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Newsline - June 16, 2004


KHODORKOVSKII TRIAL GETS UNDER WAY...
The long-awaited trial of former Yukos CEO Mikhail Khodorkovskii, Menatep Chairman Platon Lebedev, and former Volna head Andrei Krainov began in Moscow on 16 June, Russian news media reported. Only eight journalists were allowed into the courtroom, which guards said was full of the defense team's "foreign lawyers," newsru.com reported. The website reported that Khodorkovskii's defense team asked the court to postpone the trial until defense lawyer Genrikh Pavda recovers from a 15 June operation, and Lebedev's lawyers asked the court to release their client from pretrial detention. The court is considering both motions. The three are facing seven counts, including embezzlement, contempt of court, tax evasion, and forging documents. The main charges stem from the 1994 privatization of a 20 percent stake in the Apatit fertilizer company. Yukos shares fell by about 9 percent on 16 June to $5.75 per share, Interfax reported, both because of the trial and because of earlier reports that the company is considering issuing shares to the government in payment of its alleged tax arrears (see "RFE/RL Newsline," 15 June 2004). RC

...AS PROSECUTORS LASH OUT AT OLIGARCHS' UNION HEAD
A spokeswoman for the Prosecutor-General's Office on 15 June accused Russian Union of Industrialists and Entrepreneurs (RSPP) President Arkadii Volskii of attempting to influence the jury in the trial of Khodorkovskii and Lebedev, Interfax reported. At a recent conference in St. Petersburg, Volskii expressed his confidence in the innocence of the two men and said that Yukos would not be bankrupted. Prosecutor-General's Office spokeswoman Natalya Vishnyakova told journalists: "Volskii's position can only be characterized as disrespectful to the legal process. The Yukos case is not an arbitrary business dispute. It is a criminal matter involving embezzlement and large-scale tax evasion." Duma Deputy Mikhail Zadornov (independent) told RosBalt on 16 June that the government is not interested in bankrupting Yukos. "The reaction of investors would be clear -- until at least the end of the current political cycle, there would be no direct investment in our economy, no investment in our stock market," Zadornov said. RC

FOREIGN MINISTER NURTURES 'FRIENDLY RELATIONS WITH ISLAMIC COUNTRIES'...
Foreign Minister Sergei Lavrov attended the opening session of a meeting of the Organization of the Islamic Conference (OIC) on 15 June in an effort to further relations with the Islamic world, expressing Russian gratitude to "the leadership of many Islamic countries that have supported the idea of granting [Russia] observer status in the OIC," ITAR-TASS and other Russian media reported. "We're seeking to maintain and develop friendly relations with Islamic countries," Lavrov told delegates, according to ITAR-TASS. "We are interested in making our relations with the Islamic world closer due to the multinational and multiconfessional nature of our state." Lavrov added: "Mutual understanding...is very important when extremists are trying to force the world into a so-called clash of civilizations.... It is necessary to maintain the unity of the international community in order to create a safer world order." Russian President Vladimir Putin attended an OIC meeting as an observer in October, making him the first head of state from a major country with a Christian majority to have participated in an OIC conference (see "RFE/RL Newsline," 16 and 17 October 2003). Moscow considers participation in the OIC crucial amid perceived tensions between the non-Muslim and Muslim communities because it wants to remain within both camps, strana.ru commented on 15 June. VY

...TOUTS RUSSIAN PROJECTS FOCUSED ON MUSLIMS...
Lavrov also made a reference in his 15 June address to the OIC to ongoing talks between Russian officials and the OIC secretariat on a possible conference in Moscow on "Islam, peace, development, and the fight against terrorism" under OIC patronage, and he noted that the Russian government has decided to create an Islamic university under the auspices of Moscow University. VY

...AND REITERATES MOSCOW'S VIEWS ON MAJOR MIDEAST ISSUES
Addressing the OIC plenum on 15 June, Lavrov called for the early implementation of the UN resolution on Iraq that was approved on 8 June, ITAR-TASS reported. "We call for the earliest restoration of Iraq's sovereignty in compliance with UN Security Council Resolution 1546," Lavrov said. He also said that Moscow's stance on a Middle East settlement coincides with that of the OIC. "Our approach to [Ariel] Sharon's initiative on delimitation with the Palestinians has not changed," Lavrov said. "The measures concerning Israel's withdrawal from the Gaza Strip and the West Bank may play an important positive role in restoring the peace process." AH

RUSSIAN INTERIOR MINISTER WARNS OF 'SUPERTERRORISM'
Speaking at a meeting of CIS interior ministers in the Moldovan capital Chisinau on 15 June, Interior Minister Rashid Nurgaliev said the world faces a new threat of "superterrorism," strana.ru and RBK reported. "With major financial and human resources, terrorism is developing into a new phenomenon of the 21st century -- superterrorism," Nurgaliev said. "We are talking about the possibility of the use by terrorists of nuclear and chemical weapons or other means of destroying environmental and information infrastructures." Citing recent instances of terrorism in Russia and the CIS, Nurgaliev added that there is a danger of terrorist acts "with a much higher number of casualties." He also called illegal immigration and human trafficking another security threat to CIS countries that contributes to the growth of transnational crime. VY

PRIME MINISTER WANTS TO REDUCE DEPENDENCE ON ENERGY EXPORTS...
Speaking at an economic forum in St. Petersburg on 15 June, Prime Minister Mikhail Fradkov said that Russia's potential for economic growth from the export of nonrenewable energy resources has been exhausted and that the share of such exports in GDP will be drastically reduced in the coming years, RosBalt and polit.ru reported. Fradkov said Russians should be exploring new ways to stimulate growth through technological innovation, an enhanced domestic market, and improving the investment climate. Fradkov urged Russia's business community to participate in "solving the strategic goals of the Russian state and society," according to polit.ru. He added that the government has administrative-reform goals as well, not simply economic ones. VY

...AND PRIVATIZE FEDERALLY OWNED LANDMARKS
At the same forum on 15 June, Fradkov announced that his government plans to privatize some historic palaces and other landmarks that are currently owned by the federal government, polit.ru reported. The Culture and Mass Communications Ministry supports the idea and the government will soon confer with all the relevant institutions, Fradkov added. Some 140 historically important buildings are tentatively set for privatization in St. Petersburg alone, he said, in an effort to see them restored from the miserable conditions in which they currently stand (see "RFE/RL Newsline," 26 April 2004). The sell-off plans require a government instruction on lifting the federal-property status of such objects as well as legislative changes, Fradkov said. VY

