Russia 110810 Basic Political Developments Russia: US will send ships to Norway - A Russian diplomat has claimed that American authorities are hoping to place warships in Norwegian waters as part of the planned NATO missile defense system. US shares Russia’s view on Syria - At a Tuesday briefing Victoria Nuland, the spokesperson for the US Department of State noted that those countries, including Russia, which had previously criticized actions of the Syrian government were now ready to openly blame it for violence against its own people. Russia hits back at US with visa blacklist: Report - Russia is banning US citizens deemed to have violated the rights of Russians, including Viktor Bout, the alleged arms trader known in the West as the "Merchant of Death" who is now in US custody, the Kommersant daily said. o Moscow draws up blacklist of U.S. officials in response to Magnitsky list media Russian takes a potshot at past of Polish minister - In an online outburst that has caused irritation in Poland, Dmitry Rogozin, Russia's ambassador to Nato, posted an online picture of Radek Sikorski carrying an AK-47 assault rifle in 1987 when reporting from behind rebel lines. o Russia-Poland relations: timeline First 9 helicopters built under Pentagon contract to be supplied in 2011 - Russian Helicopters Russia handed over the first batch of Mi-17V5 to India India Turns Away From Russia - India blames this on Russian unwillingness to share technical information on manufacturing spares. First Russian strike UAV to be showcased at Moscow air show - Based on the Sigma 5 piloted aircraft, Lutch has a 250-350-kilometer surveillance range, which can be augmented to 500 kilometers, and an endurance of no less than 18 hours, which can be increased with extra fuel supplies to 30 hours. Mrkonjic: Russian loan talks still ongoing - Serbian Infrastructure Minister Milutin Mrkonjic has stated that talks on a USD800million Russian loan were still ongoing and that he expected it to be approved after all financial elements and conditions are brought in line. Georgia says won't be bullied into letting Russia into World Trade Organization Russia prepares alternative to Gabala radar station - According to Izvestiya newspaper, in December 2011, the space troops of Russia will get two newest stations Voronezh-DM, that are parts of the system of early notification of missile launches. “With the strategic character of the Armenia-Russia inter-allied relations, we do not at all consider Russia’s use of the Gabala radar station as actions contradicting Armenia’s security, but, rather on the contrary,” he said. o D.Tonoyan: “The presence of the Russian military base in Armenia has always been conditioned by the political-military interests of our two countries” Medvedev, Aliyev hold 4-hour meeting, Baku still has questions - According to the source, the sticking point was the future determination of NagornoKarabakh’s final legal status in term of legally binding expression of will. The fate of the enclave, according to the road map of the OSCE Minsk Group, should be resolved through referendum. It is no doubt how the majority of Armenians will vote. For this reason, Baku has still questions, the newspaper reads. o End to Karabakh status quo 'to Russia's advantage' - News.Az interviews political scientist Sahib Aliyev, a non-partisan member of Azerbaijan's parliament, the Milli Majlis. Kyrgyz detain suspected Chechen terrorist Hundreds of Russian teenagers conclude summer camp in China - President Hu Jintao invited the teenagers during his 2009 visit to Russia. This year's delegation was the second part of the exchange program specified by Hu; another 500 Russian teenagers visited China last year from July 31 to Aug. 9. Putin’s Nephew to Arrange Moscow River Services, Vedomosti Says Rimma Salonen seeks to inform Putin on problems of children in Finnish-Russian families Medvedev orders to monitor ministries’ information on internet. o Medvedev urges online diligence for military, law enforcement Yabloko leader, three more activists detained in Moscow during protests – Yabloko Armored "Ural" with 13 soldiers falls off into precipice in Dagestan Chechen policemen lose life because of mines mostly Situation in Ingushetia improves - interior minister Blast rocks Trans-Baikal kindergarten - The explosion inflicted serious damage on the building, smashing windows, the front door and the partitions inside. The explosion is the second in a day-care center in the past ten days. No survivors found in crashed Russian cargo plane o Russian crashed cargo plane found - Emergencies Ministry o Fragments of missing An-12 plane found in Magadan Region o Zero visibility impedes search for An-12 plane in Kolyma o Crew members of ill-fated An-12 plane - residents of Komsomolsk-onAmur Military aviation retires - The Russian army flies early 1970s aircraft models Ivan Smolin GLONASS equipment for social purposes to be produced in Krasnoyarsk Russian prosecutor crashes into Moscow bus stop - The driver of the black BMW X5 and his two passengers, both aides to a Moscow district prosecutor, were also hurt in the crash which occurred just across the road from RIA Novosti’s office. Minister of Health sacks Rector of Russian State Medical University Two police suspected of receiving bribe from pedophile Justice upstaged: angry public targets child molesters RIA Russian Press at a Glance, Wednesday, August 10, 2011 Interfax Moscow press review for August 10, 2011 Russian space science blooms again – by Jeffrey Manber Suffering in silence - It has been proposed to make online harassment of children punishable by imprisonment Tatiana Shadrina Schools that don’t speak Russian - Immigration significantly alters the picture of education in the capital Elena Gerasimova The Kremlin’s Extremist Youth Camp - Russia’s Kremlin-sponsored summer camp has promised warmer relations with the West, but its participants may be as radical as ever. By Anna Nemtsova Remnants of Soviet days blend with new Moscow of the big-wigs - These days Muscovites have ceased gazing skyward and have taken to staring at the ground, writes SÉAMUS MARTIN COHEN: Russian ‘reset’ malfunction - Harsh Washington criticism exposes Soviet-like anti-Americanism Canada, U.S. and Russia overcome 'suspicions' and language barrier in Arctic By: Mike Blanchfield, The Canadian Press Libyan Oil Tankers Up for Sale - Libya's General National Maritime Transportation Company, or GNMTC, could sell a portion of its fleet to unspecified Russian investors that include state-owned shipping corporation Sovcomflot, sources told industry journal The Petroleum Economist. By Howard Amos Russian leadership not too popular worldwide - Russia's leadership has relatively few fans worldwide, with poor ratings compared to the US and other major nations, according to a Gallup survey. National Economic Trends Russian ruble regains ground on foreign exchange market after two-day tumble Russian Ruble Bounces, Strengthens 1% Vs Dollar-Euro Basket Benchmarks move higher on external news IMPORTS TO RUSSIA FROM NON-CIS COUNTRIES UP 43.8% TO $140 BLN IN 7 MTHS – FCS U.S. Meltdown Bodes Poorly for Russia - Vedomosti Business, Energy or Environmental regulations or discussions Russian markets -- Factors to Watch on Aug 10 Magnit, Norilsk Nickel, TNK May Move: Russian Equities Preview UPDATE 1-Russia's Magnit gives more cautious 2011 guidance VTB Overtakes Vinci to Build a $4.1 Billion Toll Road in Russia o Consortium to Build $4Bln St. Pete Toll Road Summa Buys Russia Grain Terminal From WJ Group, Vedomosti Says Norilsk Nickel's auditor uncertain about company's share divestment o Norilsk Auditor Cites Lack of Disclosure on Stake Sale Renaissance Hires Chadda From Religare to Head India Banking Rusnano Ups Stake in Polus TPG, VTB, EBRD Sign $1.1B Deal To Boost Stake In Russia's Lenta Russian firms set up $113 million biotech venture Activity in the Oil and Gas sector (including regulatory) Sberbank Seeks Tax Breaks for Dulisma Oil Field, Kommersant Says Rosneft Poised for 11-Month Low as Oil Falls on Global Economy TNK-BP produces first oil from Ivanovskoe field, Orenburg region BP raises the stakes in Russian battle - By Sarah Arnott David Prosser: Dudley back in hot water over Russia Gazprom RWE and Gazprom willing to extend JV talks - "There is a match of interests. We want to conclude a new, modernized gas supply treaty with our biggest supplier ... while Gazprom for its part wants to increase its value creation here," Chief Executive Juergen Grossmann said in a press call. Czech tycoon's PPF works on another deal with Russian flavour - In the wake of talks to sell a stake in its consumer finance subsidiary to Russian bank VTB and the acquisition of Russian agricultural firm Rav Agro-pro, Czech billionaire Petr Kellner's PPF Group is preparing another transaction with a Russian flavour – that of buying Slovak Gas Holding with a view, say analysts, to possibly doing a subsequent deal with Gazprom. -----------------------------------------------------------------------------------------Full Text Articles Basic Political Developments Russia: US will send ships to Norway http://www.newsinenglish.no/2011/08/09/russia-us-will-send-ships-to-norway/ August 9, 2011 A Russian diplomat has claimed that American authorities are hoping to place warships in Norwegian waters as part of the planned NATO missile defense system. The Russian ambassador to NATO, Dmitrij Rogozin, told news agency NTB that “when I talked with my American colleagues, they did not rule out the possibility of placing missile defense systems in Norwegian waters.” “I do not know if the Norwegian leadership has given its approval to such a development,” Rogozin added. Rogozin came to Norway on Monday to find out whether “Norwegian leaders understand all the implications of such a scenario.” Wikileaks documents released in January showed that American diplomats had spent some time trying to convince the Norwegian government to support the missile defense system. Relations between Norway and Russia had been improving recently despite disputes over salmon imports, human rights and other issues. Views and News staff US shares Russia’s view on Syria http://english.ruvr.ru/2011/08/10/54430032.html Aug 10, 2011 01:03 Moscow Time The US agrees with Russia and its approach to the current situation in Syria. At a Tuesday briefing Victoria Nuland, the spokesperson for the US Department of State noted that those countries, including Russia, which had previously criticized actions of the Syrian government were now ready to openly blame it for violence against its own people. Earlier the Russian Foreign Ministry called on Syria to stop violence and urgently carry out social and economic reforms. It pointed out the need for a wide and constructive allSyrian dialogue in the interests of a speedy peaceful settlement of the situation by Syrians themselves “without any interference from outside.” 10 Aug, 2011, 11.43AM IST, AFP Russia hits back at US with visa blacklist: Report http://economictimes.indiatimes.com/news/international-business/russia-hits-back-at-uswith-visa-blacklist-report/articleshow/9551421.cms MOSCOW: Russia has banned several US citizens from entering the country in retaliation for Washington's visa blacklist for Russian officials linked to the death of a lawyer in prison, a report said Wednesday. The Russian move is the latest sign of the damage inflicted on improving ties by the row over the 2009 death of Sergei Magnitsky which has become one of Russia's most notorious rights cases. Russia is banning US citizens deemed to have violated the rights of Russians, including Viktor Bout, the alleged arms trader known in the West as the "Merchant of Death" who is now in US custody, the Kommersant daily said. The United States announced last month it put officials it believes are responsible for the death of Magnitsky on a visa blacklist, provoking a warning from Moscow it risked harming the "reset" in ties. Kommersant quoted concurring sources as saying Russia's tit-for-tat list, containing "several dozen Americans", was already ready even though their names would never be disclosed publicly. It said those on the list are likely to include officials from the US Drug Enforcement Agency (DEA) implicated in the arrest of Bout and Konstantin Yaroshenko, a Russian pilot detained in a drugs smuggling case. "The list will not be made public. The Americans did not publish theirs and we will not show ours," a Russian official told the paper. Another source said those on the list would not just be officials involved in the Bout and Yaroshenko cases as there is a "whole range of instances of the rights of Russian citizens being infringed." Russian Deputy Foreign Minister Sergei Ryabkov declined to confirm to the paper that the list was ready. But he confirmed "that any American guilty of violating the rights of a Russian" could be included. Magnitsky had been detained for 11 months awaiting trial in a high-profile fraud case. His supporters have argued top interior ministry officials deliberately neglected his health in an effective attempt to silence him. However Russia so far has only opened criminal probes against the doctor and deputy chief of a Moscow prison over his death, which was caused by untreated pancreatitis. Moscow draws up blacklist of U.S. officials in response to Magnitsky list - media http://en.rian.ru/russia/20110810/165675607.html 05:30 10/08/2011 MOSCOW, August 10 (RIA Novosti) Moscow has prepared a blacklist of U.S. officials who will be banned from travelling to Russia in response to a U.S. blacklist of Russian officials linked to the controversial death of Russian lawyer Sergei Magnitsky in detention, Russian daily Kommersant reported on Wednesday. Russian President Dmitry Medvedev ordered the Foreign Ministry to respond to the unfriendly move by the United States, who have imposed visa bans and frozen U.S. assets of the Russian officials without notifying Russia, in late July. Magnitsky, a lawyer for Hermitage Capital investment fund, died in November 2009 after almost a year in Moscow's notorious Matrosskaya Tishina pretrial detention center. He was detained on tax evasion charges shortly after announcing he had uncovered massive fraud by police investigators. In July, a Kremlin rights council said his death was likely to have been the result of a beating and that the charges against him were fraudulent. Human rights activists and his former colleagues allege the officers he had accused were involved in his death, which was originally said to have been the result of "heart failure." The Russian blacklist consists of several dozen U.S. officials, including those linked to the trials of Russian businessman Viktor Bout, who is prosecuted in the United States on charges of arms trafficking, and Konstantin Yaroshenko, a Russian pilot convicted of drug dealing in the United States, Kommersant said, quoting unidentified officials. The names from the list will not be disclosed, one of the officials told the paper. "The Americans have not published their [lists], and we will also not publish them," he said. Russian Deputy Foreign Minister Sergei Ryabkov told Kommersant that a "draft" blacklist of U.S. officials was being discussed, which included "people linked to problems in Russian-U.S. relations, including those on humanitarian tracks." "Any U.S. citizen responsible for violating the rights of Russian citizens may be included in this list," Ryabkov said. He described the U.S. move to introduce sanctions against the Russian officials as a significant blow to bilateral relations. Another source was quoted by Kommersant as saying that the Foreign Ministry had been considering the blacklist since December last year, when indications appeared that the United States was preparing sanctions against Russian officials over the Magnitsky case. Russian takes a potshot at past of Polish minister http://www.telegraph.co.uk/news/worldnews/europe/russia/8691608/Russian-takes-apotshot-at-past-of-Polish-minister.html A senior Russian diplomat has picked a fight with Poland's foreign minister, saying he wonders how many Russians the minister killed when working as a journalist in Soviet-occupied Afghanistan in the 1980s. By Andrew Osborn, Moscow and Matthew Day in Warsaw 6:30AM BST 10 Aug 2011 In an online outburst that has caused irritation in Poland, Dmitry Rogozin, Russia's ambassador to Nato, posted an online picture of Radek Sikorski carrying an AK-47 assault rifle in 1987 when reporting from behind rebel lines. "When will our Polish friends stop being proud of the fact that they shot at Russians in their youth?" Mr Rogozin asked provocatively on his Twitter account. "It would be interesting to know how many of ours he killed." Mr Rogozin derided Mr Sikorski's own account of his time in Afghanistan, where he worked for the Spectator, The Observer and The Sunday Telegraph, as a mixture of "boasting and an appalling admission of terrorist activity". He said he was shocked to read that the then journalist had taken part in a mujahideen attack on a Soviet barracks and fired three cartridge clips in the process. "What kind of journalist was he?" Mr Rogozin asked, wondering why Mr Sikorski, 48, had chosen to publicise his activities in Afghanistan. Poland dismissed Mr Rogozin's comments out of hand, stressing that the ambassador had a reputation for making colourful statements and that they should not undermine Poland's improving relations with its historical rival. "This is not the first time this kind of thing has happened. Rogozin has a track record of making such statements," said an unnamed Polish foreign ministry official, quoted by the newspaper Rzeczpospolita. "He's done it so many times that at some point we gave up commenting." Andrzej Halicki, the chairman of the Polish parliament's foreign affairs committee, said Mr Rogozin's statements were "just silly" and added: "I don't think they will affect Polish-Russian relations." Mr Sikorski has admitted being given a gun and even firing it when working as a journalist in Soviet-occupied Afghanistan, but has insisted that he never shot anyone and succeeded only in hitting the outer wall of a Soviet barracks. Russia-Poland relations: timeline http://www.telegraph.co.uk/news/worldnews/europe/poland/8691941/Russia-Polandrelations-timeline.html From the Polish-Muscovite War to Russia's ambassador to Nato, Dmitry Rogozin, accusing Radek Sikorski, the Polish foreign minister, of terrorist activity. By Andrew Osborn, Moscow 7:00AM BST 10 Aug 2011 1612: Polish forces are driven out of the Moscow Kremlin in the so-called PolishMuscovite War. 1795-1918: Large part of Poland is part of the Russian Empire. 1939: Poland invaded by Nazi Germany and the Soviet Union who then annex the country between them. 1940: The Soviet secret police massacres 22,000 Polish soldiers and officers in cold blood in the Katyn forest in western Russia and elsewhere, and then outrageously tries to claim that the Nazis carried out the massacre instead. 1944: The Nazis massacre 200,000 civilians and 10,000 partisans in the Warsaw uprising as the Red Army halts its advance outside the city. The Poles accuse the Soviets of leaving them to their fate, Moscow rejects the criticism. 1945-1989: Poland is a Soviet satellite state subservient to Moscow. 1993: Last Russian troops leave Poland after the 1991 collapse of the Soviet Union. 2009: The Kremlin rejoices when Washington cancels a plan to site interceptor missiles in Poland as part of its controversial missile defence plan. 2009: Russian forces conduct a military exercise in neighbouring Belarus which Polish politicians believe is a simulated nuclear attack on Poland. Russia says it is nothing of the kind. April 2010: A Polish plane carrying Lech Kaczynski, the Polish president, crashes in thick fog in western Russia, killing all 96 people on-board. A Russian investigation blames the Poles, while a Polish investigation pins some of the blame on Russian air traffic controllers. August 2011: Russia's ambassador to Nato, Dmitry Rogozin, accuses Radek Sikorski, the Polish foreign minister, of terrorist activity while working as a journalist in Sovietoccupied Afghanistan. 