Monday, January 31, 2011

Big Changes Afoot in Regulation of Lawyers in Russia

Last week, Vedomosti published an interview with Russian Deputy Minister of Justice Yuri Lyubimov, one of whose responsibilities includes supervision of the legal profession in Russia. According to the interview, profound changes are on the horizon for all legal professionals in Russia - including both "yuristy" and "advokaty." Currently, "advokaty" are highly regulated but represent a relatively small segment of the legal market in commercial matters. In contrast, "yuristy," including in-house lawyers and virtually all professionals employed by major Russian and international law firms in Russia, require no license whatsoever to practice law. Mr. Lyubimov states that the main parameters of the new reform are virtually certain and that they will involve a unification of both categories of lawyers into a single category of licensed practitioners (with possible sub-categories for specializations in criminal, civil and commercial law). He emphasizes that while nominally this may appear to be a move favoring Russian lawyers and "advokaty" especially, the intention is for the transition to be minimally disruptive to the exising legal market, while ensuring a uniform minimum quality standard for the profession. (Vedomosti, 27 January 2011)

Gazprom Management Accused of Self-Dealing

Leading Russian business newspaper Vedomosti published an article saying that many major suppliers of Russian natural gas monopoly Gazprom are associated with friends of Prime Minister Vladimir Putin and with top managers of Gazprom itself. The newspaper checked the publicly available data about Gazprom suppliers against the publicly available data on the ownership of the suppliers and discovered that several suppliers are associated with three Gazprom Board members (owned by their relatives, etc.). The managers categorically deny any conflict of interest. As for affiliation, one of the managers in question, Alexander Ananenkov, ironically commented: “According to Darwin’s theory, we descended from a monkey and, accordingly, are relatives; therefore we are all affiliated.”

Police Detain Oppositionists in Moscow

The Moscow police detained at least seven members of opposition movement “Another Russia” and conducted searches of the homes of the group's members, as well as of the organization’s office. Although the detainees are reportedly being questioned in relation to the nationalist protests on December 11, 2010, the oppositionists themselves believe the arrests are to prevent the demonstration planned for January 31, 2011 in support of Article 31 of the Russian Constitution (freedom of assembly).

Referendum To Extend Nazarbaev's Rule Found Unconstitutional in Kazakhstan

Kazakhstan's Constitutional Council has rejected a planned referendum that would extend President Nursultan Nazarbaev's rule until 2020. Instead, normal presidential eletions should be held, in which Nazarbaev may participate. The Kazakh parliament earlier this month voted to hold a referendum on whether Nazabaev's rule should be extended for another decade without elections. However, Nazarbaev himself sent the measure for review to the Constitutional Council.

Thursday, January 27, 2011

Medvedev: Foreign Investors May Be Jailed Like Khodorkovsky

Russian President Dmitry Medvedev attended the World Economic Forum in Davos, Switzerland. In his speech there, Medvedev described in detail the new opportunities the modernization of the Russian economy provides to foreign investors. In an interview with Bloomberg, Medvedev warned investors that they must be law-abiding. "Investors, Russian or foreign, should observe the law, otherwise they can get a jail term as happened with Khodorkovsky and Madoff," Medvedev stated. (video)

Tuesday, January 25, 2011

Terrorist Attack at Moscow Airport

A bomb attack at Moscow's Domodedovo airport killed at least 35 people and injured more than 100. Investigators say the explosion, which happened in the arrivals hall, was caused by a suicide bomber. President Dmitry Medvedev vowed that those behind the attack would be tracked down and punished.

Monday, January 24, 2011

Russian Court Reinstates Communist as Party Member

A court in Russia ordered the Communists to reinstate a State Duma deputy they had previously purged from their ranks. Vladislav Yurchik, a critic of Communist leaders, was expelled by the Krasnoyarsk party branch for alleged violations of party rules and “anti-party activity.” Local party officials said they would not reinstate Yurchik because the court has no authority to intervene in internal party affairs.