SENIOR FSB OFFICIALS HONOR ANDROPOV
Unspecified Federal Security Service (FSB) leaders laid wreaths at the gravesite of former KGB Chairman and Soviet leader Yurii Andropov on 15 June to mark the 90th anniversary of his birth (see "RFE/RL Newsline," 15 June 2004), Ekho Moskvy reported the same day. The report added that the leaders pledged to erect a monument to Andropov in Moscow. Meanwhile, the FSB's public-relations department announced the establishment of a scholarship in Andropov's honor for cadets at FSB training academies. In an article devoted to Andropov in "Rossiiskaya gazeta" on 15 June, FSB Director Nikolai Patrushev said he cannot conceal his regard for Andropov. "I cannot and do not want to be impartial toward him," wrote Patrushev, whose KGB career began in Karelia when Andropov was head of the Soviet secret police. VY

ELECTION COMMISSION WANTS DIRECTLY ELECTED SENATORS
The Central Election Commission (TsIK) has drafted a reform plan under which members of the Federation Council would be chosen by direct election, "Gazeta" reported on 16 June, citing Commissioner Vladimir Lysenko. The plan is intended to compensate for the commission's proposed plan to elect all Duma deputies through party lists and to eliminate single-mandate-district representatives in the lower house (see "RFE/RL Newsline," 7, 10, and 21 May 2004). The commission is proposing that both reforms be adopted in time for elections to both chambers in 2007. Federation Council Constitutional Law Committee Chairman Yurii Sharandin said the TsIK's proposal would require changing Article 95 of the constitution, which says that Federation Council members must represent the executive and legislative branches of the governments of the federation subjects. Center for Political Technologies Deputy Director Aleksei Makarkin, however, said the reform would merely require the amendment of several constitutional laws. Center for Political Technologies General Director Igor Bunin was quoted in "Izvestiya" on 16 June predicting that the TsIK proposal will never be adopted because it is not in the political interests of Unified Russia or President Vladimir Putin. RC

PRESIDENTIAL WORKING GROUP PREPARES MILITARY-REFORM PLANS
An administration working group chaired by presidential aide Igor Shuvalov has prepared two draft military-reform projects, including one that would eliminate virtually all current conscription deferments, "Vedomosti" reported on 16 June. Under that plan, the service term for conscripts would be reduced to between six and eight months by 2008. The second plan would reduce the service term to one year and maintain some current deferments, including those relating to illness and for men who are sole providers for their families. Shuvalov's commission also noted that the Defense Ministry has complained of the "extremely low educational level" of conscripts. It called on the army to transform itself into an educational institute that would guarantee servicemen professional skills and benefits, such as free higher education and the opportunity to enter state service. An anonymous source within the presidential administration told the daily that the current situation in which children of rich families avoid service by going to college while only the children of poor and dysfunctional families serve in the military could lead to the collapse of the army altogether. The working group also recommended that the military once and for all root out hazing and that the government ensure sufficient funding for the military. RC

BROADCAST SECTOR PARALYZED BY LICENSING ORGAN'S SLOW START
The Federal Tenders Commission (FKK), the government organ that issues television- and radio-broadcasting licenses, on 15 June held its first session since being reconfigured (see "RFE/RL Newsline," 11 June 2004), "Nezavisimaya gazeta" reported on 16 June. Commissioner Vladimir Pozner told the daily: "You cannot call this a session, really. It was more of a working meeting." FKK Chairman and Deputy Culture and Mass Communications Minister Leonid Nadirov described the meeting as "a very interesting and useful conversation." Pozner said the documents on the FKK's work that were presented by the ministry "were obviously not worked out" and that it would be impossible for the FKK to work effectively using them. The commission's work has been suspended since the former Media Ministry was dissolved in March and, according to participants in the 15 June session, it could still be several months before it again begins reviewing applications. Further delay could cost the sector millions of dollars, Federal Press and Mass Communications Agency Director and FKK member Mikhail Seslavinskii told the daily. RC

PUTIN LAUDS CHECHEN INTERIOR MINISTER
In televised footage shown on the Rossiya television channel on 15 June, President Putin commended Chechen Interior Minister Major General Alu Alkhanov for his role in restoring order in Chechnya while "treating the population with care," Russian agencies reported. But at the same time, Putin stressed that Alkhanov needs to monitor carefully the distribution of compensation to those Chechens whose property was destroyed during the fighting of the past decade. Putin said Alkhanov should continue this monitoring even though as a candidate in the 29 August elections for a new Chechen leader he must suspend his activities as interior minister. That formulation could be construed as meaning that the Kremlin's endorsement of Alkhanov's candidacy is not final and unconditional, but contingent on his success in preventing further embezzlement of funds earmarked for compensation. Alkhanov confirmed on 15 June that he will accept nomination as a candidate in the 29 August ballot, stressing that he intends to continue the policies of slain pro-Moscow Chechen leader Akhmed-hadji Kadyrov. LF

10 CANDIDATES SIGNAL INTENTION TO CONTEST CHECHEN BALLOT
Chechen Central Election Commission (TsIK) Deputy Chairman Buvaisari Arsakhanov said in Grozny on 15 June that two more people informed the commission that day of their intention to seek registration to contend the 29 August ballot, Interfax reported. The total number of potential candidates now stands at 10, not including Alkhanov, who has not yet formally informed the TsIK of his plans. The 10 are Mariyat Gorchkhanova, a woman on staff of the Urus-Martan administration; Chechen presidential adviser Vakha Visaev; Moscow businessman Malik Saidullaev; the deputy chairman of the Rostov Oblast Union Arbitration Managers, Marat Zainalabidov; Grozny lawyer Adam Edilov; Chechen State University lecturer Sultan Aisakhanov; Magomed Abdomirov, a Chechen businessman from the village of Tolstoi-Yurt; Hussein Bibulatov, a pensioner living in a small town in Moscow Oblast; Zura Magomadova, general director of a Moscow company; and Sergo Khachukaev, an unemployed lawyer, Russian media reported on 15 June. LF

