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Johnson's Russia List


July 19, 1999    
This Date's Issues: 3398 •   

Johnson's Russia List
19 July 1999

[Note from David Johnson:
1. Reuters: Timothy Heritage, Russian premier demands end to media war.
2. Itar-Tass: Exchange Program for Young Russian Leaders to Start Monday.
(with US).

3. Washington Post editorial: Antisemitism in Russia.
4. New York Times editorial: Russia's Nuclear Defense.
5. Reuters: Moscow mayor blasts foes, backs Primakov.
6. Itar-Tass: Primakov Says He Is in Constant Contact with Luzhkov.
7. Peter D. Ekman: Itogi.
8. Martine Self: Mensa in Russia.
9. Stratfor commentary: Are Russian Security Forces Again Acting Without 
Presidential Approval?

10. Jerry F. Hough: Re: 3396-Shapiro/Hough.
11. T. S. White: Entreprenuer 4 (Documentation).
12. Jamestown Foundation Monitor: RUSSIAN GENERALS TALKING LOUD...BUT ARMED 

13. AP: Angela Charlton, Prices, Turmoil Hurt Russia Tourism.]


Russian premier demands end to media war
By Timothy Heritage

MOSCOW, July 19 (Reuters) - Russian Prime Minister Sergei Stepashin told two 
top television stations on Monday to end a politically tinged war of words 
that has erupted before parliamentary and presidential elections. 

``I watched television last night. The channels do nothing but attack each 
other. They do not cover important events, as if there are no problems other 
than their own in the country,'' Stepashin told a government meeting. 

Television helped President Boris Yeltsin secure re-election in 1996, and 
Stepashin's remarks showed how closely the Kremlin and the government are 
watching the media before a parliamentary election in December and a 
presidential poll due in mid-2000. 

Russian Public Television (ORT), in which the state has a controlling stake, 
and the commercial channel NTV exchanged jibes at the weekend, adding spice 
to a long-running rivalry that has heated up as the elections near. 

ORT said NTV, which often criticises Yeltsin and the Kremlin, was deep in 
debt. NTV, in which natural gas monopoly Gazprom (GAZP.MO)(GAZPq.L) has a 30 
percent stake, hit back by saying the figures had been manipulated. 

NTV's weekly current affairs programme, Itogi, suggested it was the victim of 
a campaign conducted by two figures associated with the Kremlin -- Boris 
Berezovsky and Alexander Voloshin. 

Voloshin, the Kremlin chief of staff, is chairman of ORT's board. 

Berezovsky, a media and business mogul who has contacts with Yeltsin's 
family, has long been associated with ORT and is at odds with NTV and 
Vladimir Gusinsky, head of the Media-Most group that owns the television 

Berezovsky hit out at Media-Most in a newspaper interview published last week 
and said: ``And if you are interested in my personal relations with this 
group, I will reply that today it is very negative.'' 

NTV Director General Oleg Dobrodeyev told the Kommersant newspaper that his 
channel faced a concerted attack. Criticising ORT, he said: ``We are 
professionals and should solve our problems in other ways.'' 

Most of Russia's mainstream media united behind Yeltsin in his re-election 
campaign in 1996, a factor widely considered crucial in his defeat of 
Communist rival Gennady Zyuganov. 

Gusinsky, who also owns the Sevodnya newspaper, and Berezovsky, who has 
stakes in the Nezavisimaya Gazeta and Kommersant newspapers, were then united 
behind the Kremlin leader and opposed to the Communists returning to power. 

But Gusinsky and Berezovsky are now rivals, the media are in general split 
over which candidates and parties to back in the coming elections, and the 
dividing line between reformers and non-reformers is now much less clear than 
in 1996. 

Yeltsin cannot seek a third term but wants to ensure the next president is a 
like-minded leader who will not investigate his or his family's actions 
during his years as president. 

Yeltsin created a ministry for the media this month which has prompted fears 
that the Kremlin wants to tighten controls on the media before the coming 
elections. It denies the charge. 


Exchange Program for Young Russian Leaders to Start Monday.

WASHINGTON, July 19 (Itar-Tass) - One of the largest exchange programs for 
young Russian leaders, implemented under the auspices of US Congress, will be 
officially started in Moscow on Monday, and later -- in the American capital. 

Under the Open World program, 2,000 young Russian politicians and 
administrators will visit -- within a period from July 26 to September 30 -- 
various US towns to see activities of the US government and Americans' life. 

The US envoy to Russia, James Collins, and director of the US Congress 
Library James Billington who arrived in Moscow specially for the occasion, 
will announce the beginning of the project implementation on Monday. 

A joint news conference by James Billington and Russian Ambassador to the 
United States Yuri Ushakov, devoted to the event, will be held at the 
building of the US Congress in Washington on Tuesday. 

Organizing one of the largest exchange programs in the United States over 
many decades, the Congress acknowledges the unique significance of the 
development of cultural and political relations between Russia and the 
American people, according to the address to the participants of the Moscow 

Hopefully, the opportunity to receive such numbers of present and future 
leaders from all over Russia will strengthen the ties between our countries, 
which were established by the exchange programs implemented before, it said. 

