Russia 101007

Basic Political Developments Belarusian parliament to discuss relationship with Russia Belarus President sends birthday greetings to Vladimir Putin Latest anti-Lukashenko report to be aired by Russian TV on Oct. 8 - The fourth

installment of Godfather, a documentary film produced by Russian NTV, is scheduled to be aired on Friday, Oct. 8 at 7:30 p.m. Minsk time. Russia against any outside interference in Cyprus settlement – Medvedev

Medvedev slams interference in Cyprus settlement- Dual tax agreement highlight of Russia visit - Medvedev thanks Cyprus for attitude to new treaty idea- Medvedev arrives in Cyprus on first official visit- Medvedev arrives in Cyprus- Medvedev to discuss cooperation, taxation in Cyprus - Cyprus Prospers Thanks To Russian ‘Occupation’ - By Valentin

Prussakov- President Medvedev addressed readers of Cypriot newspaper

Phileleftheros - We are unswerving in affirming that the Cyprus issue cannot be resolved by pressure from outside, but only with the agreement of the parties themselves. It is clear to us that attempts to impose readymade ‘recipes’ or artificial timetables of inter-communal talks, and all the more setting deadlines for their completion or bringing in arbiters from outside are counterproductive.  

- The future of tax havens in Cyprus after Medvedev's visit – BBC Anna Rynda

Russian, Algerian Presidents sign issue joint statement- Russia, Algeria urge resumption of Mideast peace process- Russia, Algeria agree to open investment bureaus - Algeria signs 6 Russia deals during Medvedev visit

Deputy Foreign Minister Alexander Grushko Meets with Finnish Foreign Ministry Under-Secretary of State Jaakko Laajava - There was a thorough exchange of views on the reformation of the European security architecture, including the initiative of President of the Russian Federation Dmitry Medvedev for a European Security Treaty. The parties also discussed the state of affairs in Russia-EU cooperation in different areas, and the progress of preparations for the OSCE summit in Astana.

German president says he glad to make first visit to Moscow - German Ambassador in Moscow Ulrich Brandenburg said Christian Wulff would make the first state visit to Russia on October 11-15.

Berlusconi Seeks Russian Investment in Mediaset, Corriere Says - Italian Prime Minister Silvio Berlusconi may discuss Mediaset SpA when he is in Russia to meet Prime Minister Vladimir Putin tomorrow, daily Corriere della Sera reported, without saying where it got the information.

India says to jointly make 250-300 stealth fighters- India to buy 250-300 fighter jets from Russia: Antony

- Russian DM to discuss military-technical cooperation with India- India, Russia to hold anti-terror military drills- India to conduct joint anti-terror exercise with Russia

Angolan and Russian parliaments seek to strengthen cooperation Russia's troubled Bulava missile to be test launched - The 13th test launch of

Russia's troubled Bulava ballistic missile will be held in the White Sea on Thursday, a source in the administration of the northern Russian town of Severodvinsk said.

Ukraine pays for Russia Sept gas import in full - Naftogaz said in a statement it paid Russia's state-owned energy giant, Gazprom (GAZP.MM: Quote, Profile, Research), around $715 million. The August bill totalled $711 million.

State nuclear fuel company takes shares in Russian-based center - Ukrainian state company Nuclear Fuel (Kyiv) has completed the acquisition of 10% shares in the International Uranium Enrichment Center in Angarsk (Irkutsk region, Russia) and became its shareholder on October 5, the Ukrainian company said on Wednesday.

Russia thanks Lithuania for sending aid to fight forest fires - Minister of Foreign Affairs of the Russian Federation Sergey Lavrov has thanked Lithuania for helping Russia to fight forest fires, reported BC the press service of the Foreign Ministry.

Russian pilots freed in southern Sudan U.S. calls on Russia to end "occupation" of Georgian territory Georgia is not going to support Russia's WTO accession Georgian PM outlines position on Russian WTO bid U.S. welcomes Russia's plans to review cases of attacks on journalists Anniversary Of Russian Journalist Politkovskaya's Slaying Four years on: Anna Politkovskaya’s murder still unsolved Russian-Kazakhstan Nanotechnology Venture Fund Moves Closer to Founding KazSat-2 completes acoustic tests Soyuz spacecraft container damaged in transit to Baikonur Russia to make record number of space launches in 2010 - Regardless of the

incident with the Soyuz TMA-20 spacecraft, which was damaged while being transported by train to the Baikonur Cosmodrome, Russia will fulfill all 12 projected space flights by the end of the year.

DIFC says Moscow financial centre will be welcome in global network - Moscow Dubai has world-class financial regulation at the Dubai International Financial Centre (DIFC) and the experience and ability to put all components in place, a senior executive said yesterday.

Russian drug enforcement officers seize 136 kg of marijuana Icebreaker simulator centre - A simulator centre for nuclear-powered ships has

been inaugurated by Atomflot, the subsidiary of Russian state nuclear energy company Rosatom responsible for the operation and maintenance of the country's fleet of nuclear icebreakers. 

Putin to celebrate his birthday in St Petersburg - Animals have been a traditional present for Putin. His living “presents” include his favourite Labrador Koni (presented by Emergencies Minister Sergei Shoigu), a chestnut stallion) from former Bashkortostan President Murtaza Rakhimov), a pony (from former

Tatarstan President Mintimer Shaimiyev), and even a crocodile although made of crystal glass (presented by former Moldovan President Vladimir Voronin), and a little Ussuri tiger from an unknown guest.

Putin turns 58 Acting Moscow mayor to stay in post for next two years - paper Moscow to allocate almost 600M roubles for tourism over 2011 Ex-Moscow Mayor Luzhkov Approved Hotels Sale, Kommersant Says Luzhkov links dismissal to 2012 presidential election Moscow Fun - Since Yuri Luzhkov was ousted in a dramatic coup last week,

Moscow’s public life has been in flux, and this week the reshuffling of the political order continued apace. This weekend a tiny gay rights protest outside the offices of Swiss airlines was protected by police, rather than broken up. On Monday Acting Mayor Vladimir Resin floated the idea of moving the gargantuan statue of Peter the Great by Luzhkov’s long-time favorite artist Zurab Tsereteli. And on Tuesday he unceremoniously fired Oleg Mitvol, the prefect of Moscow’s Northern Administrative District and a staunch Luzhkov ally. After a meeting with Putin and his decision to join the ruling party United Russia, is Resin in the running for the top job?

PRESS DIGEST - Russia - Oct 7- LUKOIL (LKOH.MM) Vice President Leonid Fedun wants to raise his

stake in the company to 10 percent from 9.3 percent. But he did not clarify how he would acquire more shares, the daily reports.

- Germany's Douglas Holding seems to be leaving Russia's market as the company is considering selling its Douglas-Rivoli network of 30 retailers in Moscow and regions.

- Russia's TNK-BP (TNBPI.RTS) is prepared to spend $3 billion to buy BP's assets in Algeria.

- The price for newspapers and magazines could rise 5 percent as Russia's Customs Service has cancelled tax benefits for chalk overlay paper from Oct. 1.

- Swedish furniture retailer IKEA [IKEA.UL] is freezing its new investment projects in Russia for the next 3-5 years.

- Russia is ready to sell some assets of shipping group Sovcomflot, which is involved in oil shipments, according to Deputy Prime Minister Sergei Ivanov.

- Vladimir Resin is one of the main candidates for the post of Moscow's Mayor whose main task will be to ensure the victory of United Russia ruling party in the capital in elections, the daily says.

- Russia is planning to restore its permanent military presence Southeast Asia, the daily reports referring to the discussions of building of a naval base in Vietnam.

- Russian prosecutors claim they have discovered new suspects who may have been involved in the murder of Anna Politkovskaya four years ago.

RIA Novosti Press Review for Thursday, October 7, 2010 Nezavisimaya/Russia Today: A nautical déjà vu - Moscow gets ready to renew its

permanent military presence in South-East Asia

Vremya Novostei/Russia Today: Environmental revenge - Georgia lays the groundwork to boycott the Sochi Olympics

CORRUPTION WATCH: Russia amongst the world's most transparent on natural resources

Russian Church to open its own site at YouTube International Congress of Russian Compatriots opens in Moscow

National Economic Trends Russian International Reserves Rise $6.7 Billion to 2-Year High Rouble hit 5-mth peak vs dlr of 29.62 Russia: United Grain Company to increase grain processing volumes Russia's macroeconomic policy: balancing growth versus stability

Business, Energy or Environmental regulations or discussions Legislation tightens corporate disclosure - but slashes companies exposed Electricity Consumption up a Moderate 4.2% YoY in September Rosneft, Gazprom, Magnitogorsk: Russian Equity Market Preview Regulator: No major violations in Norilsk Nickel's shareholders' meeting Russia’s small businesses – dying breed, statistics show IKEA delays construction of Europe's largest mall near Moscow IKEA Will Focus on Existing Investments Sberbank develops remote client-servicing channels VTB May Purchase a Stake in TCB BNP Paribas IP Polyus starts Natalka construction Rusnano and Kazakhstan’s National Welfare Fund Samruk-Kazyna agreed to

invest $25 million each in a nano fund for both countries to be managed by I2BF Capital Management and VTB Capital, the companies said Wednesday.(Bloomberg)

Advertising beer with alcohol content in excess of 5 percent, which accounts for 40 percent of the market, may be banned, Kommersant reported Wednesday, citing draft amendments to a bill from the Health and Social Development Ministry. (Bloomberg)

Norilsk Nickel said Wednesday that the Soviet stockpiles of copper it expects to buy from the state would boost its output of the metal by 50,000 tons a year for five years. (Bloomberg)

Electronics retailer M.Video said Wednesday that it opened 20 outlets in the third quarter and sales jumped 37 percent, to 22.2 billion rubles ($743 million). (Bloomberg)

VTB Group will be the only major state asset to be sold by the end of 2010, Economic Development Minister Elvira Nabiullina said Wednesday, adding that a list of assets for sale will be finalized in November. (Bloomberg)

Polyus chief executive Yevgeny Ivanov said Wednesday that the company will probably increase this year’s production of 1.5 million ounces by up to 20 percent in 2011. (Bloomberg)

Sberbank is seeking to borrow up to $2 billion from a group of banks, Interfax reported Wednesday, citing an undisclosed source. (Bloomberg)

Natural Resources a Blessing or a Curse - Mining

Activity in the Oil and Gas sector (including regulatory) Natural Resources a Blessing or a Curse? - Yesterday, there was a panel

discussion entitled Russia's Natural Resources: a Blessing or a Curse? at our Russia Calling! Investment Forum. Vice President of LUKOIL Leonid Fedun was one of the key speakers. The main takeaways from what he said are as follows.

ConocoPhillips May Sell Remaining Stake in LUKOIL Ahead of Schedule TNK-BP considering acquiring some of BP's international assets TNK-BP to acquire 5.5% in Verkhnechonskneftegaz

Gazprom Gazprom plans to bid for Algerian gas fields Gazprom: No revision plans for gas contract with Belarus Gazprom, Total Reassign Rights in Bolivia

------------------------------------------------------------------------------------------

Full Text Articles

Basic Political Developments

10/07 10:37   Belarusian parliament to discuss relationship with Russiahttp://www.interfax.com/newsinf.asp?id=193763

Belarus President sends birthday greetings to Vladimir Putinhttp://news.belta.by/en/news/president?id=586280

07.10.2010 09:31

MINSK, 7 October (BelTA) – Belarus President Alexander Lukashenko has congratulated Russian Premier Vladimir Putin on his birthday, BelTA learnt from the presidential press service.

“I am confident that your wide experience and authority as a leader will further promote partner relations based on mutual respect and fruitful cooperation,” the message of congratulations says.

Latest anti-Lukashenko report to be aired by Russian TV on Oct. 8http://www.kyivpost.com/news/russia/detail/85324/

Today at 09:17 | Staff reports The fourth installment of Godfather, a documentary film produced by Russian NTV, is scheduled to be aired on Friday, Oct. 8 at 7:30 p.m. Minsk time.

Topics of the latest episode announced by NTV will be how a deputy mandate saved

Belarusian President Aleksandr Lukashenko from prison in the early 1990s, the 'faked' suicide of a opposition journalist Oleh Bebenin, how other opposition Belarusian journalists were killed, and revelations from a member of the so-called "death squads" responsible for killing opposition politicians in the late 1990s.

Russian President Dmitry Medvedev harshly criticized Lukashenko on Oct. 3, accusing him of waging a "hysterical" anti-Russian campaign to boost his bid for re-election.

Lukashenko, 55, has been Belarusian president since 1994. He is widely regarded in the West as the last dictator in Europe.

October 07, 2010 10:57

Russia against any outside interference in Cyprus settlement – Medvedevhttp://www.interfax.com/newsinf.asp?id=193787

NICOSIA. Oct 7 (Interfax) - Russia considers attempts of any outside pressure on the parties involved in the Cyprus settlement process, both Greeks and Turks, to be unacceptable, Russian President Dmitry Medvedev said.

"We continue to insist that the Cyprus issue should be resolved without any outside pressure and with the consent of the parties. It is obvious to us that the attempts to force ready 'scenarios' or an artificial schedule of negotiations between the communities, let alone setting limits for their completion and the institution of outside arbitration, are counterproductive," Medvedev said in an address made in connection with his official visit to Cyprus published in the Cyprus newspaper Phileleftheros.

"Russia as a permanent member of the UN Security Council provides constant support to the efforts aimed at achieving a fair and viable solution to the Cyprus issue," Medvedev said.

"We want this settlement to be comprehensive and meet the interests of all people who live in Cyprus, both Greeks and Turks," Medvedev said.

av ap

Medvedev slams interference in Cyprus settlementhttp://english.ruvr.ru/2010/10/07/24534035.html

Oct 7, 2010 11:16 Moscow Time

Russia’s President Dmitry Medvedev, who is currently in Cyprus on his first official visit to that country, has slammed outside attempts to interfere in the Cyprus settlement.

In a statement published by the Cypriot newspaper Phileleftheros, Mr. Medvedev reiterated Moscow’s position that the Cyprus dispute should be resolved with the consent of the parties involved.

He said that attempts to impose ready-made prescriptions, set artificial deadlines for talks between the Greek and Turkish communities of Cyprus and introduce outside arbitration were counterproductive and unacceptable.

The island has been divided into the Greek and Turkish parts since 1974 when Turkey invaded northern Cyprus following a coup organized by the Black Colonels Junta in Greece. The Cypriot Greeks and Turks have been engaged in unification talks.

Mr. Medvedev said Russia would continue to support efforts aimed at promoting a lasting and effective solution to the Cyprus issue.    

Dual tax agreement highlight of Russia visit http://www.cyprus-mail.com/cyprus/dual-tax-agreement-highlight-russia-visit/20101007

By Patrick Dewhurst and George Psyllides Published on October 7, 2010

ONE OF the main highlights for corporate observers of Russian President Dimitry Medvedev’s Cyprus visit today will no doubt be the signing of the long-awaited agreement for the avoidance of double taxation. The agreement - one of 16 documents on the agenda - will see Cyprus removed from Russia’s infamous “black list” of 54 countries that previously had not cooperated with Russian tax authorities.Although Cyprus signed an avoidance of double tax agreement with Russia in 1998, the island was placed on the black list in 2008 after the Russian authorities branded the island a “tax haven” because the government failed to provide Russian tax collectors with information related to repatriated dividends from companies based on the island. This blacklisting prevented Russian companies paying Cyprus’ low 10 per cent tax rate and repatriating the profits, thereby dodging Russia’s 24 per cent corporate tax rate.In April 2009, Cyprus and Russia agreed to review and renew the double taxation agreement but the Russian government avoided revealing its intentions regarding the time of implementation of the agreement.Finance Minister Charilaos Stavrakis signed a preliminary protocol for the avoidance of double taxation in Moscow last week during a one-day visit. Stavrakis said recently that failure to resolve the issue could continue negatively affecting investments from Russia.The breakthrough was achieved after Cyprus passed legislation last May facilitating the exchange of information between the authorities of the two nations.The existence of double taxation agreements between two countries presupposes the exchange of tax declarations by non-residents in either country.Russia is among the largest foreign investors in Cyprus, with an investment volume of €2 billion in 2008, according to official figures. In 2008, $34 billion was invested in Russia

via Cyprus, while Cypriot investment in the country, the world's largest by area, was €1.5 billion.The double tax agreement is therefore also likely to also benefit Russia. The country, which experienced a large outflow of capital after the collapse of the Soviet Union in the early 1990's, is benefitting from investment flows from Cyprus. Cyprus has the lowest corporate tax rate in the EU, at just 10 per cent.Double taxation occurs when the same transaction or income source is subject to two or more taxing authorities and can occur when different sovereign states impose separate taxes. The source of the problem is that governments follow different principles, and set different rates, of taxationThe consequence is that companies can end up paying in both countries, leading to unnecessary relocation of economic activity to dodge higher rates, or illegal methods of tax avoidance. To overcome this problem and remain a viable place to invest, Cyprus has signed tax treaties with some 50 countries, the first being with Norway in 1951 and the most recent being Kuwait two days ago.Apart from the protocol on double taxation, Cyprus and Russia will today sign a series of other agreements, which will lend a new dynamism to the cooperation between the two countries.The 16 agreements and protocols concern the economy, tourism, bank cooperation, science and education, transport and justice “which will give new dynamism to the wide range of political and financial activities of the Cyprus-Russian cooperation,” Foreign Minister Marcos Kyprianou told Russian news agency RIA Novosti.Included in the agreements is Russia’s and Cyprus’ joint action programme for the years 2010 to 2013 “which demonstrates the two countries’ commitment to the consolidation of their cooperation in many areas,” Kyprianou said.The programme regulates the current cooperation in all areas and actions and promotes coordination on bilateral and multilateral levels.Signing these agreements and protocols concludes the work of the two governments to consolidate the institutional cooperation between the two countries, which started two years ago with the signing of the joint political declaration and a series of agreements during President Demetris Christofias’ visit to Moscow in November 2008, Kyprianou said. Among others, the two countries will today sign a memorandum of understanding between the Cypriot foreign ministry and the Russian diplomatic academy, a joint action plan on tourism, cooperation between the countries’ stock exchanges, cooperation between trade and industry chambers, agreement on transport and health. The employers and industrialists federation (OEV) said the double taxation and the additional agreements were “foundations of a long term and multi-dimensional development of the two countries’ relations.”“Based on these agreements, Cypriot entrepreneurs will be able to broaden their business activities and cooperation with businesses and organisations of the Russian Federation,” OEV said.

