Daily Archives: June 11, 2008

08MOSCOW1680, MEDVEDEV’S MESSAGE LADEN TRIP TO BERLIN

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Reference ID Created Released Classification Origin
08MOSCOW1680 2008-06-11 14:46 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO6696
PP RUEHAG RUEHDF RUEHIK RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHVK RUEHYG
DE RUEHMO #1680/01 1631446
ZNR UUUUU ZZH
P 111446Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 8575
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 MOSCOW 001680 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL GM RS
SUBJECT: MEDVEDEV'S MESSAGE LADEN TRIP TO BERLIN 
 
REF: BERLIN 755 
 
1. (SBU) Summary: The MFA assessed Medvedev's June 5 trip to 
Berlin - his first European trip as President - as having 
successfully demonstrated the importance of Russia-German and 
Russia-EU relations.  Although the short, eight-hour visit 
yielded little on substance, it provided Medvedev an 
opportunity to establish a rapport with Chancellor Merkel and 
establish himself as a "reliable" partner (reftel). 
According to the MFA, a host of issues was discussed, with 
energy and the Nord Stream pipeline deemed the most important 
topics.  The leaders covered several foreign policy issues, 
including missile defense, which Merkel reportedly told 
Medvedev was best dealt with through discussions between the 
U.S. and Russia.  Medvedev used his public appearances to 
stress upholding the rule of law in Russia in an effort to 
assure German businesses that Russia was a sound economic 
partner.  The Russian press contrasted Medvedev's debut with 
the threatening tone of Putin's March 2008 Munich speech, 
although many noted Medvedev delivered a very similar 
message, albeit with more bonhomie.  End summary. 
 
Medvedev's Positive Message to Germany 
-------------------------------------- 
 
2. (SBU) During a June 10 briefing for the diplomatic corps, 
MFA Principal Counselor Mikhail Markarov explained that 
Medvedev's June 5 trip to Berlin was intended to demonstrate 
the importance of Russian-German bilateral ties and allow 
Medvedev to establish a working/personal relationship with 
Chancellor Merkel.  The brief, eight-hour visit centered upon 
the two leaders' meeting and a few public events, including a 
televised public address, with little time for deliverables 
or concrete results.  When asked what was the most important 
result of the trip, Markarov emphasized the significance of 
Berlin as Medvedev's first European destination as President 
and the positive tone of his message, signifying that the new 
Russian President wished to be a "partner" with both Germany 
and the EU.  Markarov did not mince words over the importance 
to Moscow of its relationship with Berlin, characterizing it 
as the "engine of Russia-EU and Russia-NATO relations." 
 
3. (SBU) Markarov explained that synchronized visits - 
Medvedev to Germany and Putin to France - demonstrated 
Russia's focus to broaden ties with the EU as they progress 
toward finalizing the EU-Russia Cooperation Agreement. 
Markarov admitted that it was important for Medvedev to visit 
Europe soon after his first foreign trip as President took 
him to China, and joked that the Europeans could accept this 
order of travel better than the Chinese, who placed more 
importance on such symbolism. 
 
Energy and Foreign Policy 
------------------------- 
 
4. (SBU) Markarov said that Medvedev and Merkel's discussion 
on energy was the most important element of their meeting, 
although Medvedev's offer of a Russia-German "energy 
partnership" did not lead to concrete results.  Medvedev and 
Merkel, reaffirming the importance of the Nord Stream 
pipeline, agreed upon the necessity of overcoming the 
objections of certain countries, particularly Sweden, to the 
project. 
 
5. (SBU) The leaders covered the waterfront on foreign policy 
without going into detail on any topic in particular. 
Markarov said that when Medvedev brought up missile defense, 
the Chancellor responded that the issue was best dealt with 
through discussions between the U.S. and Russia.  Markarov 
noted that while Medvedev's proposal for a legally binding 
treaty on European security was broached in his public speech 
but not his meeting with Merkel, the "German side" responded 
positively without making any commitment.  Markarov told us 
that the CFE Treaty was not discussed by Medvedev and Merkel 
despite a MFA press release to the contrary. 
 
Rule of Law Will Help Economic Ties 
----------------------------------- 
 
6. (SBU) Per Markarov, Medvedev previewed his political 
priorities with his message on strengthening the rule of law 
and promoting more liberal media law, partly in an effort to 
assuage European concern.  Markarov stressed that Medvedev's 
message not be taken as a new direction away from Putin's 
principles. 
 
