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TT Business Intelligence Report Vol. 2, No. 42, 20 March 2003 Business Intelligence, Crime, Corruption and Debt in C&E/SE Europe and the FSU  UPCOMING CONFERENCES I.P.C.'S "NEW DEVELOPMENTS IN ANTI-MONEY LAUNDERING MEASURES AND SOLUTIONS" This event will take place on 29-30 April 2003 at the headquarters of Raiffeisen Zentralbank, Vienna, Austria. For further information, tel: +44 (0)20 7529 8902; fax: +44 (0)20 7387 4647; email: [email protected]; W: www.ipc-conferences/vienna "INVESTING IN AZERBAIJAN - GATEWAY TO THE NEWLY INDEPENDENT STATES" This event will take place on 7-9 May 2003 at the Hyatt Conference Center in Baku, Azerbaijan. For further information, please visit: www.invest-in-azerbaijan.com, or contact Dorit Sallis, tel: +41 1 249 3133; e-mail: [email protected] BOSNIA AND HERZEGOVINA P.M. ADMITS NEW BANKRUPTCY LAW IS LIKELY TO RESULT IN 100,000 LAY-OFFS Following the warning from trade unions about a huge number of lay-offs after the new law on bankruptcy is enforced, the FBiH PM Ahmet Hadzipasic has admitted that 100,000 workers could lose their jobs in the coming months. The process of resolving the problem with over-employment would be intensified in parallel to social programmes for the workers that remain jobless as well as more efficient privatisation procedures. Hadzipasic stressed that this painful reform has to be carried out in order to revive the market and improve competitiveness. (IntelliNews 19.iii.03) BULGARIA MOODY'S ASSIGNS RATING ON FIRST INVESTMENT BANK The rating agency Moody's assigned for the first time ratings on First Investment Bank (FIB) yesterday. The agency assessed the bank at the level of the Bulgarian sovereign rating and noted that the banks' deposit rating was slightly constrained by the sovereign ceiling. The marks for different positions are: B2 (stable outlook) for long-term foreign currency deposits; NP (stable outlook) for short-term foreign currency deposit; and D- (stable outlook) for financial strength. Moody's outlined the improved funding base of the bank on the back of rapid growth and the lengthening of deposits. However, Moody's warned of credit concentration and market restraints in the country, as a relatively large number of banks were competing for a limited amount of business. The future rating of FIB would depend on the country economic and political profile and the ability of the bank to diversify its credit portfolio. S&P assessed the long-term foreign currency rating of FIB at B+ with a stable outlook late last year, keeping it one notch below the sovereign benchmark. The bank is planning a corporate bond issue in euro this year for an unspecified amount and maturity is expected in a range of 3 to 5 years. (IntelliNews 19.iii.03) CROATIA MECHEL (RF) TOOK OVER SISAK IRONWORKS ON 17-MAR-03 An agreement on the sale of Sisak Ironworks to Russia's Mechel company took effect on Monday, with Mechel taking over the ironworks and its 1,700 employees with all the commitments, rights and risks. The bankruptcy administrator has fulfilled all obligations from a sales contract signed on February 6, and paid the salaries to workers for January and February. The administrator will also pay salaries for the first 16 days of March as soon as profit is realised from selling spare parts and raw materials to the new owner. At a session the cabinet last week adopted the contract on the sale of the ironworks to Mechel, removed the mortgage from the plant's real-estate and freed the Russian company from paying capital transfer tax. This followed Mechel's provision of a recoverable bank guarantee for six months worth of salaries in case the Russian partner abandons the venture. "Mechel Ironworks" has called to work some 200 employees of the steel and rolling mill plants and around 90 workers of the Caprag Overhaul, who will work on preparing production. The new owner will call some 550 workers by the end of the month, and all of the 1,700 workers by the start of June. Workers on stand-by will receive 80% of their salaries. (NewsBase 19.iii.03) I.N.A. OIL AND GAS COMPANY PRIVATISATION EXTENDED BY END-JUNE INA oil and gas company privatisation process should be extended till the end of June, Economy Minister Ljubo Jurcic stated yesterday. The sale of 25% +1 share of INA had to be finalised by the end of March or by mid-April at the latest, however it is obvious that the deal has not proceeded as planned. According to Jurcic, the selection process for INA's strategic partner was going much slower than originally expected. The cabinet is yet to enter final negotiations