Gazprom scored a precedent-setting victory over the Moscow Tax Inspectorate on 28 October, fending off charges that it evaded $940 million in taxes on natural-gas exports, "Kommersant" reported on 29 October.

Tax Inspectorate No. 40 had charged the gas monopolist with classifying natural gas as lean (dry) gas for export purposes in 1999-2001. While lean gas -- produced from condensed gas and casing-head gas -- is identical to natural gas for commercial purposes, Russian law exempted it at the time from the 30 percent export excise levied on natural gas. Gazprom claimed significant lean-gas exports in 1999-2001, tidily reducing its tax burden.

The Tax Inspectorate, noting that both lean and natural gas mingled in the pipeline, calculated Gazprom's taxes according to the proportions of gas introduced into the system for all customers. The difference came to a whopping $940 million. When the charges were announced in March, Gazprom shares tumbled 7.6 percent. The law firm of Pepelyaev, Goltsblat and Partners argued on behalf of Gazprom that the Tax Code insists on specific reasons and proofs, not general appeals to the laws of nature.

"Vedomosti" wryly summarized the defense on 29 October as "the Tax Code has greater weight than a physics textbook." The court agreed. The Tax Inspectorate has not said whether it will appeal the case.

(RFE/RL 05.xi.02)