The Annals of PreCrime: “An Absolute Nightmare”

precriminals.jpegUnder legislation currently tabled in the Russian parliament, these up-and-coming Russian businesswomen could do hard time in a penal colony for the wholly fanciful crime of “complying” with western sanctions against target businesses and individuals. Image courtesy of Credit Bank of Moscow

Sanctions Victims Refuse the Russian State’s Protection
Big Business Categorically Rejects Adopting Law on Anti-Sanctions
Yelizaveta Bazanova, Anna Kholyavko and Yekaterina Burlakova
Vedomosti
May 16, 2018

“An absolute nightmare”: that was the phrase used by the majority of lawyers and executives of Russian and foreign companies whom we asked to comment on plans to imprison people who “implemented” foreign sanctions. On Monday, a law bill to this effect, tabled by State Duma Speaker Vyacheslav Volodin, Federation Council Speaker Valentina Matviyenko, and leaders of all four parliamentary factions was passed in its first reading. The second reading has been scheduled for Thursday.

Under the law bill, if a company refuses to sign a public contract with an entity on the sanctions list, the company and its executives would be threatened with a maximum fine of ₽600,000 [approx. €8,200] and a maximum prison term of four years.

The board of the Russian Union of Industrialists and Entrepreneurs (RSPP) has decided passage of the law would be completely unacceptable. Companies would find themselves between the frying pan and the fire: violations of sanctions would threaten them with secondary sanctions, while complying with sanctions would make them criminally prosecutable in Russia.

The RSPP’s resolution was supported even by board members who had themselves been sanctioned.

“We believe it would cause further damage to the Russian economy, including business with foreign and Russian companies, and both Comrade Vekselberg [Renova Group Chair Viktor Vekselberg] and I voted for the resolution,” Interfax has quoted VTB Bank president Andrei Kostin as saying.

A spokesperson for Vekselberg did not respond to our questions. We were also unable to contact a spokesperson for Oleg Deripaska, another target of western sanctions, yesterday evening.

If passed, the law would be unlikely to have a considerable impact on how businesses operate, but it could be a means of threatening and pressuring them, the entrepreneurs we surveyed said unanimously. The wording of the law bill is harsh. Nearly anyone could be prosecuted on the flimsiest of pretexts, complained an executive at a transnational food producer.

The key risk is the absence of clear criteria for defining what would constitute a violation of the proposed law, our sources all agreed. Even the Russian Finance Ministry could be prosecuted. In its Eurobonds prospectus, it pledged not to use the funds raised to support entities targeted by western sanctions. In January, Alfa Bank warned Russian defense companies it would not handle their accounts due to sanctions. Spokespeople for the Finance Ministry and Alfa Bank did not respond to our inquiries.

The Kremlin has also been unhappy with the law bill, said a federal official close to the presidential administration.

The law bill, if passed, would also generate risks for those companies who refuse to do business in Crimea due to sanctions, said Alexei Panich, a partner at Herbert Smith Freehills. These include the state banks Sberbank and VTB, as well as mobile telecom operators. Andrei Isayev, deputy head of the State Duma’s United Russia faction, claimed  companies who do not open branches in Crimea would not be affected by the law. What was at stake, he said, were the ordinary deals and transactions companies perform almost automatically. However, refusal to do business with counterparts in Crimea could be considered a criminal offense under the terms of the law, said an attorney at a major international law firm. The law could complicate public offerings, the issuing of loans, and contracts and transactions, he specified.

An employee at a major international firm explained it would be hard to determine whether a company refused a deal with a counterpart due to their bad reputation or the threat of sanctions. An auto dealer agreed the threat of criminal prosecution would be powerful leverage. To encourage its partners to agree to a deal, a business could threaten to report them to law enforcement agencies, argued Panich.

The proposed measures were excessive, agreed a spokesperson for an agricultural commodities trader. Some companies have in-house rules restricting such deals. Our source said the law bill appeared to be means of coercing such companies. Theoretically, it could be used as leverage. A company or person on the Specially Designated Nationals And Blocked Persons List (SDN) could show up and demand another company do business with them, agreed the head of major private bank. It was difficult to imagine how banks would solve such dilemmas, he said.

“There are many ambiguities in how the law would be interpreted, and what specific actions or inactions would be punishable,” he concluded.

Foreign businesses could interpret the law bill as a signal it was time to wrap up their operations in Russia, said the vice-president of a major foreign company that produces popular consumer products. No one has any intention of sacrificing their top executives to the Russian law enforcement and judicial system.

All issuers of bonds include in their covenants the refusal to do business with entities targeted by sanctions. Perhaps expatriates who do not want to take risks would leave the country, argued an employee at a large foreign company.

Passing the bill into law would be a mistake, said political scientist Yevgeny Minchenko. The law would have to be seriously amended over time.

“Knowing how this could affect both Russian companies and foreign business operating in Russia, this is very risky decision in my opinion,” Minchenko told us.

Spokespeople for Sberbank and Credit Bank of Moscow declined to comment.

