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Security Watch: October 1, 2003

1 October 2003, Volume 4, Number 39
SUMMIT FOCUSES ON INTERNATIONAL ISSUES... U.S. President George W. Bush and President Vladimir Putin completed a two-day summit at the U.S. presidential retreat of Camp David on 27 September with a joint declaration in which the leaders pledged to cooperate in solving key international problems, Russian and international media reported. The statement said the two countries will increase cooperation in combating international terrorism and will boost bilateral energy, trade, and high-technology cooperation. They also pledged to work together to protect intellectual-property rights. At a press conference on 27 September, the presidents said they had discussed the situations in the Middle East, Iraq, Iran, Afghanistan, and North Korea, as well as preventing the proliferation of weapons of mass destruction and strengthening the Russia-NATO relationship, RIA-Novosti and RTR reported. Putin said that Russia sees no alternative in the Middle East to the so-called road-map peace plan. He also confirmed Russia's willingness to participate in postwar stabilization and reconstruction in Iraq after the UN Security Council adopts an appropriate resolution. Bush said that he and Putin had agreed to work together to persuade Iran not to develop nuclear weapons.

...AS OLD ENEMIES STILL STRUGGLING TO BECOME FRIENDS. Commenting on the atmosphere of the Camp David Summit, TV-Tsentr commentator Aleksir Pushkov said on 27 September that the personal relationship between Presidents Bush and Putin seems better than the relations between the two countries. He said that Russia and the United States have "ceased being enemies, but have not yet become friends."

EXPERTS ASSESS STATE OF U.S.-RUSSIAN RELATIONS... A position paper drafted by a group of the country's leading political scientists and experts says that Russia needs "a strategic union" with the United States, "Izvestiya,", and RosBalt reported on 26 September. A closed-door discussion of the document, titled "The Doctrine of Forming a Strategic Union Between the United States and Russia," was held in Moscow on 24 September and was attended by Council for Foreign and Defense Policy Chairman Sergei Karaganov, Foundation for Effective Politics Director Gleb Pavlovskii, and Institute of the U.S.A. and Canada Director Mikhail Nosov, as well as political scientists Sergei Kurginyan, Viktor Tretyakov, and Viktor Kuvaldin. U.S., British, and French diplomats also attended the discussion. Most participants agreed that such a strategic alliance is not only desirable, but possible. However, they noted their dissenting views on such a partnership, including those who criticize Russia's role as the United States' "junior partner" and the Russian-military industrial complex, whose economic interests depend on perpetuating U.S.-Russian animosities, reported. Most analysts, though, support Putin's aims of using U.S. resources to help rebuild Russia. Achieving this aim necessarily entails closer relations with the United States, reported.

...AS FORMER AMBASSADOR CALLS FOR 'SELECTIVE PARTNERSHIP.' Russia should form a "selective partnership" with Washington, Duma Deputy Speaker Vladimir Lukin (Yabloko), a former Russian ambassador to the United States, said on TV-Tsentr on 27 September. Russia should focus its foreign-policy efforts on bolstering ties with both the United States and the European Union. Russia should seek to make relations with the United States better than those with the EU, and relations with the EU better than those with the United States. TV-Tsentr commentator Pushkov noted that the United States is beginning a presidential election campaign and Putin should develop his relations with U.S. President Bush in such a way as to avoid becoming a campaign issue.

PUTIN IN U.S. FOR FIVE-DAY VISIT... President Vladimir Putin arrived in New York on 24 September for his third official visit to the United States, Russian media reported. Putin is scheduled to deliver a speech at the United Nations General Assembly on 25 September, and to hold a two-day summit with U.S. President George W. Bush at Camp David on 26-27 September. Postwar Iraq is expected to dominate the discussions. In addition, Bush and Putin will focus on energy issues, Russian media reported on 24 September, citing Economic Development and Trade Minister German Gref. Gref predicted that Russian oil supplies to the United States might be increased in 2007, and that in 2010 Russia might start supplying U.S. markets with liquefied natural gas.