08/10 10:29 First 9 helicopters built under Pentagon contract to be supplied in 2011 - Russian Helicopters http://www.interfax.com/news.asp GOOGLE TRANSLATION http://www.lenta.ru/news/2011/08/10/india/ Russia handed over the first batch of Mi-17V5 to India Holding Russian Helicopters gave India the first batch of multi-purpose Mi-17V5. About it as informs "Interfax", said General Director of Russian holding Dmitri Petrov. He did not specify the number of cars assigned to the customer, but noted that the supply of equipment is carried out in accordance with the schedule outlined "Rosoboronexport". According to Petrov, the beginning of the contract was delayed because the customer for a long time could not determine the composition of the onboard equipment. Once the choice was made, Russian Helicopters were forced to spend more tests modified for Indian Mi-17V5. "Now all issues are resolved. The contract is being implemented," - said Petrov. In total, India should get 80 Mi-17 helicopters. The contract to supply cars was signed in June 2011 under the Paris Air Show in Le Bourget. The transaction amount is estimated at 1.345 billion dollars. According to the schedule, the delivery of helicopters to be completed by 2015. India Turns Away From Russia http://www.strategypage.com/htmw/htlog/articles/20110809.aspx August 9, 2011: India is rapidly losing any enthusiasm for Russian military aircraft. The big problem now is the difficulty in getting spare parts, even from Indian manufacturers. India blames this on Russian unwillingness to share technical information on manufacturing spares. These are not new problems, and solutions have already been implemented. For example, last year India announced that its fleet of MiG-21 fighters was being phased out of service. The 121 that were recently upgraded will all be retired in six years. The other 85 will be out of service in by next year. India operates the largest fleet of MiG-21s, although China has even more of their MiG-21 clones, the J-7 in service. China still exports J-7s, but is rapidly retiring the ones remaining in Chinese service. Over 10,000 Mig-21s and J-7s have been produced in the last sixty years, making this the most widely manufactured jet fighter of the last century (during World War II, there were several propeller driven fighters that were produced in greater numbers.) The MiG-21 looked fearsome, but it was a bust in combat, getting shot down more often than not. The MiG-21 was also expensive and difficult to maintain. This was often the case with all Russian aircraft, and Russia was never much help in solving these problems. As India has acquired more Western military aircraft, it was noted that maintenance was easier and cheaper, and that suppliers are more helpful. The Russian aircraft are still cheaper to buy, but in the long run, are not worth the additional costs has hassles. First Russian strike UAV to be showcased at Moscow air show http://en.rian.ru/mlitary_news/20110810/165683626.html 12:19 10/08/2011 MOSCOW, August 10 (RIA Novosti) Lutch, Russia's first unmanned air vehicle (UAV) designed to carry out air strikes, will be shown at the Moscow air show next week, according to its producer, Vega. "Vega will show a full-scale mock-up of the Lutch medium-range UAV at MAKS 2011," a Vega representative said. "Lutch is designed for optical reconnaissance, radar, radio-relay and electronic reconnaissance missions," he added. Lutch can also carry guided weapons on fuselage pylons or in a fuselage weapons bay. "Up to 150-170 kilograms of ammunition and weapons control systems can be carried," Vega said. Based on the Sigma 5 piloted aircraft, Lutch has a 250-350-kilometer surveillance range, which can be augmented to 500 kilometers, and an endurance of no less than 18 hours, which can be increased with extra fuel supplies to 30 hours. With 800 kilograms of maximum take-off weight (MTOW) it flies at speeds of up to 270 kilometers per hour. Mrkonjic: Russian loan talks still ongoing http://www.emg.rs/en/news/serbia/161754.html 10. August 2011. | 09:05 Source: Beta Serbian Infrastructure Minister Milutin Mrkonjic has stated that talks on a USD800million Russian loan were still ongoing and that he expected it to be approved after all financial elements and conditions are brought in line. Serbian Infrastructure Minister Milutin Mrkonjic has stated that talks on a USD800million Russian loan were still ongoing and that he expected it to be approved after all financial elements and conditions are brought in line. "The Russian delegation is currently in Belgrade and there are talks with the representatives of the Serbian Railways. This loan is in fact an export deal for Russian companies financed by their government, which means the funds will not be approved directly to the Serbian Railways and that there will not be ready money 'in a pile,'" Mrkonjic told daily Vecernje Novosti. Regarding a tender for the Serbian JAT Airways and the search for a strategic partner for the airliner, Mrkonjic said the entire job had only begun and that the government had not considered any alternative solutions in case no buyers are interested. "In any case, the government will not allow the national airliner to be shut down," he said. He voiced the conviction that the Socialist Party of Serbia, where he is the vice president, would run for the next election again with the party of pensioners and United Serbia, describing it as "a natural coalition, rallied on the principle of social justice." Mrkonjic said the Socialists had not considered the possibility of forming a government with Tomislav Nikolic's Serbian Progressive Party, but added that he was not happy with a big coalition, as "party interests are often put above the state's," adding that this was becoming more noticeable as elections draw near. Georgia says won't be bullied into letting Russia into World Trade Organization Today at 07:41 | Reuters GENEVA, Aug 9 (Reuters) - Georgia can see the benefit of having Russia in the World Trade Organization but it feels under no pressure to let it in if the terms are not fair, the country's permanent representative in Geneva said on Tuesday. Russia is the biggest economy outside the 153-member club, 18 years after setting out on the path to membership. Its tiny southern neighbour, with which it fought a border war in August 2008, could still thwart its plans because all new members must agree terms with all existing members before they can join. "For the moment I cannot say whether a deal will be reached or not," Georgian Ambassador Zurab Tchiaberashvili told Reuters. "It depends on the constructive approach from the Russian side. Among those urging a deal by the end of this year is the United States, Georgia's ally. WTO chief Pascal Lamy has also said he believed a deal was in sight for the first time. "We don't feel any pressure," Tchiaberashvili said. "We are speaking about the sovereign right of a member of the WTO to sort out its outstanding issues with a country that wants to become a member of the WTO. "For us it's essential that we play according to the rules." Georgian and Russian officials met on Tuesday in Geneva to prepare the technical ground for a potential deal on the thorniest outstanding issue: customs checks on the border between the two former Soviet republics. Their top negotiators will meet in mid-September, along with Swiss mediators, to try to agree how such a deal might work in practice. Russian trade officials in Geneva were not available for comment. Tchiaberashvili said any deal would have to include international monitors on two checkpoints -- one in each of the breakaway Georgian regions of Abkhazia and South Ossetia. He declined to be drawn on the likelihood of an eventual deal but said: "For the moment the rhetoric and the actions by the Russian Federation does not contribute to the constructive and positive outcome of negotiations." He said at the end of the last round of negotiations in July President Dmitry Medvedev submitted a customs agreement with Abkhazia to Russia's parliament. "In the midst of the negotiations, to do such a thing puts into question whether Russia really wants to do a deal on this issue," he said. Russia had also disclosed sensitive details of the talks and claimed it could ignore a Georgian veto, he said. "So for the moment we have a lot of questions concerning the Russian political will to join the WTO." He said Georgia was acting responsibly and not using its position to wield arbitrary power over Russia. "Definitely, whatever contributes to the trade facilitation we are happy to see. Russian membership in the WTO will increase trade on the continent so it will benefit everybody. "There is also the aspect that the more responsibly Russia behaves in the the international area and subjects itself to international regulations and rules and international law, the better it is for Georgia." Read more: http://www.kyivpost.com/news/russia/detail/110500/#ixzz1UbJfPlCL Russia prepares alternative to Gabala radar station http://www.news.az/articles/russia/42215 Wed 10 August 2011 07:14 GMT | 9:14 Local Time Russia will fully restore control over the air place around its borders. Mass media have managed to learn the plans of the Russian Defence Ministry on deployment of new radar stations to reveal missile launches from other countries. With their help, Russia will fully restore control over the air place around its borders. According to Izvestiya newspaper, in December 2011, the space troops of Russia will get two newest stations Voronezh-DM, that are parts of the system of early notification of missile launches. One of the them will be launched in Armavir and the other in Kaliningrad. In 2012, a similar object will be launched in Irkutsk. Unlike its ‘Soviet’ forerunners in Azerbaijan, Belarus and in Ukraine and Kazakhstan, the new stations will locate in Russia. Additionally, they consume by 40% less energy and can see everything in the sky and space at a distance of 4,500 km. “The stations will help restore the integrity of radiolocation area of control. In some cases we cover existing holes and in other events we raise capabilities of old stations”, sources in Aerospace troops told the newspaper. Meanwhile, Defence Minister Anatoliy Serdyukov, who has recently visited the Azerbaijani Gabala radar station (Daryal) told Izvestiya that the military command is not yet intending to reject existing Soviet stations in neighbor countries. “Everything remains as it is by way. We do not reject any station and are not planning to”, Serdyukov said. 1news.az 09:34 10/08/2011ALL NEWS RF’s use of radars in Azerbaijan not contradicting Armenia interests http://www.itar-tass.com/en/c154/201295.html YEREVAN, August 10 (Itar-Tass) — Russia’s use of the radar station in Azerbaijan does not contradict the interests of Armenia’s security and favors improvement of the situation in the region, Armenia’s First Deputy Defense Minister David Tonoyan said in an interview, published by the ministry’s press service on Wednesday. “With the strategic character of the Armenia-Russia inter-allied relations, we do not at all consider Russia’s use of the Gabala radar station as actions contradicting Armenia’s security, but, rather on the contrary,” he said. The Gabala radar station is a part of the Russian system of missile warning. It is located not far from the city of Gabala in Azerbaijan. The station used to be the USSR’s major element of anti-missile defense. As Azerbaijan gained independence, the station became its property, and Russia has been renting it. The agreement stated the station’s status as an information-analytical centre which is property of Azerbaijan and which is being rented by Russia for the term of ten years till 2012 with an option of extension. The rent term expires in December, 2012. Russia has been using the station to control the air and space in the southern direction and to warn about possible launches of ballistic missiles, including from countries like Iran, Pakistan and India. In late July, Russia’s Defense Minister Anatoly Serdyukov was in Azerbaijan on a working visit, where he discussed, among other issues, extension of the Gabala station’s rent. Following the visit, Serdyukov told reporters that “Russia has drafted suggestions on further use of the Gabala radar station, including its modernization.” As he said, a working group will come to Baku to discuss with Azerbaijan’s counterparts technical issues of further use of the station. Besides, within two years Russia will finalize reconstruction of the Gabala radar station. D.Tonoyan: “The presence of the Russian military base in Armenia has always been conditioned by the political-military interests of our two countries” http://times.am/2011/08/10/d-tonoyan-the-presence-of-the-russian-military-base-inarmenia-has-always-been-conditioned-by-the-political-military-interests-of-our-twocountries/ By Times.am at 10 August, 2011, 10:24 am The First Deputy Defense Minister Davit Tonoyan gave un intervew to Mediamax News Agency, presse service of the Ministry of Defense informs. Times.am presents the whole interview: “- On July 18-21, the delegation headed by you took part in Armenian-U.S. defense consultations in Washington D.C., during which the sides agreed to expand the spheres of cooperation. Tell us about these spheres, please. - During the recent consultations we mainly focused on Armenian defense reforms and development of Armenian Armed Forces, aiming to clarify with our American colleagues the USA’s possible assistance to these processes. We particularly discussed defense policy of the Republic of Armenia, the implementation of plans aimed at the development of Armenian Armed Forces based on the results of Armenia’s Strategic Defense Review (SDR), human resource management, professional military education, development of professional NCO corps, export control of military goods, issues related to humanitarian demining, as well as some programs of public and cultural interest. Besides, we also touched upon such issues as the effective use of the assistance rendered by the United States and US capabilities in the development of Armenian peacekeeping capabilities, including the organization of both bilateral and multilateral combined exercises. - Where, when and in what framework will the exercises be held? - It has been already 10 years that the Armenian and the U.S. military have been conducting combined military exercises in the spheres of peacekeeping, communications, military medicine and emergency response. Small-scale training activities have been also held. We should also keep in mind the combined activities and liaison of Armenian and U.S. military during the operations in Iraq, Kosovo and Afghanistan. However, all this was done mainly on multilateral basis, through multinational operations and exercises. As for the possibility of holding bilateral Armenian-U.S. exercise, yes, this issue has been discussed. However, taking into consideration the fact that NATO/PfP Live and Command Post Exercises have been restored since this year, the urgency of holding bilateral Armenian-U.S. exercise for training purposes of our peacekeepers decreases, but the issue remains on the agenda of further Armenian-U.S. consultations. The Armenian Ministry of Defense has big experience in organizing and holding multilateral exercises. - Can we say that the Armenian-U.S. defense cooperation is moving from the incipient stage to comprehensive cooperation? - The Armenian-U.S. defense cooperation has indeed grown impressively over last years. Among the achievements of Armenian-U.S. defense cooperation in 2010-2011 we can mention the process of SDR and the beginning of implementation of the development plan worked out as a result of the SDR as well as the three-fold expansion of the Armenian contingent participating in ISAF mission, taking into account the fact that the Armenian military who have been trained with the U.S. assistance forms the contingents participating in international peacekeeping operations. - The session of the North Atlantic Council in 28+1 format (NATO members +Armenia) was held in Brussels on July 27, as a result of which the renewed Individual Partnership Action Plan was discussed. Receiving the Special Representative of NATO Secretary General in Yerevan in late June, Armenian President expressed the hope that the renewed IPAP will allow bringing the cooperation to a new quality level. Which are the main changes of IPAP for the Armenian Defense Ministry? - Let me clarify that the session attended by the Armenian Ministers of Defense and Foreign Affairs, focused not on the renewed IPAP but on the Assessment Report of the previous IPAP, which gives grounds to launch the process of approval of the renewed IPAP. I think it will be approved by the end of this year when all NATO allies approve the renewed IPAP worked out by joint efforts of experts from Armenia and NATO International Staff. As for the content of the new IPAP, its biggest and principal difference is that the previous ones were mainly directed to the conduct of the SDR process, whereas the new program mainly aims at the realization of results of the Review. Besides, together with previous spheres the new IPAP includes such areas as the study of capabilities for improving battle training programs for various types of Armenian Armed Forces, cooperation in military-industrial sphere, as well as the study of NATO member states’ armament and military equipment the codification and standardization system aimed at the development of future defense industrial cooperation with them. - During meetings in USA and Brussels you have discussed the issue of improving the peacekeeping capabilities of the Armenian Peacekeeping Forces. At what stage of readiness are our peacekeepers today and what are the problems that still need to be solved? - Today, the 12th peacekeeping brigade of the Armenian Armed Forces has two fully equipped infantry battalions and can provide about two companies for operations by rotation principle. Today, on the whole 161 servicemen of the brigade are permanently deployed in the theatres of multinational operations: 126 in Afghanistan, and 35 – in Kosovo. The third battalion of the brigade is being formed now. Within the framework of developing the brigade (the process will be completed in 2015), we focus our efforts on the development of its logistics capabilities and equipment. In this process not secondary attention is paid also to the constant training, re-training and eventual assessment of the brigade’s manpower. An engineer battalion has recently joined Armenian peacekeeping forces, which was also declared in the PfP pool of forces in the framework of Operational Capabilities Concept, so we are planning to carry out combat readiness evaluations for this unit as well. - You have recently met with your Russian colleagues. Unlike the Armenian-U.S. military ties, the Armenian-Russian defense cooperation has a rich history and the sides seem to understand each other better. What issues have been discussed in Moscow? - The Armenian-Russian defense cooperation has indeed a rich history and traditions and involves wider spectrum of defense cooperation than with other countries. While in Moscow I have hold meetings with CSTO Secretariat’s leadership and my colleagues from the Russian Defense Ministry. During my meetings in CSTO we discussed a number of issues such as: the establishment of organization’s Military Committee, improvement of Combined Joint Staff activities, as well as the involvement of observers from various international organizations and countries in future military exercises to be carried out with the framework CSTO Rapid Reaction Collective Forces and Armenian-Russian Combined Task Force, which will ensure necessary transparency and will be considered as a confidence building measure in the region thus reinforcing the image of the CSTO as an organization ensuring the regional security. As for the meetings with our colleagues from the Russian Defense Ministry, they were devoted to the discussion of such issues as the coordination of Armenian and Russian defense ministries’ positions on the future of international arms control arrangements, regional security, optimization of the Russian 102nd military base in Armenia and redeployment and modernization of its units. - There is an opinion that Russia attaches rather “symbolic” than combative importance to its military base in Armenia. What can you say in this regard? I suppose the issue of the base has also been discussed. - I think this is the case when we shouldn’t seek for some hidden or other meanings. The presence of the Russian military base in Armenia has always been conditioned by the political-military interests of the two countries. According to the agreement on the extension of terms of deployment of the Russian military base in Armenia signed last year, the 102nd base also undertook the commitment to support Armenia’s security. Thus, it’s not a secret that the Russian military base is the indivisible part of Armenia’s security system, which is set in a number of conceptual documents of the Republic of Armenia such as the National Security Strategy, Military Doctrine. - The Russian Defense Minister has recently visited Azerbaijan to discuss the future of Gabala Station. Does Armenia have a position about the operation of the station and possible change of its status? - The exploitation of Gabala radiolocation station has a definite importance for the Russian Federation. During the Soviet times it was part of the missile defense system and now it allows Russian Armed Forces to control the air picture in the region and prevent missile attacks. Taking into account the Armenian-Russian allied ties, we don’t consider the exploitation of Gabala base by Russia as running counter to Armenia’s security interests. On the contrary, I believe the more our strategic ally and other partner states get involved in the security and, why not, in the military spheres of our neighboring country, the more it will facilitate the security of the entire region. /Times.am/ Medvedev, Aliyev hold 4-hour meeting, Baku still has questions http://news.am/eng/news/70548.html August 10, 2011 | 09:42 SOCHI. - Russian Presidential Aid Sergey Prikhodko declined to comment on the meeting between Russian President Dmitry Medvedev and his Azerbaijani counterpart Ilham Aliyev in Sochi on August 9, Izvestia newspaper reports. The two leaders held a 4-hour meeting at Russian presidential residence in Sochi. As Armenian News-NEWS.am reported earlier, in an official part of the meeting Medvedev told the press he hoped for a “sincere” conversation on further developments in the peace process following the presidents’ meeting in Kazan and previous meetings. In his turn, Aliyev said Azerbaijan is more interested in the swift resolution of the conflict, than any other country. Medvedev emphasized it is essential to move Karbakah peace talks from the deadlock. The Russian President received the necessary authority from the other OSCE Minsk Group co-chairing countries-heads of the U.S. and France at the Deaville meeting in May. The sides were close to signing of the “road map” in Kazan on July 24, the newspaper reports citing a source at Russian MFA. “Baku and Yerevan were one step away to shake hands due to Russian President’s mediatory efforts. However, at the last moment Ilham Aliyev backpedaled and presented 10 proposals,” the source told Izvestia. According to the source, the sticking point was the future determination of NagornoKarabakh’s final legal status in term of legally binding expression of will. The fate of the enclave, according to the road map of the OSCE Minsk Group, should be resolved through referendum. It is no doubt how the majority of Armenians will vote. For this reason, Baku has still questions, the newspaper reads. However, following the two leaders’ meeting, Medvedev and Aliyev stressed “positive dynamics is observed in all directions.” End to Karabakh status quo 'to Russia's advantage' http://www.news.az/articles/politics/42209 Wed 10 August 2011 07:43 GMT | 9:43 Local Time News.Az interviews political scientist Sahib Aliyev, a non-partisan member of Azerbaijan's parliament, the Milli Majlis. How do you assess President Medvedev's latest initiative to organize meetings with the presidents of Azerbaijan and Armenia to discuss resolution of the Karabakh conflict? The recent meeting of the presidents of Azerbaijan and Armenia in Kazan, mediated by the Russian president, bore no fruit. After that Russian President Dmitriy Medvedev made new proposals to settle the Karabakh conflict. However, Medvedev went beyond this, sending Russian Foreign Minister Sergey Lavrov to Baku and Yerevan and holding talks with US President Barack Obama. The same consultations were held with France - the other country co-chairing the OSCE Minsk Group. It's worth noting that after the failure of the talks in Kazan President Medvedev did not wait but made new proposals right away. I also want to draw your attention to the fact that after the Kazan meeting, the Armenian side announced that the talks had failed because of new changes to the conflict resolution process proposed by the Azerbaijani side. But if Russia makes new proposals which are agreed by the