Russia 110527Basic Political Developments

May 30–Jun 3: Vice Premier of State Council of China Wang Qishan to visit Russia Jun 7: Committee on Russian–Ukrainian economic cooperation to hold meeting Jun 9–10: Russia–European Union Summit to take place in Nizhny Novgorod Jun 16–18: St Petersburg International Economic Forum to take place Medvedev to hold talks with Mongolian pres on May 31. Presidential Authority Lent to Russian Trade Delegation - The President of

Mongolia Ts.Elbegdorj will make an official visit to Russia on Monday. ITAR-TASS news digest of May 27: 1. DEAUVILLE, France - - British Prime Minister David Cameron will make a visit to

Russia in September, President Dmitry Medvedev's press secretary Natalya Timakova said here Thursday.

She said Medvedev and Cameron discussed preparations for the visit at a bilateral meeting on the sidelines of the G8 summit earlier in the day.

DEAUVILLE - - President Dmitry Medvedev promised to his G8 colleagues Russia would submit proposals to develop Internet and legal norms for that in the near future, presidential economic aide Arkady Dvorkovich told reporters on Thursday after a summit session devoted to Internet problems.

He said Russia is currently “accumulating ideas” and the taskforce is headed by First Deputy Prime Minister Igor Shuvalov.

MOSCOW - - Russian Foreign Minister Sergei Lavrov had a telephone conversation with Libyan Prime Minister Baghdadi Mahmudi on Thursday, the foreign ministry said.

“The representative of Tripoli asked assistance in promoting a ceasefire agreement and beginning of negotiations without preconditions,” the ministry said.

Lavrov reiterated the Russian position and urged to comply with the UN Security Council Resolutions 1970 and 1973 and prevent actions that can trigger new civilian casualties.

TIRASPOL - - Parliament of the breakaway Dniester region of Moldova on Thursday amended the Constitution by establishing a government and limiting the president by two terms of office.

The president was given the right to dissolve parliament, while lawmakers can vote no-confidence in the government.

The parliament will continue to have 43 seats. NEW YORK - - The federal court in New York sentenced Russian professional

boxer Andrei Nevsky, 26, to three years in prison for joining a drug trafficking conspiracy that shipped tons of marijuana into the United States.

Nevsky was convicted on Thursday of trafficking, but acquitted of money laundering and smuggling.

WASHINGTON - - Kazakhstan and the United States have reached an agreement in principle about the access of U.S. suppliers of services to the Kazakh market,

a key condition for Kazakhstan’s accession to the World Trade Organization. She specified the talk was about 12 key sectors of Kazakh economy, including

finances, telecommunications, transport, and energy. DEAUVILLE - - Russian President Dmitry Medvedev has begun a meeting with

German Chancellor Angela Merkel. The two leaders are meeting on Friday on the sidelines of the G8 summit in Deauville.

According to Russian president’s aide Sergei Prikhodko, the two leaders were to “synchronize watches on bilateral cooperation, particularly, in the light of the Russian-German Year of Education, Science and Innovation, launched on May 23, and preparations for the 13th round of interstate consultations at the top level in Hanover in July.” Also on the agenda is the overall assessment of trading economic relations.

WASHINGTON - - A Kazakh minister said on Thursday Kyrgyzstan, a WTO member, is a likely candidate to join the Customs Union of Russia, Belarus, and Kazakhstan.

GORNO-ALTAISK - - The regional state of emergency in connection with forest fires has been declared in eight districts of Yakutia and in the city of Yakutsk by the republic’s presidential decree, the press service of the head and governments of the region said in Yakutsk.

KIEV - - Over the years of independence, Ukraine has got from the United Nations about 400 million dollars for its participation in peacekeeping operations, deputy chief of the General Staff of the Armed Forces of the country Vice-Admiral Igor Kabanenko said at an enlarged meeting of the board of the Defence Ministry on Thursday.

“Over 37,000 Ukrainian servicemen took part in 28 peacekeeping operations,” he also said.

At present, 476 Ukrainian servicemen are taking part in 11 peacekeeping operations and joint peacekeeping forces.

MOSCOW - - The fire at a military base in Bashkortostan is extinguished, the head of the press service of the Russian Emergencies Ministry’s Volga regional centre, Oleg Zugeyev, told Itar-Tass by telephone.

THE SETTLEMENT IGLINO (Bashkortostan) - - The damages from a fire, which broke out at a munition depot of a military unit near the settlement of Urman in Bashkortostan, according to preliminary reports, exceed 100 million roubles, Bashkir Prime Minister Azamat Ilimbetov said on Friday.

MOSCOW - - Mongolian President Tsakhiagiin Elbegdorj will make an official visit to Russia on May 30-31 at the invitation of Russian President Dmitry Medvedev. As the Kremlin press service reported, Russian-Mongolian summit talks will be held on May 31.

YUZHNO-SAKHALINSK - - The authorities in the Sakhalin Region and the Russian gas giant Gazprom will develop and use the resources of the Sakhalin shelf projects under a memorandum, which Governor of the Sakhalin Region Alexander Khoroshavin and Gazprom Deputy CEO Alexander Ananenkov signed.

ALMATY - - Russian Minister of Energy Sergei Shmatko said on Friday he thought

it highly improbable that Russia would suspend oil supplies to Belarus over payment arrears.

Moscow hopes Mladic trial will be fair – ministry Moscow hopes for fair and unbiased trial of Ratko Mladic Russia wants missile security guarantees from U.S. – Rogozin: Russia expects

ironclad US guarantees that the proposed American missile shield will not undermine this country’s strategic capability.

Russia urges Europeans to voice position on missile shield - Russia wants European nations to voice their position regarding the planned U.S. missile defense on the continent and say whether it would improve relations with Russia, according to Russian Ambassador to NATO Dmitry Rogozin.

Russia to reconcile NATO and Libya- G8 leaders have asked Russia to mediate a cease-fire in the Libyan conflict, the Russian president's press secretary said after the first day of the high-level summit in the French town of Deauville.

Libyan FM asks Russia to arrange ceasefire - In a telephone linkup Friday with his Russian counterpart Sergei Lavrov, Libya’s foreign minister Baghdadi Mahmoudi asked Moscow to arrange an immediate ceasefire in his country and the start of settlement talks with the Western coalition without any preconditions.

Lavrov outlines position on Libya to Mahmudi - “Lavrov said due to a complex of factors there are emerging components of a possible agreement to end hostilities and transfer the situation to a peaceful line with the participation of all political forces and tribes of the country without outside interference,” the ministry said.

Medvedev asked to mediate end to Libya conflict Medvedev to meet Merkel, Kan in Deauville Cameron confirms Moscow visit in September Russia to offer G8 Internet development proposals. Proprietary Thinking - Russia Tries to Change Its Image from Intellectual

Property Rights Violator to Property Rights Protector at the G8 Summit US, Russia still split on missile shield - Mike McFaul, Obama’s top adviser on

Russia, put the problem plainly after the meeting with the Russians: “They don’t believe us.’’

Smiles but Little Else as Medvedev Meets Obama - By Nabi Abdullaev M. Bryza: “NK issue must be solved peacefully” Statement on Nagorno-Karabakh conflict issued at G8 summit U.S., Russia Reaffirm Cooperation on Energy-Efficiency and Smart Grid - The

United States Agency for International Development (USAID), working with the U.S. Department of Energy (DOE) to cooperate with Russia on energy-efficiency efforts and smart grids, is supporting efforts to share experience and best practices among U.S. and Russian municipalities and utilities. This month, representatives from both countries signed a memorandum of understanding in San Diego and Belgorod, Russia, building on an earlier exchange involving utilities and regulators in Texas and federal and utility officials in Kaluga,

Russia. Russia says Canada's Arctic criticisms show lack of understanding of "reality" - Russia's ambassador-at-large for Arctic issues, Anton Vasiliev, fired back Thursday at the frequent complaints that Prime Minister Stephen Harper and his cabinet ministers have levelled at Russia for what they see as provocative behaviour in the Arctic.

New Talwar class frigate for India Navy launched- A new Talwar class stealth frigate built by Russia for the Indian Navy was launched at a solemn ceremony at Yantar Shipyard in Russia's Baltic exclave of Kaliningrad. Switzerland, France freeze Berezovsky’s accounts, seize yachts

Bosnia, Russia step up bilateral relations - Deputy Russian foreign minister Vladimir Titov and his Bosnian counterpart Ana Trisic-Babic met on Thursday to discuss a wide range of cooperation issues and approved a plan of ministerial consultations in 2011-12.

Militant killed after firing at policemen in Dagestan Gunmen blocked in house in Dagestan. Police officer killed in shootout with militants in Russia’s North Caucasus North Ossetian professor beheaded for poetry criticizing Islam – paper State of emergency declared in fire-hit districts of Yakutia Emergency regime introduced in Yakutia over forest fires. Damages from ammo depot fire in Bashkortostan exceed RUR 100 mln. Soldier charged over Russian Urals arms depot fire Ammunition depot fire injures eight Pensioner hit by police car in central Russia 11 people reported killed in bus-truck collision in Moscow region. Russian Press at a Glance, Friday, May 27, 2011 Putin Promises to Reduce Tax and Raise GDP - Prime Minister Vladimir Putin

vowed to ease the social tax burden for companies and promised that the country’s per capita GDP would double from the current $19,700 within a decade.

Why Missile Defense Talks Will Fail - By Ruslan Pukhov Shell games, G8 talks and Duma doodling - by Andy Potts Five Umarovs for one bin Laden - The US will pay for information leading to

Russia’s “top terrorist” By Svetlana Bocharova Explosions Monday through Friday - Before the end of this year, the Defense

Ministry plans to complete the recycling of outdated ammunition. Tour of Russia’s Missile Defense Facilities - By Richard Weitz Russian intern's blog exposes 'lazy' MPs Moscow's Capitalist Manifesto - Russia's capital is still a long way from being a

global financial center. Economic and legal reform would help.

National Economic Trends Dollar's weighted mean rate down against rouble in "tomorrow" deals. Central bank likely to pause with interest rate hikes Russia's Central Bank seen leaving rates on hold CBR runs a fine balancing act - RBS

Business, Energy or Environmental regulations or discussions Russian markets -- Factors to Watch on May 27 Investment funds with focus on Russia, CIS see $261 mln inflow in latest week Rosatom Wants to Renew Siemens Partnership, FT Deutschland Says Potanin rejects $19 bln offer for Norilsk stake Billionaire Timchenko May Buy Raspadskaya Stake, RBC Daily Says RUSSIAN STATE FIRM EYES BUILDING POWER PLANT IN W.JAVA Rosselkhozbank raises $800 mln via bond – IFR The volume of web-development market in Russia totaled 9.72 billion rubles in

2010 THE POLYUS OLIGARCHS OUT OF THEIR DEPTH – SOUTH AFRICAN TO THE

RESCUE

Activity in the Oil and Gas sector (including regulatory) Ministry puts forward 2 shelf exploration programs TNK-BP Submits Bid for Poland’s Grupa Lotos, Kommersant Reports Bashneft to spend $1.2 billion on downstream by 2015 Bashneft to sink $1.2bn into refineries upgrade Oil giants may put Rs 15,500 cr in Russia gas project - In a bold attempt to secure

a share in Russia’s gas sector, a consortium of ONGC Videsh, GAIL and Petronet LNG is preparing to invest around Rs 15,500 crore for a 15% stake in Russia’s independent gas producer Novatek’s $30-billion (Rs 1,35,000-crore) LNG project in Yamal peninsula.

Does Russia need China’s energy market? - By Andrei Ostrovsky

Gazprom Gazprom to launch 10 mln t LNG plant in 2016-source Sakhalin, Gazprom to develop Sakhalin shelf projects.

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Full Text Articles

Basic Political Developments

May 30–Jun 3: Vice Premier of State Council of China Wang Qishan to visit Russia

http://www.prime-tass.com/news/calendar/_Russian_calendar_Key_events_for_May_27/-103/%7BF7565D98-84A2-4959-9332-28F09AE24D24%7D.uif

Jun 7: Committee on Russian–Ukrainian economic cooperation to hold meeting

http://www.prime-tass.com/news/calendar/_Russian_calendar_Key_events_for_May_27/-103/%7BF7565D98-84A2-4959-9332-28F09AE24D24%7D.uif

Jun 9–10: Russia–European Union Summit to take place in Nizhny Novgorod

http://www.prime-tass.com/news/calendar/_Russian_calendar_Key_events_for_May_27/-103/%7BF7565D98-84A2-4959-9332-28F09AE24D24%7D.uif

Jun 16–18: St Petersburg International Economic Forum to take place

http://www.prime-tass.com/news/calendar/_Russian_calendar_Key_events_for_May_27/-103/%7BF7565D98-84A2-4959-9332-28F09AE24D24%7D.uif

11:16 27/05/2011ALL NEWS

Medvedev to hold talks with Mongolian pres on May 31. http://www.itar-tass.com/en/c154/151879.html

27/5 Tass 164

MOSCOW, May 27 (Itar-Tass) —— Mongolian president Tsakhiagiin Elbegdorj will make an official visit to Russia on May 30-31 at the invitation of Russian President Dmitry Medvedev. As the Kremlin press service reported, Russian-Mongolian summit talks will be held on May 31.

Presidential Authority Lent to Russian Trade Delegationhttp://ubpost.mongolnews.mn/index.php?option=com_content&task=view&id=6311&Itemid=37

Written by E.Bayannasan    Friday, May 27, 2011. The President of Mongolia Ts.Elbegdorj will make an official visit to Russia on Monday.

The Mongolian Embassy to the Russian Federation and the Foreign Investment Office of Mongolia as well as the Russian Chamber of Commerce and Trade will co-organize a “Mongolian – Russian Business Forum” on May 30th at the International Trade Center in Moscow.

The President will attend and give a speech during the forum.

The purpose of the forum is to raise both the countries’ trade and investment ties to new level, introducing the Mongolian legal environment to Russian businessmen for their investment interests and, through networking, making new business relations.

Discussions on mining, energy, construction, infrastructure, food, and agricultural topics will be covered.

11:57 27/05/2011ALL NEWS

ITAR-TASS news digest of May 27: 1. http://www.itar-tass.com/en/c154/151915.html

27/5 Tass 165

DEAUVILLE, France - - British Prime Minister David Cameron will make a visit to Russia in September, President Dmitry Medvedev's press secretary Natalya Timakova said here Thursday.

She said Medvedev and Cameron discussed preparations for the visit at a bilateral meeting on the sidelines of the G8 summit earlier in the day.

DEAUVILLE - - President Dmitry Medvedev promised to his G8 colleagues Russia would submit proposals to develop Internet and legal norms for that in the near future, presidential economic aide Arkady Dvorkovich told reporters on Thursday after a summit session devoted to Internet problems.

He said Russia is currently “accumulating ideas” and the taskforce is headed by First Deputy Prime Minister Igor Shuvalov.

MOSCOW - - Russian Foreign Minister Sergei Lavrov had a telephone conversation with

Libyan Prime Minister Baghdadi Mahmudi on Thursday, the foreign ministry said.

“The representative of Tripoli asked assistance in promoting a ceasefire agreement and beginning of negotiations without preconditions,” the ministry said.

Lavrov reiterated the Russian position and urged to comply with the UN Security Council Resolutions 1970 and 1973 and prevent actions that can trigger new civilian casualties.

TIRASPOL - - Parliament of the breakaway Dniester region of Moldova on Thursday amended the Constitution by establishing a government and limiting the president by two terms of office.

The president was given the right to dissolve parliament, while lawmakers can vote no-confidence in the government.

The parliament will continue to have 43 seats.

NEW YORK - - The federal court in New York sentenced Russian professional boxer Andrei Nevsky, 26, to three years in prison for joining a drug trafficking conspiracy that shipped tons of marijuana into the United States.

Nevsky was convicted on Thursday of trafficking, but acquitted of money laundering and smuggling.

WASHINGTON - - Kazakhstan and the United States have reached an agreement in principle about the access of U.S. suppliers of services to the Kazakh market, a key condition for Kazakhstan’s accession to the World Trade Organization.

She specified the talk was about 12 key sectors of Kazakh economy, including finances, telecommunications, transport, and energy.

DEAUVILLE - - Russian President Dmitry Medvedev has begun a meeting with German Chancellor Angela Merkel. The two leaders are meeting on Friday on the sidelines of the G8 summit in Deauville.

According to Russian president’s aide Sergei Prikhodko, the two leaders were to “synchronize watches on bilateral cooperation, particularly, in the light of the Russian-German Year of Education, Science and Innovation, launched on May 23, and preparations for the 13th round of interstate consultations at the top level in Hanover in July.” Also on the agenda is the overall assessment of trading economic relations.

WASHINGTON - - A Kazakh minister said on Thursday Kyrgyzstan, a WTO member, is a likely candidate to join the Customs Union of Russia, Belarus, and Kazakhstan.

GORNO-ALTAISK - - The regional state of emergency in connection with forest fires

has been declared in eight districts of Yakutia and in the city of Yakutsk by the republic’s presidential decree, the press service of the head and governments of the region said in Yakutsk.

KIEV - - Over the years of independence, Ukraine has got from the United Nations about 400 million dollars for its participation in peacekeeping operations, deputy chief of the General Staff of the Armed Forces of the country Vice-Admiral Igor Kabanenko said at an enlarged meeting of the board of the Defence Ministry on Thursday.

“Over 37,000 Ukrainian servicemen took part in 28 peacekeeping operations,” he also said.

At present, 476 Ukrainian servicemen are taking part in 11 peacekeeping operations and joint peacekeeping forces.

MOSCOW - - The fire at a military base in Bashkortostan is extinguished, the head of the press service of the Russian Emergencies Ministry’s Volga regional centre, Oleg Zugeyev, told Itar-Tass by telephone.

THE SETTLEMENT IGLINO (Bashkortostan) - - The damages from a fire, which broke out at a munition depot of a military unit near the settlement of Urman in Bashkortostan, according to preliminary reports, exceed 100 million roubles, Bashkir Prime Minister Azamat Ilimbetov said on Friday.

MOSCOW - - Mongolian President Tsakhiagiin Elbegdorj will make an official visit to Russia on May 30-31 at the invitation of Russian President Dmitry Medvedev. As the Kremlin press service reported, Russian-Mongolian summit talks will be held on May 31.

