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U.S.: Yukos Auction Cuts Confidence In Russian System

20 December 2004 -- The United States says the auction of Russian oil giant Yukos's main subsidiary to a little-known Russian buyer erodes confidence in that country's legal and judicial system.

State Department spokesman Richard Boucher told reporters in Washington today the case raises concerns about transparency and the independence of Russia's investment and tax laws, and the courts.

Boucher said the U.S. government believes the case has eroded Russia's reputation as a place to do business.

In Moscow, the Russian Justice Ministry today said if the winner of the auction yesterday for Yuganskneftgaz does not pay within 14 days, the unit may become government property.

A little-known Russian company, Baikalfinansgrup (Baikal Finance Group), placed the winning bid for Yuganskneftgaz in a move that surprised financial analysts. Officials of the group, which bid $9.3 billion dollars, have not made any comment.


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