No passion so effectually robs the mind of all its powers of acting and reasoning as fear. - Edmund Burke
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 1, No. 160, Part I, 14 November 1997



A daily report of developments in Eastern and Southeastern Europe,
Russia, the Caucasus and Central Asia prepared by the staff of Radio
Free Europe/Radio Liberty.

This is Part I, a compilation of news concerning Russia, Transcaucasia
and Central Asia. Part II covers Central, Eastern, and Southeastern
Europe and is distributed simultaneously as a second document.
Back issues of RFE/RL NewsLine and the OMRI Daily Digest are online
at RFE/RL's Web site:
http://www.rferl.org/newsline

EUROPE: Has The West Embraced The East? -- a five-part series about
Europe's multilateral organizations and whether and how they've
aided the integration of Central and Eastern Europe with the West --
is online at the RFE/RL Web site.
http://www.rferl.org/nca/special/multilateral/index.html
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Headlines, Part I

*DUMA POSTPONES BUDGET DEBATE, REJECTS THREE TAX LAWS


*FIRST HEAD ROLLS IN BOOK ROYALTIES SCANDAL


*KAZAKHSTAN TO EXPORT OIL VIA GEORGIA, BULGARIA


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RUSSIA

DUMA POSTPONES BUDGET DEBATE, REJECTS THREE TAX LAWS... The
State Duma on 13 November postponed consideration of the revised
1998 budget in the first reading until 19 November, RFE/RL's
Moscow bureau reported. Communist Party leader Gennadii
Zyuganov argued that it would be "senseless" to debate the budget
after the Duma had rejected several tax laws on which 1998
revenues are based, according to Reuters. The Duma rejected in the
first reading laws on changing current excise duties and on revoking
tax exemptions for military personnel, as well as a package of
amendments to the law on the fundamentals of the tax system,
"Kommersant-Daily" reported. Those amendments would have
rescinded 16 taxes, reduced fines for paying taxes late or concealing
income, and allowed regional authorities to impose a sales tax of up
to 5 percent. First Deputy Prime Minister Anatolii Chubais expressed
confidence that the government and Duma will reach a compromise
on the tax laws. LB

...BUT APPROVES OTHER TAX PROPOSALS IN FIRST READING. The
Duma on 13 November supported several government-proposed tax
laws in the first reading, "Kommersant-Daily" reported. The Duma
approved a law that would force regional branches of corporations to
pay taxes in the regions where they operate. (That law will find
favor with regional leaders but will be bitterly opposed by Moscow
Mayor Yurii Luzhkov.) Deputies also backed a law to raise the tax on
foreign-currency purchases from 0.5 percent to 1 percent. In
addition, the Duma approved draft laws dealing with taxation on
land, alcohol production, and industrial use of animal products.
Deputies postponed until 19 November consideration of a law on
introducing a water tax. Meanwhile, the government withdrew from
the Duma a law that would have raised value-added tax on food and
children's products from 10 percent to 20 percent. LB

FIRST HEAD ROLLS IN BOOK ROYALTIES SCANDAL. President Boris
Yeltsin on 13 November sacked Aleksandr Kazakov, first deputy
head of the presidential administration, ITAR-TASS reported the
next day. Aleksandr Shokhin, leader of the Our Home Is Russia Duma
faction, told the news agency that Kazakov's dismissal is most likely
linked to the scandal over substantial royalty payments for a book
on the history of Russian privatization, which has not yet been
published (see "RFE/RL Newsline," 13 November 1997). Kazakov was
one of the book's seven authors. The others are First Deputy Prime
Minister Chubais, Federal Bankruptcy Administration Chairman Petr
Mostovoi, former State Property Committee Chairman Alfred Kokh,
State Property Minister Maksim Boiko, Federal Securities Commission
Chairman Dmitrii Vasilev, and former Chubais aide Arkadii
Yevstafev. It is unclear whether Kazakov will also be removed as
chairman of the board of the gas monopoly Gazprom, a post to which
he was elected in June. LB

MORE FALLOUT FROM SCANDAL. Before leaving for Kyiv on 14
November (see Part II), Chubais told journalists that he believes
criticism of the high fees received for the forthcoming book on
privatization is justified, ITAR-TASS reported. Chubais said Yeltsin
will judge the matter, adding that he will accept any decision by the
president. Prime Minister Viktor Chernomyrdin, who is on a one-day
visit to Novgorod Oblast, declined to comment on Kazakov's dismissal
but told ITAR-TASS that the government will look into the book
scandal. An unnamed source close to the prime minister said he does
not expect Kazakov's dismissal to be the last in connection with the
scandal. LB