Azerbaijani side right after the Kazan meeting, it means that Medvedev practically took Baku's changes into account. In this view, the proposals of the Russian president should be assessed positively. All the same, if the Russian president holds intensive meetings with the heads of Azerbaijan and Armenia and organizes meetings, it means he wants progress in the Karabakh settlement. In other words, the Russian side considered Baku’s remarks fair, which is why it made new proposals in such a short time. Assessing President Medvedev's meetings with the heads of Azerbaijan and Armenia, I believe that the Russian president will use these meetings to study opportunities for the next trilateral meeting of the heads of state. I think that if it emerges after the talks that a joint meeting of the heads of Azerbaijan, Russia and Armenia will be held, this will certainly see the signing of the basic principles for a Karabakh conflict settlement. Moreover, it means that issues of concern to the Azerbaijani side will be removed, though progress on the basic principles does not mean the signing of a peace agreement in the future. The issue arises of striking a peace deal, since the signing of this document may be protracted, as it was between Palestine and Israel who agreed on the basic principles for a conflict settlement. I am hopeful that Medvedev’s new proposals will reflect all these issues. In a recent interview, comparing the decision of President Mikheil Saakashvili to ensure the territorial integrity of Georgia by force with the Karabakh conflict, the Russian president said that it was better to hold endless talks than to start war. Does this apply to the Karabakh conflict? The talks on a Karabakh settlement have been going on for 20 years now. I think that in this case attention should be paid to the part of Medvedev’s statement where he said that long-standing talks would help Georgia, Abkhazia and South Ossetia come to a solution. Medvedev hints that Georgia could ensure territorial integrity through long talks. As for negotiations on Karabakh, I don’t think it possible to settle this conflict at the current stage. Now only a phased resolution of the conflict is possible. Does Russia benefit from the resolution of the Karabakh conflict, given that it has assumed the role of chief moderator on the conflict? Many observers tend to assume that the Karabakh problem is an instrument of pressure in Russian hands on the countries of the region. In this regard, an option for a phased solution to the conflict can satisfy all parties involved in the settlement of the problem, including Russia. In other words, the first stage of the conflict settlement can discuss the return of refugees to their homeland, and in the future we can talk about a referendum on the status of Nagorno-Karabakh. In other words, Russia will continue to reserve the mechanisms of control over the region for a longer period. So, the option for a Karabakh solution which is currently on the table is beneficial to Russia as much as it is profitable to Azerbaijan. Progress in the negotiating process is beneficial both to improve Russia's image and to rescue Armenia. How may Russia behave in the event of a new war in Karabakh? Baku has repeatedly stated that it will not wait another 20 years and, therefore, will liberate its territory by military means. In this case, Russia would be involved in the war to some extent. There is a problem for Russia here, as it would be affected itself by its involvement in the war in varying degrees. Judging from the statements of Russian officials, Moscow is hesitating on this issue. Therefore, I emphasize that an end to the status quo in the Karabakh conflict is also to Russia's advantage. What does Baku expect from Russia’s increased focus on Karabakh? In general, Baku expects a speedy resolution of the conflict to result from Russia’s mediation. Baku has repeatedly stated the inadmissibility of preserving the status quo on Karabakh, since it could lead to a new conflict. Therefore, Baku expects Russia to justify the hopes placed on it as a primary mediator on the Karabakh conflict. Lala B. News.Az Kyrgyz detain suspected Chechen terrorist http://centralasiaonline.com/cocoon/caii/xhtml/en_GB/newsbriefs/caii/newsbriefs/2011/0 8/09/newsbrief-08 By Asker Sultanov and Staff 2011-08-09 BISHKEK – The Kyrgyz State Committee for National Security (GKNB) has detained a suspected Chechen terrorist, the GKNB’s press office said August 9. The suspect, identified only as A. A. Sh. (born 1976), is wanted internationally for terrorist crimes and allegedly belonged to illegal armed groups operating in Russia. The GKNB is holding him while it investigates further. In 2001, the suspect was involved in terrorist acts that killed seven Russian Interior Ministry personnel and three local police officers, the GKNB said. Kyrgyz authorities carrying out intensive investigative police work in Chui Oblast’s Lebedinovka village captured the suspect, the GKNB said. Hundreds of Russian teenagers conclude summer camp in China http://news.xinhuanet.com/english2010/culture/2011-08/10/c_131040890.htm 2011-08-10 14:49:07 BEIJING, Aug. 10 (Xinhua) -- A group of 450 Russian teenagers concluded a 12-day summer camp in China on Wednesday. The Russian delegates, aged 12 to 16 and accompanied by tutors and doctors, arrived in Beijing on July 30 and visited famous historical sites, including the Great Wall and the Forbidden City. After their Beijing tour, the Russian teenagers were divided into two groups and travelled to the coastal cities of Shanghai and Dalian, respectively. The two groups stayed in those cities for one week and met with their Chinese peers at local schools before flying back to Beijing on Tuesday. President Hu Jintao invited the teenagers during his 2009 visit to Russia. This year's delegation was the second part of the exchange program specified by Hu; another 500 Russian teenagers visited China last year from July 31 to Aug. 9. The summer camp was a form of reciprocation for an invitation extended by Russian President Dmitry Medvedev's for Chinese students from regions devastated by the 2008 Wenchuan earthquake. Nine hundred of the students visited the All-Russia Children's Care Center in Vladivostok in 2008 and 2009. "Although the programs initiated by the two presidents have been wrapped up, the exchanges conducted between Russian and Chinese youngsters will still go on," said Valerie Marzoev, head of the Russian delegation and director of the center. "During my stay in Shanghai earlier this week, I invited 30 local students to visit Russia next year," Marzoev said. "We need to hand over the baton of traditional friendship between Russia and China to the younger generation, as they will decide the future of their nations," Marzoev said. Putin’s Nephew to Arrange Moscow River Services, Vedomosti Says http://www.bloomberg.com/news/2011-08-10/putin-s-nephew-to-arrange-moscow-riverservices-vedomosti-says.html Q By Ilya Khrennikov - Aug 10, 2011 6:41 AM GMT+0200 Roman Putin, a 33 year-old nephew of the Russian Prime Minister Vladimir Putin, wants to arrange regular passenger services on the Moscow river to help bypass traffic jams, Vedomosti reported, citing a municipal official it didn’t name. To contact the reporter on this story: Ilya Khrennikov in Moscow at [email protected] To contact the editor responsible for this story: John Viljoen at [email protected] August 10, 2011 10:18 Rimma Salonen seeks to inform Putin on problems of children in Finnish-Russian families http://www.interfax.com/newsinf.asp?id=264824 HELSINKI. Aug 10 (Interfax) - Rimma Salonen, a Russian woman living in Finland, supports Russian Prime Minister Vladimir Putin's proposal on setting up a RussianFinnish council on adoption affairs and rights of children in Russian-Finnish families. "I am asking for an audience with Russian Prime Minister Vladimir Putin so as to personally present all of the necessary documents on the case and provisions of Finnish law," Salonen said in an interview with Interfax. It was reported earlier that Rimma Salonen had taken her son Anton to the Nizhny Novgorod region of Russia following her divorce with Paavo Salonen in 2008. On April 12, 2009, several people, including Paavo, took the boy from Rimma. Aided by Simo Pietilainen, an employee of the Finnish Consulate General in St. Petersburg, Paavo Salonen smuggled his son to Finland in the trunk of a diplomatic car. Rimma Salonen was later lured to Finland by a promise of a meeting with Anton and was detained. A Tampere court gave her a suspended sentence of 1.5 years and fined her 20,000 euro for kidnapping her son on October 13, 2009. She sought reinstating her maternal rights, but a Finnish court denied her request this April. "Russia should respond resolutely. A country cannot be considered a strong state if its citizens can be treated any possible way," she said. Salonen said she learned about numerous cases of violation of families' and children's rights in Finland when she was running for parliament. "For instance, 18,000 children have been removed from families since 2008," she said. Such practices are beneficial to custody institutions, Salonen said. "Unfortunately, the removal of children from families has become a kind of business for social custody institutions. For instance, social workers receive 38,000 euro for each removal of a child. An orphanage receives 300 euro daily for each child placed there. Orphanages in Tampere receive 12 million euro a year due to this, and it is natural that social workers do not want to lose such subsidies just like that," she said. Salonen said she is aware of quite a lot of removals of children from families on farfetched pretexts, "especially from Russian-speaking mothers." She opposed the view that problems of mixed marriages are "purely a family affair." Speaking at a joint press conference following a meeting with Finnish Prime Minister Jyrki Katainen in Sochi on Tuesday, Putin proposed setting up a joint council on adoption affairs and rights of children in Russian-Finnish families. He pointed out that Russia had recently signed a similar agreement with the U.S. and is preparing to sign such a document with France. va jv (Our editorial staff can be reached at [email protected]) 11:14 10/08/2011ALL NEWS Medvedev orders to monitor ministries’ information on internet. http://www.itar-tass.com/en/c154/201370.html SOCHI, August 10 (Itar-Tass) — Russia’s President Dmitry Medvedev ordered Minister of Communications Igor Shchegolev to organise monitoring of the information, which ministries and authorities place on the Internet. “I have signed many orders related to placement on the Internet of information about work of ministries and authorities,” Medvedev said. He explained that the information should be related to decisions they make, to formation of a legal base, to matters of their competence, to state officials, including that on their incomes. “This information should be public on the Internet, so that it is open for the country’s people,” he added. “I would like your ministry to undertake the monitoring of this process not only from the contents point of view, but rather from the point of view of a possible access to this information.” “I would like ministries and authorities to provide a full-fledged functioning of the service, and Russians, who are interested in receiving information, be that the defense ministry or secret services, but in compliance with the present legislation, could use the service and get this information from the net,” he said. Shchegolev informed the president that the ministry of communications keeps its own rating of information, which authorities place on the Internet. “After signing these orders, the monitoring will be made more effectively,” he assured. RT News line, August 10 Medvedev urges online diligence for military, law enforcement http://rt.com/politics/news-line/2011-08-10/#id16003 11:38 President Medvedev has commissioned the Media and Communications Minister Igor Shchegolev to monitor how diligent Russian officials are when posting reports regarding their work on the internet. “I have signed a lot of orders regarding the publication of information on the ministries’ and state agencies’ activities on the internet,” Medvedev reminded the official. “I want your ministry to monitor not only the contents of this information, but also how accessible this information is. I want the ministries and agencies to guarantee the full-scale functioning of this service. I also want to ensure that Russian citizens seeking information, be it from the Defense Ministry or the intelligence agencies - within the boundaries of the law, of course – will be able to use this service and obtain such information from the web,” Medvedev said. The orders signed by Medvedev on Monday call for regular online reporting from the Foreign Ministry, the Interior Ministry, the Emergencies Ministry, the Justice Ministry, the Federal Penitentiary Service, the Foreign Intelligence Service, and the Drugs Control Service, among others. August 10, 2011 11:54 Yabloko leader, three more activists detained in Moscow during protests – Yabloko http://www.interfax.com/newsinf.asp?id=264857 MOSCOW. Aug 10 (Interfax) - Four participants in the solitary pickets near the Arch of Triumph on Kutuzovsky Avenue in Moscow, who were protesting against the use of flashing emergency lights mounted on public officials' cars, were detained on Wednesday morning. "The Federation of Car-Owners of Russia leader, Sergei Kanayev, Karina Kanayeva, an activist of the youth branch Yabloko, and Yabloko party leader Sergei Mitrokhin have been detained," Yabloko told Interfax. "They have been accused of violating the law on pickets and rallies because there was less than 50 meters between them during the solitary picketing," it said. "But this all is actually nonsense, as there was at least 100 meters between them. This is just fault-finding," a Yabloko spokesperson said. The detained activists should be delivered to the Dorogomilovo police department, he said. Sergei Kanayev said that the picketers were holding banners saying, 'Flashers Are Russia's Disgrace,' and 'People's Servant, Take Off the Flasher!' "When we pointed to the unconstitutionality of the policemen's actions, they said, 'You can appeal it,'" Kanayev said. A lot of drivers passing by "protested the picketers' detention by honking their horns," he said. Interfax has yet to obtain official comments from the Moscow police on this account. The Federation of Car-Owners of Russia has been placing solitary pickets against the use of flashing lights by public officials almost every morning since the start of July. Most of these protests have been thwarted by police. va jv (Our editorial staff can be reached at [email protected]) Armored "Ural" with 13 soldiers falls off into precipice in Dagestan http://www.riadagestan.com/news/2011/08/10/7082/ 10.08.2011 , 10:21 Makhachkala, August 10, 2011. Last night at 22:00 the armored “Ural” of one of the military units of the RF Defense Ministry dislocating in Tsuntinsky district of Dagestan was caught by mudslide that took it into the break, a source in the power structures of the republic has informed the RIA "Dagestan". "13 soldiers on board of the vehicle made their way. According to preliminary reports, one soldier died and two more were got injures"- the source said. The circumstances of the incident are being investigated. Chechen policemen lose life because of mines mostly http://vestnikkavkaza.net/news/politics/16697.html Thirty terrorists were killed by special services in Chechnya this year, 80 members of terrorist groups were arrested, RIA Novosti reports, citing the interview by the minister of internal affairs in Chechnya, Ruslan Alkhanov. For example, last year more than 90 bandits were killed in the republic. The minister emphasized that notwithstanding difficult criminal situation in separate regions of the North Caucasus, the situation in Chechnya this year is stable due to effective and coordinated work of force services and the police. 05:03 10/08/2011ALL NEWS Situation in Ingushetia improves - interior minister http://www.itar-tass.com/en/c154/201202.html NAZRAN, August 10 (Itar-Tass) — The situation in Ingushetia has changed for the better, as compared with the past two years, the republic’s Interior Minister Alexander Trofimov ha said. According to him, “Compared with the previous years, despite the fact that some bandit raids have been made, some stabilisation is observed this year.” The minister also confirmed that last week, three traffic police officers of the republic were killed by bandits. There was a shootout prior to that. However, in his opinion, “the situation that was three years ago cannot be compared with the current one, as stabilisation is now obvious.” Now the task of the Interior is to preserve and strengthen this stability, Trofimov said. In his opinion, to improvement of the situation was largely achieved owing to successful operations, including in 2009-2010, aimed at neutralising the active members of the bandit underground and help from the local population. Trofimov also said that re-examination of the Interior Ministry personnel has been conducted in the republic in a short time period within the framework of the country’s work on the interior bodies reform. It was completed on July 29. A total of 4,154 law enforcement officers of the republic passed the merit rating. Of these 23 officers were not recommended for service at their posts, and 80 officers failed to pass the merit rating. The Republic of Ingushetia is a federal subject of Russia, located in the North Caucasus region with its capital at Magas. In terms of area, the republic is the smallest of Russia's federal subjects except for the two federal cities, Moscow and Saint Petersburg. It was established on June 4, 1992 after the Chechen-Ingush Autonomous Soviet Socialist Republic was split in two. Ingushetia is home to the indigenous Ingush, a people of Vainakh ancestry. The name “Ingushetia” is derived from an ancient village of Ongusht (renamed in 1859 to Tarskaya and in 1944 transferred to North Ossetia) and the Georgian ending -eti, all together meaning “(land) where the Ingush live.” Ingushetia is one of Russia's poorest and most restive regions. The ongoing military conflict in neighbouring Chechnya has occasionally spilled into Ingushetia, and the republic has been destabilized by corruption, a number of high-profile crimes (including kidnapping and murder of civilians by government security forces), anti-government protests, attacks on soldiers and officers, Russian military excesses and a deteriorating human rights situation. Ingushetia is located on the northern slopes of the Greater Caucasus foothills. Nature in Ingushetia is a striking combination of emerald vegetation, yellow and violet cliffs, and the pearly gleam of far-off snow-covered peaks. Ingushetia is a presidential republic within the Russian Federation. The republic's present Constitution was adopted in 1994. The highest legislative body is a unicameral parliament, the National Assembly. Prior to this, the People's Congress of Ingushetia consisting of 140 deputies functioned as the parliament. The Council of Ministers exercises direct leadership of the republic. In 1994–1996 Ingush volunteers fought alongside Chechens in the Russian-Chechen war. Besides few incidents (including the killings of Ingush civilians by the Russian soldiers), Ingushetia was largely kept out of the war by determined policy of non-violence pursued by President Ruslan Aushev. This changed after the beginning of the Second Chechen War, and especially since the rule of President Murat Zyazikov in 2002. The first major rebel attack of the conflict, in which a military convoy was destroyed occurred in May 2000 and caused the deaths of 19 soldiers. In the June 2004 Nazran raid, Chechen and Ingush guerrillas attacked government targets across Ingushetia, resulting in the deaths of at least 90 people, among them republic's acting interior minister Abukar Kostoyev, his deputy Zyaudin Kotiyev and several other officials. In response to a sharp escalation in attacks by insurgents since the summer of 2007, Moscow sent in an additional 2,500 interior ministry troops, more than tripling the number of special forces in Ingushetia in July. Blast rocks Trans-Baikal kindergarten http://english.ruvr.ru/2011/08/10/54435945.html Aug 10, 2011 09:50 Moscow Time An explosion rocked a day-care center in Russia’s Trans-Baikal region, east of Lake Baikal. By a lucky chance, no one was hurt. The explosion inflicted serious damage on the building, smashing windows, the front door and the partitions inside. The explosion is the second in a day-care center in the past ten days. On August 2nd a blast occurred in a kindergarten in Komsomolsk-on-Amur as a small box found by a five-year-old girl on the veranda suddenly exploded. The girl suffered burns of different category. Police arrested a suspect. No survivors found in crashed Russian cargo plane http://en.rian.ru/russia/20110810/165683192.html 11:55 10/08/2011 MOSCOW, August 10 (RIA Novosti) Rescuers in Russia's Far East have found no survivors in the wreckage of the Antonov An-12 transport plane that crashed on Tuesday, the Russian Air Transport authority Rosaviatsia said on Wednesday. "Rescuers from an Mi-8 helicopter have found no-one alive at the crash site. Wreckage is spread over two kilometers," Rosaviatsia representative Sergey Izvolsky said. The aircraft, carrying 11 people and 16 metric tons of food, disappeared from radars some 300 kilometers from its take-off point in the city of Magadan early on Tuesday, shortly after reporting a fuel leak and fire in an engine. Mil Mi-8 transport helicopters found the crash site some 82 kilometers from the village of Omsukchan. Russian crashed cargo plane found - Emergencies Ministry http://en.rian.ru/russia/20110810/165683192.html 11:55 10/08/2011 MOSCOW, August 10 (RIA Novosti) Rescuers in Russia's Far East have found the Antonov An-12 transport plane that crashed on Tuesday, the regional emergencies ministry said on Wednesday. The aircraft, carrying 11 people and 16 metric tons of food, disappeared from radars some 300 kilometers from its take-off point in the city of Magadan early on Tuesday, shortly after reporting a fuel leak and fire in an engine. There are no official reports of survivors in the crash. Mil Mi-8 transport helicopters found the crash site some 82 kilometers from the village of Omsukchan. Russia's aviation agency, Rosaviatsia, confirmed the recognition of the crashed plane. The aircraft, which was en route to Chukotka, belonged to the Komsomolsk-on-Amur aircraft building plant but was leased to Khabarovsk-based Avis-Amur air carrier. 