The first group of 250 young political leaders of various ranks will leave 
for the United States within a week starting July 25. A ten-day tour of the 
United States is envisioned for each participant. 


Washington Post
July 19, 1999
Antisemitism in Russia

THE RECENT stabbing of a Russian Jewish leader inside the Choral Synagogue, 
just blocks from the Kremlin, represents an escalation of the antisemitic 
attacks that have proceeded in Russia at a low but disturbing level through 
most of this decade. In Moscow alone, there have been at least seven cases of 
arson and bombing attacks at synagogues and other Jewish sites, and 
cemeteries and synagogues have been targets outside the capital too. This 
time, a 20-year-old man, reportedly tattooed with a swastika, entered the 
synagogue and repeatedly stabbed Leopold Kaimovsky, 52, director of the 
Jewish Cultural Center. The assailant from his jail cell described his attack 
as a "political act" against the "evil" of Judaism.

Americans know only too well how difficult it is for any society to free 
itself of racism and racist violence. Russia, in the midst of wrenching 
economic and social change, can offer more plausible explanations than many 
other countries for why such poisons might spread. But a measure of any 
society is the vigor with which it fights against such hatred. In this 
regard, Russia's performance is mixed at best.

Antisemitism is an old scourge in Russia, and its prevalence or absence at 
any given time is as good an indicator as any of the general health and 
openness of the country. President Boris Yeltsin for the most part has seemed 
to understand this, and throughout most of his time in office has spoken out 
for tolerance and against prejudice. Many Jews have prospered in the new 
Russia, and Jewish culture and religion have resurfaced after decades of 

But other political leaders are open in their antisemitism, and no one in the 
establishment has been firm enough in condemning them. Extremist leaders, 
such as Alexander Barkashov and Communist legislator Albert Makashov, attack 
Jews openly and venomously, and more mainstream leaders cannot summon the 
political will to disown them. Far from condemning party members such as Mr. 
Makashov, Communist leader Gennady Zyuganov -- a once and future presidential 
candidate -- himself speaks darkly of Zionist plots and implicitly blames 
Jews for Russia's economic troubles.

Jewish emigration to Israel, which had slowed in the past few years, has 
picked up again, in response both to rising antisemitism and new economic 
troubles -- two phenomena that are themselves partly related. That Jews can 
leave should be welcomed. But many Jews in Russia want to stay, to make a 
life that is both Russian and Jewish. Whether they can do so will be an 
important sign of the overall viability of Russia's democratic experiment.


New York Times
July 19, 1999
Russia's Nuclear Defense

Budget cuts and political changes have so weakened Russia's once-formidable 
armed forces that Moscow's military planners now feel obliged to rely on 
nuclear weapons to defend their frontiers against even a nonnuclear attack. 
That alarming shift in planning was underscored by the extensive war games 
Moscow recently conducted, the largest such maneuvers since 1991. Faced with 
a simulated invasion by an unnamed Western foe, Russian forces first 
responded with conventionally armed defenders. But when these failed to halt 
the attacker's progress, Russian commanders felt compelled to order nuclear 

Moscow has historically been responsible about nuclear weapons use. Still, 
Americans should be concerned about the new defensive plans. Russia has 6,000 
nuclear warheads that can reach American soil and thousands more available 
for use in Europe. 

The deep nuclear weapons cuts of the late 1980's and early 1990's have halted 
in recent years. While Russia and America now have only about half as many 
intercontinental nuclear warheads as they did at the cold war's peak, that is 
still nearly three times as many as military experts think they need. Even 
the treaty negotiated by President George Bush and President Boris Yeltsin, 
which would cut both sides to about 3,500 warheads, has not yet been ratified 
by Russia's parliament. 

Paradoxically, the way around that obstacle may be to negotiate deeper cuts, 
as the Clinton Administration is now prepared to do. Under the last treaty, 
Russia would have to replace multi-warhead missiles with costly new 
single-warhead missiles to reach the ceiling of 3,500. 

A new treaty that set ceilings at between 2,000 and 2,500 warheads would 
spare Russia much of this expense. Given Moscow's desperate financial plight, 
the lower ceiling could attract many parliamentarians. 

The new Administration position was announced when President Clinton and Mr. 
Yeltsin met in Germany last month. It came as part of a broader agreement 
that also included a new willingness on Russia's part to discuss changes in 
the treaty restricting defensive missile systems. Despite lingering tensions 
on other issues, this may be a promising moment for progress on arms control. 

Mr. Clinton and Mr. Yeltsin are nearing the end of their terms. Both could 
enhance their records by completing a major nuclear arms reduction treaty. 
Mr. Yeltsin, who earlier did so much to turn Russia away from the cold-war 
nuclear arms race, should not leave office with Moscow's finances drained by 
a bloated nuclear arsenal and Russia's generals tempted to use the weapons. 


