BUY WHATEVER YOU WANT!

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BUY WHATEVER YOU WANT!

Segodnya, April 14, 2001, p. 1

Cabinet met on Friday to discuss taxation, and one issue on the agenda was tax agency monitoring of major purchased by citizens. From the start of 2000, the Tax Code has obliged the taxation auditors to keep a record of individuals purchasing apartments, country homes, cars, gold bars, shares and securities. But the tax agencies aren’t doing too well at this; the definition of “major purchase” remains unclear.

Deputy Finance Minister Sergei Shatalov proposed introducing a “major purchase threshold” of $5,000, and no longer keeping track of purchases of artworks and securities: art purchases are not always registered, while the number of securities purchases is too great to monitor. Shatalov also proposed giving the tax agencies the authority to compel people to pay extra taxes if any discrepancy is discovered between their income and expenditure. Since many of those who make major purchases use savings accumulated over a long time, it is proposed to compare data on an individual’s major purchases over a year with that individual’s income over the past three years; if the difference is over 20%, additional tax payments will be demanded.

No consensus was reached in Cabinet on any of these proposals. There were objections, especially from the Economic Development Ministry, to the “major purchase threshold”, monitoring of securities purchases, and the whole system of tax monitoring.

“We’ll continue working on our proposal,” says Shatalov. “We must not discontinue monitoring; it will still be required sometimes.”

BOEING AND RUSSIAN AEROSPACE SIGN ANOTHER AGREEMENT

Nezavisimaya Gazeta, April 14, 2001, p. 2

Boeing CEO Philip Condit and Russian Aerospace (Rosaviakosmos) general director Yuri Koptev have signed a long-term cooperation agreement, covering a range of fields in space, civil aviation, and the latest aviation technologies. The agreement includes creating a network of trans-polar flight paths, joint ventures in aircraft servicing, and developing new civil aircraft designs. Over 70 employees of Boeing’s Moscow office are currently engaged in joint research projects with 500 scientists from seven Russian cities.

Boeing CEO Philip Condit told journalists that a new specialized technical aircraft servicing center would soon be opened in Moscow, with the latest computer technology. He spoke of plans to use Zenith booster rockets for satellite launches; a program called “Ground Launch”.

Boeing and Russian Aerospace engineers are also working on designs for regional commercial jets seating 50-90 passengers, with a range of 1,850 kilometers. Potential long-term projects include a supersonic business-class airliner; although this is still at the stage of market research to determine whether there is a demand for such an aircraft. Condit concluded by saying: “Aeroflot already has many Boeing planes, and I hope their numbers will increase.”

CHECHNYA: HUMANITY MOVEMENT LOSES ITS LEADER

Kommersant, April 14, 2001, p. 1

Adam Deniev, deputy head of the government of Chechnya and leader of the Adamalla (Humanity) movement, was murdered in his home town of Avtura in the Shalinsk district of Chechnya on Thursday night. A bomb exploded while Deniev was preaching a sermon live on television. Akhmad Kadyrov considers that the assassination was carried out by order of separatist leader Aslan Maskhadov, who has been planning this for a long time.

Muslims consider the night between Thurdsay and Friday to be sacred, and it is usually marked by good works: giving out “saga” (alms) and reading the “yasin” (ritual prayers from the Koran). Adam Deniev was a theologian (educated in Pakistan and Saudi Arabia), and whenever he visited his home town, he always appeared on local television to preach a sermon and read the yasin.

“It was a live broadcast, and like most people in town, I was listening to Deniev,” says local resident Musa Sultanov. “At around 9:20 p.m., just a couple of minutes after he’d closed the Koran, I heard a powerful explosion which made the whole house shake. The television screen went blank, cutting off the speaker mid-sentence. I thought we were under attack and there would be more explosions, so I took the children down to the basement. But there were no more explosions. Coming out on the street half an hour later, I saw clouds of smoke over the television studio building.”

The bomb had been planted in the attic of the building – right over Adam Deniev’s head as he faced the cameras. It was detonated by remote control. The town has no street lighting at night, so those responsible could have approached the building and climbed up to the attic unnoticed.

The seriously-injured Adam Deniev was immediately taken to Shali, but doctors were unable to save him. Mahomet Madaev, owner of the local television channel, received several shrapnel wounds, which were treated on the spot.

MORE FOREIGN DEBT WRITTEN OFF

Kommersant, April 14, 2001, p. 1

Deputy Finance Minister Sergei Kolotukhin announced in London on Friday that the Russian government already considers the problem of restructuring Soviet debts to commercial creditors to be resolved. By the end of this year, they will all be converted to Eurobonds, in exchange for a partial write-off.

An agreement on a similar plan was reached in February 2000 during talks on restructuring the debts of the former Soviet Union to the London Club of commercial creditors. Essentially the same system was used with the London Club. Over a third of the $32.2 billion debt to the London Club was written off, while the rest was converted into Eurobonds, which really do have to be honored. Mikhail Kasianov presented this as a major triumph at the time. But President Putin later criticized Kasianov for this in his address to parliament last summer.