Medvedev thanks Cyprus for attitude to new treaty idea

http://www.itar-tass.com/eng/level2.html?NewsID=15566097&PageNum=0

07.10.2010, 11.04

LARNACA, October 7 (Itar-Tass) - Russian President Dmitry Medvedev has thanked the leadership of Cyprus for a positive attitude to the Russian initiative aimed at working out a new legally binding treaty on European security.

In an article published in the newspaper Phileleftheros on Thursday, the Russian Head of State pointed out, "We are grateful to the Cyprus leadership for a positive political response to the Russian initiative aimed at preparing a European Security Treaty".

"The Republic of Cyprus has been and remains our reliable friend and partner," Medvedev emphasized. "As full member of the European Union, Cyprus does much for the development of strategic cooperation between Russia and the EU -- on the basis of the principles of equality and mutual benefit," Medvedev pointed out.

The Russian president stated, "The positions of Russia and Cyprus on key issues of world politics are in many respects similar or identical". "Both states come out in favour of a democratic multipolar world set-up, for respect for the principles of international law, sovereignty, the taking into account of the legitimate interests of all countries, as well as for the strengthening of the role of the United Nations as a universal mechanism for the maintenance of peace and strategic stability; they consider it necessary to work out reliable and effective mechanisms for a settlement of global and regional problems," he pointed out.

President Demetris Christofias of the Republic of Cyprus told Itar-Tass in Nicosia in an interview about support for the Russian initiative. "The Joint Political Declaration, signed during my visit to Moscow in November 2008, reaffirms that relations between the two countries are based on mutual striving to develop cooperation both on a bilateral basis and within the framework of the United Nations and other multilateral mechanisms," he said.

"It (the Declaration) referred to cooperation, particularly that on such matters as counteraction to new global threats and challenges, including international terrorism, the proliferation of weapons of mass destruction, transnational organised crime, the smuggling of weapons and narcotics, trade in humans, and illegal migration. In this context, the Republic of Cyprus supports President Medvedev's proposal about establishing a new European military-political (security) architecture," Christofias pointed out.

Medvedev arrives in Cyprus on first official visit

http://www.itar-tass.com/eng/level2.html?NewsID=15565203&PageNum=0

07.10.2010, 02.30

LARNACA, October 7 (Itar-Tass) -- Russian President Dmitry Medvedev has arrived in Cyprus. His plane landed at Larnaca where the island’s biggest international airport is located. This is the first official visit to Cyprus by the head of the Russian state.

In Nicosia, Medvedev is scheduled to have negotiations with Cypriot President Demetris Christofias, meet other top officials and confer with Archbishop Chrysostomos II of New Justiniana and All Cyprus, Russian presidential aide Sergei Prikhodko told Itar-Tass.

Prikhodko noted that a Russian presidential visit would be held in the year marking the 50th anniversary of diplomatic relations between the two countries. “Russia has many common historical ties with Cyprus, and we feel mutual sympathy that is based on a common approach to many historical issues, including the results of the Second World War,” he remarked. The Russian presidential aide noted that the president would award his Cypriot counterpart with the Order of Friendship “for a great personal contribution to stronger and comprehensive development of Russian-Cypriot relations.”

A number of important documents have been prepared for signing during the visit, including the Joint Action Programme for 2010-2013. The presidents will also sign the Joint Statement on the occasion of the 65th anniversary of victory over fascism will be signed by the presidents of Russia and Cyprus.

At the inter-governmental level, the two countries will sign a declaration on Russian-Cypriot cooperation for modernisation, an agreement on cooperation in energy conservation and renewable energy sources; memorandum between the ministries of culture on the prevention of theft, clandestine excavation and illicit export of cultural property; cooperation agreement in the field of tourism; memorandum on cooperation between the Russian Diplomatic Academy and the Ministry of Foreign Affairs of Cyprus; agreement on cooperation between the two chambers of commerce and industry; memorandum of understanding between the RTS and the Cyprus Stock Exchange; memorandum of understanding on cooperation in the provision of services, scientific research and education in the field of neurology, genetics and biomedicine; agreement on cooperation between the State Registration Chamber and the Cyprus Ministry of Commerce.

“Particular attention will be paid to the Cyprus issue. As it is expected, the parties will reaffirm their commitment to a comprehensive, just and lasting settlement in Cyprus, based on relevant U.N. Security Council resolutions,” said the Kremlin spokesman.  

Medvedev arrives in Cyprushttp://english.ruvr.ru/2010/10/07/24503996.html

Oct 7, 2010 03:03 Moscow Time

 

President Dmitry Medvedev has arrived in Cyprus on an official visit - his first to the Mediterranean island nation  and timed for the 50th anniversary of diplomatic relations between the two countries.

Financial and economic cooperation and taxation of Russian companies will take center stage during his talks today with his Cypriot host Dimitris Christofias where the two sides are to sign a raft of bilateral cooperation accords.

Dmitry Medvedev will also meet with the local parliamentary speaker and Archbishop Chrysostomos II of Nova Justiniana and All Cyprus.

As part of his Thursday agenda the Russian leader will attend the opening in Nicosia of a local branch of the Russian Commercial Bank.

Medvedev to discuss cooperation, taxation in Cyprushttp://en.rian.ru/world/20101007/160860253.html

01:24 07/10/2010

Russian-Cypriot financial and economic cooperation and taxation of Russian companies will be in the focus of Thursday's talks between the Russian and Cypriot presidents.

Fifteen documents are to be signed following the talks between Dmitry Medvedev and Dimitris Christofias.

The Russian leader's visit to Cyprus is his first visit to the country timed to the 50th anniversary of diplomatic relations between the two states.

Russia-Cyprus trade in the first half of 2010 grew 250% year-on-year to exceed $1 billion.

As regards taxation, the two countries plan to discuss offshore tax optimization schemes. Cyprus is the key offshore for Russian businesses, which reduces Russian budget revenues. Against the backdrop of the global financial crisis, many states have toughened requirements for offshore areas, and Russia is following suit.

"The whole set of bilateral relations, including broad political dialogue on urgent issues on the regional and international agenda, and versatile ties in the financial-economic and humanitarian spheres will be discussed at the talks," Russian presidential aide Sergei Prikhodko said.

Medvedev will also meet with Archbishop Chrysostomos II of Nova Justiniana and All Cyprus.

"Development of interfaith and intercultural dialogue has a special significance," Prikhodko said.

MOSCOW, October 7 (RIA Novosti)

Cyprus Prospers Thanks To Russian ‘Occupation’ http://www.themoscowtimes.com/opinion/article/cyprus-prospers-thanks-to-russian-occupation/418627.html

07 October 2010By Valentin Prussakov

This week, President Dmitry Medvedev will visit Cyprus, a tiny nation island that has long played a significant geopolitical and economic role for Moscow.

Since its founding in 1960, the Republic of Cyprus has had a special relationship with Russia. As evidence, the Soviet Union was the first country to recognize the independence of Cyprus.

As part of a major effort to turn the island into an eastern Mediterranean stronghold, the Soviet Union took great care to educate the young generation of Cypriots — particularly on the virtues of communism — and to defend the new state. Several thousand Cypriot students graduated from Moscow universities — including the current president of Cyprus, Dimitris Christofias. In addition, Moscow provided a steady and varied flow of weapons to the island of Aphrodite.

It is no secret that in the 1970s and ’80s, Cyprus was a favorite base for Palestinian terrorists and for KGB agents running operations throughout the Middle East. They laid the foundation for the “Russification” and “Russian invasion” of the island that has grown exponentially after the Soviet collapse. In the 1990s, thousands of “redundant” secret service agents lost no time in shedding their epaulets and going into private business. Many opened offshore companies based on the island, followed by a heavy flow of Russian capital.

According to CypRus Kommersant, a Russian-language monthly business newspaper, 60,000 of about 800,000 people living on the Greek part of the island are Russian.

Why do those people prefer to live in Cyprus? Komsomolskaya Pravda answered the question in the following manner: “Cyprus is the largest tax haven for Russian business. … According to the State Statistics Service, in 2008 alone, about $55 billion was transferred from Cyprus to Russia.” Russia’s huge offshore investment in Cyprus may be one of the reasons why the island hardly felt the effects of the global financial crisis.

Many residents of Nicosia, the capital of Northern Cyprus, will tell you that their territory is not free because of Turkish occupation. But the southern part is also “occupied” — not by Turks but by Russian capital. How can the southern part of the island consider itself free and independent when the high standard of living its citizens enjoy depends so much on Russian money?

Valentin Prussakov is a journalist with Zavtra newspaper.

President Medvedev addressed readers of Cypriot newspaper Phileleftheroshttp://eng.kremlin.ru/news/1087

October 7, 2010, 10:00

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Dear friends,

I want to share with you a few thoughts on the political, business, and humanitarian cooperation between Russia and Cyprus. It makes me particularly happy to be here given that this year, 2010, is an anniversary year. Fifty years ago, your country gained its independence and established official diplomatic relations with the Soviet Union.   

Your independence was the result of long years of a struggle for national liberation. Despite the problems left by the colonial legacy, the proclamation of Cypriot independence testified to the triumph of a new system in international relations, based on the principles of international law, equality and democracy. These values remain just as relevant today.

In 1960, our country was one of the first to recognise your young republic. We were genuinely happy to see the Cypriots get the chance to decide their own future. Our bilateral cooperation was fruitful, mutually beneficial, and grew fast. This was the result of common national interests and close cultural and spiritual traditions, along with the sincere sympathy and solidarity that have traditionally bound our peoples.

We were greatly saddened by the tragedy of 1974, when Cyprus became the arena of fierce conflict, the consequences of which are still being felt to this day. As a permanent member of the UN Security Council, Russia is constant in its support for efforts to achieve a fair and viable settlement for Cyprus. We seek a comprehensive settlement that would be in the interests of all Cypriots, both Greeks and Turks. We are unswerving in affirming that the Cyprus issue cannot be resolved by pressure from outside, but only with the agreement of the parties themselves. It is clear to us that attempts to impose readymade ‘recipes’ or artificial timetables of inter-communal talks, and all the more setting deadlines for their completion or bringing in arbiters from outside are counterproductive.  

The Republic of Cyprus remains a tested friend and partner for our country. As a member of the European Union, Cyprus does much to develop the strategic cooperation between Russia and the EU on the basis of equality and mutual benefit.

Russia and Cyprus share common or close positions on many key international issues. We both support a democratic and multi-polar global system, respect for international law, sovereignty, and the need to take into account all countries’ lawful interests. We also seek to strengthen the UN’s role as the universal mechanism for preserving peace and strategic stability. We both think it necessary to develop reliable and effective mechanisms for settling global and regional issues. We are grateful to the Cypriot leadership for their positive reaction to Russia’s European Security Treaty initiative.  

In short, our bilateral relations are developing well, in the spirit of friendly mutual assistance and trusting partnership. Over these last years, our cooperation has taken on new substance. Trade, investment and financial activities have come to the forefront. Contacts between our businesspeople are also expanding. As for our trade, despite the crisis, we achieved the impressive figure of more than $1 billion for the first half of this year.  

Cyprus is an important investment partner and holds a solid lead in terms of cumulative direct foreign investment in the Russian economy. In Moscow alone, more than 1,500 companies with Cypriot capital have been registered. Russian financial organisations have been expanding their presence in Cyprus of late. Our banks are opening their branches not just to provide services for our bilateral business partnership, but also for Cypriot citizens.   

The Russian-Cypriot business forum taking place in Nicosia today aims to set the priority areas for our trade and investment cooperation. Our goals coincide here: partnership for modernisation and developing high technology production. I am sure that these meetings will become regular events and in the future could perhaps involve representatives of other countries’ business communities too. 

Another affirmation of our cultural and spiritual closeness is the longstanding tradition among Cypriots to study in Russia’s universities. The Cypriot association of graduates of Russian universities has around 3,000 members, including President of the Republic of Cyprus Dimitris Christofias and his wife. There is growing interest in Cyprus in the Russian language and Russian culture, and in Russia more and more people, especially young people, are studying Greek.  

The dynamic humanitarian and cultural cooperation between Russia and Cyprus gets a further boost from the large Russian-speaking community in your country, which is making its contribution to strengthening our ties. There are also the tens of thousands of Russian tourists that come to Cyprus every year to holiday, enjoy the island’s beauty, and get to know the friendly Cypriot people’s way of life.

The relations between our countries have enormous potential and we will do everything possible to develop them even faster, at the intergovernmental and public levels. I wish readers success and happiness, and peace and prosperity to the entire Cypriot people.

October 7, 2010, 10:00

The future of tax havens in Cyprus after Medvedev's visit

http://www.bbc.co.uk/russian/business/2010/10/101007_medvedev_cyprus_taxes.shtml

GOOGLE TRANSLATION

Anna RyndaBBC, MoscowHalf a century of diplomatic relations between Russia and Cyprus are going to mark the signing of the document, the tax will toughen conditions for Russian offshore companies.On Wednesday, Cyprus on his first official visit to Russian President Dmitry Medvedev.According to his aide Sergei Prikhodko, after talks with Cypriot President Dimitrios Christofias will sign a protocol of amendment to an agreement on avoidance of double taxation.There are fears that, once in force, the amendments would strike on the companies' Russian origin, who are registered in Cyprus, which, in turn, imposing a negative impact on bilateral trade and investment flows.

Russia to Cyprus remains one of the main investors. For the six months of 2010, Russia has invested in Cyprus, 16.6 billion dollars, representing 23% of Russian investments abroad during this period. As told Russian Service BBC director of the Moscow office of British Tax Consulting UK Edward Savulyak, it is assumed that revenues from servicing the offshore business - most notably, the Russian companies - took second place in fiscal revenues of Cyprus after the tourism industry. "

Capital repatriated?If you look at the statistics, Cyprus in Russia is also one of the main investors: the accumulated volume of Cyprus investment in the Russian economy in August 2010 is about 52.18 billion U.S. dollars.However, according to Managing Director of Management Company "Arbat Capital, Alexander Orlov, the bulk of the money - it's" repatriation of capital, ie money Cypriot companies of Russian origin.Total in Cyprus, there are between 60 and 80,000 companies registered with the citizens of Russia.As expected, the amendments make it easier for the Russian tax authorities the procedure for obtaining information on Cypriot Companies: by signing this agreement, Cyprus undertakes to respond to requests for Russian tax authorities. Before Russia could get

information about her company's only interest in having the decision of the court, or if the Cypriot side agree to disclose this information.In addition, companies that are considered "Cyprus" only on paper and act by proxy, but in fact are not residents of the Republic of Cyprus, will lose all sorts of tax breaks.

And another change - it has only come into force four years after the signing of the agreement - concerns the introduction of a special tax on the sale of shares in Cypriot companies subsidiaries of Russian companies. In the first place, it will affect the construction companies that sell real estate in Russia through Cyprus companies. At the same time, according to Edward Savulyuka, many of these firms were not slow to leave the territory of Cyprus as soon as in April 2009 it became known about the content of the protocol.However, according to the expert, "in general for the International Business Companies registered with the Russians, nothing destructive in these amendment no.Cyprus managed to protect a number of important conditions for themselves. First, the tax rate for companies registered in Cyprus will remain unchanged - at the same low level. Second, the Russian tax authorities will nevertheless not easy to get information on the interest of their company - a request must meet many conditions that do not differ from the query conditions for such information, for example, in Germany. Thirdly, to acknowledge some of the Russian company, not Cyprus and oblige it to pay Russian taxes, you need this recognition from both Russia and from Cyprus.In addition, Cyprus, after the entry into force of the protocol will be excluded from the "black list offshore" of the Ministry of Finance of Russia, which means that Russian companies will be able to receive dividends from Cyprus without paying taxes.All these amendments will enter into force only after ratification in both countries.

In place of Cyprus - Dubai or Singapore?In connection with the entry into force of amendments to an agreement on avoidance of double taxation, "the Russian Finance Ministry does not expect a barrage of tax deductions," Edward assured Savulyuk.According to experts, Cyprus will be attractive for Russian business, and after signing the protocol. "The tax system in Cyprus, according to independent experts, is the most advanced in Europe: the financial statements on Cyprus is simple and not costly. In addition, Russian businesses to feel comfortable in Russia under the guise of a foreign business: after all, to foreigners in Russia treated less severely, "- he says.Cyprus than any other enters low tax jurisdictions mastered the Russian business, so the main part of the companies, which already operates in Cyprus, according to Savulyuka, there remained.

"Cyprus is already a traditional offshore, and that is what has established itself throughout the world. In addition, we must not forget that this is the European Union, that is, everything is understandable and legitimate," - confirmed bbcrussian.com representative of one of the companies who worked with offshore companies .Meanwhile, the flow of "newcomers" from Russia to Cyprus, fell three times, said Edward Savulyuk of Tax Consulting UK

According to Alexander Orlov, in the future, some companies are likely to go to Dubai or Singapore, as part of the investment would return to Russia.

Russian, Algerian Presidents sign issue joint statement

http://www.itar-tass.com/eng/level2.html?NewsID=15565653&PageNum=0

07.10.2010, 03.32

ALGIERS, October 7 (Itar-Tass) – Presidents Dmitry Medvedev of Russia and Abdelaziz Bouteflika of Algeria issued a joint statement upon the results of Medvedev’s visit to this country.

The document says, in part, that the two countries’ heads of state will make regular visits to each other and their foreign ministers will have at least one meeting a year.

“The sides agreed to make reciprocal visits regular so as to coordinate their steps on the bilateral, regional and international plane,” the statement says. “Such meetings will also make it possible for the ministers and heads of /governmental/ departments from both countries to coordinate positions for the purposes of expanding cooperation.”

“Considering the problems of energy security and the situation on the world market of energy resources, the sides express their willingness to build up regular dialogue for coordination of their activity in the energy sector with account of the need for defending the interests of each side and respecting the interests of other producers and consumers of hydrocarbons,” the statement says.

The Presidents confirmed their intention to build up relations in the sphere of defence technologies and military cooperation.

The statement says that Russia and Algeria speak in favour of a resumption of the peace process in the Middle East.