Friday, January 21, 2011

European Parliament Recommends Sanctions against Belarus Officials

The European Parliament adopted a resolution recommending that EU member countries introduce sanctions against Belarus officials responsible for the persecution of oppositionists during the recent presidential elections in Belarus. The Parliament proposes to prohibit issuing visas to such officials. The resolution is not binding on member countries; the binding decision may be made later this month by the Foreign Ministers of the EU countries.

Thursday, January 20, 2011

Russian Citizen Convicted of High Treason in Uzbekistan

A court in Uzbekistan convicted Russian citizen Yuri Korepanov of “high treason” and sentenced him to 16 years of imprisonment. The details of the charges are unknown because the hearings were closed to the public. Korepanov, 63, who was born in Russia, lived for 40 years in Uzbekistan, but in 2003, he obtained Russian citizenship and left for Russia. He often visited relatives in Uzbekistan and was arrested during one of his visits. Apparently, Uzbek authorities consider Korepanov an Uzbek citizen because he did not complete the formalities necessary to relinquish citizenship (only a citizen may be charged of “high treason”). Neither central Uzbek authorities nor the Russian Foreign Ministry commented on the case.

Wednesday, January 19, 2011

“Russian WikiLeaks” Publishes “Putin’s Palace” Photos

The Russian “Pirate Party” launched website, which is intended to become a Russian analogue of WikiLeaks, and invited users to send in documents related to corruption, concealment of crime, etc. The site has already published a series of photos of a palace on the Black Sea coast allegedly belonging to Prime Minister Vladimir Putin and costing an estimated $1 bln. Currently, the site is experiencing technical problems because of a massive DDoS attack. In December, a Russian businessman, Sergey Kolesnikov in an open letter to President Dmitry Medvedev stated that the palace, in the construction of which Kolesnikov participated, was predominantly paid for with money donated by Russian businessmen for Putin’s use. A Putin spokesman dismissed the report saying the building had nothing to do with Putin.

Monday, January 17, 2011

Proposal to Reduce Arbitrazh Courts' Docket

Russia's Supreme Arbitrazh (Economic) Court has prepared draft procedural amendments to reduce the caseload of the arbitrazh court system. The proposals include applying simplified procedures for disputes involving 300,000 rubles or less (~$10,000) in routine cases such as claims for rent arrears and, if the parties consent, in loan default cases. Under the simplified procedures, cases will be decided based on written submissions only, consisting of no more than four documents filed by each party.

Under the proposals, the Moscow Arbitrazh Court's caseload would be reduced by transferring cases against federal agencies to the region where the plaintiff resides and by prohibiting parties from conferring jurisdiction on the Moscow court by agreement.

Rosneft Enters into Joint Venture with BP

Rosneft and BP have agreed to work together to explore the Russian Arctic continental shelf and to extract oil and natural gas from what BP's CEO, Bob Dudley (who was forced out of Russia in 2008 related to the TNK-BP debacle), called "one of the world's last remaining unexplored basins." The two companies have also agreed to an exchange of each other's shares with BP receiving 9.5% of Rosneft's shares, and Rosneft taking 5% of BP's shares, which are worth approximately $8bn.

Saturday, January 15, 2011

Poland Objects to Russia's Report on Air Crash

Poland's prime minister, Donald Tusk, said that a Russian-led investigation into the air crash near Smolensk, Russia that killed the Polish president and other top officials was "incomplete", and vowed that his government would not accept the "unilateral account of the crash." Among other things, the report said that General Andrzej Blasik, commander of the Polish Air Force, was mildly intoxicated when he entered the cockpit shortly before the crash, and his presence distracted the pilot. The report did not find that shortcomings by Russian air traffic controllers were a factor in the crash. Despite his criticism of the report, Tusk nevertheless stated that he hoped improved relations between the countries would continue -- a sentiment echoed by Russia's foreign minister, Sergey Lavrov.

Kazakhstan Approves Third Decade of Rule for Nazarbayev

Kazakhstan's Parliament approved a referendum that would extend the rule of President Nursultan Nazarbayev until 2020.  More than half of Kazakhstan's nine million registered votes signed a petition in support of the referendum, leading one member of Parliament to declare that "[t]he will of our people is law."  The proposed referendum would avert potential challenges to President Nazabayev in elections scheduled for 2012 and 2017.

