U.S. Dismayed by Latest Russian Moves on Yukos

The United States voiced dismay on Thursday at a Russian state-owned company’s takeover of the main production asset of the Yukos oil company, the Reuters news agency reports.

“We are disappointed in the way this case has been handled,” U.S. State Department spokesman Adam Ereli told reporters. “We certainly don’t think it’s been disposed of in a transparent or open way.”

Ereli said he was referring to state-owned Rosneft’s purchase of Yukos’ key production unit, Yuganskneftegaz, as well as to the entire tax case against Yukos, which is widely seen in Russia as a Kremlin effort to neutralize the firm’s politically ambitious principal owner Mikhail Khodorkovsky.

Russian prosecutors launched a tax evasion probe into Yukos in July 2003 and three months later snatched Khodorkovsky at gunpoint from his jet in Siberia, charged him with fraud and tax evasion and sent him to prison, where he remains.

Rosneft acquired Yukos’ Yuganskneftegaz unit from Baikal Finance Group, an unknown shell company that won an auction ordered by the government to collect back taxes from Yukos.

“It sends the wrong signal to foreign investors and could negatively impact Russia’s role in the global economy,” Ereli said. “The way this case was handled raises serious concerns about the way rule of law is applied in Russia and the way that justice is perhaps politically or selectively applied.”

While Washington has voiced concerns about the Yukos case for more than a year, as well as about Russian democracy, critics accuse it of soft-pedaling the issues because of the U.S. desire for Russian cooperation in the war on terrorism.

Ereli denied this, but acknowledged that the U.S.-Russian relationship is complex with many interests.

“There is no contradiction between being an important partner and friend and speaking our mind, and calling a spade a spade, and telling Russia when we are disturbed and troubled and making clear to Russia what we think is the right course of action,” he said.

At a year-end news conference, Russian President Vladimir Putin defended the Rosneft purchase and complained about past U.S. criticisms, saying “I have to say I am not ecstatic about everything that happens in the United States either.”

Putin also suggested Washington was trying to “isolate” Russia, an idea that Ereli dismissed, citing their joint work on the Middle East, North Korea, the Balkans and elsewhere.

(Mosnews, 12.24.2004)