...AS FORMER OLIGARCH ATTACKS HIM IN NEWSPAPER ADVERTISEMENTS. Russian tycoon Boris Berezovskii took out full-page advertisements in major U.S. newspapers on 23 September warning Washington not to trust President Putin, international media reported. Under the headline "Seven questions to President George Bush about his friend President Vladimir Putin," the advertisement accuses Putin of undermining democracy; suppressing the legislative branch, the judiciary, and the media, and overseeing genocide in war-torn Chechnya. "Any person is free to choose his friends," the advertisement read. "But friendship is based on shared values." It appeared in "The New York Times," "The Washington Post," and "The Wall Street Journal." Berezovskii, who is wanted in Russia on fraud charges and who was recently granted political asylum in Great Britain, said he paid $1 million for the advertisements, which he said had two goals. "One is to point out to the American president that there are people in Russia who understand that the current regime has committed crimes," Berezovskii, a former ally of Putin's, told Reuters. "President Putin should also understand that these crimes will not go unpunished, that not everyone has a short memory, that he has to answer for them."

PUTIN DISCUSSES DOMESTIC SITUATION AT COLUMBIA UNIVERSITY... Speaking at New York's Columbia University on 25 September, President Putin rejected the idea that his administration is suppressing freedom of speech, Russian media reported. He said that there was not freedom of speech in Russia for more than 100 years, so it is not exactly clear what he is being accused of repressing. After the end of the Communist era in Russia, there came "a rebirth of freedom, and freedom of speech was understood as license, as anarchy, and a striving for destruction by any means," Putin said. Asked about the strengthening of the secret services under his administration, Putin said that they should not interfere with domestic civil-society matters, but should "protect the interests of the state." He noted that these services had fallen into a state of almost complete decay, and that in recent years it has been possible to reassemble them and to organize their work. Commenting on Putin's remarks about press freedom, Soviet-era political prisoner and human rights activist Lev Ponamarev told the BBC on 26 September that what Putin calls "anarchy" and "license" is something that liberals regard as the crowning democratic achievement of post-Communist Russia.

...AFFIRMS RESULTS OF PRIVATIZATION... Speaking with U.S. business leaders at the New York Stock Exchange on 25 September, President Putin said he would consider granting an amnesty to capital accumulated in violation of the law during the privatizations of the 1990s, and other Russian media reported. Putin said that such a move would be highly unpopular in Russia, but he is ready to consider it as part of an overall solution reached together with the Russian business community. Putin also reassured his audience that there will be no wide-scale revision of the results of privatization, as doing so would cause more harm to the economy than the botched privatization did itself.

...URGES BOOSTING ENERGY EXPORTS TO UNITED STATES. President Putin also told U.S. business leaders that Russia is hoping to substantially increase its energy exports to the United States, Russian media reported. He said Moscow hopes to provide 10 percent of U.S. oil needs within the next five to seven years. To this end, Russia is improving its oil-export infrastructure, including construction of an oil terminal in Murmansk, Putin said. He said that increasing energy exports to the United States would benefit both countries, as Russia will gain access to a huge market and to investment capital while the United States would acquire more stable and predictable energy supplies. He also advocated closer U.S.-Russian ties in space exploration and other high-technology areas.

RUSSIA PRESIDENT ADDRESSES UN GENERAL ASSEMBLY... Putin on 25 September addressed a session of the UN General Assembly in New York, calling for a stronger role for the UN Security Council in global affairs, Russian and Western media reported. Putin said the council should become "the base for the global antiterrorism coalition." He warned that when dealing with contemporary threats to international security, the global community must adopt solutions whose "legitimacy is beyond all doubt." He repeated Moscow's position on Iraq and called for the direct involvement of the United Nations in postwar stabilization and administration there. Putin said Russia is ready to participate more actively in peacekeeping or stabilization forces -- including in Iraq -- but only under the auspices of the UN.

...AS PARLIAMENTARIAN LAUDS HIS BALANCING ACT. Commenting on President Putin's UN speech on 25 September, Duma Deputy Andrei Kokoshin (Fatherland-Unified Russia), who chairs the Duma's Committee on Russians abroad and CIS relations and who is a former Russian Security Council secretary who also served as first deputy defense minister in 1992-97, rejected a journalist's assertion that the speech was "colorless and empty," TV-Tsentr reported. Kokoshin said that in this speech, as he has for the last two to three years, Putin successfully balanced Russia's interests vis-a-vis the United States, the European Union, the Arab world, and China.

PUTIN MEETS WITH FRENCH, GERMAN LEADERS... On the eve of an address to the United Nations General Assembly and a summit with U.S. President Bush, Putin met briefly on 24 September with French President Jacques Chirac and German Chancellor Gerhard Schroeder, Russian and international media reported. The meeting of the three most vocal opponents to the U.S.-led war in Iraq lasted about one hour, RIA-Novosti reported. The three leaders discussed UN reform, developments in Iraq, Iran's nuclear program, and prospects for the so-called road map, the Mideast peace plan, RIA-Novosti reported. Putin also held meetings with Algerian President Abdelaziz and Brazilian President Luiz Lula da Silva.

