Daily Archives: February 8, 2008

08MOSCOW353, DFM KARASIN ON UKRAINE, GEORGIA, TRANSNISTRIA,

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Reference ID Created Released Classification Origin
08MOSCOW353 2008-02-08 16:51 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0032
OO RUEHWEB

DE RUEHMO #0353/01 0391651
ZNY CCCCC ZZH
O 081651Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6500
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L MOSCOW 000353 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/08/2018 
TAGS: PREL PGOV GG UP MD AM BO RS
SUBJECT: DFM KARASIN ON UKRAINE, GEORGIA, TRANSNISTRIA, 
ARMENIA AND BELARUS 
 
Classified By: Ambassador William J. Burns.  Reasons 1.4 (B/D). 
 
1.  (C) Summary.  In a February 8 meeting with the 
Ambassador, DFM Karasin strongly cautioned against the 
Ukrainian government's push for NATO membership, underlining 
that a decision by the Alliance would be met with counter 
measures that would test our strategic relationship.  Karasin 
urged the U.S. to steer the Georgian leadership toward 
responsible behavior in the aftermath of the Kosovo CDI and 
to follow the January 23 UNSYG's recommendations.  Russia 
would not tolerate the GOG "feigning a normal bilateral 
relationship" with Russia while preparing its NATO MAP 
request.  Ambassador pressed back, reminding Karasin of GOR 
responsibility for reducing tensions with Tbilisi.  The GOR 
continued to believe, Karasin added, that the best channel 
for resolving the stand-off over Transnistria remained direct 
dialogue between Voronin and Smirnov, and the prospect for 
resolution had increased with Voronin taking a more 
constructive stance in recent months.  The GOR expected 
Armenian Prime Minister Sarkisian to win the February 19 
presidential election and was prepared to develop a dynamic 
bilateral relationship with Armenia during Sarkisian's 
tenure.  Karasin forecast no major new developments in 
Russia-Belarus relations.  End summary. 
 
Ukraine: NATO Ripples and Mazepa Dispute 
----------------------------------------- 
 
2.  (C) On February 8, DFM Karasin told the Ambassador that 
the GOR was "extremely disappointed" with and "surprised" by 
the speed with which the new Ukrainian government had 
requested MAP and NATO membership.  The GOR does not 
understand how and why the very first political act by the 
GOU had to be about NATO, which Karasin characterized as an 
act of "fanaticism."  The GOR, Karasin said, was dismayed and 
would be not be shy about airing its disappointment. "Who," 
Karasin asked, is threatening Ukraine?"  Karasin gauged the 
GOU's decision as dangerous domestically for a country where 
the political process is still in flux.  He emphasized that 
Russia would not consider a MAP offer as a "technical" step. 
It would be a strategic challenge with serious strategic 
consequences. 
 
3.  (C) The Putin - Yushchenko Intergovernmental Commission 
meeting will convene in Moscow on February 12, without 
Tymoshenko's participation.  Karasin thought that Ukraine and 
Russia needed to focus on economic cooperation.  He 
criticized the GOU's misdirected efforts to re-invent 
history.  According to Karasin, as in the cases of Holodomor 
and Roman Shukevich, the GOU is misinterpreting history by 
creating a national hero out of a questionable figure like 
Ivan Mazepa, who was a "traitor." 
 
Georgia: NATO Ripples and Kosovo 
--------------------------------- 
 
4.  (C) Karasin affirmed that two Georgian DFMs -- Vashkidze 
and Vashadze -- are due in Moscow next week, and that the GOR 
expected Saakashvili at the February 22 CIS informal summit, 
which would be followed by new FM Bakaradze's maiden visit. 
Karasin warned against what he described as a possible 
Georgian smoke screen of conciliatory words and a flurry of 
visits followed by the offer of a NATO MAP in Bucharest. 
Ambassador pressed back, reminding Karasin of GOR 
responsibility for reducing tensions with Tbilisi.  Karasin 
repeated that a MAP offer would be seen strategic, and would 
affect not only Russia-Ukraine and Russia-Georgia relations 
but also Russia's partnership with the U.S.  Karasin added 
that the scale of Russian reaction is difficult to predict 
but would have major implications. 
 
5.  (C) Per Karasin, FM Lavrov during his January 20 visit to 
Tbilisi, repeatedly told the Georgian leadership that the 
fastest route to resolving the frozen conflicts was to 
convince Abkhazia and South Ossetia to join Georgia by making 
Georgia more attractive to them, rather than threatening 
forceful reintegration.  Although he did not expect a radical 
GOR move after the Kosovo CDI, considering both Abkhazia and 
South Ossetia are waiting nervously for the eventual date of 
Kosovo's independence, Karasin could not exclude unexpected 
new developments.  Georgia, he argued, had not taken UNSYG 
Ban's January 23 statement on Georgia seriously.  The GOR on 
the contrary thought it was on the right track.  Karasin 
promised to work with the Abkhazians, while requesting the 
U.S. to urge the Georgians to behave responsibly. 
 
6.  (C) With the Group of Friends meeting scheduled in Geneva 
for February 18-19, the Abkhazia negotiation process may 
resume, while the situation in South Ossetia is more tense. 
Karasin saw the absence of "adventurism" in the region during 
the December election campaign in Georgia as a good sign.  He 
 
hoped that Saakashvili's weakened mandate may make him behave 
more reasonably.  The Ambassador pointed out that Kosovo &
#x000A;would make its decision shortly.  He urged the GOR to work 
with Serbia to preserve stability in the region in order to 
avoid the concept of the zero-sum game as Serbia's political 
and economic ties with Russia and Serbia's EU membership 
could go hand in hand. 
 
Transnistria: Better Prospect 
----------------------------- 
 
7.  (C) Karasin praised the new OSCE HOM Remler for his good 
grasp of the situation and the ability to find a common 
language with all involved parties.  He thought the Romanian 
government's aggressive Moldova policy has been helpful in 
pushing Voronin to take a more constructive stance.  Against 
his habit and reflex, Voronin has to accept Smirnov as a 
partner on equal footing, Karasin added.  Asked by the 
Ambassador whether any resolution could be expected anytime 
soon, Karasin answered, "no artificial deadline but the 
prospect is good for the resolution by the end of 2008." 
 
Armenia: Getting Ready for Sarkisian 
------------------------------------ 
 
8.  (C) Karasin considered Sarkisian, a "strong and 
confident" leader who will win in the first round.  The 
Nagorno-Karabakh conflict may have a better chance for 
resolution during his presidency.  The GOR is ready to 
develop a dynamic relationship with Armenia, which would much 
benefit from cooperation with Russia in the transport and 
energy sectors. 
 
