Union of Right Forces political faction announced that they would send an official State Duma inquiry to the St. Petersburg FSB, also demanding information. 
 And look what happened.
 The very same day, FSB officials announced that they knew who killed Starovoitova. 
 &quot;A circle of people linked to the assassination has been identified,&quot; ran an IMA Press report, quoting FSB officials. The report, however, was quick to add that no one had been charged.
 So what is going on?
 Over the last three years, the FSB has interrogated about 1,000 people, made 34 searches, examined 104 documents and sets of fingerprints, etc., etc. As I read this information, I recalled the experiences of Tatiana Likhanova and Danil Kotsubinsky, two local journalists who were interrogated in connection with the case in 1998. Kotsubinsky, who was working for the newspaper Chas Pik at the time, said that his interrogator informed him that the youth wing of Starovoitova's political movement regularly held orgies involving animals. He said that Interior Ministry detective Mikhail Balukhta tried to get him to testify to immoral behavior on the part of Starovoitova's political allies.
 Likhanova has worked as an aide to Duma Deputy Yuly Rybakov, an artist and Soviet-era dissident who was one of Starovoitova's closest allies. She said that Balukhta gleefully informed her that he had personally detained Rybakov 15 times during the Soviet period for taking part in pro-democracy meetings. He then added that he considered Rybakov a suspect in Starovoitova's murder.
 That would be funny if it weren't so sad.
 &quot;I'm surprised to be honest,&quot; Ruslan Linkov told me the other day. Linkov is the head of the local Democratic Russia faction, who three years ago was walking up the staircase with Starovoitova and was severely wounded by her killers.
 &quot;The 'circle of people' that is linked [to the case] is known, and it's a fact. How many years have I been demanding that investigators interrogate [Governor Vladimir] Yakovlev and [State Duma Speaker Gennady] Seleznyov? I was told that they can't be questioned because they have immunity. Investigators have told me 'Yes, we know that, but we haven't received any orders,'&quot; Linkov said. &quot;There's no political will, that's why [the investigation has not progressed],&quot; he added.

TITLE: Chris Floyd's Global Eye
TEXT: <strong>A Thirsty Evil
</strong> Are you a terrorist? If you don't know, you'd better find out fast. Because Uncle Sam's made a list and he's checking it twice - &quot;40 to 50 countries&quot; targeted for possible &quot;U.S. action,&quot; according to America's securely-located vice president, Dick &quot;Chicken Hawk&quot; Cheney. As the man says, a hard rain's a-gonna fall.
 So here's a simple test to check your moral worthiness and see if you can escape God's - sorry, Bush's - all-devouring wrath. Have you ever gone out for a beer and bought a Stella Artois instead of a Bud? Then you, my friend, have engaged in a conspiracy to cause &quot;adverse effects&quot; on the economy of the United States. And that makes you one of the evildoers. 
 So says the great Oval Object in his latest executive order, in which he gives himself the power to have anyone he designates as a terrorist to be tried by secret military tribunals and executed without appeal. Bush's dread edict - which of course takes effect without any input from that useless appendage of a bygone era, the U.S. Congress - covers anyone who &quot;causes, threatens to cause&quot; or even &quot;has as their aim&quot; to cause &quot;adverse effects&quot; on, amongst other things, the American economy or U.S. foreign policy. As always, Bush alone retains the right to decide who is and isn't a terrorist, just as he alone decides what constitutes an &quot;adverse effect&quot; on the United States. Could be a bomb, a boycott, a protest, a tariff - or the wrong beer: It's his choice. The edict gives Bush the power to seize any non-U.S. citizen, in any country on earth, and subject him or her to secret summary justice. There is no outside check or oversight of this exercise of universal dominion, and no legal recourse for the accused - not even to the laws of their own country. 
 Never has a single person in the history of the world claimed such absolute power - and commanded the military might to back it up. For we should also note that Bush now has the authority to launch attacks against any nation he chooses, at his own discretion, without a vote by Congress or that other withered appendage, the United Nations.
 And if you don't like it, pal, you can tell it to the judge. The military judge. Just before he puts a bullet in your brain.
 
