Monthly Archives: April 2006

06MOSCOW4615, IRAN AND ENERGY THE FOCUS OF RUSSIAN-GERMAN TALKS

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Reference ID Created Released Classification Origin
06MOSCOW4615 2006-04-28 14:08 2011-08-30 01:44 SECRET Embassy Moscow

VZCZCXRO8310
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV
DE RUEHMO #4615/01 1181408
ZNY SSSSS ZZH
O 281408Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5102
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

S E C R E T SECTION 01 OF 02 MOSCOW 004615 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR E 
 
E.O. 12958: DECL: 04/28/2016 
TAGS: PREL PARM ETRD ENRG GM RS
SUBJECT: IRAN AND ENERGY THE FOCUS OF RUSSIAN-GERMAN TALKS 
 
REF: A. MOSCOW 425 
 
     B. BERLIN 1132 
 
Classified By: Ambassador William J. Burns.  Reasons:  1.4(B & D). 
 
1.  (C)  Summary:  President Putin and Chancellor Merkel 
focused on Iran and energy issues during largely positive 
talks on April 26-27 in the Siberian city of Tomsk.  Putin's 
message to Merkel on Iran was that Moscow was willing to put 
diplomatic pressure on Tehran but was extremely uneasy that 
UN Security Council action would be a slippery slope that 
could eventually lead to the use of force.  Russian experts 
were skeptical about Iran's nuclear progress.  German 
Ambassador Schmid told the Ambassador that Putin had 
underlined to Merkel that Russia would be a reliable energy 
supplier.  Publicly, Putin angrily attacked European critics 
of Gazprom's expansion plans and welcomed a deal between 
Gazprom and BASF that would allow Gazprom to expand into the 
European retail market while giving BASF interests in a 
Siberian gas field.  Merkel raised Belarus and Russia's 
implementation of its NGO law; Putin responded by arguing 
that isolation would not benefit democratic development in 
Minsk and claimed that the GOR was responsive to Russian 
civil society.  End Summary. 
. 
THE SONG REMAINS THE SAME 
------------------------- 
 
2.  (C)  President Putin and Chancellor Merkel headed up 
large inter-ministerial teams that met for talks for two days 
in Tomsk, a relatively prosperous Siberian city whose 
natural-resource based economy is complemented by a large 
academic community.  According to press reports, the GOR 
selected Tomsk as the venue of the eighth annual 
Russian-German consultations in order to highlight investment 
opportunities outside of Moscow and St. Petersburg.  German 
Ambassador Schmid, who participated in some of the talks, 
told the Ambassador that the leaders met for several rounds, 
including an extended one-on-one and two hours in a 
restricted format (Putin, Merkel, Russian Presidential 
Foreign Affairs Advisor Sergey Prikhodko and Merkel's Foreign 
Policy Advisor Christoph Heusgen).  Foreign Ministers Lavrov 
and Steinmeier met twice separately as well.  In addi4\QpDUQTomsk residents.  Newspapers contrasted the increasingly 
heated dispute between Gazprom and some of its European 
critics about the firm's market power and expansion plans and 
the ease with which a major gas deal was reached at the 
summit between Gazprom and German chemical giant BASF. 
Putin's sharp response to Gazprom's critics at the wrap-up 
also received attention.  Putin charged that Europeans were 
trying to res@e\Q1.@ need for international agreement and a 
discussion of future steps following the April 28 IAEA 
report.  Schmid told the Ambassador that the Germans did not 
hear much that was new from the Russians during the talks. 
Moscow's position was still shaped largely by its "Iraq 
experience," with Russia fearing that action in the UN 
Security Council would create a slippery slope leading to the 
use of force.  Russia was willing to use diplomatic pressure, 
but remained opposed to sanctions. 
 
5.  (S)  On the margins of the talks, the Germans and 
Russians exchanged intelligence assessments about Iran's 
program. The Russian experts were more skeptical about the 
 
MOSCOW 00004615  002 OF 002 
 
 
status of the program and had concluded that Iran had not yet 
mastered running a centrifuge cascade.  They were not 
convinced that Tehran was any closer than 6-8 years from 
developing a nuclear weapon.  Russian diplomats were looking 
to the May 2 Political Directors meeting and the May 9 
Foreign Ministers meeting to determine next steps, but the 
Germans concluded that it was going to be a tough slog to 
persuade the Russians to go much beyond cajoling Tehran. 
. 
BIG ENERGY DEAL 
--------------- 
 
6.  (C)  Schmid said that energy discussions had been more 
cordial and the atmosphere much easier than the Germans 
expected, given the raft of angry public statements lately by 
Gazprom and Putin about energy security.  There was no 
banging on the table, and the Russians had gone out of their 
way to emphasize their reliability as suppliers.  Putin told 
Merkel he appreciated the straightforward way in which the 
Germans conducted energy discussions, in contrast to some in 
the U.S. who were attempting to "contain" Russia's energy 
ambitions. 
 
7.  (C)  The gas deal between Gazprom and BASF highlighted 
the extensive economic talks at the summit, with both sides 
heralding the USD 33 billion annual trade turnover (Russian 
figures for 2005).  Schmid confirmed press stories that under 
the gas deal, Gazprom will increase its stake in the Wingas 
energy trading unit of BASF (and gain a possible role in 
German retail sales) to one share short of majority control. 
In exchange, BASF through its Wintershall subsidiary would 
gain almost a 25 percent share in a large untapped Siberian 
natural
gas field, the Yuzhno-Russkoye deposit.  Another 
expected deal, between E.ON, the former German natural gas 
monopoly, and Gazprom was unexpectedly delayed.  In addition 
to energy talks, the Russian press claimed that Volkswagen 
was interested in opening an assembly plant in Russia by 2007 
to produce Golf and Skoda-Octavia models. 
. 
NEIGHBORHOOD AND DEMOCRACY 
-------------------------- 
 
8.  (C)  According to Schmid, the Germans brought up Belarus 
with the Russians, drawing a standard Russian response 
arguing that isolation would only play into the hands of the 
authoritarians.  Moscow did confirm that it intended to raise 
the price of gas it supplies to Minsk to market rates.  There 
was a pointed discussion on the CFE Treaty; Moscow argued 
that it had acted in good faith in reaching an agreement last 
year with Tbilisi to withdraw its military bases and was 
unable at this point to withdraw ammunition and troops from 
Transnistria.  The Russians also urged increased efforts to 
address narcotics trafficking from Afghanistan. 
 
9.  (C)  Merkel raised the NGO law with Putin, pointing out 
that the West would closely monitor the law's implementation. 
 Putin responded that prior Russian law on NGOs had been 
inadequate and that Moscow had to regularize the status of 
NGOs.  He pointed out that the Russian government was 
responsive to civil society pressure, noting his decision the 
day before to change the route of the Eastern Siberian 
Pacific Ocean pipeline to address environmental concerns. 
. 
COMMENT 
------- 
 
10.  (C)  The main message from this summit was one of 
continuity.  Despite some static in Putin's first meeting 
with Merkel, the sides now seem focused on the economic and 
particularly the energy ties that drive the relationship. 
Russia has invested heavily in its bilateral ties, as 
reflected in the massive effort needed to move half the 
Cabinet to Tomsk for these meetings, and it will remain 
willing to engage at all levels to protect its interests. 
Merkel's efforts to rebalance Germany's relationship will 
make her a more challenging interlocutor for Putin than 
former Chancellor Schroeder was on certain issues, such as 
democracy or "the neighborhood," but we see no reason to 
doubt that Germany will remain committed to a close 
relationship with Russia.  As the German DCM told us in a 
separate meeting, "The talks in Tomsk indicate that the 
German-Russian 'strategic partnership' will continue, despite 
the Chancellor's more critical approach." 
BURNS

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06MOSCOW4614, GEORGIA-RUSSIA: MUTUAL COMPLAINTS CONTINUE

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Reference ID Created Released Classification Origin
06MOSCOW4614 2006-04-28 13:43 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO8287
PP RUEHDBU
DE RUEHMO #4614 1181343
ZNY CCCCC ZZH
P 281343Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5101
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L MOSCOW 004614 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 04/28/2016 
TAGS: PREL ETRD GG RS
SUBJECT: GEORGIA-RUSSIA:  MUTUAL COMPLAINTS CONTINUE 
 
 
Classified By: Minister Counselor for Political Affairs Kirk Augustine. 
  Reason 1.4 (b, d) 
 
1. (C) MFA Georgia Office Director Grigoryev told us April 28 
that relations with Georgia were "at a dead end," and he did 
not know how to get them going again.  "Some impetus is 
needed," he said, "but I find it hard to imagine what it 
could be."  He ran through a litany of complaints: 
 
-- Parliament Speaker Burjanadze had "insulted" Russia April 
27 ("as she always does," he added), using her speech at the 
Duma's jubilee in St. Petersburg to complain about Russian 
support for separatism; 
 
-- "That idiot" DefMin Okruashvili's statement in Kiev April 
25 that even "fecal matter" can be sold to Russian consumers 
-- repeated and expanded on the air in Georgia April 28 -- 
was likewise an insult (Comment:  and may have played a role 
in the April 26 ban on Georgian mineral water.  End comment). 
 
-- FM Bezhuashvili had "regrettably" missed an opportunity to 
mend fences by staying away from the April 21 CIS Foreign 
Ministerial.  He had requested, and received, an appointment 
with FM Lavrov, but was not given meetings with the Russian 
Security Council and Presidential Administration that would 
have made the visit a bilateral one outside the CIS context. 
 
-- The Georgians had made no reply to Putin's invitation to 
Saakashvili to attend the Presidential Horse Races at the end 
of July, a visit that might also help mend fences. 
 
2. (C) There were, Grigoryev said, nonetheless some areas in 
which progress was being made: 
 
-- Agreement is close on a consortium to open the railroad 
from Russia through Abkhazia to Georgia and Armenia; the 
parties will meet in Moscow in early May. 
 
-- Georgia Border Guards Chief Badri Bitsadze (Nino 
Burjanadze's husband) had visited his Russian counterpart 
Vladimir Pronichev in March; their conversation on border 
security was "one professional to another." 
 
--  DFM Karasin's visit to Tbilisi April 9-10 had been mostly 
"endless repetition" of Georgian complaints, but DFM Antadze 
had said Georgia was working on a South Ossetia peace plan. 
(Karasin also visited Tskhinvali during his visit, and 
apparently expressed surprise that it looked like "a run-down 
provincial Soviet town.") 
 
However, none of these small areas of uplift could counter 
the downward momentum, in Grigoryev's view.  "The problems 
ahead are no fewer than those we've already seen." 
 
3. (C) Comment:  Grigoryev is usually the most willing of our 
interlocutors to look for signs of progress in 
Russian-Georgian relations.  His boss, for example -- IV CIS 
Director Kelin -- is always more hard-line.  Even for 
Grigoryev, however -- fresh and tanned from a beach vacation 
in the Emirates, and back in the bright Moscow spring -- the 
gray clouds almost entirely obscure even the idea of 
eventually finding silver linings. 
BURNS

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06MOSCOW4572, 4.5M U.S. Investment, Andy Warhol and American Corner

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Reference ID Created Released Classification Origin
06MOSCOW4572 2006-04-27 12:59 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO6654
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHMO #4572/01 1171259
ZNR UUUUU ZZH
R 271259Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 5023
INFO RUCNCIS/CIS COLLECTIVE
RUEHLN/AMCONSUL ST PETERSBURG 2862
RUEHYG/AMCONSUL YEKATERINBURG 1576
RUEHVK/AMCONSUL VLADIVOSTOK 1360
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 04 MOSCOW 004572 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USDOC for 4231/ITA/MACK/RISD/JBROUGHER/MEDWARDS 
 
E.O. 12958: N/A 
TAGS: ECON EINV PGOV SOCI PINR RS
 
SUBJECT: $4.5M U.S. Investment, Andy Warhol and American Corner 
Reopening in Samara 
 
MOSCOW 00004572  001.2 OF 004 
 
 
1. (U) Sensitive But Unclassified - Not for Internet 
Distribution. 
 