Belarus: Status Quo 
------------------- 
 
9.  (C) Karasin reported no development on the union state 
between Russia and Belarus.  The GOR continued to support 
Belarus by demonstrating solidarity against the sanctions 
imposed on it.  A longer-term policy was necessary for 
Belarus, Karasin thought, and it was an area where Washington 
could exert leadership, and perhaps set the direction for 
other nations.  Ambassador said that's what we intended to do 
-- although it might not be the direction sought by Russia. 
BURNS

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08MOSCOW349, C) SAKHALIN ENERGY SEEKS QUIET WITHDRAWAL OF EXIM

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Reference ID Created Released Classification Origin
08MOSCOW349 2008-02-08 15:10 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0001
PP RUEHWEB

DE RUEHMO #0349 0391510
ZNY CCCCC ZZH
P 081510Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6499
INFO RUEHLO/AMEMBASSY LONDON PRIORITY 2091
RUEHKO/AMEMBASSY TOKYO PRIORITY 4172
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 000349 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR U/S JEFFERY 
DOC FOR 4231/IEP/EUR/JBROUGHER 
 
E.O. 12958: DECL: 02/04/2018 
TAGS: EPET ENRG ECON PREL RS
SUBJECT: (C) SAKHALIN ENERGY SEEKS QUIET WITHDRAWAL OF EXIM 
APPLICATION 
 
 
Classified By: Ambassador William J. Burns for reasons 1.4 (b) and (d) 
 
1. (C) Shell has informed us that it and the other Sakhalin-2 
partners (Gazprom, Mitsu and Mitsubishi) are reconsidering 
their need for export credit guarantees from a consortium of 
three export credit agencies: U.S. EXIM, the UK's ECGD, and 
Japan's JBIC.  On February 5, the partnership, Sakhalin 
Energy Investment Corporation (SEIC) convened a shareholders 
meeting at which the decision to unwind the long-running 
applications to the three agencies was unanimously agreed. 
(Note: EBRD had been a fourth guarantor but pulled out in 
2007.  End Note.)  Our contacts in Shell tell us that Gazprom 
and the Japanese firms, however, had two conditions, that the 
package be redone as a bilateral deal with JBIC and that the 
process be done quietly. 
 
2. (C) According to our Shell sources, SEIC needs time to 
unwind the legal and financial links in the current 
multilateral package in order to transform it into a 
bilateral package with JBIC.  To that end, we understand that 
SEIC subsequently contacted EXIM, ECGD, and JBIC requesting a 
delay in any pending decisions on the applications.  We 
understand SEIC also verbally communicated to EXIM (and 
presumably the others) its intention to withdraw the 
applications from EXIM and ECGD while still going forward 
with the JBIC loan application. 
 
3. (C) Shell informed us on February 8 that SEIC intends 
immediately to visit JBIC at the CFO level to begin 
restructuring a JBIC-only package.  (Note: JBIC would be the 
guarantor of by far the largest portion of the $6.7 billion 
in export credit guarantees sought by SEIC.)  SEIC hopes this 
process can be complete by the end of April. 
 
4. (C) The Ambassador discussed these developments with his 
British and Japanese counterparts this week, and they agreed 
that a non-public, graceful closure of the applications is 
the best way forward at this time.  The Japanese Ambassador 
stressed that JBIC has always intended to go through with its 
financing and would appreciate U.S. and UK support for a 
quiet exit by EXIM and ECGD. 
 
5. (C) Post urges Washington agencies to support a delay in 
EXIM's decision on this application and to keep the process 
non-public and smooth while pressing SEIC to bring this 
"managed exit" to a conclusion as quickly as legalities and 
fiduciary responsibilities permit. 
BURNS

Wikileaks

08MOSCOW348, REACTION TO ODIHR/OSCE-PA DECISION ON ELECTION

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Reference ID Created Released Classification Origin
08MOSCOW348 2008-02-08 15:07 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO3341
PP RUEHAST RUEHFL RUEHLA RUEHLN RUEHMRE RUEHPOD RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHMO #0348/01 0391507
ZNR UUUUU ZZH
P 081507Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6497
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNOSC/OSCE POST COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 000348 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM PREL RS
SUBJECT: REACTION TO ODIHR/OSCE-PA DECISION ON ELECTION 
OBSERVERS 
 
REF: A. MOSCOW 322 
     B. MOSCOW 303 
     C. 07 MOSCOW 5682 
 
------- 
SUMMARY 
------- 
 
1. (SBU) As expected, the reaction to the decisions by ODIHR 
and the Parliamentary Assembly of OSCE not to observe the 
March 2 presidential elections has been loud and swift. 
Political analysts and members of the Duma from both United 
Russia and the Communist Party decried the decision not to 
send observer missions, despite what they viewed as the CEC's 
willingness to compromise on the arrival date of the 
delegation, or spun ODIHR's decision as affirmation that 
Russia did not need monitoring.  While several opposition and 
NGO leaders welcomed ODIHR's principled stand, the GOR's 
charge of OSCE double standards resonated among some.  While 
the dispute will fade from public view quickly, the GOR will 
intensify its efforts at OSCE "reform."  End summary. 
 
------------------------------------------- 
ANALYSTS COMMENT ON ODIHR/OSCE-PA DECISIONS 
------------------------------------------- 
 
2. (SBU) The decisions February 7 by ODIHR and the 
Parliamentary Assembly of the OSCE (OSCE-PA) not to send 
observers to the March 2 presidential elections opened the 
flood gates to predictable cries of outrage by many Russian 
political analysts.  The pro-Kremlin Gleb Pavlovskiy of the 
Effective Politics Foundation said the decision aims to 
"weaken the new president from the very beginning of his term 
of office."  Pavlovskiy accused the staff of OSCE and 
"certain forces related to the State Department" of sending 
signals that resulted in the decisions not to observe the 
upcoming elections.  Aleksey Makarkin of the Center for 
Political Technologies said that if Russia had agreed to the 
terms requested by ODIHR then it would be "an admission of 
deficient democracy."  He added that Russia had come out 
"with minimal damage to its image," and concluded that "the 
fact that it was ODIHR which refused to come and that Russia 
was ready to meet it halfway, is a plus to Russian 
leadership." 
 
--------------------------------------------- ---------- 
DUMA LEADERS AND PRESIDENTIAL CANDIDATES HAVE THEIR SAY 
--------------------------------------------- ---------- 
 
3. (U) Comments by Konstantin Kosachev, Chairman of the Duma 
International Affairs Committee and member of the United 
Russia faction, were measured.  He argued that the main 
function of OSCE monitors is to observe parliamentary 
elections or presidential elections if the campaign is 
"complicated and the results are unpredictable."  He noted 
that in Russia, "elections were run in accordance with 
electoral legislation."  Ivan Melnikov, Duma Deputy Speaker 
and Deputy Chairman of the Communist Party said the OSCE's 
refusal to send monitors was "an effort to pressure Russia, 
just as Russia is being pressured on international problems 
such as Kosovo."  "The elections, no matter how they proceed, 
will not be detrimental to Russia's image," Melnikov said. 
In the December Duma elections, the Communist Party fielded 
observers throughout the country and condemned the conduct of 
the elections, alleging thousands of violations.  Following 
the election, Melnikov and Communist Party Leader and now 
presidential candidate Gennadiy Zyuganov discussed their 
concerns with the head of OSCE-PA (Ref C). 
 