11:28 10/08/2011ALL NEWS Fragments of missing An-12 plane found in Magadan Region http://www.itar-tass.com/en/c154/201382.html MOSCOW, August 10 (Itar-Tass) —— Fragments of an An-12 airplane that went missing on Tuesday in Russia’s Far Eastern Magadan Region have been spotted, a spokeswoman for the regional emergencies administration told Itar-Tass. “A Mi-8 helicopter has found An-12 fragments,” Olga Kovalchuk said. The crashed plane was found some 70 kilometers south-west of the settlement of Omsukchan, while a signal from the plane’s radio beacon came some 50 kilometers away from the settlement. “A plane with rescuers is expected to arrive at the crash scene in thirty minutes,” the spokeswoman added. 04:16 10/08/2011ALL NEWS Zero visibility impedes search for An-12 plane in Kolyma http://www.itar-tass.com/en/c154/201193.html MAGADAN, August 10 (Itar-Tass) — The search operation for the missing Antonov An-12 plane is impeded by almost zero visibility. The Mi-8 helicopter that on Wednesday morning flew from the Omsukchan settlement has found nothing and returned to the base, head of the Omsukchan district Oleg Yegorkin told Itar-Tass by telephone. Yegorkingmade a supposition that the plane could have made an emergency landing about 50 kilometres from the Julietta gold mine that is located in the Omsukchan district. The mine area is mountainous, but there are clivages between the hills. The search and rescue operation on Wednesday involves two helicopters Mi-8, the Be200 plane and other equipment – a total of 21 vehicles. Over a hundred people are making their way on surface transport to the area where the plane could be. But the rains in the Omsukchan district have resulted in a sharp water level rise in the rivers, which creates additional obstacles to the rescuers conducting a ground search operation. The Antonov An-12 of the Khabarovsk-based Avis-Amur airline on August 9 was flying from Komsomolsk-on-Amur to the Chukchi village of Keperveyem. After refuelling and taking off in Magadan, the commander of the aircraft at 16:39, local time (07:39 MSK) reported to air traffic controllers that the plane had a fuel leak and fire in the engine in the area of the Julietta gold mine in the Omsukchan district of the Magadan region. After some time, communication with the crew was lost, and the aircraft disappeared from radar screens. Shortly after the supposed crash, an emergency beacon of the An-12 transmitted a signal that was received by satellites, but then the signal disappeared. The search and rescue operation was complicated by low clouds and rain. Rescuers failed to find the liner before dark. The gold mine is located approximately 300 kilometres from the Omsukchan village. The Interstate Aviation Committee is clarifying the existing information on the incident. After reliable data are obtained a decision to establish a commission for the investigation of the incident will be made. The Far East Transport Investigation Department of the RF Investigative Committee (SK) opened a criminal case under Article 263 part 3 of the RF Criminal Code – “violation of safety rules of air transport.” The missing An-12 plane (board number RA-11125) was made nearly half a century ago at the Chkalov Tashkent Aviation Production Association (GAO TAPOiCH). The liner made its first flight in 1963. The Avis-Amur airline leased the aircraft. The company director Sergei Astashkin told Itar-Tass that there was only one An-12 cargo plane in the Avis-Amur fleet. He declined to make comments in connection with the disappearance of the aircraft. The Commission of the Federal Service for Transport Supervision (Rostransnadzor) has launched a probe into the compliance with the requirements of legislation during preparations for the flight, including those relating to the preparation of both the plane and crew. The Antonov An-12 (NATO reporting name: Cub) is a four-engine turboprop transport aircraft designed in the Soviet Union. It is the military version of the Antonov An-10. The first prototype flew in December 1957. Over 900 had been built, in both military and civilian versions, before production finally ended in 1973. The An-12BP entered Soviet military service in 1959. In terms of configuration, size and capability, the aircraft is similar to the United States-built Lockheed C-130 Hercules. Military Soviet and formerSoviet examples have a defensive tail gun turret. Magadan Oblast is a federal subject of Russia (an oblast) in the Far Eastern Federal District. Its administrative centre is the city of Magadan. The oblast is bordered in the north by Chukotka Autonomous Area, in the east by Kamchatka Territory (Krai), in the south by Khabarovsk Territory and in the west by the Sakha Republic. Magadan Oblast is considered one of the world's richest mining areas. Gold is the region's main resource, although silver and tin deposits are also being developed. There are nearly 2,000 placer gold deposits, 100 gold ore deposits, and 48 silver ore deposits in the territory. 08:16 10/08/2011ALL NEWS Crew members of ill-fated An-12 plane - residents of Komsomolsk-on-Amur http://www.itar-tass.com/en/c154/201242.html KHABAROVSK, August 10 (Itar-Tass) — All members of the crew of the ill-fortuned An-12 plane, which got missing in Russia’s Far Eastern Magadan region on Tuesday, were residents of the city of Komsomolsk-on-Amur, a spokeswoman for the Far Eastern transport administration of the Russian Investigative Committee told Itar-Tass on Wednesday. According to updated reports, there were 11 people onboard the plane, i.e. six crew members, two technicians from Komsomolsk-on-Amur, one instructor from Sakhalin, and two residents of the Chukotka autonomous area, who were accompanying a commercial cargo. Investigators are probing into various theories of the plane crash. “They are assessing the technical condition of the aircraft that has been operating since 1963, its flight readiness, and actions of the crew,” the spokeswoman said. Criminal case was opened on charges of violations of air traffic safety rules leading to the death of two or more persons. The search operation for the plane was resumed on Wednesday at dawn. The Antonov An-12 of the Khabarovsk-based Avis-Amur airline on August 9 was flying from Komsomolsk-on-Amur to the Chukchi village of Keperveyem. After refuelling and taking off in Magadan, the commander of the aircraft at 16:39, local time (07:39 MSK) reported to air traffic controllers that the plane had a fuel leak and fire in the engine in the area of the Julietta (Juliet) gold mine in the Omsukchan district of the Magadan region. After some time, communication with the crew was lost, and the aircraft disappeared from radar screens. Shortly after the supposed crash, an emergency beacon of the An-12 transmitted a signal that was received by satellites, but then the signal disappeared. The search and rescue operation was complicated by low clouds and rain. Rescuers failed to find the liner before dark. The gold mine is located approximately 300 kilometres from the Omsukchan village. Military aviation retires http://rt.com/politics/press/trud/military-aircraft-transport-first/en/ Published: 10 August, 2011, 07:46 Edited: 10 August, 2011, 07:46 The Russian army flies early 1970s aircraft models Ivan Smolin Russia has purchased the first An-70 aircraft. However, until the Russian Air Force receives the remaining supply of this model, military transport aviation could almost entirely be written off due to its catastrophic ageing. Until 2020 Russia plans to purchase about 60 An-70 aircraft from Ukraine. This is provisioned under the military rearmament program. The first aircraft, as was reported by the general director of Ukraine’s Motor-Sich, Vyacheslav Boguslayev, has already been purchased by Russia. This aircraft has been long awaited by the troops. After all, the military transport aviation fleet became outdated a long time ago. According to the general director of the Interdepartmental Analytical Center, Sergey Kolpakov, there are approximately 290 units of military transport aircraft, most of which are inoperable, pending repairs. Meanwhile, most of the aircraft were designed in the 1970s. For example, the Il-76, which forms the majority of all military transport aircraft, had its first flight in 1971 and the An-22 in 1965. Meanwhile, the service life of such aircraft varies between 20 and 40 years. All hopes rest on the Ukrainian An-70. However, its production is yet to be launched in Russia. And until the Air Force receives the expected 60 aircraft units, the current “wings” will simply become outdated, leaving no options for transporting military cargo. The Il-76 model makes up the majority of Russia’s military transport aircraft. The An-124 is the largest mass-produced aircraft not only in the Russian Air Force but across the globe. Russia could resume its production in the coming years. The An-72 has been in operation since 1977. Due to its allocation of engines, it has been nicknamed “Cheburashka”. Until the appearance of the An-124, the Antonov An-22 Antei was the largest transport aircraft in the Soviet Union. The An-70 conducted its first flight from Kiev airfield in 1994 but this is the first time it has made it into the Russian Air Force, while the An-12 had its first flight even before Yury Gagarin went into space. 10:07 10/08/2011ALL NEWS GLONASS equipment for social purposes to be produced in Krasnoyarsk http://www.itar-tass.com/en/c154/201320.html KRASNOYARSK, August 10 (Itar-Tass) — Russia’s GLONASS equipment for social purposes will be produced at Krasnoyarsk’s Radiosvyaz enterprise. The agreement on cooperation signed on Wednesday by the enterprise and the territorial ministry of informatization and communications will enable attracting Krasnoyarsk’s leading designers to the implementation of state-private projects on the basis of IT technologies. First of all, the agreement dwells upon the development of the regional system of monitoring on the basis of the GLONASS technology, a source at the ministry told ItarTass. “The enterprise in Krasnoyarsk will produce equipment, including that with satellite communications means, so that a dispatcher could control passenger traffic in the districts, where cell communication is not working, and so that a driver had an option to contact a dispatcher in an emergency situation,” the source said. “Russia does not have analogues of this equipment as yet.” “Before the yearend, 3,105 vehicles in the Krasnoyarsk Territory will be equipped with the GLONASS/GPS systems, including 100 ambulance cars, 641 school buses, Krasnoyarsk’ s 1,763 public transport’s vehicles, and 601 commuter bus,” the ministry said. “Further on, the territory will continue installing the equipment in school buses, ambulance cars, commuter buses, small aircraft, river vessels and road repairing vehicles.” The equipment will improve the quality and safety of transport, will let ambulance cars to arrive quicker, it will control the use of fuel and vehicles. The GLONASS’ coverage in the Krasnoyarsk Territory is unprecedented already now – dispatchers control round the clock the area of over one million square metres, which is the best rate throughout Russia. The Radiosvyaz enterprise has been working for over 60 years in design and production of ground stations for satellite and troposphere communication, and of radio navigating complexes. The enterprise designed and produced several generations of stations, which provide global communication for the Armed Forces, made stations for the country’s first system of military satellite communication. Main consumers of the products are the Russian Federation’s law enforcement and defence related state agencies, as well as the Rostechnologii state-run corporation. Russian prosecutor crashes into Moscow bus stop http://en.rian.ru/russia/20110810/165675107.html 11:10 10/08/2011 MOSCOW, August 10 (RIA Novosti) Three pedestrians were injured after a Russian prosecutor crashed his car into a bus stop in central Moscow on Tuesday night. The driver of the black BMW X5 and his two passengers, both aides to a Moscow district prosecutor, were also hurt in the crash which occurred just across the road from RIA Novosti’s office. “On the night of August 10, 2011, an inspector at the Prosecutor’s Office crashed into three pedestrians at a public bus stop on Zubovsky Avenue while driving a BMW car,” the Moscow prosecutor’s office said in a statement. All six were hospitalized. The driver, whose name has not been released, “also damaged four parked vehicles,” the statement said. Officials said there was no alcohol in the driver’s system. Eyewitnesses said the BMW was traveling at a high speed. A police investigation into the cause of the crash has been launched. 11:04 10/08/2011ALL NEWS Minister of Health sacks Rector of Russian State Medical University http://www.itar-tass.com/en/c154/201360.html MOSCOW, August 10 (Itar-Tass) —— Russian Minister of Health and Social Development Tatiana Golikova has sacked rector of the Russian State Medical University Nikolai Vavilov who is suspected of being involved in office abuse in this summer’s enrolment campaign, the ministry press office told Itar-Tass on Wednesday. 10:54 10/08/2011ALL NEWS Two police suspected of receiving bribe from pedophile http://www.itar-tass.com/en/c154/201350.html YEKATERINBURG, August 10 (Itar-Tass) — Yekaterinburg’s police officers serving at the city’s police department are suspected of receiving a bribe from a man suspected of committing 26 episodes of abuse of ten young boys. Press service of the regional Investigative Division of Russia’s Investigative Committee reported on Wednesday, that the police promised for the cash offered not to draw the pedophile to criminal liability over claims of parents of children affected by sexual abuse. "A criminal case was opened over receiving a bribe for action /inaction/ in favor of the bribe giver, committed by a group of persons by prior collusion, " the press service said adding that the alleged pedophile had been arrested and is in custody now. Current investigative checking will find out all circumstances of the offence. A similar case occurred earlier in Blagoveshchensk, where a man suspected of raping a 7year-old girl was released from custody. As a result, the locals almost organized a mob law on him. Soon the suspect was detained. Now, a criminal case over abuse of power is opened against Blagoveshchensk’s former investigator. Justice upstaged: angry public targets child molesters http://rt.com/news/angry-public-child-molester/ Published: 10 August, 2011, 10:15 Edited: 10 August, 2011, 10:17 A suspected child molester in Russia’s Far East was released without charge, then almost lynched by an angry crowd. The case is one of many in which people feel the authorities have failed to act on crimes against those who need the most protection. Natalia is the mother of an underage victim. She says the thought of avenging her daughter’s abuse has been haunting her for months. “I even thought of buying a pistol and shooting him myself. I simply don’t know how else to protect my family. We live on the ground floor with curtains constantly drawn. I go to work every day sick with fear for my daughter,” she says. It was hard for Natalia to admit she had trusted someone who harmed her child. She brought the man into the house as a common-law husband to live side by side with them for more than nine years. “My daughter told me he threw a stray cat from the roof and said he’d do the same to her if she ever confided in me about the things he was doing to her,” she says. When Natalia finally managed to get things to the court, the jury acquitted the man, who she says is now after her family, hungry for revenge. Natalia’s experience is just one example of many. In a recent controversial case in the Far Eastern Amur Region, a man suspected of raping a seven-year-old girl was released without charge. Only after an enraged crowd nearly lynched the man did police launch a fully-fledged investigation into the case and record a confession. Alexey Zhititsky, the suspect, told police: “I pulled off her knickers and she started crying. I squeezed her neck and pressed her into the ground. It only took a couple of minutes. Then I told her to go home and tell no one.” Authorities have disciplined the original investigating officer and a police officer, while a probe into alleged negligence linked to this case is underway against him and two other officers of the law. “The worst that’s happened here is the mother was treated like a football. She was kicked around from office to office. A tragedy had happened to her, she didn’t know what to do, but no one wanted to even talk to her, let alone accept her statement,” says Anatoly Kucherena, a lawyer and member of the Russian Public Chamber, a civic advisory body. Russian authorities have long declared a fight against the sexual abuse of minors, but results seem to have been meager, with estimates claiming thousands still fall victim. In an attempt to put things right, some activists have started taking matters into their own hands, targeting people they suspect of being sexual predators with online smearing campaigns. They go online pretending to be an underage boy or girl and set up meetings with people who admit to preferring minors. Then they film their faces and expose them on the web. “We are simply a group of people who decided to fight this evil in our own way because our families live in this city. Our children walk these parks and we don’t want them to ever meet those perverts,” says Daniil, one of the anti-pedophilia activists. The vigilantes believe they act within the law, but many would say they go over the edge. Volunteers tracking pedophiles online say most people will sign off when they learn the person they are talking to is underage. But activists say roughly one out of 100 contacts is certain to be looking for easy prey. Currently, the maximum sentence for child sex offenses in Russia is 20 years in prison. An amendment to the law is meant to introduce tougher penalties, including life in prison and conditional chemical castration. But until the changes are implemented and proven to be effective, the activists say they will continue with their controversial campaign. Russian Press at a Glance, Wednesday, August 10, 2011 http://en.rian.ru/papers/20110810/165681371.html 10:09 10/08/2011 POLITICS Moscow has prepared a blacklist of several dozen U.S. officials who will be banned from travelling to Russia in response to a U.S. blacklist that includes Russian officials allegedly linked to the controversial death of Russian lawyer Sergei Magnitsky. Russian President Dmitry Medvedev ordered the Foreign Ministry to respond to the United States’ action in late July. (Kommersant) Sergei Mironov, a former speaker of the Russian parliament’s upper house and a leader of A Just Russia party, vowed to expel those of his party members who join Prime Minister Vladimir Putin’s All-Russia People’s Front. The statement came after several members of A Just Russia joined the political movement, created on the basis of Putin’s United Russia party ahead of the December parliamentary elections. (Kommersant) Russian President Dmitry Medvedev and his Ukrainian counterpart Viktor Yanukovych will meet in the Russian Black Sea resort of Sochi on Thursday. Ukrainian officials say that a compromise has been found to settle the issues related to the Russian-Ukrainian gas row and Russia’s lease of a naval base in the Crimea. But experts doubt that the sides would sign any agreement before the fall. (Nezavisimaya Gazeta) St. Petersburg bloggers have raised questions over the legality of former city governor Valentina Matviyenko’s election campaign, which is part of a plan to secure her the speaker’s position at the Russian parliament’s upper house. (Vedomosti) The Russian and Azerbaijani presidents discussed the situation in Nagorny Karabakh, a breakaway region in Azerbaijani territory with a predominantly ethnic Armenian population, in the Black Sea resort of Sochi on Tuesday. The discussion focused on obstacles to the resolution of the bitter conflict between Armenia and Azerbaijan over the region. (Moskovskiye Novosti) ECONOMY & BUSINESS The U.S. Federal Reserve announced on Tuesday that it will keep federal fund rates at a historic low at least until mid-2013 to stimulate economic recovery. (Kommersant, Vedomosti) Russian Deputy Prime Minister Segei Ivanov has backed a proposal by the country’s aviation authority to prohibit small airlines from operating regular domestic flights. (Moskovskiye Novosti) A new scandal is unfolding around the construction of a 500-meter skyscraper by Russian energy giant Gazprom in the outskirts of St. Petersburg. The authorities dropped their plans to build a lifeboat station near Gazprom’s future office, sparking a wave of criticism from local residents in the wake of a major ship tragedy on the Volga River, in which more than 120 people died. (Kommersant) A relative of Russian Prime Minister Vladimir Putin is planning to launch a passenger transportation business on the Moscow River. (Vedomosti) Although the Bank of Moscow is no longer controlled by the Moscow government, it continues saving money there: in July, the bank deposited 46 billion rubles ($1.54 billion) from government funds. (Vedomosti) SOCIETY A parking lot for helicopters is being constructed on the roof the Federal Security Service (FSB) headquarters in Moscow’s Lubyanskaya Square. Do the authorities have the right to reconstruct the historic building? (Nezavisimaya Gazeta) Russian video and audio broadcasters will be obliged to notify the audience about age restrictions on their content by using special markers starting from September 2012. The system, which is widespread in the West, is designed to protect children from harmful content. (Rossiiskaya Gazeta) The Russian government is planning to spend 15 billion rubles (some $502 million) on education loans for students willing to study abroad. (Moskovskiye Novosti) CRIME Britain has been struggling to quench massive riots that have spread across the country since Saturday, raising questions about Britain’s readiness to host the Olympic Games in London next summer. Meanwhile, observers have pointed to the role of Blackberry smartphones and their instant messaging service in organizing the riots. In Russia, the function, which allows sending encrypted and private messages to groups, can be blocked at the request of the Federal Security Service. (Moskovskiye Novosti) An ethnic Chechen who was organizing attacks on officials in the Russian North Caucasus republic of Chechnya under the guise of a police officer during the