Daily Archives: July 2, 2009

09MOSCOW1738, VORONIN VISITS MOSCOW

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Reference ID Created Released Classification Origin
09MOSCOW1738 2009-07-02 11:09 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO4881
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHMO #1738/01 1831109
ZNY CCCCC ZZH
P 021109Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4125
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 001738 
 
SIPDIS 
 
E.O. 12958: DECL: 07/01/2019 
TAGS: PREL PGOV ECON RS MD
SUBJECT: VORONIN VISITS MOSCOW 
 
REF: CHISINAU 493 
 
Classified By: A/Pol M/C David Kostelancik for reasons 1.4(b) and (d) 
 
1.  (C) Summary.  Russia said Moscow's agreement to meet with 
Moldovan President Voronin June 22 in Moscow was not election 
campaign assistance, but only support inasmuch as Moscow 
sought to maintain good relations with its neighbors and 
protect the interests of the Russian-speaking (voting) 
population abroad.  In general, Moscow wants to rebuild 
momentum on the stalled Transnistria talks in the near term, 
and believes both conflict parties need to find new 
approaches in the long term.  The MFA thought Putin's promise 
to provide Chisinau with the first tranche of a USD 500 
million loan within the next two months was too optimistic. 
Both the MFA and the Moldovan ambassador to Russia confirmed 
that the monies would be used for investment purposes, and 
not to repay gas debts, but disagreed on the format of the 
loan.  Although Moscow disapproved of Iurie Rosca's 
appointment as Deputy Prime Minister, Russia considered it an 
internal Moldovan affair.  End Summary 
 
----------------- 
Election support? 
----------------- 
 
2.  (C) MFA 2nd CIS Deputy Director for Moldova Nikolai Fomin 
told us June 25 that Moldovan President Voronin's June 22 
visit to Moscow was not intended to bolster Voronin's party 
in the lead-up to the presidential elections.  However, 
Russia cared about the significant Russian-speaking 
population in Moldova, which all parties needed to woo if 
they wanted to win the election.  Fomin said Moscow's ongoing 
contacts with Chisinau "naturally" supported the GOM in the 
sense that Russia wanted to support its neighbor and to 
maintain good relations.  In his welcoming remarks, President 
Medvedev blamed the opposition for Moldova's election crisis, 
and justified Russia's support for the GOM's efforts to 
"restore constitutional order" with a reference to Moldova's 
sovereignty. 
 
------------ 
Transnistria 
------------ 
 
3.  (C) Fomin, who sat in on Voronin's meeting with Medvedev, 
stressed the importance of the March 18 agreement signed by 
Voronin and Transnistrian leader Smirnov for Medvedev's and 
Voronin's June 22 talks.  He credited the agreement with 
making it possible to continue talking about Transnistria, 
given Transnistria's position that it currently "had no 
counterpart to talk to," which, coupled with its "usual 
polemics" against Chisinau's alleged leaning toward 
Bucharest, had "thrown talks back to September 2008." 
 
4.  (C) In the short term, Fomin said Russia wanted to 
provide impulses for the two sides to meet again, although 
the next meeting could only occur after Moldova's 
presidential elections.  In the medium term, Fomin said 
Russia needed to "find its own niche" in supporting 
confidence-building measures between the sides, which he 
compared to the U.S.' MCC program.  In the long-term, Fomin 
argued that both sides needed to find a new approach, as 
their current respective proposals for one-state and 
multi-state solutions were mutually incompatible.  In order 
to find a mutually acceptable solution, it was important for 
both leaders to negotiate directly, Fomin stressed.  However, 
Moscow had no current plans for hosting a "2 plus 1" meeting 
between the conflict sides to encourage such negotiations. 
 
5.  (C) Moldovan Ambassador Andrei Neguta, who participated 
in all meetings except for the one-on-one meetings that both 
Medvedev and Putin conducted with Voronin, told us that Putin 
did not discuss Transnistria with Voronin. Medvedev welcomed 
any wish by Voronin to meet either separately with a mediator 
from the "5 plus 2" group, or in whichever other format 
Voronin desired.  Although the Moldova elections had caused a 
delay in Transnistria talks, the mediators were using the 
time to prepare for post-election reengagement. 
 