7. (SBU) Markarov pointed out the fact that Medvedev used his 
speech to cover some of the same issues he and Merkel 
discussed privately, including his call to remove legal 
restrictions on Russian investment in European companies, 
which discriminated against Russian businesses and detracted 
 
MOSCOW 00001680  002 OF 002 
 
 
from potential economic cooperation.  Medvedev also spoke of 
the demographic crisis facing Russia and many European 
countries, which he and Merkel agreed their governments would 
cooperate on addressing.  During the question and answer 
period following the speech, Medvedev addressed the need to 
improve conditions in Russia for small and medium sized 
businesses such as by making capital more available, another &#x000A
;area the two leaders had discussed. 
 
8. (SBU) Markarov noted that Medvedev's trip had a 
significant public component in the hope that his message of 
partnership would reach beyond Germany's political and 
business elite.  When asked the message inferred from 
Medvedev's visit to the Soviet War Memorial and cemetery, 
Markarov responded that Treptow remained important for all 
Russians and his visit was not designed to remind Germany of 
its past. 
 
Soft Spoken But Still Follows Putin's Path 
------------------------------------------- 
 
9. (U) The Russian media focused largely on the atmospherics 
of Medvedev's visit, noting his willingness to raise issues 
of concern to Europe such as the rule of law in Russia, or 
how the new President's softer tone differed from that of 
Putin's infamous Munich speech that rattled the West.  RIA 
Novesti's Andrey Fedyashin commented, however, that despite 
Medvedev's overall positive message or softer tone, his 
speech covered much of the same ground as Putin's by focusing 
on Russian differences with the West over NATO, missile 
defense, and Kosovo, and warning against foreign interference 
in Russian internal affairs. 
RUSSELL

Wikileaks

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08MOSCOW1679, DEMARCHE DELIVERED: SUDAN/CHAD – URGE SUPPORT FOR

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Reference ID Created Released Classification Origin
08MOSCOW1679 2008-06-11 14:46 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXYZ0001
PP RUEHWEB

DE RUEHMO #1679 1631446
ZNR UUUUU ZZH
P 111446Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 8574
INFO RUEHGG/UN SECURITY COUNCIL COLLECTIVE

UNCLAS MOSCOW 001679 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETTC PREL EFIN KTFN PTER UNSC SU RS
SUBJECT: DEMARCHE DELIVERED:  SUDAN/CHAD - URGE SUPPORT FOR 
DESIGNATING 4 INDIVIDUALS UNDER TARGETED SANCTIONS 
 
REF: STATE 61842 
 
(SBU) We delivered reftel demarch on June 11 to MFA Senior 
Counselor for International Organizations Peter Ilichev. 
Ilichev said that while Russia supported designating the four 
individuals named in reftel under targeted sanctions, he 
could not say whether the GOR would press other countries to 
do the same.  Ilichev promised to take our points under 
consideration and pass them on to a higher level at the MFA. 
RUSSELL

Wikileaks

08MOSCOW1676, Challenges of Doing Business in Russia: Visa Regime Changes

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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. #08MOSCOW1676.
Reference ID Created Released Classification Origin
08MOSCOW1676 2008-06-11 14:43 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO6690
RR RUEHLN RUEHVK RUEHYG
DE RUEHMO #1676/01 1631443
ZNR UUUUU ZZH
R 111443Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 8570
INFO RUEHLN/AMCONSUL ST PETERSBURG 4984
RUEHVK/AMCONSUL VLADIVOSTOK 2869
RUEHYG/AMCONSUL YEKATERINBURG 3212
RUEHHE/AMEMBASSY HELSINKI 3359
RUEHTL/AMEMBASSY TALLINN 2742
RUEHRA/AMEMBASSY RIGA 5401
RUEHVL/AMEMBASSY VILNIUS 3145
RUEHWR/AMEMBASSY WARSAW 2328
RUEHNY/AMEMBASSY OSLO 1724
RUEHKV/AMEMBASSY KYIV 0252

UNCLAS SECTION 01 OF 02 MOSCOW 001676 
 
 
SENSITIVE 
SIPDIS 
 
FOR CA/FO, CA/VO, CA/FPP, EUR/RUS 
 
E.O. 12956: N/A 
TAGS: CASC CVIS PGOV RS
SUBJECT: Challenges of Doing Business in Russia: Visa Regime Changes 
 