Moscow mayor blasts foes, backs Primakov
By Oleg Shchedrov

MOSCOW, July 18 (Reuters) - Moscow Mayor Yuri Luzhkov, outraged by legal 
action against his wife's firm, blamed political foes including President 
Boris Yeltsin's aides on Sunday of playing dirty tricks ahead of crucial 

Luzhkov said in a television interview that post-Soviet Russia had failed to 
become a law-based state and pointed at former prime minister Yevgeny 
Primakov as a politician who could carry out the task if elected president 
next year. 

``We have failed to build a market economy so far,'' Luzhkov said. ``But we 
should have built a law-based society. One does not need money for that, only 
good conscience,'' he added. 

Luzhkov, a leader of the centrist Fatherland party and a vociferous critic of 
the way economic reforms have been carried out by Russia's changing 
governments, is preparing for a parliamentary election in December. 
Luzhkov, who wants to form a centrist coalition that could dominate the next 
parliament, has said he could run for president if he saw no other candidate 
suitable for Russia. 

The popular Moscow mayor has complained in the past that the Kremlin seeks to 
ruin his election campaigns and possibly his political career. 

He said that a recent police inquiry into the documents of his wife's firm 
undertaken, according to authorities, as a part of a wider investigation into 
suspected illegal capital flight, was part of a plot against him. 
``This is obviously an arbitrary rule by the authorities and an example of 
the use of power structures in the interests of the political struggle,'' 
Luzhkov said adding that Yeltsin's administration was part of the conspiracy. 

However, Luzhkov stopped short of directly criticising Yeltsin and made clear 
he was not calling for immediate action. 

``We should not allow a revolution,'' he said. ``Parliamentary election 
should take place as scheduled in December and presidential polls next 

Political analysts say Luzhkov's chances in the parliamentary election will 
strongly depend on whether he wins the support of Primakov, who remains the 
most popular political figure in Russia months after being sacked by Yeltsin. 

Analysts say both men harbour presidential ambitions. This meant that both 
treated the idea of an alliance with caution. 

But in a surprise statement, Luzhkov made clear he was ready to accept 
Primakov's leading role. 

Asked whether he saw Primakov as a presidential candidate who suited him 
enough to drop his own bid for that office, he said: ``Yes he suits, quite 

``Primakov is a man who can pacify our country, who has serious constructive 
goals and who will not allow arbitrary rule, into which Russia is sinking 
now, to continue.'' 


Primakov Says He Is in Constant Contact with Luzhkov.

MOSCOW, July 19 (Itar-Tass) - Russian ex-premier Yevgeny Primakov said on 
Monday that he was in constant contact with Moscow mayor Yuri Luzhkov, but 
refused to disclose whether he was planning to join Luzhkov's Otechestvo 

"I highly treasure telephone calls from many governors, I am in constant 
touch with my successor Sergei Stepashin, Moscow mayor Yuri Luzhkov with who 
I have warm and humanly relations", Primakov told Tass by telephone from 
Switzerland where he is recuperating from a back spine surgery. 

On Sunday Luzhkov said that he would like Primakov not only to head 
Otechestvo party ticket at the parliamentary elections, but would prefer him 
as the next president of Russia. 

Earlier Luzhkov, who is widely seen as a presidential hopeful, said that he 
himself may run for president only if he does not see a worthy candidate who 
he would support. Asked by an NTV anchorman whether Primakov is such a 
person, Luzhkov answered in the affirmative. 

"Yes, he is. I am not a power-seeking man", Luzhkov said. Primakov gave no 
comment, but said that "I have not quit active life and I am constantly 
working". He added that he was receiving numerous proposals from Russia and 
had already rejected some of them. 

"Much time is taken by considerable correspondence which comes to me", he 
said adding that he had rejected a proposal to run for the governor of the 
Sverdlovsk region in the Urals. 

"The other day I sincerely thanked the Ural people who have collected many 
signatures to have me named for the post of the Sverdlovsk governor. I was 
gratified, but refused", Primakov said. 

He said he was also in contact with some foreign leaders. nec/ 


From: "Peter D. Ekman" <>
Subject: Itogi
Date: Sun, 18 Jul 1999 

This week's Itogi ended up with 2 amazing segments. In the next-to-last
segment Moscow Mayor Yuri Luzhkov was interviewed by Yevgeny Kisilyov about
the criminal investigation against the mayor's wife's firms. The mayor's
words all seemed to be quite reasonable - the amazing thing was his
attitude. He seemed to be crushed - almost ashamed. One viewer here said
"The dog knows whose meat he ate." Kisilyov lead him through his paces,
suggesting answers, and Luzhkov followed tamely.

At the very end of this interview, Kisilyov asked if there was a
presidential candidate that Luzhkov could support. Luzhkov answered
"Primakov." Kisilyov, smiling like the Cheshire Cat, wanted to end the
interview right there, but Luzhkov added a few kind word about Primakov.
It looks like NTV is pushing a Luzhkov-Primakov alliance, with Primakov as
the presidential candidate.

The final segment was on ORT (Channel 1) declaring war on NTV. Berezovsky
and the Head of the Presidential Administration Voloshin were described as
the main villains. Kisilyov was pissed off (I'm sorry that's the only way
I can describe it.) If ORT hasn't declared war on NTV, then NTV has
certainly declared war on ORT.