---- 
Loan 
---- 
 
6.  (C) Fomin said that Putin's promise to grant the first 
USD 150 million of a USD 500 million loan to Moldova within 
 
MOSCOW 00001738  002 OF 002 
 
 
two months' time was overly optimistic.  Although everything 
was in place to amend the GOR's budget in order to 
accommodate the new expense, completing the procedures would 
still take time.  A further USD 150 million were to be 
granted in 2010, the remaining USD 200 million in 2011, 
Neguta said.  He said that Chisinau had only asked for USD 
500 million as that was all Moldova needed, and Moldova did 
not engage in bargaining tactics. 
 
7.  (C) The modalities of the loan are unclear.  Fomin stated 
that Moscow planned no monetary disbursement to Chisinau; 
instead, the monies would be provided to Russian companies to 
fund investment projects in Moldova.  On the other hand, 
Neguta told us that mo
nies would be disbursed for Chisinau to 
expend as it saw expedient, based on an agreement between the 
Finance Ministries of both countries expected for July 1, 
which would set the conditions of the loan.  Both agreed that 
uses for the loan included refurbishing Moldova's internal 
gas pipeline system, improving potable water supplies, plans 
for road construction in the south as part of the Black Sea 
ring road, and cultural initiatives.  Moldova had first 
requested the loan at the May 22 CIS summit in Astana, Fomin 
said.  Neguta clarified that Moldova had approached Moscow 
after the IMF had postponed its decision on granting a loan 
until after a new government was formed. 
 
8.  (C) Fomin and Neguta both said speculation in the Russian 
press that the loan could be used to pay Moldova's gas debts 
was ill-informed.  Similarly, Fomin and Neguta said rumors 
that Gazprom might take over Moldova's gas pipeline network 
in case of default by Moldova's gas company were unfounded 
and not a topic of the June 22 discussions. 
 
----- 
Rosca 
----- 
 
9.  (C) Fomin said that Moscow was disconcerted by Iurie 
Rosca's appointment as deputy prime minister on June 16, 
given he had opposed the Russian "Kozak Plan" for 
Transnistria in 2003.  However, "since Russia did not 
interfere in other countries' internal politics," Medvedev 
had not raised the issue with Voronin, and Russia would not 
protest the appointment.  Moscow's understanding was that 
Rosca's task was to attract voters away from right-wing 
parties. 
 
------------ 
Other issues 
------------ 
 
10.  (C) Fomin added that during his separate meetings with 
Medvedev and Putin, Voronin had also discussed Moldova's 
approach to European security ("understandably oriented 
toward Brussels"), and the necessity for CIS reform, given 
Moldova's current and Russia's upcoming presidency in the 
CIS.  Neguta said Moscow agreed to lift all restrictions on 
Moldovan wine exports to Russia, which had so far been 
limited to the Moscow region. 
 
------- 
Comment 
------- 
 
11.  (C) The disconnect between the Russian and Moldovan 
descriptions of the format of the loan, and the projected 
delay between the announcement and the disbursement (see also 
reftel) suggest that the loan announcement was a political 
decision by Moscow to provide election assistance to 
Moldova's communist party.  The actual conditions of the loan 
will apparently only be worked out after the election is over. 
BEYRLE

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09MOSCOW1733, ALCOA INVESTMENT LIFTS SAMARA’S SAGGING ECONOMY

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Reference ID Created Released Classification Origin
09MOSCOW1733 2009-07-02 08:11 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO4673
PP RUEHDBU
DE RUEHMO #1733/01 1830811
ZNY CCCCC ZZH
P 020811Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 4119
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 001733 
 
SIPDIS 
 
STATE FOR EUR/RUS 
COMMERCE FOR MAC (BROUGHER) 
NSC FOR MCFAUL 
 
E.O. 12958: DECL: 07/02/2119 
TAGS: EINV ECON PGOV SOCI RU
SUBJECT: ALCOA INVESTMENT LIFTS SAMARA'S SAGGING ECONOMY 
 
REF: MOSCOW 1646 
 
Classified By: Ambasador John R. Beyrle, Reasons (1.4 b,d) 
 
Summary 
-------- 
 
1. On June 23-24, the Ambassador visited Samara to officiate 
at the opening of the latest production line of the USD 750 
million Alcoa investment in the Samara Metallurgical Plant, 
Russia's largest aluminum producing facility.  The Ambassador 
met with Samara Governor Vladimir Vladimorovich Artyakov, who 
boasted of his oblast's success in attracting FDI and 
maintaining a relatively low rate of unemployment.  Artyakov 
emphasized his commitment to broadening the already 
substantial U.S. trade and investment ties in Samara (the 
U.S. being Samara's leading economic partner).  After the 
Ambassador raised the closure of our American Corner, the 
Governor said half-heartedly that he would review any future 
U.S. proposal to reopen.  Following the opening of the Alcoa 
plant, the Ambassador spoke to students and faculty at the 
Samara State University and hosted a reception for alumni of 
U.S. exchange programs. End Summary. 
 