war in the early 2000s, has been detained in Kyrgyzstan. He was previously arrested by the Kyrgyz authorities in 2004 over illegal arms possession, but was release a year later. (Kommersant) August 10, 2011 10:55 Moscow press review for August 10, 2011 http://www.interfax.com/newsinf.asp?id=264836 MOSCOW. Aug 10 (Interfax) - The following is a digest of Moscow newspapers published on August 10. Interfax does not accept liability for information in these stories. VEDOMOSTI Sberbank (RTS: SBER) has boosted its revenues due to releasing its excess reserves and increasing its credit portfolio. The bank earned over 200 billion rubles in January-July 2011. In the first half of 2010 alone, Sberbank increased its reserves by 126.9 billion rubles and then released 28.8 billion rubles in January-July 2011. Their volume amounted to 630 billion rubles as of August 1, 2011, which is 110% more than the overdue debts, Sberbank said in its financial statements. ('Gref's New Record') Although Bank of Moscow (RTS: MMBM) no longer belongs to the Moscow city government, the latter is continuing to place deposits on its accounts. In particular, Moscow deposited 46 billion rubles with the bank in July. The bank said in a statement that it had won a tender for placing Moscow budget funds organized by the city finance department. Documents posted on the department website indicate that the money has been placed under annual interest rates varying from 25% of the refinancing rate (i.e., 2%) to 4.5%. The bank's press service refused to tell Vedomosti the exact interest rate for the Moscow government. ('Old Friend') The Economic Development Ministry has forwarded a list of candidates representing the state to the Svyazinvest board of directors, which should be elected at an extraordinary shareholder meeting on September 22, 2011, Alexei Uvarov, the director of a ministry department, told Vedomosti. The candidates include Alexandre Troubetzkoy, a French citizen, who has been nominated by the Russian Communications Ministry. The list is to be cleared by the presidential office and then authorized by Prime Minister Vladimir Putin, Uvarov said. ('French Candidate') Summa Capital is taking control of Russian grain exports by acquiring shares in two major grain terminals in the country. Vedomosti has learned from three top managers of Novorossiysk Grain Product Combine's partner companies that affiliates of Ziyavudin Magomedov's Summa Capital have acquired 27.85% in Novorossiysk Grain Product Combine from WJ Group and its principal shareholder Yury Drukker. A source familiar with WJ Group's business has confirmed that Drukker and his structures have sold all their shares in the Novorossiysk Grain Product Combine, but he does not know who the buyers are. ('Summa of Grain Ports') KOMMERSANT Sberbank is asking the state to grant it special terms for exporting oil from the Dulisma field, which the bank acquired in compensation for Urals Energy's unsettled loan. Starting August 1, Dulisma, as well as other oil projects in West Siberia, has been deprived of any benefits. Negotiations with Bashneft (RTS: BANE) have so far been unsuccessful, and the bank believes the duties make Dulisma's future doubtful. (Page 7, 'Sberbank Looking For Way Out Of West Siberia') The Russian Federal Property Management Agency (Rosimushchestvo) can receive more than 40% of the starting price of a state-owned 73% stake in the Vanino port due to the sale's disruption. Rosimushchestvo sued the company Seltechstroy, which won the auction, for $10 million for failing to pay for the shares. Seltechstroy's co-owner Ivan Mikoyan has already lost the deposit amounting to over $3 million by refusing to buy the stake. (Page 9, 'Ivan Mikoyan Will Pay More For Vanino') Sberbank will enter the express crediting market at retail chains in partnership with Cetelem belonging to BNP Paribas through a special bank. To this end, Sberbank could acquire BNP Paribas Vostok from BNP Paribas. Considering that, following the restructuring of BNP Paribas's business in Russia, this subsidiary is in fact a 'blank' license, the deal would rid BNP Paribas of a spare asset and would help Sberbank distance itself from high risks in the express crediting segment. (Page 8, 'Sberbank Takes Oriental Express') A bankruptcy procedure has been opened against Oleg Deripaska's Socium pension fund. Such measures have been applied to a private pension fund for the first time on Russia's mandatory pension insurance market. Experts doubt that the fund will be recognized as bankrupt. The situation should rather be viewed as a link in a chain of scandals surrounding private pension funds seeking to utilize nearly 1 trillion rubles of pension savings managed by the state. (Page 7, 'Sanctions Imposed On Pensions') Russian space science blooms again http://rbth.ru/articles/2011/08/10/russian_space_science_blooms_again_13239.html August 10, 2011 Jeffrey Manber The Spektre R telescope shows the power of Russia's space program - and also has the potential to promote international cooperation. A three-decade-long drought came to an end on July 18 when a Zenit rocket launched a Russian radio telescope into orbit. Not since the Soviet Union's economic and political fall have Russian space scientists been able to develop and launch such a cutting edge piece of research instrumentation as the Spektre R telescope. A product of the Lebedev Physical Institute, with additional funding from the Kremlin, the Spektre R is now the largest telescope in space. It is perhaps the most beautiful as well, with a flower-like design of 27 gold-colored petals that opened up perfectly soon after launch. The main scientific goal of the five-year mission is the study of the deepest and most mysterious reaches of our universe, including the origins of black holes, the structure of galaxies, star formations and the boundaries of interstellar space. The pride of the Russian scientific community, the telescope is only 10 meters in length, or about 30 feet. But once operational by September or October, the instrument will have a capacity to provide detailed images of the universe at 1,000 times the resolution attainable via the Hubble Space Telescope. Although as Spektre R is a radio telescope, there will be no stunning photos like the ones from Hubble – but scientists are holding their breath waiting for the first streams of data. The telescope manages to be both small and powerful due to an ingenious system that makes use of a network of receiving dishes and telescopes on the ground. These pool together with the Spektre R to provide an extraordinary clarity of signals. Think of it as the ultimate in “cloud computing.” The network includes telescopes in Australia, Chile, China, those from the European Space Agency, India, Japan, Korea, Mexico, South Africa, Ukraine, and the United States as well as from Russia. Once operational, the telescope network will be known as RadioAstron, with a "dish" spanning 30 times the Earth's diameter. "We've been waiting for this day for such a long time," said Nikolai Podorvanyuk, a researcher at the Moscow Institute of Astronomy. "It's been planned since the 1980s, but has repeatedly fallen through for a variety of reasons. But now it's here, and we're bracing for all the new information it's going to deliver.” Vladimir Fotov, director of the Institute of Thermophysics in Moscow agreed. "This is going to open up a whole new era in astronomy and astrophysics," Fedotov said. "It's a huge contribution to world science; Russia has held advanced positions traditionally. It's just great.” The telescope's orbit is equally unusual and innovative, ranging from a low approach (perigee) of 500 km (310 miles) from the earth and then climbing to 340,000 km (211,000 miles) away from Earth. This elliptical orbit means that the moon's gravity is an important part of the mission and the telescope will hardly ever be in the earth's shadow—so it is in effect a deep space mission without the cost of being a deep space mission. A leader in space technology has returned But the technical aspects of the program share importance with the simple fact that the successful deployment of the radio telescope brings to an end Russia’s absence from the international community of contributions to space science. The first pictures from the far side of the moon and many other basic astronomical discoveries came from the Russian space program. So the first signals from the Spektre R will be welcomed both for what they say about the mysteries of the universe, and also for the fact that a traditional leader in space science has returned. “We are more than a space taxi,” scoffed more than one scientist, alluding to the fact that the Russian Space Agency is being paid by NASA for ferrying astronauts to and from the International Space Station. But learning about the Spektr R would be difficult for readers of most American news outlets. At a time when NASA is caught in a budget crunch, when Congress threatens to cut funding for the James Webb telescope, the next American astronomical crown jewel, the normally boisterous, supportive space sites as well as traditional news outlets have all but ignored the Spektre R mission. Let's hope the silence is due more to a myopic focus on saving NASA's basic science programs than disregard for Russian accomplishments. And it is made even more puzzling given that the recent launch of NASA's Jupiter mission, called Juno, was on an American workhorse rocket called Atlas 5, powered in part by rocket engines licensed from the Russian organization Energomash. The entwinement of the American and Russian exploration programs should be applauded for political, economical and scientific reasons. But no matter, the reality is that once this stunning astronomical tour de force involving 20 nations led by a 2.5 ton space flower gets going, we all will be hoping this is only the first chapter in the second phase of Russia's exploration of the universe. Jeffrey Manber is a long time adviser on Russian-American cooperation and author of Selling Peace, which tells his personal story of the events leading to the two nations working together in space. Suffering in silence http://rt.com/politics/press/rossijskaya-gazeta/information-internet-child-distribution/en/ Published: 10 August, 2011, 07:38 Edited: 10 August, 2011, 07:38 It has been proposed to make online harassment of children punishable by imprisonment Tatiana Shadrina Starting September next year, the country’s media and the distribution of video and audio recordings will be subject to obligatory classification of five age groups of audiences. Currently the Ministry of Communications and Mass Media (Minkomsvyaz) is working on the special labels. The ministry is responsible for the development of regulatory acts for the law “On protection of children from information harmful to their health and development”, which has already been signed by the president. Restrictions on the distribution of information, which will come in effect next year, will not only apply to obscene pornographic and violent images but also profanities said one of the law’s sponsors, Elena Mizulina. Cartoons will also need to be labeled. For example, some Japanese anime films are not suitable for children. The law will apply to Internet providers and Internet café owners, who will be required to install a filter program for websites advocating prostitution, vagrancy, drug use, and suicide. The suggested fine is 10,000-15,000 rubles. But the authors of the initiative argue that their reputations will suffer. Today major wireless service providers and Internet resource companies have joined efforts to stop the distribution of online content that causes irreversible harm to a child’s psychology or even threatens their life by forming a non-profit organization called the Safe Internet League. The online community’s concerns are not without reason. In the last five years the number of Internet users has increased by 25 times, and the number of harassment cases targeting children by 30 times, said head of the Safe Internet League, Denis Davydov. Since the beginning of 2011, 71 criminal cases have been filed against distribution of child pornography on the Web. It’s no coincidence that this content is growing on RuNet as it is extremely profitable. Moreover, psychologists have proven that there is not a single adherent of child pornography whose interest is limited to images. But in order to get into the closed society, one needs to make one’s own “risqué contribution”, which is not available on the web. According to Mizulina, they go on social networking sites in order to obtain candid photos of children. Then, they blackmail them with threats of telling their parents, and thus begin to control their victims. Moreover, the subject of violence could be a child from the neighborhood, a friend of one’s own child, or the perpetrator’s son, Mizulina said with regret. There is another frightening trend. The age of Internet users and that of the victims is getting younger. Today, users include children aged between six and nine years. They understand less in life than do adolescents and are more easily intimidated. In addition to those who are subject to virtual harassment, there are also those who are bullied on social networking sites. About 70% of children who come across cyber-bullying do not report it as they are afraid of losing their Internet privileges. Only 3% of Russian parents know what sites are visited by their children and how to protect them. In order to make communication on social networking sites comfortable and safe, Denis Davydov advises using a pseudonym rather than disclosing the user’s real name during the registration process. And instead of using a real photograph, a “generic image” such as a picture of a kitten or a cartoon character should be used. But under no circumstances should a physical address or a school name be listed, says the expert. Alas, children often disclose personal information on the web, which greatly simplifies things for those who, say, are looking to kidnap a child. In the virtual world, it is possible to come across real threats. The Safe Internet League, together with law enforcement agencies, has conducted an entire operation in an effort to catch online predators. Having opened fake online accounts, where they posed as 12-year-olds and disclosed their personal information, they were getting inappropriate proposals already by the second day. Among other reasons for this is the fact that, in Russia, online harassment is not criminally punishable. The Safe Internet League intends to turn to the country’s leadership with a proposal to introduce the necessary amendments to the legislation, said Denis Davydov. In September the community organization plans to go to schools with special tips for students and their parents on ways to behave on the Internet. As for social networking sites, groups have already formed that identify inappropriate content and report to the provider. The latter immediately removes it. One of the popular sites among children, VKontakte, promised to fully eliminate child pornography by 2012, said Davydov. Mizulina suggested creating a public national resource, where all of the information about the “dirt” in RuNet would be directed. In the US providers have already created a special search engine that not only helps remove child porn from the web, but also compares the images to those of missing children, and even monitors in real-time who and on what computer is watching the inappropriate content. A similar search engine must be created here as well, she says. Commentary by the Public Communications Department of Minkomsvyaz: In order for the law on protection of children from inappropriate information to come into effect, Minkomsvyaz has introduced a draft decree “On the introduction of amendments to certain administrative acts regarding the responsibilities of federal executive bodies in the sphere of protection of children from information, harmful to their health and/or development”, ministry representatives told Rossiyskaya Gazeta. At the same time, the Ministry of Culture has drafted another decree “On the approval of rules of the State Register of films and issuance of their distribution certificates”, which is currently being considered by the relevant federal executive bodies. But before September 2012, Minkomsvyaz will be forced to develop the inspection procedures of information products in order to ensure children’s safety. It also needs to develop the rules for accreditation of experts and expert organizations which will analyze the information products to ensure child safety. It also needs to set up and maintain a register of the accredited experts and expert organizations. In addition, the ministry will say who will be paying for the analysis of information products and how. The ministry is currently developing technical requirements for software and hardware focused on the protection of children from harmful information, as well as the conditions for distributing a warning message about age restrictions prior to its showing. Schools that don’t speak Russian http://rt.com/politics/press/nezavisimaya/children-school-parents-class/en/ Published: 10 August, 2011, 07:44 Edited: 10 August, 2011, 07:44 Immigration significantly alters the picture of education in the capital Elena Gerasimova The biggest problem Moscow’s parents face is trying to find a good school for their children. School psychologists have recently noted that if the number of international students exceeds 15% of the class student body, parents of advanced students quickly start looking for a new school. Immigrants’ children usually come from low-income families that are unable to provide additional training for their kids on their own. According to the Education Department of Moscow, there are more than 70,000 immigrant children attending schools in the capital today. Most of them arrived with their parents from Central Asia, China and Vietnam. The enclave settlements of migrants in Moscow’s southern, south-eastern and eastern districts have led to the fact that nearly 30% of elementary school students in these districts have a poor knowledge of Russian. “The idea of the Moscow government to admit all children to school, regardless of their citizenship, is in itself absolutely correct,” says Sergey Popov, president of the International Methodological Association, “but the problem is that schools are not ready for this.” For example, such an institution as a school, says Sergey Popov, was initially designed for a uniform composition of cultural, educational, and language levels of the enrolling students. When the composition of a student body is uniform, it is possible to create pressure by separating the class into advanced and slower children, which forces them to strive to achieve good grades as a condition of successful socialization. When enrolled in the same class with children of various levels of prior training, including language, under educational pressure the class is separated into the local and the foreign rather than students who excel and those that fall behind. And the created pressure no longer affects the growth of performance, but reinforces the social boundary between the two groups of children. Another element that hinders the proper development of the theme in schools is the attitude toward migration in general. “There is no public consensus on how we want to see Russia in the future,” says Vladimir Mukomel, director of the Center for EthnoPolitical and Regional Studies. “Will Russia be multi-ethnic, multi-confessional, and in need of immigrants due to serious demographic and economic problems, or will we focus on the preservation of the Russian-Orthodox foundation, rejecting immigration, which assumes an entirely different development of inter-ethnic and inter-religious relations in Russia?” This disorder in the minds and attitudes of people is reflected in schools, in a sense that there is no well-considered approach to multi-ethnic compositions in schools. And schools rely on the attitudes of the past. According to Vladimir Mukomel, in the 2000s the fairly tolerant youth of the late 1980s-1990s was replaced by “another cohort, socialized in another, more xenophobic, social context. They stand in solidarity with the harshest measures in regard to immigrants and the minority.” Therefore, tolerance programs which are aimed at a more loyal community of children do not produce the desired results. In St. Petersburg, the program “Tolerance” has been implemented since 2007. Starting in 2008, tolerance classes have been conducted in St. Petersburg’s schools. In cities, mainly in the metropolises of Moscow and St. Petersburg, social ads aimed at preventing xenophobia are displayed on billboards. But, according to the Levada Center’s recent study of January 2011, the level of xenophobia in the young is rising across a number of indicators despite all efforts. Educators should take this into consideration. As they should consider the fact that, for example, immigrants’ children are more optimistic than their Muscovite counterparts. This conclusion was drawn by sociologist Aleksandr Makarov when studying the adaptation of immigrant children in Moscow schools. The sociologist also notes that ethnic identity is formed by the time a student enters high school. This means that primary school teachers need to have a differentiated approach to working with students who have arrived from abroad, and work differently with grade-school students and high-school students. And finally, experts working in this field believe that in order to develop the skills for inter-cultural dialogue and reduce the influence inter-cultural differences have on social interaction, it is most absolutely necessary to offer socio-psychological training to heads of diasporas, elders, all those in senior positions, and teachers. And only then can we begin comprehensive work with children. The Kremlin’s Extremist Youth Camp http://www.thedailybeast.com/articles/2011/08/10/kremlin-s-extremist-youth-camp-inrussia.html Russia’s Kremlin-sponsored summer camp has promised warmer relations with the West, but its participants may be as radical as ever. AUTHOR Anna Nemtsova Aug 10, 2011 12:00 AM EDT A gentle July breeze was playing on the shores of Russia’s Seliger lake, blowing away the mosquitoes and cooling hundreds of campers who sat in tight circles on wooden platforms. On stage, speakers from the United States, Asia, and Europe lectured the youth on world politics, social development, and management skills. “Stay happy, open, and friendly,” advised Deb Sofield, a visiting Harvard professor. In the background, big flatscreen televisions mounted on pine trees loomed over the kids’ tents, broadcasting CNN and Russia Today, the state television station. Welcome to the All Russia Youth Innovative Forum “Seliger-2011,” a Kremlinsponsored summer camp set in picturesque green woods about 200 miles north of Moscow. The gathering—now in its seventh year—hosted a whopping 20,000 participants, including 900 students from foreign countries. Like the Labor Party youth camp on Norway’s Utoya Island targeted by Anders Behring Breivik in his July 22 murder spree, Seliger is a place where politically minded kids can gather to debate their ideas for the future. On Utoya, extremism tragically intruded from the outside to disrupt these ideas. But at Seliger, extremism has often bubbled up among the campers themselves, many of whom belong to Russia’s pro-Kremlin youth nationalist movements. Take the closing day of last year’s Seliger Forum, when a youth group called Stal— Russian for “steel,” with obvious echoes to the name “Stalin”—set up a thicket of wooden stakes topped with puppet heads representing Hillary Clinton, Condoleezza Rice, judges of the European Court of Human Rights, members of Estonia’s parliament, and a number of Russian human-rights activists. The puppets were adorned with military hats bearing Nazi swastikas; a banner with big red letters exclaimed, “We’re not glad to see you here.” Though other campers criticized the installation and the stakes didn’t stay up for long, the incident tarnished Seliger’s reputation both domestically and internationally. Another youth group that regularly participates at Seliger, the pro-Putin firebrand Nashi movement, has also made a name for itself by blocking trucks delivering goods to Estonia to protest “Estonian state fascism” and by harassing the former British ambassador to Russia, Anthony Brenton, at his public meetings in Moscow. As a result of these incidents, a number of Seliger sponsors backed out this year, including German auto maker Mercedes-Benz and the Italian notebook company Moleskine. The chief editor of the popular radio program Echo of Moscow, Alexei Venediktov, also claimed that he rejected an offer to speak at Seliger, since the management had never apologized for the mock heads on the pikes. “I respect myself too much to take part in that garbage,” Venediktov said In an effort to improve Seliger’s image, the Kremlin hired a former Moscow State political science professor, Mikhail Mamonov, to travel to U.S. universities such as Harvard, Stanford, and Georgetown to woo American youth to join the summer camp. Mamonov says that he faced “vast criticism” on the campuses over the conviction of oligarch Mikhail Khodorkovsky and “Putin and Medvedev’s bloody regime.” Nevertheless, Mamonov was able to drum up 32 American participants and the Seliger organizers took care to present a message of “reset” with the United States. This year, banners blared the obligatory quotes from Prime Minister Vladimir Putin and President Dmitri Medvedev, but also included Michael Jackson lyrics. On the Fourth of July, a barbeque was held with Coca-Cola and grilled sausages and partygoers sang the American national anthem. “We welcome the reset in U.S.