PACE RAPPORTEUR ENDS VISIT TO ARMENIA
Polish parliamentarian Jerzy Jaskiernia met in Yerevan on 14 June with President Robert Kocharian and Prime Minister Andranik Markarian, Noyan Tapan and RFE/RL's Armenian Service reported. Jaskiernia arrived in Yerevan last week to assess the Armenian authorities' compliance with the demands listed in a resolution adopted in late April by the Parliamentary Assembly of the Council of Europe (PACE) (see "RFE/RL Newsline," 29 and 30 April 2004). In comments on 12 June, Jaskiernia said that Yerevan has already met several of the conditions outlined in the resolution and intends to comply with the others. Armenian opposition politicians have questioned Jaskiernia's objectivity and argue that the publication at the expense of the Armenian parliament of a book he authored constituted a bribe intended to induce him to report favorably on the Armenian government's actions (see "RFE/RL Newsline," 8 June 2004). LF

ARMENIAN FOREIGN MINISTER HOLDS TALKS IN U.S.
Vartan Oskanian met in Washington on 14 June with U.S. Secretary of State Colin Powell to discuss approaches to resolving the Karabakh conflict, Turkish-Armenian relations, and the funds Armenia is to receive under the Millennium Challenge Account, RFE/RL's Armenian Service reported the following day, quoting State Department spokesman Richard Boucher. Oskanian was also scheduled to meet with national security adviser Condoleezza Rice and with Assistant Secretary of State for European and Eurasian Affairs Elizabeth Jones. LF

ARMENIAN OFFICER KILLED IN BORDER SHOOTING
An Armenian Army lieutenant and "many" Azerbaijani servicemen died last week in a cross-border exchange of fire, Armenian Army Chief of General Staff Colonel General Mikael Harutiunian said on 15 June, RFE/RL's Armenian Service reported. Harutiunian said the firefight erupted after Azerbaijani troops occupied a hill on the border near the town of Ijdevan overlooking a local reservoir, and Armenian forces moved forward to defend a nearby facility that pumps irrigation water to five neighboring villages (see "RFE/RL Newsline," 9 June 2004). He said the Armenians will not withdraw unless the Azerbaijanis pull back to their previous positions. Noyan Tapan reported on 14 June that separate groups of Organization for Security and Cooperation in Europe (OSCE) officials monitored the situation in the region on both sides of the border on 12 June and planned to do so again on 15 June. LF

FORMER ARMENIAN PREMIER SAYS REFORMS INCOMPLETE
Hrant Bagratian, who served as Armenia's prime minister from February 1993 to November 1996, told Noyan Tapan on 16 June that it is premature to claim, as Finance and Economy Minister Vartan Khachatrian recently did, that the process of structural reforms in Armenia is complete. Bagratian singled out as sectors where reform has not yet taken root education, health care, culture, public housing, pensions, the legal system, and management of state-owned enterprises. Current Prime Minister Markarian last year praised the economic reforms initiated by Bagratian, which he said paved the way for the achievements of subsequent governments, including his own (see "RFE/RL Newsline," 25 September 2003). LF

GEORGIAN OFFICIALS CHARGED FOLLOWING MASS JAIL BREAK
The former director of the Geguti penal colony in western Georgia and his two deputies were charged with criminal negligence on 16 June, two days after 41 prisoners escaped from the facility after killing one of the guards, Caucasus Press reported. Six of the escapees have already been apprehended; Interior Minister Irakli Okruashvili said on 14 June that any who voluntarily turn themselves in within 48 hours will not be punished. Justice Minister Roland Giligashvili resigned in September after 129 prisoners escaped from Rustavi jail; over 100 of them have since been recaptured (see "RFE/RL Newsline," 12, 16, and 22 September 2003). LF

THREE SENIOR ABKHAZ OFFICIALS RESIGN
Sergei Shamba has resigned as foreign minister of the unrecognized Republic of Abkhazia, Vice President Valerii Arshba told Interfax on 15 June. Shamba, together with First Deputy Prime Minister Astamur Tarba and State Security Service head Givi Agrba, submitted their resignations to protest the assassination last week of Garri Ayba, a leading member of the opposition Amtsakhara movement (see "RFE/RL Newsline," 10 June 2004). Arshba did not say whether the resignations of Tarba and Agrba have been accepted. Also on 15 June, abkhaziya.info quoted Shamba as calling for the entire cabinet to step down and for the creation of a new "government of popular trust" that will remain in power until the presidential elections due in October. The Georgian daily "Mtavari gazeti" predicted on 16 June that Shamba will contest that ballot; Shamba himself said in February he had not yet decided whether or not to do so. LF

KAZAKH PRESIDENT ADDRESSES OTAN PARTY...
President Nursultan Nazarbaev addressed the seventh extraordinary congress of the pro-presidential Otan party on 15 June, Khabar Television reported the same day. Nazarbaev used the opportunity to air a number of policy positions. Calling Otan a "powerful political force for modernization," the president disputed allegations that political reforms are lagging behind economic reforms and pointed to the country's multiparty system, effective parliament, and 4,500 NGOs. He also announced the creation of a National Commission on Democracy and Civil Society, "Kazakhstan Today" reported. Nazarbaev went on to state that the media have an obligation to observe the law and avoid stirring up interethnic strife. Calling himself the "guarantor of the constitution," the Kazakh president stressed that "freedom means responsibility." DK

...AND SETS DATE FOR PARLIAMENTARY ELECTIONS
Nazarbaev told the congress that he has signed a decree setting parliamentary elections for 19 September, Khabar Television reported on 15 June. He added that the elections will be a "test" for the country. The president also announced that he will continue the practice of appointing the akims (governors) of Astana and Almaty, KazInform reported. The posts will be integrated into the electoral system in 2006-07, when the process of decentralization reaches its logical conclusion, the president said. DK