Now, according to Kolotukhin, over a third of the $4 billion debt will be written off. So Russia will issue Eurobonds to the value of over $2.5 billion. And this is once again being presented as a major truimph.

IGOR IVANOV REPORTS TO THE DUMA FOREIGN AFFAIRS COMMITTEE

Kommersant, April 14, 2001, p. 2

Foreign Minister Igor Ivanov reported to the Duma Foreign Affairs Committee on Friday.

He first thanked committee chairman Dmitrii Rogozin and his colleagues for “productive cooperation”. Then he assured the committee that in its relations with the United States, Russia would mintain a “policy based on principles, but without confrontation”; and Russia would not cease cooperation with Iran, for example. According to Ivanov, the new US administration is yet to define its policy on Russia, but it is showing some interest in dialogue. Igor Ivanov intends to make a visit to the United States in mid-May.

The foreign minister said that in the year since Russia’s new direction in foreign affairs was established, Russia has managed to “increase the number of like-minded nations”. Russia has also managed to start constructive dialogue within the CIS with countries like Ukraine and Azerbaijan. Ivanov regretted that relations with Georgia still remain far from perfect.

Ivanov brought the welcome promise that the Foreign Ministry will protect the interests of Russians abroad “consistently, using strong measures if necessary”. He rejected the possibility of Russia unilaterally lifting sanctions against Iraq, saying this is only possible if the UN Security Council decides to do so.

FATHERLAND AND UNITY SET TO MERGE

Versty, April 14, 2001, p. 1

Fatherland movement leader Yuri Luzhkov and Unity party leader Sergei Shoigu have announced plans to merge the two organizations into a single party.

Here are some opinions from other politicians about the merger.

Yevgeny Primakov, leader of the Fatherland – All Russia faction in the Duma: In view of the impending merger of Fatherland and Unity into one party, we have proposed to all centrist forces in the Duma to create a coordination council in order to exchange opinions, bring their positions closer together, and develop legislative initiatives on fundamental state-building issues, economic and social development.

As for the Fatherland – All Russia faction, I can say with certainty that it will be independent, and I will obviously retain my position as its leader. I am not a member of any party, so the choice will depend on many circumstances.

The Fatherland – All Russia faction is comprised of may forces; we have members of the Agrarian party, and the All Russia movement… Around 30 of 45 members represent Fatherland. I would like to note that all members of the Fatherland – All Russia faction are firmly in favor of the impending merger. If it goes ahead, and if the rights of all organizations involved are upheld, then the cause will benefit – not only Fatherland or Unity.

In relation to our activities in the Duma, I can say that Fatherland – All Russia may vote with either the left or the right on a range of issues, depending on what is in the interests of the voters who elected us. This does not mean that we will automatically support our partners in the centrist bloc on all issues.

Alexander Vladislavlev, secretary of the political council of Fatherland: The time for casting away stones is over. Nothing that is functioning well shall be destroyed, and that includes the Fatherland – All Russia faction. No one will be permitted to do this under any circumstances. At the same time, we are prepared for constructive dialogue with anyone seeking it, anyone who is not constantly engaged in confrontation.

I would like to note that there are frequently quite different viewpoints in the Fatherland movement and the Fatherland – All Russia faction; but neither the political council nor the faction are afraid of this – we only welcome it, and seek optimal solutions. If we can’t find them, no one throws a fit; deputies may vote independently if they give the faction due notice.

Vladimir Pekhtin, leader of the Unity faction: The idea of merging comes from our leaders – Shoigu and Luzhkov. But it’s really the president’s idea, since everything started happening after his address to parliament: this was the final detail which enabled Unity and Fatherland to unite. Duma voting records show that the Unity and Fatherland – All Russia factions have often voted along the same lines.

I believe it would be worthwhile to set up an inter-faction coulcil to make joint decisions and bring our positions closer together.

Some deputies from other factions and groups in the Duma have recently joined Unity. I think this is because people are realizing it’s time to unite. We welcome anyone who shares our views. Those who accept the invitation will probably be from the People’s Deputy and Russian Regions groups. We need to join forces.

SPRING COMES TO CHECHNYA

Moskovskii Komsomolets, April 14, 2001, p. 2

This spring, separatist commanders in Chechnya are planning not only to create as many problems as possible for the federal forces, but to attempt a fundamental change in the situation on Chechnya’s frontlines.