“The sides voice deep concern over the persistence of dangerous tensions in the Middle East, as the tense situation there is fuelled, first and foremost, by the continuing Israeli occupation of Arab territories,” the document says.

“The sides denounce any activity on the part of Israel in building settlements /on the occupied lands/ and any other unilateral actions related to the occupied Arab territories,” it says.

The two sides call for lifting the blockade of the Gaza Strip and for stepping up the efforts to eliminate the humanitarian crisis there.

“Russia and Algeria speak in favour of a resumption of the peace process in the region on the basis of the well-known international legal acts in order to attain a fair and long-term peace settlement,” the statement indicates.

The two countries call for a just, mutually acceptable and long-term political decision that will provide for self-determination of the people of Western Sahara in line with international legislation.

The presidents also called for “U.N. reform and a responsible approach to the enlargement of the Security Council on a democratic and equal basis to ensure broader representation of Asian and African countries.”

They called for universalisation of the Nuclear Non-Proliferation Treaty (NPT) and stressed the need for Israel to join it as a non-nuclear state.

Moscow and Algiers believe that Israel’s nuclear activities should be placed under comprehensive safeguards. “The parties will coordinate their efforts at various forums and work within the relevant frameworks to turn the Middle East into an area free of nuclear weapons and all other weapons of mass destruction, and their means of delivery,” according to the joint statement adopted by the presidents of the two countries.

Medvedev and Bouteflika recognised the inalienable right of the NPT member states to use atomic energy for peaceful purposes but “stressed the need for the countries to comply with their non-proliferation obligations.”

The presidents supported IAEA activities and called for “simplifying its system of safeguards”.

“The sides emphasise the need to strengthen the non-proliferation regime for weapons of mass destruction and their means of delivery and for preventing a deployment of weapons in space,” the document says.

The leaders of the two countries are worried by new security threats posed by the proliferation of nuclear materials and their acquisition by non-state entities.

Medvedev and Bouteflika have agreed to expand bilateral cooperation against terrorism.

“The sides call for stronger international cooperation to suppress the sponsorship of terrorism and strongly condemn hostage taking by terrorist groups for ransom,” the joint statement says.

Moscow and Algiers have also agreed to step up joint efforts against drug trafficking and facilitate the implementation of the U.N. Global Counter-Terrorism Strategy.

Russia, Algeria urge resumption of Mideast peace processhttp://english.ruvr.ru/2010/10/07/24503271.html

Oct 7, 2010 00:10 Moscow Time 

Russia and Algeria call for a resumption of the stalled peace process in the Middle East.

A joint statement released in Algiers on Wednesday by Presidents Dmitry Medvedev and Abdelaziz Bouteflika voices the two countries' serious concern over the  growing tensions in the region caused, above all, by the continued Israeli occupation of Arab lands and the resumed construction of Jewish settlements in the West Bank.

The two leaders also urged an immediate end to the Israeli blockade of the Gaza Strip and the resumption of the Israeli-Palestinian talks.

Presidents Medvedev and Bouteflika underscored the need to reform the United Nations Organization and give African and Asian countries  more representation at the Security Council.

Earlier in the day Russia and Algeria inked six cooperation accords, including in the military-technical field.

Russia, Algeria agree to open investment bureaushttp://en.rian.ru/business/20101007/160861330.html

04:43 07/10/2010

Russia and Algeria have agreed to open investment bureaus, the Russian energy minister said.

"The intergovernmental commission decided to open the Algerian investment bureau in Russia and the Russian investment bureau in Algeria," Sergei Shmatko said in the Algerian capital late on Wednesday.

The bureaus will support Russian companies set to work in Algeria and vice versa.

Shmatko was speaking at the first Russian-Algerian business forum underway in the North African country in connection with Wednesday's visit by Russian President Dmitry Medvedev.

Earlier it was reported that Russia is to start deliveries of Sukhoi Su-30 Flanker-C miltirole fighters and Yakovlev Yak-130 Mitten jet trainer/light attack aircraft to Algeria next year. In all, the deliveries are to be worth some $1 billion.

Algeria is among Russia's three biggest trade partners on the African continent. Bilateral trade in the first half of 2010 grew 154.2% to $752.5 million year-on-year.

Cooperation between Russian energy giant Gazprom and Algeria's energy company Sonatrach is also important, taking into consideration considerable natural gas reserves in Algeria.

One of large projects that could be implemented by rail monopoly Russian Railways in Algeria is the construction of railroads linking the capital Algiers with its suburbs, as well as the development of infrastructure.

ALGIERS, October 7 (RIA Novosti)

Algeria signs 6 Russia deals during Medvedev visithttp://www.google.com/hostednews/ap/article/ALeqM5ioxX880rHhBUYETkNgB9otPETkGgD9IME7EO2?docId=D9IME7EO2

By AOMAR OUALI (AP) – 9 hours ago

ALGIERS, Algeria — Algeria and Russia signed six deals Wednesday in sectors including energy and transportation during a visit by Russian President Dmitry Medvedev.

The Russian leader, accompanied by a delegation that included Russian business leaders, said after a meeting Wednesday with Algerian President Abdelaziz Bouteflika that he hoped bilateral ties would continue to grow.

The visit and the agreements tighten relations between Russia, which is rich in oil and natural gas, and OPEC member Algeria, a gas-rich north African nation where U.S., Chinese and French companies are among the key international players.

"We just signed six cooperation accords in different domains," Medvedev said at a news conference. "But our cooperation won't stop in those areas, and we're going to extend it to sectors like industry and investment."

Details of the accords were not provided. Officials said they involved the energy and transportation sectors as well as official bilateral relations.

Business executives were working on their own deals.

Russia's VimpelCom Ltd. and Egypt's Orascom Telecom announced Monday a $6.6 billion merger that would create the world's fifth largest mobile telecommunication service provider.

A major sticking point has been Orascom's lucrative Algeria subsidiary, Djezzy, which has been locked in a bitter feud with the Algerian government over taxes. Algeria's government has said it want to buy Djezzy.

"If the Algerian side wants to buy it for a fair price, we're ready to sell," Vimpelcom's Alexander Izosimov told Russia's Itar-Tass news agency in Algeria on Wednesday, adding that the fair price is $7.8 billion.

Meanwhile, Russian Energy Minister Sergei Shmatko said oil giant TNK-BP is considering a deal with Algeria's state-owned hydrocarbons company as a way to tap into natural gas development in Algeria.

Shmatko was quoted by Itar-Tass as saying that the Russian-British venture and Algeria's Sonatrach could hold consultations and that "TNK-BP may come up with a certain offer to swap assets." He was not specific.

Britain's BP — which is behind the TNK-BP joint venture — owns 33.15 percent of two gas fields in In Salah, one of Algeria's largest natural gas fields, as well as 25 percent of the In Amenas field. Sonatrach co-owns the fields.

Also Wednesday, Russia's Interfax news agency quoted TNK-BP Chairman Mikhail Fridman as saying he was interested in buying BP's Algerian assets. TNK BP deputy chief executive Maxim Barsky said the deal could cost up to $3 billion, according to Itar-Tass.

Russia's state-controlled gas monopoly, Gazprom, is also interested in BP's Algerian assets. "If the Algerian side offer the assets, we will consider the offer," said CEO Alexei Miller, according to RIA Novosti.

Quoted by Itar-Tass, Miller said Gazprom has already started exploration of the El Assel gas field that will be completed by 2012. The field is located some 500 kilometers south of the Algerian capital — and Gazprom owns 49 per cent of the project, while Sonatrach owns 51 per cent.

Eds: Associated Press Writer Mansur Mirovalev contributed to this report from Moscow.

PRESS RELEASE

Deputy Foreign Minister Alexander Grushko Meets with Finnish Foreign Ministry Under-Secretary of State Jaakko Laajava

http://www.ln.mid.ru/brp_4.nsf/e78a48070f128a7b43256999005bcbb3/e3eae745e629cd1bc32577b5001cf0f4?OpenDocument

1386-06-10-2010

Russian Deputy Minister of Foreign Affairs Alexander Grushko met in Moscow with Finnish Foreign Ministry Under-Secretary of State for Political Affairs Jaakko Laajava on October 6.

There was a thorough exchange of views on the reformation of the European security architecture, including the initiative of President of the Russian Federation Dmitry Medvedev for a European Security Treaty. The parties also discussed the state of affairs in Russia-EU cooperation in different areas, and the progress of preparations for the OSCE summit in Astana.

German president says he glad to make first visit to Moscow

http://www.itar-tass.com/eng/level2.html?NewsID=15564594

06.10.2010, 20.26

MOSCOW, October 6 (Itar-Tass) - German President Christian Wulff said he is glad to make his first visit to Russia.

German Ambassador in Moscow Ulrich Brandenburg said Christian Wulff would make the first state visit to Russia on October 11-15.

“On October 12, the German president will have talks with Russian President Dmitry Medvedev and Prime Minister Vladimir Putin,” the ambassador said.

“On Wednesday, October 13, Christian Wulff will give a lecture at the High School of Economics. Then he will leave for Tver by the Sapsan high-speed train. The German president will also visit St. Petersburg for a meeting with the city’s governor Valentina Matviyenko,” the diplomat said.

On October 14, Wulff is planning to visit Ulyanovsk to familiarize himself with the economic potential of the region.

In an exclusive interview with Itar-Tass on Wednesday, Wulff said, “I was always witness in hospitality of Russians. That is why my wife and I are very pleased with my visit to Russia.”

The German president said he “has many friends in Tver, a partner city of my native Osnabruck, and other Russian regions. Germans and Russians have much in common – literature and music”. “This is just mutual respect: people feel anything to each other,” the German head of state said.

“Russians know Germany’s attitude. I’m very impressed that Russians offered their hand for reconciliation although every Russian family fell victim of the Nazi aggression against Russia during World War II,” he said.

“The fact that Russia apologized to us and that it made peace with us was a big gift for Germany that it had no right to wait for. And this fact cut me to the heart. As a young president who was born after World War II, I want to say we will never forget what responsibility we bear and why we feel gratitude to Russia,” Wulff said.

Berlusconi Seeks Russian Investment in Mediaset, Corriere Sayshttp://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aeOkukghrWY4

By Armorel Kenna

Oct. 7 (Bloomberg) -- Italian Prime Minister Silvio Berlusconi may discuss Mediaset SpA when he is in Russia to meet Prime Minister Vladimir Putin tomorrow, daily Corriere della Sera reported, without saying where it got the information.

Berlusconi is seeking to reduce his stake in the Italian broadcasting company and has been in talks with Russian funds for more than a year, according to the Italian newspaper. Mediaset may also seek to raise capital from the markets, Corriere reported, without being more specific.

To contact the reporter on this story: Armorel Kenna in Milan at akenna@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

Last Updated: October 7, 2010 01:58 EDT

India says to jointly make 250-300 stealth fightershttp://www.reuters.com/article/idUSDEL00350720101007

2:52am EDT

NEW DELHI, Oct 7 (Reuters) - India and Russia will jointly manufacture 250-300 fifth generation fighter aircraft over 10 years, Indian Defence Minister A.K. Antony said on Thursday.

Fifth-generation aircraft are invisible to radar, have advanced flight and weapons control systems and can cruise at supersonic speeds.

The Russian plane, first test-flown by Sukhoi in January, is Moscow's answer to the U.S.-built F-22 Raptor stealth fighter -- the world's only fifth-generation fighter yet in service -- which first flew in 1997. (Reporting by Bappa Majumdar)

India to buy 250-300 fighter jets from Russia: Antonyhttp://timesofindia.indiatimes.com/india/India-to-buy-250-300-fighter-jets-from-Russia-Antony/articleshow/6705406.cms

AFP, Oct 7, 2010, 12.51pm IST

NEW DELHI: India has agreed to buy 250 to 300 advanced stealth fighter jets from Russia, Defence minister AK Antony said Thursday, announcing a deal that could be worth up to 30 billion dollars.

Antony told a press conference with his counterpart Anatoly Serdyukov that the countries had agreed that Russia would supply the Fifth Generation Fighter Aircraft (FGFA) as well as 45 transport planes.

"India will receive 250-300 most advanced FGFAs," Antony said. "These are the two major projects for the next ten years which will be a shining example of Indian-Russian cooperation."

Experts say each FGFA is worth up to 100 million dollars.

Russian DM to discuss military-technical cooperation with India

http://www.itar-tass.com/eng/level2.html?NewsID=15565665&PageNum=0

07.10.2010, 08.02

NEW DELHI, October 7 (Itar-Tass) -- Russian Defense Minister Anatoly Serdyukov will meet with Indian Defence Ministry officials on Thursday, October 7, to discuss military-technical cooperation between the two countries.

“The Russian defence minister will take part in the 10th session of the Russian-Indian Intergovernmental Commission on Military-Technical Cooperation,” Serdyukov' s press secretary Irina Kovalchuk told Itar-Tass.

According to Kovalchuk, “the two sides will analyse the results of joint activity in the sphere of military-technical cooperation and define priority tasks to be addressed for its further development. The negotiating parties plan to sign a final protocol to set guidelines for military cooperation and measures to implement current projects.”

“The issues in focus will be the repair and upgrading of the heavy aircraft carrying cruiser The Admiral Gorshkov, licensed production of Sukhoi-30MKI jets and T-90S tanks, joint development and production of advanced front-line aircraft and a multipurpose transport plane and joint development and production of the BrahMos cruise missile,” the press secretary said.

“In the course of the visit, Serdyukov will hold talks with his Indian counterpart AK Antony to discuss prospects for cooperation between the two defence ministries, Kovalchuk said.

The 9th session of the Russian-Indian inter-governmental commision was held in Moscow on October 14-15, 2009. Russia and India then inked intergovernmental agreements on a programme for military-technical cooperation for 2011-2020, on after-sale servicing of Russian arms and military hardware, and a protocol to the intergovernmental agreement on cooperation in the development and production of the multipurpose transport aircraft (of November 12, 2007).

India, Russia to hold anti-terror military drillshttp://twocircles.net/2010oct07/india_russia_hold_antiterror_military_drills.html

Submitted by admin4 on 7 October 2010 - 10:58am

By IANS,

New Delhi : India and Russia will hold a counter-terror joint military exercise from Oct 15.

The 10-day Indra-2010 will be held in Uttarakhand, a defence ministry spokesperson said Wednesday.

Counter-insurgency plans in mountainous terrain will be the main focus of the battalion-level drill that will have infantry troops from both the armies.

The Russian contingent will have 257 personnel and the Indian side will be represented by an infantry battalion.

"The exercise will enhance the defence cooperation and military-to-military relations between the two armies," the spokesperson said.

The first of the Indra exercise series was conducted in India in October 2005 and the second was held in Russia in 2007.

The exercise comes as a meeting of an inter-governmental commission for military and technical cooperation headed by the defence ministers takes place here Thursday.

Defence Minister A.K. Antony and his Russian counterpart Anatoly Serdyukov will meet to discuss defence relations, buying and selling of military hardware and cooperation in military technologies.

India to conduct joint anti-terror exercise with Russiahttp://english.peopledaily.com.cn/90001/90777/90851/7158423.html

12:42, October 07, 2010The Indian Army will conduct a joint anti-terrorism exercise in northern India with the Russian Army from October 15-24, local media reported on Wednesday evening.

The joint exercise, called Indra-2010, will be held in Chaubattia in the northern Indian state of Uttarakhand, Press Trust of India reported, citing an official of Indian Defense Ministry .

It will be a battalion-level exercise, and joined by the infantry elements of the two armies, including a Russian contingent of 257 personnel and an infantry battalion of the Indian Army, said the official.

The participants of the exercise will practice anti-terrorism subjects in a mocked situation according to the scenario, including search, track and surprise attack in a complicated mountainous terrain.

The observers, air elements and representatives from the Defense Ministries of the two countries will be involved in the exercise, which aims to strengthen the relations between the two armies, according to the official.

In October 2005, the first of the Indra exercises was held in India. Indra-2010 is the third of the Indra exercises, following the second conducted in Russia in 2007.

Source:Xinhua

10/7/10 8:54 AM

MoscowAngolan and Russian parliaments seek to strengthen cooperation

http://www.portalangop.co.ao/motix/en_us/noticias/politica/2010/9/40/Angolan-and-Russian-parliaments-seek-strengthen-cooperation,aa474636-51c9-4f93-bac9-9363556914f3.html

Moscow – The parliaments of Angola and Russia intend to elevate their cooperation to the level of that existing between the two countries’ governments.

This was agreed upon on Wednesday in Moscow, between the National Assembly (Angolan Parliament) speaker and the deputy speaker of the Duma (Russian Parliament), Nadejda Guerasimova.

During the conversation, opened to the press, with the Duma deputy speaker, at Moscow’s Vnukovo International Airport, short after arriving, Paulo Kassoma said his trip to Russia is mainly meant for that purpose.

"This is why we have responded to the honouring invitation sent to us to visit Russia,” he said, adding that another purpose is to transmit the solidarity and friendship of the Angolan people with the Russians.

He said on the occasion he is counting on the “deep tradition” of the Duma to transmit its experience of functioning to the Angolan Parliament.

According to Paulo Kassoma, excellent working conditions have been put in place for  Angolan and Russian parliamentarians to exchange information and experience.

The National Assembly speaker also said that the intention to boost parliamentary cooperation had been expressed by the Russian head of State, Dimitri Medvedve, during an audience he granted to then Angolan speaker, in June last year.

To him, the trips to Moscow are intended to define formulas and models that secure a major exchange among the MPs from both countries, a task that must be reinforced by the National Assembly’s Group of Friendship.

"It is our interest to create mechanisms for a closer approximation between the two parliaments, with which we will be in a position to elevate the level of cooperation and respond to what exists between our two governments,” he stated.

He on the occasion highlighted the way the presidents of Angola ando f Russia have been developing their external policies, resulting in the good relations of friendship and cooperation.

In his turn, the deputy speaker of the DUMA, Nadejada Guerasimova, spoke of the need the adoption of teachings of the two heads of State.

"Unfortunately, the parliaments are slow in developing relations,” she regretted, wishing that this Paulo Kassoma’s visit changes the situation.

Nadejda Guerasimova said there is a wide listo f matters to be addressed, expressing the hope that the meetings produce desired results.

Thus, she spoke of the need for a major concert between the parties within the Inter-parliamentary Union, with a view to the implementation of the decisions from that international institution.

