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Update: Moscow police say discover weapons in central banker killing

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Police believe they have found the pistols used to kill the Central Bank of Russia's leading official for banking oversight, the Moscow City Prosecutor's Office said Thursday.

MOSCOW, September 14 (RIA Novosti) - Police believe they have found the pistols used to kill the Central Bank of Russia's leading official for banking oversight, the Moscow City Prosecutor's Office said Thursday.

Andrei Kozlov, 41, a first deputy chairman of the Central Bank of Russia, died Thursday morning after gunmen opened fire on him with semi-automatic weapons late Wednesday, hospital officials said. Kozlov's driver was also killed in the attack.

"A homemade pistol and a gas pistol modified to fire bullets, which were apparently used in the killing of Kozlov and his driver, have been found," the office said.

Earlier reports suggested the assailants had used automatic weapons.

Police have mounted a citywide manhunt for the two assailants who are believed to have lain in wait for the banker. No suspects had been detained as of Thursday afternoon.

Kozlov oversaw the Central Bank's efforts to clean up the banking sector, and was shot in an attack that bears the hallmarks of a contract killing as he left a sports stadium in the northeastern Moscow district of Sokolniki. His driver Alexander Semyonov was killed at the Spartak stadium, where Kozlov had watched Central Bank employees play soccer. The banker had to undergo emergency surgery after he was shot in the head.

But a hospital official said Thursday morning that doctors had been unable to save the married father of three after an operation lasting five hours. "The patient died early in the morning without regaining consciousness," the representative said.

Kozlov led efforts to close down dozens banks for violations of banking legislation, particularly on money laundering, and Central Bank regulations. Two high-profile cases centered on the revocation of licenses from Moscow-based Sodbiznesbank in 2004 and Neftyanoi Bank this year, but the CBR has been withdrawing licenses almost by the week in 2006.

Russia has more than 1,000 small banks that are often controlled by one interest-group for its own needs, which has led to legislation against money laundering and terrorist financing being enacted in 2001.

Kozlov first joined the Soviet Union's central bank and rose to become the first deputy chairman of the Bank of Russia in 1997 before quitting for the private sector in 1999. He held several senior positions, including as chairman of Russian Standard Bank in 1999-2000, before returning to the Bank of Russia in April 2002.

The Central Bank said in a statement posted on its Web site, "He made a huge contribution to the reform of the country's banking system, making it more effective, transparent and stable."

And members of the banking community also praised Kozlov's efforts to ensure stability and clean up a system that was rocked by a default in 1998 that saw confidence plunge.

"He did a great deal to improve Russia's banking system, make it more transparent and conformant with international banking standards," said Mikhail Zadornov, a former finance minister and head of Vneshtorgbank 24, a subsidiary of the state-owned foreign trade bank Vneshtorgbank.

Daily Kommersant cited banking sources as saying Kozlov's activities had also targeted "gray schemes" used by importers to minimize customs duties and value-added tax payments, as well as by criminal and shadow groups to launder money.

Contract killings in Russia were frequent in the 1990s as gangsters sought to take control of lucrative assets in various fields, but a banking figure as senior as Kozlov has never been murdered before.

In 2002, the governor of Magadan was gunned down in the center of Moscow and four years previously a prominent liberal MP was also killed in St. Petersburg.

Prosecutor General Yury Chaika has taken the case under his personal control.

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