...AND OTHER WORLD LEADERS. On 25 September in New York, President Putin met with UN Secretary-General Kofi Annan and Indian Prime Minister Atal Bihari Vajpayee, with both of whom he discussed the U.S.-drafted UN Security Council resolution on Iraq, RTR reported. Putin said a new resolution should be "a serious, working document that shows the Iraqi people that the international community is willing and able to solve its problems." The same day, Putin and New York Mayor Michael Bloomberg observed a joint training exercise of Russian and local firefighters. According to on 24 September and "Argumenty i Fakty," No. 39, Putin will also meet with former U.S. Secretary of State Henry Kissinger, U.S. Slavic studies specialists at Columbia University, and business leaders and oil executives at the New York Stock Exchange. He is also expected to visit a New York gas station that belongs to Russian oil giant LUKoil. On 26 September, he is expected to travel to Camp David for a summit with President Bush.

POLITICIANS LOOK FOR COMPROMISES ON IRAQ, IRAN. Foreign Minister Igor Ivanov told journalists in New York on 25 September that the differences between Russia and the United States over Iraq "have been left in the past," RIA-Novosti reported. "We had differences before and during the war and are not attempting to conceal this," Ivanov said. "But now we are interested in seeing the United States and other UN Security Council members find a solution to the Iraq crisis." He said that it is in the United States' interest to find such a solution. He added that U.S. Secretary of State Colin Powell has told him the United States will present its draft resolution on Iraq to the UN Security Council next week, and said that Russia will likely support it. Meanwhile, Duma Deputy Kokoshin said in Moscow that U.S. concerns about Iran's nuclear program are genuine, TV-Tsentr reported on 25 September. He added, though, that Russia's position on its cooperation with Iran is strong and able to withstand U.S. pressure. Russia, he said, is as interested as any country in making sure that Tehran does not develop nuclear weapons, although he conceded that the danger Iran might do so is real.

RUSSIA, CHINA DISCUS OIL PIPELINE... During an official visit to China, Russian Prime Minister Mikhail Kasyanov said on 25 September that Moscow will continue studying long-delayed plans to build an oil pipeline from Angarsk to the Chinese city of Datsin, but stressed that the project will be completed, Russian and international media reported. "We will continue to respect all the commitments of the Russian side on providing China's oil and gas needs," Kasyanov said. "We again stress that the most logical way to provide China with oil is through a pipeline. So we will continue to study the issue of an oil pipeline from Russia to China." Kasyanov spoke after meeting with Chinese Premier Wen Jiabao. Kasyanov said the exact route for the pipeline is being reviewed due to environmental concerns, a process that could take three or four months. The current proposal is to construct the pipeline from Angarsk to Datsin, with a spur to the Russian port of Nakhodka to supply oil to Japan. The $2.5 billion project has been delayed by the Natural Resources Ministry due to ecological concerns near the Lake Baikal region (see "RFE/RL Newsline," 3 September 2003).

...AS MOSCOW DELAYS ITS DECISION ON PIPELINE FOR ONE YEAR. Russia will not make a decision about constructing a proposed strategic oil pipeline from Angarsk to the Chinese city of Datsin earlier than August 2004, RTR and RIA-Novosti reported on 25 September, citing an unidentified government source. At that time, the source said, the government will decide between the Datsin project and the so-called Japanese option under which the pipeline would run from Angarsk to the Russian port of Nakhodka. Prime Minister Mikhail Kasyanov discussed the project during his recent visit to Beijing (see "RFE/RL Newsline," 23 and 24 September 2003). Kasyanov told journalists in Beijing that the "Chinese factor" will play a major role in the formulation of Russian policy on developing Siberian energy resources, RTR reported. He added, though, that "not all issues" have been settled. editorialized that the Chinese leadership is disappointed by Russia's delays in making a decision on the Datsin pipeline and therefore gave Kasyanov a cold welcome in Beijing.

GERMAN AMBASSADOR, U.S. COMMERCE SECRETARY UPBEAT ABOUT MOSCOW'S WTO BID... German Ambassador to Russia Hans-Friedrich von Ploetz said on 24 September that he is optimistic about Russia's chances of joining the World Trade Organization (WTO), Russian media reported. Speaking at an Internet news conference organized by RBK, Ploetz said Russia's negotiations with the WTO are making significant strides. The ambassador also praised what he called positive tendencies in the Russian economy, including a budget surplus. U.S. Commerce Secretary Donald Evans said at a press conference in Moscow on 24 September that Russia could join the WTO as early as 2004, Dow Jones reported. "I know accession in 2003 is unlikely...but I wouldn't rule out 2004 yet," Evans said. Evans added that all the WTO's 146 members must approve Russia's accession to the organization, and identified the protection of intellectual-property rights and access to Russian markets as two issues where more work is needed.