The National Assembly speaker started Wednesday a five-day official visit to the Russian Federation, at the head of a parliamentary delegation.

He has been invited by his Russian counterpart, Boris Gryzlov, and will accomplish an intense programme, mainly contacts with members of the Duma, the local Parliament and of the Government.

In Moscow, Paulo Kassoma will also discuss the state of cooperation between the two countries with the vice president of the Russian Federation Council.

A meeting with the Russian Foreign minister is also part of the agenda that includes visits to the Moscow Kremlim.

On the third day of his stay in Russia, Paulo Kassoma will travel to Saint Petersburg, where he will meet with the local governor and with the president of the local Legislative Assembly.

Visits to the Hermitage Museum of Fine Arts and to "Mariinski" Theatre, where he will watch an Opera, are on the agenda for Saint Petersburg.

Russia's troubled Bulava missile to be test launchedhttp://en.rian.ru/mlitary_news/20101007/160862214.html

07:33 07/10/2010

The 13th test launch of Russia's troubled Bulava ballistic missile will be held in the White Sea on Thursday, a source in the administration of the northern Russian town of Severodvinsk said.

The missile will be launched from Russia's Dmitry Donskoy nuclear submarine, the source told RIA Novosti by phone.

Bulava test launches were put on hold after a failed launch on December 9, 2009, which was caused by a defective engine nozzle.

The Bulava (SS-NX-30), a three-stage liquid and solid-propellant submarine-launched ballistic missile (SLBM), has officially suffered seven failures in 12 tests.

However, some analysts say that in reality the number of failures is considerably higher, with only one of Bulava's 12 test launches being entirely successful.

MOSCOW, October 7 (RIA Novosti)

Ukraine pays for Russia Sept gas import in fullhttp://uk.reuters.com/article/idUKLDE6960HH20101007

8:55am BST

KIEV, Oct 7 (Reuters) - Ukraine's state-owned energy company Naftogaz said on Thursday it had paid Russia in full for its September gas deliveries.

Naftogaz said in a statement it paid Russia's state-owned energy giant, Gazprom (GAZP.MM: Quote, Profile, Research), around $715 million. The August bill totalled $711 million.

The January 2009 agreement between Gazprom (GAZP.MM: Quote, Profile, Research) and Naftogaz set a base formula for the price of Russian gas, which the Ukrainians say is onerous despite a discount agreed this year.

In April, President Viktor Yanukovich's administration secured a $100 discount on the price of 1,000 cubic metres of gas in exchange for allowing Russia to keep its Black Sea fleet in a Ukrainian port until 2042. (Reporting by Pavel Polityuk; editing by Richard Balmforth)

State nuclear fuel company takes shares in Russian-based centerhttp://www.kyivpost.com/news/business/bus_general/detail/85329/

Today at 09:56 | Interfax-Ukraine Ukrainian state company Nuclear Fuel (Kyiv) has completed the acquisition of 10% shares in the International Uranium Enrichment Center in Angarsk (Irkutsk region, Russia) and became its shareholder on October 5, the Ukrainian company said on Wednesday.

"Following the agreement (in the form of an exchange of notes) between the Ukrainian Cabinet of Ministers and the governments of the Russian Federation and the Republic of Kazakhstan, regarding the participation in the International Uranium Enrichment Center,

Nuclear Fuel acquired shares in the International Uranium Enrichment Center and has become its shareholder as of October 5, 2010," the company said.

Very soon Nuclear Fuel plans to agree upon a procedure for acquiring uranium-enrichment services through the IUEC.

It was reported that in November 2008 the Ukrainian Cabinet approved a draft agreement (in the form of an exchange of notes) with Russia and Kazakhstan on joint participation in the IUEC. The proposal was approved by the Russian government in February 2009 and by Kazakhstan in December 2009.

The IUEC was founded by Russia and Kazakhstan around the Angarsk Electrolysis and Chemical Plant (Irkutsk region). Another candidate for joining the IUEC is Armenia.

The key goal of the Center is to provide non-nuclear states with guaranteed access to enriched uranium which can be used as fuel by nuclear power plants. Apart from enriching uranium for the nuclear power industry, the IUEC will also manage guaranteed stocks of low-enriched uranium, the so-called "fuel bank."

Russia thanks Lithuania for sending aid to fight forest fireshttp://www.baltic-course.com/eng/baltic_states_cis/?doc=32426

Petras Vaida, BC, Vilnius, 07.10.2010Minister of Foreign Affairs of the Russian Federation Sergey Lavrov has thanked Lithuania for helping Russia to fight forest fires, reported BC the press service of the Foreign Ministry.

In the letter of 5 October, which is addressed to Lithuania's Minister of Foreign Affairs Audronius Azubalis, Minister Lavrov thanks Lithuania for giving a helping hand to Russia during the natural disaster.

Minister Lavrov noted that the aid to Russian fire-fighters and the victims helped to more quickly localize forest fires in the European part of Russia, to reduce the damage and to eliminate the effects of the forest fires.

Lithuania responded to the request for technical assistance in combating the fires that Russia sent in August. Lithuania sent humanitarian aid – respirators, respiratory protection devices, fire hoses and a set of fire fighting water pump (a trailer) – to the neighbouring country.

07.10.10 08:34Russian pilots freed in southern Sudan

http://www.interfax-russia.ru/main.asp?id=179978

GOOGLE TRANSLATION

October 7. Interfax-Russia.ru - After two months of captivity Russian pilots were released in southern Sudan, according to television channel "Russia 24" referring to the Sudanese media.Decision on their release and transfer to the Russian side following an against them by the authorities of the investigation.The Russian crew of the Mi-8 "Sudan Airways, consisting of two Russian citizens, and one - Kazakhstan, was arrested Aug. 8 on suspicion of having links with insurgents. The pilots were held in Juba - the administrative center of southern Sudan.In the rebellious province of Darfur, where there are several separatist groups, have repeatedly seized as hostages foreign nationals, including Russians.Thus, on 29 August in the city of Nyala in Sudan's South Darfur have been abducted by three Russian pilots working in the private Sudanese airline Badr Airlines. After negotiations between the invaders, secret services of the Sudan and the airline pilots were released.

U.S. calls on Russia to end "occupation" of Georgian territory http://english.peopledaily.com.cn/90001/90777/90852/7158440.html

13:00, October 07, 2010

U.S. Secretary of State Hillary Rodham Clinton on Wednesday reiterated U.S. call on Russia to end its "occupation" of Georgian territory and withdraw its forces.

"Georgia has taken a constructive approach in our common efforts to address this challenge through the talks in Geneva, we support the objectives of Georgia's State Strategy on Occupied Territories," Clinton told visiting Georgian Prime Minister Nikoloz Gilauri at the State Department. "We are prepared to undertake activities that reinforce these important objectives."

Russia and Georgia fought a five-day war in August 2008, when Georgia used military forces to retake South Ossetia, a breakaway Georgian republic that borders Russia. In response, Moscow sent in troops to drive Georgian forces out of the region.

Russia recognized Abkhazia and South Ossetia as independent states on Aug. 26, 2008, two weeks after the conflict ended, prompting Georgia to sever its diplomatic ties with Moscow.

Georgia and the West have condemned Russia's plans for a military presence in Abkhazia, which they consider is sovereign Georgian land. In Oct. 2008, the Geneva talks were initiated, involving Russia, Georgia, South Ossetia, Abkhazia, the United States as well as the three mediators -- the European Union, the United Nations and the Organization for Security and Cooperation in Europe. The 13th round of talks are scheduled for Oct. 14.

In her visit to Georgia in July, Clinton called on Russia to end "the occupation" of Georgia, resulting in angry dismissal as " absolutely baseless" by Russian Foreign Ministry.

"We continue to call on Russia to end its occupation of Georgian territory, withdraw its forces," Clinton told Prime Minister Gilauri and his delegation. "The United States will not waver in its support for Georgia's sovereignty and territorial integrity."

She also said that U.S. remains committed to Georgia's aspirations for membership in NATO and continues to support Georgia's efforts on defense reform and improving defense capabilities.

Source:Xinhua

Georgia is not going to support Russia's WTO accessionhttp://www.bbc.co.uk/russian/rolling_news/2010/10/101007_rn_georgia_russia_wto.shtmlGOOGLE TRANSLATIONGeorgia would not support Russia's entry into the World Trade Organization (WTO) as long as Moscow does not allow Georgian customs posts to operate in the territory of Abkhazia and South Ossetia, said being in the U.S., Prime Minister Nika Gilauri."We stand for Russia to join WTO by the WTO rules. Georgia asks only one thing - to

Russia to observe WTO rules, before it could enter there," - said the Georgian prime minister.

Georgian PM outlines position on Russian WTO bidhttp://www.google.com/hostednews/ap/article/ALeqM5gPjlYSiO-EKxcDXuB6c662zsLkhQD9IMDKR02?docId=D9IMDKR02

By DESMOND BUTLER (AP) – 11 hours ago

WASHINGTON — Georgia's prime minister said Wednesday that his country will not support Russia's membership in the World Trade Organization unless Moscow allows Georgian customs officials to operate in two disputed territories allied with Russia.

The hard-line position could put the Obama administration in a difficult situation as it seeks to help Moscow in its bid for WTO membership. Just last week, the administration gave a boost to Russian hopes by announcing that Russia had resolved long-standing issues with the United States that had stalled the bid first requested 16 years ago.

Georgian Prime Minister Nikoloz Gilauri told The Associated Press that Georgia is asking only that Russia adhere to WTO rules before it can join. Any WTO member state, including Georgia, can block membership for a prospective country.

The Georgian demand amounts to insistence that Georgia operate the border crossing between Russia and Georgia in the breakaway regions of Abkhazia and South Ossetia. Russia recognized both territories as independent after its 2008 war with Georgia and has maintained troops despite a cease-fire agreement that specified a pullout.

"We are for Russia joining the WTO with WTO rules," Gilauri said, adding that in Georgia's reading, the WTO requires border checkpoints to be operated by both bordering countries.

Gilauri was in Washington for a daylong meeting between U.S. and Georgian officials on deepening cooperation.

At the opening of the meeting, Secretary of State Hillary Rodham Clinton reiterated U.S. demands that Russia pull out of Georgian territory.

Gilauri said Clinton's remarks, which also backed Georgian sovereignty and territorial integrity, were "everything we could have possibly wished for."

Georgia has sought such remarks by U.S. officials amid insecurity that Russia could absorb the two territories. Georgia also has watched warily as the Obama administration has made a priority of improving relations with Moscow.

With a reference to Georgian elections in 2012 and 2013, Clinton urged Georgia to strengthen its democratic institutions.

"There is still a lot of work ahead to address issues of political competition, fundraising and accountability," she said.

U.S. welcomes Russia's plans to review cases of attacks on journalistshttp://en.rian.ru/society/20101007/160862419.html

07:57 07/10/2010

The United States welcomes Russia's plans to review criminal cases concerning attacks on journalists, the U.S. State Department said in a statement on the fourth anniversary of the murder of Russian investigative reporter Anna Politkovskaya.

Novaya Gazeta reporter Politkovskaya, who gained international recognition for her reporting of atrocities against civilians in the troubled North Caucasus republic of Chechnya, was gunned down in an elevator in her Moscow apartment building on October 7, 2006.

"October 7th marks the fourth anniversary of the murder of Anna Politkovskaya, a highly respected investigative journalist. Four years have passed since her murder, yet those responsible have yet to be brought to justice," State Department spokesman Philip Crowley said.

"We welcome the recent announcement by Russian officials that the criminal investigation into Ms. Politkovskaya's case will be reenergized and that 19 unsolved cases of murdered journalists will be reopened," he said.

Russia's top investigator Alexander Bastrykin in late September ordered a review of all cases concerning attacks on journalists.

"Politkovskaya devoted much of her career to shining a light on human rights abuses and unmasking the misery of war, especially in Chechnya. She stood for what is best in independent journalism by giving a voice to victims and illuminating the truth," Crowley said.

In February, a Moscow court acquitted three men charged with involvement in the shooting of Politkovskaya, but the Supreme Court overturned the ruling and ordered a retrial.

"The U.S. will continue to focus attention on Ms. Politkovskaya's case and that of Paul Klebnikov, the murdered editor of Forbes' Russian edition, as well as the cases of all the other brave journalists who have been killed in Russia," he said.

Russia has one of the poorest journalist safety records in the world. With at least 35 journalists murdered between 2000 and 2009, the International Press Institute places Russia fifth in its ranking of countries most dangerous for journalists, after Iraq, the Philippines, Colombia and Mexico.

WASHINGTON, October 7 (RIA Novosti)

Anniversary Of Russian Journalist Politkovskaya's Slaying http://www.rferl.org/content/Anniversary_Of_Russian_Journalist_Politkovskayas_Slaying/2183183.html

October 07, 2010 Rights activists and acquaintances of Russian investigative journalist Anna Politkovskaya are marking four years since her murder in the Russian capital.

Politkovskaya, a critic of then-President Vladimir Putin and his policies in Chechnya, was shot outside her Moscow apartment in what supporters claim was a contract killing.

Criticized for its handling of the case, Russia's chief investigator's office say they have launched a worldwide search -- with the help of Interpol, among others -- for the suspected killer, Rustam Makhmudov.

Russia also says it is extending its probe until February.

Russian rights activists say the lack of progress in the probe proves such murders can be committed with impunity in Russia, where a number of high-profile murders of rights activists and journalists have gone unsolved.

compiled from agency reports

Four years on: Anna Politkovskaya’s murder still unsolved http://rt.com/Top_News/2010-10-07/politkovskaya-murder-anniversary.html/print

07 October, 2010, 09:26

October 7 marks four years since Russian journalist Anna Politkovskaya was gunned down in her apartment block. Her family and human rights activists are hitting out at police for not doing enough to find her killer.

Denis Vasiliev makes no secret that he dislikes journalists. To him, they are too intrusive, too simplistic and too manipulative.

This attitude is quite typical. According to polls, at least two thirds of Russians distrust what they read in newspapers or see on TV.

”I am tired of journalists. And I am tired of going over things that have no impact on society again and again,” Vasiliev said.

Ironically, it was a journalist that helped him find justice.

In 2001 he was badly beaten – first by thugs, then by the Russian police to whom he turned for help. When it seemed that everything in his country has failed him, one reporter came to his aid. It was Anna Politkovskaya.

“Our tragedy was widely publicized in newspapers and on TV, but only Anna Politkovskaya touched upon the real-life problems of the people she wrote about,” said Denis’s mother Marina Kondratyeva.

“Strong psychological pressure from the authorities, the involvement of psychiatrists and the police, the attempts to open criminal cases against us…No journalist is willing to take the risk of bringing those things out to the public,” she added.

That story in the Novaya Gazeta newspaper helped Denis to win a case against the Russian Federation at the European Court of Human Rights, one of many that Politkovskaya’s reporting led to.

“A journalist who deals with people’s pain as part of their job and tries to actually help people rather than just reflect their stories should not be something out of the ordinary,” said Novaya Gazeta’s deputy editor in chief, Sergey Sokolov.

”We have too many objective journalists who only litter the information sphere. Anna never did that,” he added. “Her main goal was to help people not just write a piece about them. A journalist’s work does not end once the story is done. That is what she believed.”

While she is often credited for rekindling people’s faith in justice, four years later, the people responsible for Politkovskaya’s own murder remain unpunished.

Russia’s Investigative Committee says the case is very challenging, but the search for the killers and masterminds is still ongoing.

Politkovskaya’s daughter Vera, who over the years has developed a striking resemblance to her mother, says the family is still hopeful.

“We still have hope, of course, but the way the investigation is going and the way the trial went, we can tell that the investigators have not made much progress,” Vera said. “I cannot see anything that would indicate we are getting closer to the truth.”

Vera Politkovskaya has also become a journalist, but she admits that her dedication to the profession is nowhere near as intense as her mother’s. Vera’s number one priority is her four-year-old daughter Anna.

People who knew Anna Politkovskaya say she had zero tolerance for formalism and officialdom, and that she continues to defy them even after her death.

On the building where she lived and was murdered there is a commemorative plaque with her name and date of death. In the city code it is prohibited to put such plaques within five years of a person’s death.

While Moscow officials have few reasons to appreciate her reporting, and have all the legal grounds to remove it, the plaque is still there – a tribute to her life and a condemnation of her death.

Russian-Kazakhstan Nanotechnology Venture Fund Moves Closer to Foundinghttp://engnews.gazeta.kz/art.asp?aid=322989

10:50 07.10.2010

Kazyna Capital Management (Republic of Kazakhstan), VTB Capital, and I2BF Holdings have signed a memorandum of intent to establish the Russian-Kazakhstan Nanotechnology Venture Fund. The fund's target size is $100 million. RUSNANO and Kazyna Capital Management, anchor investors for the fund, will each contribute $25 million. VTB Captial and I2BF Holdings will manage the fund's resources. The latter are expected to attract private investments of $50 million to $100 million.

The fund, which is being established for ten years, will draw investment resources for promising projects in nanotechnology and the use of nanoindustry products in the Republic of Kazakhstan and the Russian Federation. The projects are expected to involve a broad range of economic sectors. Focus of the fund will be on transferring cutting-edge technology, creating new forms of international collaboration, and stimulating development of financial infrastructure for nanotechnology markets.

Abay Alpamyssov, chairman of the Management Board of Kazyna Capital Management, remarked that developing venture infrastructure is critical to supporting and advancing an innovative environment in Kazakhstan. "The attraction of two highly professional companies in the establishment of the venture fund is an excellent signal for other investors. Fusing different management approaches and technologies will help the management team attract additional investment to achieve targeted capitalization and ensure effective leadership for the fund."

"We have chose management companies that can work effectively in selecting and supporting promising nanotechnology projects in Russia and Kazakhstan. Moreover, they will apply their experience in developing venture projects at the pre-industrial stage to maximize earnings for the fund's investors," said RUSNANO managing director Dmitry Pimkin. "Criteria for choosing projects for investment will be scientific and technical validity and forecasted return on investment."

"VTB Capital is a leader in the Russian venture industry. Our experience in venture financing is considerable. There are currently five venture funds with aggregate value of 5.8 billion rubles under VTB Capital's direction. This year Russian Navigation Technologies, a VTB Capital portfolio company, made the first ever IPO offering in Russia. We believe that VTB Capital's global platform and experience will enable us to realize the potential of the Russian-Kazakh fund," said Aidar Kaliev, head of Venture Investments at VTB Capital.