with the remaining three contenders, the Austrian OMV, Hungarian MOL and Russian Rosneft. Negotiations should reportedly begin in the next 10 days. The economy ministry received and opened the bids for 25% +1 share of INA oil and gas company on Jan 17. Unofficially, offers ranged from USD 250mn to USD 400mn. According to publications in the Austrian press, OMV was ranked first in a preliminary ranking of the candidates, but this has not been confirmed yet. Reportedly, the Ministry of Economy did not consider those offers as final, and the cabinet expects to see final offers after the next round of negotiations with remaining contenders. The opening of the final offers should be public. (IntelliNews 19.iii.03) CZECH REPUBLIC TOP CABINET OFFICIALS ASK ZELEZNY TO SHARE IN PAYING C.M.E. PM Vladimir Spidla and Finance Minister Bohuslav Sobotka yesterday urged TV Nova CEO Vladimir Zelezny to participate in discussions on paying out damages to U.S. company CME, ordered by the Stockholm arbitration court on Friday. Spidla argues that Zelezny's dispute with CME started the problem and it would only be natural if TV Nova shared the CZK 10.4 bln expense. Nova spokesperson Petr Kostka said the TV station has nothing to do with the debt resulting from a dispute between CME and the Czech Republic. The cabinet is to discuss ways of payment today, such as an issue of state bonds or using privatization revenues. (PBJ 19.iii.03) C.N.B. REVOKES UNION BANKA LICENSE The Czech National Bank (CNB) yesterday revoked the banking license of troubled Union Banka (UB). CNB rejected another salvage plan submitted by UB, claiming it is unrealistic and would not help restore the bank's solvency and stability. UB CEO Roman Mentlik said CNB mainly feared that UB would not be able to withstand a massive attack of clients eager to withdraw their money. UB can appeal the CNB decision within 15 days, but the chance of reversing the CNB stance is minuscule. Some 250,000 UB clients will receive from the Deposit Insurance Fund 90% of their deposits, up to CZK 789,000. (PBJ 19.iii.03) ESTONIA SALES OF PIRATED SOFTWARE DECLINING IN BALTIC STATES Of the 30 sellers of pirated software in Estonia checked at the end of last year only four continue offering illegal software; and the sale of pirated software is declining in Latvia and Lithuania as well, a recent inspection by Microsoft showed. "It's nice to witness such a development and it proves that our work has borne fruit," Microsoft's licensing manager Pilkku Aasma said. "We got in touch with companies that offered pirated software at the end of last year, but also police raids, which have become more frequent of late, and the efforts of Business Software Alliance have apparently had an effect." A second round of Microsoft's campaign of test purchases took place in all three Baltic states, covering stores that offered illegal software during the first half of the campaign. Of the 33 stores checked in Estonia, four sold pirated and 26 legal software; the test failed in three stores. In Latvia, where 155 stores were checked, 58 sold illegal and 84 legal software, and the check failed in 13 stores. Of the 50 Lithuanian stores covered by the test, three offered pirated and 47 legal software. Microsoft's first test purchase campaign took place in December. At that time 30% of Estonian, 33% of Lithuanian and 68% of Latvian computer sellers sold pirated software in their stores. During the campaign around 100 computer sellers in Estonia, 200 in Latvia and more than 300 in Lithuania were inspected. (NewsBase 18.iii.03) HUNGARY M.O.L., YUKOS START JOINT VENTURE Joint oil exploitation operations by Hungary's MOL Rt and the Russian firm Yukos have begun in the oil fields of Zapadno-Malobalik, MOL announced on Tuesday on the Budapest Stock Exchange website. All permits for the project have been obtained and a transport agreement with Transneft has been concluded. With the closing of the deal, MOL became a 50% owner of the joint venture. Currently the two firms are exploiting 19,000 barrels a day from the area, but production should peak at 55,000 barrels a day by 2005. The agreement between MOL and Yukos to set up the joint venture was signed in Moscow last December. (BBJ 19.iii.03) M.O.L. AND O.T.P. REMAIN COMMITTED IN SERBIA DESPITE DJINDJIC ASSASSINATION Despite the uncertainty caused by the assassination of Serbian Prime Minister Zoran Djindjic, Hungarian oil and gas company Mol and Hungary's largest bank OTP both said they remained committed to investing in Serbia. Hungarian oil and gas company Mol is still interested in the Serbian market, according to