Friday, January 14, 2011

First Application of New Russian Mediation Law

Russia's new mediation law, which went into effect on January 1, was first applied to a corporate dispute in a case filed in the Omsk Arbitrazh Court over the validity of a decision by the general meeting of shareholders of a closed joint stock company. The case was referred to professional mediators at the court's suggestion during a preliminary hearing. The case also ushered in Russia's first use of video conferencing for a court hearing; the parties were from four different regions.

Thursday, January 13, 2011

Russian Pyramid Scheme Founder Vows Comeback

Sergei Mavrodi, who in 2007 completed a four-year prison term for fraud in connection with his mid-1990s pyramid scheme MMM, is proposing to create an internet investment program through WebMoney that according to him will yield monthly returns of 20-30%. Several government agencies are investigating Mavrodi's activities and assert that current legislation is sufficient to prevent a repeat of the MMM fiasco.

Belarus Threatens Closure of Local Helsinki Committee

Authorities in Belarus have issued a written warning, accusing the prominent human rights group, the Helsinki Committee, of "unlawfully distorting information" about the situation in Belarus amid a crackdown of opposition to President Lukashenko. The group, which has operated in Belarus for 15 years, recently sent a letter to the United Nations detailing the intimidation of lawyers for opposition leaders arrested after protesting Lukashenko's election victory. More than 30 opposition leaders face a maximum of 15 years in prison for their roles in the protest. The European Union is considering the imposition of sanctions against top Belarussian officials, including Lukashenko, in connection with government actions following the opposition protest. According to Belarussian law, if two warnings are issued for the same offense in one year, the organization can be liquidated. In an effort to avoid closure, the Helsinki Committee plans to appeal the warning.

Friday, January 7, 2011

Dutch Court Hands Yukos US$ 1.2 billion; Rosneft Lodges ECHR claim

The Dutch Supreme Court has handed the shareholders of Yukos another victory by upholding an appeals court decision to unfreeze US$ 1.2 billion in assets held by Yukos Finance B.V., finding that Promneftstroy, a former subsidiary of Rosneft, did not have a legitimate claim to the funds.

Last year, the same court issued a controversial decision in an unrelated case, upholding a $400 million arbitration award in favor of Yukos Capital B.V. against Rosneft, even though that award had been annulled in Russia, where the arbitration took place. Rosneft has paid that award, but has now lodged a claim against the Netherlands for breaching the company's rights under the European Convention for Human Rights. Reuters, 7 January 2011 (reporting on unfreezing decision), 29 December 2010 (reporting on ECHR claim)

Monday, January 3, 2011

Opposition Members Arrested In Moscow Following New Year's Eve Protests

Boris Nemtsov, a prominent Russian opposition leader, was among 70 people arrested in Moscow following New Year's Eve protests against restrictions on freedom of assembly.   Despite a Moscow City Hall decision to allow the protest rally, Nemtsov received a 15-day jail sentence, with other leaders receiving similar or lesser sentences.   Although it is unclear exactly what prompted the arrests, Olga Shorina, a spokesperson for Nemtsov and his political group, Solidarity, said that Nemtsov was ultimately charged with public swearing and resisting arrest.  According to the Solidarity website, opposition supporters were outraged by the arrests, and at least twenty were detained while picketing in support of Nemtsov. 

Russia Begins Oil Shipments to China via East Siberian-Pacific Ocean Pipeline

On January 1st, Russia began shipments of crude oil to China via an East Siberian-Pacific Ocean (ESPO) pipeline.  According to Igor Dyomin, a spokesman for Russian oil monopoly Transneft, "[w]e plan to pump 1.3 million tons of oil [to China] in January."  Crude oil market participants expect the ESPO pipeline to double Russia's oil sales to China, which had totaled 12.8 million tons for the first ten months of 2010.  At a cost of $25 billion, the ESPO pipeline is the largest infrastructure project in post-Soviet Russia.  Its second stage is expected to be complete in 2013, and at 4,070 km, the ESPO pipeline will be the world's longest.