NEWSPAPER REPORTS RUSSIAN IRE AT KAZAKH ARMS DEAL
Russia's "Kommersant-Daily" reported on 15 June that Kazakhstan's decision to sign a contract with Britain's BAE Systems to modernize its antiaircraft defenses has angered the Kremlin. According to the report, Kazakhstan recently signed a $1 billion contract with BAE Systems, a British arms manufacturer that owns a controlling stake in Kazakhstan-based Air Astana. Moscow is indignant at the move, which it believes will give NATO access to elements of the CIS unified air-defense system; "Kommersant-Daily" reports that the Kremlin has already apprised the Kazakh leadership of its extreme dissatisfaction. The newspaper goes on to say that the BAE Systems contract fits in with a pattern of pro-Western moves by Kazakh President Nazarbaev, who is allegedly attempting to stave off the possibility of a U.S.-inspired, Georgia-style "Rose Revolution" in Kazakhstan. DK

KYRGYZ PRESIDENT URGES BANK REFORMS
President Askar Akaev told top managers at the National Bank on 14 June that they need to undertake a series of reforms, Kabar news agency reported the same day. Akaev said that the bank needs to reduce staff and eliminate redundant high-level posts, KyrgyzInfo reported on 15 June. The president also noted that the National Bank should work to develop more effective procedures for out-of-court settlements in resolving disputes, adding that the current opacity of the judicial system is an obstacle to foreign investment. Turning to financial issues, Akaev noted that commercial banks need to lend more extensively and aggressively, akipress.org reported. He also said that changes to banking and tax legislation are needed. DK

TAJIK PARTY HEAD PROTESTS UNREGISTERED STATUS
Sulton Quvvatov, chairman of the unregistered Taraqqiyot (Progress) opposition party, announced on 15 June that the Justice Ministry's continued refusal to register the party reflects poorly on the image of President Imomali Rakhmonov, Asia Plus-Blitz reported the same day. Quvvatov wrote in an appeal, "Under these conditions, it is difficult to consider our country a democracy with the rule of law." Taraqqiyot, which was founded in May 2001, has been trying to gain legal status for nearly three years, the Institute for War and Peace Reporting reported on 14 April. Quvvatov warned that if the Justice Ministry denies the party registration one more time, he will appeal to the International Court of Justice in The Hague. DK

PROSECUTOR WARNS TAJIK NEWSPAPER
The Prosecutor-General's Office has warned the independent newspaper "Nerui Sukhan" that some of its recent articles are in violation of Tajik media law, Asia Plus-Blitz reported on 15 June. According to the prosecutor-general, the weekly has published articles defaming the Tajik president, members of parliament, and other officials. Mehrojiddin Hakimov, an administrator at the Prosecutor-General's Office, told RFE/RL's Tajik Service on 14 June that the materials in question incited regional and ethnic strife and contained defamatory passages. Deputy Editor in Chief Muhiddin Idizoda denied to Asia-Plus that the newspaper has published materials defaming the president. The independent newspaper has a history of contentious relations with the authorities (see "RFE/RL Newsline," 5 and 7 January 2004). DK

CHINESE, UZBEK PRESIDENTS MEET IN TASHKENT
Chinese President Hu Jintao met with Uzbek President Islam Karimov on 15 June to discuss bilateral relations and sign a number of cooperation agreements, Uzbek Television reported the same day. At a news conference after the talks, Karimov told journalists that the two countries stand united in their fight against the "three evils" of international terrorism, separatism, and extremism, Uzbek Radio reported. Karimov also said that Uzbekistan supports Chinese policy toward Taiwan. For his part, the Chinese leader described Uzbek-Chinese relations as marked by "friendship and cooperation based on the principles of mutual respect." The two leaders signed a declaration on developing and strengthening friendly relations and a cooperation agreement to fight narcotics trafficking, Uzbekistan's official news agency UzA reported. The report noted that trade volume between the two countries in the first four months of 2004 totaled $220 million, a 134 percent year-on-year increase. DK

BELARUSIAN PRESIDENT ISSUES DECREE ON SALE OF UNPROFITABLE FARMS
President Alyaksandr Lukashenka has issued a decree establishing a "simplified" procedure for the sale of loss-making state-run farms to legal entities (see "RFE/RL Newsline," 3 June 2004), Belapan reported on 15 June, quoting the presidential press service. The edict requires that the new owners of unprofitable farms pay off their debts, preserve their staff positions, and not change their specialization. The decree stipulates that ailing farms will be put up for sale at a price equivalent to 20 percent of the value of their net assets. If a farm's assets have a zero or negative value, its selling price will be set at 19,000 Belarusian rubles ($9). The edict entitles the Agriculture Ministry to issue permits for the sale of farms wholly or partly controlled by the central government, while locally owned farms will be sold by consent of the regional, district, and city executive committees. JM

HUNGER STRIKE IN MINSK SPAWNS 'FOR JUST ELECTIONS' INITIATIVE
Uladzimir Kolas, chairman of the Council of Belarusian Intelligentsia, proclaimed the formation of a For Just Elections movement in Minsk on 15 June, Belapan and RFE/RL's Belarusian Service reported. According to Kolas, the movement intends to contribute to the consolidation of democratic forces in Belarus and work toward preventing election rigging by the authorities. The proclamation took place at a news conference in front of the house where three Belarusian lawmakers -- Syarhey Skrabets, Valery Fralou, and Uladzimir Parfyanovich -- and a group of opposition activists were on strike for the 13th consecutive day (see "RFE/RL Newsline," 15 June 2004). "We are at one with you in your demands to amend the election legislation in order to shield the [17 October parliamentary] elections from falsification," Kolas read from a special appeal to the lawmakers adopted by the Council of Belarusian Intelligentsia, the Belarusian Helsinki Committee, and the Belarusian Social Democratic Party (Popular Assembly). In view of the deteriorating health of the hunger-striking deputies, Kolas asked the protesters to halt the hunger strike and take the lead of the For Just Elections initiative. "We will take that lead," Fralou responded. JM

UKRAINIAN PARLIAMENT REJECTS OPPOSITION-SPONSORED BILL ON 'HIDDEN' REVENUES
The Verkhovna Rada on 16 June rejected a motion to include on the agenda a bill on "hidden" budget revenues in 2004 that was prepared by Our Ukraine, UNIAN reported. Apart from Our Ukraine, the motion was supported by other opposition caucuses but fell 15 votes short of the 226 votes required for approval. Our Ukraine believes that the revenue part of the 2004 budget was underestimated and that Prime Minister Viktor Yanukovych's cabinet is concealing 10 billion hryvnyas ($1.9 billion) in budget revenues and 5 billion hryvnyas of pension-fund revenues. On the basis of these assumptions, Our Ukraine demands that the government substantially raise wages and pensions (see "RFE/RL Belarus and Ukraine Report," 6 April 2004). JM