Communications Director Gyorgy Felkai. Mol plans to establish service stations in Serbia and is also considering taking part in the privatisation of oil company Beopetrol. Felkai added that he could not predict how the Djindic's assassination would affect the privatisation of the firm. OTP Bank also said it would continue to consider acquisitions in Serbia noting that the Serbian financial sector has large growth potential. (NewsBase 17.iii.03) PRESIDENTS OF HUNGARY, CROATIA, SLOVENIA, ROMANIA, SLOVAKIA, UKRAINE MEET IN BUDAPEST Parliamentary presidents from Hungary, Croatia, Slovenia, Romania, Slovakia and Ukraine met in Budapest on Friday 14 March to discuss their countries' integration into the European Union and regional security issues. In a statement issued by the Croatian parliament's press department, it was noted that Croatia's representative at the meeting was Parliamentary Vice-President Zdravko Tomac, who stood in for Parliament President Zlatko Tomcic. Tomac voiced confidence that Croatia could join the EU along with Romania and Bulgaria in 2007, the statement said. Parliamentary presidents from central European countries expressed their full support for Croatia's bids to become an EU and NATO member as soon as possible. Participants in the meeting forwarded a joint statement to the parliament of Serbia and Montenegro, expressing their deep regret at the tragic death of Serbian Premier Zoran Djindjic, and voiced their support for the continuation of democratic processes in Serbia and Montenegro, the statement noted. (NewsBase 17.iii.03) KAZAKHSTAN DUAL DEALS BOOST CHINA'S PRESENCE IN KAZAKHSTAN China's Sinopec announced on 11 March that it has acquired BG Group's remaining 8.33 percent stake in Kazakhstan's Kashagan oil field for $615 million, only days after China National Offshore Oil Corp. bought an identical stake from BG Group for the same price, "Nefte Compass" reported on 12 March. The moves mark a major Chinese effort to diversify the country's oil-supply base away from the Persian Gulf region, currently the source of 60 percent of China's oil imports. The two acquisitions once again raise the prospect of a West-East pipeline from Kazakhstan to China. "The New York Times" quoted CNOOC chief financial officer Mark Qiu on 12 March as saying that a new pipeline route would be needed as the oil fields near full production in coming years. Lyazzat Kiinov, president of Kazakhstan's state oil company, seconded him, saying, "China is a huge market and of course a pipeline needs to be built in that direction." The Kashagan oil field could contain up to 13 billion barrels of oil equivalent, AFP reported on 12 March, but the true extent of reserves will only become clear when the project begins operating in 2006. The Sinopec and CNOOC acquisitions are subject to approval by the other members in the consortium -- Eni, Exxon Mobil, Royal Dutch/Shell, TotalFinaElf, ConocoPhillips, and Inpex -- which have preemption rights, meaning that they can buy BG Group's stakes themselves under matching terms if they choose. (RFE/RL 18.iii.03) LATVIA TRANSNEFT TURNS DOWN VENTSPILS OFFER Russian pipeline monopolist Transneft turned down an offer to acquire a stake in Latvia's oil-starved Ventspils port, "Vedomosti" reported on 14 March. Ventspils has been reduced to accepting oil shipments by rail since Transneft closed off pipeline exports to the port in January, sparking allegations that Transneft is trying to bully port owners into a cut-rate sale. Ventspils Nafta owners offered Transneft a $200 million joint venture on the basis of the port's crude-oil transshipment facilities. Trust and Investment Bank analyst Vladislav Metnev told "Vedomosti" that Transneft's refusal is likely an attempt to drive down the price. "Kommersant" reported a slightly different version on 14 March, indicating that Transneft rejected an offer to buy Latvia's 47 percent stake in Ventspils Nafta because it would not provide complete control over the port. Ventspils Mayor Aivars Lembergs spoke out angrily about the situation in a 13 March interview with regions.ru, saying, "If I turn off the electricity and then tell you that I want you to sell me half the house or you'll sit in the dark, that's not business. There's a different word for that." (RFE/RL 18.iii.03) POLAND HEAD OF L.O.T. RESIGNS Jan Litwinski, Head of the Polish Airlines PLL LOT resigned soon after the company's supervisory board examined a report on the exuberant remuneration that LOT management members had received from the company's previous shareholder SAir Group (Swissair). The nature of the payments, amounting to about CHF 