2. (SBU) SUMMARY: Ambassador Burns' visit to Samara April 17-18 
revealed a city ripe for additional U.S. investment and eager for 
increased contacts and exchanges with American academic and 
business counterparts.  The Ambassador participated in a ribbon- 
cutting ceremony for a new production line at the local Alcoa 
plant, reopened the American Center, and visited the Alcoa- 
sponsored Andy Warhol exhibition.  Government, business, civil 
society representatives and students uniformly emphasized: 
-- The region's desire to attract more U.S. investment and 
partnerships with U.S. firms, as well as the difficulties faced 
by U.S. companies as they expand beyond Moscow; 
-- The economic and social benefits that various exchange 
programs and partnerships bring to Samara; and 
-- The need for greater access to information about studying in 
the United States and the student visa application process.  END 
SUMMARY. 
------------------------------ 
U.S. BIGGEST FOREIGN INVESTOR 
------------------------------ 
3. (SBU) Ambassador Burns, accompanied by Emboffs from the 
Foreign Commercial Service and Public Affairs section, visited 
Samara April 17-18.  In Governor Titov's absence, the Ambassador 
met with acting Vice Governor and Minister of Economic 
Development, Trade and Investment Gabibullin Khasaev, and 
Minister of Education Valeriy Putko.  (Khasaev is considered one 
of Governor Titov's closest confidants and a personal friend.) 
Khasaev emphasized the importance of U.S. investment, stating 
that U.S. companies were involved in both direct investment and 
joint ventures and represented the largest percentage of foreign 
investment in the region.  Asked about plans to increase 
transparency within the taxation system and improve overall 
stability in the regional market place as a stimulus for further 
foreign investment, Khasaev replied that the regional government 
had established an office to provide advice and information on 
proposed legislation and how its implementation might affect 
business. 
 
4.  (SBU) Khasaev also discussed the creation of a special 
economic trade zone in nearby Togliatti.  He hoped that the trade 
zone, along with its associated infrastructure development, 
including construction of a super highway, would bring more 
foreign investment to the region and enhance access to markets 
for regional agricultural goods and local small businesses.  The 
Ambassador observed that such a wide range of projects would 
create many opportunities for our two countries and referred them 
to the Embassy's Commercial Section to further develop these 
opportunities. 
 
------------------- 
EXCHANGES WIN-WIN 
------------------- 
5. (SBU) Commenting on the implementation of Putin's education 
initiative, one of the country's four national priority projects 
-- other areas include health care, affordable housing, and 
agriculture -- Khasaev said the goal was to improve access to 
higher education for future generations of Samara citizens.  In 
this context Regional Minister of Education Valeriy Putko 
discussed the plan to create a national university in Samara that 
would have greater ties with U.S. universities.  Putko mentioned 
that a meeting with representatives from the U.S. State of 
Georgia had led to a discussion about the possibility of an 
exchange program that would send Russian mathematics teachers to 
schools in that state.  Speaking more broadly of the success of 
U.S.-Russian exchange programs; Khasaev commented that many 
residents in the region had received training through Open World 
and other programs focusing on political development.  He said 
such programs were instrumental in developing the region's 
management capabilities, including governmental affairs.  He and 
the Ambassador discussed other programs that have promoted 
bilateral cooperation, including the Ambassador's participation 
in an "Education for All" roundtable and a future program being 
created through Embassy Moscow and U.S. and Russian businesses to 
encourage and support young entrepreneurs. 
 
--------------------------------------------- ------------------ 
ALCOA OPENS NEW PRODUCTION LINE AND SPONSORS WARHOL EXHIBITION 
--------------------------------------------- ------------------ 
6. (SBU) The centerpiece of the Ambassador's visit was his 
participation in the ribbon-cutting ceremony for a new production 
line at Alcoa's Samara facility.  The USD 4.5 million slitting 
line is part of an overall USD 80 million commitment that Alcoa 
 
MOSCOW 00004572  002.2 OF 004 
 
 
will invest in capital improvements and technology and 
environmental, health, and safety progra
ms at its Samara and 
Belaya Kalitva (Rusal) plants.  Alcoa purchased the two 
facilities last year and the USD 80 million will serve to 
strengthen the global competitiveness of both plants.  It is 
estimated that new slitting line will pay for itself in two years 
due to a projected increase in demand in the can sheet market. 
The Ambassador, Alcoa Russia's President, Bill O'Rourke, Khasaev, 
and the Speaker of Samara's Regional Duma, Victor Sazonov, opened 
the new production line. 
 
7.  (U) Alcoa employs 5,751 people at its Samara facility and has 
a reputation for being socially responsible.  Alcoa Russia has 
provided support to veterans of WWII in Samara, established 
charity and health funds, and recently collaborated with the 
Samara Museum of Art to host the city's first Andy Warhol 
exhibition.  Alcoa's latest initiative is its Technical Education 
Support Program, which provides a number of scholarships for 
Russian students, including those studying at the Samara State 
Aerospace University (SSAU).  The purpose of the program is to 
boost the prestige of technical education, which was undermined 
by dramatic changes in Russian society following the breakup of 
the Soviet Union.   (The lack of sufficiently qualified workers 
in both vocational and technical fields was a concern also raised 
during the Ambassador's meeting with local representatives of 
U.S. firms.) 
 
8.  (U) At an evening reception in honor of the Warhol 
exhibition, the Ambassador commended officials from Alcoa, the 
Samara Museum of Art, and the Ministries of Culture and Education 
for working together to make the exhibition a reality.  He called 
on other U.S. and Russian firms to join forces and resources with 
Samara's civil society and government entities to further 
cooperation on future public-private projects that would benefit 
the broader community. 
 
--------------------------------------------- ------------ 
GOOD NEWS FOR BIG US FIRMS BUT CLIMATE STILL NOT PERFECT 
--------------------------------------------- ------------ 
9.  (SBU) Ambassador Burns hosted a roundtable April 18 for U.S. 
companies in the Samara region.  Representatives from GM AvtoVaz, 
Packard Electrical Systems (Delphi), Tenneco Automotive, Pepsi, 
Coca-Cola, CitiBank, ExpoPul (New Sensor), Marriott Renaissance 
Hotel, Samara Cable Company (Corning), and   Amerada Hess 
attended.  (Note:  Amerada Hess is 80% owner of SamaraNafta, a 
small oil producer with a very promising production future - 
currently producing approximately 7,000-8,000 b/d and aiming for 
50,000 b/d.  Amerada Hess believes it is the largest American 
investor in the Samara region with around $500 million invested.) 
The majority of the companies reported growth in the region and 
said local officials seemed supportive of foreign investment. 
All were very interested in the latest status concerning Russia's 
WTO accession and how it might affect commercial relations 
between the U.S. and Russia.  Several companies voiced concerns 
about the vagaries and inconsistencies of Russia's tax system. 
Other issues of concern included:  lack of qualified workers with 
needed vocational, technical and analytical skills, unfair 
customs duties, high inflation, and lack of access to financing. 
The dean of the group, General Manager of GM/AvtoVAZ Richard 
Swando believes the next important step for development of their 
businesses would be availability of financing.  The ExpoPul 
Director General, Vladimir Chinchikov, updated the Ambassador on 
the company's current business dispute with RBE Saratov, noting 
that ExpoPul continued to seek the support and assistance of the 
U.S. Embassy to resolve the situation.  Overall, company 
representatives seemed pleased with how their businesses were 
growing/operating in the Samara region. 
 
--------------------------- 
AMERICAN CORNER REOPENING 
--------------------------- 
10. (SBU) The Ambassador reopened the American Corner - now known 
as the American Language and Cultural Center - in its temporary 
location at the Regional Research Library.  (Note: The previous 
Director of the Regional Research Library closed the Corner on 
January 1, 2006 when PAS refused to meet her rent demands.)  Over 
70 USG exchange program alumni, the Library Director, and other 
officials gathered for an informal reception celebrating the 
reopening of the Center and introducing the recently hired 
Director, Yelena Lugavaya.  In FY05, prior to being closed, the 
Corner served about 185 visitors a month, the majority of whom 
were USG exchange program alumni.  With over 1000 alumni, the 
Samara region has one of the largest concentrations of alumni 
outside Moscow and includes participants of Open World, FLEX and 
 
MOSCOW 00004572  003.2 OF 004 
 
 
Business for Russia/Community Connections exchange programs.  The 
club includes politicians, lawyers, accountants, business people, 
professors, and teachers.  The Samara alumni are actively 
involved in community service projects, including the adoption of 
a city park on Earth Day and raising money and gathering supplies 
for children at a local orphanage.  It was due in large part to 
alumni complaints about the unfair closing of the Corner that the 
new Regional Library Director, Tatyana Kolokolova, allowed the 
Center to reopen.  (Note:  An Open World alumna Kolokolova has 
been extremely positive in her dealings with PAS, and, in 
addition to reopening the Center in a temporary location, has 
agreed to help identify a more prominent, long-term space in the 
library's main building.  The new Center will expand services by 
offering English language classes and educational consulting.) 
 
--------------------------------------------- ----- 
AEROSPACE UNIVERSITY STUDENTS KEEN TO STUDY IN US 
--------------------------------------------- ----- 
11.  (SBU) Ambassador Burns met with over 80 faculty and students 
at Samara State Aerospace University (SSAU) for a frank 
discussion on U.S.-Russia relations, U.S. foreign policy, and 
opportunities to study in the U.S.  Students' questions focused 
mainly on the opportunities to study in the U.S. and comparisons 
between the education systems of the U.S. and Russia.  They 
expressed interest in learning more about studying in the U.S. 
and changes to the student visa application process.  The 
Ambassador provided students with information about a proposed 
exchange program that would allow young Russian and U.S. 
entrepreneurs to gain on-the-job experience by working for a set 
amount of time for American or Russian companies.  He also 
suggested that students visit the reopened American Center to 
meet with the Center's Education Advisor.  Students also asked 
pointed questions about U.S. policy, the U.S. invasion of Iraq 
and withdrawal of troops, U.S. interest in Russia and its 
neighbors, and Russia's current economic situation and future. 
SSAU is one Russia's leading academic institutions with 10,500 
students studying at ten faculties in 27 specialty areas 
including: aircraft construction, aerospace engineering, radio 
engineering, information science an
d its newest faculty - 
economics and management.  The university has more than 700 
teachers and boasts 64 members of the Russian Academy of 
Sciences. 
 
--------------------------------------------- ------------------- 
MEDIA OUTREACH; PHOTO REPORT: DAY IN THE LIFE OF THE AMBASSADOR 
--------------------------------------------- ------------------- 
12. (SBU) The Ambassador met with representatives from five local 
media outlets.  In response to questions about the future of 
Russian accession to the WTO, the Ambassador said he expected 
Russia to be able to enter the WTO prior to the G-8 summit in 
July. (Note:  Subsequently, his answer was run by Interfax 
throughout Russia and abroad.)  Other issues discussed included 
the future of U.S. cooperation in the field of space exploration, 
exchange opportunities between the U.S. and Russia, the Alcoa 
investment, and the Warhol exhibition.  Local media gave 
considerable play to the Ambassador's trip to the region and the 
Alcoa ribbon--cutting ceremony.  A photojournalist from the 
Moscow-based "Ogonyok" weekly magazine accompanied the Ambassador 
throughout the trip.  On April 24 "Ogonyok" published a photo 
report entitled, "A Day in the Life of the U.S. Ambassador to 
Russia." 
 