UKRAINIAN TRANSPORT MINISTER TO HEAD NEW PARTY
The Ukrainian Justice Ministry on 15 June registered the Revival Party (Partiya Vidrodzhennya), Interfax reported. The new party is led by Transport Minister Heorhiy Kirpa. Justice Minister Oleksandr Lavrynovych told journalists that the Revival Party is the 97th party registered in Ukraine. Kirpa said the registration of his party was supported by nearly 28,000 signatures from all of Ukraine. JM

SERBIAN LEADER DENIES RESIGNATION RUMORS...
The Serbian government issued a press statement on 15 June denying rumors that Prime Minister Vojislav Kostunica of the Democratic Party of Serbia (DSS) had resigned, the private Beta news agency reported. Speculation was rife that Kostunica had decided to quit rather than endorse either of the two candidates in the second round of Serbian presidential elections, which are slated for 27 June. The two candidates are Tomislav Nikolic of the ultranationalist Serbian Radical Party (SRS) and Boris Tadic of the Democratic Party, which is a bitter rival of the DSS. Kostunica has met with both candidates but not commented on the election. Two of Kostunica's coalition partners, as well as many of Serbia's political and economic backers in the international community, have endorsed Tadic (see "RFE/RL Newsline," 14 and 15 June 2004). In related news, Tadic told reporters after his meeting with Kostunica that they must ask the prime minister himself whom he will endorse (see End Note below). PM

...AS FOREIGN MINISTER GOES ON THE STUMP
Serbia and Montenegro's Foreign Minister Vuk Draskovic, who has already endorsed Tadic, and EU foreign- and security-policy chief Javier Solana said in Luxembourg on 15 June that they hope that Serbian voters will choose a "future in Europe" on 27 June, RFE/RL's South Slavic and Albanian Languages Service reported. Draskovic added that early Serbian parliamentary elections will take place at the end of the year, stressing that he is confident that democratic and pro-European forces will win. Nikolic and several politicians from the governing coalition have already suggested that early elections will or might be necessary after the 27 June vote, but the government has not announced them. Draskovic's Serbian Renewal Movement (SPO) is one of the smaller members of the governing coalition. He is known as a dynamic speaker but not as one who always chooses his words carefully. PM

MONTENEGRIN LEADER CALLS FOR INDEPENDENCE VOTE
Parliament speaker Ranko Krivokapic, who heads the pro-independence Social Democratic Party, said in Podgorica on 15 June that the joint state of Serbia and Montenegro "doesn't work," RFE/RL's South Slavic and Albanian Languages Service reported. He called for a referendum on independence to end the political impasse (see "RFE/RL Balkan Report," 14 February 2003). The joint state came into being in early 2003 as a result of strong EU pressure. Wags have dubbed the state "Solania" after EU foreign- and security-policy chief Solana, who was its primary architect. PM

ROMANIAN LOWER HOUSE APPROVES BILL RESTRICTING INTERNATIONAL ADOPTIONS
The Chamber of Deputies on 15 June approved a bill restricting international adoptions of Romanian children, Mediafax and international news agencies reported. The bill has already been approved by the Senate. It stipulates that children can be adopted by foreigners only if those foreigners are the children's immediate relatives and only if a search for Romanian adoptive families has failed. The bill was devised in response to criticism from the European Union, but has subsequently met with criticism from the United States. In a statement released after the lower house's approval, the U.S. Embassy in Bucharest said it and the administration in Washington are "disappointed" that Romanian lawmakers have ignored the "well-known" position of the United States on this issue (see "RFE/RL Newsline," 11 June 2004). MS

SOCIAL DEMOCRATS WILL DECIDE ON PRESIDENTIAL CANDIDATE IN SEPTEMBER
Prime Minister Adrian Nastase said on the private Antena 1 television channel on 14 June that his Social Democratic Party (PSD) will decide in September on its candidate for the November presidential elections, Mediafax reported. The first round of the presidential ballot is slated for 28 November and, in the event of a runoff, the election is to be decided on 12 December. MS

IS OUTCOME OF ROMANIAN LOCAL ELECTIONS AN OMEN FOR FALL PARLIAMENTARY BALLOT?
Final results released by the Central Electoral Bureau on 15 June show that the National Liberal Party (PNL)-Democratic Party alliance has won 553 seats on county councils, 10 more than the ruling PSD, Mediafax reported. The elections to county councils are based on an electoral system similar to that which will be employed in the November parliamentary elections. The ultranationalist Greater Romania Party (PRM) came in third place, followed by the Hungarian Democratic Federation of Romania (UDMR), and the Humanist Party (PUR). The PSD won the largest number of seats on local councils, followed by the PNL-Democratic Party alliance. The ruling party also won the largest number of mayoralties, 900 out of 3,138. On 20 June, 1,843 mayoralties will be decided in runoffs. MS

NEW ROMANIAN INTERIOR MINISTER SWORN IN
Marian Saniuta was sworn in on 15 June by President Iliescu as Romania's new interior minister, Mediafax and AFP reported. He replaces Ioan Rus, who resigned on 13 June and is running for the position of Cluj mayor (see "RFE/RL Newsline," 14 June 2004). Saniuta is an economist and previously served as head of the Romanian Agency for Foreign Investments. MS

ROMANIA CONGRATULATES BULGARIA ON FINALIZING EU ACCESSION NEGOTIATIONS
The Romanian government on 15 June congratulated Bulgaria on having successfully finalized EU accession negotiations, Mediafax reported (see "RFE/RL Newsline," 14 June 2004). In a press release cited by the agency, the government said Sofia's successful conclusion of the negotiations is "the first confirmation that the calendar for Romania and Bulgaria's accession would be respected" by the EU. Both countries are to join the EU on 1 January 2007, provided they conclude their negotiations. The cabinet added that it is "up to us now to further confirm this by concluding accession negotiations in the second half of 2004." Reuters on 15 June cited Enlargement Commissioner Guenter Verheugen as saying both Bulgaria and Romania are to face a "safeguard clause" that could delay their accession by one year if they renege on pledges to meet EU standards. Verheugen added that the mechanism would be invoked only if there were serious shortcomings, noting that safeguard clauses were not employed for the 10 countries that joined the EU on 1 May. However, Romanian Foreign Minister Mircea Geoana said Bucharest would accept such a clause only after "very intense negotiations." MS