"Joint management of the venture fund is a unique approach in venture business," noted Ilya Golubovich, managing partner at 12BF Holdings. "We are confidant, however, that our cooperation will be successful. The 12BF team has worked for a long time in Western venture investment markets, monitoring their needs and developing the most farsighted company. We are prepared to bring the global expertise of I2BF to Russia, where we already see a host of technologies for which there is demand in world markets."

Kazyna Capital Management, registered on May 23, 2007, is a wholly owned subsidiary of Samruk-Kazyna, a joint-stock company of national (Kazakh) welfare. The company devotes its work to developing a market for direct investment in Kazakhstan. It has equity of 60 billion tenge (11.55 billion rubles); the total size of funds in which the company is an investor exceeds $2.8 billion.

Kazyna Capital Management is shareholder, along with industrial and other investors, in eight direct investment funds focusing on investment in Kazakhstan. KCM manages assets of about $1.5 billion.

VTB Capital (www.vtbcapital.com), the investment business of VTB Group, is one of three strategic directions of the group. The others are corporate and retail businesses.

In the two years since its founding, VTB Capital has become a national leader in international investment banking. At the end of the first half year of 2010, VTB Capital held first place among organizers of bonded debt and Eurobonds in the Commonwealth of Independent States and second place among book runners in the equity capital markets in Russia and the CIS (reported by Dealogic). VTB Capital held first place in the Bloomberg and Cbonds rankings of investment banks by size of transactions in the Russian debt market.

In only two years, VTB Capital has attracted more than $40 billion into the Russian economy, organizing more than 90 transactions in the debt and equity capital markets. In 2010 VTB Capital won the prestigious international award Euromoney for Best Russian Investment Bank in the Debt Market. The company's Analytical Department also garnered a number of international awards in 2010, including the Extel Pan-Europe 2010 and the All Russia Research Team (Institutional Investor) prizes.

VTB Capital offers the full spectrum of investment and banking products and services to Russian and foreign clients. It focuses its work on organizing issues of marketable debt and equity securities, developing direct investment business, conducting trading

operations, managing assets and investments, and offering clients consulting services for mergers and acquisitions in Russia and abroad.

I2BF Holdings is an international asset management group engaged in venture financing and management of hedge funds in the USA, Europe and Asia. I2BF was established in 2005. It is a diversified investment group specializing in high-technology sectors. The group has more than $100 million assets under management. It directs venture funds exceeding $80 million. I2BF Holdings' hedge fund was a nominee for the 2009 EuroHedge Awards as the Best New Hedge Fund of the Year.

Nanowerk.com

KazSat-2 completes acoustic testshttp://www.brahmand.com/news/KazSat-2-completes-acoustic-tests/5111/1/10.html

Posted On: Oct 07, 2010

MOSCOW (BNS): Central Aerodynamics Institute (TSAGI) recently completed the acoustic tests of the KazSat-2 EQM, as part of acceptance, under the contract with Khrunichev Space Center.

According to the Russian Federal Space Agency, Roscosmos, the tests confirmed quality and proper operation of KazSat-2.

KazSat-2 is developed under the Intergovernmental agreement between Russia and Kazakhstan to provide communication services for the territory of the Republic.

This kazakh communication satellite, features 12 Ku-band transponders for fixed communications and 4 Ku-band transponders for TV-transmissions and is intended for telecast, fixed satellite communication and data transmission for Kazakhstan and central Asia.

KazSat-2 will be launched on December 2010. It will replace the KazSat-1 satellite due to the complete loss of the first satellite.

Soyuz spacecraft container damaged in transit to Baikonurhttp://www.turkishweekly.net/news/108233/soyuz-spacecraft-container-damaged-in-transit-to-baikonur.html

Thursday, 7 October 2010

The transportation container of a Russian Soyuz spacecraft was damaged during rail transit to the Baikonur cosmodrome in Kazakhstan.

The head of the Rocket and Space Corporation Energiya said the damage was limited to the container and did not affect the Soyuz TMA-20 spaceship inside it.

"When we put the ship on a stand to check it over before the launch, we discovered damage, but to the container, not to the ship," the Agence France-Presse (AFP) on Tuesday cited the president of the Russian spaceship factory, Vitaly Lopota, as saying. 

The Soyuz is scheduled to take a Russian cosmonaut and two NASA astronauts to the International Space Station in mid-December. 

"We will check everything, do more work on it and in December, I hope, we will fly on time," AFP quoted Lopota as saying. 

A space industry source told the Interfax-Kazakhstan news agency that the spacecraft may be sent back to the factory near Moscow. 

"According to the results of the initial inspection of the damage, it cannot be ruled out that the ship will have to be returned to the factory. A final decision will be taken in the next few days," the source told Interfax, according to the AFP report. 

Regardless of the investigations' outcome, the December 13 launch date will remain unchanged because the factory will send a reserve spacecraft, the spokesman for Russia's space agency Roskosmos, Alexander Vorobyov, told Interfax.

Thursday, 7 October 2010

News Gazeta.kz

Russia to make record number of space launches in 2010http://rt.com/Top_News/2010-10-07/soyuz-baikonur-record-launch.html/print

07 October, 2010, 11:09

Regardless of the incident with the Soyuz TMA-20 spacecraft, which was damaged while being transported by train to the Baikonur Cosmodrome, Russia will fulfill all 12 projected space flights by the end of the year.

The Soyuz TMS-20 spacecraft was severely damaged due to an improper transportation regime. One of the brackets used to secure the vessel inside the transportation capsule came loose and the Soyuz crashed to the floor, deforming the re-entry vehicle that will now most likely be replaced with another one taken from Soyuz TMA-21.

In 2010, Russia will fulfill 34 space launches, which is more than in 2009, when 32 rockets blasted to space from Baikonur Cosmodrome and the northern cosmodrome in Plesetsk. To date, 42 launches have been made worldwide this year, of which 22 were Russian.

Last year’s 32 launches were preceded by 27 in 2008 and 26 in 2007.

The next launch will be on October 8 from Baikonur, where the vast Kazakh steppes are about to witness the latest achievements of the space industry roaring off into the heavens.

On Friday, the next crew of the International Space Station will travel into orbit in a brand new Soyuz capsule, equipped with cutting-edge technology.

Soyuz rockets will soon be planet Earth’s only link with the International Space Station, which flies over 300 kilometers above.

For decades they have been launched from the renowned launch site at Baikonur, in the middle of the steppe in Kazakhstan

At a press conference Aleksandr Kaleri, commander of the next expedition to ISS, noted that “When you go to the start you’ll see the monument to the conquerors of space. On it is written, in this place the genius of Soviet man was revealed in an instant in the conquering of the cosmos. I think you can’t say better than that about Baikonur.”

And the vast concentration of technology there has just become even more advanced.

The new Soyuz spacecraft has improved and digitized control, power supply and temperature control systems.

But one thing has not changed – the humans flying Soyuz missions.

The crew, like those before them, have been training for years for their six month stint on the ISS.

The two Russians and one American know that in English, “soyuz” means “unity”, and the international nature of their mission.

“You know, personalities and that, we’re not very easily excitable and deal with things in a very calm and quiet way so I think we’re going to have a very good working relationship on board the space station because I think we have the same kind of temperament, all three of us,” Scott Kelly, a crew member, said.

Amazingly Scott will have family coming to visit him on his mission.

His brother Mark is also an astronaut and will lead the last US shuttle mission to the ISS.

They will be the first twins in space.

“We’ve occasionally flown together in the Navy as test pilots, but before that I think it was working in dairy queen when we were 12 years old, mopping the floors. That was probably the last job we really had where we worked together,” remembers Mark Kelly.

The lonely launch platform in the wind blasted desert might seem like an odd place to pursue the most advanced of human endeavors. But for the past 55 years now it’s been doing just that. From a distance the rocket looks much the same as the first one launched years ago, but after years of improvement and preparation this mission plans to push the final frontier that bit further.

DIFC says Moscow financial centre will be welcome in global networkhttp://www.zawya.com/story.cfm/sidGN_06102010_071053

Thursday, Oct 07, 2010

Gulf News

AL AWAR offers to help russians establish a centre of their own

Moscow Dubai has world-class financial regulation at the Dubai International Financial Centre (DIFC) and the experience and ability to put all components in place, a senior executive said yesterday.

Offering to help Russia in its own efforts to set up an international financial centre based in Moscow, DIFC chief executive Abdullah Al Awar said such a centre based in Moscow will be a welcome addition to other major financial centres.

Al Awar was speaking at a session on Moscow International Financial Centre (MIFC) at the Russia Calling Forum organised by VTB Bank.

At an earlier session, Russian Finance Minister Alexei Kudrin said Russia is in the early stages of discussions on setting up an international financial centre in Moscow and large foreign companies will start making initial public offerings at MIFC “within the next three to five years”.

Necessary legislation

“Russia will put the necessary legislation in place within the next two years. Russian companies hold IPOs in Moscow all the time. To be considered an international centre, of course, we need large [international IPOs], but they are unlikely to happen very soon,” Kudrin said.

The creation of an MIFC, one of President Dmitry Medvedev’s fav-ourite projects, was proposed about two years ago. Speakers at the event said Moscow must learn from London and be more welcoming to its business partners if it wants to become an international financial centre.

“We should be open and welcoming to those who come here to do business,” said Alexander Voloshin, Head of the Moscow Financial Center Task Force.

He said work is being carried out on improving the city’s financial infrastructure, and regulating financial markets, the judicial system and migration and tax policies.

International staff

Voloshin said increasing the number of international staff in Russian companies and the financial industry’s share in the city’s budget by up to 40 per cent would also benefit the success of the centre.

The task force chief expects the financial centre to add significantly to creating a full-fledged regional banking system in Russia. With plenty of banks in place in Moscow, more efforts are needed to start forming a relevant banking system in Russian regions, he said.

Speakers said Moscow has already emerged as a successful regional financial centre, boosting trade and economic activities in the country and CIS countries.

“Promoting financial integration between Russia and the rest of the world remains a key priority, which will contribute to Russia’s status as a major international player to be reckoned with,” said Ruben Aganbegyan, President of Moscow Interbank Currency Exchange.

Cooperation need

“In this respect, we see the need in cooperating more with Russian regions, whose economic landscape and organisation drive will add greatly to creating a global financial centre in Russia.”

Megan Hirons Mahon/Gulf News

Russian drug enforcement officers seize 136 kg of marijuanahttp://en.rian.ru/crime/20101007/160862030.html

07:03 07/10/2010

Police in Russia's Far Eastern Primorye Territory have seized 10 bags with marijuana weighing 136 kg and detained two suspects, a drug enforcement service spokeswoman said Thursday.

"The cache with marijuana was organized by two residents of Vladivostok. The men planned to transport the drugs using an SUV to Vladivostok to sell them," Anzhelika Nesvyachenaya said.

She said that in late September - early October, drug enforcement officers seized 20 bags weighing 300 kg and arrested another four residents of Primorye.

The arrestees face up to 10 years in prison and fines of up to 500,000 rubles ($16,770).

VLADIVOSTOK, October 7 (RIA Novosti)

Icebreaker simulator centre http://www.world-nuclear-news.org/NN-Icebreaker_simulator_centre-0610105.html

06 October 2010

A simulator centre for nuclear-powered ships has been inaugurated by Atomflot, the subsidiary of Russian state nuclear energy company Rosatom responsible for the operation and maintenance of the country's fleet of nuclear icebreakers. 

The company said that the first group of specialists started their training at the new centre in Murmansk on 4 October.

Previously, Atomflot had to send its specialists to the State Maritime Academy "Admiral Makarov" in Saint Petersburg for training. The company said that locating the new simulator centre in Murmansk, where its fleet is based, has "obvious advantages."

Farid Gabbasov, captain of the Soviet Union icebreaker, said that having to travel to Saint Petersburg took sailors some time, was inconvenient and created additional expenses for both the sailors and the company. In addition, the move to Murmansk makes it easier for specialists to be shown ships in service in order to demonstrate any issue of current operation.

Atomflot noted that workers who are nearing completion or who have already finished their careers on nuclear-powered ships will receive training in order to become qualified teachers at the new simulator centre.

Researched and written

by World Nuclear News

Putin to celebrate his birthday in St Petersburg

http://www.itar-tass.com/eng/level2.html?NewsID=15565654&PageNum=0

07.10.2010, 07.30

MOSCOW, October 7 (Itar-Tass) -- Prime Minister Vladimir Putin will celebrate his 58th birthday in his native city of St. Petersburg on Thursday, October 7.

Putin tries to come to St. Petersburg for his birthday but always works on this day.

“The day will be filled with work. Vladimir Vladimirovich will gather his family and friends only in the evening,” his spokesman Dmitry Peskov told Itar-Tass.

Putin has never taken a day off on October 7 during his presidency and premiership. “When I do not work, I still work,” he says. “The more you do, the more you understand that there is so much you haven’t done yet.”

Putin celebrated his 50th birthday at a CIS summit in Chisinau in 2000. In 2003 and 2005, he held meetings and talks in St. Petersburg. He celebrated his 55th and 57th birthdays in Moscow.

This time, Putin will meet with activists of the inter-regional association of trade unions of St. Petersburg and the Leningrad region and chair a meeting on the development of leading universities.

In a meeting with trade union leaders, Putin plans to discuss wages, occupational safety, negotiations between employees and employers, specific problems facing St. Petersburg and the Leningrad region. His partners will represent the interests of 750,000 members of their association.

After that Putin plans to check how the development programme for leading universities is implemented. The meeting will involve Education and Science Minister Andrei Fursenko, the rectors of federal universities, as well as of Moscow and St. Petersburg State Universities.

It will be evening when Putin will be able to undo his tie and celebrate his birthday with his family and friends at home. He has admitted once that he likes more to give presents than to receive them. “Frankly speaking, I do not even always look at what is there [in the package] and often hand it over to different depositaries – I simply have no time,” he said.

Animals have been a traditional present for Putin. His living “presents” include his favourite Labrador Koni (presented by Emergencies Minister Sergei Shoigu), a chestnut stallion) from former Bashkortostan President Murtaza Rakhimov), a pony (from former Tatarstan President Mintimer Shaimiyev), and even a crocodile although made of crystal

glass (presented by former Moldovan President Vladimir Voronin), and a little Ussuri tiger from an unknown guest.

Putin turns 58http://english.ruvr.ru/2010/10/07/24550576.html

Oct 7, 2010 12:13 Moscow Time

Russia's Prime Minister Vladimir Putin marks his 58th birthday. By tradition, Putin is to spend this day in St. Petersburg, his hometown. On arriving to his hometown on Thursday morning, Putin is to meet trade union activists and chancellors of St Petersburg high education institutions.

According to ministers Putin is very modest in celebrating his birthday. He usually spends it with his family in St. Petersburg. Ten years ago he made it clear to his subordinates that he did not want to receive any gifts from them. That is why ministers will only send congratulatery telegrams to their boss on this day.

Acting Moscow mayor to stay in post for next two years - paper

http://en.rian.ru/russia/20101007/160863544.html

10:10 07/10/2010

Acting Moscow Mayor Vladimir Resin may stay in office for the next two years, a respected business daily said on Thursday, citing a number of sources.

Speculation that the acting mayor may remain in charge of the Russian capital increased after Resin, 74, joined the pro-Kremlin United Russia party on Wednesday.

Resin hinted to his close associates after a meeting with Prime Minister Vladimir Putin on Tuesday that he may continue to serve as Moscow mayor until 2013, a United Russia's source told Vedomosti

But Resin told the daily newspaper Komsomolskaya Pravda that his membership of the ruling party was not part of a bid to remain in office.

"No, no, no! It is completely unrelated to this," Resin said, adding that "a person at least 20-25 years younger than me" should be mayor.

United Russia will present a list of candidates for Moscow mayor to President Dmitry Medvedev on Saturday. The party's general committee will convene on Friday night or Saturday morning to agree a final list of three or four hopefuls.

Resin was appointed acting Moscow mayor after Yuri Luzhkov, who had headed Moscow since 1992, was fired by the Russian president last week after weeks of speculation that he would either step down or be sacked amid his worsening relations with the Kremlin.

Luzhkov left the United Russia party shortly after his dismissal.

MOSCOW, October 7 (RIA Novosti)

Moscow to allocate almost 600M roubles for tourism over 2011

http://www.itar-tass.com/eng/level2.html?NewsID=15566109&PageNum=0

07.10.2010, 11.07

MOSCOW, October 7 (Itar-Tass) - Moscow will allocate almost 600 million roubles over 2011 for the development and promotion of tourism in the city. Acting Mayor Vladimir Resin made the decision on Thursday, a source in Moscow’s administration said.

“We shall allocate over 592 million roubles for the development of tourist and hospitality businesses,” the source said. The money will be spent for the annual Moscow international tourist fair and for the participation of the hospitality business in major international exhibitions, for the preparations for the Congress of the World association of guides due in 2013.

“The city will spend 70 million roubles for PR campaigns to promote Moscow as a world’s tourist centre,” the source said.

Ex-Moscow Mayor Luzhkov Approved Hotels Sale, Kommersant Says

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a84rZEfkoomA

By Jason Corcoran

Oct. 7 (Bloomberg) -- Former Moscow Mayor Yuri Luzhkov approved a new privatization program before his ouster two weeks ago, Kommersant reported, without citing anyone.

Luzhkov had agreed to sell the city’s 50 percent stake in the Radisson SAS Slavyanskaya and 20 percent of the Swissotel Red Hills, the newspaper said.

To contact the reporter on this story: Jason Corcoran at Jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Last Updated: October 7, 2010 00:22 EDT

Luzhkov links dismissal to 2012 presidential electionhttp://en.rian.ru/russia/20101007/160860938.html

03:33 07/10/2010

Ex-Moscow mayor Yury Luzhkov, sacked in late September, has linked his dismissal to the 2012 presidential election.

Luzhkov, 74, was fired by Russian President Dmitry Medvedev on September 28 after weeks of speculation about his worsening relations with the Kremlin and his imminent resignation or dismissal.

Asked by CNN reporter Matthew Chance why he had been fired, Luzhkov said: "The answer to your question is very simple: the 2012 presidential elections are ahead. The authorities need Moscow to support the Kremlin-proposed candidate."

"And they [authorities] need a person from their circle as the mayor," he said.