1mn over one year, is still unclear. Two weeks ago LOT announced it plans to record profits from transportation services, which it failed to do for number of years. LOT still awaits restructuring and is expected to develop an independent strategy from its now dominant partner Lufthansa. (IntelliNews 14.iii.03) ROMANIA NATIONAL BANK OF GREECE TO EXTEND ACTIVITY IN ROMANIA The National Bank of Greece has recently decided to extend activity in Romania by opening 15 branches in the main cities. The only branch of the National Bank of Greece in Romania is currently operating in Bucharest. The decision is part of the Hellenic bank's plans to become one of the most powerful financial groups in South-Eastern Europe. The National Bank of Greece is the largest bank on the Hellenic market and its market value stands at E2.5bn. NBG has operated in the Romanian market since 1997 and in 2002 posted a profit of almost Leu 52bn. The bank has a share capital of Leu 278bn, to be increased to Leu 320bn, by May 31. (NewsBase 19.iii.03) O.E.C.D. TO ASSIST ROMANIA IN CORRUPTION FIGHTING The OECD will grant assistance to the Romanian government in its actions regarding the fight against corruption, according to a document signed yesterday by Justice Minister, Rodica Stanoiu, and an OECD delegation. The document is a mutual declaration of the two counterparts that they commit to cooperate in fighting against corruption especially in assuring transparency in the fiscal and administrative system and strengthening judicial institutions. PM Nastase assisted the meeting and said that one of the main targets of Romania would be to obtain a full member statute in OECD. (IntelliNews 18.iii.03) RUSSIA KREMLIN SILENT AS DEADLINE PASSES Foreign Minister Igor Ivanov made an 11th-hour appeal against war at the UN Security Council on Wednesday, while the Kremlin was conspicuously silent in a clear signal that Russia didn't want to burn any bridges with U.S. or European partners. President Vladimir Putin used his single television appearance Wednesday to speak about military reforms. On Tuesday, he expressed regret about U.S. President George W. Bush's decision to try to topple Saddam Hussein's regime without the UN's blessing. Ivanov, however, has adopted more hawkish rhetoric, and on Wednesday he forcefully criticized Washington's actions at the United Nations meeting. Ivanov said the UN has never passed a resolution authorizing the use of force against Iraq and reiterated that an attack would undermine the international war on terrorism. "Not one of these decisions gives the right to use force against Iraq outside the UN Charter," Ivanov said of the Iraq resolutions that the UN has passed over the past decade. "Not one of them authorizes the violent overthrow of the leadership of a sovereign state," he said. Ivanov said there remained no evidence that Iraq poses a direct threat to the security of the United States. If there were "indisputable facts," he said, "then Russia, without any hesitation, would use any means available under the UN Charter to eliminate such a threat." The council meeting was called to hear a report by chief UN weapons inspector Hans Blix, who expressed disappointment that his work had been curtailed after only 3 1/2 months. Ivanov joined the French and German foreign ministers and Syrian Foreign Minister Farouq al-Shara in a call for inspectors to finish their job and for the Security Council to endorse Blix's work program. However, U.S. Ambassador John Negroponte said, "The fact of the matter is that the situation on the ground will change, and so will the nature of the remaining disarmament tasks. Considering a work program at this time is quite simply out of touch with the reality that we confront." (The Moscow Times 20.iii.03) RUSSIAN LEADERS URGE U.S. TO AVOID 'MISTAKE' IN IRAQ Speaking to a 17 March gathering of pro-Moscow Chechen religious leaders in the Kremlin, President Vladimir Putin said that Russia considers military action against the regime of Iraqi President Hussein to be "a mistake" and continues to pursue a "peaceful resolution" of the crisis, ORT and RTR reported. "Russia has 20 million Muslims, and, in our position, we should take into consideration their opinion," Putin noted. Foreign Minister Igor Ivanov said the same day that Iraq "poses no threat to global security" and therefore "there are no grounds for the use of force." Duma Foreign Affairs Committee Deputy Chairman Konstantin Kosachev (Fatherland-All Russia) said that U.S. President George W. Bush's 17 March ultimatum to Hussein will increase the risks of international terrorism and ecological