From: "Martine Self" <>
Subject: Mensa in Russia
Date: Sun, 18 Jul 1999

Over the past year, I've been involved in the process of attempting to
form an expat group (Moscow Mensa) and a national group for Russians. Mensa
was originally launched in Oxford, UK in 1946 as a society to act as a
point of contact for those with and IQ of 148 and above. To date I have
located only three Russian Mensans. Given that normal curve theory that 2%
of the population is likely to be eligible, with a population of 146
million (or thereabouts) some nearly 3 million are theoretically eligible.
Such a large country should not be the most glaring omission from the
global Mensa network, which numbers more than 100,000 in 42 countries. As
membership of Mensa is not determined by wealth, nor contacts, nor
religion, political affiliation, class and so on, this is an opportunity
for ordinary Russians to be able to benefit from their own intrinsic
intellectual abilities and perhaps take some pride in their achievement of
passing the Mensa test. Expats based in Moscow, who pass the test will be
welcome to join the more informal Moscow Mensa group which, in the past,
has met on a monthly basis. 

The test is non-language based and is offered free of charge. A testing
session will be held on Friday at 7pm. It is comprised of 36 questions and
lasts for 40 minutes. Those who are interested, please contact me offline
and I will provide further details. We hope that examinations will be
offered periodically, once there is an initiative group of Russian Mensans
in Moscow. 

For those who may not be able to attend this weeks examination (and even
for those who will) and wish to find out more about Mensa, please visit 

If you're tempted to try the online test, be warned that in my opinion, it
seems to be more difficult than the actual test,so don't be too discouraged
if you try it and fail. 


Stratfor commentary
1655 GMT, 990717 - Are Russian Security Forces Again Acting Without 
Presidential Approval?

Chechen Security Minister Turpal-Ali Atgeriyev was released from Moscow’s 
Matrosskaya Tishina prison on the afternoon of July 17, a day after his 
surprise arrest at Moscow’s Vnukovo airport. Atgeriyev, who was in Moscow to 
prepare for upcoming talks between Russian President Boris Yeltsin and his 
Chechen counterpart Aslan Maskhadov, was arrested by Russian Interior 
Ministry troops for his alleged role in the January 1996 attack by Chechen 
rebels on the Dagestani town of Kizlyar, which left some 13 Chechens and 20 
Russian troops dead. 

Atgeriyev was reportedly interrogated by the interior ministry, and was 
released after "supplying information which can be used by the ministry," 
according to a ministry source cited by the wire services. However, Russia’s 
Interfax news agency cited judicial sources as saying, "The participation and 
role of Atgeriyev in the crimes committed by the Raduyev band were not 
sufficiently well-studied," adding that his arrest was "premature and 
ill-founded." Charges of banditry, hostage taking, and terrorism against the 
Chechen security chief have been dropped.

Atgeriyev’s arrest will certainly put a damper on negotiations between 
Chechnya and Russia, as he must have traveled to Moscow with at least a tacit 
guarantee of safe passage. From the Chechen point of view, Atgeriyev had 
diplomatic immunity. Maskhadov must now think twice about leaving Chechnya, 
particularly to venture to Moscow. As for Russia, it has placed the 17,000 
interior ministry troops surrounding Chechnya on high alert against possible 
retaliatory strikes by Chechen forces.

Given the predictable effect the arrest would have on negotiations, a more 
important question arises, who ordered the arrest and why? To put it more 
bluntly, did Yeltsin approve this arrest, or have we just seen another 
Slatina incident, where Russian security forces handed Yeltsin a fait 
accompli upon their arrival in Kosovo? The Chechen government has accused 
Russia’s Interior Ministry of staging attacks against non-existent "rebel 
bands," in order to deceive Yeltsin and fabricate a crisis in the north 
Caucasus. And oddly, despite the very public charges laid out against 
Atgeriyev, Russian Prime Minister Sergei Stepashin called the reasons behind 
the arrest a "state secret." Finally, both the Yeltsin and Maskhadov 
administrations are attempting to downplay the incident and not let it stand 
in the way of talks. 

Unless this was an unusually risky negotiating ploy by Yeltsin, it appears as 
though elements in the interior ministry are opposed to the direction 
Russo-Chechen relations have been taking. And if this is the case, Yeltsin 
may need to do more than order weekly security council meetings if he wishes 
to rein in the disgruntled hard liners among his officer corps.


From: Jerry F. Hough <>
Subject: Re: 3396-Shapiro/Hough

Judith Shapiro may not like my economics, but I am not defending rich 
countries. Poor countries should and do have more protectionism than 
rich ones. It protects frightened workers pouring into cities as much as 
manufacturers, and if it doesn't occur they turn to Communism and fascism 
as they did in Europe. Lenin's Imperialism--The 
Highest Stage of Capitalism had enormous appeal in the Third 
World in the 20th Century precisely because it told workers that 
integration into the world economy would not let them develop 
manufacturing. Fortunately, he was wrong and tariffs let them 
achieve that goal, most notably in recent decades in the Pacific Rim. 

