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Security Watch: December 14, 2001

14 December 2001, Volume 2, Number 46
PUTIN TELLS GERMAN CHANCELLOR HE IS SATISFIED WITH PROGRESS IN AFGHANISTAN... During his brief informal meeting with German Chancellor Gerhard Schroeder in Hannover, Russian President Vladimir Putin discussed with him the current situation in Afghanistan and further steps to combat international terrorism, RIA-Novosti reported on 9 December. Putin told journalists the same day that he appreciates the efforts Germany made last week in hosting talks on the composition of the future Afghan government. "You cannot reach a situation with which everyone is 100 percent satisfied, but I think the accord was the optimal outcome that could have been reached," AP quoted Putin as saying.

...AS RUSSIA EXPANDS ITS PRESENCE THERE. According to Russian government sources, Russia is the only country that has a full-fledged state program of humanitarian aid to Afghanistan, and has already established centers along the northern border of Afghanistan from which humanitarian goods can be transported into the central provinces of that country, RIA-Novosti reported on 4 December. Meanwhile, Valerii Vostrotin, the head of the Russian operative group in Afghanistan, said that his people have cleared a mined tunnel through the Salang Pass, and by doing so have opened the strategic highway from Tajikistan to the central provinces of Afghanistan, RIA-Novosti reported on 7 December.

FORMER FSB CHIEF TO WARN WEST OF TERRORIST CAPABILITIES... Nikolai Kovalev, the former director of the FSB and the deputy chairman of the Duma Security Committee, said on 6 December that Russia's intelligence community will continue to give the United States any information it receives indicating that terrorists are in possession of chemical, biological, or atomic weapons, reported. Kovalev added that he supports President Putin's efforts to establish closer ties with the U.S. because that policy is facilitating the battle against international terrorism, and because it has made the West more attentive to Russia's opinions.

...AS SECURITY COUNCIL SECRETARY COMPLAINS ABOUT DOUBLE STANDARD ON TERRORISM. While addressing a meeting with his counterparts from Kazakhstan, Kyrgyzstan, Tajikistan, Armenia, Belarus, and Moldova, Russian Security Council Secretary Vladimir Rushailo said "some countries in the West cannot refrain from adding fuel to conflicts in Russia's sphere of influence," Russian media reported. At the same time, Rushailo said that Turkey and Saudi Arabia have a "double-standard policy regarding Chechen terrorists," especially as far as their financing is concerned. Rushailo added that Russia is consulting with the United States on the issue, and would like to initiate an investigation of countries' compliance with the UN resolution on preventing the financing of terrorist organizations.

DUMA DRAFTS BILL ON EXTREMISM. The Justice Ministry has drafted a law on extremism that is intended to counter radical and violent political groups, "Izvestiya" reported on 3 December. Although the bill has been in preparation since 1999, the 11 September terrorist attacks on the United States have given it special significance, according to Sergei Nikulin, one of the bill's authors. The bill includes a provision that permits banning or suspending activities of extremist organizations not only by a court order, but by an administrative directive of the government. In addition, the bill contains a provision that makes "subversion of national security in any form a crime." The definition of subversion includes "any public appeal for committing socially dangerous acts," Nikulin added.

RUSSIAN FOREIGN MINISTER TELLS POWELL RETREAT FROM ABM TREATY IS POSSIBLE... Igor Ivanov said following his talks with visiting U.S. Secretary of State Colin Powell on 10 December that his country continues to view the 1972 ABM Treaty as a "crucial element of international security," Russian and Western media reported. However, Ivanov said Russia "does not exclude and even takes into account" the possibility that the U.S. will withdraw from the treaty, as it then did three days later. "In fact, such an option is incorporated into the language of the treaty," he added. Ivanov also announced that U.S. President George W. Bush plans to visit Russia by mid-2002, and that by that time both sides should codify a "gentleman's agreement" discussed earlier on reducing each country's nuclear stockpile to 1,700-2,200 warheads.

...AND ZHIRINOVSKY SAYS IT SHOULD BE SCRAPPED... Speaking at the National Press Club in Washington on 4 December, Duma deputy speaker and Liberal Democratic Party of Russia leader Vladimir Zhirinovsky said that the ABM treaty and START accords are "obsolete" and called for them to be renegotiated, Russian and Western news services reported on 4 December. In addition, Zhirinovsky called for the revision of NATO's founding documents and to incorporate Russia into the Atlantic alliance. Zhirinovsky also suggested that the U.S. should take advantage of Russia's ties with Iraq, Iran, and North Korea to facilitate its fight against global terrorism. He said Russian influence can help block terrorist threats emanating from those countries. Finally, Zhirinovsky said the U.S., NATO, and Russia are key military powers that should share responsibility for trouble spots in the world, and that he regrets his previous "anti-American sentiments inspired by Cold War spirit."