YUKOS TO RECEIVE $1 BILLION SYNDICATED LOAN... A syndicate of banks will loan oil giant Yukos $1 billion in long-term credits, Interfax reported on 25 September, citing sources in the banking industry. Yukos officials would not confirm the Interfax report. A day earlier, RBK, citing Yukos' press office, reported that the oil company had signed an agreement to secure long-term credit with a group of banks including: Citibank, Commerzbank, Credit Lyonnais, Deutsche Bank, HSBC, ING, and SG Corporate and Investment Banking. The loan will be allocated in two tranches, for three and five years, respectively, and secured with revenues from oil exports.

...AS INVESTMENT IN ENERGY SECTOR TO TOP $13 BILLION IN 2003. Investments in Russia's fuel-and-energy sector will total about $13.12 billion in 2003, Deputy Energy Minister Ivan Matlashov said on 25 September at an investment forum in Khanty-Mansiisk, RBK reported. Matlashov added that he does not foresee a drop in fuel and energy investments in 2004. In the first half of this year, the sector accounted for 29 percent of Russia's GDP, 35.4 percent of revenues to the consolidated budget, and 57 percent of foreign-currency revenues.

FINANCE MINISTRY WANTS TO INTRODUCE TERRORISM INSURANCE. The Finance Ministry is seeking to require terrorism insurance for large public events, reported on 24 September. The Finance Ministry has asked leading insurance companies to submit proposals for such a plan. Denis Bryzgalov, spokesman for the All-Russia Union of Insurers, said the favored option is to require organizers of mass events such as concerts and theater performances to buy the insurance. Another option being considered is selling insurance to spectators at such events along with their tickets.

INTERIOR MINISTER SEEKS BROADER DETENTION POWERS TO BATTLE TERRORISM. Interior Minister Boris Gryzlov has proposed increasing the length of time terrorism suspects may be detained before charges are filed, Russian media reported on 23 September. "We want the Criminal Procedural Code to allow 30 days for preliminarily detention of persons suspected of terrorism," Gryzlov said, according to RIA-Novosti. "It is the minimum necessary time for identifying them and investigating their involvement in bandit formations," RIA-Novosti quoted Gryzlov as saying. Currently, suspects may be held for 48 hours. "An excessive tilt toward defendants has been made in many respects" in the new Criminal Procedural Code, Gryzlov added. "Victims have less chance to defend themselves."

INTERIOR MINISTER DRAWS FIRE FROM RIGHTS ACTIVISTS. Gryzlov's recent proposal to increase the time terrorism suspects may be detained without charges (see "RFE/RL Newsline," 24 September 2003) has drawn fire from human rights activists, reported on 24 September. Gryzlov wants that period to be increased from the current 48 hours to 30 days. The changes, said prominent defense attorney Genrikh Padva, would harm ordinary citizens more than terrorists. "They detain a person as a terrorist, keep him for a month, and then establish that he is no terrorist, but an ordinary passerby," Padva said. "But during this month he might lose his family, his job, his health, and even his life. The Interior Ministry and the Prosecutor General's Office never bear any responsibility for that." Veteran human rights activist Sergei Kovalev told the Duma would likely approve such changes. "This is quite possible in our parliament," Kovalev said. "It is ready to pass most proposals coming from the top without ever protesting them."

FSB REPORTEDLY TESTING AN SMS MONITORING SYSTEM. The Federal Security Service (FSB) is reportedly testing a system that will automatically monitor all SMS text messages from all mobile phones in Moscow, Russian media reported on 24 September. A special computer network will scan the messages for words and phrases that might be used by criminals and terrorists. If such key words and phrases are detected, the message will be picked out and put aside for further study, NTV reported. Two leading Russian mobile-phone operators -- MTS and Beelain -- denied the reports, reported on 24 September. The first report alleging that such monitoring is taking place appeared on 23 September in "Stolichnaya vechernyaya gazeta."