But like my economics or not, Shapiro should recognize that I was 
right on my basic point: the limitations on steel imports IS the way 
modern capitalism works. John Helmer's very full discussion of the 
steel negotiations is very illuminating. I disagree only to the 
extent that competitiveness reflects exchange rates, and I think that 
the present exchange rates reflect a crazy policy. But, of course, 
the US behavior is discriminatory. Of course, US behavior violates 
WTO norms. It has done so repeatedly in its relations with Europe and 
even Japan. Japanese and European behavior deviate in a major way 
from the principles of free trade. Advanced capitalist countries 
usually don't have much excuse for that, but countries at the early and
middle stages of capitalism are a very different story. To answer Helmer 
specifically, I absolutely think that the Russians should have high 
tariffs against chicken legs and a whole series of other consumers' 
goods even if that is not advantageous to Tysons Food. Russia should be 
following a policy to increase steel demand at home and to increase 
agricultural production, not to increase steel and fertilizer exports to 
profit corrupt exporters. Obviously it should import bananas instead of 
growing them, and the same is true of feed grain as it rebuilds its 
herds. However, it should study the real experience of other capitalist 
countries, not the pious theories of their neoliberal economists. 


Date: Fri, 16 Jul 1999 
From: "T. S. White" <> 
Subject: Entreprenuer 4 (Documentation)

The entreprenuer who wishes to engage in business in Russia must form a
company there. It is illegal for a foreign individual to do business in
Russia. As the subject of the previous essay, the type of company
formed will depend on the business needs of the entreprenuer. This
essay will take a cursory look at the types of documentation required to
form a company in Russia.

Before entering a discussion of documenting a Russian company it is
necessary to issue a disclaimer. The documents in the discussion that
follows are the ones that are currently supported by reliable
information. This list of documents is subject to change at the
discretion of the registration chamber. The list may be different when
an entreprenuer begins registration. The wise businessman would include
a definition of the current list of documents in the terminal stages of
a feasibility study.

There are several levels involved in documenting a company in Russia. 
The first level begins in the entreprenuer's business home outside of
Russia. The place to start is with the formation of a corporation. The
formation of a corporation is necessary to comply with the definition of
the documents required. If the businessman already owns a corporation,
outside of Russia, the documentation from it may be satisfactory. In a
case where there is an existing corporation it may be in the best
interest of asset protection to establish a new entity for the Russian
venture. It is the founding documents for the corporation that create
the foundation of a Russian company. Certain of the founding corporate
documents are common to any form of company registration in Russia.

The next level of documentation is the certification of the company
documents. The documents common to all registrations must be
authenticated in the country of origination. The required
authentication is a two step process. First the document must be
notarized. Then the document must receive an "Apostille" (Pronounced
applestile or apistle) from the government body that supervises
notarizations in the country, or state, of origin. It is impossible to
obtain an apostille for a document without a prior notarization of the
document. The apostille should be in the format designed for the
Russian Federation. The clerk at the desk where the apostille is issued
will probably ask for the country of destination. If the clerk does not
ask for the country of destination it should be clearly stated that the
documents are going to Russia. When the documents are returned, with
the apostilles attached, keep them intact. For reasons that may seem
ludicrous to most busniess people it is important to make all necessary
copies of the documents before receiving the apostilles and to avoid any
handling that would damage or detach the apostilles. Any minor
alteration, i.e. extra staple hole, may be sufficient reason for the
registration chamber to reject the registration application. The
documents that should receive these certifications are the corporate
Articles of Incorporation; By-Laws; a letter from the foreign company's
bank, or other financial institution, indicating the financial soundness
of the company; a Resolution of the Board Of Directors of the company to
establish a foreign company and appointing the company agent, including
the powers granted to the company representative (AKA power of
attorney), and this should include the right to open any necessary bank
accounts for the Russian company. Now with these certifications the
documents are ready to assemble and transport to Russia. It is prudent
to create and take at least two fully certified sets of documents. 
Also, the astute businessman will take along the corporate seal for the
founding company. As the registration process develops the Russian
registration company will add several other documents to the package
obtained from the applicant business.

For the formation of a Joint Venture a guideline list of documents would
include the following:

Two original copies of the by-laws of the company. This statement in
itself seems a contradiction. The documents intended are the original
by-laws and a certified copy of the original. Both copies of the
by-laws should have apostilles attached.

One certified copy of the articles of incorporation of the business
applying to register as a partner in a joint venture. This copy should
have an apostille attached.

A document indicating the financial soundness of the foreign partner
issued by the company's bank or other financial institution. The
document required is a letter from the company's bank, or other
financial institution, that states a solvent relationship. It is not
necessary to mention the amount of funds on deposit. This document
needs an apostille attached. 

Two original copies of the founding agreement for the joint venture. 
Again this means an original and a certified and notarized copy. The
founding documents for the joint venture must be signed by principals of
all the founders. The founding documents must be signed by the Russian
partners, the principals usually required are the Russian general
director and the deputy director or chief accountant.

Notarized copies of the founding documents of the Russian Partners. 
State and municpally owned Russian partners (where the government owns
more than 50%) must have a written agreement from the local Property

Two copies of a written application. The application should include a
separate statement covering the scope of activities of the joint venture
in accordance with it's by-laws. These documents should be signed by
the founders and company seals affixed where indicated.