----------------------------------- 
EQUAL ACCESS TO EDUCATION FOR ALL 
----------------------------------- 
13.  (SBU) On April 17, the Ambassador spoke at an "Education for 
All" roundtable to raise awareness of the importance of equal 
access to educational opportunities for people with disabilities. 
"Association Desnitsa", the leading local NGO that defends the 
rights of children and adults with disabilities and which 
receives support from USAID-funded Perspektiva, organized the 
roundtable.  Samara's Deputy Minister of Education, Yuriy 
Zalepukhin, representatives of Samara disability rights NGOs, 
parents' groups, and educational institutions, along with 
disabled adults and youth participated in the forum.  All 
participants voiced their willingness and readiness to move 
forward to resolve issues relating to the integration of disabled 
children into mainstream schools and to open new opportunities 
for all disabled children in the Samara region.  The event was 
well covered in the media, including TV news spots on April 17 
and 18, which highlighted the Ambassador's participation, as well 
as interviews with some of the disabled persons in attendance. 
 
------- 
 
MOSCOW 00004572  004.2 OF 004 
 
 
Comment 
------- 
14. (SBU) During his visit, the Ambassador found that Samara is 
doing well in attracting substantial U.S. investment, including 
companies such as GM, Delphi, Alcoa, Amerada Hess, Pepsi, Coca- 
Cola, Citibank, Marriott Hotels, and Corning.  Regional leaders 
recognize Samara's importance as one of Russia's top industrial 
regions and appear keen to take further steps to improve 
opportunities for foreign investment.  Only time will tell 
whether the Special Economic Zone planned for Togliatti and other 
regional initiatives, including creation of a national university 
and construction of a super highway will be implemented in a way 
that brings greater transparency, stability and economic benefits 
to the region and its citizens. 
 
ADDITIONAL CLEARS: DOE: MWHITNEY, USAID: TMYERS 
 
BURNS

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06MOSCOW4435, AMBASSADOR’S MEETING WITH KREMLIN ADVISOR

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To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #06MOSCOW4435.
Reference ID Created Released Classification Origin
06MOSCOW4435 2006-04-25 14:24 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO4031
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #4435/01 1151424
ZNY CCCCC ZZH
P 251424Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4847
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 004435 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 09/20/2014 
TAGS: PREL PGOV RS
SUBJECT: AMBASSADOR'S MEETING WITH KREMLIN ADVISOR 
YASTRZHEMBSKIY 
 
 
Classified By: Ambassador William J. Burns, for reasons 1.4 (B & D) 
 
1. (C)  Summary.  Ambassador met April 25 with Sergey 
Yastrzhembskiy, President Putin's Special Representative for 
Issues of Development of Relations with the European Union. 
Yastrzhembskiy said preparations for the EU-Russia summit in 
Sochi in late May were going well, and identified several 
agreements that would be signed.  He discussed at some length 
his dissatisfaction with Russia's inability to project a 
favorable image abroad of its activities, noting its failure 
to do so in the "gas war" with Ukraine, with the 
controversial NGO law now going into effect, and on the 
Northern European gas pipeline project.  Asked about how the 
U.S. might best be able to provide useful assistance to 
people in the North Caucasus, Yastrzhembskiy recommended 
continuing to work closely with Presidential Representative 
Dmitriy Kozak to identify needs that were not being filled, 
and to provide concrete assistance first and only then to 
talk publicly about it.  End Summary. 
 
The Sochi Summit 
---------------- 
 
2. (C)  Yastrzhembskiy said preparations for the Russia-EU 
Summit in Sochi on May 25 were "going well" despite a few 
problems and reflected a "very positive trend" in overall 
Russia-EU relations.  He expected at least two agreements, 
one facilitating visa arrangements between Russia and 
Schengen Agreement countries and the other concerning 
readmission to Russia of people who had transited it en route 
to the EU.  "Perhaps some of our 'siloviki' may not be happy" 
with the readmission agreement, Yastrzhembskiy said, but 
President Putin's personal support for the agreement had 
overridden their objections   The agreement's relatively 
short (two-year) phase-in period was a "very good stick" to 
force action from "lazy bureaucrats," and better 
border-management arrangements with countries like Kazakhstan 
and China would be a benefit. 
 
3. (C)  While less certain than the first two agreements, 
negotiations had also been completed for a new TASIS 
agreement, and there were "no political objections" to it. 
However, there was "ideologically one point of disagreement" 
that Yastrzhembskiy did not identify, but said there was 
adequate time left to resolve it.  There also would be the 
launch of a "Europa college" affiliated with existing Russian 
institutions of higher education and co-financed equally by 
the EU and Russian sides.  It had already sparked huge 
interest from many young people working in Russian 
governmental institutions. 
 
4. (C)  In addition to those concrete results, there would be 
discussion at the Sochi summit of a range of political 
issues:  Iran, the Middle East (Hamas), perhaps 
implementation of the Kyoto Protocol, probably Belarus and 
other issues of the post-Soviet space, Russian-EU 
disagreements about trans-Siberian airline flights, and the 
EU-Russia energy charter. 
 
5. (C)  The Ambassador noted that the Sochi summit would also 
play an important role in setting the atmosphere for the St. 
Petersburg G-8 summit in July.  Yastrzhembskiy agreed. 
 
Polishing Russia's Image 
------------------------ 
 
6. (C)  Noting that Yastrzhembskiy had at one time been 
Russia's Presidential Spokesman and also dealt for several 
years with public information aspects of the Chechnya 
conflict for the Presidential Administration, the Ambassador 
asked him for his thoughts on recent GOR attempts to improve 
Russia's image internationally and to deal with issues such 
as the "gas war" with Ukraine and the controversy surrounding 
the NGO law.  Yastrzhembskiy said Russia's PR efforts had 
been a "big headache" because they had not been very 
successful.  He had closely studied USG experience in, e.g., 
Operation Desert Storm and had concluded that while the U.S. 
was much more sophisticated than Russia in this area, even 
the U.S. had been able to show very modest results for the 
substantial resources it had expended.  When he had worked 
under President Yeltsin, trying to improve Russia's image 
abroad had been almost hopeless.  It was like "sitting on top 
of a volcano," with a weak state, huge budget problems, and 
the various branches of government feuding among themselves. 
 
7. (C)  In Soviet times, Yastrzhembskiy continued, there had 
been many institutions designed to affect international 
public opinion, but they were "just very aggressive and not 
very smart."  In post-Soviet Russia those institutions had 
been largely destroyed, but nothing had been created to 
replace them.  Some "islands" of the Soviet period (like 
 
MOSCOW 00004435  002 OF 002 
 
 
RIA-Novosti, and ITAR-TASS) still existed, but they were not 
effective.  There was a need for a new system that would not 
be focused on one-day or one-month campaigns, but that would 
work instead on the basis of a ten-year strategy, with 
sufficient funding.  Now there was no system and no 
coordination. 
 
8. (C)  Yast
rzhembskiy cited the adoption of the NGO law as 
one example of how the Russian system did not work 
effectively.  There had been no sense in taking the draft NGO 
law to the Council of Europe only after it had become an 
international public issue; Russia should have gone to the 
COE first, which would have put in a better position to 
disarm the critics.  The "gas war" with Ukraine had also been 
mishandled publicly by Gazprom, and the same was true of the 
Northern European gas pipeline project.  Public support for 
that effort should have been launched earlier, and now it had 
to be done "after the fact."  Part of the problem had been 
the need to work with a German government that first was tied 
up in an election campaign and then in lengthy cabinet 
formation.  Schroeder was now talking about the need to worry 
about Russia's image abroad in this connection, but he should 
have thought of that from the beginning.  The problem was not 
just with Gazprom, but also with the Russian state. 
 
9. (C)  The Ambassador said the GOR could still take helpful 
steps on the new NGO law, if the MFA, Ministry of Justice and 
other relevant bodies were to pro-actively call NGOs and the 
media together to explain in detail how the registration 
process would unfold and where people could turn for answers 
to their questions.  Similarly, President Putin could use his 
"Poslaniye" (state of the nation address, now expected to be 
delivered at some time in May) to be clearer about his 
long-term plans for Russia's political and economic 
modernization and to speak out on the issue of xenophobia and 
the unacceptability of attacks on ethnic or religious 
minorities in Russia.  To the degree that Putin could 
communicate a vision of a long-term Russian strategy showing 
how it planned to realize common G-8 values in the Russian 
context, that could help the St. Petersburg summit be a 
success, as President Bush had made clear he wanted. 
 
10. (C)  Yastrzhembskiy agreed in principle but said many in 
Russia had concluded that "criticism of Russia is a permanent 
process."  The level of skepticism about the good will of the 
West was "so high, even on the President's team," that it was 
hard to get consideration of proposed steps in a more open 
direction.  He would consider the possibilities, however, and 
see if there were three or four points that he could propose. 
 
North Caucasus 
--------------- 
 
11. (C)  The Ambassador asked whether Yastrzhembskiy could 
suggest a strategy by which U.S. efforts to provide concrete 
help to people in the North Caucasus could be favorably 
considered by the GOR.  Yastrzhembskiy laid out several steps 
to that end.  First, he said, forget about focusing on things 
like the provision of food or tents; the time for that kind 
of assistance had passed.  Second, continue to work with 
Presidential Representative for the Southern Region Dmitriy 
Kozak and his deputy Pochinok.  Kozak was "very sensible" 
(even compared with federal officials in Moscow, because he 
was "on the ground") and "a good ally."  The U.S. should work 
with him to identify spheres in which there were unmet public 
needs (he cited the example of providing internet facilities 
to school and university libraries).  What the U.S. should 
avoid was the mistake that the EU had made:  it had talked 
for two years about help it was going to provide, but during 
that time implemented nothing.  The U.S. should first provide 
help and only then start talking about what it had done.  The 
Ambassador said he would follow up again with Kozak to 
further explore how the U.S. might be helpful.  After the 
meeting concluded, Yastrzhembskiy's assistant Aleksandr 
Machevskiy suggested deferring a further conversation with 
Kozak until mid-May, to let the negative reaction in Moscow 
to the recent Jamestown Foundation seminar on the North 
Caucasus blow over. 
BURNS

Wikileaks

06MOSCOW4405, VARNITSA PORT SEIZURE: RUSSIAN VIEWS

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Reference ID Created Released Classification Origin
06MOSCOW4405 2006-04-25 11:09 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO3722
PP RUEHDBU
DE RUEHMO #4405 1151109
ZNY CCCCC ZZH
P 251109Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4800
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L MOSCOW 004405 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 04/25/2016 
TAGS: PREL PGOV PBTS MD RS
SUBJECT: VARNITSA PORT SEIZURE:  RUSSIAN VIEWS 
 
REF: A) CHISINAU 455 B) MOSCOW 4198 C) KIEV 1444 
 
Classified By: Minister Counselor for Political Affairs Kirk Augustine. 
  Reason 1.4 (b, d) 
 
1. (C) We raised the April 21 Transnistrian seizure of 
Varnitsa Port (ref. a) with Russian Transnistria negotiator 
Nesterushkin April 25.  Nesterushkin compared the seizure to 
the incident several years ago when Moldovan farmers tried to 
farm land on the Left Bank after receiving privatization 
vouchers from Chisinau.  Such events are common in the many 
"gray areas" left by the cease-fire lines, he claimed, and 
should be settled by "civilized" dialogue between the sides. 
He implied that such incidents are too common and too trivial 
to be worth a discussion between the U.S. Embassy and the 
Russian MFA. We countered that the issue was worth raising: 
in other conflicts, seizure of disputed territory has led to 
bloodshed.  Nesterushkin said that fortunately this is not 
the case in Moldova -- but without a functioning negotiating 
process (i.e., as long as the Moldovans and Ukrainians 
enforce their customs rules), who could say what might happen 
in the future?  He did, however, appreciate knowing that the 
U.S. considered the incident significant. 
 
