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MOSCOW, August 8 (RIA Novosti)

Noviye Izvestia

Russian opposition financed by foreign money - expert

The opposition has never been an independent political force in Russia and is financed by foreign money, a leading political scientist told a respected Russian daily Monday.

Alexei Mukhin, the director of the Center for Political Information, said in an interview with Noviye Izvestia that tycoons and political exiles Boris Berezovsky and Leonid Nevzlin, who finance the opposition, were not independent players but "nothing more than advocates of the U.S. State Department's line."

"The Kremlin is involved in horse-trading with the U.S. over the terms of not entering an alliance with China, which the Americans view as their main adversary," the political scientist said. "The opposition is being used as an instrument of pressure on Moscow."

Accordingly, ex-premier Mikhail Kasyanov had no alternative to becoming the opposition's leader, Mukhin said. It was an act of financial self-defense. Kasyanov has more foreign than Russian money, which makes the former prime minister dependent more on the State Department than on the Kremlin.

The latter has launched a powerful attack against the opposition, which needs to keep Kasyanov as the Moscow alternative to the St. Petersburg-dominated presidential election in 2008. The opposition should also promote and coordinate the operation of foreign non-governmental organizations in Russia in a bid to mobilize as many people as possible in time for the election.

The political scientist said the Kremlin was split by the struggle for a re-division of property between the group of Dmitry Medvedev, the head of the Presidential Administration, and a group led by his deputy, Igor Sechin.

Another deputy head of the administration, Vladislav Surkov, is waging an aggressive PR campaign to present himself as the main ideologist of the Kremlin in the 2007-2008 election campaign. Mukhin said a struggle was also under way for this campaign's budget.

Vedomosti

Russian navy failed to set up effective rescue service -- paper

In the five years since 118 men were lost in the Kursk nuclear submarine disaster, the Russian navy has failed to set up an effective rescue service, a leading business daily reports Monday.

Vedomosti writes that the seven-man crew of the AS-28 deep-sea submersible spent more than three days submerged in the Bering Sea off the coast of the Kamchatka Peninsula after it became entangled in fishing nets. It was only rescued on Sunday after the British Royal Navy provided assistance. Twenty-nine RN experts arrived on the scene with the remotely operated Scorpio deep-diving vehicle, which was fitted with a manipulator that cut the fetters holding the AS-28 in place.

According to presidential spokesman Alexei Gromov, Vladimir Putin thanked everyone who was involved in the rescue operation. However, politicians were unhappy: left-wingers were distressed that foreigners had contributed and right-wingers were upset by the pitiful state of the navy.

"It is incomprehensible why the British have the necessary equipment and we don't," Communist Party leader Gennady Zyuganov said. Dmitry Rogozin, the leader of a left-wing patriotic party, Homeland, said his faction would raise the issue with the Main Military Prosecutor's Office because it suspected the navy of negligence and doubted "the true role played by the British rescuers." Only United Russia proved to be quite pleased with the outcome of the drama: The chairman of the party's Central Executive Committee, Andrei Vorobyov, said, "the operation was conducted at a high professional level" and asked politicians to end their speculation.

According to the military, it learnt its lessons form the Kursk disaster. Seven Tiger search-and-rescue submersibles and four diving suits were bought overseas and a shipyard in Rybinsk completed an advanced rescue ship for the navy, a source in the Defense Ministry said. The 2005 budget allocated as much money for developing an advanced diving suit as it did for developing the fifth-generation fighter, i.e. 300 million rubles ($10.5 million), a Federal Agency for Industry official echoed.

However, the rescue service remains "spread" among four fleets and, as far as the Pacific is concerned, between Kamchatka and the Maritime Territory as well. As a result, assets are scarce, naval expert Mikhail Barabanov said. "If rescuing a small submersible craft is so great a problem for the Navy, it is hard to fathom what would happen if a real nuclear submarine found itself in distress," he said.

Vremya Novostei

Gazprom issues ultimatum to Lithuania

Gazprom, Russia's natural gas monopoly, has demanded that the Lithuanian government abolish regulated natural gas prices for consumers buying more than a million cubic meters a year, a leading Russian daily reports Monday.