...AS POWELL TELLS DUMA HE UNDERSTANDS RUSSIA'S MIXED FEELINGS TOWARD U.S. Meanwhile, Powell told President Vladimir Putin during their meeting that the limited missile defense shield the U.S. wants to deploy would not undermine Russia's deterrence potential and is directed against "irresponsible states that might use this type of mass destruction weapon," RIA-Novosti reported on 10 December. Powell also met with the heads of Duma factions and committees, after which Duma deputy speaker and Yabloko leader Vladimir Lukin said: "Powell did not show all his cards, but he said he understands that the Russians might have mixed feelings concerning cooperation with America."

PUTIN SAYS CLOSER U.S.-RUSSIAN TIES ARE A STRATEGIC COURSE... During an interview with top editors of Greece's print and electronic mass media on the eve of his visit to that country, President Vladimir Putin said on 5 December that Russia's recent improvement of relations with the U.S. "is not a tactical move, but a strategic policy," RIA-Novosti reported. In this context, Russia is not worried about the United States' development of closer ties with Central Asian states, or the American presence in the region, he continued. Russia intends to develop its relations with the U.S. in such a way that the confidence it has in the relationship will leave no room for such concerns, Putin stressed.

�AS ANALYST SAYS PUTIN IS STILL FINDING HIS WAY. Writing in "Moskovskii komsomolets" on 5 December, the international relations director at the Institute of U.S.A. and Canada, Anatolii Utkin, said that despite Russia's clear moves toward better relations with the West, President Putin has yet to determine the course the country will ultimately take. Utkin said Putin is hesitant to make big concessions to the United States for fear of antagonizing China and the Arab world.

RUSSIAN PREMIER HITS THE ROAD TO DISCUSS OIL, ARMS� Mikhail Kasyanov arrived in Ottawa on 10 December on the first leg of his voyage to Canada, Venezuela, and Brazil to discuss world oil prices, "Kommersant-Daily" reported. The daily said that Kasyanov hopes to use Canadian and Brazilian access to markets in Third World countries to sell Russian arms, including Tu-204 transport aircraft and Mi-38 medium-lift helicopters. During the South American segment of his trip, Kasyanov seeks to promote Russian weapons for the regional market, especially air-defense systems.

RUSSIA AND NATO SET UP PERMANENT JOINT COUNCIL. At a joint session of foreign ministers from Russia and the 19 NATO members in Brussels on 6 December, the creation of the NATO-Russia Permanent Joint Council was announced, Russian and international media reported. NATO Secretary-General Lord George Robertson said that the new council will not be a consultative organ, but an independent decision-making body for areas of joint concern, especially in the international fight against global terrorism, the BBC reported. However, Robertson stressed that Russian President Putin has accepted NATO's condition that it retains its right to make decisions independent from Russia in other areas.

PUTIN VISITING GREECE STRESSES RUSSIA'S ROLE IN SOUTHEASTERN EUROPE� Speaking to journalists in Athens following his talks with his Greek counterpart Costis Stephanopoulos on 6 December, President Putin said that "Russia will not allow anyone to redraw the borders in the Balkans whatever the slogan they use for it," Russian news agencies reported. Putin also stressed that Russia historically played and will continue to play an important role in Southeastern Europe. He noted the special ties between two countries in the past, their present economic cooperation, and said that Russia wants more access to tenders for the rearmament programs of the Greek army.

�AND IMPORTANCE OF STRONG TIES AND COOPERATION WITH GREECE. While in Athens Putin also stated that Russia and Greece are no longer divided by "ideological differences," and are thus able to build a partnership based "on national and geopolitical interests," reported on 8 December. Putin also called on "foreign powers" to return cultural valuables and historical artifacts taken from Greece. His comments were apparently addressed to those in Europe and America who have criticized Russia's reluctance to return cultural items it took as war trophies from Germany and other European countries during World War II. Putin and his Greek counterpart, Constantinos Stephanopoulos, signed cooperation agreements on combating international terrorism and organized crime, as well as on strengthening cultural, trade, and military ties, Russian and Western media reported. Meanwhile, LUKoil head Vagit Alekperov, who accompanied Putin to Athens, said his company is hoping to take part in the privatization of the Greek national oil company Hellenic Petroleum, "Vedomosti" reported on 6 December.