YUZHNO-SAKHALINSK - - The authorities in the Sakhalin Region and the Russian gas giant Gazprom will develop and use the resources of the Sakhalin shelf projects under a memorandum, which Governor of the Sakhalin Region Alexander Khoroshavin and Gazprom Deputy CEO Alexander Ananenkov signed.

“The memorandum holds that the signatory parties intend to cooperate in the use of the resources under the Sakhalin shelf projects for gas supplies in the Sakhalin Region and gas supplies in other constituents in the Far Eastern Federal District and the development of the export supplies in the countries in the Asia-Pacific Region,” spokesman for the regional governor Alexei Bayandin told Itar-Tass on Friday. For this purpose the regional government and Gazprom will synchronize the development of the gas production capacities on Sakhalin (including the Sakhalin-Khabarovsk-Vladivostok gas pipeline) and the liquefied gas output rate near the settlement of Prigorodnoye.

ALMATY - - Russian Minister of Energy Sergei Shmatko said on Friday he thought it highly improbable that Russia would suspend oil supplies to Belarus over payment

arrears.

“So far the issue is not tackled at the ministerial level. We are aware of certain difficulties but hope that companies would agree at a corporate level,” he told journalists on the sidelines of the CIS Electricity Council.

“I think that rapid politicising of such situations is nothing more but overreacting,” he said.

When asked if the situation might entail a suspension of oil supplies to Belarus, the Russian minister said he had “heard nothing about such scenarios.”

11:54 27/05/2011ALL NEWS

RF energy minister denies possible suspension of oil supplies to Belarushttp://www.itar-tass.com/en/c154/151913.html

27/5 Tass 160

ALMATY, May 27 (Itar-Tass) — Russian Minister of Energy Sergei Shmatko said on Friday he thought it highly improbable that Russia would suspend oil supplies to Belarus over payment arrears.

“So far the issue is not tackled at the ministerial level. We are aware of certain difficulties but hope that companies would agree at a corporate level,” he told journalists on the sidelines of the CIS Electricity Council.

“I think that rapid politicising of such situations is nothing more but overreacting,” he said.

When asked if the situation might entail a suspension of oil supplies to Belarus, the Russian minister said he had “heard nothing about such scenarios.”

May 27, 2011 11:14

Moscow hopes Mladic trial will be fair – ministryhttp://www.interfax.com/newsinf.asp?id=247122

MOSCOW. May 27 (Interfax) - Russia hopes that the trial over former leader of the Bosnian Serbs Ratko Mladic will be fair and will not lead to the protraction of the work of the International Criminal Tribunal for the former Yugoslavia (ICTY), said Kostantin Dolgov, a Foreign Ministry official in charge of human rights, democracy and rule of law.

"We expect the trial against Mladic to be fair and unbiased," he told Interfax on Friday.

"We also hope this trial will not lead to the protraction of the ICTY work," he added.

kk jv

(Our editorial staff can be reached at eng.editors@interfax.ru)

Moscow hopes for fair and unbiased trial of Ratko Mladichttp://rt.com/politics/news-line/2011-05-27/

RT News line, May 2711:13 permalink

Russia hopes that the trial of Ratko Mladic, a Serbian general accused of genocide, terror and war crimes, will be fair. «We hope that the upcoming trial will be fair and unbiased,» the Foreign Ministry said in a statement on Friday. Mladic, who is charged with orchestrating Europe's worst massacre of civilians since World War II, was arrested at a relative's home in a tiny Serbian village on Thursday. Meanwhile, some 500 demonstrators gathered in Belgrade in support of Mladic after his arrest was announced.

Russia wants missile security guarantees from U.S. http://english.ruvr.ru/2011/05/27/50882064.html

May 27, 2011 06:30 Moscow Time

Russia expects ironclad US guarantees that the proposed American missile shield will not undermine this country’s strategic capability.

Russia’s envoy to NATO, Dmitry Rogozin, made this point clear Friday shortly after he arrived in Varna, Bulgaria, to attend the meeting there of the Russia-NATO parliamentary committee.

Presidents Dmitry Medvedev and Barack Obama had earlier discussed the matter on the sidelines of the G8 summit in Deauville, France.

President Obama said his country wanted a missile shield that would have in mind the security interests of both America and Russia.

05:05 27/05/2011ALL NEWS

Russia urges Europeans to voice position on missile shield. http://www.itar-tass.com/en/c154/151668.html

27/5 Tass 35

VARNA, May 27 (Itar-Tass) —— Russia wants European nations to voice their position regarding the planned U.S. missile defense on the continent and say whether it would improve relations with Russia, according to Russian Ambassador to NATO Dmitry Rogozin.

“They cannot continue hiding behind broad American shoulders and have to come out and voice their position. The Europeans have to say what they are planning to do and whether they comprehend the whole set of risks they are taking on and whether the missile defense will promote enhanced relations with Russia,” Rogozin told Tass late on Thursday after arrival in Bulgaria to address the Russia-NATO parliamentary committee in the framework of NATO parliamentary spring session.

“The Americans have made the first step and work to convince everyone that the missile defense means movement in the right direction. We, in our turn, proceed from the fact that the American system will be deployed on European land, which means European countries have to voice their point of view. The European position on the issue is extremely interesting for Russia,” Rogozin said.

He said Russian Deputy Defense Minister Anatoly Antonov will hold consultations with U.S. counterparts in Brussels in early June.

“We hope the negotiations will give an impulse to political dialogue and the upcoming meeting of the Russian and NATO defense ministers will be more constructive,” the ambassador said.

Rogozin will address NATO parliamentary session on Friday.

Russia to reconcile NATO and Libyahttp://rt.com/news/g8-russia-libya-mediator/

Published: 27 May, 2011, 05:08Edited: 27 May, 2011, 12:11

G8 leaders have asked Russia to mediate a cease-fire in the Libyan conflict, the Russian president's press secretary said after the first day of the high-level summit in the French town of Deauville.

Russia actually came to the G8 meeting aiming to try to influence G8 leaders on what is happening in Libya. It is no secret that Russia and China, on the one hand, and the West as such on the other, have very different approaches when it comes to the situation in Libya and North Africa and the Middle East in general.

That is: Every time you get involved in the internal affairs of a sovereign nation, you have to be very careful about what you do. Russia does not feel that it is the way things are being done in Libya right now.

Neither Russia nor China vetoed the infamous UN Security council resolution 1973 on Libya, but both made it very clear that they feel like the resolution has been manipulated in one way or another and that NATO’s operation to protect civilians has become anything but that.

It really looks like Russia is becoming a mediator in the Libyan conflict. Russia’s foreign minister, Sergey Lavrov, has held negotiations with the Libyan prime minister, Al-Baghdadi al-Mahmoudi, who asked him to help personally in achieving a cease-fire. Obviously world powers felt like Russia is the country to go into the stalemate and try to get things done.

Another major issue on the agenda is the euro crisis. The president of the European Council, Herman Van Rompuy, has already proclaimed “we will not let euro fail,” which by itself is a recognition of the probability of such a course of events.

European officials appear to be really scared at such a prospect, and are doing the best they can making “it cannot happen” statements and spending billions not to let it happen.

A lot of bilateral meetings have occurred. President Dmitry Medvedev had a meeting with the host, French President Nicolas Sarkozy, and another one with US President Barack Obama. No doubt they have exchanged opinions on the situation in Libya.

Another topic of the Medvedev-Obama meeting was missile defense. Russia lately has been raising post-signing Strategic Arms Reduction Treaty concerns that the US is not transparent enough when it comes to its future plans for missile defense. The Russian president also pointed out that he does believe in finding a solution acceptable to both parties when it comes to national security issues and even if the solution will only come with time, Medvedev and Obama have laid the groundwork for that to happen.

By looking to Russia to mediate the Libyan crisis, the G8 leaders have realized that the process of weakening or eliminating Gaddafi forces will take even more time while the Libyan opposition is not ready to associate itself with overturning the regime, noted Middle East expert Walid Phares from the Foundation for Defense of Democracies in Washington.

By standing firm in the UN and not letting the allies broaden their mandate in Libya, Russia gained its unique position as a credible mediator in the conflict, believes Phares.

“Gaddafi knows that on the ground he will have to give a major concession – to end with a regime change, not brutally, but politically. If he rejects the Russian conditions or Russian mediation, then his fate is sealed,” concluded Phares.

Libyan FM asks Russia to arrange ceasefirehttp://english.ruvr.ru/2011/05/27/50881884.html

May 27, 2011 06:08 Moscow Time

In a telephone linkup Friday with his Russian counterpart Sergei Lavrov, Libya’s foreign minister Baghdadi Mahmoudi asked Moscow to arrange an immediate ceasefire in his country and the start of settlement talks with the Western coalition without any preconditions.

Lavrov, for his part, said he believed in a diplomatic solution to the crisis.

On Thursday President Dmitry Medvedev’s negotiating partners at the G8 summit in Deauville, France, asked him to act as a go-between in the ongoing efforts to peacefully resolve the conflict in Libya. 

Dmitry Medvedev held one-on-one meetings on Thursday with US and French Presidents Barack Obama and Nicolas Sarkozy, and also with British Prime Minister David Cameron.

01:24 27/05/2011ALL NEWS

Lavrov outlines position on Libya to Mahmudi. http://www.itar-tass.com/en/c154/151624.html

27/5 Tass 642

MOSCOW, May 27 (Itar-Tass) —— Russian Foreign Minister Sergei Lavrov had a telephone conversation with Libyan Prime Minister Baghdadi Mahmudi on Thursday, the foreign ministry said.

“The representative of Tripoli asked assistance in promoting a ceasefire agreement and beginning of negotiations without preconditions,” the ministry said.

Lavrov reiterated the Russian position and urged to comply with the UN Security Council Resolutions 1970 and 1973 and prevent actions that can trigger new civilian casualties. He informed the Libyan prime minister about Russian assessments of prospects to end the crisis in Libya “in the light of meetings held by President Dmitry Medvedev on the sidelines of the summit in Deauville,” the ministry said.

“Lavrov said due to a complex of factors there are emerging components of a possible agreement to end hostilities and transfer the situation to a peaceful line with the participation of all political forces and tribes of the country without outside interference,” the ministry said.

It stressed Russia will support such a turn of developments. “There are real chances for that. The Libyans, including Tripoli, which shall display responsibility for the fate of the state and people, shall now have a say,” it said.

Lavrov also said President Medvedev actively supports the effort of the African Union and the United Nations which has been discussed in detail during recent contacts in the Russian foreign ministry with representatives of Tripoli and Benghazi.

Lavrov is accompanying Medvedev in Deauville.

Medvedev asked to mediate end to Libya conflicthttp://english.ruvr.ru/2011/05/27/50880757.html

May 27, 2011 02:22 Moscow Time

President Dmitry Medvedev’s negotiating partners at the G8 summit in Deauville, France, have asked him to act as a go-between in the ongoing efforts to peacefully resolve the crisis in Libya. 

Dmitry Medvedev held one-on-one meetings on Thursday with US and French Presidents Barack Obama and Nicolas Sarkozy, and also with British Prime Minister David Cameron.

06:40 27/05/2011Top News

Medvedev to meet Merkel, Kan in Deauvillehttp://www.itar-tass.com/en/c32/151758.html

DEAUVILLE, May 27 (Itar-Tass) —— Russian President Dmitry Medvedev will meet German Chancellor Angela Merkel and Japanese Prime Minister Naoto Kan on the sidelines of the G8 summit in Deauville on Friday.

Medvedev and Merkel “will ‘synchronize watches’ in bilateral cooperation, in particular, in the light of the Russian-German Year of Education, Science and Innovations which began on May 23 and preparations for the 13th round of interstate consultations at the top level in Hannover in July,” Medvedev’s foreign policy aide Sergei Prikhodko said.

“On the foreign policy track the Russian and German leaders will pay specific attention to the current situation in the Middle East and Northern Africa and to further joint work in the G8 and partnership development between Russia and NATO,” he added.

“On the eve of the Russia-EU summit in Nizhni Novgorod in June Medvedev and Merkel will exchange opinions on issues of the formation of renewed European security architecture and the development of strategic partnership between Russia and the European Union, including the promotion of Russian initiatives on a visa-free travel and cooperation in the framework of the Partnership for Modernization program, and the state and development of European interaction in the sphere of energy,” Prikhodko said.

With the Japanese prime minister Medvedev will discuss the elimination of the aftermath of the devastating earthquake and tsunami in March.

“An important issue to be discussed is ongoing interaction in the elimination of the consequences of the accident at Fukushima Daiichi nuclear power plant. Russia is ready to share with Japan its experience and available designs in the sphere,” Prikhodko said.

Medvedev and Kan “will discuss problems of ensuring nuclear power safety.”

“The Russian side is ready for close interaction with Japan in the sphere both on bilateral and multilateral basis, including in the IAEA framework, and is set for major joint effort in the framework of bilateral intergovernmental agreement on cooperation in peaceful nuclear energy and hopes Japan will ratify it in the near future,” the aide said.

“Joint efforts of our countries to overcome the consequences of the natural-technogenic disaster create possibilities for providing additional dynamic to bilateral relationship. Major guidelines of joint work include interaction in the energy sphere, including increased supplies of Russian energy carriers to Japan and participation of Japanese businesses in major long-term projects in East Siberia and the Far East, expanded cooperation in fishing and agricultural production,” Prikhodko said.

He did not rule out that Kan will traditionally raise the territorial dispute and said the Russian position remained unchanged regarding it.

Cameron confirms Moscow visit in Septemberhttp://www.kyivpost.com/news/russia/detail/105428/

Today at 09:07 | Interfax-Ukraine Deauville, May 27 (Interfax) - British Prime Minister David Cameron has confirmed his visit to Russia in September 2011.

"At their meeting in Deauville on Thursday Dmitry Medvedev and David Cameron discussed the forthcoming visit by the British prime minister to Moscow in September. Cameron has confirmed his intention to come to Russia with a large group of British business people," Russian President's Press Secretary Natalya Timakova told journalists.

Medvedev emphasized the need for a more significant representation of the BRICS countries (Brazil, Russia, India, China, South Africa) at the senior level within the International Monetary Fund (IMF), she said.

"Today there is a certain Eurocentrism in this international organization. We believe that the BRICS countries need a far weightier representation in the IMF, given their economic potential. We are talking not about the IMF chief specifically, but the Fund's senior level," Timakova said.

The two countries' leaders praised the level of the bilateral economic cooperation, the press secretary said. "The parties acknowledged that despite a number of issues in the bilateral relations and those that are quite sensitive, the countries have to step up their economic cooperation," she said.

Cameron's visit to Moscow with a group of British business people will be aimed precisely at achieving this goal, Timakova said.

Read more: http://www.kyivpost.com/news/russia/detail/105428/#ixzz1NWxA8lmP

02:04 27/05/2011ALL NEWS

Russia to offer G8 Internet development proposals. http://www.itar-tass.com/en/c154/151635.html

27/5 Tass 623

DEAUVILLE, May 27 (Itar-Tass) —— President Dmitry Medvedev promised to his G8 colleagues Russia would submit proposals to develop Internet and legal norms for that in the near future, presidential economic aide Arkady Dvorkovich told reporters on Thursday after a summit session devoted to Internet problems.

He said Russia is currently “accumulating ideas” and the taskforce is headed by First Deputy Prime Minister Igor Shuvalov.

The Russian president “insists traditional legal norms regarding intellectual property are not fit for Internet,” Dvorkovich said adding the position is shared by British Prime Minister David Cameron.

“We have to change both international and national legal norms to legalize the use of content and protect copyright,” Dvorkovich said adding the meeting devoted to Internet was “specifically interesting, informal, and very lively.”

“They spoke about the necessity of accurate approaches to Internet as it is important not to undermine freedom principles, but protect from cybercrime, interference into privacy, and protect children from dangerous information,” Dvorkovich said adding some countries occupy a tougher stance on the issue.

Proprietary Thinkinghttp://russiaprofile.org/politics/37357.html

Russia Tries to Change Its Image from Intellectual Property Rights Violator to Property Rights Protector at the G8 Summit

By Tai Adelaja Russia Profile 05/26/2011

When Russian President Dmitry Medvedev meets head to head with G8 leaders in Deauville on Thursday, he will have a lot to offer in terms of how to protect intellectual property rights. In a symbolic move on the eve of his visit, the Russian leader ordered immediate reorganization of two largely inefficient federal agencies – the Russian Agency for Patents and Trademarks (Rospatent) and the Federal Agency on Intellectual Property Protection (FAPRID). "I would like to inform you that today I have signed a decree to set up a new Federal Service for Intellectual Property,” Medvedev told a government meeting on Tuesday.

President Medvedev's Economic aide Arkady Dvorkovich said on Wednesday that the Russian delegation to the G8 summit will be armed with concrete proposals on new approaches to intellectual property protection. “When speaking about protecting intellectual property rights we should think about how these rights should be adjusted in the future in order to balance clearly the interests of the rights holders and consumers of services,” Itar-Tass reported Dvorkovich as saying. "We must work together to develop new approaches to intellectual property rights on the Internet, so that the interests and rights of the content providers and users are balanced."

Russia also has its own ideas of how to maintain a balance between freedom and responsibility when posting materials on the Internet, which it hopes to share with other G8 leaders, Dvorkovich said. "It is necessary to stimulate the types of business models and rules of using Internet content that fully correspond to the legislation on intellectual property and, at the same time, make the opportunities of using content less costly to the users," said Dvorkovich. President Medvedev has called in the past for drafting new global conventions on intellectual property, saying that the existing ones fail to regulate developing technologies. The Russian leader said both the Universal Copyright Convention and the Berne Convention for the Protection of Literary and Artistic Works have failed to catch up with the demands of modern technologies.

But given the fragile status of his presidency at home, observers say president Medvedev may also be pushing hard for a successful outcome to the intellectual property rights debate in order to bolster his position ahead of the 2012 presidential elections. From a Russian perspective, any major events in which either Medvedev or Vladimir Putin are involved are assessed in the context of the March 2012 succession, Chris Weafer, the chief strategist at UralSib in Moscow, said in a note on Thursday. “It is clear that Prime Minister Putin has regained the momentum in recent months, so Medvedev’s supporters will hope for a successful G8,” Weafer said. “The president may push for a more direct commitment to support Russia’s WTO entry bid in 2011, progress in the missile shield talks and recognition of Russia’s position in the Mid East conflict.”