With additional reporting by Vladimir Shtanov, Darya Borisyak, Alexandra Astapenko, and Svetlana Bocharova

Translated by the Russian Reader

Totally Wired

DSCN5713A view of Kolokolnaya Street, in downtown Petersburg, crisscrossed by telecom cables. Photo by the Russian Reader

Telecom Operators Taking Their Time Clearing Nevsky Prospect of Wires
Zhanna Zhuravlyova
Delovoi Peterburg
May 15, 2018

Clear Sky, a program designed to move underground the thick network of wires stretching over Nevsky Prospect, has been launched. The results so far have not been promising. Only three out of dozen and a half telecom operators have gone underground.

The first three telecom operators have removed their fiber-optic cables from Nevsky Prospect and moved them underground into conduits built as part of the city’s Clear Sky program. These trailblazers were Prometei, Obit, and Centrex Smolny, a wholly owned affiliate of city hall’s IT and Communications Committee (KIS), which acted as the project’s general contractor, according to Centrex Smolny’s director Felix Kasatkin.

According to Kasatkin, another three or four operators are ready to move their overhead lines, currently stretched between poles and buildings, underground in May. There are around a dozen and a half telecom providers whose lines crisscross the space immediately above the Nevsky. According to market insiders, the cost of dismantling the old lines and rerouting them to the access points into the underground conduits could range from ₽100,000 to ₽2 million. The cost depends on how many times the cables cross Nevsky, and how close they are situated to the necessary access points.

It is utterly impossible to force operators to remove the lines. The overhead lines may be ugly, but they are completely legal.

A Multi-Channel Story
The problem of overhead lines on the Nevsky surfaced in 2012, when Petersburg Governor Georgy Poltavchenko voiced his outrage over the large number of lines, which disfigured the city’s main thoroughfare, in his opinion. The solution appeared obvious: move all the telecom operators into Rostelecom’s underground conduits. Many of them, however, resented the prospect, complaining about the state telecom operator’s rates, the speed with which it performed work, and its frequent refusals to configure networks.

That was when an alternative and somewhat extravagant solution was advanced: putting the telecom lines in Vodokanal’s water main conduits. A design was drafted, but never implemented.

The final solution seemed simpler. The city would build its own infrastructure within Rostelecom’s conduit, offering to rent the space to telecom operators. The idea was that they would be more open to this proposal than to collaborating with Rostelecom, with whom they were in constant competition.

Built for Free
Ultimately, ten underground conduits were built under the Nevsky, and collective access fiber-optic cables were inserted in them. Ownership of the conduits is currently being transferred to Centrex Smolny, and telecom operators are encouraged to lease the fiber-optic cables.

Kasatkin emphasizes the rates for leasing the cables are as low as possible, since they include only servicing charges. There is no need to recoup the costs of constructing the conduits, since they were built at the city’s expense. Despite our best efforts, we were unable to find the relevant government purchase order for performance of this work, nor could Centrex Smolny could not provide us with specific information on on the matter.

According to Rustelecom, around twelve kilometers of conduits were constructed for the Clear Sky project. The cost of laying one kilometer of conduit is around ₽100,000, says Yuri Bryukvin, head of Rustelecom. So, along with the cost of materials and incidental expenses, the total costs could have amounted to ₽1.5 million. KIS chair Denis Chamara reported ₽30 million were spent on the project.

Broken Telephone
Telecom operators who have received Centrex Smolny’s offer say the cost of leasing one kilometer of fiber-optic cable is approximately ₽500 a month. One conduit can contain eight, sixteen or more fiber-optic cables.

All the telecoms who operate in the city centere have fiber-optic cables that cross the Nevsky five or six times, explains Vladislav Romanenko, commercial director of Comlink Telecom. In this case, a telecom would pay up to ₽50,000 a month to lease fiber-optic cables.

Andrei Sukhodolsky, director general of Smart Telecom, whose lines also hang over the Nevsky, says the company has not yet been made an offer by Centrex Smolny.

“I have definitely not received official proposals in writing,” Sukhodolsky claims. “Theoretically, we would agree to move our lines if we could understand the costs.”

“The cost of the lease you quote is quite decent, but we have not received a commercial offer to lease fiber-optic cables,” says Romanenko. “Currently, we are considering laying our own cable in Rostelecom’s conduits.”

ER Telecom told us they were working to move their communications lines, but they did not specify where they were moving them.

The initial list of streets that should have been cleared of unnecessary wires under the Clear Sky project featured a dozen streets, including Bolshaya Morskaya Street, Moskovsky Prospect, and Izmailovsky Project. So far the KIS has no specific plans to go beyond the Nevsky. And, perhaps, the issue will no longer be relevant after the 2018 FIFA World Cup.

Market insiders point to Moscow as a positive example. The city moved its cables underground with no hitches and in much greater numbers. In Tatarstan, the authorities have obliged building owners to dismantle all structures that have not been vetted by the city on pain of paying a hefty fine.

“So the building owners dismantled the telecom lines on their own,” our source at Comfortel told us.

Our source at the KIS was at pains to emphasize that operators removed the lines “voluntarily and at their own behest.”