RUSSIA CALLS ON ISRAEL, PALESTINE TO HALT ESCALATION OF VIOLENCE. In a statement circulated on 4 December, Russian Foreign Ministry spokesman Aleksandr Yakovenko urged Israel and Palestine "not to yield to emotions and give up the hopeless 'eye for an eye' logic," Interfax reported the following day. Yakovenko said: "Moscow is extremely concerned about the dramatic developments over the Palestinian territories," and added that " that the Palestinian leadership should take decisive and effective measures to restrain terrorism.

�AND PROPOSES TO CREATE A COUNCIL FOR THE ARCTIC AND FAR NORTH� Speaking in Ottawa on 10 December, Kasyanov also spoke of the possibility of forming a special government council for the Arctic and Far North, Interfax reported on 11 December. At a Russian-Canadian seminar devoted to problems of the Far North, Kasyanov said that among priorities of the special council would be the preservation of the northern environment, the development of natural resources, and addressing the problems of indigenous communities.

�AS RUSSIA PREPARES TO ASK FOR EXPANSION OF ITS ARCTIC TERRITORY. A spokesman for the Russian Foreign Ministry announced on 10 December that Russia has informed the United States, Canada, Norway, and Denmark that it is ready to submit an official request to the UN for the extension of Russia's exclusive economic zone in the Arctic Ocean by 1.2 million square kilometers (see "RFE/RL Security Watch," no. 12, 9 October 2000, and no. 36, 17 September 2001) ITAR-TASS reported. The territory Russia seeks is extremely rich in hydrocarbon resources. The spokesman admitted that both the U.S. and Canada are "very reserved" about Russia's intentions to gain control of the territory.

RUSSIAN AIRLINE PROMOTES AIR CORRIDOR FROM ASIA TO NORTH AMERICA THROUGH SIBERIA. Speaking at the opening of an air and space exhibition in Krasnoyarsk, KrasAir head Boris Abramovich said that opening an air corridor from Asia to North America over his city could reduce flights between the two continents by up to 4 1/2 hours, "Izvestiya" reported on 3 December. Because of its favorable geographic position, Krasnoyarsk may indeed became a central hub for two major international passenger and cargo routes: from southeast Asia over the North Pole to North America; and from Europe over Siberia to Japan, Korea, and China.

RUSSIA TO MEET OPEC DEMAND OVER OIL EXPORT CUT� Russia will cut oil exports to 150,000 barrels per day beginning on 1 January, the government's Information Department told Interfax on 5 December, following Russian Prime Minister Kasyanov's meeting with the heads of major Russian oil companies. "Taking the current situation into account, the Russian government and the oil companies find it possible to further reduce oil exports," the department said.

�AS EXPERTS WARN THAT GLOBAL OIL PRICES WILL CONTINUE TO FALL. Slavneft President Andrei Shtorkh said on 6 December that the decision by Prime Minister Mikhail Kasyanov's government to cut Russian oil exports in compliance with OPEC requests will not prevent global oil prices from falling, "Kommersant-Daily" reported. The dynamics of global oil prices are regulated by factors much more complicated than the simple economic principles of supply and demand, added Moscow Globalization Institute Director Mikhail Delyagin.

PRIME MINISTER SAYS RUSSIA SEEKING TO INVEST IN UKRAINIAN PRIVATIZATION PROJECTS. Speaking in Moscow at a meeting of the Russian-Ukrainian Intergovernmental Economic Commission on 4 December, Premier Kasyanov said that Russia has a keen interest in taking part in major privatization projects in Ukraine in "complete accordance with local legislation," Prime-TASS reported. In addition to joint ventures in the energy sector, Russia seeks to invest in Ukrainian aviation, transport, and agricultural machinery production, Kasyanov said. In response, his Ukrainian counterpart Anatoliy Kinakh said Kyiv supports the creation of more joint financial and industrial groups between the two countries.

CENTRAL BANK TELLS CITIZENS TO REFRAIN FROM BUYING EUROS� Russia's Central Bank is urging citizens not to acquire euros in cash and to exchange their European currencies by the end of the year, RBK news agency reported on 4 December. "We have data that criminal clans may throw onto the market a large amount of false bank notes, and are asking the population to refrain from buying euros," Central Bank spokesman Aleksandr Yurov was quoted by the agency as saying. Meanwhile, reported that most Russian citizens are looking to shed their German marks, of which some 5.5 billion ($2.5 billion) are circulating in Russia. He said that Russians are exchanging marks not for euros, but for U.S. dollars, "as they understand that the U.S. is politically more stable than the 12 states of the European Union."