A good track record in intellectual property protection has always been a key condition for Russia’s admission to the World Trade Organization. Russia, the largest economy still outside the global trading bloc, has been trying to join the WTO for 17 years and has often been accused of copyright violations, especially by the United States. Russia has complained that it is being held to a higher standard on intellectual property rights enforcement in the WTO talks than earlier entrants, such as China. However, experts say

that the situation with intellectual property rights enforcement in the country remains murky at best.

Part of the reasons for the slow progress on the issue is that unlike Western nations Russia is not a case law country, experts say. “Russian judges rely on the Civil Codes rather than following legal precedents in deciding intellectual property infringement cases,” Eugene Arievich, a partner at law firm Baker & McKenzie, said by telephone Thursday. “This means that there is no unified approach to the application of intellectual property laws in the country. We see this happening in court cases relating to trademarks and patent rights. Different judges interpret the same law differently.” There are numerous examples when different judges hand over legally diverse decisions on practically analogous cases, Arievich said. “For these reasons, many foreign companies find it extremely difficult to understand where they stand in the legal landscape of intellectual property rights,” he said.

Last month, president Medvedev instructed his administration to consider establishing a special court for intellectual property rights in Russia. "Maybe we should consider creating a special court for intellectual property rights within the Russian system of arbitration courts and place the court in Skolkovo," Medvedev said at a joint meeting of the Commission on Modernization and the Board of Trustees of the Skolkovo high-tech hub. However, even such a move, which is backed by the judges of the country’s Higher Arbitration Court, can hardly improve the situation with intellectual property rights in Russia, experts say.

“It is necessary to expedite action on the creation of intellectual property rights courts,” Arievich said. “However, there are concerns in professional circles about the level of competence of judges that will work in such courts. In order to judge intellectual property rights cases, it is not enough for a judge to have a legal training. Judges must be well-honed in the area of intellectual property rights. Unfortunately, there are just a handful of judges of such caliber in Russia today.” One way of resolving the issue is to encourage more active participation of Higher Arbitration courts, whose decisions are binding on lower instance courts, in deciding thorny intellectual property rights cases, Arievich said. Court decisions regarding intellectual property infringement should always be published and widely circulated, he added.

For 14 consecutive years, Russia has remained on the black list of countries where intellectual property rights are not sufficiently respected, Gazeta.ru reported on Thursday. In March, the United States Trade Representative (USTR) blacklisted two leading Russian sites which it said may merit further investigation for possible intellectual property rights (IPR) infringements. The Sites, Vkontakte.ru and Rutracker.ru, are said to facilitate copyright infringement by permitting users access to illegally copied materials. Along with the Petryvka market in Kiev, Ukraine, Moscow’s Savyolovsky market also reportedly makes “pirated goods widely and openly available,” USTR said in a report. “These notorious markets not only hurt American workers and businesses, but are threats to entrepreneurs and industries around the world,” Ron Kirk, a United States Trade Representative, said.

Curbing such threats is the greatest challenge before the newly-created Federal Service for Intellectual Property, legal experts said. "The Agency also has to do more to facilitate trademark and patent registration procedures than its predecessors have done,” Samir Rahman, an expert at the IPPRO Patent Law Firm, said. “Registering new inventions now takes years, not months. Russia has surely made giant strides in recent years to promote creativity and innovation and facilitate the development of commercially promising discoveries, but loopholes still exist in the country's intellectual property protection laws."

US, Russia still split on missile shieldhttp://www.boston.com/news/world/europe/articles/2011/05/27/us_russia_still_split_on_missile_shield/

Associated Press / May 27, 2011

DEAUVILLE, France — President Obama and President Dmitry Medvedev of Russia emerged from private talks yesterday unable to show progress on the contentious issue of missile defense, underscoring an enduring mistrust underlying the US-Russian relationship.

Mike McFaul, Obama’s top adviser on Russia, put the problem plainly after the meeting with the Russians: “They don’t believe us.’’

At issue is Washington’s plan to site missile interceptors in Central and Eastern Europe in phases through 2020. Despite repeated assurances, Russia has not let go of the fear that the United States would end up threatening Russia’s own missile arsenal, something US officials say will not happen.

Obama said that they had committed to working together on missile defense to find an approach that is “consistent with the security needs of both countries, that maintains the strategic balance and deals with potential threats that we both share.’’

Medvedev, however, suggested that the problem would not be solved anytime soon.

He has warned that failure to cooperate with Moscow on the missile shield could spark a new arms race.

Smiles but Little Else as Medvedev Meets Obama http://www.themoscowtimes.com/news/article/smiles-but-little-else-as-medvedev-meets-obama/437637.html

27 May 2011By Nabi Abdullaev

Tackling perhaps the most divisive issue in relations between Russia and the United States, Presidents Dmitry Medvedev and Barack Obama agreed Thursday to press ahead in their search for a solution on missile defense in Europe that would satisfy the security demands of both their countries.

The other results from one-on-one talks on the sidelines of a Group of Eight summit in Deauville, France, were equally as modest, with the two presidents mainly affirming existing cooperation in various fields and pledging to expand it.

"This issue will be solved in the future, maybe in 2020, but we should lay the basis for the work for a future generation of politicians," Medvedev said of the missile defense plans after emerging with Obama from their meeting ahead the summit.

Obama said the configuration of the future missile defense shield in Europe should help maintain a strategic balance between the two countries.

The United States and NATO say the missile defense system is needed as protection from a potential missile attack by Iran or North Korea. Moscow has vehemently opposed the plans, saying the deployment of missiles near Russia's borders diminishes the country's capacity for a retaliatory nuclear strike if it is attacked by an overwhelming force.

Russia and NATO agreed in November to consider possibilities for cooperation in building the missile defense together, and the results of a preliminary expert study are to be discussed at a June 8-9 meeting of Russian and NATO defense ministers in Brussels.

Moscow wants the creation of a joint system with dual launch keys. NATO insists on two different systems sharing information about missile threats. Medvedev has warned that failure to accommodate Moscow's concerns will spur a new arms race.

Medvedev and Obama also agreed Thursday to step up talks on Russia's entry into the World Trade Organization, with Obama expressing confidence that membership would be awarded eventually.

The two presidents also discussed stability in North Africa and the Middle East, where Russia has attempted to act as a mediator between conflicting sides.

The situations in Tunisia and Egypt, where entrenched leaders were removed by public uprisings earlier this year, will be a main topic for the G8 summit, as will be nuclear energy safety and a NATO-led military campaign in Libya that Russia says is aimed at killing Moammar Gadhafi.

Another issue to be discussed by G8 leaders is the leadership of the International Monetary Fund, whose managing director Dominique Stauss-Kahn was arrested last week in New York on sex assault charges.

Obama praised Russia for its cooperation in the anti-terrorist coalition effort in Afghanistan, singling out its authorization for the coalition to transport cargo over Russian territory. He also stressed that Moscow and Washington continue their cooperation on nuclear nonproliferation.

Obama called Medvedev "a friend and a partner" who has done a lot to advance and expand cooperation with the United States.

Medvedev responded by saying his good personal relations with the U.S. president have "direct consequences" on the development of ties between the two countries.

Obama added that two more working groups — on modernization and on the rule of law — will be added to the existing 16 groups operating under the umbrella of the U.S.-Russia Bilateral Presidential Commission set up during Obama's first visit to Moscow as president in July 2009.

U.S.-Russian relations improved significantly after the change of guard in the Kremlin in 2008 and in the White House in 2009.

The two countries agreed Thursday to strengthen cooperation on airport and aviation security, on nuclear threats and crisis management and on countering improvised explosive devices.

Prior to the talks with Obama, Medvedev and his administration said Moscow would raise the issue of easing visa rules between the two countries. No reports concerning this issue appeared in the hours after the talks.

Meanwhile, Medvedev, Obama and French President Nicolas Sarkozy adopted a joint statement Thursday calling on Armenia and Azerbaijan to seek a peaceful resolution of the conflict over the separatist Nagorno-Karabakh region.

M. Bryza: “NK issue must be solved peacefully” http://times.am/2011/05/27/m-bryza-%E2%80%9Cnk-issue-must-be-solved-peacefully%E2%80%9D/

By Times.am at 27 May, 2011, 11:48 am

US Ambassador to Azerbaijan Matthew Bryza commented on the statement on NK issue accepted yesterday by Russian, French and the US Presidents. He especially said that this statement underlines once more time the issue must be solved peacefully.

“This statement proofs that the Presidents of Russia, France and the USA follow carefully the negotiations of the issue settlement. The statement notes one more that there is nothing more important than to make all efforts to solve the issue peacefully in the frame of the OSCE MG,” Bryza said according to APA.

/Times.am/

Statement on Nagorno-Karabakh conflict issued at G8 summithttp://www.aysor.am/en/news/2011/05/27/g8-nkr2/

Yesterday the Presidents of U.S., Russia and France, Barack Obama, Dmitry Medvedev and Nicolas Sarkozy issued a joint statement on the Nagorno Karabakh conflict during the Deauville-hosted G8 summit.

The statement read: “We, the Presidents of the OSCE Minsk Group's Co-Chair countries France, the Russian Federation, and the United States of America, are convinced the time has arrived for all the sides to the Nagorno-Karabakh conflict to take a decisive step towards a peaceful settlement.

We reiterate that only a negotiated settlement can lead to peace, stability, and reconciliation, opening opportunities for regional development and cooperation. The use of force created the current situation of confrontation and instability. Its use again would only bring more suffering and devastation, and would be condemned by the international community. We strongly urge the leaders of the sides to prepare their populations for peace, not war.

As a result of efforts by the parties and the Co-Chair countries at all levels, significant progress has been made. The latest version of the Basic Principles, as discussed in Sochi on March 5, lays a just and balanced foundation for the drafting of a comprehensive peace settlement. This document, based on the Helsinki Final Act and elements outlined in our joint declarations in L'Aquila in July 2009 and Muskoka in June 2010, provides a way for all sides to move beyond the unacceptable status quo.

We therefore call upon the Presidents of Armenia and Azerbaijan to demonstrate their political will by finalizing the Basic Principles during their upcoming summit in June. Further delay would only call into question the commitment of the sides to reach an agreement. Once an agreement has been reached, we stand ready to witness the formal acceptance of these Principles, to assist in the drafting of the peace agreement, and then to support its implementation with our international partners.”

 

Reference. The Nagorno-Karabakh (armed) conflict broke out back in 1991, when, subsequent to the demand for self-determination of the Nagorno-Karabakh people, Azerbaijani authorities attempted to resolve the issue through ethnic cleansings, carried out by Soviet security forces (KGB special units) under the pretext of the implementation of the passport regime and by launching of large-scale military operations, which left thousands dead and caused considerable material damage. A cease-fire agreement was established in 1994. Negotiations on the settlement of the conflict are being conducted under the mediation of the OSCE Minsk Group Co-Chairmen (Russia, USA, France) and on the basis of their Madrid proposals, presented in November, 2007.

Azerbaijan has not yet implemented the 4 resolutions of the UN Security Council adopted in 1993, by continuing to provoke arms race in the region and openly violating the basic principles of the international law non-use of force or threat of force. 

TODAY, 10:35

Aysor.am

U.S., Russia Reaffirm Cooperation on Energy-Efficiency and Smart Grid http://eponline.com/articles/2011/05/27/u.s.-russia-reaffirm-cooperation-on-energyefficiency-and-smart-grid.aspx

May 27, 2011

The United States Agency for International Development (USAID), working with the U.S. Department of Energy (DOE) to cooperate with Russia on energy-efficiency efforts and smart grids, is supporting efforts to share experience and best practices among U.S. and Russian municipalities and utilities. This month, representatives from both countries signed a memorandum of understanding in San Diego and Belgorod, Russia, building on an earlier exchange involving utilities and regulators in Texas and federal and utility officials in Kaluga, Russia.  

USAID's deputy assistant administrator for Europe and Eurasia, Jonathan Hale, explained: "This new U.S.-Russia cooperation will enable utilities to reduce harmful emissions, including greenhouse gases, by enhancing their ability to help consumers use energy more efficiently; integrate and deliver renewable energy; and more efficiently transmit and deliver electricity to consumers. It is a win-win effort for the U.S., Russia, and the global environment and climate. At the G8 Summit in Deauville, France, presidents Barack Obama and Dmitry Medvedev highlighted the mutual interest of their countries in energy efficiency and sustainable energy development and the progress that has been made since their announcement of this initiative at the Summit on June 24, 2010. Under the Energy Working Group of the Presidential Bi-national Commission,

USAID in cooperation with DOE and the U.S. Energy Association, (USEA) have developed and begun implementation of a smart grid partnership program.

A visit by Russian industry, technical and government officials to Texas and Washington, D.C., in December 2010 provided an opportunity to see first-hand the activities of CenterPoint Energy and Austin Energy utilities in this field and their interactions with consumers, vendors, and regulators. A seminar in Washington provided an overview of U.S. policy, programs and technologies that are being supported by the DOE and the private sector. A work-plan for a two-year effort was developed that included utility partnership exchanges, business roundtables, and a joint assessment of regulatory and other barriers to the introduction of smart grid technologies and systems. A return visit by CenterPoint Energy and Austin officials to Russia in the spring of this year exposed these U.S. utilities and technology companies to the challenges that Russian utilities face in modernizing their systems and moving to smart-grid applications.

These discussions produced ideas for possible pilot projects that are currently under review. Will Polen, USEA Program Manager, stated that this exchange of "industry experience and knowledge" broadens the perspectives of the participants and can help spur new ideas and innovations in tackling these 21st century problems.

Austin Energy explains its interest in participating in the partnership to help advance its mission to deliver clean, affordable, reliable energy and excellent customer service. According to Jeff Vice, director of local government relations, "as the electric system adapts we are trying to figure out what the business model is going to be. Power is not going to be pushed centrally and one way through the grid. It's a much more fluid environment, homes are going to be built much more efficiently, and consumers are better educated. We use a variety of mechanisms to get to the goal. It's not just about adopting one of the pieces of smart grid, it's about creating new policies – for example, every new home will have to be net zero by 2030 or introducing rebate programs for our customers," Vice said.

By partnering with local universities or participating in the bilateral exchange with Russia, Austin Energy is designing what they call the "energy system of the future." According to Vice, "one thing we liked discussing was the pilot projects Russia was doing – start small, test and learn." These ideas through the exchange help boost innovation. USAID is working with DOE in fostering additional partnerships, including a municipal partnership between the cities of San Diego and Belgorod. A delegation from Belgorod visited San Diego and Silicon Valley technologies in April and a return visit is planned for June 2011 within the framework of a memorandum of understanding  concluded prior to the summit. From these initial exchanges, it is clear that U.S. companies are very interested in exploring opportunities in Russia as this large system further modernizes its transmission and distribution infrastructure.

USAID and DOE will be working to further these business and commercial ties over the coming year. Two specific activities are envisioned in addition to the utility and

municipal partnerships. A business roundtable is planned for the fall in Russia and a joint study on regulatory issues and barriers in smart grid deployment is in the works.

Russia says Canada's Arctic criticisms show lack of understanding of "reality"http://www.google.com/hostednews/canadianpress/article/ALeqM5hL5H0JRLgx78plVCA4MlPaTpmIBQ?docId=6967241

By Mike Blanchfield, The Canadian Press – 2 hours ago

OTTAWA — A senior Russian diplomat says the Harper government's pointed public criticisms of his country's motives in the Arctic are not grounded in reality.

Russia's ambassador-at-large for Arctic issues, Anton Vasiliev, fired back Thursday at the frequent complaints that Prime Minister Stephen Harper and his cabinet ministers have levelled at Russia for what they see as provocative behaviour in the Arctic.

That has included former foreign minister Lawrence Cannon blasting a planned Russian parachute jump that was to take place in April 2010 as a "stunt" and an exercise in "propaganda."

"It could come from lack of knowledge of reality," Vasiliev told The Canadian Press during a major conference on Canada-Norway-Russia Arctic co-operation at Ottawa's Carleton University.

"I think that time and reality proves that this is all wrong."

In an earlier speech to about 100 academics, diplomats and bureaucrats, Vasiliev extolled the exemplary relationship between Russia and Norway, which recently settled a 40-year Arctic border dispute.

He called it an "encouraging precedent" for Russia and Canada. The two countries disagree over the undersea boundaries of the Arctic Ocean, which is thought to hold massive deposits of oil and gas.

"Russia and Canada are natural partners in the Arctic. We have a good and dynamic relationship. But its potential is enormous," Vasiliev told the conference.

In a later interview, Vasiliev addressed the public criticism of his country by the Harper government. This includes Cannon's April 2010 outburst and others, as well as complaints by Defence Minister Peter MacKay about Russian bombers flights near Canadian Arctic airspace and Harper's own rebuke of those flights.

"Why do we still hear that? Because of inertia," Vasiliev said. "We are human people. It's very hard for us to change our mentality, to adapt ourselves to the changing world, but we have to do that because the world has changed."

He described his work as Russia's envoy to the eight-country Arctic Council, which includes Canada, as "a counter-argument to these skeptics."

Russia also angered Canada when a submarine bearing its scientists planted a flag on the seabed under the North Pole in 2007.

Norway's deputy foreign minister Espen Barth Eide said the incident was overblown and suggested Canada shouldn't take offence.

"It wasn't really Russia; it was a Russian scientist," Barth Eide said in an interview.

"There has been no follow-up claim and the moon isn't American because there's an American flag up there."

Barth Eide said his country's historic Barents Sea border agreement, four decades in the making, should be taken by Canada as reason to tone down its rhetoric towards Russia.

He said Russian co-operation in the Arctic can help defuse tension that it has had with the West in recent years on other strategic issues.

"It is an area where we see the benign side of Russia and where we see the collaborative Russia. It can become a buffer," said Barth Eide.

Vasiliev suggested Canada's politicians might be trying to score points at home by attacking his country's motives in the Arctic.

"My vision is it's mostly domestic. I can't judge your politicians by what they say, about this thing. Our politicians say the Arctic is becoming more and more a territory of dialogue, a territory of co-operation. This is a drastic change compared with the Cold War years."