Before he was given the ax, Luzhkov had been the target of widespread media accusations that he helped his wife, property developer Yelena Baturina, win construction contracts in the Russian capital.

A documentary aired by the NTV channel accused Luzhkov's wife, rated the world's third richest woman by Forbes, of using her husband's position to amass her alleged $2.9 billion wealth. Both Luzhkov and Baturina deny all the accusations.

MOSCOW, October 7 (RIA Novosti)

October 6, 2010Moscow Funhttp://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1286387868

By Roland OliphantRussia ProfileGetting Rid of Tsereteli’s Peter the Great Monument Would be a Greater Symbol of Breaking With the Luzhkov Era Than Firing Any Number of Bureaucrats  Since Yuri Luzhkov was ousted in a dramatic coup last week, Moscow’s public life has been in flux, and this week the reshuffling of the political order continued apace. This weekend a tiny gay rights protest outside the offices of Swiss airlines was protected by police, rather than broken up. On Monday Acting Mayor Vladimir Resin floated the idea of moving the gargantuan statue of Peter the Great by Luzhkov’s long-time favorite artist Zurab Tsereteli. And on Tuesday he unceremoniously fired Oleg Mitvol, the prefect of Moscow’s Northern Administrative District and a staunch Luzhkov ally. After a meeting with Putin and his decision to join the ruling party United Russia, is Resin in the running for the top job? Oleg Mitvol’s departure was as abrupt as that of his former boss. On Tuesday Acting Mayor Vladimir Resin signed a decree (which mayors as well as presidents are apparently able to do) dismissing the Northern Administrative District prefect with immediate effect. He hadn’t been in the job long – he was installed by Luzhkov in July last year. Once is funny, twice is silly In a re-run of Luzhkov’s ouster, Russian media reported that Resin originally proposed to Mitvol that he step down “voluntarily.” When the prefect refused, Resin simply fired him by decree. Mitvol came back fighting, telling Interfax that his dismissal was “absolutely illegal” and tweeting images of a doctor’s note – under Russian law it is illegal to fire someone when they are on sick leave, which Mitvol claims he is. “Since yesterday I’ve been in hospital, and Resin knows this,” Mitvol told the news agency. “I think the question of my responsibilities will be decided by the new mayor of Moscow.” But it seems the colorful former environmentalist is as doomed as his former patron. Even if he’s pinning his hopes on Luzhkov’s as-yet-unknown successor, he will be discouraged by the news this morning that supposed caretaker mayor Resin himself has leapt to the head of the bookies lists of potential successors. The Gazeta.ru Web site tipped Resin for the top job after the acting mayor met with

Prime Minister Vladimir Putin yesterday evening and then promptly applied for membership in United Russia.  Citing Vladimir Putin’s press secretary Dmitry Peskov, the Internet newspaper reported that Resin and the prime minister had discussed “economic activity of the city and specific socio-economic questions in the life of the capital.”  But, as the paper – and Peskov – noted, Putin doesn’t usually meet with acting governors. The exception was attributed to the “scale of the processes” going on in Moscow. And while the normal process for joining United Russia can take up to six months, the move signals a “serious claim to the post of mayor,” President of the St. Petersburg Political Fund Mikhail Vinogradov told the paper.  The final list of candidates for the post of mayor is expected to be announced by the United Russia party on Saturday, October 9, during a meeting of the United Russia leadership and Dmitry Medvedev. Apparently, it is not necessary to be a member of the party to make the list.  Peter, much more fun The real replacement that has Muscovites talking is that of Zurab Tsereteli’s 98-meter-tall bronze statue to Peter the Great on the Moscow river, which Resin suggested “relocating” on Monday. The immense monument, which has dominated the center of the city since 1997 and is estimated to have cost the city some 30 billion rubles ($5.17 million at the time), has been the subject of many an incredulous stare ever since it was constructed. Everyone has their favorite words for it – Russia’s Ambassador to NATO and chief Tweeter Dmitry Rogozin called it a “Cyclops” on Wednesday. And as the biggest and brashest of the Georgian artists’ works in Moscow, it symbolizes both Luzhkov’s strange patronage of Tsereteli and the nepotistic style of government that relationship typified. But most of all “it symbolizes the bad taste” of the former mayor and his favorite artist, said Ksenia Luchenko, who describes herself as an “ordinary Muscovite who doesn’t want anything to destroy the city’s atmosphere.” Tsereteli. One either loves him or hates him, and Luzhkov loved him with a passion. Apart from taking Peter the Great off the artist’s hands (it started life as a Christopher Columbus that neither the United States, nor Spain, nor any Latin American country wanted), the former mayor passed the maniac bronze caster commissions ranging from the 149-meter war memorial obelisk at Victory Park to the fairy tale characters amidst the fountains on Manezhnaya Square. When the Cathedral of Christ the Savior was reconstructed, he used period photographs to get as close to the original as possible – and then slapped bronze reliefs on the exterior. There are several museums in Moscow – including the Modern Art museum on Petrovka and his personal studio on Malaya Gruzinskaya – whose courtyards are literally littered with his bronzes – including a life size Vladimir Putin and a larger-than life Luzhkov carrying a broom, in a rather unsubtle metaphor about cleaning up Moscow’s streets. Not that he’s super villain – like it or not, he has made a contribution to artistic life in

Moscow and Russia, including helping out lots of young artists, pointed out Luchenko. But shifting the Peter statue would be a clearer and more symbolic break with Luzhkov’s era than firing any number of district prefects. It would also be far more costly: the Kommersant daily reported Tuesday that Peter’s retirement could cost the city “a billion rubles” ($33.36 million at current exchange rates). Deconstructing the monolith could take up to three weeks.  So perhaps it should stay? The Echo of Moscow radio station on Monday said it had found several Muscovites who had grown if not fond of the statue, then at least tolerant. “Thirteen years on, the giant statue doesn’t hurt the eyes anymore,” the station declared. Luchenko wasn’t buying that, however. “To get used to it is difficult. It’s too big and too incongruous,” she said.  In which case, where on earth does one send it? Mikhail Moskvin-Tarkhanov, the head of the Moscow City Duma committee for future development, suggested to Kommersant that Peter “would look wonderful” further north near the Rechnoi Vokzal metro station. More logical, perhaps, is the suggestion that Peter would be more at home in St Petersburg. After all, he built the place, hated Moscow with a passion, and it is the home of the Russian Navy – whose foundation the monument is meant to represent. The St. Petersburg legislature, however, has reportedly turned it down. Maybe it could go further afield. The government of the breakaway Moldovan province of Transdnestr has expressed an interest in the monument, the Moscow Times reported late Wednesday. But Rogozin had another idea – giving it to NATO. “The Belgians will be so happy. Their Manneken Pis doesn't look too solid. And besides, Peter I at NATO is quite symbolic,” he wrote. “How do you like such a slogan: ‘We'll break a window onto Europe despite the ‘open-door’ policy!’”

PRESS DIGEST - Russia - Oct 7http://af.reuters.com/article/energyOilNews/idAFLDE69601K20101007

Thu Oct 7, 2010 6:57am GMT

MOSCOW Oct 7 (Reuters) - The following are some of the leading stories in Russia's newspapers on Thursday. Reuters has not verified these stories and does not vouch for their accuracy.

KOMMERSANT

www.kommersant.ru

- LUKOIL (LKOH.MM) Vice President Leonid Fedun wants to raise his stake in the company to 10 percent from 9.3 percent. But he did not clarify how he would acquire more shares, the daily reports.

- Germany's Douglas Holding seems to be leaving Russia's market as the company is considering selling its Douglas-Rivoli network of 30 retailers in Moscow and regions.

VEDOMOSTI

www.vedomosti.ru

- Russia's TNK-BP (TNBPI.RTS) is prepared to spend $3 billion to buy BP's assets in Algeria.

- The price for newspapers and magazines could rise 5 percent as Russia's Customs Service has cancelled tax benefits for chalk overlay paper from Oct. 1.

- Swedish furniture retailer IKEA [IKEA.UL] is freezing its new investment projects in Russia for the next 3-5 years.

ROSSIISKAYA GAZETA

www.rg.ru

- Russia is ready to sell some assets of shipping group Sovcomflot, which is involved in oil shipments, according to Deputy Prime Minister Sergei Ivanov.

NEZAVISIMAYA GAZETA

www.ng.ru

- Vladimir Resin is one of the main candidates for the post of Moscow's Mayor whose main task will be to ensure the victory of United Russia ruling party in the capital in elections, the daily says.

- Russia is planning to restore its permanent military presence Southeast Asia, the daily reports referring to the discussions of building of a naval base in Vietnam.

IZVESTIA

www.izvestia.ru

- Russian prosecutors claim they have discovered new suspects who may have been involved in the murder of Anna Politkovskaya four years ago.

RIA Novosti Press Review for Thursday, October 7, 2010http://en.rian.ru/russia/20101007/160862933.html

09:11 07/10/2010

A brief look at what is in the Russian papers today

POLITICS

Acting Moscow Mayor Vladimir Resin joined the ruling United Russia on Wednesday, getting the fast-track treatment a day after meeting with party leader and Prime Minister Vladimir Putin. Resin's decision fueled speculation among analysts and bloggers that he was on the shortlist of candidates for mayor, which United Russia needs to submit to President Dmitry Medvedev on Saturday. (Moscow Times, Vremya Novostei, Vedomosti, Kommersant, Nezavisimaya Gazeta)

Prime Minister Vladimir Putin, who turns 58 on Thursday, will meet with St. Petersburg trade unions. He will celebrate his birthday with his near and dear at the end of the day. (Rossiiskaya Gazeta)

ECONOMY

The Russian government says businessmen should be ready for an increase in taxes in the next three years. Finance Minister Alexei Kudrin said raising taxes is the only way to reduce the budget deficit. (Vremya Novostei)

TNK-BP is ready to spend $3 billion to buy its parent company BP's Algerian assets. Deputy TNK-BP CEO Maxim Barsky said Prime Minister Vladimir Putin supports the plans. (Vedomosti)

OIL & GAS

Russian President Dmitry Medvedev on Wednesday paid a one-day visit to Algeria at the head of a Russian delegation. Gas was the focus of talks, and one agreement was signed. Russia is pushing for a more active presence on the Algerian gas market. (Vremya Novostei, Rossiiskaya Gazeta)

REAL ESTATE

Novosibirsk authorities will seek investors for the construction of a 10-billion-ruble ($336- million) industrial park. (Vedomosti)

CONSUMER

IKEA is changing its strategy in Russia to focus on existing stores rather than expansion to more sites, new IKEA CEO for Russia Per Wendschlag said Wednesday. No new sites will be opened in the next three to five years, he said. (Moscow Times, Vedomosti)

DEFENSE

Russia's Dmitry Donskoy nuclear submarine headed to the White Sea to hold the 13th test launch of the troubled Bulava ballistic missile, the administration of the northern Russian town of Severodvinsk said. The Bulava (SS-NX-30), a three-stage liquid and solid-propellant submarine-launched ballistic missile (SLBM), has officially suffered seven failures in 12 tests. (Rossiiskaya Gazeta)

The Russian Navy is ready to rebuild a defunct military base in Vietnam from which it pulled out in 2002. Cam Ranh became the Soviet Union's largest foreign naval base in 1979. (Moscow Times)

SPORT

The Russian national football team arrived in Dublin, where on Friday they will clash with Ireland in a qualifying match for Euro 2012. (Sport Express, Rossiiskaya Gazeta)

SCIENCE

This year's Nobel Prize in Chemistry was awarded to Richard F. Heck, Ei-ichi Negishi and Akira Suzuki for the development of palladium-catalyzed cross coupling. This chemical tool has vastly improved the possibilities for chemists to create sophisticated chemicals, for example complex carbon-based molecules. (Nezavisimaya Gazeta)

Nezavisimaya/Russia Today: A nautical déjà vu http://rt.com/Top_News/Press/eng.html#

Moscow gets ready to renew its permanent military presence in South-East Asia

By Vladimir Mukhin

Russia is ready to restore its naval base in Cam Ranh, Vietnam, where our military ships, submarines (including nuclear), and aircraft (including long-range strategic), were deployed, since Soviet times, free of charge. The base had existed for 31 years, since 1979. This time, the geopolitically important facility will be rented from Vietnam for 25 years, after which the lease may be renewed. A source in the Defense Ministry told Nezavisimaya Gazeta (NG) that the agreement may be signed in time of President Dmitry Medvedev’s visit to Vietnam, scheduled for late October.

The information, provided by NG’s source from the Defense Ministry, is indirectly confirmed by an Interfax report, in which a source from the General Staff of the Navy

said that “the Main Command has completed the preparation of documents, which substantiate and calculate the necessity of rebuilding the naval base for Russian ships in the Asia-Pacific region”. Meanwhile, it is stressed that “if a political decision is made, then the Navy is ready to make the base operational within three years”.

Looking back at the recent history, the decision of early termination of stay of the Russian Navy and the Air Force in Cam Ranh was made by then-President Vladimir Putin. In a February, 2002 interview with the Wall Street Journal, he had argued that Russia’s decision to leave the base in Cam Ranh is an “absolutely correct” and “balanced military and political decision”.

“These are not arbitrary decisions of a single person,” stressed Putin. “These are well-considered military and political decisions, based in the realities and opinions of not only politicians, but also the military personnel, first and for most of the General Staff.”

General-Colonel Leonid Ivashov, who at that time headed the Main Directorate for International Military Cooperation (GUMVS) under the Ministry of Defense, told NG that the proposal to close the base in Cam Ranh and the intelligence and technical center in Cuba was personally made to Vladimir Putin by the former head of the General Staff, Anatoly Kvashnin. Many experts, however – especially in the Main Command of the Navy, the GUMVS, and Defense Minister Igor Sergeev (who served as defense minister since 2001) – had objected to the idea.

NG’s interlocutor recalled that he had, for several years, taken part in negotiations and consultations with the Vietnamese side regarding the future of the base in Cam Ranh and “the Vietnamese were against our withdrawal from the county; though they did demand rental fees”. According to Ivashov, the suggested fees were relatively small (about $300 million annually) and it could have been written off as Russia’s debt to Vietnam, which according to Moscow’s estimates, amounted to $10 billion. “But, apparently under America’s pressure, the former Russian leadership had made an absolutely arbitrary decision to withdraw from Vietnam. If we are able to, again, secure our military presence in the country, it is likely to be a major geopolitical victory for Russia,” says the general.

After Russia withdrew from Cam Ranh, proposals to establish a naval presence on the base were made by China and the United States. They were ready to pay $500 million for rent. But, Hanoi refused. It was officially announced that Cam Ranh will not be a foreign base.

Director of the Center for Analysis of Global Arms Trade, Igor Korotchenko, told NG that Russia and Vietnam have signed contracts worth over one billion dollars in the military and technical spheres. The expert does not exclude the possibility that some of the arms, which are being supplied to Vietnam, will be concentrated in the Bay of Cam Ranh: “A joint base for the Vietnamese Navy as well as the Russian ships and submarines in Cam Ranh is a highly possible option”.

Vladimir Komoedov, a State Duma deputy and former commander of the Black Sea Fleet, is concerned about the possibility that there may not be anything to deploy in Cam Ranh. “The Pacific Fleet, whose ships are supposed to monitor the waters of South-East Asia, has, for nearly two decades, not been supplied with new military equipment. So, what will we deploy in Cam Ranh?” asks the admiral. According to Komoedov, the new 2020 arms program does not provision the construction of aircraft carriers, which had, at one time, protected the geopolitical interests of the USSR in the Indian and Pacific Oceans.

The naval base of the USSR and Russia in Cam Ranh

The Cam Ranh Bay is one of the best deep-water bays in the world. Its total area is 60 square kilometers, and its depth reaches 20 meters. The bay is protected from the wind by the mountains. Since the 1950s, Cam Ranh was one of the most important bases for the US Seventh Fleet, especially during the Vietnam War from 1964-1973. There, US engineers had constructed a military airfield and a port. In 1972, due to America’s gradual withdrawal from South Vietnam, all military facilities in Cam Ranh were transferred to the South Vietnamese Army. On April 3, 1975, during an all-out offensive on Saigon, the Cam Ranh base was captured by the North Vietnamese Army. In 1979, after the brief war between Vietnam and China, the USSR and Vietnam signed a 25-year agreement.

Read the article on the newspaper's website (in Russian)

Vremya Novostei/Russia Today: Environmental revenge http://rt.com/Top_News/Press/eng.html#

Georgia lays the groundwork to boycott the Sochi Olympics

Mikhail Vignansky (Tbilisi)

Georgian authorities are launching a campaign aimed at raising doubts among the global community about the ability to hold the 2014 Winter Olympics in Sochi. According to Vremya Novostei’s sources, it will focus on the political situation and the environmental component. Throughout October, the Georgian parliament will hold a number of hearings, during which the tactics and the strategy for the anti-Olympic campaign will be discussed.

Georgia does not plan to rush into urging the public to boycott the Olympics in Sochi – as this requires the preparation of the proper groundwork. Neither is Tbilisi planning to delay action much further. The first step was President Mikhail Saakashvili’s speech at the UN summit in New York, which was held in September. He stated that in connection to the preparations for the Sochi Olympics, environmental problems appeared in the

neighboring “occupied” Abkhazia, as its natural resources “are being used for the construction of facilities for the Olympics”. The Georgian leaders asked the international community to monitor the situation, because the territory of Abkhazia is “outside of [Tbilisi’s] control”.

Later, Georgia’s Ministry of Environmental Protection and Natural Resources blamed Russia for “destroying a unique ecological system” of Abkhazia. The transfer of materials to the construction sites in Sochi could allegedly lead to erosion of the shoreline and create ecological problems for all countries bordering the Black Sea. “The Olympic Games are supposed to promote peace and friendship between people without causing irreversible damage to the environment,” said the Ministry’s representatives. Yesterday, head of the Ministry, Georgy Khachidze, turned to the Organization for Security and Cooperation in Europe (OSCE) with a request for it to turn its attention to “the environmental barbarism that is happening in Abkhazia due to the upcoming Olympics in Sochi”.