MOSCOW PROSECUTORS TO INVESTIGATE SCANDAL. Sergei
Gerasimov, the head of the Moscow Prosecutor's Office, announced on
13 November that an investigation of the latest scandal is under way,
Russian news agencies reported. Gerasimov said Chubais and other
senior officials will be questioned. Moscow prosecutors are already
investigating Kokh for accepting a $100,000 payment from a Swiss
firm for another book on privatization. That investigation is to be
completed by 1 December, Gerasimov said. Meanwhile, "Segodnya" on
14 November slammed the officials involved in the latest book
scandal for hypocrisy. The author noted that while top officials
received $90,000 each to write a book, State Property Minister Boiko
recently ordered his ministry to investigate a privatization official in
Vologda Oblast who receives a monthly salary of $16,500.
"Segodnya," owned by Vladimir Gusinskii's Media-Most company, has
frequently criticized Chubais and his associates. LB

DUMA PASSES ANTI-CORRUPTION LAW. The Duma on 14 November
approved by 363 votes to zero a law on fighting corruption, ITAR-
TASS reported. The law would prohibit government officials from
accepting remuneration from government agencies, individuals, or
legal entities in the form of money, services, gifts (other than
symbolic ones), or payment for trips within Russia or abroad. LB

FOREIGNERS ALLOWED TO HEAD STOCK MARKET BROKERAGES. The
Federal Securities Commission has revoked part of a resolution,
adopted in September, that banned foreigners from serving as chief
executive or chief accountant of banks or companies licensed to trade
on the Russian stock market, "Kommersant-Daily" reported on 14
November. The decision affects several prominent firms, including
Credit Suisse-First Boston and the investment bank MFK, part of the
Oneksimbank empire. MFK appointed U.S. citizen Boris Jordan as
chairman of the board in September. LB

PRIMAKOV WRAPS UP JAPAN VISIT. Minister of Foreign Affairs
Yevgenii Primakov ended his four-day visit to Japan on 14
November, Russian media reported. Primakov and his counterpart,
Keizo Obuchi, signed an agreement allowing Russia to open a center
in Japan for promoting foreign investment. An agreement on mutual
protection of investments, currently being drawn up, will pave the
way for a Japanese investment of $100 million in oil projects off
Sakhalin Island. Russian managers will soon attend special training
sessions in Japan, while a delegation from the Japanese Federation of
Economic Cooperation will visit Russia on 19-20 November to seek
ways to boost cooperation in power engineering. BP

U.S. AMBASSADOR LISTS PRIORITIES. James Collins, the new U.S.
ambassador to Russia, announced at his first press conference in
Moscow that "security issues and preventing proliferation of
weapons of mass destruction" are among his top priorities, AFP and
Russian news agencies reported. Collins also called on Russia to ratify
the START-2 arms control treaty. He said U.S. President Bill Clinton
plans to visit Russia during the first half of 1998, although no date
has been set. He added that Clinton's visit would be "most
productive" following ratification of START-2, so that he and Yeltsin
could discuss further arms control agreements. There is staunch
opposition to START-2 in the Duma. Collins also said the U.S. will
closely watch how Russian authorities implement the new religion
law, which imposes restrictions on foreign missionaries and some
minority religious groups. LB

ORT SHAREHOLDERS CONFIRM DIRECTOR, BUT NOT CHARTER.
Shareholders in the 51 percent state-owned network Russian Public
Television (ORT) on 13 November unanimously approved Kseniya
Ponomareva as the network's director-general , Russian news
agencies reported. Ponomareva was named acting director-general
last month (see "RFE/RL Newsline," 7 October 1997). However,
shareholders postponed consideration of a new ORT charter until 2
December. According to "Kommersant-Daily" on 14 November, the
government seeks changes to the draft charter proposed by ORT
managers, who are close to former Security Council Deputy Secretary
Boris Berezovskii. The current draft would require a two-thirds or
three-quarters vote to appoint members of the ORT board of
directors. But the government, which seeks to reduce Berezovskii's
influence at the network, wants the right to appoint board members
by a simple majority of shareholders--that is, without input from the
private shareholders in the network. LB