2. (C) Nesterushkin claimed to have no detailed information 
on the circumstances surrounding the seizure.  He said he had 
only heard the "cries" of each side blaming the other, and he 
hoped the Joint Control Commission would be able to sort 
through the claims.  Despite his professed lack of knowledge, 
however, he painted a detailed picture "based on 
speculation:" that the port managers of Bender decided they 
wanted the rent from Varnitsa which had flowed to Bender in 
Soviet times, and authorized a local company to exploit 
Varnitsa and pay them the rent.  The seizure, in 
Nesterushkin's view, might have been the company's guard 
force trying to take control of the facility.  Nesterushkin 
categorized the incident as a "management dispute."  We said 
that the Moldovan version of events is far different, and 
reiterated that such disputes can be destabilizing. 
Nesterushkin repeated that negotiations were necessary to 
resolve such issues. 
 
3. (C) Comment:  The incident comes conveniently soon after 
Nesterushkin's warning that the new customs regime was 
"radicalizing" Transnistria (ref. b) and preventing the 
resumption of negotiations.  We would read it as a reflection 
of the degree to which the customs regime has unsettled the 
Russians and Transnistrians. 
BURNS

Wikileaks

06MOSCOW4374, ZIMBABWEAN TRADE DELEGATION VISITS RUSSIA

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Reference ID Created Released Classification Origin
06MOSCOW4374 2006-04-24 13:53 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO2628
RR RUEHMR RUEHPA
DE RUEHMO #4374 1141353
ZNY CCCCC ZZH
R 241353Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 4754
INFO RUEHZO/AFRICAN UNION COLLECTIVE

C O N F I D E N T I A L MOSCOW 004374 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 04/23/2016 
TAGS: PREL ETRD ZI RS
SUBJECT: ZIMBABWEAN TRADE DELEGATION VISITS RUSSIA 
 
 
Classified By: Political Minister Counselor Kirk Augustine for reasons 
1.4 (b, d). 
 
1.  (C)  Poloff met with MFA Africa Department Counselors 
Mikhail Gulyakin and Andrey Stolyarov April 21 to discuss the 
April 3-13 visit to Moscow and St. Petersburg of Zimbabwean 
Reserve Bank Governor Gideon Gono and Transport Minister 
Chris Mushohwe to promote Russian investment in Zimbabwe. 
Gulyakin and Stolyarov characterized the visit as "mostly for 
show" and said that few concrete results were achieved.  They 
said that the impetus for the trade delegation came 
completely from the Zimbabwean side.  After failing to secure 
IMF loans last month, Governor Gono is coping with Zimbabwe's 
deep economic crisis by seeking investment from other 
sources.  Gulyakin and Stolyarov said that Russia's USD 20 
million in trade with Zimbabwe was unlikely to grow to rival 
that of Zimbabwe's largest trading partner, China.  Queried 
about GOR policy toward Zimbabwean officials, they saw no 
reason why Russia would avoid contact with a government that 
was no more autocratic than "the norm in Africa." 
 
2.  (C)  While in Moscow, Governor Gono and Minister Mushohwe 
met with their respective counterparts in the Russian 
government, Central Bank Head Sergey Ignatiev and Transport 
Minister Igor Levitin.  Gulyakin and Stolyarov said Gono did 
not raise the possibility of loans from Russia in his meeting 
with Ignatiev since he knew that the GOR would not likely 
find Zimbabwe creditworthy.  Gono also met with Chamber of 
Commerce and Industry Vice-President Georgiy Petrov. 
Gulyakin and Stolyarov said that in each case the parties 
signed memoranda of understanding that were of little 
significance. 
 
3.  (C)  Gono also met with representatives of the company 
Tyazhpromeksport, a large industrial equipment exporter that 
in the past has helped several African governments develop 
industrial projects.  Gulyakin and Stolyarov said 
representatives of the company would pay a reciprocal visit 
to Zimbabwe next month, but no concrete plans had formed. 
Gono and Mushohwe met with representatives of Ilyushin 
Finance to discuss buying five Ilyushin 96-400 planes. 
Gulyakin and Stolyarov were skeptical of the GOZ's ability to 
afford the planes. 
 
4.  (C)  COMMENT:  Moscow's interest in the trade delegation 
was directly proportional to the dubious benefits of 
investment in Zimbabwe.  The GOZ's courting of Russia 
presumably reflects a perception that Russia remains a 
willing partner to governments on unfavorable terms with the 
West. 
BURNS

Wikileaks

06MOSCOW4353, KOMI: SOCIO-ECONOMIC SITUATION IMPROVING FOR

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Reference ID Created Released Classification Origin
06MOSCOW4353 2006-04-24 13:10 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO2533
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHMO #4353/01 1141310
ZNR UUUUU ZZH
R 241310Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 4730
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 MOSCOW 004353 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PGOV PREL RS
SUBJECT: KOMI: SOCIO-ECONOMIC SITUATION IMPROVING FOR 
REMOTE RUSSIAN REGION 
 
1. (SBU) SUMMARY. Economic progress is visible in the 
resource-rich Komi Republic, we found on a recent trip to 
that remote region.  Its economy is doing well, in part 
because of global price gains in oil, gas, and metal, but 
also because of its growing paper and furniture industries 
and budding retail sector.  Although the regional government 
seems to be working hard to promote small and medium-sized 
enterprises, corruption is a strong countervailing force. 
Prospects are uncertain for significantly reducing 
corruption, although the federal government has stepped in to 
address that issue.  Despite such problems, we found that 
locals tend to be upbeat about the future.  END SUMMARY. 
. 
Background 
---------- 
 
2. (SBU) On a recent trip to Syktyvkar, capital of the Komi 
Republic, we found a prospering city in a resource-rich 
region.  Originally a crossroads of trade and the location of 
dozens of Soviet gulag camps, the republic, in European 
Russia's northeast, has an ethnically and religiously diverse 
population of just over one million people.  European virgin 
forests cover over 60 percent of the republic's territory and 
represent the first natural UNESCO World Heritage site in 
Russia.  Komi's economy is based mainly on energy extraction, 
mining, and forestry, which together make up more than 70 
percent of the republic's output.  Komi is home to Europe's 
largest paper mill and cardboard factory; other plants 
produce pre-cut boards and furniture parts.  To modernize and 
diversify its economy, Komi is seeking to develop its retail 
and tourism sectors ) ecological and extreme sport tourism 
is becoming popular in its national parks, drawing a small 
but growing number of foreign tourists.  Western-style 
shopping centers are appearing in Syktyvkar and Komi's other 
major cities. (NOTE: For more information on the 
geographical, sociological, political, and economic make-up 
of the Komi Republic, see www.rkomi.ru and www.komistat.ru. 
END NOTE) 
. 
Komi's Financial Situation Positive ... For Now 
--------------------------------------------- -- 
 
3. (SBU) Recently appointed Regional Head Vladimir Torlopov 
has touted his 2006 budget as "socially oriented," but 
members of Komi's Public Chamber and independent media told 
us the budget underfunds healthcare -- one of President 
Putin's national projects -- and programs to fight poverty 
and unemployment.  In Komi, 16.6 percent of the population is 
below the official poverty line (somewhat better than the 
18.9 percent for Russia as a whole), and unemployment is 2.9 
percent (versus 3.4 percent for Russia).  The republic's 
municipalities are almost completely financially and 
politically dependent on subsidies from the republican 
authorities, our interlocutors said.  Outside of the 
subsidies, supplemental funds to support the municipalities 
are distributed competitively based on detailed business 
plans.  Because developing such plans requires specialists 
and money, however, only a few of the wealthier 
municipalities have the resources to compete for these funds. 
 Accordingly, the municipalities that usually receive such 
funds will continue to do so, increasing the divide between 
the municipal haves and have-nots. 
 
4. (SBU) Although it is a net contributor to the federal 
government, Komi is on course to run an anticipated regional 
budget deficit in 2006 of 1.5 billion rubles (USD 53.6 
million).  The republic's overall debts are nearly as large 
as its annual budget, and further increases in debt without 
serious sources of new income could lead to financial 
problems.  Despite the spending pressures, high dependency on 
the primary sector, and resulting vulnerability to commodity 
price fluctuations, Fitch Ratings changed Komi's outlook from 
stable to positive in 2005 and affirmed its international 
long-term and short-term foreign currency ratings at B  and 
B, respectively.  Likewise, Moody's Investors Service raised 
Komi's domestic and international borrowing ratings from B1 
to Ba3, with a stable prognosis. 
 
5. (SBU) After a seven-fold rise from 1998 to 2004, 
investment dropped in 2004-2005 to approximately 20 billion 
rubles (USD 714 million).  The largest investment inflows 
took place from 2001 to 2004, up to 90 percent of which came 
from Austria in connection with the investment programs of 
Mondi Business Paper, which dominates harvesting and 
processing in the forestry sector.  Aside from Mondi the bulk 
of investment in Komi's industry comes from Severstal, which 
is modernizing Vorkuta's coal mines, and SUAL, which 
continues to invest in the development of local bauxite mines 
and processing.  The other major corporate investor, LUKoil, 
is moving much of its refining activity from the city of 
 
MOSCOW 00004353  002 OF 003 
 
 
Ukhta to the neighboring Nenets Autonomous Okrug, because it 
is more profitable to process oil there. 
. 
SME Sector Growing But Bureaucracy Is a Problem 
--------------------------------------------
- -- 
 
6. (SBU) Regional Head Torlopov has spoken out frequently in 
support of developing SMEs to diversify the republic's 
economy.  Most SMEs in Komi are retail shops, creating jobs 
and improving the selection of Western-style goods and 
services.  Almost 90 percent of small businesses are located 
in Komi's major cities, and fifty-three percent of them are 
in Syktyvkar alone.  From 2000 to 2005 the number of small 
businesses increased by one-and-a-half times: from 2700 to 
4500.  On average, a small business employs 13 people.  The 
median salary for one worker is 8,400 rubles per month (USD 
300), which is one-third less than in large and medium-sized 
businesses.  Small businesses wield considerable influence on 
the republic's socio-economic development, generating almost 
80 percent of the turnover of retail trade, 25 percent of 
consumer services, and almost 50 percent of construction 
work.  In 2005 revenues from small businesses increased 38 
percent over 2004, and investment in small business increased 
1.8 times.  More than half of the investment (55 percent) was 
in Syktyvkar, and 48 percent of that was in construction. 
 