Meeting With the Governor 
------------------------- 
 
2.  (C) The Ambassador met with Samara Governor Vladimir 
Vladimorovich Artyakov on June 24, with the media in the room 
for the entire session.  Speaking without notes, Artyakov 
boasted about Samara's success in attracting FDI, eliminating 
bureaucratic red tape, and lowering taxes for business.  He 
stated that the U.S. was Samara's leading foreign partner, 
with a total of 18 U.S. companies doing business in the 
region and accounting for about 900 million of the oblast's 
USD one billion foreign trade turnover.  The leading U.S. 
investor was Alcoa (with an investment of about 750 million), 
followed by Pepsi Cola and Coca Cola.  Artyakov also 
mentioned GM's joint venture with Avtovaz to produce the 
Chevy Niva; the USD 60 million purchase of GE medical 
equipment; and purchases of agricultural machinery from Casey 
and other U.S. manufacturers.  Artyakov pledged to do all 
possible to increase business ties with the U.S., promising 
bountiful rewards for companies taking the initiative to 
venture into the potentially lucrative Samara market.  The 
Ambassador responded that a strong business relationship with 
Russia could be a catalyst for improving bilateral ties 
across the board, and that the opening of the Alcoa plant in 
Samara on the eve of President Obama's visit to Russia was of 
great symbolic importance. 
 
3.  (C) While Samara's heavy industrial base made it 
vulnerable to the economic crisis, Artyakov claimed that the 
oblast was faring much better than most other regions of 
Russia.  Per capita income was higher than the average for 
Russia, and unemployment was only 2.5 percent of the work 
force - significantly lower than the Russian average, in 
Artyakov's estimation.  He attributed the relatively low 
unemployment to the success of federal and regional 
programs for retraining and relocating dismissed workers. 
Programs included loans and technical assistance to set up 
SME's.  Four "business incubators" - based on U.S. models - 
had been established to help prospective small and 
medium-sized entrepreneurs acquire technology, credits, and 
licenses. 
 
Closing of America Corners 
--------------------------- 
 
4.  (C) The Ambassador raised the problem of the recent 
closure of the American Corner in Samara, noting that the 
importance of cultural, academic, and people-to-people 
exchanges would be a theme of the upcoming Moscow Summit. 
Artyakov responded defensively, noting that Samara had many 
places with internet access to information and that 
literature about the U.S. was available in most libraries and 
universities.  However, he offered to "study" a U.S. proposal 
to reopen the American Corner, and agreed with the Ambassador 
that both countries could gain from exchanges, particularly 
scientific and academic.  He also made a pitch for promoting 
U.S. tourism in Samara. 
 
Corruption and Red Tape 
----------------------- 
 
5.  (C) En route to the Alcoa plant opening, the Ambassador 
 
MOSCOW 00001733  002 OF 002 
 
 
was able to have a more candid, one-on-one discussion with 
Artyakov in his Mercedes limo.  When the Ambassador mentioned 
the 47,000 pages of documentation that Alcoa had been forced 
to present to local authorities in connection with its 
investment, Artyakov brushed the matter off with a clip 
"bureaucracies will be bureaucracies".  Artyakov did not 
react when the Ambassador told him the problem had been 
raised by the Alcoa CEO in his meeting with Medvedev at the 
Saint Petersburg Economic Forum. 
 
6.  (C) The Ambassador also raised IKEA, which earlier that 
day had issued its statement suspending investments in 
Russia. (According to local contacts and press accounts, the 
year-long delay in opening IKEA's store in
 Samara over 
alleged "fire and safety violations" was a key factor in 
IKEA's decision to halt activities in Russia.)  Artyakov 
placed the entire blame on IKEA, claiming they should have 
"fixed the violations", while refusing to accept that the 
accusations against IKEA might have been unfounded. 
 