*********************

The overhead lines on the Nevsky usually contain eight to sixteen fiber-optic cables, which means the price of leasing a single conduit for moving lines underground could be as much as ₽8,000 a month. Then it would make sense to take advantage of Centrex Smolny’s offer. But of an operator is running a large number of cables, he would find it more profitable to lease a conduit from Rostelecom. We have already moved our cables to Rostelecom’s conduits without waiting for the offer from Centrex Smolny. It’s odd certain operators postponed the move to May, since construction work is not carried out by telecom operators only when the temperature dips below –15°C.
—Dmitry Petrov, director general, Comfortel

We have been preparing for the move for three years or so. In one spot, where our cables cross the Nevsky, we took advantage of Centrex Smolny’s offcer. The terms for leasing the fibers really are good. Centrex Smolny is clearly not making any money on this project, but they are probably not losing any money, either. The important thing about the project is the telecom operators are not commercially entangled with Centrex Smolny, while many telecoms have long, complicated relationships with Rostelecom: for example, when a lot of illegal fiber-optic cables were laid in the conduits, something that is still a matter of controversy.
—Аndrei Guk, director general, Obit

Translated by the Russian Reader

Harmacy

DSCN6345.jpg

Back to the World of Me-Too Drugs: How Anti-Sanctions Will Deal a Blow to the Mental Health of Russians
Takie Dela
May 2, 2018

The ban on the import of drugs from the United States and other “unfriendly” western countries, tabled by MPs in the Russian State Duma, will worsen the mental health of Russians. Two psychiatrists discussed the consequences facing people with mental illnesses if brand-name drugs are replaced by domestic lookalikes.

The Big Picture
In early April, State Duma Speaker Vyacheslav Volodin announced the imminent expansion of countersanctions by Russia towards the US and other western countries opposed to the Russian Federation’s foreign policies. In particular, there are plans to introduce a ban on the import of drugs from the countries on the sanctions lists, but only on those drugs for which there are domestic counterparts. However, many foreign-manufactured psychotropic drugs have domestic counterparts, and they will be banned, therefore.

Russia is not a happy country in terms of psychiatry. Every fourth Russian suffers from mental illness at some point in his or her life, and between three and six percent of the populace needs to take medications regularly.

Due to severe conditions such as epilepsy, schizophrenia, clinical depression, and bipolar disorder, hundreds of thousands of Russians lose the capacity to work and are unable to adapt to society. Many of them commit suicide. Modern drugs are effective enough to let most patients lead full lives. Their well-being depends on drugs, which they must take for many years and, sometimes, their whole lives.

The drugs in question are antidepressants, antipsychotics, tranquillizers (sedatives), and normotics (mood stabilizers). Nearly all the brand-name drugs in the field are produced in Western Europe and the US. If theban is adopted, they will vanish from Russian pharmacies, since nearly all these drugs have counterparts (i.e., generics), with the same active ingredients, that are produced in Russian and Eastern Europe.

When discussing the possbile stop list, experts named two popular antidepressants: Paxil (France) and Cymbalta (USA). Many other drugs popular in Russia, including the antipsychotics Zyprexa (Eli Lilly, UK) and Seroquel (AstraZeneca, UK/Sweden), and the antidepressant Zoloft (Pfizer, USA), could be included in the ban. What would be the consequences for millions of patients?

Increasingly Ineffective Treatment
Mental equilibrium is a delicate matter, and selecting drugs to treat psychiatric conditions can much more complicated than selecting drugs to treat somatic illnesses. The optimal outcome is for the individual not merely to stop experiencing severe symptoms like obsessive suicidal tendencies and hallucinations, but also to remain capable of working and leading a social life, rather than turning into a lifeless vegetable.

People with clinical depression, which can last for years, know well the laborious process of choosing the right drug and the right dosage that will finally let them live a normal life. The process can take weeks and months.

Matters are even more complicated with bipolar disorder. The disease’s two opposite phases require different medications, and an unsuitable drug can even worse the outcome of the illness. Schizophrenia presents such a variety of symptoms that a veritable cocktail of drugs is sometimes needed, and attending physicians have to make sure the side effects do not outweigh the benefits of treatment.

“Current guidelines for pharmacotherapy recommend prescribing the brand-name drug and not substituting a generic without good reason,” says Maria Gantman, a psychiatrist at the Mental Health Center.

Dr. Gantman prescribes her patient brand-name drugs, which have undergone high-quality trials on thousands of patients and have a proven effect. Generics also undergo trials when they are licensed, trials that prove their similarity to brand-name drugs, but the evidentiary base is filled with too many gaps, she notes.

“Generics are usually less expensive, and we start off with them if the patient cannot afford the brand-name drug. The abrupt replacement of one generic with another can produce a change in the effect. Due to the peculiarities of their ingredients, generics may be absorbed at a greater or lesser rate and generate a different concentration of the active ingredient in the blood. The people who suffer most are those forced to switch from a brand-name drug they have been taking for years and that was laboriously selected for them to a generic,” explains Dr. Gantman.

She fears the Russian authorities will approach the issue in a perfunctory manner.

“For example, there is a drug that is effective in treating schizophrenia, Rispolept. There are Russian lookalikes, sold under the generic name risperidone. But if the brand-name drug is banned, it hard to imagine what lies in store for people who survive by taking Rispolept Consta (Belgium), which does not exist in this form as a generic in Russia,” says Dr. Gantman.

“The problem is that theRussian pharmaceutical industry hopelessly lags behind the western pharmaceutical industry. There are certain types of drugs Russia just cannot produce, because it does not have the resources, the equipment or the research,” continues Anatoly Shepenyov, a psychiatrist and psychotherapist. “Say, the antidepressant Cipralex (Denmark) cannot be synthesized in Russia. Folic acid is an indispensable drug, too. In Russia, it cannot be produced in the form needed for the synthesis of serotonin, that is, in the form needed for maintaining normal brain function.”