SAYS SOME RUSSIAN REGIONS MAY BE PROCLAIMED BANKRUPT. Deputy Finance Minister Bella Zlatkis announced on 4 December that her ministry is examining the possibility of proclaiming seven subjects of the Russian Federation bankrupt, reported. Zlatkis said that she cannot name the financially troubled regions, as that could complicate their status even further. She added that should the regions be declared bankrupt, the federal government will take over their financial management.

MOST RUSSIANS REGRET DEMISE OF USSR, BUT DO NOT FAVOR ITS RESTORATION. Over 70 percent of Russians lament the fall of the Soviet Union, and this number continues to rise, reported on 9 December, citing an opinion poll conducted by the Public Opinion agency on the occasion of the 10th anniversary of the official dissolution of the Soviet Union on 8 December 1991. But the poll of 1,500 respondents in 44 regions also reported that some 72 percent do not think that restoring the Soviet Union is possible or necessary. The number of those who regret the disintegration of the Soviet Union has grown by 10 percent since 1992, when the first poll on that issue was conducted, reported.

MORE BOOKS ABOUT PUTIN. The Russian market for political best-sellers is inundated with books about President Putin, which has led to the establishment of his own small cult of personality, reported on 3 December. Political scientist Vadim Pechenev, in his newly released book "Putin: Last Chance for Russia?" compares the Russian president with the hero of the Aleksandr Pushkin poem "Yevgenii Onegin," while in his book "Russian Challenge," the French author Victor Lupan makes comparisons between Putin and Napoleon. Finally, the astrologist Aleksandr Astragor, in his book "The Mystic Side of Putin," offers his readers a formula of Putin's soul that, in his view, is governed by the planets Mars, Venus, and Pluto.

NEW AUTOMATIC RIFLE FOR RUSSIAN ARMY WILL REPLACE LEGENDARY KALASHNIKOV. The armament producing factories in Izhevsk began serial production of the new automatic rifle AN-97, which will replace the Kalashnikov as the standard personal weapon for the Russian armed forces, Ekho Moskvy reported on 10 December. The AN-97 is designed by Gennadii Nikokonov and exceeds the Kalashnikov in shooting efficiency by 1.5 times.

RUSSIA EVALUATES DISMISSAL OF NORTHERN FLEET COMMANDERS� The unexpected reshuffling of the top commanders of Russia's Northern Fleet (see "RFE/RL Newsline," 3 December 2001) 15 months after the sinking of the "Kursk" nuclear submarine had both international and domestic aspects, "Kommersant-Daily," "Vedomosti," and "Izvestiya" commented on 3 December. They argued that, from the foreign policy perspective, the Russian navy has no significant adversary other than NATO, unlike other branches of the Russian armed forces. President Vladimir Putin considered the command of the Northern Fleet to be hampering the current rapprochement between Russia and NATO in general, and Russia and the U.S. in particular, according to the newspapers. From the domestic point of view, the newspapers argued that the Northern Fleet command should never have allowed the "Kursk" to begin naval exercises with a full arsenal of combat torpedoes and missiles on board. Had the command forbidden this, even the most critical incident on board would never have led to the destruction of the entire submarine.

�AS NEW COMMANDERS OF THE NORTHERN AND PACIFIC FLEETS ARE APPOINTED. On 5 December, Vice Admiral Gennadii Suchkov was appointed commander of the Northern Fleet, Interfax reported. Suchkov was previously the commander of the Pacific Fleet. To replace him, former Pacific Fleet Chief of Staff Vice Admiral Viktor Fedorov was appointed to command the Pacific Fleet. Meanwhile, Admiral Vyacheslav Popov, the recently dismissed commander of the Northern Fleet, has been offered a top post at the Atomic Energy Ministry, Russian agencies reported on 5 December.

STEPASHIN, KUDRIN COMPETE FOR COUNTRY'S AUDIT CONTROL. Speaking at a conference of private auditors on 3 December, state Audit Chamber head Sergei Stepashin said the country needs a unified system of financial investigation and auditing, and that his agency could play a role in coordinating all controlling authorities, "Kommersant-Daily" reported. However, Stepashin's comments prompted an immediate response from Finance Minister Aleksei Kudrin, who said that a single financial controller already exits in Russia -- the recently created Financial Monitoring Committee within his ministry.

