Izvestia, March 29, 2002, p. 2

Yesterday morning, KGB General Kalugin was expected for questioning at the FSB investigatiion administration. He was to give his first testimony as the accused. Kalugin, who now lives in the United States, is charged with divulging state secrets. The general did not appear in Moscow; he says the summons he received a few days ago will be given to a new espionage museum in America. Due to his absence, FSB investigators will have to approve the charges in absentia. The same will apply to legal action against FSB Lieutenant Colonel Alexander Litvinenko, charged with stealing ammunition and abuse of power. Litvinenko is currently hiding from Russian justice in Britain, and he is not returning to his motherland either.

However, even if legal action goes ahead, judges will not be able to convict the men in absentia, as the FSB is insisting. Neither the existing Criminal Procedural Code nor the new one, to come into effect from July 1 this year, permit courts to consider cases in the absence of defendants and their lawyers.


Izvestia, March 29, 2002, p. 4

The latest poll done by the National Public Opinion Research Center (VTsIOM), at 83 locations around Russia, indicates that the confidence of Russians in their leaders is declining.

This is the first time since his appointment as prime minister that Mikhail Kasianov has faced such a problem with public opinion. His approval rating has declined by 9% between February and March. Meanwhile, the overall approval rating for the Cabinet has fallen by only 4%.

Leonid Sedov, a senior VTsIOM analyst, explains these changes as follows. “Apparently, this harsh criticism of Kasianov’s performance is not connected with any notable political events. The problem is much deeper – there is a gradual decline in living standards, which is less visible to the federal government.”

However, the prime minister is not the only “scapegoat” for the financial woes of citizens. The performance of regional leaders and presidential envoys in the federal districts has also been viewed with strong disapproval over the last two years. Forty-one percent of respondents disapprove of their performance.

Political preferences are also shifting toward the opposition. The gap between the Communist Party and United Russia (in favor of the former) has grown by another 2% compared with February. Support for United Russia, the party of Sergei Shoigu and Yuri Luzhkov, is at a record low.


Trud, March 29, 2002, EV

A revolution in small business is coming. At a meeting with academics in Baikalsk, where he is currently on vacation, President Putin stated that a bill on small business taxation prepared by the Cabinet may undoubtedly be called revolutionary, no less so than the 13% flat-rate personal income tax.

Prime Minister Mikhail Kasianov proposed replacing a number of existing taxes with one low rate: 10% or even less. The social tax is planned to be cancelled altogether. The treasury will compensate the Pension Fund for any resulting shortfalls. The bill permits regional governments to set the rate of the integrated tax independently.

In the president’s words, the bill makes it possible to introduce two taxation systems: simple and complex. Small enterprises with revenues of under 10 million rubles a year, employing fewer than 20 people, will use the first option. Instead of the unified social tax, against which small business owners have protested so much, they would pay superannuation contributions at the rate of 14%.

There are two versions of the “simple” taxation system so far. The first proposes a 20% profit tax, to be charged after deducting business operation costs, including investment. The second option would charge 8% tax on total revenue. The president stressed that business owners will have the right to choose the appropriate system for themselves.


Rossiiskaya Gazeta, March 29, 2002, EV

Deputy Prime Minister Victor Khristenko made a working visit to Belgium yesterday, where he held intensive talks with senior representatives of the European Commission (EC). The talks concerned the “airplane noise” problem, and the visit proved very fruitful. According to Khristenko, there is currently a trilateral format for the talks: Russia, the EC, and specific EU member states. An understanding has been reached with Greece, the Scandinavian nations, Holland, and Belgium. Consultations with Germany and France have almost been completed. The greatest problems concern Italy and Spain. Khristenko noted he had received firm assurance from EU authorities that the tension would be resolved by the end of 2002. The problem will be solved by redirecting Russian flights along western routes, and removing them from the EU general mode to arrange primarily chartered flights.

A Cabinet source who participated in the talks in Brussels says that some non-EU countries (Turkey, Egypt, and Tunisia) are prepared to tolerate the noise in future. So are Cyprus and other islands to which Russians have taken such a liking.