-Russia relationships as long as it is mutual,” said Nikita Borovikov, the leader of a forum hosted by the Nashi youth group. Lecturers also reported being impressed by the tone of this year’s conference. Rod Martin, a U.S. Republican Party member and former Paypal.com advisor, said he was thrilled by how well read the kids were. “We discussed George Orwell’s 1984, as a part of my lecture on how advancing technology will make you richer and freer. Most of the kids had read the book.” A speaker on risk management, Gaurav Singhal, said he was delighted to meet “potential partners” for the environmental NGO he founded in India. Neither Martin nor Singhal said they felt any sense of an anti-Western political agenda. Remnants of Soviet days blend with new Moscow of the big-wigs http://www.irishtimes.com/newspaper/world/2011/0810/1224302181495.html MOSCOW LETTER: These days Muscovites have ceased gazing skyward and have taken to staring at the ground, writes SÉAMUS MARTIN IN TODAY’S Moscow, it’s difficult to conjure up a vision of what this huge city was like in Soviet times. There are few Ladas to be seen and as for food queues, you might see one at the checkout in one of the French hypermarket chain Auchan’s 16 Moscow outlets. A once green space off Kutusovsky Prospekt, along which the shishki (the big-wigs) flee to their dachas, has sprouted a small Manhattan of skyscrapers known as “Moscow City”. This project, introduced by the city’s former mayor Yuri Luzhkov, looks impressive from a distance, but up close a different picture emerges. Only half the skyscrapers are occupied, some have been halted in mid-construction and the new mayor, Sergei Sobyanin, has described the complex with some understatement as a “an error of urban construction”. Mayor Luzhkov ran the city for 18 years and oversaw a massive construction boom. Beautiful old houses were razed and replaced by appallingly over-ornate high- rise buildings that assaulted the eyes of more artistically sensitive Muscovites. In the course of this boom, Luzhkov’s wife, Yelena Baturina, who had construction interests, became the richest woman in Russia. President Medvedev put an end to all this two years ago when he gave Luzhkov the sack. Today Muscovites have ceased gazing skyward at the high-rise monstrosities and have taken to staring down at the ground. There is good reason for this: almost every footpath in the centre of town is having its old paving stones removed and replaced with concrete setts known as plitka. There are gaps that can catch a toe or a heel and cause a nasty fall. So with safety first as their motto, the people move through the city with their heads bowed just as they may have done when comrade Stalin was in charge. In those days, it was necessary not only to be careful with one’s eyes but also one’s mouth. The latter precaution has long since been redundant and the arrival of the plitka has become a major topic of outspoken conversation. Many have suggested that little has changed and that Mayor Sobyanin’s wife may have started on the footpath to riches taken earlier by Irina Baturina. The rumours gained ground so quickly that popular radio stations such as Ekho Moskvy issued statements from the mayor’s office over the weekend declaring that Mrs Sobyanina has no financial or other interest in either the factory that makes the plitka or the firm that installs them – or indeed anything with even a remote link to them. I have negotiated my way over the dangerous footpaths of central Moscow to observe the changes that have taken place since, as Irish Times correspondent, I witnessed the last days of the Soviet Union and the early days of the new Russia. In 1991, before a failed coup d’état hastened the USSR’s demise, The Irish Times office was situated in what may have been the worst building in all the Russias. This hideous construction still stands overlooking the sprawling Taganskaya Square. Appalling from the exterior, it was every bit as bad inside. Screams could at times be heard from those trapped in lifts stuck between floors. When one lived on the 17th floor, however, there was little option but to ascend or descend in hope rather than confidence. In my time, as dusk fell the rats cascaded on to the streets from a derelict house. Now the rat-infested building has been replaced by the Moscow Church of Scientology. Gone too is the nearby Great Communist Street. It is now Aleksandr Solzhenitsyn Street, perhaps the most dramatic name change in Moscow since 1992 when Bezbozhny Pereulok (No God Lane) reverted overnight to its pre-revolutionary title of Protopopovsky Pereulok (Arch Priest Lane). But all these changes are merely on the surface. In the Metro it’s different. At Kievskaya station, mosaics of happy Ukrainians smile down at you from motifs of sheaves of wheat and abundant fruit. In the 1930s, by the way, when the station was being built, the people of Ukraine and southern Russia were starving to death. At Taganskaya there are ivory-white porcelain plaques proclaiming the glory of the armed forces, while next door at Markisistskaya, giant red stars adorn the marble floor. Recently the Metro returned even more closely to what it looked like in the Soviet days. All advertising posters have been removed. The rumour mill has rolled into action. Ask any Muscovite and you will be told with a knowing smile that a move is afoot to replace the ads with something that will enrich some shishkha, some big-wig. COHEN: Russian ‘reset’ malfunction Harsh Washington criticism exposes Soviet-like antiAmericanism http://www.washingtontimes.com/news/2011/aug/9/russian-reset-malfunction/print/ By Ariel Cohen The Washington Times 7:03 p.m., Tuesday, August 9, 2011 The recent Russian threats to cease crucial cooperation with the United States and statements by Russian Prime Minister Vladimir Putin and Dmitry Rogozin, Russia's special representative for missile defense cooperation with NATO, raised hackles in Washington. Mr. Putin called the United States a "parasite" on the body of the global economy, while Mr. Rogozin claimed that U.S. senators told him U.S. missile defense is aimed at his country. Mr. Putin's statements are baffling, as the global economy needs consumer consumption for growth and the United States is by far the biggest consumer country. In fact, the U.S. trade deficit drives a lot of global growth. Mr. Putin spoke at his United Russia Party youth camp on Lake Seliger, while Mr. Rogozin let his hair down on a visit to Washington after a meeting with two U.S. senators. Two Senate staffers vehemently denied Mr. Rogozin's allegations in a lengthy discussion with this author. These are no longer words alone: Russia is threatening to stop cooperating with the United States over Afghanistan, Iran, Libya and North Korea if Congress passes the Sergei Magnitsky sanctions. The toughening Russian negotiating positions and rhetoric including Mr. Putin's outburst and Mr. Rogozin's reference to the senators as "monsters of the Cold War" - suggest the Obama "reset" policy is in deep trouble. The State Department has placed 64 Russian officials on a visa blacklist that would prevent them from entering the United States. These officials - prosecutors and policemen - all played a role in the death of the lawyer Sergei Magnitsky, the most famous whistleblower in post-communist Russian history. The Foreign Ministry in Moscow loudly protested that the United States is being tough on Russia. But the imposition of sanctions looks more like the State Department's preemptive way to prevent the Senate's Sergei Magnitsky Rule of Law Accountability Act of 2011 (S. 1039) from passing. Russia has threatened to "respond asymmetrically" against the Obama administration's "reset" policy if the bill becomes law. In a tit for tat, the Russian foreign ministry reportedly is drawing up a list of U.S. officials who will be banned from Russia and prevented from banking there. While this may be of little concern to Washington, Russian threats to curb cooperation on Afghanistan, Iran, Libya and North Korea are taken more seriously. To reiterate, Sergei Magnitsky, a lawyer representing Hermitage Capital, which was then the largest Western hedge fund operating in Russia, was arrested on spurious tax-evasion charges. Magnitsky alleged that Russian officials swindled $230 million in tax rebates. He died before his trial in 2009 after being denied essential medical care and possibly tortured and beaten. President Dmitry Medvedev said that those who were in charge of Magnitsky committed crimes. Russia has reluctantly launched investigations into the matter, but the Russian Interior Ministry promoted the Magnitsky interrogators and even pinned medals on them. The case irritated U.S. lawmakers who are actively pursuing this case. In a way, the U.S. Congress is doing Russia a huge favor. Without external prodding, there is no hope for improvement in that country's rule of law and investment climate. In fact, S. 1039 is not aimed exclusively at the Magnitsky affair. Other brutal and corrupt officials may be included, such as those who persecuted and expropriated Mikhail Khodorkovsky, the former oil magnate. And the bill is not singling out Russia, either. It would target the most notorious wrongdoers in other countries as well. Now, the U.S. State Department appears to pre-empt and obviate the Senate bill by placing some Russian officials on a visa blacklist. Unlike the Senate, the State Department did not go any further, such as implementing asset freezes. Foggy Bottom opposes the Magnitsky bill and is campaigning for its defeat. However, according to David J. Kramer, president of Freedom House and the former assistant secretary of state for human rights in the George W. Bush administration, the bill has been integral in keeping the pressure on Russia and has "done more for the cause of human rights [in Russia] than anything done" by the two previous administrations. Mr. Kramer is right. The Obama administration is worried that inconvenient pressure from Congress may derail the hallowed "reset" policy. President Obama called the "reset" his "great achievement" only days after Mr. Putin's "parasite" outburst. Maybe he was encouraged by Russia's issuing a series of postage stamps to commemorate his 50th birthday. If one takes the White House at its word and the "reset" is truly based on mutual interests between Russia and the United States - not on efforts to appease Moscow into cooperation on nuclear disarmament - then cleaning the Augean stables of Russian corruption and criminality should not derail it. Yet Moscow's overblown reaction to the visa ban for suspected criminals working for the Russian state clearly demonstrates its priorities and exposes its anti-Americanism. As Mr. Kramer points out, if Russia is willing to hold back the reset solely based on the Magnitsky case, then the U.S. needs "to re-examine the relationship." The U.S. policy toward Russia and other market authoritarians should be a balance of protecting American national interests and upholding American values. The cause of Sergei Magnitsky does that. The flagging "reset" policy does not. ArielCohenisseniorresearchfellowinRussianandEurasianStudiesandInternationalEnergyPo licyattheHeritageFoundation (heritage.org). © Copyright 2011 The Washington Times, LLC. Click here for reprint permission. The Canadian Press - ONLINE EDITION Canada, U.S. and Russia overcome 'suspicions' and language barrier in Arctic http://www.winnipegfreepress.com/canada/breakingnews/127326113.html By: Mike Blanchfield, The Canadian Press Posted: 08/9/2011 2:55 PM | Comments: 0 (including replies) | Last Modified: 08/9/2011 7:31 PM OTTAWA - It took a major Arctic military exercise to help thaw old Cold War suspicions between Canada, the U.S. and Russia, according to a Canadian Forces report. And despite an "immense" language barrier, the Department of National Defence heralded the success of last summer's groundbreaking joint exercise with its former Cold War adversary. The report offers a glimpse into the behind-the-scenes tensions that led up to the historic attempt at military co-operation, dubbed Exercise Vigilant Eagle. It comes as the second version of Vigilant Eagle took place this week in Alaskan airspace. The exercise was originally set for 2008 but had to be cancelled when relations between Russia and the West plummeted after Moscow's invasion of neighbouring Georgia. "Accordingly, a measure of uncertainty and a perceptible note of suspicion were evident to military planners as the exercise was resurrected," Canadian Col. Todd Balfe, the deputy commander of Norad's Alaskan region, wrote in his report on the 2010 exercise. Norad is the joint Canada-U.S. command that defends against threats to North American airspace. Considered the jewel of Canada-U.S. defence relations, it was established 53 years ago essentially to monitor for Russian missile or bomber attacks. Many Canadian officers in Norad found it "challenging, for example, to explain to Russian officers the bi-national nature of this organization and to fully convince them that air defence was indeed a shared U.S.-Canadian responsibility," Balfe wrote. He noted that planners had to overcome the "memory of decades of antagonism and confrontation during the Cold War" to build new co-operation and communication between Russia and the two Norad allies. "Not surprisingly, communication between former Cold War adversaries was an immense obstacle." Planners used Internet technology such as Skype and Yahoo Chat to break down the barriers and ease the burden on translators, wrote Balfe. His report said the 2008 cancellation "did not invalidate the premise of the exercise" — improving communication between Russia and the U.S. to reduce air terrorism. This year's drill began Sunday with a simulated American passenger jetliner flying over Alaska and not responding to air traffic controllers. Under the scenario, no one on the ground knew what was happening on board, so warplanes were scrambled to pull up along side and make visual contact. The airliner was eventually turned back to Alaska. The drill was conducted with a series of exchanges between Russian and Norad military command and controllers, with jets and air surveillance from both sides fully engaged. On Monday the same scenario was repeated in reverse, this time with a mysterious airliner coming out of Russia. It too was repelled from North American airspace and was escorted back home, eventually by Russian jets. "Both days went off pretty much flawlessly," U.S. Air Force Capt. Uriah Orland told The Canadian Press on Tuesday from Norad's Alaskan headquarters. "We had good connectivity" between Russian, Canadian and U.S. air force participants. Orland said many of the past communications obstacles ironed themselves out this year. "This being the second year, it's really allowed us to kind of resolve a lot of the issues we've had with that by having good translators and really working through the protocols of what information is passed," Orland explained. "Both sides know what to expect and how to expect it. So that's really helped with that communication piece." In his 2010 report, Balfe wrote that senior Norad officers and their Russian counterparts, as "old cold warriors," felt it was a "surreal experience" to see each others' aircraft up close during the exercise. But in the end, both sides expressed "immense satisfaction" that they had opened up new lines of communication. Balfe said he shared the views of his Russian counterpart, Col. Alexander Vasilyev, whom he quoted as saying: "(t)his exercise is very beneficial to North America and to Russia …. It is very important that we work together to develop procedures and bring the relationship between our countries closer together to unite our countries in the fight against terrorism." Libyan Oil Tankers Up for Sale 10 August 2011 By Howard Amos Read more: http://www.themoscowtimes.com/business/article/libyan-oil-tankers-up-forsale/441807.html#ixzz1Uby0vyPd The Moscow Times The Libyan oil tanker fleet could soon be sold to Russian investors, as speculation swirled Tuesday about a reported $300 million deal with the Gadhafi regime, which is under economic sanctions imposed by the United Nations, the United States and the European Union. Libya's General National Maritime Transportation Company, or GNMTC, could sell a portion of its fleet to unspecified Russian investors that include state-owned shipping corporation Sovcomflot, sources told industry journal The Petroleum Economist. A spokeswoman for Sovcomflot told The Moscow Times that she had no official information on her company's interest in Libyan oil tankers. "It's rumors, and we don't comment on rumors," she said. GNMTC lists a fleet of 15 vessels on its web site that, before civil war erupted in February and halted crude shipments, were involved in the export of the 1.6 million barrels of oil Libya produced daily. Libya's shipping industry is believed to have close ties to the Gadhafi family. A U.S. Embassy cable from Tripoli in 2008, released by WikiLeaks, identified Moammar Gadhafi's son, Hannibal, as the key figure behind GNMTC. Hannibal Gadhafi had also been linked to the company during a Libya-Switzerland spat in 2008 when he was briefly arrested in the alpine country for joining his pregnant wife in a violent assault on their servants. Reached by phone in Tripoli, GNMTC's spokesman declined to comment. GNMTC is not a Libyan-registered company subject to economic sanctions, but Hannibal Gadhafi is on a United Nations blacklist of figures associated with the North African regime. Assets controlled by blacklisted individuals are subject to sanctions. In June the European Union added six Libyan ports to a list of frozen assets — Tripoli, Al Khums, Zuara and the oil terminals of Brega, Ras Lanuf and Zawiyah. President Dmitry Medvedev signed a decree that signaled Russia's observance of the UN embargo on arms, ammunition and military shipments to Libya shortly after the start of the conflict. Russia was set to lose $4 billion in export earnings as a result of the ban, Sergei Chemezov, head of Russian Technologies, said at the time. Though GNMTC's fleet was valued at $300 million for the alleged deal with Russian investors, before the outbreak of Libyan hostilities its book value was $1.3 billion, The Petroleum Economist reported, adding that Hannibal Gadhafi may be seeking to raise cash as a part of an exit strategy for his family. Moscow has sought to position itself in the role of an international mediator in the Libyan conflict, hosting Moammar Gadhafi's foreign secretary for talks last month. "We must continue the search for opportunities for a peaceful solution," Medvedev said July 20. Read more: http://www.themoscowtimes.com/business/article/libyan-oil-tankers-up-forsale/441807.html#ixzz1Uby67sWw The Moscow Times Russian leadership not too popular worldwide http://www.news.az/articles/georgia/42204 Wed 10 August 2011 07:49 GMT | 9:49 Local Time Russia's leadership has relatively few fans worldwide, with poor ratings compared to the US and other major nations, according to a Gallup survey. In 2010, a median of 27% of adults across 104 countries that Gallup surveyed approved of the Kremlin's leadership, while 31% disapproved and 33% didn't have an opinion. Approval of Russia's leadership is significantly higher in former Soviet Union countries and in sub-Saharan Africa, Gallup reported on its website. Russia's sphere of influence continues to be most visible in former Soviet countries, where a median of 61% said they approved of the Kremlin