Prior permission from the Anti Monopoly Committee must be obtained if
the investment in the joint venture exceeds a specified level. This
level must be verified with the Russian registration company prior to

A document confirming the legal address of the joint venture in Russia.

Potentially a requirement for receipts indicating the advance deposit of
a minimum captilaization.

A copy of the receipt verifying that the registration fee has been paid.

For the registration of a Foreign Branch Office a preliminary list of
documents would include the following:

Two original copies of the by-laws of the company applying to register a
Foreign Branch Office. The documents intended are the original by-laws
and a certified copy of the original. Both copies of the by-laws should
have apostilles.

One certified copy of the articles of incorporation of the company
applying to register a Foreign Branch Office. This copy should have an
apostille attached.

A document indicating the financial soundness of the foreign company
issued by the company's bank or other financial institution. The
document required is a letter from the company's bank, or other
financial institution, that states a solvent relationship. It is not
necessary to mention the amount of funds on deposit. This document
needs an apostille attached.

Two copies of a written application. The application will be completed
by the Russian registration company. These documents should be signed
by the founders and company seals affixed where indicated.

Two original copies of a resolution of the board of directors of the
founding company stating it's intent to establish the Foreign Branch
Office, authorizing an agent to act on it's behalf, and deliniating the
activities of the company and the powers of the agent, including the
opening of bank accounts. This document must have an apostille

Two original copies of the charter of the Foreign Branch Office. This
is the original charter (Which will be written and signed by the
director of the Foreign Branch Office) and a certified copy of the

A document confirming the legal address of the Foreign Branch Office in

Payment of a registration fee in rubles.

For the registration of a Representative Office the following list of
preliminary documents would be a begining:

Two original copies of the by-laws of the company applying to register a
Representative Office. The documents intended are the original by-laws
and a certified copy of the original. Both copies of the by-laws need
to have apostilles.

One certified copy of the articles of incorporation of the business
applying to register a Representative Office. This copy should have an
apostille attached.

A document indicating the financial soundness of the foreign company
issued by the company's bank or other financial institution. The
document required is a letter from the company's bank, or other
financial institution, that states a solvent relationship. It is not
necessary to mention the amount of funds on deposit. This document
needs an apostille attached.

Two copies of a written application for registration. This application
will be prepared by the Russian registration company. These documents
should be signed by the principals and company seals affixed where

Two original copies of a resolution of the board of directors of the
founding company stating it's intent to establish the Representative
Office, authorizing an agent to act on it's behalf, deliniating the
activities of the Representative Office, and the powers of the agent
including the opening of bank accounts. This document must have an
apostille attached.

Two original copies of the charter of the Representative Office. This
is the original charter (Which will be written and signed by the
director of the Representative Office) and a certified copy of the

A document confirming the legal address of the Representative Office in

Payment of a registration fee in rubles.

A review of the documents listed above, for the various forms of company
registration, will certainly reveal a common core of forms that apply
to each. However, the documents required will vary from city to city,
and oblast to oblast. It is imperative that the entreprenuer define
exactly which documents are required, for the preferred form of company
and in the desired locale, before they approach the registration
process. If the novice businessman in Russia does not define the
required documents, and obtain them in advance of the registration
process, the probability is high that the entreprenuer will make
redundant trips, to the business home of the company, to obtain
documents and certifications. 

A question that begs to be answered in a discussion of business
registration in Russia is the length of time required to register. The
answer is twenty-one days. It is the law in Russia that a registration
chamber must complete an application for registration, either approved
or rejected, within twenty-one business days. When calculating the time
interval for registration the entreprenuer needs to use a Russian
calendar that indicates all Russian hollidays. In Russia it is
difficult to discover a period of twenty-one consecutive business days
that does not contain a holliday. The entreprenuer needs to be prepared
for the fact that not a lot of work will get done for a day before a
holliday and several days thereafter.

Of the documents listed for registering a company some will be generated
in Russia. The most probable candidates for originataion in Russia are
any documents pertaining to a Russian partner, the charter for the
Russian company, the document confirming the company's Russian address,
the application for registration, and receipts for payments. The
Russian registration company may offer to register the company to a
"Rented address" where the business has no physical presence. This
practice is common and presents no apparent downstream problems. It is
suggested that the entreprenuer avoid registering the company to a
rented residential flat.

Before presentation of the document package to the registration chamber,
for consideration, all documents must be in Russian, certified copies,
and notarized by a Russian notary if notarization is required. It is
advisable to have all translation done at the local Russian Chamber of
Commerce and Industry. This is a government office that specializes in
interpretation, certifications, and some testing. The advantage of
doing this is that there is far less likelyhood that the registration
chamber will object to the translations if they are done by the Russian
Chamber of Commerce and Industry.