Side Effects
The side effects of psychotropic drugs are numerous and varied. Mental impairment, convulsions, fainting, anemia, and fever are only some of them. Predicting them ahead of them is impossible: they are the individual body’s reactions. A drug that simultaneously provides relief while not producing agonizing side effects is a valuable find for many patients.

Dr. Shepenyov illustrates the circumstances by mentioning the antidepressant Paxil (France). It has generics, for example, Rexetin (Hungary). Rexetin works, but its therapeutic effectiveness is lower. To get the same effect she would get from 20 mg of Paxil, thae patient would need to take at least 30 mg of Rexetin. As dosages increase, so do the side effects.

“The main difficult is not synthesizing the right substance, but isolating it in pure form. I’ll give you an example. The antidepressant must fit the receptor in the brain the way a key fits a lock. When generics are synthesized, a whole slew of impurities emerge, extra ‘keys,’ if you like. If you use this ‘dirty’ molecule, you won’t open the lock, but there will be something jammed in it,” notes Dr. Shepenyov.

The use of generics thus introduces the risk there will be a lack of therapeutic effect coupled with a slew of side effects that would never be produced by brand-name drugs. The liver also suffers more from the constant intake of “dirty” drugs.

“Take the most popular Russian-made antidepressant, Fluoxetine (a generic version of the US-produced Prozac). It is terrible in terms of side effects. Although its benefits are weak, patients suffer from phenomenal absentmindedness,” explains Dr. Shepenyov.

Withdrawal Syndrome
If western-produced drugs one day vanish from Russian pharmacies, thousands of patients will undergo withdrawal syndrome, the body’s physiological reaction to the absence of a substance to which it is accustomed.

“I felt terribly sick within a few days. I had a terrible chill, severe dizziness, nausea, weakness, and insomnia,” a female patient described her withdrawal from Paxil.

It is necessary to gradually reduce the dosage to avoid this effect, which means having a good supply of the drug and then just as gradually increasing the dosage of the new drug. This means weeks of enduring shaky health.

The Anti-Placebo Effect
“The anti-placebo effect is no less frequent and severe than the placebo effect. The patient knows she has taken another drug. This exacerbates her anxiety and could ultimately destabilize her condition. So, if an individual has taken the same drug for years and feels fine, there is no need to give her another drug. It’s risky,” says Dr. Gantman.

Both doctors are agreed that patient health should not be a geopolitical bargaining chip. According to Dr. Gantman, medical issues should be left out of the political games countries play, and she calls the State Duma’s plans to ban the imports of foreign-made drugs “profoundly unethical.”

“If Russian MPs adopt such a law, we should oblige them to be treated solely with Russian-made drugs, drive Russian-made cars, and use Russian-made telephones and computers. Those would be excellent sanctions that would finally force them to use their brains before making radical decisions without having the foggiest notion about either medicine or how the body functions,” concludes Dr. Shepenyov.

Translated by the Russian Reader

*******************

Anastasia Plyuto
VK
May 12, 2018

A group picket was held on Saturday, May 12, 2018, in Petersburg’s Ovsyannikov Garden, to protest the Russian State Duma’s tabling of a bill that would ban the purchase of drugs abroad. Yes, we have heard that legislators have suggested removing the word “drugs” from the wording, but we know much freighted the phrase “and other goods” can be.

To increase the chances city authorities would authorize the picket, activists applied for several venues at once. The authorities waited until the last possible moment to render a decision, and so there was no time to inform the public about the planned protest. Around a dozen people were in attendance, including a diabetic who depends on imported insulin, and several people outraged by the politics and statements of our MPs.

One of the placards featured a toy pyramid for little children, which MP Iosif Kobzon gave to a teenaged cancer patient while visiting a hospital in Simferopol in 2015. In our view, the incident reflects the lack of understanding displayed by our bigwigs when it comes to the needs of patients.

There were few visitors in the garden, and nearly none of them had heard of the law bill, but no one, from schoolgirls to a seventy-year-old female pensioner, was left unmoved by the subject. They reacted with surprise, indignation, and complete support for the picketers.

meds-1“You want to ban imported drugs? Start with yourselves. Treat your ailments with oak bark!”

meds-2.jpg“Insulin addict. Bring it on! Deprive us of our doses, assholes. ‘Life in Russia is no picnic: you can survive without insulin.’ Insulin or formaldehyde? Neuroleptics or belladonna? You choose, Russia!”

meds-3“State Duma! By banning the import of drugs, you are killing people!”

meds-4“Ban yourselves from driving Geländewagens! Hands off the drugs!”

meds-5jpg“Viva asymmetrical responses! (Genocide)”

Photos by Mikhail Ryzhov and Anastasia Plyuto. Thanks to Victoria Andreyeva for the heads-up. Translated by the Russian Reader

How Don Trump Gave the Russian Economy a Leg Up

Brent-Crude

Buying Dollars No Way to Stop: Russian Finance Ministry Purchasing Foreign Currency at Record Pace in Aftermath of Putin’s Announcements
Alexander Pirozhkov
Delovoi Peterburg
May 10, 2018

As of today, the Russian Finance Ministry will be buying dollars at a record pace over the next four weeks. It will spend a total of ₽323 billion on these deals during the period. Since the start of the year, the Finance Ministry has spent nearly ₽3 billion on replenishing its foreign currency reserves. If we take into last year’s transactions, it has spent a total of ₽1.8 trillion.

