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RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol. 2, No. 136 Part I, 17 July 1998


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RFE/RL NEWSLINE Vol. 2, No. 136 Part I, 17 July 1998

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

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Headlines, Part I

* DUMA APPROVES NUMEROUS GOVERNMENT-BACKED LAWS

* YELTSIN ATTENDS TSAR'S REBURIAL

* YELTSIN WANTS PEACEKEEPERS TO STAY IN ABKHAZIA
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RUSSIA

DUMA APPROVES NUMEROUS GOVERNMENT-BACKED LAWS... The State
Duma passed a large number of laws included in the
government's anti-crisis program on 17 July, the final day
of an extraordinary session. Deputies passed in all three
readings a revised version of the budget code and a law
allowing the government to restrict tax breaks and other
privileges granted to closed cities, ITAR-TASS reported. The
Duma approved in the first reading a law setting up a new
procedure for determining electricity and heating fees,
which is aimed at reducing the regional discrepancies in
those charges, and a law that would make state benefits
means-tested (paving the way to cuts in benefits to all but
low-income families). On 16 July, the Duma approved final
versions of laws to reduce excise duties on oil and cut
child benefits to families above a certain income level and
also approved a revised version of a law on gambling taxes.
LB

...BUT VOTES DOWN SEVERAL PARTS OF ANTI-CRISIS PLAN. During
its 17 July session, the Duma rejected several government
proposals, including a law that would have nullified all
legislation calling for unforeseen expenditures in the 1998
budget, ITAR-TASS reported. Deputies also voted down a
proposal to decrease employers' contributions and increase
individual contributions to non-budgetary funds, such as the
Pension and Social Insurance Funds. A proposal to establish
posts for the tax authorities in enterprises that are major
taxpayers met with the same fate. On 16 July, the Duma
returned to the government a law that would have quadrupled
the land tax and voted down a law that would have introduced
a 2 percent tax on waste land or land not used for its
declared purpose. LB

DUMA APPROVES ITS OWN VERSION OF SALES TAX... The Duma on 16
July again voted down a government-backed law introducing a
sales tax but later approved a revised version of that law,
Russian news agencies reported. The law would allow regional
authorities to introduce a sales tax of up to 5 percent. The
sales tax would be levied on luxury items such as furs and
travel agencies and would not be allowed on essentials such
as bread, meat, milk products, and children's goods.
Regional authorities would be granted the right to determine
which other goods may be subject to sales tax. After the
Duma rejected the government's version of the sales tax law
and other proposals, Finance Minister Mikhail Zadornov
criticized the Duma for not backing "key points" to lead the
country out of its economic crisis. LB

...AND INCOME TAX IN FIRST READING. Also on 16 July, the
Duma passed in the first reading a law revising the income
tax scale, but in a substantially different version from the
government's draft of that law (see "RFE/RL Newsline," 3
July 1998). Like the government's plan, the new version
would retain the 12 percent income tax rate for annual
incomes below 20,000 rubles ($3,200) and would reduce the
rate on incomes above 100,000 rubles from 35 percent to 30
percent. But whereas the government sought a 20 percent tax
rate for all other incomes, the Duma approved a 15 percent
rate on annual incomes from 20,000 to 40,000 rubles and a 20
percent rate on incomes between 40,000 rubles and 100,000
rubles. The Duma's draft also would not levy income tax on
interest earned from bank deposits that are less than 10
times the minimum monthly wage. LB

DUMA REJECTS PRESIDENT'S VERSION OF LAND CODE. Three
attempts to pass a version of the land code that had the
president's backing failed during the Duma's 16 July
session. According to Duma Agriculture Committee Chairman
Aleksei Chernyshov, whose committee endorsed the draft, the
new code would grant farmers some land ownership rights but
would prohibit the purchase and sale of farmland, ITAR-TASS
reported. (President Boris Yeltsin previously insisted on
giving farmers the right to buy and sell farmland.)
Nonetheless, the Communist faction opposed the revised land
code. In successive ballots, the code gained 213 votes in
favor, then 220 votes, and finally 225 votes--just one short
of the majority needed for passage. On 17 July, the Duma
decided to postpone further consideration of the land code
until its fall session or at an extraordinary session if
such a meeting is called during the summer recess. LB

GOVERNMENT PROPOSES NEW TAXES ON LUXURIES. The government on
16 July approved several draft laws aimed at increasing
taxes on wealthy citizens. One law would tax automobiles and
motorcycles with engines exceeding a certain size. Another
would increase the excise duty on high-octane gasoline
(which, according to the government, is used primarily by
those who own foreign cars). In addition, the government is
seeking to impose a 10 percent tax on user costs for pagers
and mobile telephones. The new proposals may be intended to
counter charges that the government is trying to shift the
tax burden from the wealthy to less affluent Russians. The
government's anti-crisis program called for lowering the top
income tax bracket from 35 percent to 30 percent,
introducing a sales tax, and eliminating a reduced rate of
value-added tax for many goods. LB