 <strong>No Direction Home
</strong> But what about malcontents in what Bush now calls &quot;the Homeland?&quot; Hey, we got it covered. The U.S. government now has the power to prosecute any public expression of dissent as an act of &quot;domestic terrorism,&quot; thanks to the super-duper new &quot;USA PATRIOT&quot; Act passed, in the dead of night, by Congress earlier this month - a law which most of the dangling legislative appendages freely admit they never read before the vote. Under the new law, you are a &quot;domestic terrorist,&quot; subject to 25 years in prison, if you engage in acts intended to &quot;influence the policy of government by intimidation or coercion.&quot; Which is, of course, the very definition of public protest: the attempt to force policy changes on reluctant governments through an unsettling display of popular will. In this case, the Imperial Executive has delegated power to his most faithful minion: Attorney General John Ashcroft. It is Ashcroft - the only senator in U.S. history to be rejected by voters in favor of a dead man - who will now define the limits of freedom in America. 
 And Ashcroft - a prissy religious crank like his boss - has gone about his task with Christian zeal. (After all, your true believers know there is a higher law than that secular humanist rag, the Constitution.) For example, just last week, Ashcroft stripped prisoners of the ancient right to confer with legal counsel in private, conferring upon himself the power to monitor any such conversation whenever he sees fit. This also applies to people being held without any charge at all - and there are hundreds, perhaps thousands in that category now. We don't know the exact number, because Ashcroft no longer tells anyone - including the appendages - how many people he's holding, or why he's holding them, or who they are, or where they might be, or what he's going to do with them. But not to worry; he's taking good care of his nameless captives. Why, only one has died in custody so far. At least only one that we know about.
 Because Ashcroft's not telling.
 
 <strong>Bullet Points
 The terrorist attacks on American liberty are coming so fast these days you can't keep track of them all, and so your inundated Eye is reduced to making mere lists of a few recent developments:
 . Bush insiders begin pushing the idea of using regular army troops to &quot;keep order&quot; among the general populace - the kind of thing that once drove terrorist leaders like George Washington and Patrick Henry to violent rebellion.
 . A rightwing group founded by the vice president's wife, Lynn Cheney, issues a list of dozens of academics it considers &quot;short on patriotism&quot; for making critical comments about American policy. The group plans more &quot;naming and shaming&quot; of individuals who are &quot;out of step&quot; with &quot;the Homeland.&quot;
 . Ashcroft orders the interrogation of an additional 5,000 young Arab men who entered the country legally during the past two years. With a straight face, Ashcroft denies singling out anyone on the basis of race, creed, or national origin.
 . And finally, some good news: Billy Bush, radio DJ and the president's first cousin, finds work after being canned by a small Virginia radio station for low ratings. He's been hired by CNN.
 
 <i>Background Check: Get more facts in the annotated Global Eye on the World Wide Web at: www.sptimesrussia.com </i>