MOLDOVAN PRESIDENT URGES PARLIAMENT TO APPROVE AGREEMENT WITH GAZPROM
President Vladimir Voronin on 15 June urged parliament to approve an agreement with the Russian concern Gazprom that, according to the president, would settle Moldova's debt for gas deliveries, Infotag reported. At a meeting with Party of Moldovan Communists deputies, Voronin said Gazprom has agreed to write off $64 million of the $115 million debt. Voronin said that after paying off the total debt, Moldova will no longer owe Gazprom anything, since payments for current gas deliveries are settled. MS

UNCERTAINTY CLOUDS SERBIAN PRESIDENTIAL VOTE
Serbia's runoff presidential election on 27 June seems set to involve much more than just filling a largely symbolic post. Issues on the table range from Serbia's relations with the West to the future of the government.

The final official results of the 13 June first round of voting show that Tomislav Nikolic of Vojislav Seselj's Serbian Radical Party (SRS) won 30.6 percent of the vote among a field of 15 candidates, RFE/RL's South Slavic and Albanian Languages Service reported. His opponent in the 27 June runoff will be reformist candidate Boris Tadic of the Democratic Party, who took 27.3 percent of the vote in an election widely seen as a barometer of Serbian political sentiment.

Making his political debut, business kingpin Bogoljub Karic received 18.2 percent of the ballots cast, while Dragan Marsicanin of the Democratic Party of Serbia (DSS) and the governing coalition took 13.3 percent. Many observers consider Marsicanin's showing as disappointing as Karic's was impressive.

Under recent legislation, the ballot is valid even though the turnout was only 47.7 percent of all registered voters.

An unnamed European diplomat told Reuters in Belgrade on 14 June that Nikolic probably has peaked, but that "Tadic is a rising star" who might well win in the second round, picking up the majority of the votes from the defeated candidates.

But several observers have suggested that the low turnout for the first round demonstrates continuing widespread voter apathy, particularly among the young. Many analysts added that the impressive showing by Karic, who promised to create hundreds of thousands of jobs, indicates that poor voters in particular are concerned with economic issues and dissatisfied with the ability of the political establishment to improve the economy.

It is not clear whether Nikolic's showing reveals primarily the continuing popularity of nationalism or a deep general alienation from the governing parties. He is nonetheless expected to pick up some second round support from Karic voters disgusted with the political establishment.

In any event, London's "The Independent" reported on 14 June that "some fear a victory for Mr. Nikolic could have a catastrophic impact on Serbia's economy, driving away foreign investors and stalling desperately needed aid from Western financial institutions." Tadic noted that "the world is watching.... We cannot solve our problems without foreign help," the daily added. Meanwhile in Luxembourg, EU foreign ministers called on Serbian voters to "say no to the past" and back Tadic.

Referring to Nikolic, London's "The Times" observed on 14 June that "the man they call 'the gravedigger' looked as if he would start burying Serbia's hopes of European integration last night." The daily believes that "while the rest of Europe unites, much of Serbia continues to wallow in a Balkan vortex of nationalist pride, maudlin self-pity, and stubborn refusal to understand how the world has moved on since the collapse in October 2000" of the regime of former Yugoslav President Slobodan Milosevic.

Meanwhile, Serbian political leaders have begun preparing for the second round. Officials of the governing G-17 Plus political party said in Belgrade on 14 June that they will support Tadic. G-17 Plus leader and Deputy Prime Minister Miroljub Labus said after talks with Prime Minister Vojislav Kostunica of the DSS that it will be clear after the runoff whether the government will remain in power or call new elections.

Finance Minister Mladjan Dinkic, who is deputy leader of G-17 Plus, said that a Nikolic victory "will push Serbia back into the 1990s" and frighten off the international financial institutions and foreign investors whose support Serbia needs, "The Independent" reported.

The governing Serbian Renewal Movement (SPO) and its leader Vuk Draskovic called on "all democratic forces" to back Tadic, the Belgrade daily "Danas" reported. Tadic, for his part, told RFE/RL that among his immediate tasks is to start "very constructive" talks with Karic.

But the big question mark is Kostunica, whose DSS is the largest party in the coalition. As of the morning of 16 June he had not made any endorsement, although he had met with both Nikolic and Tadic.

Kostunica's reasons for hesitating are not difficult to fathom, because none of the choices he faces is pleasant. It is highly unlikely that he would endorse any candidate from the SRS, but were he to back Nikolic, Kostunica would most probably face international isolation and the loss of his smaller coalition partners. Withholding any endorsement would widely be seen as a failure to join with other "reformers" against the SRS and hence be regarded as tantamount to an endorsement of Nikolic.

The main obstacle preventing Kostunica from joining Labus and Draskovic in endorsing Tadic is the bitter rivalry between the Democratic Party and the DSS. Political expediency may yet prompt Kostunica to swallow his pride and back Tadic, but this is not a foregone conclusion.

In any event, the second round could just be the start of Kostunica's troubles. Nikolic, Labus, and Marsicanin have all suggested that new general elections might or will be in order after the second round. In that case, the prime minister would find himself entering a campaign in the wake of Marsicanin's humiliating showing in the first round. Were the DSS also to finish a parliamentary election behind not only the SRS and the Democrats but also Karic as well, Kostunica's days as party leader might be numbered.

If Kostunica is able to avoid an early general election, he will be under strong pressure at home and abroad to bring the Democrats into the government, particularly if Tadic wins the presidency. The Democrats could then be expected to drive a much harder bargain than they did at the beginning of the year, when Kostunica opted instead for a minority government with the parliamentary support of Milosevic's Socialists.

By forming a broad-based coalition of parties largely untainted by association with the Milosevic regime, Kostunica would at least ensure for himself the good will of Serbia's foreign sources of economic and political support, who had hoped for a "reformist" coalition after the December 2003 elections. But there is also another possibility, namely that Kostunica will extract himself at some point from a no-win situation by resigning. This would enable him to build up his strength from the political sidelines while others are left with the thankless task of governing an impoverished, crime-ridden country that lags well behind most of its neighbors in Euro-Atlantic integration. Quitting might seem out of character for Kostunica, but rumors of his resignation were so widespread in Belgrade on 15 June that the government felt compelled to issue a press release denying them.