Countries have a right to deploy military resources in the Arctic, but that doesn't mean there's a nefarious military build-up, he said.

"If before there was zero and now (there) is one gun, is that a build-up? I don't think so. Every Arctic state has a right to defend their sovereignty.

"We don't think we have any military problems in the Arctic or other problems that might require military solutions. We don't see any need for the presence of any military political blocs in the Arctic."

He said Russia agrees with Canada's Arctic strategy, which is a pillar of its foreign policy. Along with economic and regional development, the strategy includes a greater military presence as well as the eventual construction and deployment of an ice-breaker.

"We really need some more hardware in the Arctic, for example, for some new types of activities that come from more accessible Arctic resources."

Chris Day, spokesman for Foreign Affairs Minister John Baird, said Canada makes no apologies for investing in the Arctic or defending its sovereignty.

"Our government has made unprecedented investments to that end, and we will continue to do so during the next phase of Canada's Economic Action Plan."

Vasiliev lauded this month's historic agreement by Arctic Council members to co-ordinate search-and-rescue activities. He said it was an example of how Russia wants to work within legal frameworks to solve disputes.

"There are remaining problems of course. All the problems will be solved the same way no blood, no conflict, professional quiet work on the basis of international law. Full stop. And we shall do it."

In his speech, Vasiliev made only a vague passing reference to the tension between Canada and Russia.

He said the renewed co-operation between Norway and Russia was a benefit for greater Arctic security.

"I'm not pointing the fingers," Vasiliev told delegates.

"I hope all these and other achievements should persuade even the few, hardest skeptics, who can't detach themselves from the Cold War cliches, and who still look for nothing else but the military build-up and the inevitable wars."

Copyright © 2011 The Canadian Press. All rights reserved.

New Talwar class frigate for India Navy launchedhttp://www.zeenews.com/news708986.html

Updated on Friday, May 27, 2011, 08:37

Moscow: A new Talwar class stealth frigate built by Russia for the Indian Navy was launched at a solemn ceremony at Yantar Shipyard in Russia's Baltic exclave of Kaliningrad.

Ira Malhotra, wife of newly-appointed Ambassador Ajai Malhotra, launched the stealth frigate 'Trikand', the third of the three stealth frigates christened by President Pratibha Devisingh Patil along with 'Teg' (Sabre) and 'Trakash' (Quiver) in the Navy's tradition of naming the same class of warships beginning with common letter.

"Trikand", means a mythological arrow with three heads.

Deputy Head of the Defence Committee of the State Duma, Savenko, Deputy Commander-in-Chief of the Russian Baltic Fleet Vice Admiral VP Kravchuk and top officials from ROSOBORONEXPORT state arms exporters, United Shipbuilding Corporation, Federal Service for Military Technical Cooperation, Russian industry and public representatives also attended the ceremony.

Ambassador Malhotra congratulated workers of the state-owned Yantar Shipyard and all associated organizations on the successful launch.

He recalled that defence cooperation was a key pillar of the special and privileged strategic partnership between India and Russia, and that that the launch of INS Trikand reflected the sophisticated level that India-Russia defence co-operation had achieved.

Malhotra noted that joint development and construction of advanced and frontline defence system and platforms, such as INS Trikand, had become a new hallmark of India-Russia defence cooperation.

The first warship under the present project, "Teg", was launched in November 2009.

The second ship, "Tarkash", was launched in June 2010. Delivery of all three ships to the Indian Navy and their commissioning will take place during 2011-12, after completion of outfitting works and extensive trials in harbor and at sea.

Like its predecessors the INS Trikand will carry the supersonic BrahMos missile system.

It would also be armed with advanced surface to air missiles, 100mm artillery guns, and other sophisticated equipment, as also a deck- based KA-31 helicopter.

The INS Trikand is powered by four gas turbines and is fitted with state -of -the -art navigation, communication and electronic warfare equipment.

It is also equipped with very advanced radar and sonar systems for early detection and warning.

Earlier, Russia had built INS Talwar, INS Trishul and INS Tabar at Balitiisky Zavod

shipyard in St Petersburg.

PTI

Switzerland, France freeze Berezovsky’s accounts, seize yachtshttp://rt.com/politics/news-line/2011-05-27/#id10989RT News line, May 2712:15

At the request of Russian prosecutors, law enforcement agencies in France and Switzerland have frozen some 21 million Swiss franks on the accounts of Forus Group. Forus Group was allegedly founded by exiled Russian business tycoon Boris Berezovsky in order to launder money from Russian air carrier Aeroflot. The businessman’s two luxury yachts, worth some $20 million, have also been seized. Aeroflot is seeking more than $100 million in damages from London-based Berezovsky, who has been sentenced in absentia in Russia on charges of embezzlement, fraud and money laundering.

Bosnia, Russia step up bilateral relationshttp://en.rian.ru/russia/20110527/164258811.html04:24 27/05/2011

Russia signed an intergovernmental program with Bosnia and Herzegovina on Thursday to step up bilateral cooperation between the two countries , the Russian Foreign Ministry reported.

Deputy Russian foreign minister Vladimir Titov and his Bosnian counterpart Ana Trisic-Babic met on Thursday to discuss a wide range of cooperation issues and approved a plan of ministerial consultations in 2011-12.

During the talks, the Russian side confirmed its readiness to support the strengthening of Bosnia and Herzegovina's statehood and help further stabilize the country.

MOSCOW, May 27 (RIA Novosti)

May 27, 2011 10:38

Militant killed after firing at policemen in Dagestanhttp://www.interfax.com/newsinf.asp?id=247110

MAKHACHKALA. May 27 (Interfax) - A militant was killed in a shootout with police officers in the Karabudakhkent district of Dagestan last night, a spokesman for the republic's branch of the Russian Investigative Committee told Interfax.

A man sitting inside a Lada car that was stopped by police for a check on a Manas-Sergokala motorway "opened fire on policemen, who fired back, killing the attacker," the spokesman said.

"He was identified as Magomed Bagautdinov. A Makarov pistol was confiscated from him," he said.

Investigators are currently working at the site.

tm jv

(Our editorial staff can be reached at eng.editors@interfax.ru)

08:11 27/05/2011ALL NEWS

Gunmen blocked in house in Dagestan. http://www.itar-tass.com/en/c154/151731.html

(updates)

27/5 Tass 102

MOSCOW, May 27 (Itar-Tass) —— A group of gunmen is blocked in a house in Dagestan. Fighting is underway, a National Antiterrorism Committee spokesman told Itar-Tass.

"A group of up to five gunmen is blocked in a private house in the village of Chontaul, Dagestan's Kizilyurt district. Residents were evacuated from nearby houses before the beginning of the active phase of the operation. At present fighting is going on," NAC spokesman Nikolai Sintsov said.

According to the NAC information centre, the counter-terrorist operation regime was imposed in the village at 06:00 Moscow time. The gunmen responded with fire to the order to surrender and are continuing their fierce resistance.

Police officer killed in shootout with militants in Russia’s North Caucasushttp://en.rian.ru/russia/20110527/164260319.html

08:38 27/05/2011

One police officer has been killed in a shootout with militants in the volatile south Russian republic of Dagestan, a police spokesman said on Friday.

Police have blockaded the militant group of around five people inside a private house in the village of Chontaul in the Kizilyurtovsky region.

“A police officer, who was wounded in the shootout, has died,” the spokesman said. “Security forces have isolated three private houses; militants are hiding out in one of them.”

More than a decade after the end of a war against separatists in Russia's North Caucasus republic of Chechnya, Russian security forces continue to fight militants in other regions in the area, including Dagestan, Kabardino-Balkaria, Ingushetia, and North Ossetia.

MAKHACHKALA, May 27 (RIA Novosti) 

North Ossetian professor beheaded for poetry criticizing Islam – paperhttp://rt.com/politics/news-line/2011-05-27/#id10979RT News line, May 27

Investigators believe a North Ossetian professor and public activist Shamil Jikayev has been killed for writing a poem critical of Muslims, Kommersant daily reports. The body of Jikayev, 71, Dean of the Ossetian Philology Department at the North Ossetian University and a prominent public figure, was found beheaded on Thursday. According to the investigators, Jikayev recently complained he had been receiving threats from Muslim activists who found one of his poems to be insulting to their religion and extremist. The poem in question, which mentions wolf cubs on their way to Hadj, was even reviewed by an official commission, though the experts did not find it extremist.

May 27, 2011 12:22

State of emergency declared in fire-hit districts of Yakutiahttp://www.interfax.com/newsinf.asp?id=247153

YAKUTSK. May 27 (Interfax) - Yakutia President Yegor Borisov has declared a state of emergency in the city of Yakutsk, villages located in its suburbs and eight districts of the republic where major wildfires are raging, the press service of Yakutia's president and government reported on Friday.

They include the Amga, Gorny, Megino-Kangalassky, Namtsy, Tattinsky, Ust-Aldansky and Churapcha districts.

The administrations in all of the municipalities where a state of emergency has been introduced have been ordered to take measures to extinguish forest fires and to prevent any threat to the local population.

Earlier reports said that a state of emergency had been declared in the Amga, Namtsy and Tattinsky districts by the local authorities, while 15 other districts of the republic and the city of Yakutsk had been put on a fire alert.

tm jv

(Our editorial staff can be reached at eng.editors@interfax.ru)

09:35 27/05/2011ALL NEWS

Emergency regime introduced in Yakutia over forest fires. http://www.itar-tass.com/en/c154/151789.html

27/5 Tass 88

GORNO-ALTAISK, May 27 (Itar-Tass) — The regional state of emergency in connection with forest fires has been declared in eight districts of Yakutia and in the city of Yakutsk by the republic’s presidential decree, the press service of the head and governments of the region said in Yakutsk.

The emergency situation regime is declared in the territory of the Amginsky, Gorny, Megino-Kangalassky, Namsky, Tattinsky, Ust-Aldansky, Khangalassky, Churapchinsky

districts and the city of Yakutsk urban district. President of Yakutia Yegor Borisov instructed heads of municipalities to take measures to extinguish fires and prevent threats to human settlements in an emergency situation regime. According to him, the stay of people that are not involved in the fire extinguishing efforts in the forest zone, will be banned.

There are a total of 34 fires affecting a total area of 86,500 hectares in the forests of Yakutia. The city of Yakutsk and a number of settlements are in smoke. As many as 2,978 people and 289 pieces of fire-fighting equipment, including 8 aircraft, including two helicopters Mi-26 and an Ilyushin Il-76 plane from the Ministry of Emergency Situations of Russia (EMERCOM) are engaged in the fire fighting operation. The paratroopers of the specialised aviation fire fighting service of the Krasnoyarsk Territory, Magadan, Murmansk and Arkhangelsk regions, as well as Karelia, have been attracted to the operation within the framework of interregional cooperation in fighting wildfires. The main cause of the fires is agricultural burning in the conditions of dry and windy weather. The law enforcement and regulatory authorities have been able to identify 39 people, through the fault which fires occurred. Criminal proceedings will be instituted against them depending on the damage caused.

Earlier, head of the Aerial Forest Protection Service (Avialesookhrana) Andrei Yeritsov said that Yakutia’s leadership should declare the state of emergency in the republic due to big wildfires. “We proposed to move personnel of the Russian Federal Forest Service to the area. Previously the personnel fought fires in the Trans-Baikal region. But the republic’s government has given up assistance,” he said. Now the Federal Forest Service is expected to send its representatives to Yakutia “in order to estimate the situation on the ground.” “Recommendations have been given to declare the state of emergency because the situation remains difficult in the next few days,” Yeritsov said.

On May 16, a source from the regional department of the Russian emergencies ministry told Itar-Tass that five major forest fires, each covering the territory of up to 900 hectares, are raging in Russia’s Baikal region.

“Three of them have engulfed 1,600 hectares in the Petrovsk-Zabaikalsk district,” they added. Dry weather and gusts of wind up to 24 meters per second contribute to the spread of the blaze in Baikal region’s taiga, where 25 fires have spread to the area of 4,300 hectares. Seven more fires have been localized. Nine fires covering the area of about 240 hectares were put out on Monday. A total of 1,200 people, assisted by 215 special vehicles and six aircraft fight the blaze. Meanwhile, the regional prosecutor’s office toughens punishment for fires for officials and forest renters.

According to the Emergencies Ministry’s statistics, the most difficult fire situation is in the Republic of Yakutia, the Khanty-Mansi Autonomous Area, the Chelyabinsk, Sverdlovsk, and Amur regions. “There is no danger of fire spreading to local settlements. However, means and forces of the Ministry for Emergency Situations remain on high alert,” sources from the regional centre of the emergencies ministry said.

10:53 27/05/2011ALL NEWS

Damages from ammo depot fire in Bashkortostan exceed RUR 100 mln. http://www.itar-tass.com/en/c154/151845.html

27/5 Tass 128

 

THE SETTLEMENT IGLINO (Bashkortostan), May 27 (Itar-Tass) —— The damages from a fire, which broke out at a munition depot of a military unit near the settlement of Urman in Bashkortostan, according to preliminary reports, exceed 100 million roubles, Bashkir Prime Minister Azamat Ilimbetov said on Friday.

Bashkir President Rustem Khamitov pledged that the full material damages will be indemnified to local residents. “New houses will be built at the place of the destroyed village and all the damages, even the minimal ones, will be repaid to local residents,” he noted.

About 400 employed residents of the village will receive the salary for the whole period of forced inactivity over the incident.

“The railway resumed the full train traffic and the oil pumping continues along the oil pipeline to Tatarstan,” he pointed out.

Ilimbetov emphasized that “construction sites for new houses are being picked up, the material aid is being determined to allocate from federal and republican budgets.” The Russian Defence Ministry will also agree on the payments, he remarked.

The fire was localized at a military unit by now, the press service of the Bashkir main EMERCOM department told Itar-Tass on Friday. “According to preliminary reports, no people died in the fire. Some 12 people turned for the medical aid, particularly nine people received the medical aid on the spot and three people were hospitalized to the central district hospital in the Iglino district,” the source said.

“The fires in the residential area were put down and were localized at the military unit. A drone has made a reconnaissance of the terrain in the incident area. The robotic equipment El-10 and El-4 are used at the ammunition depot. The robot extinguished at 7.23 a.m. Moscow time a fire in the building at the military unit quarters,” the press service reported.

Some 627 people and 189 pieces of machinery, including a fire train, airplanes Be-200 and il-76, are involved in the firefighting efforts.

“Some 526 evacuated people, including 60 children, are accommodated at temporary residence stations and more than 2,000 people dropped at their relatives,” the press service reported.

Soldier charged over Russian Urals arms depot firehttp://en.rian.ru/russia/20110527/164262160.html

10:58 27/05/2011

UFA, May 27 (RIA Novosti) - A soldier is facing criminal charges over a fire at an ammunition depot at a military base in the Russian Urals, investigators said on Friday.

The fire broke out on Thursday when 120-mm artillery shells exploded in the loading area of the depot some 50 kilometers (30 miles) from the republic of Bashkortοstan's capital of Ufa.

About 2,500 people were evacuated from the village of Urman over the threat posed by exploding shells that scattered around the area, injuring at least eight people and setting fire to houses and trees. More than 50 buildings, including 14 residential houses, were destroyed or damaged as a result.

Private Sergei Denyayev has been charged with "a violation of weapon handling rules," the Russian Investigative Committee said in a statement published on its website on Friday.

Denyayev, together with other soldiers, was involved in repackaging shells at the depot, the statement said.

"In violation of security rules, he threw a shell with a detonator in with other repackaged shells, which resulted in a detonation and the explosion of the shells," the statement reads.

Local officials said on Friday the damaged caused by the fire may exceed 100,000 rubles ($3.5 million).

On Thursday, Rustem Khamitov, the head of Bashkortοstan, ordered the construction of new houses for people left homeless as a result of the fire.

Ammunition depot fire injures eighthttp://rt.com/news/artillery-ammunition-arsenal-fire/

Published: 27 May, 2011, 05:25Edited: 27 May, 2011, 07:38

In Russia’s Bashkiria Republic, a fire destroyed an artillery ammunition dump and caused the destruction of over 40 houses in a nearby town.

The injured were hospitalized, but only one of them in moderately serious condition. Most of the injured received minor burns while extinguishing the fire.

Local authorities had to evacuate approximately 6,000 citizens because the ammunition at the burning depot – consisting of 120-millimiter cannon shells, among other weaponry – started to detonate in the fire, spraying fragments at a distance of up to two kilometers.

A Be-200 amphibious aircraft and three robots designed to deal with industrial fires belonging to Russia’s Emergency Ministry (Emercom) are participating in the firefighting operation, which might last through the end of the weekend.

The fire started on the esplanade of the 99th Arsenal, where outdated ammunition was being prepared for recycling. The arsenal is situated near Urman township, about 100 kilometers from Bashkiria’s capital Ufa.

Pensioner hit by police car in central Russiahttp://en.rian.ru/russia/20110527/164261889.html

10:35 27/05/2011

An 81-year-old pensioner was killed after she was run over by a police car in the central Russian city of Kaluga, police said on Friday.

The police officer responsible was reversing the vehicle when he knocked over the pensioner on Thursday afternoon. The old woman died on the scene.

Russia's police forces have come under criticism in recent years for a string of high-profile scandals involving drunken shooting sprees, rampant corruption and beatings of detainees.

President Dmitry Medvedev launched a police reform in February in a bid to restore the soured image of Russia's law enforces which, among other things, renamed the Russian law enforcement agency from the traditional "militia" to the more Western-sounding title of "police".

MOSCOW, May 27 (RIA Novosti) 

09:51 27/05/2011ALL NEWS

11 people reported killed in bus-truck collision in Moscow region. http://www.itar-tass.com/en/c154/151800.html

27/5 Tass 94

 

MOSCOW, May 27 (Itar-Tass) —— The traffic police in the Moscow Region opened a hotline for the relatives of people killed or injured in a road accident in the Stupino district. According to the preliminary reports, a bus, which was en route from Tambov to Moscow, collided with a truck killing 11 people and another four people were hospitalized.

“The lists of people, who were inside the bus at the moment of the crash, are being made up. Calling the hotline one can learn about those killed and the medical institutions, where injured people were brought,” a source said.