TITLE: Czech Capital Is Now the New Casablanca
AUTHOR: By Danica Kirka
PUBLISHER: The Associated Press
TEXT: PRAGUE, Czech Republic - Soon after the Sept. 11 attacks, reports that one of the terrorist pilots had met with an Iraqi agent in Prague made international news. But far more important to Czechs are their own spies and their brawl for control of the largest of four intelligence services operating in the post-communist country.
 The Iraqi Embassy in Prague, which features a 3-meter-tall photo of Saddam Hussein cuddling a child, has become a focus of intrigue in recent weeks since it emerged that the Iraqi agent held several clandestine meetings with Mohammed Atta, the Egyptian suspected of flying one of the airliners into the World Trade Center. It was suspected that Atta had come to the Czech capital seeking help from the Iraqis, old friends of the Czechs, in attacking the Prague headquarters of U.S.-funded Radio Free Europe.
 But the affair hasn't caused much concern here. Czechs are far more interested in their own spies' in-house quarrels. The fight has become so vicious that newspaper columnists speculate that Czech spies have little time to gather intelligence on anyone except each other. That disarray, combined with the country's position at the crossroads between East and West and the potential for corruption in a changing economy, has created a spy's dreamland.
 &quot;The Czech Republic ... has become the playground for every foreign service imaginable,&quot; said Jan Urban, the editor of Radio Free Europe's Czech-language program. &quot;'Casablanca' is a very good description.&quot;
 The World War II-era, Humphrey Bogart classic comes up frequently as an analogy, as Czechs grope to explain the lingering feeling that few can be trusted, despite the years that have passed since Vaclav Havel and his reformers ousted the communist regime. Commentators like Urban wonder exactly what the many spies who underpinned the communist system are up to these days.
 Adding to the anxiety was the defense minister's recent decision to name Jiri Giesl to head the military-intelligence agencies, despite his once having worked as a military spy during the days before Havel's Velvet Revolution. Up to one third of his staff once worked in the communist regime, Respekt reported.
 Political parties, meanwhile, are trying to make the agencies part of their power bases, creating a management crisis that has pushed the espionage world to near collapse, said Petr Holub, editor at the influential weekly, Respekt. When asked whether the disputes would affect the quality of information being passed to the West, Holub could only observe with a smile: &quot;At least there's good will.&quot;
 Those efforts to cooperate became public last month when senior Czech officials speaking on condition of anonymity revealed the Atta connection. Prime Minister Milos Zeman later told reporters that Atta and the Iraqi diplomat, Ahmad Khalil Ibrahim Samir Al-Ani, discussed an attack on Radio Free Europe, the massive black office building just off Wenceslas Square. 
 Al-Ani was expelled in April, just weeks after the last meeting. 
 Authorities put up concrete barriers outside the station after the Sept. 11 attacks and parked a few armored personnel carriers in the driveway.

TITLE: WORLD WATCH
TEXT: Plot Foiled
 

NEW BEDFORD, Mass. (AP) - A high school where three teenagers allegedly plotted to use explosives and guns to kill fellow students was declared safe by police following a sweep by nearly 40 officers and five bomb-sniffing dogs.
 Eric McKeehan, 17, and two 15-year-old freshmen, who allegedly modeled themselves after the two students who carried out the Columbine High School massacre in Littleton, Colorado, were to be arraigned Monday on charges that include conspiracy to commit murder. 
 The students were arrested at their homes Saturday after a New Bedford High School janitor found a letter outlining their plans to detonate explosives in the school and then shoot fleeing students. Police said the students then planned to kill themselves when police arrived.
 A search of the students' homes yielded bomb-making instructions, knives, shotgun shells and pictures of the suspects holding what appeared to be handguns. The guns were not recovered. Two more students were being questioned and faced arrest, authorities said.
 
 
State of Emergency
 

KATMANDU, Nepal (AP) - Nepal's king declared a state of emergency Monday after weekend attacks by rebels killed at least 76 soldiers and police, the palace said.
 King Gyanendra accepted a cabinet recommendation that allows the government to deploy the army for the first time in hunting down rebels fighting to establish a socialist state.
 The recommendation comes in the wake of a guerrilla attack Sunday night that killed five soldiers, 28 police officers and the chief district officer in Solukhumbu, 200 kilometers north of Katmandu, Interior Security Minister Khum Bahadur Khadka said.
 A total of 76 soldiers, police and government officials have been killed since Friday, when rebels broke off a four-month cease-fire and launched assaults across the Himalayan kingdom.
 Security will be tightened across the country, Khadka said.
 The rebels are seeking an end to the constitutional monarchy and the creation of a socialist republic. Their insurgency, launched in 1996, has claimed more than 1,800 lives.
 