7. (SBU) The republic administration has sought to help SMEs. 
 It worked with the Komi Chamber of Commerce, for instance, 
to turn an abandoned factory into a business incubator for 38 
up-and-coming businesses at a time.  Beneficiaries receive 
reduced rent, training, and commercial information.  SMEs 
also pay regional taxes at more favorable rates than larger 
companies.  However, SME entrepreneurs complain about the 
administrative hurdles they must overcome to be able to 
start, conduct, or grow their business.  Chamber of Commerce 
officials told us, for example, that the Syktyvkar government 
mandated that all businesses replace the aging concrete 
sidewalks in front of their buildings with brick.  The brick 
had to be purchased from a certain supplier so it would be 
uniform, and there was a citywide deadline established for 
all walks to be finished.  The sidewalks would remain the 
property of the city after the upgrade, but the building 
owners had to pay all of the costs associated with the 
installation and upkeep.  Businessmen were further outraged 
when they found out that over eighty separate administrative 
approvals (both at the city and regional levels) were 
required to make the change.  Our interlocutors said that 
pursuing these approvals took the average businessman an 
entire workweek. 
. 
And Corruption Remains a Problem 
-------------------------------- 
 
8. (SBU) Such excessive bureaucratic hurdles are often rife 
with corruption opportunities.  There are no regional or city 
programs to combat corruption, although in March a 
parliamentary roundtable recommended creation of a regional 
Anti-Corruption Commission.  In 2005, about 4,500 officially 
recorded economic crimes -- worth about 165 million rubles 
(USD 5.9 million) -- were committed in Komi.  According to 
komistat.ru, the number of economic crimes in the republic 
grew 16 percent in 2005 and is up 30 percent since 2000. 
Komi entrepreneurs told us that almost all SMEs enjoy the 
protection ("krysha" or "roof") of bureaucrats and law 
enforcement agencies, and that this is essential to 
commercial success.  Local authorities have been reluctant to 
attack the problem because they would essentially be giving 
up a key source of income. 
 
9. (SBU) Additionally, entrepreneurs say they are expected to 
sign "contracts" with government entities to cover the 
"costs" of fire, health, sanitary, and security inspections. 
Normally, these inspections would happen once every two 
years, with the costs covered by the budget.  In Komi, 
however, businesses pay for these "contracts" when they first 
register and then are told to expect "inspections" every 
month or so, paying a "fee" each time.  As long as the 
contract is current, the business will likely pass the 
inspection, but the business's profit margins are squeezed 
because they are paying both legitimate taxes and these 
"contract fees." 
 
10. (SBU) Arson appears to be a favored mode of intimidation 
or retribution in the republic.  Ukhta authorities are 
prosecuting a case against an organized crime group that 
extorted a significant sum from businessmen to support 
imprisoned colleagues.  The criminals not only threatened the 
businessmen but even burned one of their cars to intimidate 
them.  Stores have been set on fire in Usinsk, apparently 
because their owners refused or were late in paying 
 
MOSCOW 00004353  003 OF 003 
 
 
extortionists.  In the most extreme case of arson, in July 
2005, a fire in a shopping center killed 25 people in Ukhta 
because no one could escape through the metal grills on the 
windows. 
. 
Federal Government Gets Involved 
-------------------------------- 
 
11. (SBU) Federal authorities appear to be growing tired of 
waiting for local officials to adopt decisive anti-corruption 
measures and remove barriers for SME development.  After 
Russia's General Procurator issued an August 2005 order 
requiring regional procurators to provide more oversight in 
implementing laws defending SME rights, the Komi procurator 
created a working group to execute that order.  Reporting on 
the group's first month of operation, a procuracy official 
said that investigators found evidence that criminal groups, 
government officials, and policemen were extracting bribes 
from businesses.  Procurators have filed several criminal 
cases as a result.  For example, an official in Ukhta faces 
charges for soliciting a USD 25,000 bribe from an 
entrepreneur seeking to rent municipal property, and a Komi 
Interior Ministry investigator and a former tax police 
official face charges for seeking bribes in return for 
stopping an investigation against several businessmen.  In 
April, the Komi Prosecutor's Office opened a criminal case 
against a deputy industry and energy minister for taking a 
USD 1.8 million bribe from a company director and town 
council deputy in Troitsko-Pechorsk in exchange for 
assistance in the wood-processing business.  Charges without 
convictions tend to be commonplace in Komi, however, and this 
new initiative appears to be no exception.  Indeed, Syktyvkar 
Deputy Mayor Vladimir Pystin was charged with embezzling over 
three million rubles (USD 107,000) in computer equipment 
meant for regional schools, but managed to evade conviction 
by returning the embezzled money to the regional government. 
. 
COMMENT 
------- 
 
12. (SBU) Given its solid industrial base and relatively 
well-developed infrastructure, the Komi Republic seems to 
have good economic prospects.  Syktyvkar has a strong 
entrepreneurial feel to it, with housing and commercial 
construction booming and foreign-made cars crowding the 
streets.  Customer service approaches Western standards in 
the main hotel and restaurants.  With an imp
roved tourism 
infrastructure and better marketing, Syktyvkar and the 
republic in general could capitalize on their many cultural 
and natural attractions.  Lack of economic diversification, 
budget woes, and corruption remain nagging problems that even 
federal intervention will be hard-pressed to eliminate. 
Nonetheless, our visit suggested that the typical Komi 
citizen's attitude is upbeat and positive about the future. 
BURNS

Wikileaks

06MOSCOW4316, THE CENTRALIZING RUSSIAN STATE MEETS THE NORTH

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Reference ID Created Released Classification Origin
06MOSCOW4316 2006-04-21 14:35 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO0801
PP RUEHDBU
DE RUEHMO #4316/01 1111435
ZNY CCCCC ZZH
P 211435Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4679
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 004316 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 04/21/2016 
TAGS: PGOV PREL PBTS RS
SUBJECT: THE CENTRALIZING RUSSIAN STATE MEETS THE NORTH 
CAUCASUS 
 
Classified By: Minister Counselor for Political Affairs Kirk Augustine. 
  Reason 1.4 (b, d) 
 
1. (C) Summary:  The lesson of 500 years of Russian 
statecraft is clear:  when the Center is strong, it 
centralizes, eliminating alternative power structures. 
Putin, seeking to show that he -- and Russia under his 
leadership -- are strong, is seeking to centralize.  He is 
doing so by eliminating ethnically based autonomies, starting 
with those that have caused no problems for the Center.  The 
net effect is to give Slavs more control over former ethnic 
homelands.  While some ethnic homelands have disappeared in 
Siberia, the strategy has run into resistance in the already 
troubled North Caucasus.  Adyge President Sovmen resigned 
April 14 rather than preside over the incorporation of his 
Republic into the surrounding Krasnodar Kray.  He drew 
support from the other Adygh peoples, including the 
Kabardians and Cherkess and their large overseas diaspora. 
Strong ethnic nationalism in the Caucasus, the legacy of 
Soviet nationality policies, and the realization that Moscow 
was unswayed by local concerns promoted an upsurge of 
resentment and unrest throughout the region, already 
suffering from the rapid growth of religious extremism. 
Faced with this prospect, the Kremlin backed down April 17 -- 
for now.  End Summary. 
 
------------------- 
Who are the Adyghs? 
------------------- 
 
2. (C) Adyghs are the indigenous population of the Northwest 
Caucasus.  Sub-groups include the Kabardians, Cherkess, 
Shapsugs and Ubykh.  The Abkhaz, further south, are cousins. 
The Adyghs were long linked to the great Middle Eastern 
empires -- Adygh boys became Mamluk Sultans in the 14th and 
15th centuries, and the Adyghs were nominally under Ottoman 
patronage until the Treaty of Kuchuk Kaynarja in 1774.  The 
Russian conquests of the 19th century led to mass migrations 
of a majority of Adyghs to the Ottoman empire.  Adygh 
("Cherkess" or "Circassian") communities are significant 
today in Turkey, Jordan, Syria and Paterson, New Jersey. 
 
3. (C) Descendants of those who remained in Russia are 
scattered through the North Caucasus, and are a majority only 
in Kabardino-Balkaria.  The Cherkess are a titular, but 
minority, nationality in Karachayevo-Cherkessia.  The 
Shapsugs of the Black Sea coast were unsuccessful in 
obtaining a titular homeland in their native area, near 
Sochi.  The Republic of Adygea was created in 1991 as a 
titular homeland for Adyghs, carved out of the Krasnodar Kray 
that completely surrounds it.  Though Adyghs make up only 20 
percent of the population, legal guarantees give control of 
the political system to Adyghs, including Shapsugs who moved 
in. 
 
---------------- 
The April Events 
---------------- 
 
4. (C) For three years, the Kremlin has been promoting the 
"amalgamation" ("ukrupneniye") of regions.  Several Siberian 
ethnic homelands have been incorporated into neighboring 
regions, starting with the incorporation of Komi into Perm 
three years ago. The first attempt to implement this policy 
in the North Caucasus ran into resistance. On April 4 Adyge 
President Khazrat Sovmen publicly denounced plans to hold a 
referendum on re-incorporating Adyge into Krasnodar -- a 
referendum that would easily carry on the votes of the 
majority Slavic population.  Two days later demonstrators 
poured into the streets of Maykop, Adyge's capital, in 
support of Sovmen.  Joining the demonstration was the Adyge 
Khase, a Shapsug nationalist organization -- Sovmen is 
himself a Shapsug.  Sovmen gave interviews blaming the crisis 
on Putin's Plenipotentiary Representative in the Southern 
Federal District, Dmitriy Kozak.  After several days of 
jockeying and an April 11 meeting between Sovmen and 
Presidential Administration chief Sobyanin -- with Kozak 
present -- Sovmen on April 14 submitted his resignation to 
President Putin, leaving in charge Dr. Murat Kudayev, head of 
one of the Republic's sub-districts. 
 
------------- 
Dire Warnings 
------------- 
 
5. (C) The prospective swallowing of this small ethnic 
homeland by a larger Slavic entity sent shock waves through 
the North Caucasus.  Small nations there have kept their 
identities for thousands of years, despite invasions by 
Indo-European and Turkic peoples, by retreating to the 
region's mountains and forests and developing tightly-knit 
 
MOSCOW 00004316  002 OF 003 
 
 
societies, extraordinary toughness and languages no outsider 
can pronounce.  Locals feared this was only the first step. 
The shock waves first hit the other Adygh enclaves, 
Karachayevo-Cherkessia and Kabardino-Balkaria, whose Adygh 
populations participated in the Maykop protests.  Kabardians, 
especially, are quick to defend their co-ethnics -- they sent 
hundreds of fighters to Abkhazia in the early 1990s; today's 
Abkhaz "Defense Minister," Sosnaliyev, is a Kabardian. 
 
6. (C) The concerns were shared in the rest of the North 
Caucasus, where disputes over territory claim lives
to this 
day.  No one considers current territorial boundaries 
optimal, but all fear that attempts to change them could be 
pulling the thread that unravels the whole cloth.  As 
Makhachkala Duma Deputy Gadzhi Makhachev (an Avar) told us, 
"What are they going to do?  Unite us with Chechnya?  Unite 
Chechnya with Stavropol?  It will all end in blood." 
Makhachev himself was involved in a dispute several years ago 
with Chechen warlord Sulim Yamadayev, who drove ethnic Avars 
out of their homes in north-east Chechnya; Makhachev fears 
that attempts to change the boundaries will mask similar 
land-grabs. 
 
7. (C) Many Moscow commentators were mystified by Putin's 
insistence on this course of action.  Even Russian 
nationalist commentator Sergey Markedonov -- who is 
virulently opposed to "ethno-territorial formations" and the 
"exceptionalism" granted to the Chechens and other satraps in 
the Caucasus -- told us he regarded the tactics as 
heavy-handed and likely to lead to destabilization.  He would 
have favored a demand that the Russian constitution apply in 
Adygea -- meaning that the special privileges given to Adyghs 
would be abolished by administrative action, allowing the 70 
percent Slavic majority to dominate without changing 
administrative structures. Markedonov challenged the 
strategy, as well, in a recent publication, asking,  "Why is 
"amalgamation" viewed as tantamount to saving the country 
from collapse, and equated with the strengthening of the 
state?" 
 