DUMA SLAMS GOVERNMENT'S PENSION POLICY. The Duma on 16 July
adopted a resolution slamming a telegram sent by Deputy
Prime Minister Oleg Sysuev and Pension Fund Chairman Vasilii
Barchuk to regional leaders on 6 July, ITAR-TASS reported.
The telegram advised regional leaders to pay out pensions at
a level below that provided for by federal legislation. The
Duma demanded that Sysuev withdraw the telegram and called
on regional leaders to strictly follow federal laws on
pensions. It also called on Prosecutor-General Yurii
Skuratov to monitor closely whether laws on pension payments
are violated in the regions. Under a law that took effect on
1 February, pensions are to be recalculated quarterly. But
Sysuev recently announced that because of the financial
constraints of the Pension Fund, the government wants a
temporary reversal of the pension indexing (see "RFE/RL
Newsline," 10 and 13 July 1998). LB

YELTSIN ATTENDS TSAR'S REBURIAL. "We must end this century,
which became an age of blood and lawlessness in Russia, with
repentance and peace, regardless of political views,
religion, or ethnicity," President Yeltsin said at the
reburial ceremony for Nicholas II at the St. Peter and Paul
Cathedral in St. Petersburg on 17 July. "For many years we
have kept silent about this monstrous crime, but we must
tell the truth: the executions in Yekaterinburg formed one
of the most shameful pages in our history," he commented.
Yeltsin added that the Bolsheviks, who killed the tsar and
his family in 1918, were not the only guilty ones but also
"those who justified the act for decades." While first
secretary of the Sverdlovsk Oblast Communist Party
Committee, Yeltsin authorized the demolition of the building in
which the tsar and his family were killed. BT

MIXED REACTION TO YELTSIN'S PARTICIPATION IN TSAR'S
REBURIAL. Russian Orthodox Church Patriarch Aleksii II said
that while he respects the "moral motives" behind President
Yeltsin's decision to attend the reburial of Nicholas II's
remains, the Church's "central act of commemoration and
repentance" will be at a monastery outside Moscow on 17
July, Russian news agencies reported. The previous day,
shortly after Yeltsin announced his decision to attend,
Federation Council Speaker Yegor Stroev backed down from his
former position, saying a delegation from the upper house
led by St. Petersburg Governor Vladimir Yakovlev will attend
the funeral. Communist Party leader Gennadii Zyuganov
slammed Yeltsin's decision, accusing the president of
fostering a "split in society, including a split among
believers." He also claimed that Yeltsin's last-minute
decision shows that the president is controlled by his
"inner circle." Liberal Democratic Party of Russia leader
Vladimir Zhirinovsky supported Yeltsin's decision as a way
to "stigmatize regicides," adding that "it was the
Communists who were known to have been regicidal." BT

GOVERNOR SAYS YELTSIN TO SEND SYSUEV TO KEMEROVO. After a 16
July meeting with Yeltsin in the Kremlin, Tomsk Oblast
Governor Viktor Kress said the president is sending Deputy
Prime Minister Oleg Sysuev to Kemerovo Oblast in the next
few days to negotiate with miners blockading the Trans-
Siberian Railroad, Russian news agencies reported. Sysuev
had said earlier that he will not go until the miners lift
the blockade and stop demanding Yeltsin's resignation. Also
on 16 July, Kemerovo Governor Aman Tuleev threatened to file
suit against the federal government for "failing to meet
their commitments to the region's coal miners and public-
sector employees." Meanwhile, industrial workers in three
towns in Kemerovo Oblast have sent an ultimatum to the
Railroads Ministry demanding that trains not be allowed to
by-pass the blockade of the Trans-Siberian via the Toguchin-
Mezhdurechensk line. BT

COURT REFUSES TO STRIKE DOWN LAW ON POWERS OF
INVESTIGATORS... The Constitutional Court has rejected an
appeal by a journalist against sections of the law on
operational-investigative activities, "Kommersant-Daily"
reported on 15 July. Irina Chernova, the editor of the
Volgograd edition of the weekly "Novaya gazeta," filed the
court appeal. As a correspondent for "Komsomolskaya pravda"
in 1994 and 1995, Chernova published several articles
criticizing the Volgograd police. She was subsequently
followed and detained without being told the grounds on
which she was being investigated. Police officers also tried
to blackmail her by threatening to release pictures or
videotapes of her engaged in sexual activities. However, the
Constitutional Court found that the disputed articles in the
law either were not relevant to Chernova's case or did not
violate her rights. LB