If the entreprenuer has accumulated the correct documents and presented
these to a competent and reliable registration company the registration
process should go smoothly. The businessman will need to pass an
interview referred to as a "Tax inspection". This is a two page
application, completed by the registration company, and an interview
with the tax inspector in the district of proposed registration. A
representative of the registration company should accompany the
entreprenuer to this interview. The entreprenuer will need to have a
Russian accountant to designate as the company accountant. A referral
from the registration company is a reasonable way to approach this for
the purposes of registration. Questions may arise during the
registration process that will need to be resolved. Proper advance
documentation will hold these to a minimum. Near the end of the process
the entreprenuer will need to go to a Russian notary with a
representative of the registration company. This is when the signature
cards that authorize bank accounts will be signed. These cards are an
essential part of the registration process and should be obtained during
the registration. During the signing of the bank signature cards the
entreprenuer will use the official stamp (Seal) of the Russian company
for the first time.

At the end of the registration process the entreprenuer will be holding
a package of documents. That package contains the business
registration. There remain numerous actions that will need to be
completed before any effective level of business can occur. The actions
that follow registration will be the subject of the next essay.


Jamestown Foundation Monitor
19 July 1999

RUSSIAN GENERALS TALKING LOUD... Recent weeks have seen a more boastful and
a more seemingly belligerent military leadership emerge in Russia. Although
President Boris Yeltsin's weakening grip on power has probably been one
factor in this development, most observers would say that the major catalyst
for change was NATO's air war against Yugoslavia. The West's Kosovo campaign
afforded Russian military and civilian hardliners alike the opportunity to
step up their already sharp criticism of the Western alliance.

These same military and political figures also used the Balkans conflict to
resurrect Cold War-era rhetoric of both an alleged confrontation between
east and west and a growing threat to Russia by NATO. For Russia's hardline
generals, the surprise dispatch of paratroopers to Kosovo on June 12
represented a rare--and, indeed, a sweet--"victory" over NATO. The military
high command simultaneously engaged in a bit more muscle-flexing during the
recent Zapad (West)-99 military exercises, during which several Russian
bombers were sent to probe NATO defenses around Iceland and Norway (see the
Monitor, June 24; July 2, 6).

President Boris Yeltsin moved subsequently to rein in the generals by
calling on them to work constructively with the West in Kosovo and by
stating that a possible attack by NATO--as was hypothesized in the Zapad-99
exercises--does not constitute the main threat to Russia's security. But
Yeltsin's admonitions lacked real credibility, given that the Russian
president himself had enthusiastically embraced the June 12 dash to Pristina
and had publicly congratulated one of its authors (see the Monitor, July 9).

More generally, of course, Yeltsin and the government were also guilty
during the long Balkans conflict of uncritical support for Yugoslav
President Slobodan Milosevic and of matching the rhetoric of Russian
hardliners in their continuous denunciations of NATO and the West. In
addition--albeit without providing any specifics--Yeltsin and top government
officials also acquiesced to calls by military leaders for a new emphasis on
rebuilding Russia's armed forces and for increased defense spending.
Meanwhile, the Russian military leadership pointed to the Zapad-99 exercises
as a proof of sorts that the country's armed forces remain a viable fighting
force, and one capable of repulsing the West.

different story. Amid the generals' crowing, there was ample evidence
suggesting that Russia's military leadership has made little if any progress
in rooting out the key sociological ills which in over more than a decade
have helped to destroy military morale and to make service a living hell for
thousands of Russian draftees. Indeed, crime and corruption in the country's
armed forces appear, if anything, to be growing, and the plight of
servicemen worsening. According to one military prosecutor, for example, the
overall crime rate in the armed forces last year was up 43 percent over the
year before, while incidents of bribery rose nearly 80 percent. A rising
crime rate among officers was a particularly ominous development; it was
reportedly up 40 percent last year and rose even faster over the first two
months of this year (Segodnya, May 7).

Russia's main military prosecutor, Colonel General Yuri Demin, told much the
same story in an interview last month. Although he claimed that overall
crime last year was down in the armed forces for the first time in many
years, that fall appeared to be attributed in large part to what he said was
a significant decrease in the number of those evading military service. With
that category of crime excepted, Demin's statistics also indicated that
crime rates within the armed forces are rising rapidly. Particularly
worrisome was what Demin said was a 44 percent increase in cases of physical
violence (Nezavisimoe voennoe obozrenie, June 15).

While he provided no details, that statistic he cited presumably refers to
so-called "nonregulation regulations"--that is, barracks violence directed
against draftees. The military leadership has long railed against this most
pernicious of practices (at least when military leaders were not denying its
occurrence). Barracks violence, some of it perpetrated by officers
themselves, has reportedly left thousands of young draftees dead or injured,
and has helped to turn young Russians--and many others in society--against
the military and military service.

The magnitude of the disconnect between the current rhetoric of the military
leadership in Moscow and real life in the armed forces was suggested by a
pair of articles published recently about Russia's Northern Fleet. One
appeared in the Defense Ministry's main newspaper and followed the Zapad-99
exercises. Pointing to the results of the exercises, it painted a relatively
rosy picture of the fleet's performance and suggested that units from the
Northern Fleet could win prizes in several different categories. It said
matter-of-factly that the exercises would help the fleet further improve its
military readiness (Krasnaya zvezda, July 13).