4. (U) Vladimir Zhirinovskiy, leader of the Liberal 
Democratic Party and presidential candidate, said the 
decisions not to observe the elections will have no effect on 
the results.  "The elections will take place and the 
president will be announced," he said.  Speaking about 
international observers in general, Zhirinovskiy said that as 
many observers who want to come should, but that this 
standard should apply to all countries, "not just Russia." 
Andrey Bogdanov, the Democratic Party's candidate for 
president, said it is ODIHR's and OSCE-PA's "right to send or 
not send observers."  He opted to place their decision not to 
observe in the best possible light, arguing that their 
decision meant "our ways are democratic and there is 
democracy in our country." 
 
----------------------------------------- 
POLITICAL OPPOSITION, GOLOS, OTHERS REACT 
----------------------------------------- 
 
5. (U) Former Prime Minister Mikhail Kasyanov, who was denied 
 
MOSCOW 00000348  002 OF 002 
 
 
registration to run for president, welcomed ODIHR's refusal 
to send observers as an expression of its principles.  Liliya 
Shibanova, the head of the election monitoring NGO GOLOS, 
blamed the CEC for making the international community 
question the legitimacy of the presidential elections. 
Referring to ODIHR's refusal to observe the December Duma 
elections, Shibanova said:  "Refusing to attend Russian 
elections for the second time is a very serious move for the 
international community."  Viktor Sheynis, one of the authors 
of Russia's law on elections said the da
mage caused by 
ODIHR's and OSCE-PA's refusal to participate is "moral" and 
will be "implanted in world public opinion."  Dmitriy Orlov 
of the Agency for Political Economic Communications said that 
having a united front of organizations question the 
legitimacy of the presidential elections is "absolutely not 
wanted."  He called OSCE an "influential organization" and 
said "its non-participation is bad news for the Russian 
political system."  That being said, he accused ODIHR of 
taking a non-constructive position from the beginning and 
said Russia should not be treated as a politically 
underdeveloped country. 
 
------- 
COMMENT 
------- 
 
6. (SBU) With the election outcome a foregone conclusion, and 
interest in its conduct among Russians slight, this 
disagreement with ODIHR, and its failure to observe elections 
here for the second time in a row will fade from public view 
quickly.  However, we can expect ODIHR's decision to 
reinvigorate GOR calls for OSCE reform, particularly with 
respect to election monitoring standards, with GOR statements 
focused on the "overwhelming majority" of OSCE member-states 
that allegedly had fewer monitors and a similarly truncated 
period as offered by Russia. 
BURNS

Wikileaks

08MOSCOW346, RUSSIA SEEKS, AND FINDS, A ROLE IN THE MIDDLE EAST

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Reference ID Created Released Classification Origin
08MOSCOW346 2008-02-08 14:47 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO3306
PP RUEHROV
DE RUEHMO #0346/01 0391447
ZNY CCCCC ZZH
P 081447Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6493
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 000346 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/08/2017 
TAGS: PGOV PREL LE IS SY RS XF
SUBJECT: RUSSIA SEEKS, AND FINDS, A ROLE IN THE MIDDLE EAST 
PEACE PROCESS 
 
REF: A. MOSCOW 282 
     B. 07 MOSCOW 5681 
     C. MOSCOW 184 
 
Classified By: Ambassador William J. Burns for reasons 1.4 (b/d). 
 
1. (C) Summary:  Russia is playing a higher profile role in 
the Middle East peace process, designed to draw attention to 
Moscow's reemergence on the international stage, which 
remains a significant motivation in the Kremlin's diplomacy. 
Russia continues to position itself as a bridge between the 
West and Arab states, using its engagement with Hamas and 
Hezbollah, and its largely uncritical approach to Asad as 
cards to play in the Quartet and in planning for an Annapolis 
follow-on conference.  This, along with a competitive 
interest in tapping Middle Eastern markets beyond arms sales, 
has led Russia to inject new life into formerly moribund 
relations with Arab states, at a time when ties with Israel 
are also improving.  However, Russian influence in the region 
remains limited, with Russia checkmated by the intransigence 
of some of its erstwhile partners.  End summary. 
 
Factors Driving Russian ME Offensive 
------------------------------------ 
 
2. (C) As DFM Saltanov underscored in his February 4 meeting 
with the Ambassador (ref A), Russia remains committed to 
playing a more active role in the Middle East peace process 
(MEPP), reflecting ambitions that go beyond a seat at the 
Quartet table.  Despite Israeli diffidence, intra-Palestinian 
turmoil, and continued rocket attacks by Hamas, Russia 
continues to advocate a follow-on conference to Annapolis in 
Moscow ) with the idea of a conference first floated by 
Putin in 2004 and now viewed as part of his leadership 
"legacy."  While Saltanov and his MFA colleagues underscore 
that Russian efforts remain calibrated to American diplomacy 
and to progress by the parties in advancing the goals set at 
Annapolis (with former PM Primakov grousing to the Ambassador 
that he now was "working for the Americans"), Russian 
activism is fundamentally aimed at raising Moscow's profile 
on the international stage.  By positioning itself as a 
"bridge" between the West and the Muslim world, the GOR seeks 
not only international respect, but the tangible by-products 
of improved relations with the Muslim world, including 
greater access to Middle Eastern markets.  A side-effect, if 
not a factor driving Russian policy, is the internal dividend 
of playing to Russia's significant Muslim population. 
 
3. (C) For too long, experts tell us, Russia relied on ties 
with Arab states forged during the Soviet era to maintain a 
modicum of influence in the Middle East.  As Russian 
self-confidence and coffers have grown over the course of the 
Putin presidency, so too has the pace of Russian diplomacy. 
Commencing with Putin's historic visit to Israel in 2005, we 
have seen a diplomatic offensive by senior Russian officials 
that paved the way for Putin's equally historic visit to 
Riyadh in 2007.  Russia's brand of shuttle diplomacy is seen 
in the frequent deployment of Saltanov and Arabist eminence 
gris, former PM Primakov, to the region, where they have 
focused their efforts on the Palestinians, Lebanese, and 
Syrians.  Most recently, Saltanov and Security Council Acting 
Secretary Sobolev made the rounds of Middle East capitals in 
 
SIPDIS 
January to advance the MEPP and help facilitate a settlement 
to the political crisis in Lebanon. 
 
4.  (C)  Russian diplomacy remains closely synched to 
advancing commercial interests, with the Russians selling 
themselves as a strategic counterweight to U.S. influence in 
the region, a partner in oil and gas markets, and as an 
interlocutor with the Iranian leadership.  The courtship of 
the oil rich Gulf States, in particular, has focused on 
expanding economic ties and arms sales beyond Russia's 
traditional regional ally, Syria (ref B).  Over the past 
year, high-level Russian and Saudi officials discussed arms 
purchases and trade deals, with Rosoboronexport Director 
Chemezov in Riyadh to conclude a "major" arms package and 
Russian Railways winning a $800 million contract in January 
to construct a new Saudi rail line.  (Note:  Russian-Saudi 
trade has increased from $50 million in 2000 to $250 million 
in 2006.)  Putin's visits to region have been in the company 
of large business delegations and Russian energy officials 
have become a regular presence - Gazprom Deputy Chairman 
Medvedev visited Egypt, Saudi Arabia, and Qatar in 2007 to 
discuss joint projects.  Lukoil won the right to explore for 
natural gas in Saudi Arabia's largest oil field in 2005, the 
same year Stroytransgaz won the contract to construct a 
portion of the Arab Gas Pipeline and related gas processing 
plants in Syria. 
 