disaster, RTR reported on 18 March. (RFE/RL 19.iii.03) ANALYST LOOKS FOR RUSSIA'S INTERESTS IN IRAQ CRISIS The pressure that the United States is exerting on the Arab world through the Iraq crisis is in Russia's national interests, Boris Makarenko, deputy director of the Moscow-based Center for Political Technologies, told TV-Tsentr on 17 March. Makarenko said that the leading Arab oil-producing countries have long been interested in destabilizing Russia and preventing it from competing with them. Therefore, they have supported Islamic extremists in Russia, including Chechen separatists, Makarenko argued. On the other hand, he said, Russia is not interested in siding too closely with the United States during this crisis in order to avoid increasing its own risk of facing terrorist attacks. Russia -- like France and Germany -- has a large Muslim population and is much closer to the Arab world than the United States is. Therefore, any potential wave of international terrorism provoked by a U.S.-led military action against Iraq would more likely hit Russia and Europe than the United States, he said. (RFE/RL 19.iii.03) DIPLOMAT ATTACKED A Brazilian diplomat was attacked, raped and robbed by two unidentified men on the Arbat, police said Tuesday. The 46-year-old woman, an attache of the Brazilian Embassy, was walking after midnight Sunday when two men, aged between 28 and 35, attempted to start a conversation with her, a spokeswoman for the Moscow central district police, Yelena Persilova, said Tuesday. When the woman refused to talk to the strangers, one of them grabbed her by her hair, dragged her to a nearby unguarded parking lot and raped her, police said. One of the assailants then took her mobile phone and both men ran away, Persilova said, citing a complaint that the victim filed with the police Monday morning. Police have opened a criminal investigation into the attack, Persilova said. The Brazilian Embassy on Tuesday could not immediately provide information on the woman's condition. Moscow police said the incident was the 12th attack on foreign diplomats in the past year in Moscow. (The Moscow Times 19.iii.03) M.T.S. GEARS UP FOR EASTERN EXPANSION Moscow-based cellular operator Mobile TeleSystems (MTS) hopes to expand beyond the bounds of the former USSR to such countries as India, Iran, Pakistan, and Lebanon, "Vedomosti" reported on 11 March. According to the newspaper, the company has already created analytical groups to develop strategies for entering these distant new markets. Vladimir Evtushenkov, who heads MTS's top shareholder AFK Sistema, recently visited India to conduct on-the-ground research. Sources in the embassies of India, Iran, and Pakistan confirmed to the newspaper that they are aware of MTS's plans. Analysts told "Vedomosti" that, cultural differences aside, MTS will find its homegrown Russian experience useful as it expands eastward. Deutsche Bank analyst Yulii Matevosov explained, "The situation in India is similar to Russia: lots of ground, poor population." MTS's most recent expansion was into Ukraine, where the company acquired a 57.7 stake in Ukrainian Mobile Communications, the country's second-largest cellular operator, for $194.2 million. Ukrainian authorities registered the deal, which was sealed in February, on 4 March, MTS reported in a 7 March press release. (RFE/RL 18.iii.03) VOLVO TO BEGIN TRUCK PRODUCTION IN RUSSIA Volvo Truck Corporation will open a production facility in Zelenograd on 20 March, RosBusinessConsulting (RBK) reported on 11 March. The factory is a joint venture between Volvo (66 percent) and AFK Sistema (34 percent). The two sides have not disclosed the size of their investments, but "Vedomosti" reported on 12 March that Volvo has put $10 million into the project. The factory will produce 350 heavy trucks annually. (RFE/RL 18.iii.03) FORMER ADVISER TO SLAIN MAGADAN GOVERNOR ARRESTED IN FISHING SCANDAL The corruption investigation within the State Fisheries Committee has led to the arrest of Viktoriya Tikhacheva, a former adviser to slain Magadan Oblast Governor Valentin Tsvetkov, on suspicion of embezzlement, Deputy Prosecutor-General Vladimir Kolesnikov told Interfax on 14 March. Tikhacheva was arrested two days ago and, according to Kolesnikov, is allegedly responsible for the theft from the government of fish products worth more than $16 million. Tsvetkov was killed in Moscow in October. According to Kolesnikov, Leonid Kholod and Yurii Moskaltsov, both deputy chairmen of the State Fisheries Committee, have also been implicated during the investigation. On 13 March, the month-long suspension of State