Ref: (A) 07 Moscow 4974 
      (B) 08 Moscow 0218 
 
1.  (SBU) Summary:  Late last year Russia implemented a new visa 
regime which limits foreigners with business or humanitarian (i.e., 
students, missionaries, and individuals traveling for scientific, 
cultural, or sporting activities) visas to a 90-day stay in any 
180-day period.  Standard work permits, however, allow one-year, 
multiple entry work visas. As a result, more and more U.S. 
businesses are opting for such permits, which are subject to 
region-specific numerical quotas. Because the Moscow-region quota 
was recently reached, employees of some U.S. businesses have been 
unable to obtain a visa. The Government of Russia (GOR) has told 
companies that it plans to temporarily increase the quota in the 
next few months. Companies have noted that the same problem will 
arise next year unless GOR makes the quota increase both substantial 
and permanent. 
 
2.  (SBU) None of the companies interviewed believed the visa regime 
changes were particularly unfair or designed to push western 
businesses out of Russia. Nor did the companies interviewed claim 
they were specifically targeted by GOR in any other way. The 
complaints about doing business in Russia faced by both Russian and 
non-Russian firms were more about corruption and the overly 
bureaucratic regulatory framework.  End Summary. 
 
Russian Visa Regime 
 
3.   (U) In late 2007, the Ministry of Foreign Affairs (MFA) 
announced changes to the Russian visa regime (Refs A and B). 
Previously, holders of business and humanitarian (i.e., students, 
missionaries, and individuals traveling for scientific, cultural, or 
sporting activities) visas, similar to the U.S. B-1/2 visa, were 
allowed to stay up to 180 days at a time in Russia with the option 
of continual renewals. In October of 2007, GOR limited holders of 
business or humanitarian visas to a 90-day stay in any 180-day 
period. In essence the changes mean that foreigners with these types 
of visas are limited to no more than 180 days per year. When the 
rules were clarified in January 2008, GOR explained that the rules 
did not apply to work permits, which allow employees of foreign 
businesses to obtain one-year, multiple entry visas. In order to 
obtain a work permit, an applicant must have a contract with an 
employer that is registered with the Russian Federal Migration 
Service. 
 
4.   (U) When these changes were announced, some U.S. citizens 
expressed concern about the difficulty of continuing their Russian 
operations under these restrictions. The majority of complaints have 
arisen from missionaries, students, small businessmen, and 
consultants. These categories of visa applicants are either 
ineligible for a work permit or cannot afford the time and expense 
of obtaining one. Most large, well-established companies are already 
using work permits. Applying for a work permit can be a lengthy 
process, requiring the company to obtain employment authorization 
and the employee to have an approved physician certify that he or 
she is free of tuberculosis, HIV, and leprosy, among other diseases, 
and is not a drug addict. However, the primary concern with work 
permits relates to the quotas for applicants from outside the 
Commonwealth of Independent States. GOR only issues so many of these 
per year for specific areas of the country (the figure for the 
Moscow region is 105,000) and holders of a work permit in one region 
may not work more than a specific number of days in another region. 
 
Effect of Changes on U.S. Businesses in Russia 
 
5. (SBU) The direct effect of the changes on large U.S. corporations 
has been minimal because most employees already had work permits. 
Such companies often employ a large staff devoted to dealing with 
work permits and visa issues. An executive with Topcon, a U.S. 
subsidiary of a Japanese corporation, involved in the global 
positioning systems industry, said renewing work permits is 
relatively easy when you understand the process, and takes only a 
few weeks. In general, companies entering the Russian market do not 
find the process for obtaining work permits particularly 
burdensome. 
 
6. (SBU) The primary difficulty with work permits are the quotas - 
GOR issues only so many per year. According to recent media 
 
MOSCOW 00001676  002 OF 002 
 
 
reporting, the quota for the Moscow region is 105,000. As greater 
numbers of businesses apply for work permits, the annual work permit 
quota will be met even earlier. Already some foreign corporations 
have been unable to obtain work permits for their employees. Procter 
& Gamble (P&G), for example, said that it has eight employees 
stranded in the U.S. because the work permit quota has been filled. 
They were told that GOR plans to offer a one-time in
crease in the 
quota in the next few months. In the mean time, P&G has said it will 
use business visas (subject to the 90-day rule) as a temporary 
solution. The difficulty with such visas is that employees are 
unable to open bank accounts, sign leases, and enroll their children 
in school. An executive with P&G also said he knew that there are 
over 20 employees of TNK-BP in a similar situation. 
 