 
Deadly Letter
 

WASHINGTON (AP) - Senator Patrick Leahy says there was enough anthrax in the letter sent to his office to kill more than 100,000 people.
 The letter to the Vermont Dem ocrat was discovered Nov. 16 in a batch of unopened mail sent to Capitol Hill and quarantined since the discovery of an anthrax-contaminated letter to Senate Majority Leader Tom Daschle on Oct. 15.
 "We still haven't got the letter open," Leahy said Sunday. "It is so powerful that they're having difficulty figuring out how best to open it."
 An FBI microbiologist said last week that there were billions of spores inside the letter, which was taped around the edges. "You could feel the powder inside," the microbiologist told reporters.
 Daschle, speaking a day after a memorial service for a 94-year-old Connecticut woman who died from inhalation anthrax, said Americans should be careful opening the mail.
 "I would be very skeptical about opening envelopes that aren't recognizable, that look suspicious," Daschle said. "And we can't possibly protect every single one of our citizens from the possibility of another attack."
 
Who's Next?
 

WASHINGTON (AP) - Iraq tops the lists of countries where the United States might take its war on terrorism next. Some other places - Somalia, Sudan, Kashmir - could also face military attacks if Osama bin Laden flees there.
 Beyond that, America's next steps probably won't involve bombing runs. Instead, U.S. officials will work with police and armies to find suspects, as they've done in the Philippines and Germany, work to cut off money for terror, as they have in Somalia and Saudi Arabia, and urge governments to end support of terrorists as they have with Syria.
 In all, the United States will turn, to another 40 to 50 - perhaps even 60 - countries where global terrorist networks operate, top Bush administration officials say.
 In recent days, U.S. Deputy Defense Secretary Paul Wolfowitz and other top officials, including national security adviser Condoleezza Rice, have again hinted that Iraq may soon be a target, regardless of whether the United States can definitively tie the country to the Sept. 11 attacks. That has led America's Arab allies, including Jordan, Saudi Arabia and Egypt, to once again warn that they could not support a strike on a fellow Arab country, because they fear it would further agitate the volatile Middle East.
 
 
Crash Kills 24
 

ZURICH (Reuters) - Swiss aviation investigators sifted through the wreckage Monday of a Crossair regional airliner for clues on why it crashed on approach to Zurich airport at the weekend, killing 24 of the 33 people aboard.
 Helicopters took pictures of the wreckage and surrounding area, while dozens of investigators tramped through the woods to look for debris that could shed light on what caused the plane to go down.
 They appeared already to have all but ruled out foul play, but Saturday's loss of the 97-seat RJ-100 jet was still a blow to an airline industry struggling to regain passenger confidence after the Sept. 11 hijack attacks in the United States. Both the flight data and the cockpit voice recorders were quickly retrieved from the wreckage in snow-covered woodland.
 Officials are hoping to clarify why the 57-year-old pilot, one of Crossair's most experienced captains, flew so low in a snow shower. He and the co-pilot died. Flight LX3597 from Berlin went down late at night and in bad weather two miles short of Zurich airport. 
 
 
Opposition Victory
 

TEGUCIGALPA, Honduras (Reuters) - Honduras' main opposition leader claimed victory in presidential elections on Sunday and promised to use his four-year term to clamp down on rampant crime and attack poverty in the country of 6.3 million.
 Ricardo Maduro, a conservative businessperson and former central bank chief, told euphoric supporters at the National Party headquarters in Tegucigalpa that early returns and the party's figures showed victory was assured.
 "We've done it. Hondurans have won," a jubilant Maduro said to his supporters. Maduro's main rival, the ruling Liberal Party's Rafael Pineda, accepted defeat gracefully late on Sunday night.
 With some 740,000 votes counted, the electoral tribunal said Maduro had 52.7 percent support against Pineda's 43.8. Some 3.4 million Hondurans were eligible to vote.
 But the murder of a congressional candidate from Maduro's party on Saturday cast a shadow over his triumph. 
 "We are going to fight to end crime, and we're going to manage it," he said. 