...AS DISSENTING JUDGE CRITICIZES DECISION. Speaking to
"Kommersant-Daily," Constitutional Court Judge Anatolii
Kononov disagreed with the ruling on Chernova's case. He
said the court should have declared all the disputed
passages of the law unconstitutional but instead upheld the
state's interests over the interests of individual citizens.
Among other things, Chernova challenged passages that allow
police to keep secret the reasons for opening an
investigation and the materials gathered during an
investigation. She also disputed an article allowing judges
to give permission to conduct investigations without holding
hearings or issuing official protocols. LB

BASHKORTOSTAN COURT VALIDATES PRESIDENTIAL ELECTION. The
Constitutional Court of the Republic of Bashkortostan ruled
on 16 July that President Murtaza Rakhimov's re-election
last month was valid, RFE/RL's Moscow bureau reported. The
court upheld the decision to reschedule the election from
December to June 1998. Rakhimov's critics argued that
holding the election six months early violated federal law.
They say the election date was changed to allow Rakhimov to
run for re-election. He will turn 65 in early 1999, and
Bashkortostan's law on presidential elections says
presidential candidates may not be within three months of
turning 65. The Russian Supreme Court could still declare
the Bashkortostan election invalid. It is to consider an
appeal from two would-be candidates whose names were kept
off the ballot in spite of Russian Supreme Court rulings
(see "RFE/RL Newsline," 15 and 23 June 1998). LB

MOSCOW RESPONDS TO TURKISH THREATS AGAINST CYPRUS. A
commentary published in "Nezavisimaya gazeta" on 17 July
suggests that the U.S. may be behind Ankara's recent threats
to launch air strikes to destroy the S-300 air defense
missiles that Russia plans to deliver to Greek Cyprus later
this year. The commentator said that Russia's "return to the
eastern Mediterranean" poses a threat to the perceived
nascent U.S.-Turkey-Israel axis and that Western arms firms
may be concerned about losing the Cypriot arms market.
Russian Foreign Ministry spokesman Vladimir Rakhmanin told
journalists on 14 July that unspecified groups in Turkey are
trying to draw other countries into "an anti-Russian
campaign" over the proposed deployment of the missiles. But
speaking in Yerevan on 15 July, Russian Defense Minister
Igor Sergeev called for "normal, friendly" relations between
Russia and Turkey in order to promote stability in the
region, ITAR-TASS reported. LF

CHECHEN PRESIDENT BANS WAHHABISM. Following the fighting in
Gudermes on 14-15 July between a detachment of the Chechen
National Guard and forces identified by Chechen official
spokesmen as radical Islamists, Aslan Maskhadov issued a
decree on 16 July banning Wahhabism in Chechnya, ITAR-TASS
reported. Dagestani religious leader Saidmukhamed Abubakarov
expressed support for the ban but said he fears Maskhadov
delayed too long in taking action against Wahhabis.
"Nezavisimaya gazeta" on 17 July argued that the forces
opposed to Maskhadov are not Wahhabis but detachments loyal
to other Chechen political figures. Maskhadov also disbanded
the Islamic special purpose regiment and a subdivision of
the Sharia National Security Ministry. The commanders of
both those groups had sent units to Gudermes to fight on the
side of the alleged Wahhabis, according to ITAR-TASS. LF

TRANSCAUCASUS AND CENTRAL ASIA

YELTSIN WANTS PEACEKEEPERS TO STAY IN ABKHAZIA. Russian
President Yeltsin wrote to the Federation Council on 16 July
requesting that the mandate of the CIS peacekeeping force
deployed along the border between Abkhazia and the rest of
Georgia be prolonged, ITAR-TASS reported. The force's
mandate expires on 31 July. Yeltsin argued that the
peacekeepers are "the only real force that ensures a stable
cease-fire and conditions for a political settlement." He
added that their withdrawal could "cause an explosion not
only in the region but possibly in the whole of the
Caucasus." Abkhaz Foreign Minister Sergei Shamba told
Interfax on 16 July that if the Russian peacekeepers are
withdrawn, Abkhaz units will occupy the 12 kilometer
security zone currently patrolled by the Russian force and
advance to the Inguri River, which forms the border. LF