7. (SBU) The difficulty with work permit quotas will likely 
increase. The booming Russian economy and the burgeoning middle 
class are likely to draw more and more foreign businesses to Russia. 
United Airlines, for example, intends to begin offering direct 
flights between Moscow and the U.S. in October of 2008. Unless GOR 
dramatically increases the quota for work permits, demand will 
continue to outpace supply, which may limit the entry and expansion 
of U.S. and other international firms in Russia or require them to 
have a predominantly Russian staff. 
 
8.   (SBU) Comment: The MFA has maintained that the changes to the 
visa regime were designed to harmonize Russian visa regulations with 
those of Schengen countries. They apparently were not intended to 
limit or prevent U.S. businesses from operating in Russia. The 
numerical quotas, however, particularly with respect to Moscow, 
ultimately may have such an effect. In line with our previous 
reporting on this issue, we will continue to closely track these 
issues and monitor the effects on U.S. businesses. End Comment. 
 
Russell

Wikileaks

08MOSCOW1673, DEMARCHE DELIVERED: SUDAN/CHAD – URGE SUPPORT FOR

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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. #08MOSCOW1673.
Reference ID Created Released Classification Origin
08MOSCOW1673 2008-06-11 13:40 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXYZ0018
PP RUEHWEB

DE RUEHMO #1673 1631340
ZNR UUUUU ZZH
P 111340Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 8566
INFO RUEHGG/UN SECURITY COUNCIL COLLECTIVE

UNCLAS MOSCOW 001673 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETTC PREL EFIN KTFN PTER UNSC SU RS
SUBJECT: DEMARCHE DELIVERED:  SUDAN/CHAD - URGE SUPPORT FOR 
DESIGNATING 4 INDIVIDUALS UNDER TARGETED SANCTIONS 
 
REF: STATE 61842 
 
(SBU) We delivered reftel demarch on June 11 to MFA Senior 
Counselor for International Organizations Peter Ilichev. 
Ilichev said that while Russia supported designating the four 
individuals named in reftel under targeted sanctions, he 
could not say whether the GOR would press other countries to 
do the same.  Ilichev promised to take our points under 
consideration and pass them on to a higher level at the MFA. 
RUSSELL

Wikileaks

08MOSCOW1672, DESIGNATION OF FOUR LET OPERATIVES DELIVERED

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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. #08MOSCOW1672.
Reference ID Created Released Classification Origin
08MOSCOW1672 2008-06-11 13:39 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXYZ0010
RR RUEHWEB

DE RUEHMO #1672 1631339
ZNR UUUUU ZZH
R 111339Z JUN 08
FM AMEMBASSY MOSCOW
TO SECSTATE WASHDC 8565

UNCLAS MOSCOW 001672 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EFIN ETTC PREL PTER KTFN UNSC
SUBJECT: DESIGNATION OF FOUR LET OPERATIVES DELIVERED 
 
REF: STATE 61363 
 
(U) On June 11 we delivered reftel nonpaper to MFA Department 
of New ChQlenges and Threats Senior Counselor Vladimir 
Prokhorov, who told us his department would study the list 
and provide us with a response at a later date. 
RUSSELL

Wikileaks

08MOSCOW1669, RUSSIAN EXPERT EXPRESSES “RESERVED OPTIMISM” ON

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Reference ID Created Released Classification Origin
08MOSCOW1669 2008-06-11 11:12 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO6443
RR RUEHLN RUEHVK RUEHYG
DE RUEHMO #1669/01 1631112
ZNR UUUUU ZZH
R 111112Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 8561
INFO RUEHLN/AMCONSUL ST PETERSBURG 4980
RUEHVK/AMCONSUL VLADIVOSTOK 2866
RUEHYG/AMCONSUL YEKATERINBURG 3209
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 MOSCOW 001669 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV RS SOCI
SUBJECT: RUSSIAN EXPERT EXPRESSES "RESERVED OPTIMISM" ON 
HOUSING 
 
 
------- 
Summary 
------- 
 
1. (SBU) Continuing our series of cables on Russia's housing 
sector, Econoffs met with Alexander Puzanov, General Director 
of the Institute for Urban Economics.  Puzanov told us that 
the obvious solution was to increase the supply of housing. 
He was optimistic that this would occur eventually through 
market forces but argued that the government should take 
action to speed the process.  In that regard, Puzanov said 
that while the GOR appeared to have good intentions, its poor 
track record on housing did not inspire confidence that it 
would do what was needed. End Summary. 
 