TITLE: Russia Cup Dominated By Familiar Skaters
AUTHOR: By Olga Dervenyova
PUBLISHER: Special to The St. Petersburg Times
TEXT: Figure-skating fans can't be blamed if the faces atop the podium at this year's Cup of Russia Grand Prix event created a sense of deja vu. But, while the Italian ice-dancing pair of Barbara Fuzar-Poli and Maurizio Margaglio repeated their victory of last year with little difficulty, the winners in the three other events retained their crowns with a bit more effort.
 The struggles of the Russian pair of Yelena Berezhnaya and Anton Sikha ru li dze were a good indicator of those that compatriots Irina Slutskaya and Yevgeny Plushenko would experience in their own quests to repeat.
 Saturday's short program had been disastrous for the pair, with Berezhnaya falling on a side-by side triple jump and then again on a throw later in the program. The pair received low marks of 5.1 to 5.3 for technical merit, and only higher marks for presentation kept them from falling to lower than their third-place standing.
 On Sunday, however, the two bounced back with a nearly flawless performance of their comic Charlie Chaplin program to grab first place. In fact, one judge awarded the pair a perfect mark of six for the routine.
 &quot;I really don't have anything to say. I have no words or emotions left,&quot; Sik ha ru lidze said after the skate. &quot;I just had to trust in Yelena's inner strength again.&quot;
 Second place went to another Russian pair, Maria Petrova and Alexei Tikhonov, who had led after the short program.
 &quot;[Maria] was great today,&quot; Tikhonov said about the performance by his partne. Petrov had skated with Sikharulidze earlier in her career, before he opted to switch and team up with Berezhnaya in 1996.
 The only fault in the pair's routine was a rough landing by Tikhonov on a side-by-side double-axel, but it was not serious enough to drop them below the French pair of Sarah Abitol and Step hane Bernadis, who skated an impressive free program that included a numer of unusual lifts.
 Slutskaya, the defending European champion, was skating a new free program on Saturday and didn't seem comfortable in either that or her short program the day before.
 &quot;The competition was okay for me, but not perfect because of the mistakes,&quot; Slutskaya said Saturday. &quot;But the main competitions are coming up soon and I have to try to skate my best there.&quot;
 Slutskaya's troubles began when she fell while attempting a triple-toe loop during her skate Friday. After the opening of her new program - skated to selections from Puccini's &quot;Tosca&quot; - drew huge applause from the fans at the Ice Palace on Saturday, she again ran into trouble, landing two triple-double combinations shakily.
 The errors might have been enough for Angela Nikidonov to move into first, but the American fell to third following a number of mistakes in her long program after a clean skate on Friday in the short program had left her in the top spot.
 Russia's Viktoria Volchkova jumped ahead to grab the silver despite a mistake on a minor element.
 &quot;I was a little bit upset when I didn't land the flip in my short program, but it might have helped me to skate so well in the free program today,&quot; said Volch kova, who did land a triple-salchow, triple-toeloop combination on Saturday. &quot;I was skating for the enjoyment.&quot;
 Russians also provided the excitement in the mens' competition.
 While St. Petersburg's Yevgeny Plu shen ko attempted a figure-skating first, 24-year-old Roman Serov nearly skated away with first place.
 Serov was the only skater to land all of his jumps in the free skate, but a routine containing few risks kept him from grabbing the top spot.
 &quot;My goal was to skate cleanly. That's why I didn't risk a quad,&quot; Serov said. &quot;Although I didn't land all of the jumps perfectly, in general I'm pleased.&quot;
 The 19-year-old Plushenko didn't shy away from risks at all, opening with a attempt at a quadruple lutz - a jump that has never been landed in competition. He missed the landing, as he did later on a quadruple toeloop, and then put a hand down on a triple-triple combination, but he went on to land the rest of his jumps cleanly and didn't seem disappointed afterward.
 &quot;I'm very pleased with my short program. I performed it perfectly,&quot; the defending world and European champion said Saturday. &quot;I wasn't able to land the most difficult jump in skating - the quad-lutz - in my free program, but I'm glad that I attempted it.&quot;
 Aside from the new jump, Plu shen ko's free program didn't differ much from the one he skated in the competition a year ago.
 Bulgaria's Ivan Dinev finished third, ahead of last year's bronze medalist, Matthew Savoie of the United States.
 Sunday's win for Fuzar Poli and Mar gaglio surprised no one. The defending world and European champions in ice dance received two perfect marks for presentation while skating a high-energy, high-speed program to disco music.
 &quot;We enjoyed ourselves a lot today - dancing and dancing and dancing,&quot; Margaglio said after. &quot;We just did what we wanted.&quot; Israel's Galit Chaid and Sergei Sakhnovsky finished second in the event while Yelena Gru shina and Ruslan Goncharov of Uk rai ne finished third.