MOSCOW LEGISLATURE LOSES COURT APPEAL OVER REFERENDUM.
The Supreme Court on 13 November approved a decision by the
Moscow Oblast Court on setting a referendum for 14 December, the
same day as elections to the Moscow Oblast Duma, "Kommersant-
Daily" and "Nezavisimaya gazeta" reported. The referendum, backed
by Governor Anatolii Tyazhlov, would ask voters whether they
support halving the number of deputies in the oblast legislature who
hold no job outside the legislature. The Moscow Oblast Duma, which
opposes the referendum, failed to persuade the Supreme Court that
the oblast court exceeded its authority by setting a referendum date
without the legislature's approval. They fear that voters will pass the
referendum, which has popular appeal as a cost-cutting measure. If
the officials in the oblast administration were allowed to
simultaneously serve as oblast Duma deputies, Tyazhlov would
increase his influence over the legislature's activities. LB

SOBCHAK'S WIFE RETURNS TO RUSSIA. Duma deputy Lyudmila
Narusova on 13 November returned to St. Petersburg from Paris,
where her husband, former St. Petersburg Mayor Anatolii Sobchak, is
receiving medical treatment. Narusova told journalists that her
husband will return to Russia by the end of the year, as soon as he
has recovered, Russian news agencies reported. She said Sobchak has
informed the Prosecutor-General's Office that he will answer any
questions in connection with a corruption investigation of his former
associates. The same day, ITAR-TASS reported that Sobchak is
considering running for the Duma seat formerly held by Irina
Khakamada, who was recently appointed to the cabinet. Duma
deputies are immune from criminal prosecution. LB

SCULPTOR SAYS LUZHKOV HAPPY WITH FRESCOES PLAN. Zurab
Tsereteli says Moscow Mayor Yurii Luzhkov is satisfied with a
budget of 372 billion rubles ($63 million) for frescoes in the restored
Cathedral of Christ the Savior, ITAR-TASS reported on 13 November.
Tsereteli said 60 percent of that sum will be spent on materials and
the remainder on the salaries of some 360 artists who will be
involved in the project. Earlier reports suggested the mayor thought
the proposed budget was excessive, but Tsereteli explained that
Luzhkov only objected to his initial cost estimate for painting the
frescoes: 4 trillion rubles. That would have been nearly three times
as expensive as all previous costs of rebuilding the church, which
was razed under Stalin. LB

STAVROPOL TO CREATE SECURITY ZONE ON BORDER WITH CHECHNYA.
Participants at a meeting of law-enforcement officials in Stavropol on
13 November voted to create a 3-kilometer security zone along the
region's border with Chechnya to prevent shootings and hostage-
takings by maverick Chechen groups, Russian media reported.
Addressing the conference, Russian Interior Minister Anatolii Kulikov
termed Chechnya a destabilizing factor in the North Caucasus and
said a special regiment of Interior Ministry troops will be deployed
to protect the border. Kulikov said he opposed the creation of local
volunteer armed militias in regions bordering on Chechnya as
violating the Russian Constitution and federal laws. In Grozny,
Chechen First Deputy Prime Minister Movladi Udugov criticized the
planned deployment of more Russian forces along the border as
evidence of "Russia's ongoing blockade of Chechnya," Interfax
reported. LF

INGUSHETIA PLANS "WILD DIVISION." Ingush President Ruslan
Aushev on 13 November warned that his republic may be forced to
form a "wild division" to protect its territory and people if the
situation in the North Caucasus deteriorates, Interfax reported.
Aushev expressed concern at the arming of Cossack units in the
North Caucasus and the planned creation of self-defense militias in
Dagestan. He called on the Russian authorities to take "premeditative
rather than threatening steps" in the North Caucasus. LF

TATARSTAN NOT TO ISSUE NEW RUSSIAN PASSPORTS. The Tatar
parliament on 13 November ordered the republic's government not
to proceed with issuing new Russian passports pending a vote in the
republican legislature, RFE/RL's Kazan bureau reported. The
parliament recently voted to postpone issuing the new passports to
protest the omission of any mention of the holder's nationality (see
"RFE/RL Newsline," 21 October 1997). Addressing parliamentary
deputies, President Mintimer Shaimiev said the Russian passports
issued to citizens of Tatarstan should mention Tatarstan's statehood
and the state languages of Tatarstan. He added that the passports
should also make provision for dual (Tatar and Russian) citizenship
for the republic's inhabitants. LF

TRANSCAUCASUS AND CENTRAL ASIA

KAZAKHSTAN TO EXPORT OIL VIA GEORGIA, BULGARIA. Bulgarian
Foreign Minister Nadezhda Mikhailova met with her Kazakh
counterpart, Kasymzhomart Tokaev, and President Nursultan
Nazarbayev in Almaty on 13 November to discuss cooperation in the
oil sector. Mikhailova told Interfax that Bulgaria wants to buy part of
the Kazakh oil exported via Azerbaijan and Georgia at its Burgas
terminal. Tokaev said the proposed Burgas-Aleksandroupolis
pipeline--a joint venture between Bulgaria, Russia, and Greece--was
also discussed. In Tbilisi on 13 November, Minister of State Niko
Lekishvili said President Eduard Shevardnadze had reached
agreement with the Kazakh leadership in Almaty on 10-11
November on exporting 5-7 million metric tons of Kazakh crude via
Georgian ports. LF