Alcoa Plant Opening 
------------------- 
 
7.  (U) The Ambassador, along with Governor Artyakov and 
Alcoa CEO Helmut Wieser, presided at a ribbon-cutting 
ceremony in honor of Alcoa's new coating line plant in the 
outskirts of Samara.  (Note: Alcoa has invested approximately 
USD 750 million in the Samara Metallurgical plant, which 
employs 4,000 people.  It is Russia's largest fabricated 
aluminum operation.  The new production line will allow Alcoa 
to produce parts for drink cans that are currently imported. 
Plans are also underway for the Samara plant to supply 
aluminum to Boeing's investment in Russia. End note.)  In his 
remarks, the Ambassador emphasized that the Alcoa 
installation was an excellent example of the confidence U.S. 
investors had in Russia.  He noted that business ties between 
the U.S. and Russia were a cornerstone of the bilateral 
relationship and would be an important part of President 
Obama's upcoming visit to Moscow.  He also mentioned Alcoa's 
commitment to corporate governance and investments in the 
local community, exceeding one million USD.  Governor 
Artyakov seconded the Ambassador's praise for Alcoa's "social 
responsibility" and expounded on how the Alcoa investment 
would benefit Samara through new jobs, higher revenues and 
technology transfer. 
 
Meeting with Students and Exchange Alumni 
----------------------------------------- 
 
8.  (U) Concluding his visit to Samara, the Ambassador spoke 
to students of Samara State University on the future of the 
bilateral relationship and entertained their questions, 
ranging from Middle East policy to educational exchanges. 
Samara State University, with 13,000 students, places large 
emphasis on international contacts and has academic exchanges 
with a number of U.S universities.  The rector of the 
university presented the Ambassador with a two-volume 
compendium on civics education published by the university 
with a State Department grant in 2003. The Ambassador later 
hosted a reception for alumni of U.S. exchange programs, a 
small but motivated group in Samara that strongly support the 
reopening of an American Corner there. 
 
Comment 
------- 
 
9.  (C) There is little doubt that the Alcoa investment will 
contribute to the economic recovery of the Samara region and 
will profit from a near monopoly of the Russian market with 
the possibility of exporting to China and Europe.  Artyakov 
is clearly not going to be leading the anti-corruption fight 
in Samara any time soon, to judge from his dismissive 
response to suggestions that the oblast investment climate 
could use some attention.  He struck us as a real "comer" 
politically, though - self-confident, exceedingly 
well-spoken, and definitely in control of the local political 
scene as described in reftel. End Comment. 
 
BEYRLE

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09MOSCOW1732,

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Reference ID Created Released Classification Origin
09MOSCOW1732 2009-07-02 05:00 2011-08-30 01:44 SECRET//NOFORN Embassy Moscow

VZCZCXRO4507
RR RUEHAO RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHMO #1732/01 1830500
ZNY SSSSS ZZH
R 020500Z JUL 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 4117
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUEHUB/USINT HAVANA 0032
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RHEHNSC/NSC WASHDC

S E C R E T SECTION 01 OF 02 MOSCOW 001732 

NOFORN 
SIPDIS 

E.O. 12958: DECL: 06/29/2034 TAGS: PINR PREL PGOV CU RS

1. (S/NF) Summary: GOR officials and outside experts told us the Cuba-Russia relationship had not significantly changed since Raul Castro became president, but that Cuba-Russia ties are strengthening. Russia does not think it is harder or easier to work with Raul Castro than it was with Fidel Castro. MFA officials declined to prioritize the bilateral relationships with Cuba and Venezuela. GOR officials told us there were no plans to establish military bases in Cuba and that Russia was unlikely to deploy any long-range aviation assets to Cuba. End summary. 
-------------------------------------- 
No Strong Preference for Raul or Fidel 
-------------------------------------- 

2. (S/NF) The MFA's Cuba desk told us June 23, and outside experts subsequently confirmed, that Russia did not have a preference for working with Raul or Fidel Castro. As a general trend, the MFA said that Cuba-Russia ties were becoming stronger, but that the relationship had not changed significantly since Raul Castro came to power in 2008. 

3. (S/NF) Vladimir Davydov, Director of the Latin American Institute at the Russian Academy of Sciences, said that Russia perceived a difference between the two Castro brothers in how they viewed the Cuba-Russia relationship. Davydov told us that Raul spent more time in the Soviet Union and Russia than Fidel and understood Russia better. Russia believed Raul to be the more pragmatic brother, according to Davydov, and that he did more to encourage outside investment in Cuba from a number of sources, including Russia. The MFA confirmed that Russia and Cuba were looking for mutually beneficial investment opportunities in Cuba. 