-------------- 
The Climb-Down 
-------------- 
 
8. (C) Faced with such prospects, this week the Kremlin 
climbed down.  On April 17 Putin met with Sovmen, and on the 
18th a brief announcement reversed Sovmen's resignation.  On 
April 20 Kozak met in Rostov with the Speaker of Adyge's 
People's Assembly, Ruslan Khadzhibiyekov.  In remarks 
afterward he acknowledged that Sovmen would serve out his 
term, but "we will correct him" if his initiatives go too 
far.  Asked about the referendum on unification, Kozak 
back-pedaled fast:  it was a local concern, he said, not a 
federal question at all.  The Speaker, however, was strident. 
 Unification?   "Don't you believe it.  Not today, not 
tomorrow, not in the future." 
 
9. (C) It is unclear whether the climb-down is permanent.  An 
official of the Presidential Administration, Aleksandr 
Machevskiy, reminded us April 21 that Sovmen's current term 
is up in a year.  After that, he predicted, the referendum 
would be held and the Slavic population would vote for 
unification with Krasnodar.  He believed that Putin could 
calm regional fears by declaring that this would be the only 
such unification in the North Caucasus.  Indeed, Machevskiy 
said, no other amalgamation would be possible in the region. 
 
------- 
Comment 
------- 
 
10. (C)  In our view, Markedonov put his finger on the 
ideological mindset that sees "amalgamation" as the solution 
to seemingly unrelated problems.  To an American observer 
watching the rapid and unchecked spread of jihadist Islam in 
the North Caucasus, the Kremlin's insistence on making 
administrative changes that reduce the number of local 
governments without changing governance itself looks like 
rearranging the deck chairs on the Titanic -- or worse, since 
the move will predictably fan local resentment of Russians 
and exacerbate other inter-ethnic problems.  To Putin, 
however, the prominence of autonomies may have been a 
reminder of Russia's weakness in the Yeltsin era.  As one 
bible-quoting Russian official told us, "There is a time for 
casting away stones and a time for gathering stones together; 
now is the time for gathering stones." 
 
11. (C) In gathering together the stones of the Caucasus 
Mountains, however, Putin is also trying to reverse the 
effects of 70 years of Soviet nationalities policy.  After 
initial failures (the Soviet "Mountain Republic," including 
 
MOSCOW 00004316  003 OF 003 
 
 
all the North Caucasus except Dagestan, broke up after only 
six months), the Soviets developed a policy of giving 
"titular" nationalities their own homelands.  The policy of 
"korenizatsiya" meant that the "root" ("koren") population of 
any territory received special rights to dominate that 
homeland.  That legacy has become so deeply rooted in the 
already nationalist local cultures that an attempt to abolish 
those privileges is perceived as Russification and cultural 
genocide -- and evokes bitter memories of repeated wars, 
exiles and deportations.  It is that legacy, rather than a 
calming Presidential statement, which is likely to dominate 
regional emotions.   But Putin appears to be following the 
book of Russian statecraft and the 500 year-old dream -- 
never quite realized -- of a unitary Russian state. 
BURNS

Wikileaks

06MOSCOW4265, A/S RADEMAKER’S APRIL 12 MEETING WITH DVBR

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Reference ID Created Released Classification Origin
06MOSCOW4265 2006-04-21 06:47 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0015
PP RUEHWEB

DE RUEHMO #4265/01 1110647
ZNY CCCCC ZZH
P 210647Z APR 06
FM AMEMBASSY MOSCOW
TO SECSTATE WASHDC PRIORITY 4584

C O N F I D E N T I A L MOSCOW 004265 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 04/21/2016 
TAGS: PARM PREL MNUC RS
SUBJECT: A/S RADEMAKER'S APRIL 12 MEETING WITH DVBR 
DIRECTOR ANTONOV 
 
REF: MOSCOW 3860 
 
Classified By: Minister-Counselor for Political Affairs Kirk Augustine. 
  Reasons 1.4 (a/b/d/f/h) 
 
1. (C)  SUMMARY.  In an April 12 meeting with Anatoliy 
Antonov, Director of the MFA's Department for Disarmament and 
Security Affairs, ISN Assistant Secretary Stephen Rademaker 
explained that U.S. concerns about Russian treaty compliance 
were the main obstacles to U.S. support for Russian 
membership in the Australia Group.  A/S Rademaker also 
reiterated that the U.S would like to move forward to 
negotiate a Fissile Material Cutoff Treaty without a 
verification regime.  He informed Antonov that the U.S. is 
not interested in pursuing an agreement for the Prevention of 
an Arms Race in Outer Space (PAROS).  Antonov said the GOR 
would like to extend the mandate of the Security Council 
Committee established by UNSCR 1540 for two more years, and 
added that the GOR would like to get consensus for the 
Committee's activities during the course of these two years. 
Antonov said the GOR does not agree with the U.S. proposal to 
restrict anti-vehicle mines within the framework of the 
Convention on Conventional Weapons.  Rademaker requested that 
the GOR not block consensus on the U.S. proposal, but Antonov 
rejected that request, noting that Russia would equally like 
the U.S. to stand aside and not block others negotiating a 
PAROS agreement in the Conference on Disarmament (CD). 
Rademaker and Antonov agreed that we need to find ways to 
attract more countries to participate in the Hague Code of 
Conduct Against Ballistic Missile Proliferation.  Rademaker 
said the U.S. is committed to making pre-launch notifications 
for missile launches, and suggested that the Joint Defense 
Exchange Center (JDEC) would be the best way to do that. 
Antonov said that we could move forward again on the JDEC. 
Antonov reported that the joint U.S.-Russian proposal to 
launch the Global Initiative to Combat Nuclear Terrorism is 
still within the Russian interagency clearance process. 
Discussion on Iran was covered reftel.  END SUMMARY. 
 
AUSTRALIA GROUP 
--------------- 
 
2. (C)  Antonov raised U.S. opposition to Russian membership 
in the Australia Group (AG).  He said the U.S. list of 
conditions that Russia must first meet before being able to 
join the AG failed to reflect the many changes that had taken 
place in the U.S.-Russia strategic relationship over the past 
decade and our cooperation in the BW and CW framework and on 
export controls.  The two sides continued, of course, to have 
differences, "but that's normal."  Pointing to the February 
22 and March 31 U.S. non-papers detailing those conditions, 
Antonov said U.S. accusations that Russia may be maintaining 
an offensive biological weapons program in violation of the 
Biological Weapons Convention (BWC) were particularly 
upsetting.  If one were to judge by those non-papers, "We're 
still enemies."  According to Antonov, a number of European 
states have stated that they could agree to Russia joining 
the AG, but the U.S. was acting as if the Cold War were still 
on.  Antonov also protested about stated U.S. concerns over 
the accuracy of Russia's declaration of chemical weapons 
stocks under the Chemical Weapons Convention (CWC).  He said 
U.S. concerns over Russia's compliance with the BWC and CWC 
were unfounded and should not be raised in the context of the 
Australia Group.  Antonov said that if the U.S. really 
considered Russia to be in violation of the BWC and CWC, the 
GOR would have to rethink its cooperation with the U.S. in 
those two spheres. 
 
3. (C) Antonov added that U.S. demands for Russian officials 
to be fired and for non-reciprocal short-notice access to 
certain sensitive military facilities in Russia as a 
condition for membership in the Australia Group were 
insulting.  U.S. officials who thought Russia might agree to 
such demands simply were demonstrating their lack of 
understanding of Russia.  How could they think that sending 
such papers to the GOR would improve relations between the 
two countries?  The U.S. should not waste its time with this 
request, as it would not be met.  "Russia is a different 
country in 2006" from what it was a decade ago, "but you talk 
to us as if we were less important than Iraq or Iran.  You're 
treating us like Russia were Mali or Burundi." 
 
4. (C)  Antonov asked how Russia and the U.S. could continue 
to cooperate in the Global Partnership or bilaterally on, 
e.g., bio-terrorism, if the U.S. really thought Russia was 
violating the BWC and CWC?  How could the U.S. imagine that 
Russia would accept the U.S. conditions just to join the AG? 
"We will continue to live without it, and we will survive." 
Many people in Moscow had wanted Russia to press on U.S. 
vulnerabilities in the BW area, but Antonov had previously 
blocked that.  Now he had not even reported the latest U.S. 
non-paper to his superior (Deputy Foreign Minister Kislyak) 
or to the Russian inter-agency, which would press for Russia 
 
to take up an actively anti-U.S. position, and that would 
benefit Iran, India, and "some Europeans who dislike 
U.S.-Russia cooperation."  He added that the GOR would be 
willing to discuss U.S. concerns about Russian CW and &#x
000A;biological programs within the framework of general 
U.S.-Russian cooperation and cited specifically the 
willingness to discuss the DPRK cases raised in the nonpaper. 
 Antonov then passed a nonpaper to A/S Rademaker responding 
to the two U.S. papers. 
 
5. (C)  Rademaker acknowledged that the USG had concerns 
about Russian CWC and BWC programs, and is required by law to 
voice those concerns in an annual compliance report to 
Congress.  He added that in 1992 then-President Yeltsin 
admitted that Soviet officials had lied about the USSR's BW 
program.  Rademaker said the U.S. believed Russia's 1992 BWC 
declaration to the United Nations was misleading. 
 
6. (C)  Rademaker said the U.S. also had concerns about a 
lack of Russian transparency about its CW stockpile.  The 
U.S. side has been asking without success for information 
about Russia's CW stockpile and possible non-declared CW 
production facilities.  Rademaker added that Russia had 
back-tracked on an agreement and refused a U.S. request for 
access to documents on its CW program the GOR had previously 
shown to the Organization for the Prevention of Chemical 
Weapons (OPCW).  Russian officials had claimed the documents 
had been "destroyed."  Rademaker said the USG did not take 
the Russian reply seriously, and cited it as an example of 
Russian non-cooperation regarding CW issues. 
 
7. (C)  Rademaker explained that since membership in the 
Australia Group requires a party to be in compliance with the 
BWC and CWC and the USG continues to have concerns about 
Russia's compliance with these Conventions, the U.S. could 
not support Russia's membership until U.S. concerns are 
addressed.  The U.S. remained ready to engage with Russia to 
resolve the issue. 
 
8. (C)  Antonov asked Rademaker to cite even one drawback for 
the U.S. that would result from Russian participation in the 
AG.  Rademaker said the basis for the U.S. position was as 
set out in para 7 above, but he added that in a meeting that 
had just taken place in Washington, Antonov's deputy Mashkov 
had objected to updating MTCR control lists to take technical 
developments into account, on the grounds that doing so would 
be too difficult bureaucratically within the GOR.  The same 
need for updating existed within the AG, and it appeared 
Russia would not agree to such revisions for the same 
reasons.  Antonov replied that either Mashkov had been 
misunderstood in Washington or he had not accurately 
represented the GOR position.  Russia was not opposed to 
revising MTCR control lists -- what it opposed was changing 
the MTCR Guidelines.  Russia also had some reservations about 
expanding participation in the MTCR, especially with regard 
to the EU, which thought that the fact that a country (e.g., 
Slovenia) had joined the EU meant that it automatically 
qualified to join the MTCR. 
 
9. (C)  Antonov returned to the BW area, citing a passage 
from the U.S. non-paper about a lack of Russian "openness 
about the Soviet biological weapons program."  There was "no 
framework" for such a U.S. question, he said.  "We are a P-5 
country.  What if I wanted an answer about the U.S. BW 
program?  You still have the capability to have an offensive 
program.  You rejected continuing discussions in the BWC 
framework about verification  -- that may mean that you are 
continuing an offensive BW program."  He added, "We are ready 
to cooperate, but you have to decide whether we are partners, 
or whether you're a superpower and we're from Africa."  The 
GOR was compiling a list of all CW and BW programs where the 
two sides were cooperating, and "we may need to stop them if 
there is no trust.  We are not students, and you are not 
professors.  We are equals." 
 