The driver of the bus, which got in the road accident in the Moscow Region, most likely fell asleep behind the wheel, a source in the traffic police in the Moscow Region said.

“The traffic conditions at the road accident site are normal,” he noted. “The illumination is on, the road marking is clear, the road is straight and the road surface is dry,” he said. “A team of investigators was formed to investigate the road accident, but we preliminarily assume that the driver just fell asleep behind the wheel,” the source said.

Meanwhile, the press service of the Moscow regional traffic police noted that the road accident occurred at about 3.50 a.m. Moscow time at the 104th kilometre of the Don highway (Stupino district). “The Neoplan-116 bus, which was en route from Tambov to Moscow, rammed into a leading KAMAZ truck with the Dagestani numbers for an unclear reason. Some 21 passengers were inside the bus at the moment of the road accident,” the press service said.

From a strong hit the front part of the bus caught fire. “Eleven people died, four were hospitalized and another nine people received the medical aid at the accident site,” the source said.

The road accident site is fenced off, a team of detectives is working at the accident site.

Russian Press at a Glance, Friday, May 27, 2011http://en.rian.ru/papers/20110527/164260834.html

09:07 27/05/2011

POLITICS

Prime Minister Vladimir Putin vowed to ease the social tax burden for companies and promised that the country's per capita GDP would double from the current $19,700 within a decade

(Moscow Times)

Three people died and dozens were injured when riot police dispersed a protest rally near the Georgian parliament building in Tbilisi on Thursday. President Mikheil Saakashvili said the opposition was guided by a "scenario written outside of Georgia"

(Kommersant, Vedomosti, Moskovskiye Novosti)

Just months before Russian parliamentary elections, Russians say they know almost nothing about the liberal Right Cause party, which is touted by the ruling United Russia party as one of its main opponents

(Kommersant)

ECONOMY & BUSINESS

The Federal Anti-Monopoly Service could start proceedings against the administration of Moscow's Vnukovo Airport for supporting a limited number of taxi companies who overcharge passengers

(Kommersant)

Central Bank head Sergei Ignatyev estimated Russia's net foreign capital outflow in the first quarter of 2011 at $30 billion

(Kommersant)

The total cost of an ambitious project to establish a tourist base in Russia's volatile North Caucasus region could reach 1 trillion rubles ($35.5 billion)

(Kommersant)

Czech car dealer AAA Auto Group will re-launch trade in the Moscow Region in August-September. The group's previous attempt at business in Russia was stifled by the 2008 financial crisis

(Vedomosti)

Russian bank profits this year could exceed 900 billion rubles ($31.9 billion), the Central Bank said.

(Vedomosti)

OIL & GAS

Russian-British joint venture TNK-BP has become the only Russian company to file a bid to take part in the privatization of Poland's Lotos oil concern

(Kommersant)

Oil company Lukoil will pay $1.8 billion for new, and undisclosed, production assets abroad

(Vedomosti)

SOCIETY

The Investigative Committee and Public Chamber are wrapping up legislation that would oblige authorities to pay compensation to crime victims

(Moscow Times)

An influential Islamic organization with offices across the country has been forced to close, highlighting a political struggle over the country's millions-strong Muslim population

(Moscow Times)

Whistleblowing blogger Alexei Navalny has sued the Investigation Committee for failing to officially notify him of its decision to reopen a fraud case against him

(Moscow Times)

Russia's Prosecutor General's office announced a campaign to reclassify the key prosecutors in the Moscow Region following a recent scandal involving corrupt officials

(Kommersant)

New motor vehicle inspection regulations, that postpone checks on certain cars for 12 months and cancel them for new cars, will come into force on June 4

(Rossiiskaya Gazeta)

IT

Popular Internet phone service Skype crashed on Thursday just two weeks after Microsoft bought the company for $8.5 billion

(Kommersant)

Putin Promises to Reduce Tax and Raise GDP http://www.themoscowtimes.com/business/article/putin-promises-to-reduce-tax-and-raise-gdp/437640.html

27 May 2011By Alexander Bratersky

Prime Minister Vladimir Putin vowed to ease the social tax burden for companies and promised that the country’s per capita GDP would double from the current $19,700 within a decade.

“We are now actively working on how to cut social security taxes. It is not a simple task. But I believe we must do it,” Putin said Thursday.

He made his statement during an annual conference organized by Delovaya Rossia, a lobby group that unites businesses not working in the natural resources sector.

Putin said the plan to reduce the current 34 percent tax on payroll that companies must pay for mandatory employee insurance, pension and social needs has been mutually agreed upon with the government, the president and his administration. “I am not ready to give the final parameters,” he said, adding, “We all believe that it should be done, but we should not make any mistakes.”

It was Putin’s government that introduced the law last year ordering the tax increase from Jan. 1, 2011, up from the previous 26 percent.

According to business owners and experts, the heavier tax burden forced many small and midsized enterprises to return to the practice of paying part of their employees’ salaries in “envelopes” filled with cash to avoid paying taxes.

Putin added that his government would work with trade unions to find a common solution. Such a gesture to the United Russia-controlled Federation of Independent Trade Unions prompted Yana Yakovleva, head of the group Business Solidarity, to comment that a business-oriented solution was not likely.

“I think they will find some obscure category of small businesses and lower the social tax burden for them,” said Yakovleva, who -attended the Delovaya Rossia forum. “In this country it is not customary to roll back decisions.”

She also said Putin’s statement was made more for the sake of the upcoming elections to please the manufacturing sector.

“I do not exclude the idea that this was an election-year promise made by the prime minister,” political expert and Public Chamber member Iosif Diskin said.

Diskin was referring to the All-Russia People’s Front, a populist movement chaired by Putin whose goal is to drum up support for United Russia. Delovaya Rossia is among several business and public groups that have joined the front.

But Diskin added that Delovaya Rossia had early lobbied to lower the social tax and replace it with increases on tobacco and alcohol excise taxes. “Their point of view has finally gotten through to the authorities,” he said.

Yakovleva said that, despite Putin’s promises, the forum disappointed her. “The prime minister appeared really concerned and said many of the right things, but he spoke a lot in future tense. I also didn’t hear the word ‘corruption’ once,” Yakovleva said.

Putin’s statement concerning the lowering of the social tax was made on the same day that several hundred businesspeople gathered at Moscow’s downtown Pushkin Square to demand a reduction of the social tax. The protesters carried a coffin bearing the name “middle class” on it as a symbol of government neglect toward the country’s fragile midsized businesses, which employ 15 million to 20 million people, according to various estimates.

Similar rallies, supported by opposition parties, including A Just Russia and the Liberal Democratic Party, were conducted simultaneously in Ryazan, Izhevsk, Krasnoyarsk and other cities.

Many small companies have gone out of business after the increase of the social tax, said Grigory Strelkov, deputy head of the Udmurt branch of Opora Russia, an association of small businesses. “Some just withdrew into the shadows and started to pay ‘gray’ salaries,” Strelkov told the Udm-Info news agency Thursday.

Presenting himself as a leader of global ambitions, Putin said during the conference that over the next 10 years Russian GDP would increase to make the country the world’s firth-largest economy per capita.

Putin, in an address in 2003, the year before he ran for re-election as president, promised to double GDP within a decade.

While the economy is currently the eighth-largest globally in terms of consumer spending, Russia ranks one of the last in Europe in terms of GDP per capita.

Putin has said he or President Dmitry Medvedev may run in next year’s presidential election.

The tense situation between the government and small and midsized businesses makes it hard for domestic entrepreneurs to start their own companies. According to a recent survey conducted by GlobeScan market research, 61 percent of Russians have no desire to start their own business.

More then 24,500 Russian citizens took part in the poll conducted last year, the BBC reported, citing Globe Scan.

Why Missile Defense Talks Will Fail http://www.themoscowtimes.com/opinion/article/why-missile-defense-talks-will-fail/437644.html

27 May 2011By Ruslan Pukhov

At a news conference on May 18, President Dmitry Medvedev once again made the claim that the elements of a U.S. missile defense system to be deployed in Europe would actually be aimed against Russia because the "rogue" states for which they are ostensibly intended do not constitute a threat. Later, General Staff deputy chief Andrei Tretyak declared that the United States would be able to effectively intercept Russian intercontinental ballistic missiles and submarine-based ballistic missiles by 2015 with the planned deployment of Washington's SM-3 missile defense system in Poland. U.S. President Barack Obama will visit Poland this weekend to discuss the missile defense plans.

A fatal flaw undermines Russia's objections. A technical analysis of the U.S. plans indicates that U.S. missile defenses, in their current configuration, will be unable to significantly reduce the strike potential of Russian ICBMs for the next 10 to 15 years. The 30 Ground Based Interceptor (GBI) systems currently deployed in Alaska and California are not capable of intercepting more than seven or eight Topol-M missiles. In their current Block I/IA configuration, the SM-3 missile defense systems deployed on U.S. ships are unlikely to be able to intercept Russian ICBMs and their warheads. Due to their location, the GBI systems deployed in Alaska and California would probably also prove ineffective at intercepting Russian ICBMs and are more likely intended for countering a potential threat from North Korea.

Eastern Europe, however, does appear to be a logical location for deploying a missile defense system to intercept intermediate-range and intercontinental missiles launched from Iran — should Tehran eventually develop them. If those missiles were launched toward Europe or North America, Romania and Poland really would be the optimal geographic center for deploying an interceptor system. At the same time, the ground-based SM-3 system that the United States proposes deploying there would lack the necessary range to intercept Russian ICBMs launched from bases in Tatishchevo and Kozelsk.

That shows that the U.S. missile defense system is basically focused on countering the missile threat posed by rogue states. But that is only half the picture. The real reason for Washington's large-scale missile defense work is much more far reaching, and this is what gives Russian politicians and military chiefs legitimate cause for concern.

The fundamental motivation behind U.S. missile defense is a desire to ensure the complete security of U.S. territory. When the Soviet Union first threatened U.S. security with its nuclear missiles in the 1960s — thereby ending its historical invulnerability — it came as a shock to U.S. citizens and shook up Washington's defense policy. It is not surprising that Washington's strategic goal ever since has been to restore the status quo ante. But technological and economic factors make it impossible to create a missile defense system that could guarantee protection to all U.S. territory in the event of a massive nuclear missile attack.

That is why Washington has set the goal of creating a limited missile defense system that would fend off a rudimentary missile attack by rogue states. At the same time, such a move is an intermediate step or testing ground toward creating a full-scale system.

Former U.S. Secretary of State Henry Kissinger once said something like: "Absolute security for one means a complete lack of security for everybody else." And that best describes Russia's position on U.S. missile defense. For Russia, preserving the effectiveness of its strategic nuclear forces is a categorical imperative to its national security. For relatively little expense, Russia's nuclear forces support the country's status as a great power, provide a military deterrent to other major powers, and enable it to maintain moderately sized conventional forces.

Even the hypothetical possibility that Russia's nuclear forces would be devalued threatens the foundation of Russia's military security. For that reason, opposition to an expanded U.S. missile defense system is one of the cornerstones of Russian security policy.

At the same time, Russia is unable to stop the U.S. missile defense program. A broad consensus exists in the United States for striving to provide the most complete protection possible against any missile attack on the country's territory. It is hopeless to hold talks with the United States on the subject of missile defense, just as there is no way to involve the United States in contractual obligations for chimerical "joint missile defense" projects.

President Dmitry Medvedev's proposal to create a pan-European missile defense system with Russia's participation also appears to be entirely unrealistic. Toward that end, Russia has offered use of its missile attack early warning system, primarily the installation in Gabala, Azerbaijan, and the Voronezh-DM unit in Armavir. But the West sees the missile defense offer as an attempt to paralyze or slow the creation of a U.S. missile defense system in Europe and therefore has no intention of striking a deal with Moscow.

Meanwhile, the downside to Russia's talk on joint missile defense is that it implicitly gives legitimacy to U.S. plans to create a limited missile defense system and erodes the clarity and integrity of the Russian position on the issue. Russia's actions undermine its own argument against the deployment of U.S. missile defense installations in Romania and Poland. That is why Russia's Western partners are willing to continue talks on a joint missile defense system while having no intention of actually working with Russia in that area.

And despite the general consensus among the Russian elite regarding U.S. missile defense plans, Moscow's foreign policy on the subject lacks consistency and coherency.

Considering that it has no political or diplomatic leverage it can use to stop or at least slow developments in the U.S. missile defense program, Russia must rely on a military and technical approach for countering it. This primarily means that it must upgrade the quantity and quality of its nuclear forces, and should create a new generation of heavy, ground-based multistage missiles to replace its SS-18 Satan series.

Ruslan Pukhov is director of the Center for Analysis of Strategies and Technologies and publisher of the journal Moscow Defense Brief.

Shell games, G8 talks and Duma doodlinghttp://themoscownews.com/theweekinreview/20110526/188699667.html

by Andy Potts at 26/05/2011 22:16

After the collapse of Rosneft’s planned Arctic adventures with BP, Shell could be in pole position to start drilling in the frozen north.

A meeting on Wednesday between Shell CEO Peter Voser and Deputy Prime Minister Igor Sechin has fuelled speculation that an alternative deal may be on the cards.

While Sechin, the former Rosneft chairman and the broker of the BP dea – has listed an impressive set of potential partners, sources told Vedomosti that only Shell had been invited for further talks.

And the likes of Chevron, Petrobras or Exxon, although reportedly keen to get involved, are not scheduled to come to Moscow any time soon, the paper added.

The Rosneft-BP deal was wrecked by a legal claim from AAR shareholders in the TNK-BP joint project which has worked in Russia for several years. A court ruling in Stockholm backed AAR’s claim that any BP projects in the country had to go through TNK-BP first.

Missile defence at G8

Dmitry Medvedev began talks with Barack Obama on Thursday ahead of the G8 summit in Deauville, France.

The presidents are expected to discuss missile defence and Strategic Arms Reduction Treaty (START) issues as well as the settlement of regional conflicts.

Russia will also offer new ideas on how to fight cybercrime, Kremlin aide Arkady Dvorkovich said on Tuesday.

Dvorkovich also said that Medvedev and Obama would discuss US plans to deploy a missile shield over Europe, which has aroused concern in Moscow, and Russia's long-time bid to join the World Trade Organisation.

Tripoli safer than Moscow?

Russia is more dangerous than Libya, according to the Global Peace Index.

The international study ranked the country 147th out of 154 in terms of its peacefulness and stability, with the strife-torn Arab state at 143 as NATO’s bombers roar overhead.

Only Congo, North Korea, Afghanistan, Sudan, Iraq and Somalia are less attractive than Russia, according to the latest study, which calculates levels of violence and terrorism, the extent of organised crime, corruption and commitment to democratic principles among other variables.

Not surprisingly, Russian officials are unimpressed. “I find it both amusing and bizarre to see Russia rated alongside the Congo,” Federation Council International Affairs chairman Mikhail Margelov told Kommersant.

“The standard of living in Moscow, Pskov or Krasnodar cannot be compared with wild African places like Juba, El Fasher or Abuja,” he said.

Duma time-wasting

The Duma intern who lifted the lid on dodgy expenses and timewasting in Russia’s parliament has been fired.

Yevgeny Starshov posted complaints about feckless and fraudulent delegates on his LiveJournal blog last week, although his comments were later removed after they were reprinted in some Russian newspapers.

He picked out ex-gymnast Svetlana Khorkina and crooner Josif Kobzon as expenses fiddlers, and complained about time-wasting deputies playing cards during sessions.

On Wednesday he tweeted that his time in the corridors of power was over, however, saying he had been dismissed from his internship.

Good week for …

A second bite

Gadget fans eager to get their hands on the new iPad-2 have a shorter wait than expected.

The tablet’s Russian launch was brought forward to May 27 (a month after the Europe launch) after Svyaznoi started selling imported models on May 12.

Bad week for …

Flying away

International travellers were holding their breath this week as another Icelandic volcano, Grimsvotn, threatened to ground fl ights, but Aerofl ot quickly resumed fl ights this week after suspending some European routes.

Five Umarovs for one bin Ladenhttp://rt.com/politics/press/gazeta-ru/reward-umarov-us-bin-laden/en/

Published: 27 May, 2011, 04:15Edited: 27 May, 2011, 04:15

The US will pay for information leading to Russia’s “top terrorist” By Svetlana Bocharova

The US has announced a reward of $5 million in exchange for information on the whereabouts of the leader of the forbidden Caucasus Emirate, Doku Umarov. This happened after the talks between US President Barack Obama and his Russian

counterpart, Dmitry Medvedev. The anti-terrorist present to the Kremlin has put Russian intelligence services into an awkward position, say experts. 

The US included the entire composition of the Caucasus Emirate on the list of terrorist organizations, and Washington announced a $5 million reward for information on Umarov. The developments were announced in a joint Russian-US statement on the fight against terrorism, signed by Medvedev and Obama during the G8 summit in Deauville, France.   

“The United States is also announcing today that it has included Doku Umarov in its ‘Rewards for Justice’ program, offering a reward of up to $5 million for information that leads to the location of this key terrorist leader, who has claimed responsibility, among other things, for organizing the Moscow subway bombing and the attack on rail traffic between St. Petersburg and Moscow in 2010, and the Domodedovo airport bombing this year,” the statement reads, as quoted by the Ria Novosti news agency.

Immediately afterward, the Caucasus Emirate itself was included in the list of “US Most Wanted Terrorist Organizations,” the US Department of State announced on Thursday. The Emirate is accused of attacking a train in November 2009 and the Chechen Interior Ministry in May 2009, the US State Department stated.  

In the US, Umarov has been recognized as being Russia’s “top terrorist,” and in June 2010, the US included him in a list of international terrorists. In March, Umarov was included in the special consolidated list of the UN Security Council Al Qaeda and Taliban Sanctions Committee, which also deals with associated persons and organizations. For Umarov, this meant a freezing of his accounts and a ban on travel to and assistance from any UN member state.  

The reward for information leading to Umarov is five times lower than the reward that had been promised for Al Qaeda leader Osama bin Laden, who was killed by US special forces on May 2.

The reward listed for bin Laden was $25 million. However, US officials refused to pay it, announcing that “the top terrorist” was discovered by electronic intelligence. 