--------------------------------------- 
Russian Priorities: Cuba or Venezuela?
 --------------------------------------- 

4. (S/NF) Both MFA officials and outside experts declined to prioritize Russia's relations with Cuba and Venezuela. Russia has a longer history of working with Cuba than with Venezuela, but this relationship suffered after the end of the Cold War. In addition, Russia has recently sought closer ties with the Chavez regime. XXXXXXXXXXXXX, an expert on Latin America-Russia relations, said Russia's main intention in improving ties with Cuba and Venezuela was not to aggravate the U.S., rather to gain access to new markets in the region. 

5. (S/NF) Leaders of Cuba and Venezuela have participated in high-profile visits with Russia officials, including President Medvedev. Palacio said that Russia's primary purpose from these engagements was access to the Cuban and Venezuelan markets. Russian MFA officials emphasized that there was currently no ideological component to either the Cuba-Russia or the Venezuela-Russia relationship, stating that the main basis of both relationships was economic. 

6. (S/NF) Russia's bilateral trade with Venezuela totals more than USD 700 million, while trade with Cuba totals about USD 280 million. Davydov told us that Russia's most important partner in Latin America was Brazil, which has the largest economy in the region. Russian-Brazilian bilateral trade totaled more than USD 5 billion in 2007. 

----------------------------------- 
Russian Military Operations in Cuba 
----------------------------------- 

7. (S/NF) GOR officials told us there were no plans to establish military bases in Cuba. They added that the GOR was unlikely to deploy any long-range aviation assets to Cuba. Russia's military relationship with Cuba would most likely be limited to upgrading Soviet-era equipment. The MFA's Cuba desk and Latin America experts here told us that Russia was looking for very little militarily from Cuba, emphasizing that the main basis of their bilateral 

MOSCOW 00001732 002.3 OF 002 

relationship was economic.

 ---------------------------- 
Working with Cuban Officials 
----------------------------

8. (S/NF) When asked about their working relationship with their Cuban counterparts, GOR officials declined to comment. BEYRLE

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09MOSCOW1731, RUSSIAN MFA GRANTS MARINE RESEARCH CLEARANCE WITH

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Reference ID Created Released Classification Origin
09MOSCOW1731 2009-07-02 04:56 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXYZ0006
OO RUEHWEB

DE RUEHMO #1731 1830456
ZNR UUUUU ZZH
O 020456Z JUL 09
FM AMEMBASSY MOSCOW
TO SECSTATE WASHDC IMMEDIATE 4116

UNCLAS MOSCOW 001731 
 
OES/OA FOR TIRPAK AND BARNES 
EUR/RUS FOR GREENSTEIN 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KRVC TPHY EWWT RS
SUBJECT: RUSSIAN MFA GRANTS MARINE RESEARCH CLEARANCE WITH 
CONDITIONS FOR NOAA OSCAR DYSON (STATE FILE NO 2008-108, 
07/01/2009-08/03/2009) 
 
REF: A. Barnes-Lobstein e-mail 10/31/2008 
 B. 08 STATE 94522 
 
1. On June 29, 2009, via diplomatic note 3217/DSA, MFA authorized a 
fisheries research survey on pollock (Theragra chalcogramma) by the 
vessel Oscar Dyson in Russia's Exclusive Economic Zone in the Bering 
Sea during the period July 1 to August 3, 2009, without entering 
Russian ports.  Post has e-mailed scanned copies of note and 
informal embassy translation to OES/OA and EUR/RUS. 
 
2. Informal embassy translation follows: 
 
No. 3217/DSA 
 
The Ministry of Foreign Affairs of the Russian Federation presents 
its compliments to the Embassy of the United States of America and 
in response to the Embassy's note (MFA/039 of 22 May 2009) has the 
honor to inform that the research expedition by the American vessel 
"Oscar Dyson" in the exclusive sea zone of the Russian Federation is 
authorized for the period of 1 July through 3 August 2009 on the 
following conditions: 
 
- observance of requirements of section 4 "Research of marine 
bioresources and marine research" of the federal law of 17 December 
1998 "On the Exclusive Economic Zone of the Russian Federation" (No. 
191-FZ) and also export control legislation of the Russian 
Federation for export of experimental samples; 
 
- provision of access by Russian specialists taking part in the 
expedition to data gathered during the course of the research at the 
stage of collection, processing, and analysis. 
 
The Ministry of Foreign Affairs of the Russian Federation avails 
itself of this opportunity to renew to the Embassy of the United 
States of America assurances of its highest consideration. 
 
Moscow, 29 June 2009 
 
BEYRLE

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