5.  (C)  Integral to the Russian conception of its role is 
its self-proclaimed "absence of ideology" and "pragmatism" in 
 
MOSCOW 00000346  002 OF 003 
 
 
serving as a
 mediator between the U.S. and states and 
entities that we have designated terrorist.  MFA officials 
are candid about their disagreement with American policy 
towards Hamas, Syria, Iran, and Hezbollah.  Moscow Carnegie 
Center analyst Aleksey Malashenko stressed to us that, 
perversely, crises were good for Russian diplomacy, since it 
allowed the GOR a niche role as self-styled mediator, whether 
it was the dispute over Iran's nuclear program, Syrian 
involvement in Lebanon, or the split between the Palestinian 
Authority and Hamas. 
 
Analysts:  Skeptical, but Hopeful about Russia's Role 
--------------------------------------------- -------- 
 
6. (C) Moscow's foreign policy think tank community, which 
traditionally has been jaundiced about GOR motives and 
performance in the Middle East, recently has begun to view 
Russian MEPP diplomacy in a more positive light.  Middle East 
Studies Institute Director Yevgeniy Satanovskiy, who told us 
last year that Russian diplomacy was show over substance, 
said Russian efforts on behalf of Annapolis indicated that it 
had become more serious about the peace process.  The Russian 
Academy of Sciences' Vyacheslav Belokrinitsy acknowledged 
that as part of its effort to "solidify its image" as a major 
power, Russia had been required to play a "useful role" in 
the region. 
 
7. (C) Political expert Boris Makarenko praised the GOR for 
convincing Syria to attend Annapolis, proposing a follow-up 
meeting in Moscow, and lending encouragement to political 
stability in Lebanon.  He admitted that Russia had few real 
resources at its disposal in the region and no close friends 
or allies, as the U.S. had in Israel, but said that American 
political weakness caused by Iraq created new opportunities 
for the Kremlin.  Makarenko argued that when one looked at 
all the issues over which Russia and the U.S. were at odds, 
the Middle East offered the best opportunity for cooperation. 
 
8. (C) Even skeptics, such as Georgiy Mirskiy, a Middle East 
expert who is close to Primakov, do not dispute Russia's 
increased aspirations in the region, but remain cynical about 
Moscow's motivations.  Increased Russian activism, Mirskiy 
argued, was less about promoting peace than it was the result 
of the GOR failing to find other avenues to play a decisive 
part in world affairs.  Mirskiy argued that Europe was "too 
crowded" with influential countries, while in Asia it was 
China, Japan and the U.S. that dominated diplomacy.  This 
left only the Middle East, where Russia could take advantage 
of the USSR's history as friend to the Arab world to insure 
itself a prominent place, at a relatively low cost.  Mirskiy 
argued that Russian foreign policy, including in the Middle 
East, was a "continuation of domestic policy," through which 
the Kremlin attempted to convince Russians that the country 
was "rising up from its knees." 
 
The Limits of Russian Influence 
------------------------------- 
 
9. (C) Russia's engagement with Syria, Lebanon, and the 
Palestinians - the very actors over whom the GOR hoped to 
exert a level of influence - reveal the limits of Russian 
effectiveness.  While Russia can take partial credit for 
convincing Damascus to attend Annapolis, Moscow cannot 
deliver Asad or reliably sway his regime.  Lebanese Counselor 
Fadi Ziadeh told us that his government "looked to Russia" to 
convince Asad to let the democratic process work in Lebanon 
and stop the killing of anti-Syrian politicians, but the 
bloodshed and instability continued.  Lebanese politicians 
who come to Moscow hoping Russia could use its leverage with 
Syria to end the political impasse over the election of a new 
Lebanese President leave disappointed.  Satanovskiy termed 
Russian influence with Syria a tool to "send a message and 
nothing more," whereas Russian Academy of Sciences expert 
Vladimir Sotnikov characterized the GOR position as 
preemptive capitulation.  Understanding how tenuous its 
position in the region actually was, he charged, the GOR did 
not attempt to use its Syrian intermediaries to influence 
Hezbollah, which would only end in failure. 
 
10. (C) While Russian officials typically put the best face 
on their engagement with Damascus, Saltanov was candid in his 
assessment to the Ambassador that Russia had failed to secure 
Syrian support for the selection of a consensus presidential 
candidate.  Across the peace process landscape, Malashenko 
and other experts stress, Russia's approach has hit the same 
brick wall:  contacts with Hamas "moderates" did not produce 
compromise with Fatah or a halt to rocket attacks, engagement 
with Asad and espousal of the Syrian peace track did not stop 
the assassinations of anti-Syrian leaders in Lebanon, and the 
cultivation of Iran did not end its defiance of the 
international community or support for the destructive 
 
MOSCOW 00000346  003 OF 003 
 
 
policies of Hamas and Hezbollah. 
 
Russia's Middle East Role and Israel 
------------------------------------ 
 
11. (C) The new element in Russia's enhanced peace process 
diplomacy is that it no longer comes at the expense of its 
relations with Israel.  The GOR has worked hard under Putin 
to expand ties with Israel, at the same time it improved 
relations with Arab states and reached out to Hamas.  The 
chill in relations that followed the first Hamas delegation 
visit to Russia in 2006 was brought to end by PM Olmert's 
visit to Moscow later that year, and Lavrov now trumpets the 
strategic partnership that the Putin and Olmert governments 
have built.  In January, for example, Foreign Minister Livni 
visited Moscow while National Security Acting Secretary 
Sobolov was in Israel opening, what the Israeli Embassy 
termed, a "new channel" in the strategic relationship (ref 
C).  Russia resolutely straddles the fence, balancing 
criticism of Palestinian rocket attacks from Gaza with calls 
for greater Israeli "wisdom" in its treatment of Palestinian 
civilians, and exhorting both parties to remain on the 
diplomatic path. 
 