DRAFTER OF CORPORATE BEHAVIORAL CODE SUSPECTED IN CORRUPTION. The Corporate Behavioral Code that was prepared by Igor Kostikov, the head of the Federal Securities Commission, and presented by him to the West as an example of Russia's movement toward a civilized market economy, is in fact a document that leaves much room for abuse, "Novaya gazeta" reported on 3 December. According to experts from the Association for Protection of Minority Shareholders, Kostikov has added many loopholes into the document in order to suit his own business interests. The paper noted that, as Kostikov is both the head of the Russian securities market and his own investment company that controls up to 40 percent of the municipal bond market in Russia, it is not surprising that there are no provisions in the code to ban such conflicts of interest.

DID PROSECUTOR-GENERAL'S OFFICE CLEAR EX-FINANCE MINISTER IN MISUSE OF $450 MILLION? The Prosecutor-General's Office announced that it will hand over to court the case of Colonel General Georgii Oleinik, the chief military financial officer who is accused of misappropriating some $450 million from the military budget, ITAR-TASS reported on 10 December. According to investigators, in 1996 Oleinik transferred those funds as payment for construction materials for military needs to the bank account of the Ukrainian-British company United Energy International, Ltd. However, the materials were never supplied and the money disappeared. Despite this, the investigators claim, the Prosecutor-General's Office absolved former Finance Minister and current head of Northern Oil Andrei Vavilov, who authorized the deal, of criminal responsibility. The Prosecutor-General's Office did not find Vavilov guilty of criminal conduct, only negligence.

DUMA WILL REVIEW REQUEST THAT PROSECUTOR-GENERAL'S OFFICE INVESTIGATE VOLOSHIN. First deputy Duma speaker Lyubov Sliska announced on 11 December that the lower house included on its agenda a bill asking the Prosecutor-General's Office to investigate the activities of presidential administration head Aleksandr Voloshin, RIA-Novosti reported. Sliska said the request was initiated by the Communist and People's Deputy factions following mass media reports that Voloshin has appeared as a central figure in several corruption investigations. The parliamentarians will also request the investigation of former Vladivostok Mayor Viktor Cherepkov, whom Voloshin allegedly offered $2 million to bow out of the city's mayoral race, according to Sliska.

RUSSIA TO RECEIVE DOCUMENTS ON BONY AFFAIR. Russian law enforcement authorities have been informed by the U.S. Justice Department that it is ready to transfer documents to them concerning the Russian side of the Bank of New York (BONY) scandal, "Vremya novostei" reported on 11 December. The documents pertain to the investigation of illegal transactions in 1994 worth some $2 million between BONY and the Russian company Nizhnegorodets. The transactions were allegedly authorized by then-governor of Nizhnii Novgorod Boris Nemtsov, and Anatolii Chubais, who headed the State Property Committee at that time. Several days after the transactions were made, "Nizhnegorodets" declared bankruptcy. The documents reportedly name Nataliya Gurfinkel-Kagalovskaya, a central figure in the BONY affair, as the person who made the transaction.

INTERIOR MINISTRY CONFIRMS INTERNATIONAL WARRANT OUT FOR BEREZOVSKY. Viktor Prokopov, the deputy chief of the Interior Ministry's Main Directorate for Criminal Investigation, said that his agency has opened a criminal case against embattled entrepreneur Boris Berezovsky and issued an international warrant for his arrest, reported on 11 December. He added that the whereabouts of Berezovsky abroad is well known, and that it is up to the Prosecutor-General's Office to decide how to proceed.

MASS MEDIA AND COMMUNICATIONS U.S. AMBASSADOR EXPRESSES CONCERN ABOUT TV-6. U.S. Ambassador to Russia Alexander Vershbow told reporters in Vladivostok on 3 December that he is "somewhat worried by the situation around TV-6" (see "RFE/RL Newsline," 29 November 2001). He said that the U.S. "is concerned that a truly independent voice could be lost as a result of the dispute" over the station. He also expressed the hope that the dispute can be resolved without the channel being closed.

NEWSPAPER SAYS LUKOIL TAKING CONTROL OF TV-6 ON KREMLIN'S ORDERS. LUKoil head Vakhit Alekperov is taking control of TV-6 not because of his business interests, but under the direct instruction of the Kremlin, which would like to put a leash on the independent station, "Moskovskie novosti" wrote on 4 December. The paper argued that, had Alekperov really needed a mass media outlet, he never would have sold the profitable REN-TV, as he did recently. Furthermore, Alekperov also has personal interests in the deal -- by abiding by the Kremlin's will now, he can expect many more favors from it in the future, the daily said.