TITLE: SPORTS WATCH
TEXT: A Good Day
 

INDIO, California (Reuters) - Greg Norman won the entire $1-million purse at the 19th annual Skins Ga me on Sun day, sending Ti ger Woods, defending champion Co lin Montgo me rie and Jesper Par nevik home empty-handed.
 The Australian followed a birdie putt that won the 17th hole with a conservative two-putt par on 18 that was worth $800,000. He collected the remaining $200,000 on the second extra hole at the Landmark Golf Club.
 Norman had predicted that the rule changes would mean the annual made-for-TV event may go down to the last hole with the full $1 million on the line.
 Under the new format, a player who wins a skin could not collect the money unless he won or tied for the lowest score on the next hole.
 As a result, the entire $300,000 up for grabs on the front nine on Saturday rolled over to Sunday and the pot for each hole kept growing as no one managed to win a skin early on the back nine.
 
 
Miami Moving Up
 

ARLINGTON, Virginia (Reuters) - After its second straight rout, Miami remained the top-ranked team in the latest USA Today/ESPN coaches' poll, while Florida took advantage of Nebraska's loss to move into the No. 2 spot.
 The Hurricanes (10-0) received 59 first-place votes and a total of 1,499 points following their 65-7 dismantling of then-No. 12 Washington. The huge victory comes just one week after Miami pounded No. 17 Syracuse (9-3), 59-0.
 Florida (9-1), which did not play, collected one first-place vote and moved up a notch to second, 67 points behind Miami.
 Nebraska (11-1), was pounded by Colorado, 62-36, and dropped four spots to No. 6. The Buffaloes (9-2) soared four places to 10th.
 Defending national champion Oklahoma will not be playing for another title this season. The Sooners (10-2), who were shocked by Oklahoma State, 16-13, were denied a spot in the Big 12 championship game and fell from fourth to No. 11.
 Third-ranked Texas (10-1) and No. 5 Oregon (9-1) both leaped two places, while Brigham Young (11-0) and Maryland (10-1) are tied for seventh with 1,080 points. Ninth-ranked Illinois (10-1) completes the top 10.
 
 
Sibbling Success
 

ASPEN, Colo. (AP) - Ivan Kostelic, brother of womens' skiing great Janica Kostelic, pulled off a stunning upset with his history Sunday in the season's first World Cup men's slalom.
 The 22-year-old Croatian skied out of the 64th position in the first run, then was fastest in the second run to win in 1:38.81 seconds. It was the latest starting position for a slalom winner in World Cup history and third latest in any event.
 "I learned a lot in the last four years," Kostelic said. "In every life, there is a fight. I was injured, but I never thought of quitting."
 Four severe knee injuries, three on the right knee and one on the left, had stalled his promising career. The first came just before the 1998 Nagano Olympics and the latest last Jan. 31.
 Giorgio Rocca of Italy was second in 1:38.93. Reigning world slalom champion Mario Matt of Austria finished third in 1:39.00.