Only a few weeks earlier, however, a Northern Fleet newspaper had carried an
address by the fleet's commander which showed things in a considerably
different light. Admiral Vyacheslav Popov said that crime rates in the fleet
were even worse this year than last, with the overall crime rate up 23
percent and the incidents of barracks brutality up 45 percent. Indeed,
incidents of violence among servicemen now reportedly accounts for nearly 50
percent of all crimes committed in the Northern Fleet. But that is certainly
not all. What Popov called "racketeering"--the practice whereby older
conscripts forcefully extort money from the younger men--is reportedly
becoming increasingly widespread. This has compelled the younger servicemen
to steal from officers and warrant officers, and to steal equipment and
materials from the ship for sale on shore. Indeed, according to Popov,
thievery in the fleet overall has reportedly reached epidemic proportions,
to the point where "combat capacity is being undermined and lives of
servicemen are being jeopardized" (Murmansky vestnik, July 1).


Prices, Turmoil Hurt Russia Tourism
July 18, 1999

MOSCOW (AP) - The summertime sun glints off the domes of the old Kremlin 
churches nearly 21 hours a day. St. Petersburg's Hermitage Museum offers 
unprecedented access to one of the world's richest art collections. Tickets 
for top Russian orchestras cost as little as $2.

So where are the tourists?

When the Soviet Union began imploding in 1991, travel agents around the world 
prepared for a rush of tourists to Russia. The demand was there, but thanks 
to decades of isolation during the Soviet era, the tourism infrastructure 
wasn't. Eight years later, it's still elusive.

``I can't say I would recommend Russia for the weak of heart,'' said Maryann 
McAlee, a lawyer from Sunnyvale, Calif., after a recent visit. ``I knew it 
wouldn't be easy ... but I never expected it to be so exhausting.''

McAlee's introduction to Russia was a four-hour debate with officials at 
Moscow's grim international airport over her visa, which had her first and 
last names reversed. She hadn't noticed because she doesn't read Russian, the 
only language used on Russian visas.

Growth of tourism has been hurt by corruption, crime, Russia's lack of a 
customer service culture and the economic and political upheaval that has 
bedeviled the country for most of the decade.

``Potential? We've been talking about potential for years,'' Sergei Shpilko, 
deputy head of Russia's Ministry of Physical Culture and Tourism, said with a 
sigh. ``It's time to start fulfilling it.''

Russian consular officials are adept at infuriating - and sometimes scaring 
away - visa applicants. Once here, a double-pricing system forces foreigners 
to pay up to 30 times more than Russians for the same hotel room or museum 

Public restrooms are scarce, and are often a hole in the floor of a dank 
stall, invariably without toilet paper. Neither Moscow nor St. Petersburg has 
a central tourist office, and nearly all signs even at tourist sites are only 
in Russian.

Shpilko laments that no one in the government is willing to invest in the 
construction and training needed to encourage tourism in Russia - even though 
a thriving tourism industry could bring in substantial tax revenues.

The number of tourists is consistently low for a country this size. Russia 
saw fewer visitors last year than the Czech Republic, according to the World 
Tourist Organization, partly because Russia's economic meltdown and political 
upheaval last summer frightened away many visitors.

About 1.9 million tourists from outside the former Soviet Union visited 
Russia in 1998, the Tourism Ministry says. That was up from about 1.5 million 
in 1993 but down from 2.2 million in 1997.

Russia has discovered how to cater to some tourists: those with bulging 
wallets. Five-star hotels are sprinkled across Moscow and St. Petersburg. 
There are $100-a-head restaurants with French chefs and venison liver pate.

``The shopping is great, if only I could afford it,'' said Eric Ryan, a 
visitor from Chicago, fanning himself beneath the columned entrance to the 
Bolshoi Theater.

Visiting Russia with a tour group is the most common approach, but it's not 
cheap and quality can be unpredictable.

For the individual or budget traveler, hurdles are legion. The horror stories 
usually start with the Soviet-style visa process.

``Getting visas should cost 10 pounds (about $16) and take a week,'' said 
Justin Redway, a travel agent at Overseas Business Travel in London. ``In 
reality, it often costs 100 pounds ($160) and takes several.''

Sometimes politics snags things. NATO's bombing of Yugoslavia - which Russia 
staunchly opposed - prompted the Russian Embassy in London to turn down a 
rash of visa applications, Redway said.

The next challenge for the foreign visitor is Russian airports. At Moscow's 
Sheremetevo-2, arriving passengers are herded into a musty passport control 
hall that has long lines even on slow days. Customs rules change frequently 
and vary depending on who is enforcing them. Phones and maps are only 
sporadically available.

Still, there are some signs Russia is growing more tourist-friendly.

The Hermitage Museum, with IBM's help, recently opened a computer center 
introducing visitors to its collection of almost 3 million works, only a 
fraction of which are on display on the museum's walls.

Adventure travel and eco-tourism have gained a foothold, offering rock 
climbing tours on volcanoes in Kamchatka in the Far East, excursions through 
uranium mines and rides in MiG jet fighters.

But, Shpilko concedes, ``It will be a long time before Russia attracts 
ordinary tourists.''


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