Fisheries Chairman Yevgenii Nazdratenko was extended for another month, newsru.com reported. Previously, news media had reported that a decision about whether he would be dismissed had been expected on that date. (RFE/RL 17.iii.03) SERBIA AND MONTENEGRO ZORAN ZIVKOVIC APPOINTED AS SERBIA'S NEW PRIME MINISTER The Serbian parliament appointed a new cabinet, with the new Prime Minister Zoran Zivkovic, as well as a new deputy PM, Cedomir Jovanovic. In line with our expectations, no other changes were made in the cabinet. In his address to the parliament, Zivkovic said that his government would set as its most important task the continued crackdown on organised crime and the increase of overall security in the country. In this light, he announced not only the arrests of members of criminal groups, but also on plans of reforms in the police and the judiciary. Zivkovic said that more than 750 people have been arrested since Mar 12, out of whom many have been kept in custody. At a news conference held after the parliamentary session, Zivkovic said that, besides a crackdown on all crime groups that have been identified two years ago, the political inspirers of Zoran Djindjic's killers would also be punished. Zivkovic explained that he was speaking about political inspirers, because an assassination of a prime minister was always an attempt to destabilise the country, and reiterated that the murder of Djindjic was certainly politically motivated. However, Zivkovic said that the possible ban of certain parties was within the jurisdiction of the Constitutional Court, not of the government. The co-president of the Social Democratic Party, Slobodan Orlic, openly accused the Serbian Radical Party (SRS) and the Party of Serb Unity (SSJ) of "politically inspiring" the assassination of Djindjic. Serbian Interior Minister Dusan Mihajlovic also indirectly linked Serbian Radical Party leader Vojislav Seselj with the Zemun clan, describing him as the clan's "last political associate". "If you recall (Seselj's) statements on an upcoming bloody spring, then you can piece together the whole picture," he added. (Intellinews 19.iii.03) PRIVATISATION AND ECONOMY MINISTER VLAHOVIC EXPECTS EUR 400mn IN URGENT AID FROM E.U. Serbian Privatisation and Economy Minister Aleksandar Vlahovic said that the government expected the EU to quickly send at least EUR 400mn in financial aid to Serbia. "We expect two types of aid from the EU. One is related to the direct support to the budget - around EUR 250mn, and the other would be intended for the alleviation of the consequences of NATO's air strikes in 1999," Vlahovic told BETA news agency. The minister explained that the second form of aid would envisage around EUR 150mn for the repairing of destroyed facilities and building of bridges. "This aid would be visible and would give a strong message to our population that the EU is on our side," Vlahovic explained. The EU is very likely to approve additional financing to Serbia, in order not to let the country fall back to the times of Slobodan Milosevic's reign. European Commission President Romano Prodi and EU security policy chief Javier Solana pledged their support during their brief visit to Belgrade for the funeral of Serbian PM Zoran Djindjic. (Intellinews 19.iii.03) POLICE ARREST TWO MORE ZEMUN CLAN MEMBERS OVER P.M. DJINDJIC MURDER Searching for the killers of Serbian Prime Minister Zoran Djindjic, Serbian police units arrested another two Zemun clan members Zoran Vukojevic, aka "Vuk" and Dragan Ninkovic, aka "Prevara". Vukojevic is a suspended police officer and chief of security of a Zemun clan leader Dusan Spasojevic, aka "Siptar" who is still at large. Ninkovic is allegedly one of the leaders of the clan believed to be behind the Prime Minister's murder. Special police units also arrested popular folk singer Svetlana "Ceca" Raznatovic, widow of Zeljko Raznatovic "Arkan" on suspicion that she was in contact with two clan bosses both before and after the assassination. Milorad Lukovic, aka "Legija", the Zemun clan ringleader and the prime suspect in the Prime Minister's murder, was a member of Arkan's paramilitary unit that allegedly committed atrocities during the Balkan wars in the 1990s. Legija, who became a special police commander in mid-1990s but left the force in 2001, remains at large. Arkan was gunned down in a Belgrade hotel in 2000. During the raid on Raznatovic's house, police seized a large cache of weapons and ammunition, including 21 handguns, three boxes of ammunition, and military and police hidden in a bullet-proof bunker. Since the Prime Minister's assassination on March 12, police