RUSSIA WILL FIGHT FOR CASPIAN MAIN EXPORT PIPELINE. Russian
First Deputy Prime Minister Boris Nemtsov, who is also fuel and
energy Minister, said on 13 November that Russia will fight to have
the main export pipeline for Azerbaijan's Caspian oil routed north to
the Russian Black Sea port of Novorossiisk, Interfax reported. The
same day, First Deputy Fuel and Energy Minister Sergei Kirienko said
Russia proposes that the Azerbaijan International Operating
Company (AIOC), which oversees the exploitation of three
Azerbaijani Caspian oil fields, should hold a tender to select the route
for the main export pipeline. He noted that a tender would be
advantageous for Russia, since the northern route is the most
economic one. The AIOC has said the choice of route will be
determined by economic, not geo-political, factors. LF

NEMTSOV CALLS FOR NEW TALKS ON STATUS OF CASPIAN. Nemtsov
also told journalists in Moscow on 13 November that it is time for
new talks to resolve the deadlocked question of the international
status of the Caspian Sea. In an indication that Russia may stop
insisting that Caspian hydrocarbon resources be developed jointly by
all five littoral states, Nemtsov had hinted in Baku the previous day
that the Caspian could be divided into national sectors. Those sectors
would be determined on the basis of dividing lines drawn by the
former USSR Oil Ministry, Turan reported on 13 November.
Meanwhile, Iran's Permanent Mission to the UN has sent a letter to
Secretary-General Kofi Annan protesting Azerbaijan's "unilateral
exploitation" of Caspian oil resources, AFP reported on 13 November.
The letter claimed Azerbaijan's action violates international
agreements and affirms Iran's readiness to take action to protect its
interests in the Caspian. LF

COUNCIL OF EUROPE DELEGATION IN ARMENIA. Prime Minister
Robert Kocharyan met with a delegation from the Council of Europe's
Parliamentary Assembly in Yerevan on 13 November to discuss
Armenia's possible full membership in that body and the political
and human rights situation in Armenia, Noyan Tapan reported. The
delegation also held talks with opposition party leaders. Speaking
after that meeting, Paruyr Hayrikyan, head of the Union for Self-
Determination, argued that Armenia's full membership in the council
should be made contingent on the democratization of its political
system, RFE/RL's Yerevan bureau reported. Hayrikyan proposed that
the council stipulate preconditions for full membership including free
and fair elections. LF

ABKHAZIA CUTS POWER SUPPLIES TO GEORGIA. Following an 11
November explosion at a substation in Abkhazia's southern-most Gali
Raion, Abkhazia has reduced power supplies to Georgia from the
Inguri hydro-electric power station, Interfax reported. The Abkhaz
government has blamed the explosion on Georgian guerrillas
operating in Abkhazia. The Inguri facility generates much of the
country's electricity. LF

NEW KYRGYZ MEDIA LAW RESTRICTS FREEDOMS. Doronbek
Sadyrbayev, the chairman of Kyrgyzstan's parliamentary commission
on human rights, said a law on mass media passed by the parliament
on 11 November, violates freedom of the press, Interfax reported on
13 November. Under the new legislation, journalists cannot report
information on persons who are under criminal investigation until a
verdict is passed. Mass media are not allowed to enter either public
or private enterprises without permission or make public
information about the private lives of individuals. Journalists must
name their sources upon request. President Askar Akayev can veto
the law within 10 days, but the parliament can override such a veto
by a two-thirds majority. The new law reportedly enjoys "wide
support" among law-makers. BP

EU PROVIDES AID TO TAJIKISTAN. The EU has voted to grant
Tajikistan $9 million ecu in humanitarian aid, ITAR-TASS reported
on 14 November. The funds will be used for medicines and food
supplies. BP

U.S. ENERGY SECRETARY IN TURKMENISTAN. Federico Pena met with
Turkmen President Saparmurat Niyazov on 13 November, whom he
urged to seek to solve the dispute with Azerbaijan over an oil field in
the Caspian Sea. Niyazov proposed that a gas pipeline running along
the sea bed would be the best route for exporting Turkmen natural
gas. That line would run from Turkmenistan via Azerbaijan to
Turkey. BP


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