12. (C) Increasingly, there are more shock absorbers in 
Russian-Israeli relations, both economic (increased trade 
from $700 million in 2002 to $2.3 billion in 2006, and 
Gazprom's hope that Israel will become a consumer of Russian 
gas) and cultural, reflecting the large number of 
Russian-Israeli citizens and family ties between the 
countries.  Analyst Satanovskiy also credited Putin with 
taking a genuine interest in improving relations with Israel 
because of his strong personal ties with Russian Jews.  He 
said, however, Putin's personal engagement did not mean 
Russia took Israeli interests as paramount, an assessment 
seconded by Israeli emboffs who believed the GOR separated 
the bilateral relationship from its regional role.  Analysts 
pointed out that improved ties with Israel had not stopped 
Russia from selling arms to Syria, although they understood 
(and Israeli emboffs confirmed) that Putin interceded a f
ew 
times to halt the sale of certain weapons at Israel's request. 
BURNS

Wikileaks

08MOSCOW345, RUSSIAN-ESTONIAN BILATERAL RELATIONS UNDER MORE

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Reference ID Created Released Classification Origin
08MOSCOW345 2008-02-08 14:40 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO3267
PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #0345/01 0391440
ZNY CCCCC ZZH
P 081440Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6491
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 000345 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/05/2018 
TAGS: PREL EN RS
SUBJECT: RUSSIAN-ESTONIAN BILATERAL RELATIONS UNDER MORE 
STRAIN 
 
 
Classified By: M/C for Political Affairs Alice G. Wells for reasons 1.4 
 (b/d). 
 
1.  (C) Summary.  Russia and Estonia's already strained 
relationship took hits as Estonian contributions to the 
Schengen "blacklist" went into effect, closely followed by 
the beginning of trials in Tallinn from last May's Bronze 
Soldier incident.  The MFA blamed new Schengen visa 
ineligibilites for some Kremlin-friendly youth group members 
on their participation in Moscow demonstrations, which 
Estonian diplomats refuted.  MFA officials told us that 
Russia would formally protest the visa ban and noted that 
harsh sentences in Bronze Soldier trials could damage 
bilateral relations even further.   End Summary. 
 
2.  (C) Following several months of strained but generally 
quiet relations after last May's Bronze Soldier incident, 
Estonia Section Head Yevgeniy Minakov told us recently that 
"additional irritants" in the bilateral relationship have 
made for a difficult atmosphere.  He said the bilateral 
agenda was comprised of "negative issues," pointing out that 
no major official visits were planned at this time.  Estonian 
Embassy contacts agreed that the current atmosphere was 
difficult, noting that a proposed Intergovernmental and 
Economic Commission was "on hold." However, Estonian 
diplomats emphasized the continuation of the official policy 
on both sides to tone down the rhetoric. 
 
Estonian Visa Tensions 
---------------------- 
 
3.  (C)  Members of Nashi, the Kremlin-friendly youth group, 
put on Estonia's visa "blacklist" felt the sting when Estonia 
joined the Schengen Zone on December 21.  Minakov told us 
that Nashi protesters, who were expelled from Tallinn for 
conducting a "symbolic honor guard" around the Soviet Bronze 
Soldier WWII memorial to protest its relocation, had been 
denied visas to all Schengen countries.  He claimed that the 
Nashi who participated in large protests around the Estonian 
Embassy in May in Moscow were also denied visas, which the 
GOR considered an unfair measure because it involved Russian 
citizens demonstrating in a legal protest on Russian 
territory. 
 
4. (C) Minakov told us that the GOR would make a formal 
protest of these ineligibilities to the EU, and would make 
sure the issue was on the agenda at the EU-Russia visa 
facilitation Council in Brussels.  The Estonians were 
blacklisting Nashi members for "political" reasons, he 
claimed, and said the GOR was "considering" reciprocal 
measures.  Press reports indicated that on February 6, Nashi 
activists organized a demonstration outside the Russian MFA 
to present a list of Estonian figures they wanted to be 
declared ineligible by the GOR. 
 
5.  (C)  When asked how many members of Nashi had been 
affected by the blacklist, Minakov told us that only one 
person had filed a formal complaint with the MFA, but cited 
media reports of others.  He noted GOR irritation that the 
Estonians would not reveal the total numbers or reasons for 
their placement on the blacklist.  He told us that while 
there was a chance to appeal the ineligibility, "in reality" 
they would not be able do so without government support. 
Estonian diplomats told us that because the reasons for visa 
ineligibilities were not made public, the denial of Nashi 
members was being badly misinterpreted by the GOR. 
 
6.  (C/NF) Estonian diplomats stressed that individuals were 
neither made ineligible because of their membership in Nashi, 
nor because of their demonstrations at the Estonian Embassy 
in Russia, but because of other ineligibilities such as drug 
trafficking, crime, or visa fraud.   Only about 10 
individuals were ineligible because of their actions in 
Estonia during the Bronze Soldier riots.  They told us that 
when Estonia joined the Schengen zone, about 500 people were 
added to the Schengen Zone's list of ineligible people, and 
that redress for ineligibilities could be sought through the 
Estonian Ministry of Interior. 
 
Trials and Tribulations 
----------------------- 
 
7.  (C) Minakov told us the GOR was "closely watching" the 
trial of three individuals, two Estonian and one of 
undetermined citizenship, which started in Estonia on January 
14 for mass disorder around the Bronze Soldier event.   He 
stated that "their actions were carried out in protest over 
the moving of a symbol of the fight against fascism." 
Although not Russian citizens, all of the defendants speak 
Russian, and Minakov expressed concern that the trials were 
to be conducted in Estonian -- which Estonian diplomats later 
explained to us would be translated for the accused, free of 
 
MOSCOW 00000345  002 OF 002 
 
 
charge.  He said the GOR would not speak publicly about the 
trials, as it understood that the situation was sensitive and 
"did not want to make the situation worse" for the 
defendants, but warned that harsh sentencing would badly 
affect relations.  Estonian contacts worried that the next 
court sessions were scheduled to occur at the beginning of 
May, near the anniversary of the riots, and were apprehensive

that this could trigger a new round of protests. 
 
Comment 
------- 
 
8.  (C) Official relations between Russia and Estonia have 
been civil in public, but resentment over the Bronze Soldier 
incident is alive and well.  Local media reporting of both 
the trials and visa denials have only heightened the 
perception in Russia of Estonian "hostility." 
BURNS

Wikileaks

08MOSCOW341, TERRORIST FINANCE: PRE-NOTIFICATION OF DESIGNATION

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Reference ID Created Released Classification Origin
08MOSCOW341 2008-02-08 14:08 2011-08-30 01:44 SECRET Embassy Moscow

VZCZCXYZ0017
PP RUEHWEB

DE RUEHMO #0341 0391408
ZNY SSSSS ZZH
P 081408Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6479
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

S E C R E T MOSCOW 000341 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/RUS KTUMINARO, EUR/PGI LREASOR 
STATE FOR EEB/ESC/TFS DBENDANA 
TREASURY/OIA FOR TTORGERSON, HMENDELSOHN 
TREASURY/OFAC FOR ASZUBIN 
NSC FOR WARLICK 
 
E.O. 12958: DECL: 02/08/2018 
TAGS: EFIN ECON RS
SUBJECT: TERRORIST FINANCE: PRE-NOTIFICATION OF DESIGNATION 
OF SYRIA-BASED BADRAN TURKI HISHAN AL MAZIDIH AND THREE 
MEMBERS OF HIS NETWORK 
 
REF: STATE 8902 
 
Classified By: ECMIN Eric T. Schultz, Reasons 1.4 (b/d). 
 