High oil prices have made it possible to buy up foreign currency aggressively. This week, the price of Brent crude jumped above $76 a barrel, its highest price in three and a half years. Russian Urals crude, which is traded at a discount of several percentage points to Brent, exceeded $70 a barrel. The price rise has continued for several months, producing a huge surplus in the federal budget (₽344.35 billion in the first quarter of 2018), since budget revenues had been planned based on a Urals price of $40 a barrel. Thanks to favorable trends in extractive resources markets, both President Putin and Prime Minister Medvedev cheerfully announced earlier this week that finding an additional ₽8 trillion to implement the president’s so-called May decree would not be a problem.

In turn, oil prices have been conquering new heights not only due to the efforts of OPEC and the countries allied to it. Quoted prices for black gold flew up an additional five to seven dollars thanks to statements by US President Donald Trump, who has been trying to dissolve the nuclear deal with Iran while blaming OPEC for high oil prices on his Twitter acccount for appearance’s sake. The US’s exit from the nuclear deal means sanctions cancelled under the previous US leader, Barack Obama, would be reintroduced against Iran, thus removing from the market, according to various estimates, 500,000 to 700,000 barrels of Iranian oil a day.

While Trump has been bending over backwards to give the Russian economy a leg up, Putin has spoken of the need to “untie” it from the US dollar in order to boost economic sovereignty. Perhaps these are mere words, not backed by real intentions, especially since they are at odds with the Finance Ministry’s actions. However, Iran itself earlier took certain steps in the same direction as it faced the threat of renewed sanctions. There is a risk the example of our Middle Eastern neighbor will prove contagious.

Translated by the Russian Reader. Image courtesy of Business Eye

Monetizing Russia’s Migration Maze?

DSCN5633.jpg“Help is like hell, only it’s help.”

Punishment Minus Expulsion
Interior Ministry Develops Individual Approach to Migrant Workers
Anna Pushkarskaya
Kommersant
April 27, 2018

The Russian Interior Ministry has published draft amendments to the Administrative Offenses Code that would permit judges not to expel people from Russia who violated immigration regulations by allow them to take into account mitigating circumstances and substitute monetary fines for expulsion. The individual approach has already been enshrined in several articles of the Administrative Offenses Code by decision of the Russian Constitutional Court, but the police are willing to make it the “general rule for the assignment of administrative penalties.” Meanwhile, the Russian Justice Ministry has reported to the Council of Europe on measures it has taken in response to the complaints of stateless persons, although the rulings of the European Court of Human Rights (EHCR) and the Russian Constitutional Court on these cases have not yet been implemented, experts have noted.

The draft amendments to the Administrative Offenses Code, which would give judges the ability to replace administrative punishment with less harsh penalties, depending on the specific circumstances of the case, have been posted by the Interior Ministry for public discussion until May 4. The police drafted them on the basis of a February 17, 2016, ruling by the Constitutional Court. The ruling was rendered in the case of Moldovan national Mihai Țurcan, who was expelled from Russia for failing to notify the Federal Migration Service he was registered in Moscow Region. (This requirement is stipulated by Article 18.8 Part 3 of the Administrative Offenses Code, and it also applies to stays in Moscow, St. Petersburg, and Leningrad Region.)

Expulsion entails a five-year ban on entering the Russian Federation and reapplying for a residence permit. Courts did not consider the complainant’s work experience and payment of taxes as grounds for mitigating his punishment. The Constitutional Court ruled that these immigration regulations were unconstitutional and obliged legislators to individualize penalties for single violations of the controversial regulation by taking into account the length of an alien’s stay in the country, whether or not s/he has family in Russia, payment of taxes, and law-abiding behavior. Since December 2016, Article 18.8 Part 3 has allowed authorities to avoid explusion except in cases in which the documents confirming the alien’s right to stay have been lost or are lacking. In April 2017, the Constitutional Court’s approach was enshrined in the “General Rules for the Assignment of Administrative Penalties” (Article 4.1 of the Administrative Offenses Code), which deals with violations at official sporting events, for which foreign fans can get off, under mitigating circumstances, with a fine of 40,000 to 50,000 rubles and a ban on visiting stadiums for a period of one to seven years.

In October 2017, First Deputy Prime Minister Igor Shuvalov instructed authorities to extend the approach to all cases of compulsory explusion. If the court concludes that expulsion is an excessive stricture on the right to a private life and is disproportionate to the objectives of administrative penalties, it can be substituted by a fine of 40,000 to 50,000 rubles [approx. 530 euros to 660 euros]. Courts may already opt not to order expulsion in accordance with the clarifications issued by the Russian Supreme Court and Russian Constitutional Court, but now the factors courts should take into account are supposed to be incorporated in the wording of the law, noted lawyer Sergei Golubok. Lawyer Olga Tseitlina told Kommersant the draft amendments are quite important, because courts have, in practice, ignored marital status and other vital circumstances.