Vremya Novostei writes that the concern had taken this drastic measure after a decision by Lithuania's state commission on prices and energy to lower disbursement prices unilaterally by 6% for a number of wholesale consumers. Lietuvos dujos, a Lithuanian natural gas distributor 37.1% owned by Gazprom, may, according to Gazprom deputy board chairman Alexander Ryazanov, "suffer about 25 million litas (7.2 million euros or almost $9 million) in losses."

The Lithuanian authorities pledged to deregulate prices for companies consuming more than a million cubic meters of natural gas a year when Gazprom made a deal to purchase the Lietuvos dujos stake. But they have not honored the promise. If the Russian concern's demand is left unfulfilled, Gazprom forecasts that natural gas prices for Lithuania will grow more rapidly than expected.

Gazprom is known to have drawn up a program for raising gas prices for the Baltic countries. Ryazanov said they should reach European levels within three years. Currently the gas distributors of Lithuania, Latvia and Estonia receive gas at about $90-100 per 1,000 cubic meters, or at one-third less than the average European rate (minus additional transport charges for delivery).

Ryazanov declined to reveal what the increase might be if the Lithuanian government failed to take Gazprom's opinion into consideration. Evidently the concern will step up the transition to the prices in Europe, completing the process in, for example, two years. At the outside, this could happen by next year, as the concern has already declared with respect to Ukraine, the paper said.

Gazeta

Kremlin seeks to diversify diamond producer into energy giant

Alrosa, Russia's diamond producing giant, will be reformed as a commodity concern under state control, Finance Minister Alexei Kudrin said July 6.

A popular daily, Gazeta, reports Monday that the federal authorities wanted Alrosa to diversify into oil and natural.

In a campaign to regain control over Russia's natural resources, last year the federal government secured Yuganskneftegaz, Yukos's former cash generator, as the leading asset that would propel state-owned oil major Rosneft to the top of the Russian oil sector, and is planning to secure a controlling share in the gas monopoly Gazprom by the end of the year. Alrosa, the producer of a quarter of the worlds' uncut diamonds, seems to be the next target.

Kudrin, who chairs Alrosa's supervisory board and reports to the government about the company's affairs, said Russia should accelerate the development of its Far Eastern mineral deposits, which will be accomplished using huge government-controlled energy and mining companies. The minister said the reformed Alrosa would extend its operations beyond the Siberian republic of Sakha-Yakutia, where the company is headquartered, and well beyond its original business - into coal, oil, and natural gas.

"Diversification does not mean ending diamond production," Kudrin added.

As the regional government controls 40% in Alrosa and the federal authorities only 37%, the latter technically has to secure the agreement of the former. Regional officials, however, are highly unlikely to challenge the Kremlin.

Biznes

Russian business prefers to pay maximum taxes

Anatoly Serdyukov, the head of the Federal Tax Service, said 22% more taxes were collected than had been planned in the first half of 2005, a leading business daily reports Monday.

Biznes writes that the increase was largely because oil companies, frightened by the Yukos case, were not using tax optimization schemes.

Yukos was punished for using tax loopholes in the legislation, said Yury Dobronravov, a managing partner of law firm Dobronravov & Partners. "Companies that use such planning optimize their taxable base," he said. "The tax agencies take a negative view on this and demand the payment of the maximum amount of taxes possible."

He said he believed that lawmakers should preclude possible different interpretations by drawing a clear line between tax planning and tax avoidance.

Sergei Belyakov, a deputy chairman of the tax committee of the Russian Union of Industrialists and Entrepreneurs (which unites big businessmen), said, "nobody wants even to risk receiving tax claims." He said businesses were not using available possibilities to minimize the taxable base, as they believed it was simpler to pay up.

The collection of taxes to the budget also increased because of changes in the system of hearing cases in court, Belyakov said. "Most disputes have recently been settled in favor of the tax agencies," he said. "It is becoming increasingly difficult for business to win cases against the tax agencies."

Experts name one more way to increase tax collection: Barriers erected by tax agencies during VAT repayment. Edward Kucherov, the chief of the Tax and Legal Department at Baker Tilly Russaudit, a leading consulting and auditing association, said VAT settlements on export operations were being contested increasingly often in court.

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