(S) Post delivered the pre-notification in reftel to 
Department of New Threats and Challenges Deputy Director 
Vladimir Prokhorov, who also serves as the Department's Legal 
Advisor.  We also delivered the pre-notification to 
Department of North American Affairs Deputy Director Nikolay 
Smirnov.  Prokhorov said the GOR supported the proposed 
designation in principle but emphasized that the GOR would 
like to have more information on the network.  We have 
stressed the importance of the designation and reiterated 
that the information provided in reftel satisfied designation 
requirements.  He responded that the issue was still under 
discussion and that he would inform us of the GOR's position 
by COB (Moscow time) on February 11. 
BURNS

Wikileaks

08MOSCOW339, LOWER PROFILE FOR KREMLIN YOUTH GROUP

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Reference ID Created Released Classification Origin
08MOSCOW339 2008-02-08 13:13 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0018
PP RUEHWEB

DE RUEHMO #0339/01 0391313
ZNY CCCCC ZZH
P 081313Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6475
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L MOSCOW 000339 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/08/2018 
TAGS: PGOV PHUM SOCI PINR RS
SUBJECT: LOWER PROFILE FOR KREMLIN YOUTH GROUP 
 
REF: 07 MOSCOW 3808 
 
Classified By: Political M/C Alice G. Wells.  Reason:  1.4 (d). 
 
1.  (C) Summary:  Recent Kremlin steps to rein in the United 
Russia-affiliated youth movement Nashi suggest that GOR 
neuralgia about a possible Orange Revolution has faded.  With 
the Kremlin now confident that operation successor has been 
successfully launched and will encounter no opposition, Nashi 
has been told to re-invent itself as a provider of charitable 
and community-based services related to the Medvedev-led 
National Priority Projects and end its harassment of alleged 
"enemies" of the regime. Commentators believe that the 
Kremlin had tired of Nashi's heavy-handed tactics and 
confrontational style, and hope that Nashi in its new 
incarnation will present a better face to the West and to 
Russia's own citizens. End summary. 
 
--------------------------- 
Rumors of Nashi's Demise... 
--------------------------- 
 
2.  (SBU) The Kremlin-friendly youth group Nashi was created 
in 2005 in order to counter the perceived threat of an Orange 
Revolution in Russia.  Since its creation, the organization 
has been used to promote Kremlin policies and discredit 
anti-Kremlin figures.  The movement has been reflexively 
hostile towards the West and other of Russia's perceived 
enemies, ostensibly in response to the "mood" of the Russian 
people. In response to Estonia's decision to re-locate a 
Soviet World War II memorial from Tallinn's central square to 
a cemetery, Nashi members picketed the Estonian Embassy in 
Moscow and hounded the Estonian Ambassador. In the wake of 
his appearance at the anti-government Other Russia conference 
in summer 2006, Nashi activists relentlessly harassed the 
British ambassador:  they picketed the British Embassy, and 
dogged the Ambassador's at his public appearances in Moscow 
and the regions. Formal efforts by the British Embassy via 
the MFA to force Nashi to halt its disruptive behavior bore 
no fruit for months. 
 
3. (SBU) In the run-up to the 2007 Duma election campaign, 
Nashi activists heckled former Premier and erstwhile 
presidential candidate Kasyanov and took part in activities 
to intimidate opposition movements, including harassment of 
several of the Dissenters Marches. In the wake of the 
December 2 elections, Nashi members appointed themselves, 
with no interference from the police, to "protect" the 
Central Election Commission from potential incursions. 
According to news reports, Nashi youth were on combat duty 
the day following the elections, ready to defend against 
"enemies of Russia" and to short-circuit any effort to stage 
an Orange Revolution. 
 
4. (U) On January 29, the media reported that Nashi would 
re-invent itself as a less centralized youth movement, and 
noted that only five of the movement's fifty regional offices 
would remain open.  The movement's top cadres have moved from 
work in the youth movement to jobs in the government, 
legislature, and Public Chamber. Vasiliy Yakemenko, the 37 
year old former leader of Nashi, has been appointed to head 
the Committee on Youth Affairs, a Federal organization 
created to coordinate national youth policy and programs. 
Five leaders from Nashi and other youth movements won seats 
in the December 2 Duma elections, while others were elected 
to seats in local legislative assemblies or in the regional 
public chambers.  Rumors have circulated that many others in 
Nashi were disappointed and disillusioned that they had not 
received jobs allegedly promised them during the Duma 
campaign. 
 
-------------------------------- 
...Have Been Greatly Exaggerated 
-------------------------------- 
 
5.  (U) At a February 1 press conference, Nashi Head Nikita 
Borovikov said, "the subsiding of the threat of an "Orange 
Revolution" (presumably because of the apparently seamless 
transition from Putin to Medvedev) meant that Nashi could now 
"concentrate on other things."  He suggested that his 
organization would maintain the ability to attract at least 
100,000 demonstrators to rallies, protests, or other mass 
activities should a specific threat arise.  According to 
Borovikov, Nashi planned to focus on twelve core projects 
that would provide a variety of political outlets for young 
people.  They include efforts to improve the image of service 
in the armed forces, instruction in Russian Orthodoxy, and 
even a new line of fashionable yet patriotic clothing. These 
new projects appeared to emerge from the activities that 
Nashi activists took part in at their most recent summer camp 
(reftel). Borovikov indicated that each project was begun 
late in 2007, although the exact number of participants in 
each project were not given. When asked, he did not or could 
not identify funding sources for the projects. 
 
6.  (SBU) Despite discussions about a new role for Nashi, the 
organization has continued to behave assertively. In January, 
Nashi members picketed the European Commission in Moscow to 
protest the inclusion of several Nashi members on an EU visa &#x0
00A;blacklist. Those blacklisted had participated in sometimes 
violent protests against the re-location of a Soviet War 
Memorial from central Tallinn, and when Estonia entered the 
Schengen zone on January 1, Tallinn ensured that the 
activists would be prevented from traveling to other Schengen 
countries. In response, on January 29 Nashi leaders submitted 
to the Russian Foreign Ministry a list of Estonian citizens 
whom they feel ought to be barred from entering Russia. 
 
-------------------------- 
The Kremlin's Unruly Child 
-------------------------- 
 
7.  (C) According to Aleksey Mukhin, General Director of the 
Center for Political Information, presidential heir apparent 
Medvedev has little interest in maintaining a youth group 
whose aim would be solely to prevent an Orange Revolution. 
With Medvedev's popularity soaring and real opponents like 
ex-Prime Minister Kasyanov out of the race, there is little 
prospect of an Orange Revolution in Russia. Mukhin thought 
that youth parading through Moscow in defense of the current 
establishment had increased the unease of Western media and 
governments with Russian politics. In particular, the image 
of Nashi youth hounding the Estonian and British ambassadors 
had created a negative image in Europe and seemed to have 
embarrassed the Kremlin. According to Mukhin, the order to 
reorganize Nashi came directly from the Kremlin and was part 
of an effort to support Medvedev's attempt to present a more 
Western-leaning image of Russia as the succession race got 
underway. 
 