CONFERENCE ON DISARMAMENT 
------------------------- 
 
10. (C)  A/S Rademaker said the Conference on Disarmament 
(CD) is going into its ninth year with no real work 
accomplished.  The U.S. would like to reinvigorate the CD and 
was considering submitting a draft Fissile Material Cutoff 
Treaty (FMCT).  There would not be any surprises in the draft 
text.  Since the U.S. believed, it would be difficult to 
negotiate a verification regime and verification in any case 
could not be very effective, such a draft would not propose 
any verification provisions, but would instead leave it up to 
individual states to use their own national means and methods 
to assess compliance.  The U.S. remained opposed to the 
Shannon Mandate because of its presumption that an FMCT 
Treaty must include a verification regime.  Antonov said the 
Shannon Mandate was so vague on verification that even the 
U.S. should be able to accept it.  Rademaker repeated that 
 
the Shannon Mandate clearly foresaw a verification regime. 
 
11. (C)  Rademaker said if the U.S. put forward a draft 
Treaty text, a main obstacle would be political linkages to 
other CD proposals that countries have attached to the FMCT. 
The USG believes FMCT negotiations should be able to begin 
even if there is no movement on related CD issues.  He asked 
whether the GOR would be willing to de-link the FMCT from 
agreement on discussions concerning the Prevention of an Arms 
Race in Outer Space (PAROS).  The FMCT, which enjoys 
consensus in principle within the CD, was being held hostage 
to PAROS, which does not enjoy consensus.  Antonov said 
Russia was willing to start negotiations on an FMCT and would 
not block consensus, but it would not actively support the 
U.S. in forming such a consensus.  He indeed doubted that a 
consensus for FMCT negotiations could be achieved without at 
least discussions on PAROS.  If the U.S. tabled an FMCT 
draft, there would be no real discussion of it, because there 
would be no decision to form an ad hoc discussion group.  He 
noted that when Russia took over the CD chair, it would have 
to take NAM views more strongly into account. 
 
12. (C)  Antonov said that Russian Ambassador Loshchinin had 
said Russia would need U.S. help during its presidency on 
PAROS and on radiological weapons.  He planned to organize a 
discussion on PAROS and hoped the U.S. would send experts to 
discuss that issue.  In any event, Antonov said he wanted a 
U.S.-Russia bilateral dialogue on outer space to continue. 
Rademaker said he would be surprised if the U.S. sent experts 
to Geneva to discuss PAROS, but he said bilateral discussions 
of outer space could continue. 
 
13. (C) Antonov asked whether the U.S. was still opposed to 
discussions on PAROS, adding that it was a top priority for 
Russia within the CD.  He added that the GOR would be willing 
to be flexible to reach some sort of agreement on PAROS. 
Rademaker replied that the CD works on consensus, and the 
U.S. is not interested in PAROS.  He added that he would 
think that Russia would share with the U.S. an interest in 
China being limited by an FMCT.  Antonov said he regarded 
PAROS as a higher priority than FMCT. &#
x000A; 
UNSCR 1540 
---------- 
 
14. (C)  Antonov said the GOR would like to extend the 
mandate of the Security Council Committee established by 
UNSCR 1540 for two more years.  He added that the GOR would 
like to get consensus on a relatively simple text for the 
Committee's activities during the course of these two years. 
He said that Russia would introduce a draft text to do that, 
but was also willing to work on the basis of the UK draft. 
 
15. (C)  A/S Rademaker said the U.S. also wanted to extend 
the Committee's mandate and would like to include specific 
language that deals with proliferation-related financing. 
Antonov said that 1540 had required a "delicate compromise" 
that should not be overturned.  The GOR did not feel it 
appropriate to single out proliferation financing as an issue 
that merited more attention than other issues (e.,g., export 
controls, prevention) in the framework of 1540.  Russia was 
ready for a compromise, and urged the U.S. to find a 
formulation that drew only on existing 1540 language.  He 
noted that Russia would also like to draw on 1540 language to 
include in G-8 documents at the St. Petersburg summit, and 
would look for a U.S. proposal. 
 
CONVENTION ON CONVENTIONAL WEAPONS 
---------------------------------- 
 
16. (C)  Antonov began the discussion by passing over a 
nonpaper replying to the U.S. proposal to restrict 
anti-vehicle mines within the framework of the Convention on 
Conventional Weapons (CCW).  He said the majority of 
non-aligned countries do not support the U.S. proposal for a 
Mines Other Than Anti-Personnel Mines (MOPATOM) Protocol, and 
added  that such mines have legitimate uses.  He said China 
and Pakistan would not negotiate the issue.  If the U.S. 
would like to start a process of negotiating agreement on 
MOPATOM outside the framework of the CCW, Russia would not 
object. 
 
17. (C) A/S Rademaker requested that the GOR not block 
consensus of the U.S. proposal within the CCW Group of 
Experts.  He added that the U.S. and Russia have a lot in 
common regarding their stand on anti-vehicle mines.  Antonov 
noted that the Russia would not stand aside and let others 
pursue the issue within the CD, just as the U.S. would not 
stand aside and let PAROS negotiations proceed.  Moreover, 
there was no statistical data confirming that anti-vehicle 
mines are a humanitarian problem.  Russia had also been 
seeking clarity on what kind of an instrument the U.S. 
wanted, and how it would affect the Russian army.  The U.S. 
 
still had not clarified those issues.  Rademaker said he 
would take the Russian non-paper to Washington for it to be 
studied. 
 
INTERNATIONAL ATOMIC ENERGY AGENCY 
---------------------------------- 
 
18. (C)  Rademaker raised the issue of making it a binding 
principle in the IAEA that a country under investigation for 
possible violations of its obligations should not be in a 
position to act in the Board of Governors or the new Special 
Committee on Safeguards and Verification when its own case 
was being considered.  Antonov turned to his deputy Oleg 
Rozhkov for a response.  Rozhkov said that the issue could 
not be resolved without changes to the IAEA Statute and to 
its Rules of Procedure.  Such changes would require 
ratification and would take decades, and in any case the NAM 
did not support making such changes.  Rademaker suggested 
that the principle in question, which had been accepted by 
the G-8 at Sea Island, could be reiterated in St. Petersburg. 
 Antonov said he was not sure, but would be willing to look 
at an American proposal. 
 
HAGUE CODE OF CONDUCT 
--------------------- 
 
19. (C)  Antonov raised the issue of the Hague Code of 
Conduct (HCOC), wondering whether Russia should continue to 
submit annual declarations when the U.S. was failing to do 
so.  Rademaker responded that the U.S. was committed to 
making pre-launch notifications for vehicle launches and test 
flights.  We had expected, however, to be able to make the 
same notifications to HCOC as we made to the bilateral Joint 
Defense Exchange Center (JDEC), but agreement on the JDEC had 
become stalled over the liability issue.  Now that liability 
was close to resolution, it should be possible to move 
forward with the JDEC and that would resolve our problem with 
the HCOC.  Antonov said he did not understand the U.S. 
position.  The U.S. had accepted a multilateral obligation to 
provide HCOC notifications, and it was not meeting that 
obligation.  The bilateral JDEC issue was a separate issue. 
Did the U.S. think Russia should also not be making HCOC 
notifications?  The Russian military was very reluctant to 
make such notifications when the U.S. was refusing to do so. 
If Russia stopped, Antonov said, the majority of other HCOC 
countries would also not comply with HCOC obligations. 
 
20. (C)  Rademaker and Antonov agreed that ways should be 
found to attract more countries to participate in the HCOC. 
Rademaker said the U.S. appreciated Russia's intentions in 
proposing amendments designed to make the HCOC more 
attractive to other countries, but the majority of countries 
were not yet prepared to support changes to the HCOC. 
Antonov said the GOR's main concern was to bring China and 
India into the regime. 
 
GLOBAL INITIATIVE 
----------------- 
 
21. (C)  Antonov reported that the joint U.S.-Russian 
proposal to launch the Global Initiative to Combat Nuclear 
Terrorism was still in the Russian interagency clearing 
process. 
 
22. (U)  A/S Rademaker has cleared this cable. 
BURNS

Wikileaks

06MOSCOW4198, TRANSNISTRIA: “THREE PLUS TWO” TALKS IN MOSCOW

WikiLeaks Link

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Reference ID Created Released Classification Origin
06MOSCOW4198 2006-04-20 11:46 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO8984
PP RUEHDBU
DE RUEHMO #4198/01 1101146
ZNY CCCCC ZZH
P 201146Z APR 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4508
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 004198 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 04/20/2016 
TAGS: PREL PBTS ETRD OSCE UP MD RS
SUBJECT: TRANSNISTRIA:  "THREE PLUS TWO" TALKS IN MOSCOW 
 
Classified By: Minister Counselor for Political Affairs Kirk Augustine. 
  Reason 1.4 (b, d) 
 
1. (C) Summary:  "3 2" talks on Transnistria took place in 
Moscow April 19 including the mediators -- Russia, Ukraine 
and the OSCE -- and observers -- U.S. and EU.  Russia tried 
to focus discussion on the customs regime between Moldova and 
Ukraine.  All other sides pushed back, hardest of all 
Ukraine, whose negotiator noted sharply that the new regime 
"has been decided."  Russia introduced a draft protocol to 
roll back the new customs regime; the others agreed to study 
it.  Ukraine proposed that the next negotiating round focus 
on the OSCE's draft delimitation of competencies between 
Chisinau and Tiraspol as well as on creating monitoring 
groups on militarization and an evaluation mission on the 
feasibility of democratic elections in Transnistria.   The 
group agreed to include the delimitation paper in the 
negotiating agenda.  An unofficial translation of the Russian 
draft protocol is in para 13.  End summary. 
 
2. (C) Russia (Nesterushkin) led off by complaining about the 
effects of the Moldovan-Ukrainian customs agreement.  In a 
departure from previous Russian statements, he focused not on 
the "humanitarian crisis" but on the budgetary effects of 
depriving the Transnistrian authorities of customs revenues. 
The consequent inability of Transnistria to provide social 
services to its people was causing "radicalization" and cast 
the future of the peace process into doubt. 
 
3. (C) OSCE (Hill) replied that the customs issue had a long 
and complex history.  Different sources are giving 
contradictory information about what is now happening on the 
ground.  Hill ascribed this to an attempt by Transnistrian 
leader Smirnov to put pressure on Russia and Ukraine.  Hill 
noted that the Moldovan steps needed to be understood in the 
context of the last five years of negotiating history, which 
have convinced Moldova that Transnistria is not interested in 
creating a single economic space as previously agreed. 
Convincing Moldova to take steps to attract the 
Transnistrians back to the peace process meant first 
convincing Moldova that there was a peace process to return 
to.  "This is a chicken-and-egg problem," he said.  Hill 
believed that the registration process under the new regime 
was not working with perfect transparency, and could be 
improved. 
 
4. (C) Ukraine (Veselovskiy) agreed that the situation is 
abnormal.  He blamed this on Transnistria, whose 
"unconstructive position" has "gone beyond the bounds of the 
reasonable."  Veselovskiy agreed that some details of the 
functioning of the new customs regime could be improved.  He 
noted that President Yushchenko had proposed a new initiative 
of Transnistria one year ago, and its goals remain 
unrealized.  Veselovskiy proposed the creation of expert 
monitoring groups, one to look at Transnistria's military 
industry and the other to evaluate weaponry.  He also 
proposed moving forward on an international evaluation by 
OSCE of the feasibility of democratic elections and on the 
new OSCE paper delimiting responsibilities between Chisinau 
and Tiraspol. 
 