AUDIT CHAMBER HEAD ASSAILS LACK OF PROGRESS IN MONEY-LAUNDERING PROBES. Sergei Stepashin has complained about the lack of progress in combating money laundering, RBK reported on 25 September. Of the 13,000 cases of suspicious financial transactions that the Committee on Financial Monitoring has forwarded to law enforcement bodies, only 13 criminal cases have been filed, Stepashin said. And not one of those 13 cases resulted in a conviction, he added. "It is very hard for law enforcement agencies efficiently to handle shady financial transactions single-handedly," Stepashin said, adding that auditing agencies need to become more involved in the process.

PRIMAKOV TRIES TO CUT A DEAL BETWEEN KREMLIN, OLIGARCHS. Former Prime Minister and head of the Russian Chamber of Commerce and Industry Yevgenii Primakov has sent President Putin a proposal for an agreement between the Kremlin and the oligarchs, "Komsomolskaya pravda" and TV-Tsentr reported on 25 and 27 September. According to the so-called Primakov Pact, the government will guarantee the results of all privatizations prior to 1998 if the oligarchs agree to pay in full all natural-resource rents to the states. Currently, up to 80-85 percent of such rents are misappropriated by the oligarchs, economist and academician Nikolai Petrakov told TV-Tsentr. Petrakov said this situation is as unjust as if a man who purchased a knife and fork claimed this gives him the right to all the food as well. However, "Komsomolskaya pravda" commented, if privatization results are to be reexamined, almost every businessperson in the country could be targeted by law enforcement, opening up vast vistas for corruption, with officials accepting payments to forestall investigations. Therefore, the Primakov Pact merits serious consideration, the daily wrote.

PROSECUTORS PRODUCE NEW ACCUSATION AGAINST FORMER NTV OWNER. The Athens Appeals Court has postponed hearing the extradition case against former Russian oligarch Vladimir Gusinskii until 29 September, after Russian prosecutors presented a new indictment against him, Russian media reported on 26 September. "Kommersant-Daily" reported on 25 September that First Deputy Prosecutor-General Yurii Buryukov presented the new document, in which Gusinskii is accused of laundering $100 million. The money-laundering case was opened shortly after a Spanish court refused to extradite Gusinskii to Russia in 2001, and Russian prosecutors intend to make it the centerpiece of their case in Athens. Defense lawyers argue that the charge will not stand because prosecutors cannot prove that the money was illegally acquired.

EES HEAD CALLS FOR RUSSIA TO BECOME A 'LIBERAL EMPIRE'... Speaking at the St. Petersburg Engineering Economics Institute, Union of Rightist Forces leader and Unified Energy Systems (EES) head Anatolii Chubais said the main goal for Russia in the 21st century is to develop "liberal capitalism" and to build up a "liberal empire," ORT,, and reported on 25 September. The most direct way to form such an empire, he said, was through the creation of a joint economic space with Ukraine, Belarus, and Kazakhstan. He also said that Russia should strengthen its position in the CIS by providing increased economic aid. Commenting on EES, Chubais said it plans to participate in "anticrisis management" of the energy grids of Georgia, Armenia, Ukraine, and Kazakhstan.

...AS PUTIN OPENS THE WAY FOR CIS CITIZENS TO SERVE IN RUSSIAN MILITARY... President Putin on 24 September introduced to the State Duma a bill that would pave the way for citizens of CIS countries to serve in the Russian military, "Vremya novostei" and reported on 25 September. According to the bill, CIS citizens would be granted Russian citizenship after three years' service in the Russian military. The Russian General Staff believes that many CIS citizens would be enticed into the Russian military by the prospect of Russian citizenship and by the comparatively high wages Russian contract soldiers receive. "Vremya novostei" quoted one General Staff representative as saying that some CIS officers have expressed a willingness to serve as ordinary soldiers in the Russian Army. However, the paper commented, the bill conflicts with legislation in many CIS countries. Ukraine, for instance, treats its citizens who perform foreign military service as mercenaries, which is punishable by up to eight years' imprisonment. The Georgian Constitution bars citizens from serving in foreign armies, the paper wrote.

...AND FOREIGN MINISTRY URGES MAKING RUSSIAN OFFICIAL LANGUAGE IN CIS STATES. Speaking at Moscow's International University, First Deputy Foreign Minister Eleonora Mitrofanova said on 25 September that Russia is striving to see that Russian be granted official-language status in all CIS countries, RTR and RIA-Novosti reported. She deplored what she described as a process by which national languages are squeezing out Russian, and said Moscow is committed to strengthening the position of the Russian language as one of the main forms of its support for ethnic Russians abroad. She added that the Foreign Ministry has allocated 210 million rubles ($7 million) this year for this goal.