GEORGIAN GUERRILLAS DENY TARGETING PEACEKEEPERS. A Russian
Defense Ministry spokesman told ITAR-TASS on 16 July that
leaflets signed by the Georgian guerrilla "White Legion" and
containing threats against the peacekeeping force have been
found in the 12 kilometer security zone. Also on 16 July,
White Legion leaders rejected the accusation by Colonel-
General Sergei Korobko, the commander of the peacekeeping
force, that the legion planted the land mine that killed
five peacekeepers in Abkhazia's Gali Raion on12 July. LF

GEORGIAN PRESIDENT UNDERGOES SURGERY. Eduard Shevardnadze
was hospitalized on 16 July for minor surgery, Georgian and
Russian agencies reported. Shevardnadze's press secretary,
Vakhtang Abashidze, told ITAR-TASS that the 40-minute
operation involved destroying a "medium-sized" kidney stone.
Abashidze said Shevardnadze "is feeling well, perfect" after
the surgery. He denied a Caucasus Press report that the
operation was to remove a prostate adenoma. LF

AZERBAIJANI PRESIDENTIAL ADMINISTRATION HEAD SAYS NO MORE
CONCESSIONS. Ramiz Mekhtiev told a press conference in Baku
on 16 July that the country's leadership will not meet the
remaining conditions laid down by opposition political
parties for their participation in the 11 October
presidential election, Turan reported. The opposition is
demanding that criminal charges against former parliamentary
speaker Rasul Guliev and Musavat Party chairman Isa Gambar
be dropped and that the opposition be allowed to select half
the members of the Central Electoral Commission. Mekhtiev
said that six of the 24 seats on that commission have been
reserved for nominees from two opposition parties. Mekhtiev
added that up to 300 international observers are expected to
monitor the poll. LF

STRAINS IN AZERBAIJANI-TURKISH RELATIONS. The Azerbaijani
Embassy in Ankara has issued a statement expressing
"dissatisfaction" over former parliamentary speaker Rasul
Guliev's presence in Turkey, the "Turkish Daily News"
reported on 17 July. The statement said that "Guliev is
taking advantage of Turkish hospitality and using Istanbul
as a base to harm the friendship between the two countries."
In other news, the Azerbaijani Arbitration Court has
confiscated assets belonging to the Turkish trade and
construction firm DHT, which owes $7 million in taxes dating
back to 1995, Turan reported on 16 July. DHT claims it
signed contracts with the International and National Banks
of Azerbaijan exempting the company from taxes. LF

NIYAZOV CONGRATULATES FARMERS ON HARVEST. Turkmen President
Saparmurat Niyazov opened a 16 July session of the People's
Council by congratulating farmers on this year's grain
harvest, which totals 1.24 million tons, Russian media
reported. "Nezavisimaya Gazeta" noted that this year's
harvest is 20 times larger than during the last years of the
Soviet Union. Niyazov also raised the retirement age by two
years to 62 for men and 57 for women. He noted that Russia's
proposal to repay more than 70 percent of its $107 million
debt through goods is "unacceptable," saying Turkmenistan's
economy "needs hard currency." And he said that it is time
to declare war on drug trafficking, which he called the
country's "problem number one." BP

KYRGYZ GROUPS APPEAL RULING ALLOWING AKAYEV TO RUN AGAIN FOR
PRESIDENT. The leaders of 10 political parties, movements,
and non-government organizations have appealed to the
Constitutional Court asking it to overturn its 13 July
decision to allow President Askar Akayev to run again for
office. Akayev has been elected in popular votes twice (in
1991 and 1995). The constitution states that one person may
serve a maximum of two terms, but the court ruled that since
the country adopted a new constitution in 1993, Akayev has
been elected only once under current legislation. BP

DEMONSTRATORS ARRESTED IN KYRGYZSTAN. Kyrgyz police on 16
July arrested 47 people who had staged a demonstration
outside the government building in Bishkek since 13 July,
RFE/RL correspondents reported. The demonstrators came from
the village of Masy in Jalalabad Oblast and were protesting
the delay in receiving plots of land from the government. BP

KAZAKH COMMITTEE SEEKS TO DISBAND MONOPOLIES. The Kazakh
Committee responsible for regulating natural monopolies and
ensuring fair competition has begun reviewing tariffs
charged by the country's large companies, Interfax reported
on 16 July. Committee chairman Nikolai Radostovets told a
press conference in Astana that the national oil company,
Kazakhoil, has increased the price of oil it supplies to
refineries, despite a 17 percent decrease in the price of
petroleum on world markets since the beginning of this year.
Radostovets said the company "needs to be de-monopolized."
Other companies under review are Intergaz Central Asia,
Kazakhtransoil, the railroad company Temir Zholy,
Kazakhtelekom, and Almaty Power Consolidated. BP

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