----------------------------- 
Housing: A Complicated Crisis 
----------------------------- 
 
2. (SBU) Puzanov said that the lack of housing has pushed 
prices so high that less than 20 percent of families can 
realistically afford a new home even though mortgages are 
increasingly available.  He said the lack of land for 
residential construction is a key factor driving up housing 
prices.  Puzanov explained that 90 percent of land in Russia 
is owned by state and municipal governments who do not have 
an efficient (read: corruption-free) method of re-zoning 
large tracts of agriculture and forestry land for housing. 
 
3. (SBU) Puzanov said the GOR has re-zoned some land for 
residential use and auctioned off plots.  However, more often 
than not, he said the land is purchased by a wealthy 
developer.  The developer in turn builds expensive homes for 
Russia's elite, which have higher profit margins than middle 
class housing.  Puzanov said that until the high-priced 
housing market is saturated, developers and construction 
companies will not even consider building mid-range housing. 
 
4. (SBU) Puzanov said he was optimistic that rising incomes 
and falling interest rates would eventually lead to improved 
housing affordability.  In an optimistic scenario - "if all 
goes according to plan" - Puzanov estimated that by 2020 the 
number of homes purchased by Russians would increase from 
today's 2.5 million to 4 million per year. 
 
------------------------------------------- 
Government Intervention Needed and Underway 
------------------------------------------- 
 
5. (SBU) However, Puzanov told us that the key to speeding up 
this process was government action.  In that regard, he said 
he was encouraged by President Medvedev's May promise to 
continue previous GOR efforts on housing and by the GOR's 
decision to include housing market reform in its long term 
"2020" development plan.  Puzanov said the GOR has pledged to 
increase housing stock by 2020 using a combination of 
incentives and public-private partnerships to more than 
triple housing construction.  He said that among some of the 
more promising measures the government was considering or had 
begun to implement were the following: 
 
-- A Fund to Assist Housing Maintenance:  Established in 
January, its goals are to repair existing housing stock and 
to resettle people from uninhabitable housing.  Puzanov said 
the GOR hopes this Fund will also encourage market mechanisms 
for housing construction and repair, such as home ownership 
associations and cooperatives; and 
 
-- A Fund to Promote Housing Construction:  This Fund was 
announced by Medvedev in April.  Puzanov said its purpose is 
to address the lack of land for residential construction. 
The Fund plans to redistribute up to one million hectares of 
unused government land for residential building projects and 
for factories to produce scarce construction mater

Wikileaks

08MOSCOW1653, BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK ON LICENSE

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Reference ID Created Released Classification Origin
08MOSCOW1653 2008-06-11 05:09 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXYZ0010
RR RUEHWEB

DE RUEHMO #1653 1630509
ZNR UUUUU ZZH
R 110509Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 8540
INFO RUCPDOC/USDOC WASHINGTON DC
RUEKJCS/SECDEF WASHDC
RHMFIUU/FBI WASHINGTON DC
RUEAIIA/CIA WASHDC
RUEHLO/AMEMBASSY LONDON 2114
RHMFIUU/HQ BICE INTEL WASHINGTON DC

UNCLAS MOSCOW 001653 
 
DEPARTMENT FOR PM/DDTC - BLUE LANTERN COORDINATOR 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: DA ETTC RS KOMC UK
SUBJECT: BLUE LANTERN LEVEL 3: PRE-LICENSE END-USE CHECK ON LICENSE 
05-050101397 WILL NOT BE COMPLETED 
 
REF: STATE 50705 
 
(U) Post has been unable to confirm the bona fides of reftel 
entities.  Andrey Firsov, Deputy Director of foreign consignee JSC 
Instrument Plant TENZOR, told us June 6 he would rather lose the 
contract than answer our "strange questions" related to reftel 
pre-license check.  Yelena Kulakova, Senior Specialist of the 
end-user Russian Ministry of Atomic Energy (RosAtom), also declined 
to provide us with information regarding this case.  ESTOff 
contacted his interlocutors at RosAtom as well, but no answer was 
forthcoming. 
 
RUSSELL

Wikileaks