At the same time, the Russian Justice Ministry has sent a letter to the Council of Europe’s Committee of Ministers, asking it to recognize that the EHCR’s rulings on complaints filed by stateless persons have been implemented. The virtually indefinite detention of complainants in special Russian Interior Ministry facilities on the basis of rulings by Russian courts and the conditions of their detention in custody were ruled violations of the European Convention on Human Rights. The Justice Ministry reported that compensation had been paid to the complainants. They are now no longer subject to expulsion and deportation, and can “fix their migration status.” Moreover, the State Duma has passed, in their first reading, the admendments to the Administrative Offenses Code drafted by the Interior Ministry to settle the problem, the Justice Ministry reported four years after the ECHR issued its ruling. The Justice Ministry referred to the Constitutional Court’s ruling in the Mskhiladze case. In May 2017, the court also ordered that the Administrative Offenses Code be amended.

The ruling has not been implemented, noted Golubok and Tseitlin, who represented Mr. Mskhiladze. The ECHR’s decision in the case of another of Tseitlina’s clients, Roman Kim, has not been implemented, either, she told Kommersant.

“He has no legal status and de facto cannot apply for [Russian] citizenship or a [Russian] residence permit, since he cannot expunge his conviction due to his unemployment, but he is unemployed because legally no one can hire him,” said Tseitlina.

She stressed the general measures required by the ECHR and the Constitutional Court have not been implemented, either, since no changes have been made to Russian federal laws.

Thanks to anatrrra for the heads-up. Translation and photo by the Russian Reader

Valery Pshenichny: Tortured, Then Murdered

ByEkK6EZL1H45U3VA1r3Businessman Valery Pshenichny did not kill himself in his cell in a Petersburg remand prison, as the Russian Federal Penitentiary Service has claimed. 

Tortured, Then Murdered
Irina Tumakova
Novaya Gazeta Sankt-Petersburg
April 16, 2018

Valery Pshenichny, a defendant in the case of embezzlement at the Defense Ministry in connection with the building of a submarine at the Admiralty Shipyards in Petersburg, did not die from a lack of medical care. He did not take his own life. He was not tormented by abominable living conditions, something the wardens arrange for other inmates. He was simply tortured and then murdered, and his murderers did not even try to hide their tracks. This was the unambiguous verdict reached by the Petersburg Bureau of Forensic Medical Examiners, thus ruling out the possibility of suicide.

Novaya Gazeta wrote in February about the businessman’s strange death at Petersburg Remand Prison No. 4. Valery Pshenichny stood accused of embezzling money from a Defense Ministry contract for construction of the submarine Varshavyanka. His company, NovIT Pro, was developing a 3D computer model of the submarine for servicing the craft after it was sold. In 2016, Pshenichny, who owns the company, suspected his partner and company director Andrei Petrov had stolen millions in funds from the firm’s accounts and persuaded police to open a criminal investigation. Petrov was arrested. After several months in police custody, Petrov testified the embezzlers were Pshenichny himself and Gleb Yemelchenkov, a deputy head engineer at Admiralty Shipyards. Allegedly, they had colluded and deliberately overstated the cost of the contract. Investigators determined how much the contract should actually be worth, based on their own calculations.

Petrov was released while the new suspects were arrested. Three weeks later, Pshenichny was found hanged in his cell. Before the incident, his cellmates had been removed simultaneously from the cell under various pretexts. The Russian Federal Penitentiary Service insisted Pshenichny had committed suicide, while his loved ones accused prison wardens of not giving him medical care after he had suffered a stroke.

The forensic examination was completed last week. Now we can establish what happened.

Don’t Pay Anyone Anything
Pshenichny shared a cell with three other inmates. At around two in the afternoon on February 5, 2018, two of the inmates were taken to talk to police investigators, while the third was taken to a meeting with his lawyer. CCTV footage shows Pshenichny was removed from the cell fifteen minutes later. He did not leave the remand prison. We do not know how long he was gone from his cell, where he was during this time, what condition he was in when he returned to his cell, and who was with him.  But after four o’clock in the afternoon a guard escorted his cellmate back to the cell and found Pshenichny hanged. An electrical cord torn from a water boiler and the destroyed sneakers of a cellmate lay near his body. Prison wardens explained Pshenichny had tried to slash his wrists with the arch support from the sneakers, but had failed. He then tore the cord from the water boiler, hoping to electrocute himself. Finally, he pulled the lace from his hooded sweatshirt and hanged himself.

A graduate of the Leningrad Electrotechnical Institute, Valery Pshenichny was an engineer. He would hardly have attempted to use a 220-volt current to kill himself. The lace from his hooded sweatshirt was forty centimeters long. It would have been impossible to hang himself with this length of lace. And everyone who knew Pshenichny is unanimous. The last thing this strong, cheerful man used to winning would have done was given up and taken his own life.

“My husband and I were together for forty years, since our first year at the Leningrad Electrotechnical Institute,” says Natalya Pshenichnya. “I’d never met such an intelligent, striking, strong positive person before. I’m not exaggerating. He was confident in himself and the stance he took. He knew he was innocent, and he was not afraid of anything.”

An incitement to suicide investigation was opened. But then rumors flew around the remand prison that all staff members had been made to submit sperm samples for analysis.