leadership. Among its South Caucasus neighbours, Russia's leadership had the highest ratings in Armenia, with approval from 75% of respondents, while 54% of respondents approved in Azerbaijan. Not surprisingly, three years after the five-day Russo-Georgian August war, Georgian respondents gave a massive 76% disapproval rating to the Russian leadership with only 6% approval. Gallup noted that the popularity that Russia's leadership enjoys in several countries in Central Asia and the Caucasus has its roots in their shared history as former Soviet republics. But the high approval also reflects how dependent many residents of these counties are on remittances from Russia. In Tajikistan, where approval of Russia's leadership is highest, the International Monetary Fund estimates that these remittances accounted for 50% of the country's GDP in 2008. The results of the survey are based on face-to-face and telephone interviews with approximately 1,000 adults, aged 15 and older, conducted in 106 countries in 2010, Gallup said. News.Az National Economic Trends Russian ruble regains ground on foreign exchange market after two-day tumble http://en.rian.ru/business/20110810/165682330.html 11:04 10/08/2011 MOSCOW, August 10 (RIA Novosti) The Russian ruble regained ground against the U.S. dollar and the euro on the domestic foreign exchange market on Wednesday morning after a steep decline in the previous two days in the wake of the U.S. rating downgrade. The ruble opened 33 kopecks up against the greenback to 29.40 rubles to the dollar and 24 kopeks against the single European currency to 42.05 rubles to the euro on the MICEX on Wednesday, with investors in a positive mood on global markets following the U.S. Federal Reserve’s decision to keep its key rate unchanged at close to zero for two more years. Global stocks, which had been tumbling since late Friday when S&P took the decision to cut the U.S. top rating by one notch to AA-plus, recovered their losses on Tuesday following the Fed’s interest rate move. The ruble-denominated MICEX opened 1.60 percent up on Wednesday to 1,521.70 points after a two-day massive sell-off triggered by the S&P downgrade. Russian Ruble Bounces, Strengthens 1% Vs Dollar-Euro Basket http://www.nasdaq.com/aspx/stock-market-newsstory.aspx?storyid=201108100324dowjonesdjonline000123&title=russian-rublebouncesstrengthens-1vs-dollar-euro-basket MOSCOW -(Dow Jones)- The Russian ruble bounced Wednesday as risk appetite returned to the markets following the previous day's Federal Reserve pledge to boost the U.S. economy by keeping borrowing costs at an all time low. At 0655GMT, the ruble was trading 1% stronger against a basket of dollars and euros at 35.04. Russia's currency also strengthened by 1.2% against the dollar to 29.31 and was up 0.6% against the euro to 41.98. The recovery follows a deep plunge in the ruble, which had lost as much as 6% of its value against the dollar-euro basket in the first two days of the week, amid falling commodity prices, global growth concerns and a lowering of the U.S. credit rating by Standard & Poors. -By Ira Iosebashvili, Dow Jones Newswires; +7 495 232-9195, [email protected] dowjones.com (END) Dow Jones Newswires 08-10-110324ET Copyright (c) 2011 Dow Jones & Company, Inc. Benchmarks move higher on external news http://www.rbcnews.com/free/20110810104853.shtml RBC, 10.08.2011, Moscow 10:48:53.The RTS index opened 1.6% higher today at 1,636 after closing down 2.87% at 1,610.22 in yesterday's trading session. Meanwhile, the MICEX index added 1.5% to 1,521.01 after 30 minutes of trading. Yesterday, the index was down 0.13% at 1,497.81. According to analysts, global markets have reacted positively to news from the Fed's Tuesday meeting. The U.S. central bank sent reassuring signals by leaving the benchmark rate unchanged at 0-0.25% until mid-2013, also promising "to consider additional stimulus measures," if necessary. That being said, experts note that the market's initial reaction to the Fed's statement may prove to be overly optimistic. 08/10 11:24 IMPORTS TO RUSSIA FROM NON-CIS COUNTRIES UP 43.8% TO $140 BLN IN 7 MTHS – FCS http://www.interfax.com/ U.S. Meltdown Bodes Poorly for Russia 10 August 2011 Vedomosti After Standard & Poor’s lowered the U.S. credit rating late last week, the global economy will have to adjust to a new period of instability and volatility. U.S. bonds will no longer serve as collateral for banks and finance companies to use when investing in higher-yield assets, and the future of the dollar as a global reserve currency is even more uncertain. But there may be no immediate cause for alarm. The global economy cannot function without a reserve currency, and the United States provides this to the world thanks to an implied global agreement according to which the international community places its faith in the U.S. dollar and treasury bonds in return for a safe haven for its capital — while at the same time closing its eyes to the true condition of the US. economy. At the same time, however, the lowering of the U.S. credit rating serves as a strong signal that the correction of the global imbalance has become a serious problem. Faith in the U.S. economy cannot continue forever, but the question is whether any other country is able to assume that leadership role. The global economy could be entering a new crisis considering that the United States may be sliding into another recession, that growth in Europe and most of the world is sluggish and national debts are rising. The same factors that triggered the economic crisis of 2008 are still in play. The only counter-argument that optimists can cite is that global stock markets fell over a period of several months in 2008, whereas the current drop may be shorter in length. A new crisis would surely be terrible news for Russia in particular. It would lead to an significant drop in oil prices and the ruble, and we are already seeing the first signs of these downward trends since the meltdown began last week. The Russian budget can remain balanced only if the price of oil holds at $115 per barrel. According to the Finance Ministry, if oil were to fall as low as $45 per barrel, Russia would be forced to borrow so much money that by the 2013-14 fiscal year government debt could amount to 20 percent of the country’s gross domestic product. This comment appeared as an editorial in Vedomosti. Read more: http://www.themoscowtimes.com/opinion/article/us-meltdown-bodes-poorlyfor-russia/441819.html#ixzz1UbxdkwLj The Moscow Times Business, Energy or Environmental regulations or discussions Russian markets -- Factors to Watch on Aug 10 http://www.reuters.com/article/2011/08/10/russia-factors-idUSLDE77906120110810 Wed Aug 10, 2011 2:20am EDT MOSCOW, Aug 10 (Reuters) - Here are events and news stories that could move Russian markets on Wednesday. You can reach us on: +7 495 775 1242 STOCKS CALL (Contributions to [email protected]): Troika: U.S. equities rallied after the Federal Reserve said it was prepared to use a range of tools to bolster the economy. Crude recovered some of its lost ground. Asian equity markets are increasing this morning. We are opening our prices this morning up 2.0 percent. Uralsib: The Fed's comments yesterday to keep rates at 0-0.25 percent for another two years infused markets with optimism... We expect the Russian market to open strongly this morning; however, with S&P equity futures trading in red this morning, we expect the market to remain volatile. EVENTS [RU-DIA] (All times GMT): MOSCOW - The Federal Statistics Service to release weekly consumer price index. MOSCOW - Russian retailer Magnit (MGNT.MM) (MGNTq.L) July trading update. MOSCOW - Russian restaurant group Rosinter (ROST.MM) July trading update. IN THE PAPERS [PRESS/RU]: Vedomosti reports that BP's (BP.L) Russian venture TNK-BP (TNBP.MM) has applied to the state anti-monopoly watchdog for permission to buy 50 percent of independent gas producer Itera. Kommersant writes that Russia's biggest lender Sberbank (SBER03.MM) plans to buy BNP Paribas' (BNPP.PA) Russian subsidiary BNP Paribas Vostok as part of the banks' joint express lending project. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: COMPANIES/MARKETS: * Russia stocks, rouble fall, Putin pledges help * BP sues TNK-BP partner for breach of agreement * TPG gets control in Russia's Lenta-sources * Magnit gives more cautious 2011 guidance * VTB confident of surviving market volatility * Sberbank RAS net profit at $7 bln in Jan-July * Credit Europe Bank borrows $250 million * * * * [ID:nLDE77805H] [ID:nLDE7780K7] [ID:nLDE7780I5] [ID:nLDE77900K] [ID:nLDE77811J] [ID:nLDE778064] [ID:nLDE7780ZW] ECONOMY/POLITICS: Putin pledges cash for Russia market if needed [ID:nLDE7780A2] Russia cbank buys $3.7 bln, 1 bln euros in July[ID:nLDE779052] Russia to auction riskiest OFZ at no premium [ID:nLDE7780N3] Cargo plane crash kills 11 in Russian far east [ID:nLDE7780J8] COMMODITIES: * Russia switches to beet sugar refining MARKETS CLOSE/LATEST: RTS .IRTS MSCI Russia .MIRU00000PUS 1,605.4 832.1 [ID:nLDE7780RF] -4.81 pct -2.67 pct MSCI Emerging Markets .MSCIEF 993.2 +2.55 pct Russia 30-year EurobondRU011428878= yield: 4.452/4.395 pct EMBI+ Russia 11EMJ 263 basis points over Rouble/dollar RUBUTSTN=MCX Rouble/euro EURRUBTN=MCX NYMEX crude CLc1 ICE Brent crude LCOc1 29.7300 42.2925 $81.34 $104.80 +$2.04 +$2.23 For Russian bank balances see CBDEPOS For Russian company news, double click on [E-RU] Treasury news [M-RU] Corporate debt [D-RU] Russian stocks [.ME] Russia country guide RUSSIA All Russian news [RU] Scrolling stocks news [STXNEWS/EU] Emerging markets top news [TOP/EMRG] Top deals [TOP/DEALS] European companies [TOP/EQE] Magnit, Norilsk Nickel, TNK May Move: Russian Equities Preview http://www.bloomberg.com/news/2011-08-09/magnit-norilsk-nickel-tnk-may-moverussian-equities-preview.html Q By Yuliya Fedorinova - Aug 9, 2011 10:00 PM GMT+0200 The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close. The 30-stock Micex Index (INDEXCF) was little changed, falling 0.1 percent to 1,497.81 yesterday. The dollar-denominated RTS Index declined 2.9 percent to 1,610.22, dropping for a sixth trading day. OAO Magnit (MGNT RX): Russia’s largest food retailer by market value plans to publish operational results for July. Magnit gained 3.4 percent yesterday to 3,522.7 rubles, snapping a five-day decline. OAO Norilsk Nickel: (GMKN RX): Russia’s largest mining company will move its shares from the first level of the Moscow- based Micex Exchange’s so-called A list to the second level, according to a regulatory filing late yesterday. That will allow the company to disclose less information to investors, according to Dmitry Smolin, an analyst at UralSib Financial Corp. in Moscow. Norilsk fell 2.9 percent to 6,500 rubles yesterday. TNK-BP (TNBP RX): TNK-BP is seeking to buy half of Russian natural gas producer and trader OOO Itera, according to three unidentified people familiar with the deal. TNKBP fell 4.5 percent to 75.66 rubles, a record low closing price. OAO Rosneft (ROSN RX): The Organization of Petroleum Exporting Countries cut its forecasts for oil demand in 2011 and 2012 as the global economic recovery loses momentum amid debt crises in the U.S. and Europe. Rosneft, Russia’s largest oil producer, was little changed at 207.13 rubles. To contact the reporters on this story: Yuliya Fedorinova in Moscow at [email protected]; To contact the editor responsible for this story: John Viljoen at [email protected] UPDATE 1-Russia's Magnit gives more cautious 2011 guidance http://af.reuters.com/article/commoditiesNews/idAFLDE77900K20110810 Wed Aug 10, 2011 5:08am GMT * Sees 2011 sales rising 46-48 pct vs pvs forecast 49 pct * Says full-year EBITDA margin will not exceed 7.5 pct * July sales growth 43 pct, down from 46 pct in June MOSCOW, Aug 10 (Reuters) - Fast-growing Russian grocery chain Magnit said on Wednesday it turned more cautious on full-year guidance after July sales growth slowed from the previous month. Magnit said it expects 2011 full-year sales to grow 46-48 percent in rouble terms, slightly lower than its previous guidance for a 49 percent rise, adding it continues "to focus on the strategy of more aggressive expansion and customer acquisition." The company also said its margin on earnings before interest, taxation, depreciation and amortisation (EBITDA) would not exceed 7.5 percent this year against 7.5 to 8 percent range forecast previously. Both Magnit and arch rival X5 are in the midst of a major store-opening campaign to take advantage of Russian economic growth and the emergence of a middle class that spends more on food and other consumer goods. Magnit's July sales rose 43 percent on the year to stand at 28.8 billion roubles ($1.02 billion), after a 46 percent increase in June. As of end-July, Magnit had 4,547 stores, of which 87 were opened last month, translating into a 38.75 percent year-on-year increase in selling space. VTB Overtakes Vinci to Build a $4.1 Billion Toll Road in Russia http://www.bloomberg.com/news/2011-08-10/vtb-overtakes-vinci-to-build-a-4-1-billiontoll-road-in-russia.html Q By Ilya Khrennikov - Aug 10, 2011 7:58 AM GMT+0200 A group led by state-run VTB Group and OAO Gazprombank won the right to build the first toll road in St. Petersburg, overtaking Vinci SA (DG) and its partners, the city administration said on its website late yesterday. The builders plan to spend 120 billion rubles ($4.1 billion) by 2014 to construct the central part of the Western High-Speed Diameter, the most spent on a single roadconstruction project in Russia, Kommersant said today citing VTB. Investors will contribute 69 billion rubles, while the rest will be provided by the government, the newspaper said. The group will have a 30-year concession with guaranteed revenue of 9.7 billion rubles a year, according to Kommersant. Italy’s Astaldi SpA and Turkey’s Mega Yapi and IC will help build the road, the St. Petersburg website said. To contact the reporter on this story: Ilya Khrennikov in Moscow at [email protected] To contact the editor responsible for this story: John Viljoen at [email protected] Consortium to Build $4Bln St. Pete Toll Road 10 August 2011 By Irina Filatova An international consortium led by investment company VTB Capital, a subsidiary of VTB Group, won a concession to build a 120 billion ruble ($4 billion) segment of a high-speed toll road in St. Petersburg, the city government announced Tuesday. The project involves building an 11.5-kilometer segment, including three bridges and a tunnel, which is part of a road that will connect the northern and southern parts of the city and bypass the center. The consortium — named Magistral Severnoi Stolitsy, or MSS, which also includes Gazprombank, Italian developer Astaldi and Turkish construction company Ictas Insaat — offered more attractive conditions for implementing the project than its rival, St. Petersburg Governor Valentina Matviyenko said. The other bidders included Sberbank; Terra Nova, which is controlled by State Duma Deputy Vitaly Yuzhilin; St. Petersburg-based developer Renaissance Construction; French construction group Vinci, and Belgian dredging company Jan De Nul. "The structure of both consortiums is very strong. Both made proposals whose details were well thought out," Matviyenko said, Interfax reported. She added, however, that the tender commission had voted unanimously in favor of the MSS offer because the consortium had promised lower costs and a shorter construction period. VTB Capital already has a successful partnership with Astaldi and Ictas Insaat in a 700 million euro ($1 billion) project to build a new terminal at St. Petersburg's Pulkovo Airport. The road project's financial side was the major criterion for choosing a winner, said Zarina Gubayeva, a spokeswoman for the St. Petersburg government's investment and strategic projects committee. Another deciding factor was the possible risks for the city, she said by telephone. According to the concession agreement, MSS will run the central section of the highway over the next 30 years and expects to earn 9.67 billion rubles annually from operations. According to the deal, the city will have to compensate a concessionaire in case the project brings lower revenues than expected. The rival consortium was counting on 16 billion rubles in annual revenue, for which the city would have been liable. VTB Capital expects that after finishing the central part of the highway the traffic along the Western High-Speed Diameter, as the road is called, will be good enough to reach the forecast revenues quickly, the investment company said in a statement. According to the Western High-Speed Diameter’s managing company, which bears the same name, the central segment is “the most expensive and technically complicated” part of the 213 billion ruble highway project. MSS named a construction cost of 120 billion rubles, of which it will provide about 70 billion rubles, with the rest being paid from the federal budget, said Oleg Pankratov, head of infrastructure capital and project finance at VTB Capital. “In order to finance the [MSS share of the] project VTB and Gazprombank will provide the project company a loan of 50 [billion] to 60 billion rubles, as well as required equity,” he said in a telephone interview. The consortium headed by VTB Capital will sign an agreement with the St. Petersburg government and the Western High-Speed Diameter company by the end of this year, with construction being scheduled for the first quarter of 2012, Gubayeva said, adding that it will take MSS three years to complete the project. She also said the rival consortium proposed a 48-month construction period. Given that the city needs the highway, which will help solve a number of problems, the tender commission chose the fastest way to get the project completed, said Dmitry Baranov, an infrastructure analyst at Finam. Building the highway, whose southern section was launched in May, will help relieve traffic, especially in the city center, he said. Sberbank did not reply to the e-mailed request Tuesday. Other representatives of the second consortium were unavailable. VTB head Andrei Kostin said global market volatility would not affect plans to complete the project. “We have a firm assurance that we’ll build this section over the time period and within the sum stipulated in the agreement,” he said, Interfax reported. In 2009, the St. Petersburg government decided to finance construction of the Western High-Speed Diameter from the city and federal budgets after a consortium led by Oleg Deripaska’s Basic Element holding, which had won a concession, was unable to bear the construction costs due to the financial crisis. The northern access road of Moscow’s Kutuzovsky Prospekt is likely to be built as a concession project, Deputy Mayor Marat Khusnullin said, Vedomosti reported, citing media reports. Regardless of the fact that the project cost has already been reduced from 110 billion to 45 billion rubles, it is still too large a sum for the city budget, he said. Since Kutuzovsky Prospekt generally flows smoothly, there is nothing preventing the building of a parallel toll road. The additional thoroughfare is necessary to facilitate the functioning of Moskva-City business center and develop the areas slated for the city to expand to, including Rublyovo-Arkhangelskoye. Khusnullin also said the city is moving away from building major intersections and big expensive roads, and is now focused on smaller construction projects. Expensive projects do not help significantly improve the situation, he said, and now the goal is to “achieve a big effect for less money.” Read more: http://www.themoscowtimes.com/business/article/consortium-to-build-4blnst-pete-toll-road/441833.html#ixzz1Ubi0tSVc The Moscow Times Summa Buys Russia Grain Terminal From WJ Group, Vedomosti Says http://www.bloomberg.com/news/2011-08-10/summa-buys-russia-grain-terminal-fromwj-group-vedomosti-says.html Q By Ilya Khrennikov - Aug 10, 2011 6:59 AM GMT+0200 Summa Capital, a Russian company that co-owns OAO Novorossiysk Commercial Seaport, bought a stake in a grain terminal in Novorossiysk from WJ Group, an agricultural trader, Vedomosti reported, citing people it didn’t name. Summa, controlled by billionaire Ziyavudin Magomedov, bought a 28 percent stake in the terminal, which has the capacity to handle 3.5 million tons of grain a year, for about $40 million, the newspaper said. To contact the reporter on this story: Ilya Khrennikov in Moscow at [email protected] To contact the editor responsible for this story: John Viljoen at [email protected] Norilsk Nickel's auditor uncertain about company's share divestment http://www.rbcnews.com/free/20110810120047.shtml RBC, 10.08.2011, Moscow 12:00:47.Following a number of warnings from rating agencies, Norilsk Nickel has approved the company's 2010 IFRS annual financial statement, and it is expected to be officially published within the next few days. At the same time, according to the RBC Daily newspaper, the mining and metallurgical company's auditor - KPMG - was unable to perform a complete examination of the deal involving the sale of 8.5m quasi-treasury shares and an option for the sale of 6.9m securities. KPMG was also unable to verify an official statement claiming that independent oil trader Trafigura was the purchaser. The publication reported that Norilsk Nickel sold 8.06% of its quasi-treasury shares worth over $2.77bn to offshore companies Delmonico Group and Crelios Investment whose beneficiaries are undisclosed. In December 2010, when the announcement about the deal was made, the market value of an 8% stake in Norilsk Nickel was priced at $3.3bn. UC Rusal, which owns 25% in the company, has been leery about the deal, claiming that it was a front for selling the quasi-treasury stake to companies affiliated with Interros Group. AUGUST 9, 2011, 2:57 P.M. ET Norilsk Auditor Cites Lack of Disclosure on Stake Sale http://online.wsj.com/article/SB10001424053111904140604576498470423146018.html? mod=googlenews_wsj By ALEXANDER KOLYANDR MOSCOW—OAO Norilsk Nickel's auditor said it hasn't received sufficient documents concerning a multibillion-dollar sale of an approximately 8% stake in the company in the last year, according to a document obtained by Dow Jones Newswires. The company's independent auditor, the Russian affiliate of KPMG, is expected to attach that opinion to Norilsk's full 2010 financial results, which were approved Monday by Norilsk Nickel's board and are expected to be released in the coming days, according to two people familiar with the matter. "We couldn't get enough documents in the proper form to determine the beneficiaries of the indicated operations. As a result, we couldn't determine whether the demands for financial