Russian authorities have not listed an official reward for Umarov. In 2008, the German press reported about the readiness of the FSB to pay $1 million for help in capturing him; however, this information was not confirmed by official representatives of the Russian special forces. 

The FSB previously announced generous rewards for information about the former leaders of the Caucasian criminal underground. In 2004, a reward was set for Shamil Basayev and Aslan Maskhadov in the amount of 300 million rubles ($10 million). In 2005, after the elimination of Basayev, the special services announced the issuance of payment to an informant, whose name was not made public. Whether or not rewards were paid after the killing of Maskhadov is unknown.

So far, the only person who has openly admitted to knowing the current location of Umarov is the head of the Russian FSB, Aleksandr Bortnikov. 

At a Tuesday press conference in Dnepropetrovsk, he told reporters that the Russian special forces know of Umarov’s whereabouts.

“Localization of activity of the most notorious leaders of the Caucasian criminal underground is in the constant field of view of the FSB. We know the whereabouts of Umarov and are making necessary arrangement for his detention or other measures,” Bortnikov said ambiguously. 

Representatives of the Caucasus Emirate, whose activity was banned last year at the request of the General Prosecutor’s Office by the Supreme Court of Russia, have yet to comment on the announcement of a reward for their leader and the inclusion of their organization in the US list of terrorist organizations. However, the militants’ news website, Kavkaz Center, declared the US reward for Umarov as payment for Russia’s agreement to make concessions on the deployment of the US anti-ballistic missile system. 

Aleksey Malashenko, a member of the Scientific Council of the Carnegie Center in Moscow, disagreed with the assertion, arguing that Russia is not required to do anything in return for America’s actions in regard to Umarov. But the very announcement of a reward for the Russian terrorist made “a dual impression” on the expert.

“On the one hand, it is the provision of assistance to Russia – which is good,” he said. “On the other, [the Americans] killed bin Laden and did many other things, but what are our special services doing? In this ‘pat on the back’ there is an element of humiliation of our special forces – most likely an unconscious one.”

According to Malashenko, an interesting situation could arise “if some Russian mayor – Pronin, for example – turns to Obama” for the reward for catching Umarov.

Explosions Monday through Fridayhttp://rt.com/politics/press/izvestiya/military-ammunition-recycling-explosion/en/

Published: 27 May, 2011, 06:57Edited: 27 May, 2011, 06:57

By Dmitry Litovkin

Before the end of this year, the Defense Ministry plans to complete the recycling of outdated ammunition. Twenty railway cars of expired ammunition have accumulated in Russia’s warehouses. They are not only dangerous in terms of the risk of explosion, but also call for the allocation of significant amounts of resources for the protection of the storage facilities. Izvestia visited one of the test sites in the Leningrad region, where destruction of the explosive materials is currently being done through forceful military measures.

“This is a special engineering test site,” said the commander of the blasting operations group, Captain Anatoly Koshcheyev, without shifting his glance away from a sapper working in an explosion crater. “We daily recycle up to 50 tons of decommissioned ammunition through under-mining. That’s 100, 125 and even 203 millimeter shells for tanks and self-propelled mortars. They are all either expired or can no longer be used in troops’ training, because the weapons and equipment for which they were designed no longer exist. We even had the shells for T-34 tanks…”   

Meanwhile, the sapper in the explosion crater, after laying out a stack of 20 and 100-millimeter tank ammunition, began covering it with TNT. The total power of the explosion is equal to 80 kilograms of TNT. In order to effectively blow them up, it is necessary to have 10 kilograms of TNT blocks. The village of Elizavetkin near St. Petersburg has a total of 54 such explosion craters. Blast operations are taking place from 9:00 a.m. until the evening. Military officers are determined to carry out the order of the defense minister, Anatoly Serdyukov, to fully recycle all explosive materials before the end of this year.    

Recycling by the method of explosion is a forced measure. Military officials jokingly say that it was not them who built warehouses filled with explosives in the cities, but rather it was the cities that extended to the warehouse locations. Keeping expired ammunition is not safe. Each year, a special method must be applied to examine and transfer, as they say, “from the bottom to the top shelf,” each piece of ammunition. And when the number of these objects reaches millions, this becomes physically quite difficult to do. Moreover, it does not make any sense when the equipment for which this ammunition was designed no longer exists. As a result, in order to protect themselves and the local residents, military officials were forced to turn to force methods of destruction of the ammunition.   

“Before, ammunition was dismantled at the arsenals,” said a representative of the Western Military District, Andrey Bobrun. “Gunpowder was burned, shells were melted. The process took some time. It was unsafe. You remember the explosion at the army’s arsenal in Ulyanovsk, and the consequences it had? Today, we are completing a month’s work in a single day.”

“We are conducting blast operations Monday through Friday,” confirmed Koshcheyev. “Saturday is a ‘bath’ day, during which we clean the territory from the debris and fragments of the blasted ammunition. Upon completion of the disposal, all of the collected metal will be melted down.”  

The test site is located in a residential zone. Rural settlements are located several dozen kilometers away. And it is only 35 kilometers from St. Petersburg.

“This was one of the serious problems,” said Bobrun. “The local population and community organizations protested. The regional command did the right thing by inviting all of the interested parties to attend the test site. It showed how the works are organized, and how safety is ensured. We even agreed to conduct the blasts with 80 kilograms of TNT equivalent instead of 120 kilograms, so as to make sure the explosions did not bother the summer residents.”

Today, the process of recycling of the ammunition in the Leningrad region is closely monitored by the FSB, the Ministry of Emergency Situations, and the Defense Ministry. According to Koshcheyev, each and every recycled shell is counted. A report on the amount of ammunition that came in from the warehouses and that was recycled is provided daily to the regional headquarters and interested agencies.   

“It is impossible to steal or lose something,” said the officer. “Everything is counted and the demands made are very serious. Neither can there be any nuances on our side. Officers are responsible for the entire process.”

According to the chief of Engineering Troops, Major General Yury Stavitsky, since early 2010, more than 700 tons of ammunition has been destroyed in the military districts by the methods of explosion and burning, which equals about 20,000 railway cars. Of these, 18,500 cars of artillery and engineer ammunition were destroyed, 620 cars of air force ammunition, and 685 cars of navy ammunition. Today, the average daily volume of destructed missiles and ammunition amounts to 1,330 tons.     

Recycling is being carried out at 60 test sites, which have been equipped with 137 special platforms for blasting and burning small arms ammunitions and gunpowder. Meanwhile, half of the test sites where operations are ongoing are located in the remote areas of the Eastern Military District. It also has the largest number of blast operations groups, and is staffed with a contingent deployed from the Western Military District. Work is carried out by 220 blast operations groups that have completed a special training course. A full 2,300 vehicles are involved in recycling missiles and shells. By the end of the year, military officials plan to complete the recycling of 20,000 cars of ammunition using this method – thus completely closing the issue.

Tour of Russia’s Missile Defense Facilitieshttp://www.sldinfo.com/?p=19151

05/27/2011 By Richard Weitz

The second day of the Russia site visit began with a tour of the DON-2N multifunctional radar station at Sofrino, about 90 minutes outside Moscow. The facility is one of Russia’s most important aerospace facilities. It is a major component of Moscow’s missile defense system, which the Soviet Union constructed to protect the capital.

The Soviet government preserved the Moscow system as its sole missile defense site permitted by the 1972 Anti-Ballistic Missile (ABM) Treaty. The DON-2N radar station can detect and track ballistic missiles, analyze targets, and aim interceptor missiles at them.

Furthermore, the radar station contributes to Russia’s unified missile warning and space surveillance system. It also detects and tracks objects in outer space and sends this data to Russia’s Central Space Surveillance Center.

Although the base commander greeted our group and saw us off, we were given a lengthy tour by Major General Vladimir Derkach, First Deputy Commander of the Russian Space Forces http://www.inf.sch1451.edusite.ru/p12aa1.html

As part of Russia’s military reforms, the Russian Space Forces (Космические войска России) are being merged with the Air Defense Forces into a single command. Earlier, they had been part of the Strategic Missile Forces, but this merger proved detrimental since the offensive forces received priority funding and other treatment. The Space Forces operate the GLONASS global positioning system as well as control the Baikonur, Plesetsk, and Svobodny Cosmodromes.

After we entered the complex and left all our electronic devices behind, the tour of the DON-2N multifunctional radar station began with tea, coffee, and some informal chatting with Derkach. Then we visited the base’s one-room interior museum. General Derkach explained that all Space Force units have such museums to assimilate new officers as well as remind all those at the station of their traditions and values.

Construction of the radar started in 1978. It became operational in 1996. The station’s exterior resembles a four-sided truncated regular pyramid. It is 30 meters high. The sides of its lower platforms measure 140 meters, while its upper platforms are 100 meters in length. The sides house phased array antennas for tracking targets and guiding interceptors.

Many of its systems operate automatically and are highly jam-resistant. It has independent supplies of power, water, food, and other inputs needed to function regardless of its external environment. Its key systems are duplicated to provide redundancies in case of attack, failure in one system, or the need to replace equipment and parts without shutting down.

The radar is capable of monitoring the airspace throughout the former Soviet Union, Eastern Europe, and other areas such as Iran. It works with Russia’s early warning

satellites and the new radars Russia is constructing on its periphery to provide Russian commanders with aerospace situational awareness.

Although this was not discussed in the museum display, for some time in the 1990s, following the disintegration of the Soviet Union (many of whose early warning radars were situated in the other Soviet republics) and a sharp decrease in military spending (which led to failure to build and launch a sufficient number of new satellites to replace the Soviet-era ones when they went out of service), Russian leaders lost this capacity.

Both Russians and foreigners were concerned about this situation of uncertain early warning, since it could lead Russians to misperceive a nonexistent foreign missile attack on the Russian Federation.

After the museum, we then saw the display where the aerospace information is projected on a big screen. The command center used the kinds of telephones common in the United States in the 1970s and 1980s, while the display also looked like it did not use the latest big screen technology. Nonetheless, Derkach said the system was very accurate, and could easily detect objects the size of a soccer ball and focus on select objects with even greater accuracy.

The General explained that the radar’s command and control system operates automatically once it receives authorization to do so from the General Staff. We then entered a section of the station that allowed direct access to its exterior walls, where we saw one of the elements of the phased array being removed for repair.

Unlike the NATO hit-to-kill systems, Russian missile interceptors use nuclear-armed warheads. General Derkach said that Russia planned to transition to the use of only conventional warheads as the detection, targeting, and interception capabilities of the Russian systems improved and as the requirements for Russian missile defense changed.

Due to its explosive power and other effects, a nuclear warhead can more easily destroy incoming warheads as well as their decoys, which present problems for “hit-to-kill” systems that must distinguish between genuine warheads and decoys. NATO countries, which have long abandoned the use of nuclear warheads for missile or air defense, are eager to promote this conversion since they contribute to the imbalance in the number of so-called non-strategic (also known as tactical) nuclear warheads and make it difficult to negotiate arms control agreements between Russia and the West.

Many U.S. Senators have indicated that they would not support another Russian-U.S. strategic arms control agreement unless it placed restrictions on Russia’s large stockpile of non-strategic nuclear weapons.

General Derkach stressed that the DON-2 radar station, and other Russian facilities, could make an important contribution to any joint NATO-Russian missile defense system. He claimed it can detect all missile launches from Iran despite their initial launch site and subsequent trajectory.

Although the General stressed that Russia’s participation in any multinational missile defense system was a decision for the country’s political leaders, Derkach said it could theoretically save money, augment protection against missile threats, and promote international cooperation.

General Derkach explained that the DON-2 radar was also used to track outer space debris. Space is becoming more congested with orbital debris and other objects. Estimates are that there are more than 100,000 man-made objects in space, of which current technologies can track some 20,000 items. Even very small and undetectable debris can still threaten the more than one thousand active satellites and manned space ships.

Since my sister works for NASA, I asked the General about the new U.S. National Security Space Strategy, which calls for the United States to cooperate with foreign countries to address the growing quantity of space debris. A priority is sharing more data about debris and orbital locations with the private sector, foreign governments, and intergovernmental organizations.

The collaboration aims to improve the international community’s ability to rapidly detect and respond to adverse developments in space. The new approach recognizes that no one nation has the resources or geography necessary to track every space object. The goal is to avoid collisions by notifying satellite operators much earlier and with much greater accuracy of potentially hazardous conjunctions between orbiting objects.

General Derkach said that cooperation could easily proceed in two ways.

First, Russia, the United States, and other countries should make sure to avoid adding more debris by, for example, testing anti-satellite weapons (which the Chinese did in 2007, breaking a two-decades moratorium on such tests) or conducting more interceptions in outer space. He said the DON-2 radar station could help target and intercept objects in both the air and in outer space, but that the Russians had never used it for the latter purpose.

Second, Russia, the United States, and other countries could exchange information about the volume and location of space debris to improve situational awareness and minimize accidental collusions. Derkach agreed that orbital debris was becoming a major problem for Russia and other space powers since it damaged satellites and threatened space ships

We were all impressed by General Derkach’s professional manner and willingness to answer all our questions in a frank and often detailed way. At one point, he noted that all officers of the Russian Space Forces are educated at the Mozhayskogo Military Engineering-Space Krasnoznamennyy in Saint Petersburg. Even in Soviet times, the officers serving with the strategic offensive and strategic offensive forces were well-respected for their high levels of education and other attributes.

Meeting the General and his team made us feel that this superior performance continues despite the constraints placed on Russia’s defense budget and other military capabilities.

Russian intern's blog exposes 'lazy' MPshttp://www.montrealgazette.com/life/Russian+intern+blog+exposes+lazy/4845636/story.html

 By Andrew Osborn, The Daily Telegraph May 26, 2011

A young intern at the Russian parliament has been sacked after writing a no-holds barred account of how MPs spent their time playing cards, surfing the Internet, and fiddling their expenses.

Yevgeny Starshov lost his placement after one week after writing an online blog in which he likened the 450-member lower house of parliament to "an office smoking room" where MPs frittered away their time and had to be told how to vote by "a plump old woman dressed in red". "We of course knew that MPs did absolutely nothing but I have not seen anything like this anywhere," he wrote. "The chamber was less than a quarter full and those who were present were doing anything apart from paying attention."

Mr Starshov, who studies at a management school in Moscow, said he saw MPs reading newspapers, surfing the Internet on iPads and playing cards. "It is all sad and shameful," he wrote.

He said he had seen evidence of regular expenses fraud while working in the office that processed MPs' expenses. A Russian MP's average expense claim for travel amounted to 65,000 pounds ($104,000), he disclosed, adding that they usually spent 1,000 pounds ($1,600) at the airport while waiting for flights. He named one MP for the ruling United Russia party whom he alleged had got parliament to pay for him to travel 700 miles to sing to local officials.

Mr Starshov said "innocent people" at his school had suffered "disciplinary measures" as a result of his behaviour, but he had no regrets. "I only wrote what I saw with my own eyes," he said.

© Copyright (c) The Daily Telegraph

Read more: http://www.montrealgazette.com/life/Russian+intern+blog+exposes+lazy/4845636/story.html#ixzz1NXH2YJsL

MAY 27, 2011

Moscow's Capitalist Manifesto http://online.wsj.com/article/SB10001424052702304520804576347250162877520.html?mod=googlenews_wsj

Russia's capital is still a long way from being a global financial center. Economic and legal reform would help.By ROBERT MACIEJKO

Russian President Dmitri Medvedev has said he wants to transform Moscow into a global financial center. And he has made this transformation a core element of his plans to modernize the Russian economy. Yet Russia experienced $21 billion of capital outflows in the first quarter of this year. And Mr. Medvedev's own top economic adviser admitted recently that the president believes that "we did not have real progress in improving the investment climate. We need progress now in the short term. Investment is very low and capital flight is high."

The adviser's comments capture just one piece of the larger challenge in Moscow's quest to become a financial center. There are a number of significant obstacles to overcome.

Corruption is a corrosive force in the country. Russia comes in at 154th out of 178 countries on Transparency International's 2010 Corruption Perceptions Index. The country also has a well-deserved reputation for stifling bureaucracy. In a World Bank survey of the process required, in 182 countries, to obtain construction permits, Russia's was found to be the second most difficult in the world. Other obstacles include inadequate infrastructure, which contributes to massive traffic tie-ups, and occasional forced shutdowns of the stock market, a practice that began during the financial crisis.

For these and other reasons, the latest Z/Yen survey of 75 financial centers throughout the world ranks Moscow 68th, behind Manila, Jakarta and Malta.

Moscow's lowly status is also reflected in the local investor base, which is small in terms of both retail and institutional investors. Large Russian companies, even global leaders in their industries, frequently choose to raise capital in London or Hong Kong. Price-earnings ratios in other BRIC countries are, on average, 50% higher than those in Russia. The country's ratio of market capitalization to GDP is two to three times lower than in the most developed G20 countries, and lower also than in Latin America and in Eastern European countries like Poland. The upside potential for Russia, therefore, is large.

A recent Oliver Wyman survey of leading participants in Russian financial markets underlined the gap between Moscow and leading financial centers like New York or London. Survey respondents cited the rule of law as a key area in need of regulatory improvement, emphasizing deficiencies in combating corruption and prosecuting economic crimes.

Respondents were also asked to identify the most important areas to focus on. The first was to increase market liquidity and expand availability of long-term funding. Second was creation of a centralized depository system. And third was improved transparency.

To attract investment, the survey respondents recommended strengthening regulatory requirements and oversight, improving disclosure, offering more robust protections for minority shareholders and modernizing corporate governance standards.

Implementation of these reforms could significantly increase investor confidence and help reduce the "Russia discount" relative to other emerging markets. These reforms would also help to expand the investor base among both retail and institutional investors.

Russia has taken some steps in the right direction. A new regulator is being created that combines oversight of financial markets and the insurance sector. Steps have been taken to introduce Basel II and III standards in banking, which should improve bank transparency. The upcoming merger of the Micex and RTS exchanges is expected to result in a consolidation of the market infrastructure, which could address the absence of a central depositary. A combined exchange could also help Russia clarify its role in the global markets infrastructure amid ongoing international merger activity.

The government's $50 billion privatization program, bringing the sale of mainly minority stakes in leading oil, banking and logistics companies, will reinforce Russia's commitment to market-driven development, while helping to attract investment. But without legal and judicial reforms, international investors may well remain wary of whether their rights will be protected as minority owners in state-owned companies.