In an interview with Vremya Novostei, leader of the Georgian Green Party, Georgy Gachechiladze, recalled that under the Charter of the International Olympic Committee (IOC), the Games “shall be held in accordance with environmental demands”, and the IOC is obliged to show “responsibility and concern for the protection of the environment, and ensure compliance with environmental principles in the development of the sport”. According to Mr. Gachechiladze, “millions of cubic meters of inert materials are being withdrawn” from Abkhazia, in particular from the coastal zone – and that is “an environmental catastrophe”.

Chairman of the Georgian Parliamentary Commission on Restoration of Territorial Integrity of Georgia, Shota Malashkhia, told Vremya Novostei that not only politicians will be invited to attend the upcoming hearings, but also ecologists (because “we can talk about damage in the amount of $15 billion to the ecosystem of Abkhazia”), as well as representatives of the Olympic Committee of Georgia and non-governmental organizations. “We are not directly talking about boycotting the Olympic Games, but indicating Charter violations on various parameters,” explained Mr. Malashkhia. “Initially, we will suggest the IOC address Russia with a request to correct the situation. First, it should apply to the return of Abkhazia under Georgia’s jurisdiction and withdrawal of the Russian troops from Abkhazia. Second, we need to resolve the environmental situation. If Russia does not meet these requests, then we could start talking about moving the Olympics outside of the country’s territory. We are especially counting on the understanding from the members of the IOC, who boycotted the 1980 Olympic Games in Moscow due to the deployment of the Soviet troops to Afghanistan. They should clearly see the parallels with our situation.”

After the armed conflict in 2008, Moscow recognized the independence of Abkhazia and South Ossetia, and Georgia cut diplomatic relations with Russia. Prior to that fact, Mikhail Saakashvili spoke only of “certain risks”, as the Games are being held near a conflict zone, but the Olympics, according to him, could be “useful” in regulating the

regional problems. Currently, Georgia has been more frequently noting that the capital of the Games is only 120 kilometers from Sukhum.

Deputy Chairman of the Government of Georgia, Georgy Baramidze, in an interview with Vremya Novostei rigidly stated that “holding the Olympics in a country, whose military are occupying the territory of another state, contradicts the principles of the Olympic movement”. Press secretary of Georgia’s National Olympic Committee, Kakha Beridze, told Vremya Novostei that the organization does not have the right to urge colleagues from the Olympic committees of other countries to boycott the Sochi Olympics, but it is “presenting information about the existing problem”.

Read the article on the newspaper's site

CORRUPTION WATCH: Russia amongst the world's most transparent on natural resources

http://www.businessneweurope.eu/dispatch_text13074

bneOctober 7, 2010

Russia may have its problems when it comes to transparency in many spheres, but when it comes to natural resources, the country is one of the most open in the world.

That's the conclusion of the first Revenue Watch Index released on October 6, which ranks government public disclosure in managing oil, gas and minerals.

Only Brazil and Norway are better than Russia at making public detailed information about key resources amongst the 41 largest producers of energy around the world said the Revenue Watch Institute (RWI) and Transparency International (TI) as they launched the report.

Mexico and Chile rounded out the top five, with the US dragging its heels in 11th place, whilst Turkmenistan came in last behind a posse of sub-Saharan states and middle eastern giants such as Saudi Arabia.

Juan Carlos Quiroz, from Revenue Watch Institute explained the importance of the index: "In all these countries, oil, gas and minerals are public resources ... so citizens have a right to know what their governments are doing with the money they get from it and how they manage it."

He admitted that he hadn't expected Russia to come in third. "That was a surprise," he said, "because in many other indexes that measure good governance or corruption, they appear very high on the negative. What we found is that for the period we researched (2006-2009) we found reports that contained the information we were looking for."

The 56-page report compares how much the 41 governments disclose publically about the money they receive for oil, gas and minerals exploitation, and about contracts and other basic data. "We found that in too many countries, governments give citizens little information about this crucial part of the economy," said RWI Director Karin Lissakers. "Without access to information, the public has very limited influence on how governments manage the resources and how governments use the revenues."

07 October 2010, 11:31

Russian Church to open its own site at YouTubehttp://www.interfax-religion.com/?act=news&div=7781

Moscow, October 7, Interfax - The Russian Orthodox Church will open its own site at popular YouTube video hosting service.

The project presentation will be held October 11 in the conference hall of the Christ the Savior Cathedral during the international festival of Orthodox media "Faith and Word", the Synodal Information Department reported to Interfax-Religion Thursday.

Before, Vladimir Legoyda, head of this department, acknowledged in an interview the need to develop the church public relations and "create proper awareness of the Church's activity."

He emphasized that the Church currently "is exposed to continuous information pressure, i.e. "counter-public relation" practices initiated by people who never play fair and do not scruple to employ dirty tricks."

Legoyda believes that such challenge should be opposed by "a competent and efficient work performed by specialists, otherwise the Church may be drowned in the flood of lies and deceit."

"If "public relations" means creating and promoting any image, I believe, this term is not quite appropriate in relation to the Church," Legoyda states.

He reminded that the Church is "a bearer of Truth and the Truth - Christ - does not need any image."

International Congress of Russian Compatriots opens in Moscowhttp://english.ruvr.ru/2010/10/07/24523824.html

Oct 7, 2010 10:42 Moscow Time

The International Congress of Russian Compatriots opens in Moscow on Thursday.

It will gather more than 150 Russian scientists and representatives of the intellectual elite living and working abroad. They will discuss issues linked to Russia's, modernization in particular the creation of data base of the Russian scientists working abroad.

Speaking at the Congress last December, President Dmitry Medvedev said he counts on contribution of compatriots to Russia's modernization.

National Economic Trends

Russian International Reserves Rise $6.7 Billion to 2-Year High

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ajFmPTjxv3p0

By Torrey Clark

Oct. 7 (Bloomberg) -- Russia’s international reserves rose $6.7 billion to $494.4 billion, a two-year high, in the week to Oct. 1, Bank Rossii said today on in an e-mailed statement.

To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net

Last Updated: October 7, 2010 01:51 EDT

7 Oct, 2010, 12.22PM IST,REUTERS

Rouble hit 5-mth peak vs dlr of 29.62http://economictimes.indiatimes.com/markets/forex/Rouble-hit-5-mth-peak-vs-dlr-of-2962/articleshow/6705177.cms

MOSCOW: The Russian rouble rose versus the broadly battered dollar to its strongest level in five months in early trade on Thursday, pricing in global forex moves and strong oil prices.

By 0638 GMT, the rouble inched up 27 kopecks, or 0.91 percent to 29.62 -- its highest levels since early May, according to Reuters data.

Versus the eruo, the rouble added 7 kopecks, or 0.17 percent to 41.34, heading away from the lowest mark since February of 42.04 touched earlier this week.

Russia: United Grain Company to increase grain processing volumeshttp://www.agrimarket.info/showart.php?id=99152

OJSC United Grain Company (Russia) plans to diversify own activity, and started the work on mixed fodder production market for cattle-breeding and poultry enterprises needs, and also to increase flour production, announced the press-service of the company.

As of to date, United Grain Company stocks grains of the public intervention fund, purchases and supplies grains on the domestic market, first of all, to consumers of the regions of the country, which suffered from the droughts.

Due to the fact that the company received the Government block of stocks in 6 milling enterprises, United Grain Company also plans to increase flour production volumes at the expense of intensification of the enterprises work.

United Grain Company plans to organize grains processing into mixed fodder on the base of own production capacities.

Grain by-products production will allow for United Grain Company to essentially increase not only production volumes and trading geography, but also to balance agricultural products supplies to the end consumers.

Russia's macroeconomic policy: balancing growth versus stability http://www.businessneweurope.eu/dispatch_text13074

VTB CapitalOctober 7, 2010

A panel discussion as part of VTB Capital's Russia Calling! Investment Forum took place yesterday. The key speakers were: Andrey Klepach (Deputy Minister for Economic Development), Mikhail Zadornov (RF Minister of Finance 1997-99, President and Chairman of the Management Board, VTB 24), Aleh Tsyvinski (Professor of Economics, Yale University), Vladimir Inozemtsev (Academic Supervisor, Centre for Research of Post-Industrial studies), Erik Berlof, (Chief economist and special advisor, EBRD). The main takeaways from what they had to say are as follows.

Official view and forecast assumptions: contained GDP growth. According to Klepach, the Russian government started to prepare for the crisis in 2006; however, its scope and severity went far beyond expectations. The recent crisis revealed that the economy remains quite vulnerable to external shocks. After Russia's financial crisis in August 1998, GDP rebounded as early as October 1998. In 2003-07, when GDP growth averaged about 7.5% YoY, half of this was the result of rising oil prices and capital inflows. Hence, the country's dependence on these two growth drivers is high. A USD 10 increase/decrease in oil prices adds/shaves about 0.4-0.5pp of GDP growth (although this is less than before).

External growth drivers muted. In the next three years, the government expects stable oil prices and contained capital inflows, with gross FDI of about USD 45-50bn and only marginally positive net FDI. With these assumptions, Russia's development in 2011-13 would depend solely on internal drivers.

Local growth drivers: challenges from the budget deficit. As to the local growth drivers, there is scope for enhancing productivity. According to Klepach, productivity declined only about 4% in 2009, much less than the 7.9% YoY drop in GDP. A number of sectors, such as metals, the chemical industry, automotives and aircraft building can substantially enhance productivity. However, the MinEconomy assumes that government demand (and stimulus to internal demand) will be subdued in 2011-13 as the budget is no longer in surplus.

Experts: inflation expectations to revive. The MinEcomy's official stance on fiscal policy was questioned by Zadornov, who mentioned that the practice of supplementary budgets (i.e. when unspent revenues are channelled for extra expenditures and not to reduce the budget deficit), is being reinvigorated. We highlighted a similar risk in At the Crossroads of Full Employment, 13 September. In the summer revision of its fiscal policy guidelines,

the Ministry of Finance directed the revenues from higher oil prices and GDP growth forecasts to expenditures.

This, coupled with the hike in public wages and pensions, as well as the still high tariffs growth, will reinvigorate inflation expectations. We concur with this statement and, on top of this, think that the loose monetary policy of the past 12 months will also push inflation higher towards 2011.

Urgent need for investment: macro stability, low inflation and reforms are key. The panel participants noted that higher inflation would be a hurdle for investment growth as interest rates would be elevated. This, in turn, would hinder access to credit for whole sectors. And without investments, if oil prices remain stable then Russia can count on 3-4% GDP growth at best (which is equivalent to stagnation). The same conclusion was reached as a result of a survey held at the St Petersburg Economic Forum in June, when participants were asked what would be the likely outcome if oil prices stayed in the USD 70-80 range. About 60% of respondents predicted stagnation. However, if the reform agenda is implemented, the probability of this scenario reduces to about 30%.

We also see inflation as an immediate challenge for economic growth. However, in our view (and this is supported by the panellists), the CBR would opt to keep interest rates on hold for a while in order to stimulate credit growth and investment demand.

What else is needed for successful economic growth. Besides macroeconomic stability and low inflation, Russia needs to pay attention to its regions. The crisis has affected regions differently and the recovery is far from homogeneous. The government might push investment growth by supporting medium-sized companies (as they tend to invest more). And the best use of extra budget expenditures is on improving the investment climate.

Aleksandra Evtifyeva

Business, Energy or Environmental regulations or discussions

Legislation tightens corporate disclosure - but slashes companies exposedhttp://www.businessneweurope.eu/dispatch_text13074

bneOctober 7, 2010

President Dmitry Medvedev signed into law a bill that the Kremlin says will tighten the demands for corporate information disclosure, reports Prime Tass. However, at the same time the new legislation exempts the vast majority of companies from any disclosure at all.

The law expands the number of items whose disclosure is required, Yury Isayev, a

member of the State Duma's financial markets committee, claimed in September. However, companies with less than 500 shareholders and non-traded companies will now be exempt from disclosure requirements.

The law also requires companies to disclose beneficiaries, Isayev said earlier, adding that this would help prevent hostile takeovers, as well as overturning a ban on stock exchanges owning more than 20% in other stock exchanges. A tie-up between the RTS and Micex is a centerpiece of Medvedev's ambition to turn Moscow into an international financial centre.

Electricity Consumption up a Moderate 4.2% YoY in September http://www.businessneweurope.eu/dispatch_text13074

AtonOctober 7, 2010

System Operator issued a press release saying that Russia's electricity consumption in September expanded by 4.2% YoY, while electricity production increased by 4.5% YoY. In 9M10, electricity use and generation were up by 5.1% and 5.2%, respectively.

Bottom line While the electricity consumption growth rate is somewhat lower than in the previous month (5.9%), we view it as rather healthy. We believe electricity consumption growth is the primary driver for sector reforms (such as the MRSKs transition to the RAB regulatory method) and is therefore a key factor in the investment stories of Russian utility companies. We consider the news as moderately positive for the entire utilities sector and electricity distribution companies (MRSKs) in particular.

Rosneft, Gazprom, Magnitogorsk: Russian Equity Market Preview

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aRSZ8ikfq5E4

By Henry Meyer

Oct. 7 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close of trading in Moscow.

The 30-stock Micex Index added 0.1 percent to 1,475.12. The dollar-denominated RTS Index rose 0.6 percent to 1,578.35.

OAO Rosneft (ROSN RX): Crude oil rose to a five-month high of $84.09 a barrel as the dollar declined on speculation the Federal Reserve will act to revive the U.S. economy by buying assets. Russia’s biggest oil company declined 1.8 percent to 210.68 rubles.

OAO Gazprom (GAZP RM): The world’s biggest natural gas producer plans to bid to explore and produce hydrocarbons in Algeria, Chief Executive Officer Alexei Miller said in Algiers. Shares in the company rose 0.3 percent to 162.92 rubles.

OAO Lukoil (LKOH RX): Russia’s largest oil producer not controlled by the state may sell shares it bought back from ConocoPhillips to Asian investors to broaden its shareholder base, Deputy Chief Executive Officer Leonid Fedun said. The share price added 0.3 percent to 1,759.58 rubles.

OAO Magnitogorsk Iron & Steel (MAGN RX): Russia’s fourth- largest steelmaker plans to increase steel output to 12 million metric tons in 2011 from about 10 million tons this year. The stock fell 0.4 percent to 29.4 rubles.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net

Last Updated: October 6, 2010 22:00 EDT

Regulator: No major violations in Norilsk Nickel's shareholders' meeting

http://www.rbcnews.com/free/20101007105746.shtml

      RBC, 07.10.2010, Moscow 10:57:46.The Russian Federal Financial Markets Service has completed its review of the annual general meeting of shareholders of Norilsk Nickel and did not find any major law violations. At the same time, however, the regulator's chief, Vladimir Milovidov, stressed that the service had questions on 'certain matters,' the RBC Daily newspaper reported today.

      Milovidov indicated that the regulator would specify its questions in the near future, noting, however, that the violations were minor, the Rossiya 24 TV channel reported today.

      According to Milovidov, the service had already submitted a report to the Prosecutor General's office regarding the complaint filed against Norilsk Nickel. It has also prepared written statements in response to UC Rusal and Norilsk Nickel's complaints against each other.

      Meanwhile, Milovidov noted that the service's representatives would participate in the mining and metallurgical company's upcoming extraordinary meeting of shareholders on October 21.

Russia’s small businesses – dying breed, statistics showhttp://rt.com/prime-time/2010-10-06/small-businesses-dying-breed.html/print

06 October, 2010, 22:09

According to the recent government figures, the number of SME has declined almost 6 per cent year on year.

The National Institute of Business Research has shown that the worst results were found in south and central Russia (26 and 13 per cent decline correspondingly), whereas Far East and Volga regions demonstrated 1.5 per cent growth.

This comes two years after President Medvedev singled out small business as the flagship of Russia's economy and innovation.

Since then, SME have been pumped with subsidies – as a result, their number grew by 20 per cent. In 2009, there were 127,600 people in Russia who started their own business, having received a year unemployment benefit of 58,800 rubles each. About 127,000 new enterprises were registered, creating at least the same number of jobs.

Then the crisis hit and the bubble burst.

However, vice president of the National Institute of Business Research, Vladimir Buev, was quoted as saying by the Vedomosti newspaper that it was not only crisis that affected the situation with SME.

“The government programmes are not working,” Buev said. “State subsidies breed dependency. People are more concerned with filling in all the necessary forms and red tape than with developing their business and searching for new markets.”

Adding fuel to the fire is the recent arrest of a Moscow official, suspected in receiving a 90,000 bribe from an entrepreneur who was trying to bypass the lengthy procedures and register his company as quickly as possible.

The officials say that their figures do not confirm the sad conclusions. According to the data presented by Yury Gertsy, head of State Labour Service, only 5 per cent of the companies set up in 2009 actually went bankrupt.

Vladimir Demidov, head of Business Department in one of Russia’s south cities, believes that the data obtained by the National Institute of Business Research are incorrect because the study did not take into account micro business.

“The number of small enterprises in our region has declined by 2,067 companies, but the number of micro enterprises has grown by more than 4,000 units,” Demidov said. “Evidently, the first just turned into the latter.”

Deputy PM Aleksandr Zhukov said that the government would continue to allocate money for SME. This year, the Ministry of Social Development has already granted 14 million rubles to 242,000 people. Another 11 million have been reserved to be paid in 2011 to 120,000 entrepreneurs.

The officials say that among the main reason for such measures is a lack of jobs, but economists do not view the programme that optimistically.

“In the US, to create 9 jobs you have to support 43 start-ups,” Aleksandr Chepurenko from the Higher School of Economics, told RT. “A renowned economist, Scott Shane, said that supporting small business is a bad policy by itself. Sadly, Russian officials don't like to read. They prefer mechanisms the West gave up 30 years ago.”

Chris Gilbert, director of the Russo-British Chamber of Commerce, believes that state help makes the companies lose their own initiative.

“If company starts to exist on state money, once these hand-outs are withdrawn, they find themselves in trouble. The best way to help the small companies is just to leave them alone,” Gilbert told RT.

IKEA delays construction of Europe's largest mall near Moscowhttp://en.rian.ru/business/20101007/160863808.html10:37 07/10/2010

The Swedish furniture giant IKEA has no plans to resume investment into new projects in Russia, including the construction of Europe's largest shopping mall near Moscow, the Vedomosti business daily said on Thursday.

The Moscow Region government announced plans to build the Mega-4 mall in April 2010, and the IKEA Group received a 50-hectare plot of land near the city of Khimki, northwest of Moscow, for construction.