A meeting of separatist commanders, chaired by Khattab’s emmissary Abu Dharr, has been held in the fourth suburb of Grozny (in the city’s north-east) – an area officially controlled by the federal troops. The meeting took place in a relaxed atmosphere, and no one disrupted it; the guerrillas felt completely secure. They welcomed the news that funds would be made available for the purchase of weapons and communications, and declared they were ready to carry out any orders in opposition to federal troops, up to and including recapturing Grozny. According to official figures, there are around 500 separatist guerrillas in Grozny – in reality, there could be ten times as many…

According to military intelligence, guerrillas are coming down from the mountains and gathering around Grozny. For example, several guerrilla detachments have gathered in the village of Kular (part of the Selskii district of Grozny). For the time being, the guerrillas are watching the federal forces and keeping track of all troop movements. Although they prefer not to engage in direct battles, they are targetting civilians: the deputy mayor and ten other people have been killed in the village of Oktiabriskoe (Kurchaloevsk district). Aslan Maskhadov, who is still trying to pass himself off as the leader of the “insurrection movement”, has also sent a signal about intensifying military activities. He wants all communications frequencies coordinated, and contact maintained with the so-called headquarters of the armed forces of the Chechen Republic of Ichkeria.

The guerrillas are undoubtedly planning some kind of large-scale action. The question is where: in Grozny, Gudermes, Argun, Vedeno…? They are unlikely to want a drawn-out conflict in the mountains, where it is hard for them to evade artillery fire and air-strikes. Local residents, who are always up to date on impending events, are sure that May will be a busy month in Grozny.

PROPERTY MINISTRY PLANS MORE SALES

Trud, April 14, 2001, p. 2

Deputy Property Minister Alexander Braverman has held a news conference to explain upcoming privatization moves and new methods of privatization. The plans have turned out to be broader than those detailed in the 2001 budget. But the proposed methods of implementation are the same old methods. The Property Ministry will once again try to revoke the budget item which requires the Duma’s approval before major stakes in state-owned enterprises (worth over $350 million) are sold.

Alexander Braverman outlined how the Property Ministry intends to resolve the problem. Its proposal is that in future, lists of enterprises to be privatized will be prepared in advance, and approved by the Duma at the same time as the federal budget is passed. This year’s budget has already been passed, but it would only take a few months to prepare a list of enterprises in which the state will auction shares. The Property Ministry promises complete transparency for all sales, and says major deals will only be done through open auctions. State officials say this will ensure that valuable stakes are not sold for less than their real value.

The initial list of enterprises to be privatized has just been released. It includes 19 small-scale companies in the areas of oil, gas, coal, and metals; shares in these will be put out to auction in the first half of this year. No Duma approval will be required; but these sales will not bring any major money into the treasury. This is unlikely, even for the attempt to sell a 50% stake in Russian State Insurance (Rosgosstrakh), which was included on the list at the very last moment. Therefore, some larger and more attractive sales will have to be attempted in the second half of the year. The Property Ministry has no other option.

A SAFE LANDING FOR BORODIN

Vremya MN, April 14, 2001, p. 1

After over two months of ordeals abroad, Pavel Borodin is back on his home soil once more. The secretary of the Russia-Belarus Union landed in Moscow at 8:25 p.m. Friday.

Borodin spent his last night abroad at Russia’s U.N. office in Geneva. He wasn’t making any comments to the media, but television reports showed him to be looking rather tired. His attorney Eleonora Sergeeva wasn’t concealing her delight in a professional victory. “This is a very big step forward,” she said, but immediately added that there is still a lot of work ahead, since the investigation is being continued.

Borodin is also planning a lawsuit of his own, to demand compensation from his erstwhile jailers. He is sure that he was unlawfully arrested and held in detention in the United States.

Another lawsuit – directed agains the Swiss investigators – is being prepared by the standing committee of the Russia-Belarus Union, a committee headed by Borodin. Sources at the standing committee say that monetary compensation will be demanded. The standing committee wants $100 million in damages for the Russia-Belarus Union.

If these lawsuits are even partially successful, Borodin could still refuse any further cooperation with the Swiss justice system – but then he would have to hand over some of his compensation to the Russian treasury, to repay it for posting bail of $3 million.

WHAT PEOPLE THINK OF THE MEDIA

Novoe Vremya, No. 15, April, 2001, p. 1

Gazprom’s efforts to take over the NTV network and install its own managers has drawn a great deal of public interest; NTV reports on these events have scored higher ratings than most other television programs in recent days. The latest events are bound to boost NTV’s popularity and draw the issue of freedom of speech to the public’s attention.

However, attitudes to the media – particularly television – are contradictory. The latest polls indicate that while 35% of respondents believe the information they get from the media, 40% don’t believe it, and 25% are uncertain. The elderly have the most confidence in the media (40-50%); confidence is lowest among business owners, of whom only 16% trust the media, while 58% do not.

Despite regular media reports about freedom of speech and freedom of the press being under threat, only 33% of respondents “see a real threat to free speech in Russia”; 36% don’t believe such a threat exists, while 31% are uncertain. Of those who think there is such a threat, 39% believe the threat comes from the state; 18% believe it comes from the oligarchs, and another 18% believe it comes from the special services.

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