Moscow does possess a number of advantages. Its geography naturally lends itself to serving as a bridge between Europe and Asia. And it has bonds of language and culture that tie it to the former Soviet countries that now make up the Commonwealth of Independent States. The population is also well educated, with a strong base of mathematical and technical skills. Perhaps most important of all, the country's economy is, adjusted for purchasing power parity, the sixth largest in the world, and it possesses a huge reservoir of natural resources—providing a firm foundation for future growth.

While it remains to be seen whether these advantages will enable Russia to overcome the obstacles, the country's leaders should look at the experience of Poland. To develop its financial sector, Poland created strong individual and local institutional investor bases as it privatized industries beginning in the 1990s, while also improving conditions for foreign direct investment. It listed companies through Warsaw, not through foreign exchanges, and at prices that allowed local investors to profit quickly. The IPO of the Warsaw Stock Exchange last November attracted 323,000 individual investors, more than the number of active investors in all of Russia.

Such action has reinforced development of the financial sector in Poland. In the last few years, local capitalization and liquidity have increased, investors and issuers have

renewed their focus on Warsaw, and the Warsaw exchange has reinvested in infrastructure and products, leading to an increase in the number of listings.

That experience holds lessons for Moscow's goal of becoming a financial center, and it's been analyzed by the working group President Medvedev created last year. Alexander Voloshin, who served as chief of staff to President Putin, is leading the effort.

But in Russia, some insiders are still skeptical that real positive change will come and are waiting for more concrete steps. Based on past experience, that skepticism is justified. But the potential payoff from reform is significant for Moscow—helping to attract investment, diversify the country's economy and create wealth.

—Mr. Maciejko is a partner in the financial services unit of Oliver Wyman, a global management consultancy, and is the managing director in Central and Eastern Europe for the unit. He has worked in Russia and the region for 24 years.

National Economic Trends11:51 27/05/2011ALL NEWS

Dollar's weighted mean rate down against rouble in "tomorrow" deals. http://www.itar-tass.com/en/c154/151909.html

27/5 Tass 115

MOSCOW, May 27 (Itar-Tass) The US dollar's mean weighted exchange rate against the Russian rouble in "tomorrow" deals plunged by 11.14 kopecks to 28.1166 roubles per one U.S. dollar in Friday’s unified trading session as at 11.30 Moscow time, the economic news agency PRIME-TASS reports.

Since April 15, 2003 the Bank of Russia has set the dollar's official exchange rate against the rouble for "tomorrow" delivery on the basis of the weighted mean rate shown in the unified trading session (UTS) at 11.30 Moscow time.

Central bank likely to pause with interest rate hikeshttp://www.bne.eu/dispatch_text15433

CitiMay 27, 2011

Inflation is a priority for the Central Bank of Russia, Chairman Ignatiev stressed in his speech at a banking conference in St Petersburg on Thursday. His comments reiterated the central bank's gradual switch to using interest rates rather than controlling the ruble exchange rate as its main monetary policy tool (Reuters, 26 May 2011). However, he said that the central bank would tighten cautiously to minimize any negative impact on growth.

We expect the CBR to pause interest rate hikes at its next meeting on 30 May, as inflation is likely to decelerate. Growth performance appears uneven, with some stabilization in April after the disappointing 1Q 11. M2 growth moderated to 23%YoY in May 2011 from some 36% in September 2011. According to Chairman Ignatiev, there is no excess liquidity in the banking sector any more. Weekly inflation remains moderate at about 0.1% (4.6%YTD this year vs 3.8% at the end of May 2010). While May inflation is likely to stay close to 9.5% driven by non-monetary factors, we forecast it will decelerate during the summer.

Meanwhile, capital outflows reached US$7.8bn in April and about US$30bnsince the beginning of the year, according to CBR estimates. Chairman Ignatiev did not rule out the possibility that the outflows could be driven by an unfavourable investment climate, fast-growing imports and risks of downward correction in the oil price. There is a risk that capital outflows in January-April would not reverse in 2H2011. Together with the falling quarterly current account surpluses, this may lead to the ruble weakening towards end-2011. We think the CBR will resume rate hikes closer to the end of the year if inflationary risks intensify and capital outflows continue.

Russia's Central Bank seen leaving rates on hold http://www.brecorder.com/business-a-finance/banking-a-finance/15404-russias-central-bank-seen-leaving-rates-on-hold.html

Friday, 27 May 2011 06:42

MOSCOW: Russia's central bank is widely expected to take a breather with tightening of monetary policy on Monday after an at least temporary respite in price rises and data that suggests the economic recovery is still fragile.

Russia's consumer prices have risen 0.1 percent for three consecutive weeks, taking inflation since the start of the year to 4.6 percent. That compares with the central bank's full-year target of 6-7 percent.

Central Bank Governor Sergei Ignatyev said on Thursday the regulator was not in a hurry to raise rates, citing concerns about a possible shortage of domestic liquidity.

While inflation gains in urgency as one of the top concerns among Russians ahead of parliamentary and presidential elections late this year and in 2012, the central bank is counting on a seasonal food price decrease in summer.

The central bank is also worried that higher rates will attract speculative capital inflows through carry trade operations, where low-yielding currencies such as the dollar are used to fund the purchase of higher-yielding Russian assets.

"Despite the fact that this time the central bank may leave key rates unchanged, citing uncertainty in the global economy, monetary conditions will tighten as a result of a worsening in the situation around liquidity," said Maxim Oreshkin, chief economist at Credit Agricole in Moscow.

The money market's benchmark RUONIA rate, currently at 3.68 percent, may exceed the central bank's deposit rate by 50 basis points by month end, said Oreshkin.

At its April meeting the central bank raised all key rates, surprising markets with a broad tightening move.

Following are main scenarios of the central bank meeting:

The median forecast in the poll of 17 economists pointed to the central bank leaving the deposit rate on hold. This rate tends to have the most significant effect on rouble liquidity.

If the deposit rate is left unchanged, it could disappoint yield-hungry investors, putting some downside pressure on the rouble.

"If the central bank hikes rates, the rouble will firm a little. If rates are put on hold, the rouble may slightly ease," said Pyotr Milovanov, a dealer at Metallinvest bank.

Only two economists of 17 polled by Reuters predict a 25 basis point hike.

The refinancing rate -- officially seen as the benchmark rate -- has had less influence on domestic liquidity since interbank money market rates fell below its level in 2010.

The rouble is unlikely to react immediately if the refinancing rate is left at 8.25 percent, as that is already priced in by the market. An unexpected rise in the rate could reinforce rouble demand.

The median forecast in the Reuters poll showed Russia leaving reserve requirements at 5.0 percent for banks' liabilities to corporate non-residents on Friday, and at 4.0 percent for other liabilities.

Dealers say the rouble is unlikely to be moved by the decision on reserve requirements.

Copyright Reuters, 2011

CBR runs a fine balancing act

http://www.bne.eu/dispatch_text15433

RBSMay 26, 2011

Interesting commentary from Sergei Ignatiev, the chairman of the CBR this morning. First, Ignatiev indicated that while inflationary expectations remain elevated the bank is not yet set to change its inflation target of 6-7% for year end. As of April YTD inflation had reached 3%, with Ignatiev suggesting that MOM inflation would come in around 0.5% in May, comparable to the April out-turn. On a YOY basis inflation reached 9.6% in April. Ignatiev indicated that the harvest remained the main threat to inflation targets - albeit surely herein the favourable base from the year earlier level will help drag down the headline rate later in the year.

Second, the governor appeared pretty dovish in terms of the interest rate outlook, and while noting that no decision had been made over the May 30 interest rate meeting, and while rates/RRRs could be hiked or kept on hold, the CBR was in no rush to tighten.

Third, Ignatiev noted the recovery in credit growth, but seemed comfortable with the current 20/22% YOY rate of growth - admittedly from a low base.

Fourth, the governor indicated that the economy was still on track to meet the official 4.2% real GDP growth target for the year.

Fifth, Ignatiev highlighted the positive impact (on inflation) from the stability/strength of the rouble, albeit ruled out a further near term widening in the official FX bands. He indicated some comfort with current FX volatility, and suggested that the currency could move in either direction.

Sixth, on the issue of capital outflows, the governor revealed that capital flight is continuing, with net outflows of USD30bn for the first 4 months of the year, and apparently a quickening in the pace, with April seeing around USD8.7bn in outflows. Ignatiev indicated that the outflow reflected Russia's difficult business climate and concern over the impact of oil price volatility on the balance of payments. While noting that outflows continued in May, he was upbeat that the outflows would reverse to year end - we struggle with this view given the close proximity of parliamentary/presidential elections.

Seventh, Ignatiev indicated the CBR intervened with around USD3.6bn in FX purchases in April, comparable to that seen in recent months. The overall message though is that the BOP is fairly finely balanced, with a large oil-fuelled current account surplus being partly offset by capital flight, and the CBR intervening at the margin to prevent over-appreciation of the rouble.

Our sense on the FX front is that the CBR will want stability/modest rouble strength this side of elections. The CBR will be both targeting inflation and growth - previously it put

a greater weight on growth, but with signs that the population is becoming increasingly sensitive now to the impact of inflation on real disposable incomes, and with opinion polls showing a dip in support for the ruling elites, controlling inflation is also centre stage. The CBR will be eager to try and hold inflation around target. It will monitor inflation trends, and if the signs are that inflation will overshoot, and if the growth outlook is appearing sufficiently robust, it will step from FX intervention. It seems to be running a fine balancing act.

Timothy Ash

Business, Energy or Environmental regulations or discussions

Russian markets -- Factors to Watch on May 27http://uk.reuters.com/article/2011/05/27/russia-factors-idUKLDE74Q06L20110527

Fri May 27, 2011 7:16am BST

MOSCOW, May 27 (Reuters) - Here are events and news storiesthat could move Russian markets on Friday. You can reach us on: +7 495 775 1242 STOCKS CALL (Contributions to moscow.newsroom@reuters.com): Troika: U.S. equities managed to close the day in positiveterritory; crude is up slightly today after losing one percentyesterday. Asian markets are up this morning on strong corporateearnings. We are opening our prices this morning up 1.0 percent. Nettrader: On the Russian forex market we expect a furtherweakening in the dollar against the rouble due to its weakeningagainst the euro and rising oil prices. EVENTS [RU-DIA] (All times GMT): DEAUVILLE, France - Russian President Dmitry Medvedevattends the Group of Eight leaders meeting. MOSCOW - Russian Prime Minister Vladimir Putin will chair ameeting on gas industry taxation. IN THE PAPERS [PRESS/RU]: Russian billionaire Vladimir Potanin has rejected an offerfrom rival tycoons Viktor Vekselberg and Len Blavatnik to buyhis stake in Norilsk Nickel (GMKN.MM), the Vedomosti newspaperreports. TNK-BP (TNBP.MM) has submitted an unbinding offer to buyPoland's refiner Lotos LTOS.WA, Kommersant writes. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: TOP NEWS:

* Georgia halts protests, accuses Russia [ID:nANT638904]* Still no joint BRIC candidate for IMF-Russia [ID:nLDE74P261] COMPANIES/MARKETS:* LUKOIL's profits boosted by price rise [ID:nLDE74P0YL]* Tax payments, oil push rouble up 1 pct vs dlr [ID:nLDE74P1PU]* TNK-BP eyes Brazil oil, gas; may pay $1 bln [ID:nLDE74P0AJ]* Yandex backer Baring Vostok plans new fund [ID:nLDE74O0R0]* MTS Q1 net income falls 16 pct [ID:nLDE74P177]* X5 earnings beats forecast, shares jump [ID:nLDE74P06E]* Pharmacy 36.6 cuts year loss, Q1 sales jump [ID:nLDE74P1QW] ECONOMY/POLITICS:* Russia c.bank says no hurry to hike rates [ID:nLDE74P0WG]* Russia to curb spending growth, payroll taxes [ID:nLDE74P14V]* Russia's April GDP growth at 3.3 pct y/y [ID:nMSC000213]* Russian gold/fx reserves rise to $516.8 bln [ID:nMOS007706]* Russia sells 250 mln rbls OBR, yield 3.6 pct [ID:nLDE74P1NF] ENERGY:* Russia's domestic oil prices at 2011 lows [ID:nLDE74P1GK]* Gazprom, Japan to invest $7 bln in LNG plant [ID:nLDE74P0LF]* Bashneft to spend $1.2 bln on downstream [ID:nLDE74Q02D]* SOCAR to buy BP's 1.6 pct in Caspian field [ID:nANT643904]* Turkmenistan urged to commit gas for Nabucco [ID:nLDE74P156] COMMODITIES:* Russia ministry supports grain ban lifting [ID:nLDE74P12F]* Russia sows 77 pct targeted spring grain area [ID:nLDE74P07L]* POLL-Russia to harvest 52.7 mln t of wheat [ID:nLDE74P1OE]* Hot, dry summer seen in some Russian regions [ID:nLDE74P1SL]* Isolation caps Kazakh export growth potential [ID:nLDE74O18W] MARKETS CLOSE/LATEST: RTS .IRTS 1,828.2 +0.54 pct MSCI Russia .MIRU00000PUS 960.5 +0.40 pct MSCI Emerging Markets .MSCIEF 1,142.4 +0.80 pct Russia 30-year EurobondRU011428878= yield: 4.596/4.548 pct EMBI+ Russia 11EMJ 199 basis points over Rouble/dollar RUBUTSTN=MCX 28.1108 Rouble/euro EURRUBTN=MCX 40.0800 NYMEX crude CLc1 $100.69 +$0.46 ICE Brent crude LCOc1 $115.20 +$0.15 For Russian bank balances see CBDEPOS For Russian company news, double click on [E-RU] Treasury news [M-RU] Corporate debt [D-RU] Russian stocks [.ME] Russia country guide RUSSIA All Russian news [RU] Scrolling stocks news [STXNEWS/EU]

Emerging markets top news [TOP/EMRG] Top deals [TOP/DEALS] European companies [TOP/EQE]

May 27, 2011 12:08

Investment funds with focus on Russia, CIS see $261 mln inflow in latest weekhttp://www.interfax.com/newsinf.asp?id=247143

MOSCOW. May 27 (Interfax) - The outflow of capital to funds that invest in Russia and the CIS totaled $261 million in the seven-day period ending May 25, compared with an outflow of $353 million in the preceding week, according to data from Emerging Portfolio Fund Research (EPFR).

However, there has been a net inflow in the year so far totaling $3.815 billion.

The outflow in the latest week is the result of lower commodity prices and greater uncertainty on global markets. "Investors have pulled $614 million out of the Russian funds in the last two weeks, of which ETF [Exchange Traded Funds] accounted for 92%. The main risk factor for the Russian market is that of the $4.4 billion invested in Russia in the first four months of the current year, $2.9 billion was received via ETF. A large portion of that ETF money represents a bet that oil prices will stay high. If oil prices drop more substantially, another $2.3 billion in ETF money is at risk," Uralsib said in a note to investors.

jh

(Our editorial staff can be reached at eng.editors@interfax.ru)

Rosatom Wants to Renew Siemens Partnership, FT Deutschland Sayshttp://www.bloomberg.com/news/2011-05-27/rosatom-wants-to-renew-siemens-partnership-ft-deutschland-says.html

By Sheenagh Matthews - May 27, 2011 9:31 AM GMT+0200

Rosatom Corp. wants to revive ties to Siemens AG (SIE) even after the German engineer signaled a strategy shift, Financial Times Deutschland reported, citing Nikolai Spassky, deputy chief of the Russian nuclear company.

Rosatom wants to “hold serious talks to renew the level of our partnership” with Munich-based Siemens, which could deliver technology and factory parts, the German newspaper cited Spassky as saying.

Siemens has said it will discuss with its Russian partner the implications of an arbitration tribunal decision forcing the German company to pay France’s Areva SA 648 million euros ($923 million) following its exit from a nuclear joint venture. Talks will “take into account the events in Japan and the worldwide market environment as well as the social and political aspects,” Alfons Benzinger, a Siemens spokesman, said in an e- mail May 23.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net

Potanin rejects $19 bln offer for Norilsk stakehttp://en.rian.ru/business/20110527/164262716.html11:22 27/05/2011

Billionaire Vladimir Potanin has declined a $19.2 billion for a 30 percent stake in Russia's Norilsk Nickel metals producer from Viktor Vekselberg and Leonard Blavatnik, Vedomosti business daily quoted sources as saying on Friday.

Norilsk Nickel has been the center of a conflict between Potanin and RusAl aluminum company owner Oleg Deripaska, which started last June after an annual shareholders' meeting when Potanin's investment vehicle Interros increased its representation, weakening Deripaska's position. Deripaska holds a quarter of Norilsk.

Vedomosti quoted sources close to RusAl's shareholders as saying that Vekselberg and Blavatnik, who have small holdings in RusAl, made the offer in late April in an effort to put an end to the conflict and create Russia's largest metals holding company.

The companies declined to comment.

Interros has also tried to resolve the conflict by offering to buy RusAl's stake in Norilsk for $12 billion and 20 percent of its shares for $12.8 billion but the aluminum company rejected both offers.

At a recent extraordinary shareholders' meeting, Interros gained four seats on Norilsk board, while RusAl and Norilsk management, regarded as being close to Interros, got two seats each. RusAl's nominee chairs the board.

MOSCOW, May 27 (RIA Novosti)

Billionaire Timchenko May Buy Raspadskaya Stake, RBC Daily Sayshttp://www.bloomberg.com/news/2011-05-27/billionaire-timchenko-may-buy-raspadskaya-stake-rbc-daily-says.html

By Yuliya Fedorinova - May 27, 2011 7:56 AM GMT+0200

Russian billionaire Gennady Timchenko is in talks to buy a controlling stake in OAO Raspadskaya (RASP) from Evraz Group SA (EVR) and the coal company’s management, RBC Daily reported, citing people they did not identify.

Timchenko seeks to create a holding company which will include coal assets and is also in talks to buy SDS-Coal Holding Co., the Russian newspaper wrote.