Cuts and stab wounds were found on Pshenichny’s body. His spine was broken. Simply put, he was tortured. Forensic experts have identified blunt trauma to the neck and asphyxiation as the causes of death. Translated into Russian, this means Pshenichny was strangled with the forty-centimeter-long lace from his own hood. Tests showed it was not remand prison staff who raped him. Most likely, someone from the outside was sicced on Pshenichny to have his way with him.

None of the businessman’s intimates can imagine what the cause of this stupid brutality could be. However, before his death, Pshenichny managed to pass a note to his wife in which he asked three times not to give money to anyone.

“Don’t pay anyone anything,” he wrote.

A Russian Elon Musk
The work for which, according to investigators, Pshenichny artificially inflated the price, was completely unique. Nobody in the world had done anything like it before. In the future, it could have generated new opportunities not only in shipbuilding, but also for oil and gas companies. NovIT Pro had been negotiating with Gazprom and Rosneft to produce similar designs.

Friends dubbed Pshenichny a Russian Elon Musk. The talk was that he was not only a brilliant engineer but also a maverick genius whose risks paid off sooner or later.

“He arrived in Leningrad to enroll at the institute carrying a tiny suitcase,” Natalya Pshenichnaya continues. “He had nothing. No one helped him, he was a self-made man. At the institute, he was the most talented student in our year. Things came easily for him, but he was a hard worker. Intelligent, cultured, well-read, he could talk with you about any subject. He would immediately pick it up. Sometimes, I would ask him how he knew something. He would laugh and say, ‘It’s obvious.'”

The student with the tiny suitcase eventually became the owner of a major IT company. NovIT Pro occupies two floors in a building on a corner of the Moika River Embankment and Palace Square in downtown Petersburg, and it has worked on defense procurement orders for many years. Staff say that when investigators arrived to search NovIT Pro’s offices in January, they laughed at first. It was clear this was a fly-by-night firm, they said, joking the place had three desks and one and a half diggers. Then they went down to the floor below and were shocked when they saw a large engineering center.


Admiralty Shipyards

One of Pshenichny’s breathtaking ideas was the selfsame 3D digital model of the submarine. He came up with idea back in 2011 after attending the Naval Salon. NovIT Pro had previously worked on orders from the Defense Ministry for seperate units and parts of ships. But nobody had ever produced a virtual model of an entire ship. Technical specs are attached to each part of the computer model, and mechanics can have access to repair documentation and blueprints wherever the ship is deployed. But it was not this design Pshenichny had planned to patent.

As Novaya Gazeta reported, the contract was signed in 2015. But then Pshenichny went even further in his thinking. What if he could make it possible to carry out repairs of the boat remotely as well? After all, no one knows how far from the shipyards where it was built the submarine will be when it needs servicing, and the specialists capable of doing the repairs all work in Petersburg at the Admiralty Shipyards. The idea of mobile repair centers thus arose.

The mobile data center for the Varshavyanka is a room the size of two railway container cars put together. It can be quickly delivered to anywhere the ship is deployed. The technician from the nearest shipyard enters the room and finds himself inside the submarine as it were. He сan produce a cross section of the ship at any point and peer into any compartment of the ship. He communicates in real time with specialists at the Admiralty Shipyards, who see the same picture as he does in the stationary center in Petersburg. This idea had no impact on the cost of the contract. Pshenichny decided to implement it using the funds approved for the contract. He was curious.

Pshenichny was planning to patent the idea for the mobile center, but he did not have the time. On January 16, investigators came to search his company and his home, and he was arrested. All documentation, including the documentation needed to apply for the patent, was confiscated and entered into evidence. It is currently in the hands of investigators.

All You Need Now Is a Grave Two Meters Deep
“When they came to search our home, those men looked at my husband’s suits in the closet and immediately said, ‘Well, you won’t be needing any of that anymore,'” Natalya Pshenichnaya says. “The investigator said that now all he needed was a grave two meters deep.”

Pshenichnaya had suffered a stroke a few years ago. The doctor had told him a second stroke would be his last. Since then, Natalya had been afraid to worry her husband unnecessarily. During the search of their home, his blood pressure jumped to 250 over 140. She begged the investigator to call an ambulance, but he refused. The police asked her only to confirm whether her husband was really in danger of a stroke. Natalya found her husband’s medical records and handed them over to the investigator. Both she and Pshenichny’s lawyer Larisa Fon-Arev say these medical records were not listed in the search inventory. Moreover, during Pschenichny’s custody hearing, the defense asked the court to order house arrest for Pshenichny or release him on his own recognizance, citing the accused man’s  health, but it transpired that the medical records, confiscated during the search, had not been entered into evidence.


The submarine Varshavyanka

It is unclear what happened to Pshenichny at the remand prison. It is clear he was tortured, that is. A wealthy man who was visited by his lawyer nearly every day was tortured. But then he was killed, and his killers did not even bother to hide their tracks, attempting to get off by making up a lie about his suicide.

What did they want from Pshenichny? Perhaps they were trying to extort money from him, because, as we have already mentioned, he wrote to this wife that she should not pay anyone. Maybe they wanted to force Pshenichny to testify, but in that case it is unclear against whom. As Novaya Gazeta has reported, Pshenichny could not have turned on anyone because he was confident the contract was clean, and to this day no new defendants have been named in the embezzlement case.