disclosure were satisfied" for related-party transaction rules under International Financial Reporting Standards, according to the auditor's Russian-language document. KPMG representatives couldn't immediately be reached for comment Tuesday. Norilsk released July 22 a limited version of its unaudited 2010 financial results, later than in previous years and later than its Russian peers. The limited results included a loss on its stake sale in power generator OAO OGK-3 but didn't include details on the sale of an 8% stake and didn't name the buyer. Norilsk declined to comment on the matter Tuesday. Norilsk has previously said the lack of audited financial disclosure was due to timing problems, saying the new board elected in June hadn't had enough time to review the figures. On Oct. 12, Norilsk wrote a call option granting an undisclosed counterparty the right to buy 68.8 million American depository receipts at a price of $18.10 per ADR, according to another financial document seen by Dow Jones Newswires. The call option was sold for $67 million, and it was exercised at some point in 2011 but within 180 days of Oct. 12, the document said. Ten ADRs are equivalent to one ordinary share in Norilsk. Norilsk also agreed in October to sell 84.8 million ADRs for $18 per ADR in a deal that was completed in December, according to the document. Thus in all, the company sold 153.6 million ADRs for $2.77 billion, in addition to the $67 million proceeds of the call option. The document, however, doesn't name the buyer. In December, Norilsk said it had agreed to sell an 8% stake in the company from treasury stock to commodities trader Trafigura Beheer BV. Yet neither Trafigura nor Norilsk have disclosed the exact terms of the announced deal. Trafigura didn't provide comment, despite several phone and e-mail messages seeking details. Renaissance Hires Chadda From Religare to Head India Banking http://www.bloomberg.com/news/2011-08-10/renaissance-hires-chadda-from-religare-tohead-india-banking.html Q By Ruth David - Aug 10, 2011 8:45 AM GMT+0200 Renaissance Capital, the Russian brokerage half-owned by billionaire Mikhail Prokhorov, said it has hired Ateev Chadda from Religare Capital Markets Ltd. as head of investment banking and financing in India. Chadda, Renaissance’s first investment-banking appointment in India, will eventually be based in Mumbai, the Moscow-based company said in a statement. The firm has been active in India since 2010. To contact the reporter on this story: Ruth David in Mumbai at [email protected] To contact the editor responsible for this story: Philip Lagerkranser at [email protected] Rusnano Ups Stake in Polus 10 August 2011 Interfax State nanotechnology corporation Rusnano has taken up an option to buy 10 percent of U.S. laser producer IPG Photonics' local subsidiary NTO IRE-Polus, IPG Photonics said. The deal took place in June and was worth $20 million. Rusnano bought 12.5 percent of NTO IRE-Polus in late 2010 and obtained the option to buy another 12.5 percent for $25 million over five years if certain financial indicators were achieved. Rusnano still has the option to buy another 2.5 percent for $5 million. Massachusetts-based IPG Photonics was founded by a group of Russian scientists led by Valentin Gapontsev. It has production facilities in the United States, Germany and Russia. President Dmitry Medvedev in August 2010 appointed Gapontsev, president and board chairman of IPG, to the Skolkovo Scientific Advisory Council. Read more: http://www.themoscowtimes.com/business/article/rusnano-ups-stake-inpolus/441841.html#ixzz1Ubxs8O95 The Moscow Times AUGUST 10, 2011, 3:25 A.M. ET TPG, VTB, EBRD Sign $1.1B Deal To Boost Stake In Russia's Lenta http://online.wsj.com/article/BT-CO-20110810-703863.html By William Mauldin Of DOW JONES NEWSWIRES MOSCOW (Dow Jones)--U.S. private equity giant TPG Capital and Russian statecontrolled bank VTB Group (VTBR.RS), together with the European Bank for Reconstruction and Development, Wednesday signed a $1.1 billion deal to buy a 44% stake in St. Petersburg-based retailer Lenta LLC from a private investor. In a statement, the parties didn't disclose financial details of the transaction, but a person familiar with the deal said it values Lenta at $2.6 billion. The agreement ends a bitter battle for control that included court battles in several jurisdictions and a highly publicized police-assisted raid of the retailer's headquarters. Wal-Mart Stores Inc. (WMT) and other international retailers had previously shown interest in Lenta, according to news reports. In the deal, U.S. investor August Meyer sold his 41% stake, and his associates sold their 3% stake. Previously an alliance of TPG and VTB held about 30% of Lenta, with the EBRD holding about 10%, and those shareholders on Wednesday boosted their stakes in proportion to their prior holdings, the person said. Meyer's Svoboda holding company will "exit the business in full" and see its representatives step down from the board, according to a joint statement seen by Dow Jones Newswires. TPG founder David Bonderman was recently tapped for the board of VTB, in which TPG owns a stake, and he visited St. Petersburg this summer for an international economic forum attended by key business leaders and Russian officials. At the forum, Russian President Dmitry Medvedev announced details of a direct equity investment fund led by the state. The fund will allow the Kremlin to put money alongside that of private equity investors in Russian companies, and is part of its efforts to boost the country's investment climate. -By William Mauldin, Dow Jones Newswires; +7 495 232-9192; [email protected] Russian firms set up $113 million biotech venture http://www.pharmatimes.com/Article/11-0809/Russian_firms_set_up_113_million_biotech_venture.aspx World News | August 09, 2011 Kevin Grogan Several Russian companies have linked up to establish a joint venture designed to develop innovative treatments in the country. The SynBio project has been initiated by the Human Stem Cells Institute (HSCI), Russia's leading biotechnology company, which will have a 28.1% stake in the venture. It has attracted investment from the government-owned investment company Rusnano, which will have a 41.4% holding and other Russian firms involved include Cryonix and Pharmsynthez. The lead R&D partner for the project is the UK's Lipoxen, which is in the process of merging with Germany's SymbioTec. SynBio will focus on developing treatments based on three technological platforms, ie it will look at drugs engineered from cell-based technologies for the treatment of chronic diffuse liver disease, plus treatments based on the human nuclear protein histone H1 for cancer and other diseases. Thirdly, SynBio will focus on "sustained-release drugs using polysialic acid", ie 'biobetters' for the treatment of diabetes, Alzheimer's, chronic kidney disease and a number of other conditions. The total budget for the project over the next four years amounts to around 3.22 billion roubles, roughly $113 million. HSCI general director Artur Isaev said "it is difficult to overstate the importance" of the JV because "for the first time a Russian company is acting as the initiator of an international M&A project in the biotech sector to serve both the Russian and global markets". He added that Synbio is "an excellent example of how the government’s programme for innovative development of the Russian pharmaceutical sector can b Activity in the Oil and Gas sector (including regulatory) Sberbank Seeks Tax Breaks for Dulisma Oil Field, Kommersant Says http://www.bloomberg.com/news/2011-08-10/sberbank-seeks-tax-breaks-for-dulisma-oilfield-kommersant-says.html Q By Ilya Khrennikov - Aug 10, 2011 7:29 AM GMT+0200 OAO Sberbank, Russia’s biggest lender, is seeking tax breaks for the Dulisma oil field in East Siberia that obtained in 2009 after Urals Energy Plc (UEN) failed to repay a $650 million loan to the bank, Kommersant reported. Russia annulled tax breaks for East Siberian oil projects from Aug. 1, while Sberbank Chief Executive Officer German Gref asked Dmitry Medvedev to consider keeping tax breaks for Dulisma, the newspaper said, citing a copy of Gref’s letter to the President. Sberbank seeks to sell the non-core asset to billionaire Vladimir Yevtushenkov’s OAO Bashneft, while current tax levels make the development of Dulisma unprofitable, Kommersant said. To contact the reporter on this story: Ilya Khrennikov in Moscow at [email protected] To contact the editor responsible for this story: John Viljoen at [email protected] Rosneft Poised for 11-Month Low as Oil Falls on Global Economy http://www.bloomberg.com/news/2011-08-09/rosneft-poised-for-11-month-low-as-oilfalls-on-global-economy.html Q By Jason Corcoran - Aug 9, 2011 11:33 AM GMT+0200 OAO Rosneft, Russia’s largest oil producer, headed for its lowest in more than 11 months as crude slumped in New York. The shares dropped 4.4 percent to 198.1 rubles by 1:10 p.m. in Moscow, poised for the lowest since Sept. 28. Crude for September delivery fell as much as $5.60, or 6.9 percent a barrel to $75.71 as the U.S. credit-rating cut and rising stockpiles stoked concern a slowing economy will reduce demand for fuel. To contact the editor responsible for this story: Gavin Serkin at [email protected] TNK-BP produces first oil from Ivanovskoe field, Orenburg region http://www.tnk-bp.com/en/center/news/2011/08/9158/ 10/08/2011 Buguruslanneft (a TNK-BP Group company) has produced the first crude oil from the Ivanovskoe field in the Orenburg region, according to the company’s General Director Igor Kristyan. The company expects to drill a production well and carry out seismic surveying in 2012. ‘Buguruslanneft has every opportunity to develop dynamically by improving production and harnessing new technologies’, said Mr. Kristyan. TNK-BP bought the Ivanovskoe oil and gas field spreading across the Krasnogvardeisk and Ponomarevsk regions of the Orenburg region in 2010. As of January 1, 2011, the field has reserves of 1.7 million tonnes. Information for editors: TNK-BP is Russia’s third largest oil company and is owned by BP and the AAR consortium (Alfa Group/Access Industries/Renova) on a parity basis. Additionally, TNKBP owns approximately 50% of the Russian oil and gas company Slavneft. TNK-BP’s share in Russian oil production (including TNK-BP’s share in Slavneft) is about 16%. Total Company’s proved SEC LOF reserves are 8.794 billion BOE as of December 31, 2010. “TNK-BP” or “the Group” refers to “TNK International” as well as for company’s consolidated subsidiaries if the context does not require a different reading. For further information please refer to: Public Affairs Division: tel. (495) 363-27-57 [email protected] www.tnk-bp.ru BP raises the stakes in Russian battle http://www.independent.co.uk/news/business/news/bp-raises-the-stakes-in-russian-battle2334961.html By Sarah Arnott Wednesday, 10 August 2011 The tussle between BP and its partners in TNK-BP took yet another twist yesterday as the oil giant filed a case accusing the Renova Group of breaching the Russian joint venture's shareholder agreement. The British company and the Alfa-Access-Renova (AAR) consortium are already embroiled in a formal arbitration process over BP's bid for a $10bn (£6.2bn) tie-up with Russia's Rosneft earlier this year. The Rosneft deal, which included a share-swap and Arctic exploration programme, collapsed because AAR claimed it contravened the TNK-BP shareholder agreement, which states that all business in Russia must be conducted through, or at least offered to, the joint venture. When the claim was upheld, first by the courts and subsequently by anindependent arbitration panel, BP was forced to pull out. But AAR is still pursuing BP for the attempt on Rosneft. The consortium said last month it could look for damages of up to $10bn. And BP's counter-claim – that Renova has breached the shareholder agreement in a similar fashion by not offering its holdings in Russia's Integrated Energy Systems to TNK-BP – will now form a second strand of the arbitration. The hearing, to be held in London under Stockholm rules, is not expected for several months. The spat is just the latest spasm in the relationship between the partners in TNK-BP. In 2008, TNK-BP's then-chief executive, Bob Dudley – who subsequently took over as the boss of BP – was forced to flee the country after a protracted fight for control. David Prosser: Dudley back in hot water over Russia http://www.independent.co.uk/news/business/comment/david-prosser-dudley-back-inhot-water-over-russia-2334965.html Wednesday, 10 August 2011 Outlook It is now three months since BP was forced to give up its deal with the oil giant Rosneft amid a seemingly intractable legal dispute with its existing Russian partner TNKBP – or, more specifically, with AAR, which owns 50 per cent of that operation. BP came close to securing a deal with AAR and privately counselled that talks would continue – the implication being that once everybody had time to calm down, a deal would be done. Well, that view is looking rather optimistic now. The latest news from Russia is not an announcement that the Rosneft venture is back on but that BP now intends to sue Renova, one of the partners in the AAR consortium. Its claim is that Renova has made investments in Russia without offering them to TNK-BP first, as the partnership requires. That requirement, of course, is what did for the Rosneft agreement. The impending legal dispute does not suggest that relations between BP and AAR have become any friendlier at all over the past three months. Nor, for that matter, did last month's warning from AAR that it is considering suing BP for as much as $10 billion over the Rosneft row. BP's behaviour immediately after the collapse of the negotiations in May, when it told itsRussian partners it was thinking of selling control of TNK to Rosneft, did not help to restore trust. Now it seems matters have gone from bad to worse. This is a mess that Bob Dudley can ill afford as he tries to rebuild BP after last year's disaster in the Gulf. BP's chief executive gambled heavily on Russia last year and has yet to see his bravery rewarded – if anything, the company looks to be in a worse position in a market that accounted for £1.6bn of profits in the second quarter of 2011 alone. That is not something BP'sowners will tolerate forever, particularly given the way in which the company's shares have got stuck in the doldrums – and more so following the sell-off of the past week. Gazprom RWE and Gazprom willing to extend JV talks http://www.reuters.com/article/2011/08/09/us-rwe-gazprom-idUSTRE7781PO20110809 Tue, Aug 9 2011 By Maria Sheahan and Vera Eckert FRANKFURT (Reuters) - RWE (RWEG.DE: Quote, Profile, Research, Stock Buzz) and Russia's Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) are both willing to develop further their exclusive talks, begun last month, on power station ventures and gas prices, the German utility said on Tuesday. "There is a match of interests. We want to conclude a new, modernized gas supply treaty with our biggest supplier ... while Gazprom for its part wants to increase its value creation here," Chief Executive Juergen Grossmann said in a press call. "If we work hard at, it we can soon reach a result that will be interesting for both sides," he added. The utility and the Russian gas monopoly signed a memorandum of understanding in July to hold three months of exclusive talks to explore energy projects that could lead to a gas and coal power joint venture in Germany, Britain and the Benelux countries. Germany's decision to exit nuclear power has prompted its largest utilities to look to Russia for investment and as a source of natural gas for low-carbon power production. Because of Germany's decision, RWE said its core net profit plunged 40 percent in the first six months of the year. Grossmann said suitable assets in Germany, Britain and the Benelux countries were being selected for the potential venture. RWE would like any deal to comprise plants fired by hard coal and brown coal as well as the gas-fired that would be a natural fit for the Russian company. Coal-fired plants emit broadly double the CO2 of gas-fired plants. RWE as a coal-biased producer must uphold a costly long position in carbon emissions rights, and a joint venture that included coal would mean that Gazprom would help share the CO2 burden. RWE's dilemma accords with Gazprom's motive to improve German sales margins by not just selling gas but also by participating in the local power generation business, Grossmann said. Grossmann swept aside any suggestion that RWE's British electricity unit Npower or parts of it might be sold to Gazprom. "Npower is not at all an object of the discussions," he said. Apart from the power plant cooperation, the talks seek to resolve the issue of overpriced gas procurement contracts, which have hit RWE as much as many other European importer. Gazprom, which sells Germany 40 percent of its gas, insists on selling under long-term oil-indexed contracts, which at low spot market prices force partners such as RWE and bigger rival E.ON (EONGn.DE: Quote, Profile, Research, Stock Buzz) to incur losses when selling on the gas. RWE confirmed it had begun arbitration proceedings in this matter like E.ON, which is more exposed due to its greater market share and stands to post a 1 billion euro loss in gas trading in 2011. RWE also brushed aside expectations of possible repercussions from the planned partnership for the Nabucco pipeline, which aims to bring Caspian region gas to Europe via Turkey, bypassing Russia, and in which RWE has a leading role. (Reporting by Vera Eckert and Maria Sheahan, editing by Jane Baird) Czech tycoon's PPF works on another deal with Russian flavour http://www.bne.eu/storyf2836/Czech_tycoons_PPF_works_on_another_deal_with_Russi an_flavour Nicholas Watson in Prague August 10, 2011 In the wake of talks to sell a stake in its consumer finance subsidiary to Russian bank VTB and the acquisition of Russian agricultural firm Rav Agro-pro, Czech billionaire Petr Kellner's PPF Group is preparing another transaction with a Russian flavour – that of buying Slovak Gas Holding with a view, say analysts, to possibly doing a subsequent deal with Gazprom. Sources have confirmed to bne reports that have been doing the rounds for several months that Energeticky a prumyslovy holding (EPH), an energy joint venture in which PPF holds 40% along with J&T Group (40%) and Czech national Daniel Kretinsky (20%), is looking to buy out the two shareholders of Slovak Gas Holding – E.On Ruhrgas and Gaz de France (49%). Slovak Gas Holding has a 49% stake and managerial control of the Slovak gas monopoly Slovensky plynarensky priemysel (SPP), with the Slovak National Property Fund holding the other 51% of SPP. A report from Czech Position on August 9 said the deal could be worth around €2.5bn, with EPH hiring Morgan Stanley and JP Morgan to advise on the deal and help raise €1.75bn to finance it. E.On and GDF bought the 49% stake in SPP in 2002 for 123bn Slovak crowns, then worth around €4bn. This potential loss is illustrative that it hasn't been an entirely happy investment for the two foreign utilities. SPP has continually been at odds with Slovakia's utility regulator URSO over not being allowed to increase prices sufficiently to cover its costs in the household gas segment; on August 5, the daily Pravda reported that SPP has filed 15 suits against URSO for rejecting its requested tariff for the period from November 2010 and May 2011, claiming this cost it €70m in the household segment last year, with similar losses in the segment expected this year too. SPP is the incumbent gas distributor, but has gradually been losing its dominant share of the local market to about 75% since the liberalisation of the gas industry and the arrival of competitors Germany's RWE and Gazprom-controlled Vemex. The antipathy between the foreign utilities and the previous left-leaning Slovak government was so great that in 2009 the then PM Robert Fico stated his wish to see a Slovak-Gazprom joint enterprise created that would compete against SPP, declaring that the SPP privatisation had turned Slovakia into a "vassal." The question is why Kellner's PPF would want to buy a company that is losing market share and profits, and in danger of being further discriminated against if Fico, as most polls predict, returns as prime minister at the next election. As is often the case with Kellner and his group, the answer is a little convoluted. Some experts argue that while buying SPP might not be such a good fit for PPF, it would help Gazprom, which lost its monopoly of supplying gas to Slovakia in 2009 after SPP began buying gas from GDF, E.On and Verbundnetz Gas as part of efforts by the country to diversify the country's gas supplies. "I think PPF buying SPP may not be such a good idea if Fico wins next elections. It may make a lot of sense for Gazprom – their strategy is to get close to final consumers," says Jan Ondrich, an energy analyst with Prague-based advisory firm Candole Partners. Thus PPF may be looking to strike some subsequent deal with Gazprom if it buys SPP – something that would fit in with the group's broader strategy to invest in and with Russian concerns. Motherland On July 27, PPF confirmed that it had completed the purchase of a majority stake in the Russian agricultural firm Rav Agro-pro for an undisclosed price. Rav Agro-pro controls 164,000 hectares of Russian arable land, cultivating wheat, barley, sunflower, sugar beet and potatoes in the Voronezh region with an annual capacity for 80,000 tonnes, as well as owning a pig farm with 3,700 heads and a large dairy and cattle farm. PPF said in a statement it's looking to raise the efficiency of the Russian agricultural holding through the transfer of international management know-how and technology. "Agriculture is a traditional sector of the Russian economy and its development plays an important role in raising the living standards of the population there. This investment is further confirmation of PPF’s position as one of the prominent foreign investors in Russia’s real economy," PPF said. bne has also revealed that PPF has been in talks for almost a year with Russian bank VTB about doing some kind of deal over PPF's Home Credit BV consumer finance company that operates in Russia, Belarus and Kazakhstan. As part of wider consolidation trend in the Russian banking sector, VTB is looking to beef up its consumer finance operations and Home Credit & Finance Bank in Russia presents an attractive proposition, being the leading provider of consumer loans at points of sale with a 27.3% share of the market, and the sixth largest provider of credit card loans.