Click here for web link

To contact the editor responsible for this story: Denis Maternovsky at dmaternovsky@bloomberg.net

UPDATE 1-Indonesia-Market Factors to watch - May 27http://in.reuters.com/article/2011/05/27/indonesia-factors-idINL3E7GR01B20110527

Fri May 27, 2011 8:42am ISTRUSSIAN STATE FIRM EYES BUILDING POWER PLANT IN W.JAVA Russian state power trader Inter RAO has expressedinterest in investing in the energy sector in Indonesia's WestJava with total investment of $2 billion, said Raam Saraogi,representative of Inter RAO. West Java province has thepotential to generate 3x300 megawatts of power, said deputygovernor Yusuf Macan Efendi. (Jakarta Post p.5)

Rosselkhozbank raises $800 mln via bond – IFRhttp://www.reuters.com/article/2011/05/27/russia-agribank-bond-idUSLDE74Q06O20110527

2:41am EDT

MOSCOW, May 27 (Reuters) - Rosselkhozbank, Russia's fourth-largest lender by assets, raised $800 million via a subordinated bond issue, according to IFR markets, a Thomson Reuters news and market analysis service.

The yield for the 10-year bond with a call option after five years was set in line with initial guidance at 6 percent. [ID:nLDE74P0A6]

The lender will use part of the proceeds to exercise a call option for a $500 million subordinated issue of loan participation notes (LPN) raised in September 2006, IFR added. [ID:nLDE74B1NJ] (Reporting by Katya Golubkova; Editing by David Holmes)

The volume of web-development market in Russia totaled 9.72 billion rubles in 2010http://www.prlog.org/11513037-the-volume-of-web-development-market-in-russia-totaled-972-billion-rubles-in-2010.html

PRLog (Press Release) – May 27, 2011 – The volume of Russian web-development and site support market totaled 9.72 billion rubles in 2010. This figure is 35% higher than during the same period last year. These figures are taken from the new study of CMS Magazine analytical portal and Rating Runet Project.The study is based on a survey conducted by CMS Magazine among the leaders of 400 Web Studios, and the data collected within Rating Runet Project. The main topics of them are market volume of web development, site development costs and the levels of specialists’ salaries.

According to this research there are about 2,300 web studios that work in Russia. Most companies are concentrated in capital cities and regions with high penetration of broadband Internet access. 32% of all web developers’ offices are located in Moscow, 11% of companies are registered in St. Petersburg, 5% in Yekaterinburg, 4% in Novosibirsk and 2-3% (or 40-60 web studios) are located in other Russian cities millionaires.

Compared with last year the average cost of site development services has slightly decreased. According to experts, there are 2 main reasons for this. Firstly, after the crisis in the market the number of companies focused on work at the lowest prices has increased. This category has always been present in the market, but price sensitivity of customers, which had increased after the crisis 2009, significantly increased the number of dumping studios. Secondly, in 2010, many market participants have adjusted their price-lists, designating as official positions those quotations, which in 2009 had been made "off the record" in the form of significant discounts on initial prices.

At the same time, the majority of respondents (60%) expect increase of prices for web development services in the near future.

According to forecasts of the survey participants, the market for web development in Russia in 2011 could grow by 40% to 13.65 billion rubles. This may happen by the increase of average check for site development, as well as due to the growth of individual economics segments, which gradually return    to pre-crisis level and will increase the budgets for the development of new and ongoing Internet projects.

THE POLYUS OLIGARCHS OUT OF THEIR DEPTH – SOUTH AFRICAN TO THE RESCUEhttp://www.businessinsider.com/the-polyus-oligarchs-out-of-their-depth--south-african-to-the-rescue-2011-5

John Helmer, Dances With Bears | May 27, 2011, 2:32 AM

By John Helmer, Moscow

South African James Nieuwenhuys has taken over as chief operating officer of Moscow-based Polyus Gold, Russia’s largest goldminer. The mining company, owned in roughly equal parts by Mikhail Prokhorov and Suleiman Kerimov, has been unsuccessful in months of effort to find a major international mining company to partner, or to take over and buy the oligarchs out.

Market sentiment has been negative as production growth at Polyus’s three Russian mines has been sluggish, and a merger with a Kazakhstan gold company generated recriminations in the courts. Polyus Gold’s share price has been falling even as the price of gold has gone up. For 2010, the company has reported sale revenues up 43% to US$1.7 billion; net profit was up 91% to $356 million. Current market capitalization is $12.8 billion, down 7% in the year to date.

Nieuwenhuys has been managing director of the South African subsidiary of Canada’s SNC-Lavalin, an engineering and mine design consultancy. Sources at his Johannesburg office confirm that he wound up there early this month, and has now moved to Moscow.

The Nieuwenhys appointment, which Polyus Gold confirmed today, signals that Prokhorov, who took over the CEO position last December, has run into trouble with his public promises to list Polyus Gold directly on the London Stock Exchange by August; the company shares are listed on the Moscow stock exchange and traded in depositary receipt form in London. Prokhorov has also said he is trying to sell a strategic stake in the company to an international miner, although North Americans Kinross Gold, Barrick Gold, and Newmont have proved reluctant, and Anglo American Ashanti has not been tempted.

Prokhorov’s running of Polyus Gold has been criticized by mine sector analysts for exaggeration of the company’s reserves and reluctance to invest in costly new mine projects. He and co-director of Polyus Gold, Maxim Finsky, are currently under investigation by the Canadian stock market regulator after complaints by minority shareholders in junior goldminer, Century Mining, that the two have acted improperly as they acquire mining company assets for a Toronto IPO of their new mining company called Intergeo. A formal application for a ruling was issued on May 25.

Kerimov, an investor for syndicates of silent Russian partners, is reported to be under investigation in India at present in connexion with money-laundering and tax evasion charges against Hassan Ali Khan, a hawalla money-changer. Kerimov’s spokesman told Business Day the two had a business relationship before 2004. “We deny ever having strong ties to Hasan Ali Khan. Indeed, we have had no dealings with him since that introductory period over 7 years ago,” the spokesman, Eliot Lauer, said, adding “the reports that appeared in the Indian media last month contained unverified and untrue statements regarding Mr. Kerimov.”

Brian Gilbertson was the last of the well-known South Africans to have been engaged by Russian oligarchs to lift their financial performance and corporate transparency, and pilot IPO attempts in London. Gilbertson was CEO of Victor Vekselberg’s SUAL aluminium concern, before it was merged on Kremlin order with Oleg Deripaska’s Rusal in 2006. Deripaska then put Vekselberg in Gilbertson’s seat at the head of the Rusal board, but the Russians failed in their attempt at listing on the London Stock Exchange in 2007. Rusal finally listed on the Hong Kong Stock Exchange in January 2010. The only foreigners in senior management at Rusal are Australian salesmen.

Read more: http://www.businessinsider.com/the-polyus-oligarchs-out-of-their-depth--south-african-to-the-rescue-2011-5#ixzz1NX7S5dNb

Activity in the Oil and Gas sector (including regulatory)

Ministry puts forward 2 shelf exploration programs

http://www.rbcnews.com/free/20110527123122.shtml

      RBC, 27.05.2011, Moscow 12:31:22.Russia's Natural Resources Ministry has proposed to develop two programs to prospect and develop the country's continental shelf and criticized the program being advanced by the Economic Development Ministry as outdated, RBC Daily reported today.

      The first program should focus on tapping discovered mineral resource fields and domestic service and shipbuilding facilities. The second program should be devoted to exploration of the continental shelf. It should include two scenarios. One scenario envisages that only state-controlled Rosneft and Gazprom are authorized to explore offshore fields, while under the other scenario the list of such companies could be expanded and the amount of government and private financing would increase.

TNK-BP Submits Bid for Poland’s Grupa Lotos, Kommersant Reportshttp://www.bloomberg.com/news/2011-05-27/tnk-bp-submits-bid-for-poland-s-grupa-lotos-kommersant-reports.html

By Denis Maternovsky - May 27, 2011 6:36 AM GMT+0200

TNK-BP, BP Plc (BP/)’s Russian joint venture, submitted a non-binding bid to buy a stake in Poland’s second-largest oil refiner Grupa Lotos SA (LTS), Kommersant reported.

The Moscow-based oil producer is the only Russian bidder for the asset, the newspaper said, citing an unidentified person with knowledge of the auction. OAO Gazprom Neft and OAO Rosneft, which earlier were considering taking part in the tender, did not submit their bids, Kommersant reported, citing the companies.

Click here for web link

To contact the editor responsible for this story: Denis Maternovsky at dmaternovsky@bloomberg.net

Bashneft to spend $1.2 billion on downstream by 2015http://in.reuters.com/article/2011/05/27/us-bashneft-idINTRE74Q0PK20110527

10:47am IST

UFA, Russia (Reuters) - Russian mid-size oil producer Bashneft, owned by conglomerate Sistema, plans to invest 35.14 billion roubles ($1.18 billion) in oil refining by 2015, a company executive said on Friday.

Vadim Nikolaichuk, head of Bashneft's subsidiary UfaNefteKhim, told reporters the company invested a total of more than 12 billion roubles in oil processing in 2009-2010.

(Reporting by Olesya Astakhova; Writing by Maria Kiselyova; Editing by Jon Loades-Carter)

Bashneft to sink $1.2bn into refineries upgrade

http://www.rbcnews.com/free/20110527104605.shtml

      RBC, 27.05.2011, Ufa 10:46:05.Bashneft plans to invest RUB 35.14bn (approx. USD 1.24bn) in the upgrade of its Bashkortostan-based oil refineries Novoil, Ufa Oil Refinery and Ufaneftekhim by 2015, Ufaneftekhim CEO Vadim Nikolaychuk said at a chemical forum on Friday.

      Of this total, Bashneft intends to allocate RUB 19bn (approx. USD 673m) for projects to increase the level of crude oil conversion into light oil products. It plans to launch a delayed coking unit and a vacuum gasoil hydrocracker at Ufaneftekhim.

      As a result of these measures, the level of crude oil conversion is expected to reach 94.7% in 2016, up from 80.21% in 2008. Investments in a project to enhance the quality of fuel are planned at RUB 9.7bn (approx. USD 344m) until 2013.

Anupama Airy, Hindustan TimesEmail AuthorNew Delhi, May 26, 2011First Published: 21:04 IST(26/5/2011)Last Updated: 02:03 IST(27/5/2011)

Oil giants may put Rs 15,500 cr in Russia gas projecthttp://www.hindustantimes.com/Oil-giants-may-put-Rs-15-500-cr-in-Russia-gas-project/Article1-702336.aspx

In a bold attempt to secure a share in Russia’s gas sector, a consortium of ONGC Videsh, GAIL and Petronet LNG is preparing to invest around Rs 15,500 crore for a 15% stake in Russia’s independent gas producer Novatek’s $30-billion (Rs 1,35,000-crore) LNG project in Yamal peninsula.

Novatek will retain 51% equity in the project while the balance 49% will be given to potential investors. France’s Total is also understood to be persuing a 20% stake in the project.

A non-binding indicative bid for a 15% stake in the project is underway and, if successful, the Indian consortium will invest R15,500 crore for a 15% in the project, a company official close to the development told HT.

“The 15% equity of this multi-billion dollar project (to be financed on a debt-equity ratio of 50:50) will be split between ONGC Videsh, GAIl and Petronet LNG as 7.5%, 5% and 2.5% respectively,” the official said.

Global consultants including Gaffney Cline Associates (GCA), Poten & Partners (UK) Ltd (P&P) and Allen & Overy were appointed by the Indian consortium for conducting a due-dilligence of the project, besides preparing an indicative offer.

A joint team comprising of representatives from OVL, GAIL and GCA also visited the data room in Tyumen, pertaining to upstream assets.

“While Novatek has indicated the project cost to be $16 billion, our consultants have worked out the capex for upstream development and the LNG liquefaction plant as $30 billion,” the official said.

The capacity of the plant will be 16.5 million tonnes per annum and the delivery of first LNG from Yamal is expected by 2016.

“The Yamal LNG project will receive supplies from the South Tambeyskoye field located in the north east of the Yamal Peninsula and holds estimated reserves of 1256 billion cubic meters of natural gas and 52 million tonnes of oil,” he said.

Does Russia need China’s energy market?http://en.rian.ru/valdai_op/20110527/164261847.html

10:32 27/05/2011

By Andrei Ostrovsky

A new round of energy talks are soon to be held within the larger framework of Russian-Chinese economic cooperation. Russian Deputy Prime Minister Igor Sechin and his Chinese counterpart, Wang Qishan, will discuss the current conditions of and prospects for cooperation in the energy sector, particularly with regard to oil and gas, which have become a major component of Russian-Chinese bilateral relations.

In October 2009, when Prime Minister Vladimir Putin visited China, a number of agreements were signed in order to boost bilateral cooperation, including a cooperation program between the regions of Eastern Siberia and the Russian Far East and China’s northeastern provinces.

More recently, Rosneft and the China National Petroleum Corporation (CNPC) also signed an agreement on the annual supply of 15 million metric tons (110.25 million bbl) of Russian oil in exchange for a $25 billion loan to Rosneft and Transneft for the construction of a branch pipeline from Skovorodino to Daqing in northeastern China. A related agreement stipulates the supply of some 70 billion cubic meters (2.47 trillion cu f) of Russian natural gas to China annually.

Many people in Russia wonder whether such cooperation is in fact in their own interests, fearing that Russia might soon find itself in the position of a mere commodities supplier. But the question should be rephrased as follows: Has Russia missed the chance to strike a lucrative partnership with China over energy resources? Do its oil and gas companies still have time to strengthen their foothold in eastern markets?

China is the world’s second largest energy consumer after the United States, accounting for over 10% of global primary energy consumption.

While implementing its 11th five-year plan (2006-2010) and drafting a socio-economic development plan through 2020, China came to the conclusion that in order to achieve its goal of “prosperity in moderation” (xiaokang), it needs to increase its energy production accordingly. However, that could be more easily said than done: ever since the 1990s, China has been aware of its dwindling oil supplies, and now insufficient reserves of natural gas and coal may be added to the list.

Meanwhile, China’s demand for energy will keep growing. Its sizable coal reserves notwithstanding, its imports have exceeded exports since 2007. Given the trends of its economic development, China will be hard put to meet its energy requirements in the 21st century.

As for Russia, oil and gas account for over 70% of its exports in terms of value, but nearly all of it is directed westward along existing pipelines from Western Siberia. This irrational distribution of production power in Russia in part underwrites the hypertrophied growth of its European territory at the expense of the starkly underdeveloped east.

The development of large-scale projects designed to deliver Russian oil and gas to Northeast Asia could boost the economic development of Siberia and the Russian Far East while attracting the investment from countries interested in importing Russian energy resources. Russian-Chinese oil and gas projects could be the first step in this direction.

One of the biggest stumbling blocks to Russian-Chinese energy cooperation, however, will be a pricing agreement. It’s no coincidence that this issue has been at the center of ongoing and thus far unsuccessful negotiations between Gazprom and CNPC. Russian companies can demand the same prices for energy distribution as they do for their Western clients, however, as long as China produces more energy than it consumes, it will be reluctant to pay those prices. In this regard, it should be noted that China has large coal reserves and that its so-called “coal kings” can always increase production to compensate for energy shortages on the domestic market. Furthermore, it has surged ahead in the production of alternative energy, including wind, solar, tidal, geothermal, hydrothermal energy and bioresources, as well as building small hydroelectric plants. It also has long-standing relations with oil suppliers in the Middle East, Russia, Central Asia, and Latin America.

Overall, China has enough energy to maintain the rapid growth of its economy. But it will need more energy to accelerate the growth of its GDP, which means that it will have to import oil, as well as natural gas and coal.

Under these circumstances, if Russia does not pay more attention to the eastward development of its energy exports, it will soon find itself elbowed out of the Chinese energy market by its international competitors.

Dr. Andrei Ostrovsky (Economics) is Deputy Director of the Institute of the Far East, Russian Academy of Sciences

Gazprom

Gazprom to launch 10 mln t LNG plant in 2016-sourcehttp://af.reuters.com/article/energyOilNews/idAFLDE74P0J020110526

Thu May 26, 2011 8:20am GMT

UFA, Russia May 26 (Reuters) - Gazprom (GAZP.MM) and Japanese companies plan to build a liquefied natural gas plant near Russia's Pacific port of Vladivostok in 2016 with capacity of 10 million tonnes a year, a Gazprom source said on Thursday.

He also told reporters that the investment required for the plant's construction is estimated at $7 billion. Japan is slated to get 7 million tonnes of the frozen gas a year, the rest will be shipped to South Korea.

Last month, a consortium led by the Japanese trading house Itochu Corp (8001.T), said it may build an LNG plant in Russia's Far East together with Gazprom to satisfy rising demand for the fuel.

(Reporting by Olesya Astakhova; writing by Vladimir Soldatkin; editing by Jessica Bachman)

11:30 27/05/2011ALL NEWS

Sakhalin, Gazprom to develop Sakhalin shelf projects. http://www.itar-tass.com/en/c154/151887.html

27/5 Tass 152

YUZHNO-SAKHALINSK, May 27 (Itar-Tass) —— The authorities in the Sakhalin Region and the Russian gas giant Gazprom will develop and use the resources of the Sakhalin shelf projects under a memorandum, which Governor of the Sakhalin Region Alexander Khoroshavin and Gazprom Deputy CEO Alexander Ananenkov signed.

“The memorandum holds that the signatory parties intend to cooperate in the use of the resources under the Sakhalin shelf projects for gas supplies in the Sakhalin Region and gas supplies in other constituents in the Far Eastern Federal District and the development

of the export supplies in the countries in the Asia-Pacific Region,” spokesman for the regional governor Alexei Bayandin told Itar-Tass on Friday. For this purpose the regional government and Gazprom will synchronize the development of the gas production capacities on Sakhalin (including the Sakhalin-Khabarovsk-Vladivostok gas pipeline) and the liquefied gas output rate near the settlement of Prigorodnoye.

Gazprom will also consider the construction of an oil refinery in the Sakhalin Region. Oil and gas condensate from the Sakhalin shelf fields can become the raw materials for the oil refinery. Meanwhile, the government of the Sakhalin Region will assist the company in these issues, the memorandum runs.

The signatory parties act under the cooperation agreement and the agreement for gas supplies in the Sakhalin Region. In 2009 the general schedule of gas supplies in the Sakhalin Region was approved.