Gleb Yemelchenkov, the deputy chief engineer at the Admiralty Shipyards, was Pshenichny’s co-defendant in the case. Yemelchenkov had no financial authority and could not have unduly influenced the contract. He was arrested and charged in the case only due to Petrov’s testimony: he and Petrov had fallen out over Yemelchenkov’s wife. Yemelchenkov is still jailed in the remand prison. The term of his detention was extended to May.

Thanks to Julia Galkina et al. for the heads-up. Translated by the Russian Reader

Russia’s Trash Flashpoint

Landfills Become a Problem for the Kremlin
Environmental Protests Move from Local to Federal Level
Yelena Mukhametshina and Yekaterina Bryzgalova
Vedomosti
April 1, 2018

guseva“Volokolamsk right now. Protest rally against the Yadrovo Landfill.” Screenshot of Olya Guseva’s Twitter page. Courtesy of Meduza

According to various estimates, 6,500 to 7,000 people attended this past Sunday’s protest rally in Volokololamsk against the Yadrovo Landfill. This was more than the number of people who attended the rallies on March 3 (approx. 5,000) and March 29 (6,000). (Volokolamsk’s official population is less than 21,000.)

Among the demands made at Sunday’s rally were the closure of the Yadrovo Landfill, the declaration of an emergency, the resignations of Moscow Region Governor Andrei Vorobyov and Andrei Vikharev, acting head of Volokolamsk District, and the release of activist Artyom Lyubimov, who was detained by police a day before the rally.

Protesters at the rally held up placards addressed to President Putin, including ones  bearing the message, “Putin, Help!”

On March 21, a strong release of landfill gas took place in Volokolamsk, causing schoolchildren to say they felt sick. Fifty-seven children were hospitalized in the Volokolamsk Central Hospital. Subsequently, Governor Vorobyov fired the head of Volokolamsk District.

Volokolamsk has not been the only town in Moscow Region protesting landfills. During the past year, people have taken to the streets in such towns as Balashikha (after the local Kupchino Landfill was closed there on direct orders from the president, the garbage that used to be transported to the landfill was redirected to Yadrovo), Kolomna, Klin, Sergiev Posad, Tuchkov, and Serpukhov.

A former federal official explained why garbage has recently become a hot-button issue.

“New laws were passed obliging the regions to adopt local waste handling schemes and select regional contractors. A market is emerging. There are different disposal strategies: incineration versus separate collection of recyclables. Different strategies require building different processing facilities, and the stakeholders backing the different strategies are also different, from the federal to the municipal level,” he said.

The stakeholders are in conflict with each other and with the regions. This is especially true of Moscow and Russia’s other major cities, he claimed.

Last week, it transpired that Tver Region Governor Igor Rudenya had warned all heads of municipalities in his region that if the regional authorities found garbage from other regions in local landfills, the municipal heads responsible for this would have problems with law enforcement and Governor Rudenya’s administration.

“You will not import garbage from other Russian regions for any amount of money at all,” said Governor Rudenya, as quoted by Tverigrad.ru.

The president’s retinue is to blame for the flare-up in Volokolamsk. When they were getting ready for his annual Direct Line program, they insisted on underscoring the subject of landfills by way of speeding up the construction of processing facilities. It was then the president ordered the closure of the landfill in Balashikha, argues a source close to the Kremlin.

“The landfill was closed. The garbage from there was shipped to nearby landfills, and the flow of garbage to these landfills increased manifold. First it was necessary to put the infrastructure in place, and then close the landfills,” he said.

Environmental protests by people concerned with specific issues are a considerable risk to the system’s stability, and the regime is very concerned about them, saif another source close to the Kremlin.

“The president pays great attention to the environment. Last year, he personally telephoned activists in Chelyabinsk to show he supported them. This is quite important, especially in circumstances when environmental measures are given short shrift to save money.”

Last year was officially the Year of the Environment in Russia. During the presidential campaign, Putin held meetings in Krasnoyarsk on improving the ecological situation and  reducing the emission of pollutants into the atmosphere.

Political scientist Andrei Kolyadin argues the issue of landfills cannot be solved quickly. Several years would be needed to do that.

“This abscess has long been ripening, and now it threatens people’s lives. As the risks to people’s live increase, the risks to the regime increase as well.”

A final decision on the future of Governor Vorobyov, who faces elections in the autumn, has not yet been made, said Kolyadin.

“If the protests balloon, he could be made their scapegoat. He has been doing his best to wiggle his way out of the subject politically, but he has not been able to do this economically. If the elections are handled by the authorities, he will not have complications, but if they are run more or less honestly, the districts in which anti-landfill protests have been taking place will not turn out to vote for him.”

Political scientist Mikhail Vinogradov argues such protests ordinarily wane quickly. In this case, however, the boiling point has not yet been reached. Various grievances, such as Governor Vorobyov’s less-than-happy appointment of a new head of Volokolamsk District, have been building up.

“I get the feeling there will be a new wave [of protests] that will help solve the problems that have accumulated. People feel they are in the right, and it gives them a strong impetus to protest,” he said.

Given current conditions, in which protests have been de facto banned, any socio-economic protest takes on political overtones, Vinogradov concludes.

Translated by the Russian Reader