8.  (C) Nashi's new-found restraint, according to Mukhin, 
would be another signal that Russia's political culture had 
entered a new, less confrontational phase.  Mukhin noted that 
the change had been in the works for some time and had 
culminated with the Kremlin decision to put Borovikov in 
charge of the "liquidation" of Nashi, and the absorption of 
much of the organization's leadership into government 
committees or the Duma. 
 
9.  (C) Still, as the Moscow Carnegie Center's Liliya 
Shevtsova told us, five of Nashi's regional offices will 
remain open, "in order to keep Nashi within bus range" of any 
undesirable developments.  Shevtsova agreed that, with 
concerns about an Orange Revolution on the wane, many in the 
Kremlin had tired of Nashi's "tacky" escapades, and that the 
Medvedev team, in particular wanted to keep Nashi's street 
politics at arm's length. 
 
------- 
Comment 
------- 
 
10.  (C) All signs are that, Mukhin's comments 
notwithstanding, the decision to re-channel Nashi had been 
made relatively recently.  As early as the summer of 2007, 
the organization seemed to be in full flower.  Its camp at 
Selinger was well-attended, and the organization's activities 
there were only selectively accessible to a very curious 
press.  With the beginning of the fall Duma election 
campaign, Nashi remained poised to be a thorn in the side of 
those identified as "foreign and domestic enemies."  The 
decision to pull the plug on the kinds of activities that 
Nashi has been most closely identified with to date suggests 
that Medvedev's team is attempting at least to put a new face 
on its treatment of those out of step with the Kremlin. 
BURNS

Wikileaks

08MOSCOW336, BP RUSSIA LAWYER DISCUSSES “IMMENSE CHANGES” IN

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Reference ID Created Released Classification Origin
08MOSCOW336 2008-02-08 12:12 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO3013
PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #0336/01 0391212
ZNY CCCCC ZZH
P 081212Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6471
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 000336 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT 
EUR/CARC, SCA (GALLAGHER, SUMAR) 
DOE FOR HARBERT, HEGBORG, EKIMOFF 
DOC FOR 4231/IEP/EUR/JBROUGHER 
 
E.O. 12958: DECL: 02/06/2018 
TAGS: EPET ENRG ECON PREL RS
SUBJECT: BP RUSSIA LAWYER DISCUSSES "IMMENSE CHANGES" IN 
BUSINESS PRACTICES SINCE FORMATION OF TNK-BP 
 
REF: 07 MOSCOW 4583 
 
Classified By: Econ MC Eric Schultz for Reasons 1.4 (b/d) 
 
------- 
Summary 
------- 
 
1. (C) BP Russia's chief lawyer, Michael Drew (protect), said 
that when TNK-BP was formed in 2003 there were profound 
differences in the business philosophies of senior Russian 
management at the former TNK and those of BP.  When BP bought 
50% of TNK, it found a company with no health, safety, or 
environmental program, no interest in institutionalized 
corporate governance, and a culture of maximizing short-term 
gains over long-term performance.  He said that divide has 
been significantly narrowed, with TNK-BP adopting, even if 
grudgingly, many of the practices of its Western partner. 
End Summary. 
 
--------------------- 
Narrowing Differences 
--------------------- 
 
2. (C) Having recently ended a temporary assignment with 
TNK-BP, BP Russia chief lawyer Michael Drew (protect) told us 
February 6th that his company has brought significant 
long-term value to its joint venture, TNK-BP, and to Russia, 
with its insistence on international standards of corporate 
management.  BP's strategy is guided by a long-term vision of 
value creation for the shareholder.  TNK was initially more 
of a "smash and grab" outfit with a short-term outlook 
pervasive among senior TNK management as well as culturally 
ingrained among the rank-and-file. 
 
3. (C) Drew said that although the philosophical differences 
continue, BP has been largely successful in forcing TNK to 
accept BP's ways and norms.  He started with what he 
described as BP's top concern worldwide -- health, safety, 
and environmental management (HSE).  According to Drew, "HSE 
was non-existent at TNK" when BP bought 50% of the company in 
2003.  He said BP immediately demanded that all workers be 
trained in HSE and be provided with state-of-the-art 
protective clothing and gear in the field.  Drew said he 
believes many lives have been saved and injuries prevented as 
a result.  TNK was incredulous of the need for such an 
expense, that seemed, on face of it, to have little immediate 
payback for the company. 
 
4. (C) Drew said BP has also instituted modern management 
practices and technologies that TNK lacked.  Investment 
decisions, previously haphazard, are now run through rigorous 
models and scenarios and ultimately approved by an investment 
committee.  BP has also pushed TNK-BP to move toward 
international standards of corporate governance and 
transparency.  Although just 3.5% of TNK-BP stock is held by 
the public, BP has insisted that those shareholders' rights 
be respected.  Drew said TNK management saw this as another 
costly exercise with little benefit, since, in their view, 
"the most those shareholders could do is to unsuccessfully 
sue in the Russian courts." 
 
--------------- 
Immense Changes 
--------------- 
 
5. (C) According to Drew, TNK-BP's tax payments to the 
government (the company is among the very largest single 
taxpayers in Russia) have increased dramatically over the 
last three years and that a "sizable amount" of those 
increases are purely a result of legitimized bookkeeping and 
unrelated to the company's growth.  Another of Drew's 
examples of the "immense changes" at TNK-BP was the move from 
a system of simple "cash for work" to a comprehensive system 
of employee benefits, including health care and training. 
 
6. (C) Drew said it is hard to overstate how challenging it 
was to work in a Russian company, explaining that he checked 
his moral compass frequently to make sure he didn't fall into 
the trap of accepting the deplorable status quo simply 
because "that's how they do it here."  An example of the 
 
MOSCOW 00000336  002 OF 002 
 
 
absurdities he faced was the discovery that a "lawyer" on his 
team was not in fact a real lawyer and had no legal training. 
 He had presumably been given a job in the legal department 
due to his connections.  Drew said that what got him through 
the challenges was the knowledge that BP was making a 
difference, not only for TNK-BP, but for the Russian 
employees and Russia in general. 
 
7. (C) Drew also extolled the "rigor exerted by the debt 
markets."  He explained that TNK-BP's need to borrow in 
international markets had forced a level of transparency and 
results-focused management that had been previously lacking. 
"The banks like to know what you're doing with the billion 
dollars they loan you." 
 
------- 
Comment 

------- 
 
8. (C) Drew's account of TNK's operations tracks closely with 
what we have heard from other expats working within Russian 
companies (reftel).  Inefficiency, short-term thinking, a 
lack of health, safety, and environmental standards, along 
with few internal standards and procedures for corporate 
governance, are all hallmarks of the old way of doing 
business here.  But those ways are changing, thanks in part 
to the active participation of international companies in 
partnerships such as TNK-BP.  End comment. 
BURNS

Wikileaks

08MOSCOW329, FM LAVROV PRESSES FOR 2+2 DATES

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
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Reference ID Created Released Classification Origin
08MOSCOW329 2008-02-08 10:25 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0002
OO RUEHWEB

DE RUEHMO #0329 0391025
ZNY CCCCC ZZH
O 081025Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6463
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L MOSCOW 000329 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/08/2018 
TAGS: PREL PGOV MARR RS
SUBJECT: FM LAVROV PRESSES FOR 2+2 DATES 
 
Classified By: Ambassador William J. Burns: 1.4 (b, d). 
 
