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White House Disappointed Over Yukos Unit's Sale

22 December 2004 -- The U.S. White House says it is "disappointed" that Russian authorities went forward with the sale of the Yukos oil company's main asset -- the Yuganskneftegaz oil producing subsidiary.

White House spokesman Scott McClellan said Washington had hoped for a solution that would allow for the legitimate enforcement of Russian tax laws but avoid harming investors in Yukos.

McClellan said the United States has communicated to the Russian government repeatedly that the authorities' handling of the Yukos case could have a "chilling effect" on foreign investment in Russia.

Russian President Vladimir Putin, after talks in Germany with Chancellor Gerhard Schroeder, yesterday said the 19 December auction of Yugasnkneftegaz for more than $9.3 billion was in complete compliance with Russian law.

Putin said the new owners -- of the previously unknown Baikalfinansgrup (Baikal Finance Group) -- have been active in the energy sector for many years, but he did not identify them.

The Russian authorities forced the sale Yuganskneftegaz to repay massive tax debts its says are owed by Yukos. Yukos says it has been targeted for political reasons.