have arrested more than 300 persons in connection with the crime. (NewsBase 18.iii.03) SLOVAKIA RUSSIAN YUKOS WANTS TO RAISE STAKE IN TRANSPETROL According to Slovakia's Minister of Economy Robert Nemcsics, Russian oil giant Yukos wants to raise its current 49% stake in Slovak crude pipeline operator Transpetrol if additional shares were offered for sale in the firm. Nemcsics traveled to Moscow last week to promote trade relations with Russia, Slovakia's key supplier of raw materials and energy, and his agenda included also meeting with Yukos officials. In Nemcsics words, Yukos has expressed interest in the eventual further privatization of Transpetrol and this interest seemed to be great. In addition, Yukos reiterated its commitment to boost the volume of crude flowing through Transpetrol-operated pipelines, a part of the Druzba system connecting Russia and western Europe, to full capacity by 2006. Transpetrol operates 515km of Druzba and Adria crude oil pipelines on the territory of Slovakia. Yukos bought 49% and management control in Transpetrol from the Slovak government last year for USD 74mn. (IntelliNews 18.iii.03) SLOVAK TELEVISION TO DISMISS MORE THAN HALF OF STAFF State broadcaster Slovak Television will dismiss 1,200 of its 2,000 employees by the end of this year due to chronic budgetary problems, Slovak Television Director Richard Rybnicek announced on 11 March, according to CTK. Presenting what he described as an "emergency" program, Rybnicek also said Slovak-produced programs are to be drastically cut and Slovak Television will move some operations out of its current building. Dismissal notices will go out by end of June, he said. Rybnicek said the redundancy measures will cost 250 million crowns ($6.6 million) in severance pay but should save 224 million crowns over one year, which amounts to about one-third of the cost of running the station. By 2004, he said, Slovak Television will no longer depend on government funding and will function solely on the basis of license fees and revenues it generates itself. (RFE/RL 12.iii.03) UKRAINE KIEV VOWS TO REFORM ECONOMY Ukraine's prime minister, whose country risks being ignored by an expanding EU, said he was determined to push ahead with economic reforms to enable the ex-Soviet state to move closer to its neighbors to the west. Viktor Yanukovich, who left Monday for talks with European Union officials in Brussels, said his priorities were to secure market economy status for Ukraine and speed up negotiations on entry to the World Trade Organization. "Domestic reforms are the best way to move Ukraine closer to the European Union," Yanukovich said Monday. "The EU sets the example for us on democratic freedoms and social standards. The EU economic model is close and clear for us," he said in his first interview with the foreign media since taking office last November. Yanukovich, widely seen as President Leonid Kuchma's likely choice as successor in elections next year, said Ukraine should take its rightful place within Europe. He also wants close ties with Russia. "Ukraine is a European country and sees its future in Europe," he said. "We would certainly like to find such an understanding in the EU to give an impulse to our relations." (The Moscow Times 18.iii.03) SWISS EXPERTS IDENTIFY JOURNALIST GONGADZE'S BODY According to the results of an examination conducted by Swiss forensic experts, a body found in the woods near Kyiv in November 2000 is that of Ukrainian journalist Heorhiy Gongadze, Ukrainian media reported on 11 March, quoting Deputy Prosecutor-General Viktor Shokin. "I believe it would be unjust to deny that the body belongs to Heorhiy Gongadze from this moment on," Reporters Without Borders (RSF) Secretary-General Robert Menard told journalists in Kyiv the same day. An RSF representative participated in the examination. Lesya Gongadze, Heorhiy's mother, said she is ready to bury the remains of her son, Interfax reported. Meanwhile, Shokin said investigators in the Gongadze case are considering several possible scenarios of the journalist's death, including the possibility that he was murdered by law-enforcement officers. (RFE/RL 12.iii.03) INFORMATION PROVIDERS - For further information on our InformationProviders, please contact: NEWSBASE NewsBase is a leading provider of business and economic news and intelligence from Russia, Central Europe and the FSU. Daily bulletins and industry specific weekly reports backed by an archive containing over 10 million words combine to provide a comprehensive service to a global blue chip client base. 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