1.  (C)  At the request of FM Lavrov, Deputy Foreign Minister 
Sergey Kislyak contacted the Ambassador on February 8 to urge 
the U.S. to confirm the timing for the second round of the 
2 2 ministerial dialogue.  Noting the outstanding GOR 
proposal to meet in Washington on March 13, Kislyak said that 
FM Lavrov and DefMin Serdyukov were concerned by the delay in 
confirming dates given the busy calendars of all the 
participants and the need to ensure that adequate 
preparations for the negotiations are completed in advance. 
Kislyak underscored that the GOR sought confirmation of the 
dates as soon as possible, and no later than the beginning of 
the week of February 11.  He reiterated the GOR assessment 
that the 2 2 mechanism was important to keeping lines of 
communication open and advancing strategic objectives. 
 
2.  (C)  Kislyak added that if the U.S. remained interested 
in pursuing the strategic framework first floated during the 
October 2007 session, he would need to begin consultations 
with U/S Rood, during their already scheduled February 21 
expert talks in Budapest. 
 
3.  (C)  Comment:  Kisylak made clear that if March 13 is not 
feasible for the U.S., the GOR is ready to entertain a 
counterproposal on both timing and locale, but strongly 
prefers to hold the second session as close as possible to 
that date. 
BURNS

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08MOSCOW328, U/S JEFFERY’S JAN 30 MEETING WITH DEPUTY PRIME

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Reference ID Created Released Classification Origin
08MOSCOW328 2008-02-08 10:17 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0012
PP RUEHWEB

DE RUEHMO #0328/01 0391017
ZNY CCCCC ZZH
P 081017Z FEB 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6461
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 000328 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/RUS, EEB/IFD, NEA/FO 
STATE PASS USTR 
TREASURY FOR MEYER, TORGERSON 
DOC FOR 4231/IEP/EUR/JBROUGHER 
NSC FOR WARLICK 
 
E.O. 12958: DECL: 02/08/2018 
TAGS: ECON ETRD EFIN RS
SUBJECT: U/S JEFFERY'S JAN 30 MEETING WITH DEPUTY PRIME 
MINISTER KUDRIN 
 
REF: MOSCOW 141 
 
Classified By: Ambassador William J. Burns, Reasons 1.4 (b/d). 
 
Summary 
------- 
 
1.  (C) During a January 30 meeting with Under Secretary of 
State for Economic, Energy and Agricultural Affairs Reuben 
Jeffery, EEB Principal Deputy Assistant Secretary for 
Elizabeth Dibble, and the Ambassador, Deputy Prime Minister 
and Finance Minister Kudrin said that the end of Russia's WTO 
accession negotiations was in sight.  He expected 
negotiations to conclude "before May."  While completing WTO 
negotiations was Russia,s top priority, Kudrin was also 
instructing the relevant Russian ministries to launch 
negotiations on a U.S.-Russia bilateral investment treaty 
(BIT).  Kudrin said that Russia would implement Iraqi debt 
relief in February.  He also noted that Russia would play an 
active role in the IMF and OECD discussions on establishing 
investment guidelines and transparency benchmarks for 
Sovereign Wealth Fund (SWF) investments.  End Summary. 
 
WTO: End in Sight 
----------------- 
 
2.  (C) Deputy Prime Minister Kudrin opened the meeting by 
noting that the U.S. had been Russia's main ally in its WTO 
accession talks.  He highlighted the fruitful discussions he 
had with Deputy National Security Advisor Dan Price and 
Deputy Secretary of the Treasury Robert Kimmitt in Davos the 
previous week and expressed his appreciation for their 
support.  Kudrin expressed hope that the fourth revision of 
the Working Party report would be out by the end of February 
and said he was confident that all accession negotiations 
would be completed "before May."  He also expressed optimism 
that the politically difficult issue of agricultural 
subsidies would be resolved on schedule.  Kudrin conceded 
that negotiations with Saudi Arabia and Georgia had been 
rather difficult and that he would welcome any assistance the 
USG might be able to provide.  U/S Jeffery said the USG was 
committed to helping with Russia,s WTO accession and 
encouraged the GOR to maintain its implementation commitments. 
 
Bilateral Investment Treaty 
--------------------------- 
 
3.  (C) Kudrin said that his discussions with senior U.S. 
officials in Davos had touched on starting the process of 
negotiating a U.S.-Russia Bilateral Investment Treaty (BIT). 
He had directed relevant agencies and the Finance as well as 
Economic Development and Trade ministries to begin preparing 
for BIT talks.  He said he shared U/S Jeffery's hopes that 
work on the BIT would proceed quickly after Russia's 
accession to the WTO and that it would generate greater 
bilateral investment flows. 
 
Iraqi Debt Relief 
----------------- 
 
4.  (C) Russia planned to implement Iraqi debt relief in 
February, according to Kudrin.  He shared U/S Jeffery's 
perspective that, in light of the improving security 
environment, finalizing the debt relief commitment would 
allow the GOI to take a critical step forward in its economic 
policy planning.  Kudrin added that the GOR had also 
initiated programs to provide humanitarian aid and other 
forms of assistance. 
 
Investment Regulation and SWFs 
------------------------------ 
 
5.  (C) Kudrin noted that Russia would be an active 
participant in discussion with the IMF and the OECD on 
establishing guidelines and transparency benchmarks for 
Sovereign Wealth Fund (SWF) investments.  He expressed some 
frustration, however, over what he perceived as a lack of 
clarity in the U.S. law (Exon-Florio and amendments) 
governing foreign investments.  He said that, despite 
discussions with his counterparts in the USG, the objectives 
and decision making standards of the Committee on Foreign 
Investment in the U.S. (CFIUS) did not seem transparent. 
Kudrin said the asset allocation rules for the Reserve Fund 
(reftel) had already been published.  He emphasized that the 
 
GOR was planning to use assets from the National Prosperity 
Fund only for non-controlling, portfolio investments.  He 
added that "concerns the U.S. might have about SWF 
investments have not been generated by our plans." 
 
Bilateral Economic Dialogue 
--------------------------- 
 
6.  (SBU) U/S Jeffery briefly outlined the purpose of the 
CFIUS-related changes that had been adopted last year.  He 
noted that he would meet with Deputy Foreign Minister Denisov 
the following day to discuss establishing a bilateral 
economic dialogue.  U/S Jeffery added that the economic 
dialogue, which would foster greater formal as well as 
informal communication between the public and private sector, 
would provide an ideal forum for raising economic, business, 
and regulatory issues, such as CFIUS, of mutual interest. 
 
7.  (U) This message has been cleared by U/S Jeffery. 
BURNS

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