AFGHAN LEADER ADDRESS U.S. CONGRESS...
Afghan Transitional Administration Chairman Hamid Karzai addressed a joint session of the U.S. Congress on 15 June, international news agencies reported. Karzai said that prior to the terrorist attacks in the United States on 11 September 2001, terrorists subjected the people of his country "to unspeakable terror even though" they "were among the most pious Muslims in the world," CNN reported on 15 June. "These atrocities continued for many years, and the world remained unengaged" in Afghanistan, Karzai said. The Afghan leader thanked the United States for helping his country with resources, leadership in the international community, and "most importantly with the precious lives" of U.S. troops. He labeled the relationship between Kabul and Washington as a "partnership" and asked for more investment by U.S. companies in Afghanistan. AT

...AND MEETS WITH U.S. PRESIDENT, DENYING ANY DEALS WITH WARLORDS
Karzai also met with President George W. Bush on 15 June, international news agencies reported. At a news conference after the meeting, Karzai said that while his administration has been talking to the warlords, no deals or coalitions have been made. According to a White House press statement (http://www.whitehouse.gov), Karzai added that his administration does not refer to the "warlords" by that name, as "some of those people are respected leaders of the Afghan resistance" against the Soviet invasion and "former presidents." Karzai said that there are "bad people" in Afghanistan with whom his administration is "not making a deal" or talking. Recent reports have indicated that Karzai held discussions with former mujahedin leaders, some of whom command private militias, in a bid to secure their support in September elections. Moreover, there were reports that Karzai has continued his negotiations with some members of the former Taliban regime in order to include them in a postelection government in Afghanistan (see "RFE/RL Afghanistan Report," 10 June 2004). AT

DEMONSTRATORS DEMAND AFGHAN LEADER'S RESIGNATION
Over 100 demonstrators demanded the resignation of Chairman Karzai at a political rally held in Kabul on 15 June, Hindukosh News Agency reported. The demonstration, which was organized by the Afghan Justice and Democracy Front, focused on the fact that, according to the agreement signed in Bonn in 2001, Karzai's term in office expires in June. Demonstrators also claimed that the election law recently signed by Karzai is undemocratic (see "RFE/RL Afghanistan Report," 2 June 2004). Sayyed Eshaq Gailani, a presidential candidate from Afghanistan's National Unity Movement, said in May that Karzai's administration would not be legitimate beyond June (see "RFE/RL Newsline," 14 May 2004). AT

HEAD OF REFUGEE DEPARTMENT IN SOUTHERN AFGHAN PROVINCE SLAIN
Hamid Agha, the head of the refugee department in Kandahar Province, was shot dead, the BBC reported on 15 June. Two of Hamid Agha's bodyguards were also shot, but their condition is not known. No one has claimed responsibility for the killing. AT

MISSILE FIRED AT ISAF BASE IN KABUL
A missile was fired on 15 June at the headquarters of the NATO-led International Security Assistance Force (ISAF) in Kabul, Peshawar-based Afghan Islamic Press reported. One Afghan soldier is reported to have been injured in the attack. AT

IRAN REPORTEDLY GETS EAST ASIAN NUCLEAR ASSISTANCE
The U.S.-China Economic and Security Review Commission, which was established by Congress in 2000, describes possible WMD transfers to Iran in its 15 June "2004 Report to Congress" (http://www.uscc.gov/researchreports/2004/04annual_report.PDF). The report describes China's expanding energy cooperation with Iran and Sudan and cites analysts who suspect "WMD-related transfers as a component of some of its energy deals." The report also describes "China's cooperation with Pakistan and Iran in nuclear and missile-related technologies," its supply to Iran of advanced conventional weapons, and its provision of dual-use chemical-weapons related equipment. Japan's "Sankei Shimbun" newspaper (http://www.sankei.co.jp/) reported on 15 June that Iran and North Korea will soon test a nuclear detonator. Quoting an anonymous "military source," the newspaper reported that six Iranian experts visited North Korea in May to hold discussions on a six-month neutron irradiation testing project that will begin in July. BS

TEHRAN UNHAPPY WITH MODIFIED IAEA RESOLUTION
Although a tough draft resolution that criticizes the level of Iranian cooperation with the International Atomic Energy Agency (IAEA) has been toned down, it is still too tough for Tehran's taste. The draft resolution -- prepared by Britain, France, and Germany -- backed away from earlier demands that Iran forsake its plan to build a heavy-water reactor and toned down the wording in the document, which nevertheless "remained tough," according to AP on 16 June. The resolution pressures Iran to be transparent on its nuclear program but does not mention any deadlines. According to AP, the Iranian delegation's meeting with IAEA Director-General Muhammad el-Baradei and European delegates was fruitless. Hussein Musavian, spokesman for the Iranian delegation to a meeting of the IAEA's board of governors, said after the meeting, "This is not acceptable. It does not meet our expectations for substantial revisions, not at all," Reuters reported. Expediency Council Secretary Mohsen Rezai said on 15 June in Tehran that the three European countries have mistaken Iranian cooperation for weakness, ISNA reported. He warned of permanent damage to Iran-Europe relations. BS

TEHRAN CALLS FOR COLLECTIVE SECURITY SYSTEM IN PERSIAN GULF
Iranian First Vice President Mohammad Reza Aref-Yazdi visited the Sultan Qabus University in Muscat on 15 June and expressed Iran's willingness for a scholarly exchange, IRNA reported. During a 14 June meeting with Oman's Deputy Prime Minister for Cabinet Affairs Fahd bin-Mahmud al-Said, Aref-Yazdi called for the creation of a collective security system, IRNA reported. He described collective security and economic cooperation as the way to achieve regional development and tranquility, adding that the presence of foreigners in the region causes instability. Aref-Yazdi said events in Iraq illustrate his point. BS