The mall, with an area of 400,000 meters, would have become Europe's largest shopping center. Construction, with the cost roughly estimated at $1 billion, was to begin in 2011 and to take from three to five years.

IKEA, however, has frozen its investment into new projects in Russia until its projected shopping mall in the Volga city of Samara finally opens. The opening of the Samara mall has been delayed eight times since 2007 over safety code violations, and the opening date still remains unclear.

IKEA's new chief in Russia, Per Wendschlag, who began work on October 1, announced that the company's new strategy was to focus on developing existing stores instead of opening new ones.

The investment plans were possibly affected by a bribery scandal which broke out this February and involved two IKEA Russia top managers.

The Swedish furniture retailer entered the Russian market in 1999 and currently has 12 functioning IKEA malls and 12 Mega malls in Russia, while two more - in Samara and Bashkiria's capital Ufa are about to open. Its total investment in Russia is estimated at $4 billion.

MOSCOW, October 7 (RIA Novosti)

IKEA Will Focus on Existing Investments http://www.themoscowtimes.com/news/article/ikea-will-focus-on-existing-investments/418610.html

07 October 2010By Derek Andersen

IKEA is changing its strategy in Russia to focus on existing stores rather than expansion to more sites, new IKEA CEO for Russia Per Wendschlag said Wednesday.

No new sites will be opened in the next three to five years, he said.

"We put in the tenants who were waiting," Wendschlag said of the company's Mega malls. Now more attention will be paid to the mix of tenants and to upgrading and expanding the facilities. There are 12 malls currently in operation in Russia.

Investment will continue, Wendschlag said, but it will be funneled "into other things."

"We will take a break and work with what we have," he told reporters.

Wendschlag replaces Per Kaufmann, who was dismissed in February after failing to intervene in the plans of a company contractor to pay a bribe. The bribe was connected with attempts to ensure the power supply to the Mega-Parnas mall outside St. Petersburg.

IKEA has been a vocal opponent of corruption worldwide.

Wendschlag inherits a number of problems from Kaufmann, including shopping complexes in the regional cities of Samara and Ufa that are two years behind schedule in opening.

Wendschlag said he spent a day at the Samara site and met with Samara region Governor Vladimir Artyakov and local building inspectors. The opening of the complex is being held up because of safety code violations.

"We are doing the things we have to do to open. I won't take any chances with opening a store that is not safe. We learned from our mistakes. It was very costly learning,"

Wendschlag said, maintaining the conciliatory tone that the company has adopted since Kaufmann's departure.

Wendschlag said he will travel to Ufa soon. Construction of the Ufa mall was delayed after inspectors found problems with the contractor's building permit and foreign labor force in 2008.

The company has also experienced difficulties with Moscow regional officials in its plans to expand near Moscow.

"We could grow much faster'' near Moscow, Wendschlag said.

Renaissance Capital analyst Natalia Zagvozdina is sympathetic with the company's problems on the Moscow market.

"The Moscow region is shooting itself in the foot. IKEA is a great employer and has very good, adequately designed products that the local market cannot produce," she said.

"The market is not saturated for IKEA or for furniture," Zagvozdina said, but "IKEA has built quite a lot already."

IKEA has invested $4 billion in Russia since opening its first store in 2000.

Kaufmann canceled plans for 30 new projects and declared an investment freeze in the heat of the conflict with Samara regional officials in 2009.

Wendschlag took over in Russia on Oct. 1 after being managing director of Inter IKEA Centre Group for Austria, Switzerland and Southeast Europe.

Sberbank develops remote client-servicing channels

http://www.businessneweurope.eu/dispatch_text13074

Renaissance CapitalOctober 7, 2010

Event: Kommersant reported today (7 Oct), citing Alexei Chernikov, head of Sberbank's retail department, that by Sep 2010 about 50% of settlement transactions previously serviced through Sberbank's cash offices were redirected to remote client channels, such as payment terminals, ATMs and internet banking. According to Chernikov, the bank's goal is to increase the share of settlement transactions processed via remote client channels to 70%. He also added that Sberbank is currently working out a proper model to launch express lending at reasonable rates.

Action: Positive for Sberbank, in our view.

Rationale: The development of remote client-servicing channels is part of Sberbank's plans to promote retail lending growth amid ongoing optimisation of personnel (Sberbank is reducing personnel 3-5% annually, aiming to bring down the number of employees to 210,000 by 2014). With respect to express lending, we note that Sberbank's activity in this area is rather limited at the moment, as it is issuing consumer loans only in its offices.

Armen Gasparyan

VTB May Purchase a Stake in TCB BNP Paribas IP

http://www.businessneweurope.eu/dispatch_text13074

AtonOctober 7, 2010

Vedomosti reported today (7 Oct) that VTB intends to purchase a stake in asset management company TCB BNP Paribas IP (formerly KIT Fortis Investments). The information was reportedly confirmed by sources close to the management of VTB and Russian Railways.

BNP Paribas became a shareholder in KIT Fortis Investments in Feb 2010 and placed $300mn worth of assets under its management. BNP Paribas and KIT Finance group (controlled by Russian Railways, as is Transcreditbank) were the owners of TCB BNP Paribas IP on equal terms.

We see two possible scenarios in the deal for VTB. First, a stake in TCB BNP Paribas IP could be purchased by VTB directly from KIT Finance. Second, VTB could purchase TCB BNP Paribas IP from Russian Railways as part of its potential purchase of Transcreditbank. TCB BNP Paribas IP may be worth $160_180mn, according to Vedomosti's report. However, the terms of the deal have not yet been released.

Bottom line We believe the news is moderately positive for the bank as it would be in line with VTB's strategy of enlarging its asset management business.

Polyus starts Natalka construction

http://www.businessneweurope.eu/dispatch_text13074

Alfa BankOctober 7, 2010

Interfax reports, citing the Magadan region press service, that Polyus Gold is set to begin construction at the Natalka deposit. The project was reportedly approved on September 28 by the Federal Subsoil Resources Management Agency, which means that the large-scale construction phase can begin. By the end of 1Q11, the company plans to hire 340 people out of the 3,000 staff needed when the unit is commissioned. 30 drilling specialists have already been hired to facilitate the exploration work necessary to prepare the mining schedule.

We view the news as POSITIVE for the stock, as it shows that Natalka is finally moving forward. This was one of three catalysts for Polyus over the next few quarters (alongside the resolution of the KazakhGold dispute and operational improvements at Olimpiada).

In other news, Polyus's CEO has announced that the company is intending to stick to its current 2010 production guidance of 1,500 koz (we forecast 1,415 koz). The company expects to produce 1.7-1.8 mln oz in 2011, which we believe is slightly negative, as we forecast 1,853 koz for next year.

For the Record 07 October 2010

Rusnano and Kazakhstan’s National Welfare Fund Samruk-Kazyna agreed to invest $25 million each in a nano fund for both countries to be managed by I2BF Capital Management and VTB Capital, the companies said Wednesday.(Bloomberg)

Advertising beer with alcohol content in excess of 5 percent, which accounts for 40 percent of the market, may be banned, Kommersant reported Wednesday, citing draft amendments to a bill from the Health and Social Development Ministry. (Bloomberg)

Norilsk Nickel said Wednesday that the Soviet stockpiles of copper it expects to buy from the state would boost its output of the metal by 50,000 tons a year for five years. (Bloomberg)

Electronics retailer M.Video said Wednesday that it opened 20 outlets in the third quarter and sales jumped 37 percent, to 22.2 billion rubles ($743 million). (Bloomberg)

VTB Group will be the only major state asset to be sold by the end of 2010, Economic Development Minister Elvira Nabiullina said Wednesday, adding that a list of assets for sale will be finalized in November. (Bloomberg)

Polyus chief executive Yevgeny Ivanov said Wednesday that the company will probably increase this year’s production of 1.5 million ounces by up to 20 percent in 2011. (Bloomberg)

Sberbank is seeking to borrow up to $2 billion from a group of banks, Interfax reported Wednesday, citing an undisclosed source. (Bloomberg)

Natural Resources a Blessing or a Curse - Mining http://www.businessneweurope.eu/dispatch_text13074

VTB CapitalOctober 7, 2010

News: Yesterday, there was a panel discussion entitled Russia's Natural Resources: a Blessing or a Curse? at our Russia Calling! Investment Forum. The key speakers were: Leonid Fedun (LUKOIL), Artem Volynets (EN+), Peter Hambro (Petropavlovsk), Vladimir Strzhalkovsky (Norilsk Nickel) and Evgeny Ivanov (Polyus). The main takeaways from what they had to say are as follows.

There are many deposits in Russia that are not producing due to a lack of infrastructure or because of refractory ores. However, these difficulties will be resolved with government help. Taxation must change, as gold miners need a differentiated royalty tax which takes into account such things as infrastructure, geology and margins. The government needs to provide incentives to stimulate exploration.

Polyus Gold has spent USD 80mn a year but managed to triple its reserves since starting up and is constantly increasing production. Petropavlovsk is just beginning to become an iron ore producer, although it has got an outstanding track record in gold growth. It is also well-positioned for the rapidly growing Chinese market.

Norilsk Nickel could see strong profits (up to pre-crisis levels) and reserves have increased. It is currently negotiating with the government over tailings in the state reserves fund (this would provide feed to produce 50ktpa of copper for five years). The crisis showed that extensive growth can be dangerous, and Norilsk's strategy is only to invest if high returns are in sight. The company intends to sell directly to the Asian markets and has sent its first ship to Asia. Until the ecological situation has been improved, the company cannot grow production.

Volynets repeated RUSAL's arguments that structural problems in corporate governance, poor cost control, and a lack of premiums to LME on metals sold and investments into growth were preventing MNOD from attaining a Mcap of USD 55bn. If the company is not investing, then it should pay dividends rather than undertake buy-backs. There is no question of a merger at this stage.

Strzhalkovsky denied the accusations, saying that Norilsk Nickel's share price was up more than UC RUSAL's, the company paid the highest dividends among peers and it was working in the interest of all shareholders.

Alexander Pukhaev

Activity in the Oil and Gas sector (including regulatory)

Natural Resources a Blessing or a Curse? http://www.businessneweurope.eu/dispatch_text13074

VTB CapitalOctober 7, 2010

News: Yesterday, there was a panel discussion entitled Russia's Natural Resources: a Blessing or a Curse? at our Russia Calling! Investment Forum. Vice President of LUKOIL Leonid Fedun was one of the key speakers. The main takeaways from what he said are as follows.

Oil price at USD 60-90/bbl in the medium term. The crude supply trend is strong and Fedun does not expect any oil shortage in the medium term (especially with current technology, which makes two-thirds of the global shelf available for development). OPEC's spare capacity of 6mmbd makes any near term shortage unlikely. At the same time, Fedun believes that given the current cost of crude production, oil prices will probably not drop below USD 60/bbl.

Iraq to boost production, West Qurna in focus. Iraq would be able to boost its production significantly at a low cost (a fifth of the cost in Russia). West Qurna-2 is one of the largest oil fields in the world. LUKOIL will develop it in several stages, the first in 2011-early 2013. The company needs to drill just 500 wells and expects growth to be highly efficient, with peak production at 20mmtn.

Gas market is under pressure. Fedun has always been more constructive on shale gas than Gazprom and thinks that Europe could fairly soon be producing the bulk of the gas that it consumes. Unconventional gas will continue to filter into the higher global supply. The marginal cost of production is going down. Some pressure on the oil market is likely as well.

Focus on cash accumulation, technologies and foreign projects. As far as Russian brownfield assets are concerned, LUKOIL plans to focus on accumulating cash and applying technology. During the Q&A session, Fedun mentioned that LUKOIL was planning to list in Hong Kong or Singapore in the near term. He also pointed out that domestic growth prospects were capped by high taxation and limited access to new licences.

ConocoPhillips May Sell Remaining Stake in LUKOIL Ahead of Schedule http://www.businessneweurope.eu/dispatch_text13074

AtonOctober 7, 2010

Vedomosti reports this morning (7 Oct), referring to a statement by LUKOIL's Vice President Leonid Fedun, that ConocoPhillips will sell its remaining stake in the company next month.

ConocoPhillips reported holding 6.15% on 27 Sep, while Fedun estimated the US_based energy company's stake at 4%. This suggests that ConocoPhillips has sold more than 2% of LUKOIL's shares over the past two weeks. The identity of the buyer is unclear as the sale was probably not conducted on the open market, given very modest movements in the share price. Moreover, ConocoPhillips promised to limit its open market sales to 0.59% per month, which is significantly lower than the 0.12% per day (about 3% per month) recorded over the past two_to_three weeks.

Fedun also said the process of LUKOIL accumulating its own shares is not yet complete (we believe this means the company could buy more shares from ConocoPhillips) and the treasury shares are likely to be used for an additional listing planned for Hong Kong or Singapore.

Bottom line We see the news as marginally positive for LUKOIL. It is possible that LUKOIL's President Vagit Alekperov, who recently (according to Vedomosti on 30 Sep) raised $2.4bn in debt from a banking syndicate, is behind the deal. If Alekperov and LUKOIL keep buying LUKOIL shares, we believe market concerns about a share overhang resulting from the sale of ConocoPhillips' stake will be allayed.

TNK-BP considering acquiring some of BP's international assets http://www.businessneweurope.eu/dispatch_text13074

Renaissance CapitalOctober 7, 2010

Event: Today (7 Oct) Vedomosti reported that TNK-BP is actively looking at three BP assets in Algeria, and could spend up to $3bn to acquire them. The assets include two production blocks (In Salah Gas and In Amenas) and one exploration block. Algerian national oil and gas company Sonatrach has the right of first refusal for these assets, and a third partner of BP in Algeria - Statoil - has also expressed interest in these assets. According to Maxim Barsky, who will become the CEO of TNK-BP from 2011, Prime Minister Vladimir Putin is backing TNK-BP's bid and has already written a letter to his Algerian counterpart supporting TNK-BP. Other news agencies have reported that TNK-BP is interested in other assets that BP could sell in the near future, such as blocks in Vietnam and Venezuela.

Action: We think the news is neutral for minorities in TNK-BP Holding, a listed subsidiary of TNK-BP Ltd.

Rationale: TNK-BP expressed its interest in acquiring of some of BP's assets soon after BP announced a $40bn disposal programme, following the accident in the Gulf of Mexico. We believe TNK-BP's chances are fairly high, given that the seller owns 50% of TNK-BP International and due to Russia's political ties with Algeria (as well as with Vietnam and Venezuela). These efforts also fall in line with the Russian government's

strategy of creating strong national companies with a presence abroad, in our view. However, the assets are likely to be acquired by TNK-BP Ltd (a 50/50 JV between Russian partners AAR and BP), not by its listed Russian subsidiary TNK-BP Holding, so there will be no direct implications for minority shareholders of TNK-BP Holding, in our view.

Ildar Davletshin

TNK-BP to acquire 5.5% in Verkhnechonskneftegaz http://www.businessneweurope.eu/dispatch_text13074

VTB CapitalOctober 7, 2010

News: According to Vedomosti, TNK-BP is to acquire 5.5% in Verkhnechonskneftegaz (which develops the Verkhnechonsk field in East Siberia) from East Siberia Gas Company (ESGC) for RUB 1.5bn (USD 50mn). TNK- BP currently has 68.5% in Verkhnechonskneftegaz. ESGC is a 50/50 joint venture between TNK-BP and the government of the Irkutsk region.

On a separate note, Vedomosti speculates that TNK-BP is ready to spend USD 3bn acquiring Algerian assets from BP.

Our View: On an EV/Reserves basis, the price of the Verkhnechonskneftegaz deal implies TNK-BP acquiring the 5.5% share at USD 0.6/bbl, which is an 83% discount to the average multiple for Russian oil majors. Thus, we believe that TNK-BP is acquiring the share at quite a lucrative price, increasing its stake in Verkhnechonskneftegaz to 74%.

Lev Snykov

Gazprom

Gazprom plans to bid for Algerian gas fieldshttp://af.reuters.com/article/commoditiesNews/idAFLDE6951Y420101006

Wed Oct 6, 2010 3:11pm GMT

ALGIERS, Oct 6 (Reuters) - Russia's gas giant Gazprom (GAZP.MM) plans to bid in new exploration tenders for Algerian gas fields, Gazprom's head Alexei Miller said on Wednesday.

"Gazprom is holding talks in Algeria, we.. are planning to participate in the nearest tenders announced by the Algerian party," Miller told reporters. (Reporting by Denis Dyomkin, Writing by Andrey Ostroukh, Editing by John Bowker)

Gazprom: No revision plans for gas contract with Belarushttp://www.kyivpost.com/news/russia/detail/85274/

Yesterday at 19:05 | Interfax-Ukraine Algeria, Oct. 6 (Interfax) - A possible revision of the gas agreement with Belarus is not a negotiation issue and no side is stalling on this since Belarus is entirely meeting its obligations, Gazprom CEO Alexei Miller told journalists in Algiers on Wednesday.

When asked about a possible revision of these agreements, Miller stressed that both sides (Belarus and Gazprom) "are working hard on signing a five-year contract."

"Belarusian payment for gas is taking place strictly in accordance with the terms set out for 2010. Regarding payments for supply over recent months, we absolutely don't see any problems at present," Miller said.

"We will hope that this will happen by year's end," he stressed.

"However, some time ago we heard concerns from Belarus that they could experience problems with payments. But the payments are being made in full," he said.

"To date, this issue [a revision] is not a subject of the negotiations. Neither Gazprom nor our Belarusian colleagues have done anything to stall the process. This is an effective contract that both sides are carrying out," Miller said.

07.10.2010

Gazprom, Total Reassign Rights in Boliviahttp://www.oilandgaseurasia.com/news/p/0/news/9021

Gazprom and Total have signed an agreement on reassigning stakes in a geological survey project on the Ipati and Aquio blocks in Bolivia, the company reported in a news release.After state agencies in Bolivia approve the deal, the Gazprom Group (Gazprom EP International B.V.) will own 20 percent of the authorized capital in the venture; Total will own 60 percent and TecPetrol will own 20 percent.The partners in the project plan to jointly conduct geological surveys and develop fields on the Ipati and Aquio blocks. They expect to begin producing gas in the region in 2013.The Gazprom Group and Total are also negotiating with the Bolivian state oil and gas company YPBF on a joint project on the Acero block. Copyright 2010, Oil and Gas Information Agency. All rights reserved.