5. (C) EU (Jacobovits) suggested a new round of negotiations 
in May.  There had been some more positive elements to Hill's 
last interaction with Transnistrian negotiator Litskai, and 
those needed follow-up.  While the simple solution to the 
customs issue would be for the Transnistrians to allow 
exports again, the next round needed to include agenda items 
each party wanted (such as customs) even if the other did 
not. 
 
6. (C) U.S. (Kramer) noted that the G-8 political directors 
had requested a more detailed discussion of regional issues 
such as Moldova at their next meeting on June 7, and they 
would be formally included in the agenda of the June 29 
Ministerial.  Undersecretary Burns had called for less 
assigning of blame and more effort to get the sides working 
together. 
 
7. (C) Nesterushkin insisted once again that there can be no 
discussion of politics until there is a unified customs 
space, to which Veselovskiy retorted that the form of 
required documentation has been decided.  He suggested 
sending an OSCE mission -- Ukrainian expertise would be at 
its disposal -- to Moldova and Transnistria to work on 
smoothing out issues related to obtaining the new 
documentation.  Hill agreed that if this were considered part 
of the negotiating process, the OSCE can undertake such a 
mission.  The principles have already been decided; the 
question is how Transnistrian enterprises can register. 
 
8. (C) Nesterushkin insisted yet again that there will be no 
negotiations until the resolution of the "current crisis," to 
 
MOSCOW 00004198  002 OF 004 
 
 
which Kramer replied that the majority opinion within the G-8 
was that Tr
ansnistria had created the crisis itself. 
Nesterushkin sarcastically asked whether "Japan and Canada" 
were now going to be invited in as observers.  At this point 
Nesterushkin distributed a Russian draft protocol on customs. 
 He said the basic deal was that Transnistrian companies 
would register in Moldova, and Transnistria will keep all the 
revenues (but see analysis, para 11, and unofficial 
translation, para 13). 
 
9. (C) All agreed they would study the Russian draft. 
Veselovskiy promised Hill Ukrainian legal analysis within two 
days.  Hill said this was a two-stage process:  the 
negotiators had to reach consensus before going on to seek 
agreement of the parties on this complex issue.  Hill 
switched topics to the delimitation paper, saying that 
Moldovan negotiator Sova confirmed to him three times 
Moldova's willingness to discuss status and democratization 
issues.  All agreed to support inclusion of the paper in the 
agenda for upcoming negotiating rounds, though Nesterushkin 
expressed the reservation that since the new document is an 
abridgement of a February, 2004 document, the negotiators 
would have to disavow the earlier document to proceed on to 
this one. 
 
10. (C) The meeting concluded by setting the next negotiating 
round for the week of May 17 and agreeing that Hill would 
signal the group's determination to the Parties when he meets 
with COE ambassadors in Strasbourg next week. 
 
11.  (C)  Highlights of the Russian protocol are: 
 
-- By making itself a signatory (along with Ukraine, Moldova 
and Transnistria), Russia is implicitly claiming a say in 
affairs on the Ukrainian-Moldovan border. 
 
-- The third and fourth preambular paragraphs -- on the 
"unacceptability" of economic pressure and the 
"impermissibility" of administrative barriers to trade hint 
at a Russian offer of quid pro quo to the Moldovans:  this 
protocol in exchange for a repeal of the ban on imports of 
Moldovan wine. 
 
-- According to Para 2, the form of any customs stamps must 
be agreed by the Transnistrians (who can therefore refuse all 
Moldovan stamps without contradicting the protocol). 
Transnistrian freedom from tax liability is not dependent 
upon further agreement with Moldova. 
 
-- Both Parties must make changes in their internal 
legislation; failure to do so does not prevent the Protocol 
from entering into force; rather, it gives Russia and Ukraine 
full rights to do whatever they deem necessary to ensure free 
movement of goods into and out of Transnistria. 
 
-- While waiting for the Protocol to enter into force, the 
new customs regime is to be rolled back, creating a new 
base-line favorable to Transnistria. 
 
12. (C) Comment:  All the above points indicate that Russia 
understands this paper is a non-starter.  It appears to us in 
Moscow that the reaction of the U.S. (in close cooperation 
with Ukraine and the EU) can be a) to call the draft a 
non-starter and refuse to discuss it; b) try to amend it to 
make it more acceptable; or c) get the Ukrainians -- the 
other "State-Guarantor" -- to introduce a competing draft 
that shuts the Russians out of the Ukrainian-Moldovan border 
operations, binds the Transnistrians to more transparent 
procedures that the OSCE works out with Moldova, and 
addresses in some way the budgetary issues.  All the options 
have drawbacks.  Option (a) will have the Russians constantly 
raising this text as the first order of business at any 
Transnistria meeting, and complaining about the 
obstructionism of the other negotiators.  Option (b) is a 
reasonable option if we are willing to negotiate the text for 
months or even years -- an advantage being that during those 
negotiations the current regime holds.  Both Options (a) and 
(b) could lead to the irrelevance of the 5 2 format that 
includes the U.S. and EU -- which may be the real aim of the 
Russian paper.  Option (c) is reasonable if Ukraine is 
willing and able to lead the charge against the Russians -- 
at a time when its own government is still in formation.  End 
Comment. 
 
13.  Begin text of unofficial translation of Russian draft 
protocol: 
 
PROTOCOL 
 
Mechanism for the Conduct of Foreign Economic Activity of 
Transnistria 
 
 
MOSCOW 00004198  003 OF 004 
 
 
The Republic of Moldova and Transnistria, hereinafter "the 
Parties," as well as the Russian Federation and Ukraine, 
hereinafter "the States-Guarantors," in the presence of the 
plenipotentiary representatives of the OSCE, EU and USA, 
 
Striving to create an international-juridical mechanism for 
the unhindered conduct by Transnistria of foreign economic 
activity on the basis of international standards and of the 
obligations of the Parties, 
 
Recognizing the unacceptability of measures of economic, 
political or other pressure and considering that all 
questions must be resolved in the framework of a constructive 
dialog of equals, 
 
Recognizing the impermissibility of imposing administrative 
barriers that could artificially hinder the free economic 
activity and conditions for the broadening of international 
economic activity, 
 
Confirming their commitment to agreements reached in the 
course of the negotiating process, including the Memorandum 
"On the Bases for Normalization of Relations between the 
Republic of Moldova and Transnistria" of 8 May 1997, 
 
Viewing the resolution of the issue of a mechanism for the 
conduct of foreign economic activity of Transnistria as an 
important component of the process of elaborating a stable 
model of a comprehensive and just normalization of relations 
between the Republic of Moldova and Transnistria, 
 
Striving to strengthen the regime of transparency and 
openness on the Transnistrian sector of the border with 
Ukraine, 
 
Conscious of responsibility for the welfare of the 
population, and for securing the socio-economic rights of the 
inhabitants of Transnistria, 
 
Have agreed on the following: 
 
1.  Transnistria has the right to autonomous conduct of 
foreign economic activity in accordance with the present 
Protocol, considering as well the agreements of the 
negotiating process. 
 
2.  The transportation of cargoes across the 
Transnistrian-Ukrainian sector of the border  by enterprises 
registered in Transnistria, with the aim of exporting to 
Ukraine and/or for transit through Ukraine to a third country 
shall be carried out on the basis of accompanying 
("tovarosoprovoditel'nyy") commercial or other documents on 
which are affixed customs stamps, the form of which shall be 
agreed and implemented by the Parties with the advice of 
authorized foreign ("zarubezhnyy") and international 
structures. 
 
3.  The customs clearance of cargoes destined for export to 
Ukraine and/or for transit through Ukraine to a third country 
shall be carried out on co
ndition of presentation by 
Transnistrian exporter-organizations of documents confirming 
the listing (vneseniye) of these economic agents in special 
registers for the statistical accounting of juridical persons 
authorized to conduct foreign economic activity. 
 
4.  The form of the special registers for statistical 
accounting, the rules for their book-keeping, and the 
agencies of the Republic of Moldova and Transnistria 
authorized to keep them will be determined by separate 
agreement of the Parties no later than ten days after the 
signing of the present Protocol. 
 
5.  The listing of economic agents of Transnistria in special 
registers for statistical accounting of juridical persons 
authorized to conduct foreign economic activity shall be 
carried out free of charge on the basis of copying out from 
registration (founding) documents given out by the agencies 
of Transnistria for registration of juridical persons no 
later than ten days after application to the authorized 
agencies. 
 
The listing of economic agents of Transnistria in the special 
registers for statistical accounting of juridical persons 
authorized to carry out foreign economic activity shall be 
carried out in strict accordance with the 
organizational-legal form and the form of property of the 
applying juridical person which exist at the time of the 
presentation of the necessary documents. 
 
The listing of economic agents of Transnistria in the special 
registers for statistical accounting of juridical persons 
authorized to carry out foreign economic activity shall be 
 
MOSCOW 00004198  004 OF 004 
 
 
confirmed by appropriate witness. 
 
6.   The listing of economic agents of Transnistria in the 
special registers for statistical accounting of juridical 
persons authorized to carry out foreign economic activity 
shall not give rise to any sort of tax or other obligation by 
these economic agents to the budget or tax system of the 
Republic of Moldova and cannot serve as the basis for payment 
of any taxes or fees. 
 
7.  The listing of economic agents of Transnistria in the 
special registers for statistical accounting of juridical 
persons authorized to carry out foreign economic activity may 
not serve as a basis for reviewing property rights with 
regard to the property of those enterprises, as well as with 
regard to their shareholdings, obligations or other property 
rights. 
 
8.  Oversight of the fairness and timeliness of the movement 
of Transnistrian cargoes on the Transnistrian-Ukrainian 
sector of the border shall be carried out on the basis of 
exchange of information between the authorized customs 
agencies of the Republic of Moldova and Ukraine with regard 
to customs documentation ("obespecheniye") issued and with 
regard to the volume of the movement of cargoes for export to 
Ukraine and/or transit through the territory of Ukraine to a 
third country. 
 
9.  The entry of import cargoes into Transnistria shall be 
carried out without hindrance in accordance with contracted 
obligations of the economic agents of Transnistria, without 
the levying of any taxes, fees, or other liabilities for 
payment into the budget of the Republic of Moldova.  By 
agreement with the Republic of Moldova and in accordance with 
the national legislation of Ukraine, Ukrainian customs 
agencies have the right to present to the Moldovan side 
information concerning the volumes and descriptions of 
imports into Transnistria. 
 
10.  For the implementation of the present Protocol, the 
Parties shall within one week adopt necessary changes and 
additions to their internal legislation. 
 
In the event that necessary changes are not adopted by one of 
the Parties, the States-Guarantors shall make every effort 
and take all necessary measures to secure the unhindered 
conduct of export-import operations by Transnistria. 
 
11.  From the day of the signing of the present Protocol and 
until its entry into force, the Parties and the 
States-Guarantors shall return to the regime of movement of 
cargoes across the Ukrainian-Transnistrian sector of the 
border which existed on 28 February 2006. 
 
12.  The guarantee (garantiynyy) elements of the present 
Protocol will be determined in the framework of further 
interaction of the plenipotentiary representatives of the 
Parties, States-Guarantors and other participants in the 
negotiating process for Transnistrian Resolution in the 5 2 
format. 
 
13.  The present Protocol shall enter into force 14 days 
after signing and shall remain in force until the coming into 
being of a final model of political resolution of relations 
between Moldova and Transnistria and the conclusion of an 
agreement in international law on a higher level of 
cooperation between the Parties in the indicated districts. 
 
The refusal of one of the Parties to bring its internal 
legislation into agreement with the present Protocol shall 
not hinder its entry into force. 
 
End text. 
 
 
BURNS

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