PERSIAN GULF NAUTICAL TENSIONS PERSIST
Brigadier General Ali Reza Afshar, deputy chief for defense and cultural affairs at the Armed Forces Headquarters, on 15 June denounced the recent Qatari attack on an Iranian fishing vessel that allegedly entered Qatari waters, IRNA reported the next day (see "RFE/RL Newsline," 14 June 2004). Afshar said it is not unusual for fishing vessels to enter the territorial waters of littoral states. For example, in the previous week, the Islamic Revolution Guards Corps stopped seven vessels from the United Arab Emirates and detained 22 of their crew. Meanwhile, the Iranian Foreign Ministry twice summoned Qatar's Ambassador Saleh Ibrahim al-Kuwari on 15 June, ISNA reported. Iranian Deputy Foreign Minister Dr. Hadi said, "Contrary to initial claims made by local Qatari officials, it has now become clear that the attack was carried out in calm and still waters." Dr. Hadi went on to say that the Iranian vessels had permits and were attacked without warning or justification. He demanded an explanation and compensation. BS

IRAN DENIES MOVING TROOPS TO IRAQI BORDER
An anonymous "reliable political source" in Iran denied on 15 June that the Islamic republic has deployed four military divisions along its southwestern border, ISNA reported. The source was reacting to a report in that day's "Al-Sharq al-Awsat" daily from London, which said that the four divisions are stationed "near the Iraqi border in the Al-Amarah and Al-Basrah sector and in the vicinity of Dezful in the Maysan sector and Shalamcheh in the Al-Basrah sector." "Al-Sharq al-Awsat," which cited anonymous "reliable Iraqi sources," also reported that Iranian military intelligence personnel have infiltrated Iraqi territory. These sources suggested that Iranian forces might enter Iraq upon the withdrawal of U.S. forces. ISNA's anonymous source contended that such allegations reflect the alleged U.S. desire to continue occupying Iraq. Iran's Deputy Interior Minister Ali Asqar Ahmadi said on 12 June that plans are being drafted to have the police take over security duties along the border with Iraq, Fars News Agency reported. Ahmadi said that the Islamic Revolution Guards Corps is responsible for the northwestern border and the army handles the southwest. The law handing over responsibilities to the police has been approved, and the plan will be implemented after organization charts are prepared and a budget is allocated. BS

IRAQI OIL OFFICIAL ASSASSINATED IN KIRKUK...
Ghazi Talabani, the security chief for Iraq's Northern Oil Company, was assassinated outside his home in Kirkuk on 16 June, KUNA reported. Talabani was the cousin of Patriotic Union of Kurdistan (PUK) head Jalal Talabani. KUNA reported that the PUK has blamed terrorist group Al-Qaeda for the attack. Meanwhile, AP quoted Iraqi Civil Defense Corps General Anwar Amin as saying that three gunmen attacked Talabani's car after his bodyguard briefly exited the vehicle in a crowded marketplace. The bodyguard was wounded in the attack. Talabani is the third Iraqi official to be assassinated in Iraq this month. KR

...AS ATTACKS ON OIL FIELDS HALT DISTRIBUTION
Iraqi Oil Minister Thamir al-Ghadban confirmed on 15 May that two attacks on an Iraqi pipeline that feeds storage tanks in the southern Iraqi port city of Al-Basrah have halted deliveries to the port, Al-Jazeera reported the same day. One unidentified local shipping agent told the satellite news channel that the targeted line was "seriously damaged," while a second trunk line was intact but closed. Repairs on the pipeline could take up to 10 days at a cost of $60 million per day, international media reported. The 15 June attack was the fourth on Iraqi pipelines in nine days. KR

CAR BOMB DETONATES IN AL-RAMADI
A car bomb detonated on 16 June in the Iraqi city of Al-Ramadi, which is located 110 kilometers west of Baghdad, killing at least three individuals, international media reported. Al-Jazeera television said that three foreigners were killed in the explosion, while Reuters news agency reported that the attack killed four Iraqis. Reuters quoted witnesses who said that several foreigners were also believed to be among the casualties. The attack destroyed an Iraqi police car and a civilian four-wheel-drive vehicle, Reuters reported. Iraqi police and U.S. forces cordoned off the area following the explosion. KR

IRAQ PURCHASES RECONNAISSANCE PLANES, HELICOPTERS
Iraq this week purchased a number of reconnaissance planes and helicopters from Jordan for its air force, Baghdad's "Al-Sabah" reported on 15 June. Lieutenant General Amir al-Hashimi said that the fleet would be deployed to air bases throughout the country and serve as the core of the Iraqi air force. Iraqi pilots have been sent to Jordan and other countries to receive training on the new planes. U.S. Brigadier General Mark Kimmitt confirmed the purchase in a 15 June Baghdad press briefing, saying that the aircraft were purchased from Jordan "as part of a plan to provide surveillance capability to the growing Iraqi security forces." The first two reconnaissance aircraft purchased "represent the initial acquisition of a tentative force of 16 aerial-observation and surveillance aircraft intended to assist in the protection of electrical and oil assets as well as border and coastal security," Kimmitt said. Delivery of the fleet is expected to be completed by mid-July, he added. KR

U.S.-SPONSORED IRAQ POLL SHOWS WIDESPREAD ANTI-AMERICAN SENTIMENT
A opinion poll of Iraqis sponsored by the Coalition Provisional Authority (CPA) and carried out in mid-May has found that 92 percent of Iraqis surveyed consider the United States an occupying force and 54 percent of those surveyed said they believe all Americans behave in a manner similar to the behavior of U.S. soldiers depicted in the Abu Ghurayb prisoner-abuse photos, AP reported on 16 June. AP obtained a copy of a multimedia presentation on the poll, which has not been released to the public. Some 55 percent of Iraqis surveyed said that they would feel safer if U.S. troops departed immediately; 28 percent of those surveyed responded the same way in January. Respondents gave the coalition an 11 percent confidence rating; it stood at 47 percent in November. Eighty-one percent of Iraqis said that their opinion of radical Shi'ite cleric Muqtada al-Sadr had improved in May from three months earlier, while 64 percent of respondents said that the activities of al-Sadr loyalists had strengthened the unity of Iraq, AP reported. However, only 2 percent said they would support al-Sadr for president; 3 percent said they would support deposed dictator Saddam Hussein. Some 1,093 Iraqis were randomly surveyed in six cities: Baghdad, Ba'qubah, Al-Basrah, Al-Diwaniyah, Al-Hillah, and Mosul. KR

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