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1 February 2010
RUSSIA CONTINUES TO LOSE INVESTOR CONFIDENCE AS WORLD BUSINESS LEADERS GATHER IN DAVOS
At the opening of the World Economic Forum Annual Meeting in January 2009, Russian Prime Minister Vladimir Putin called for an overhaul of the global financial system. A year later, under the theme 'Improve the State of the World: Rethink, Redesign, Rebuild', French President Nicolas Sarkozy gave this year's opening speech, declaring that the world must revamp capitalism with morality and responsibility.
President Sarkozy's remarks at Davos came at a fitting time, as the binational 'France-Russia Year 2010' officially began almost simultaneously. The France-Russia Year is intended to provide opportunities for the two country's citizens to gain a better understanding of each other through a series of exhibitions and high-level visits. But questions have been raised as to whether the Russian government truly respects the principles and aspirations of its own people, of Russia's business leaders, and of their foreign counterparts.
Meanwhile, as business leaders and heads of state gather at Davos, uncertainties persist over Russia's current trajectory. President Dmitry Medvedev has recognised that the country's economy is short of inward investment and too dependent on oil, yet there has been little progress to encourage foreign investment. With Mikhail Khodorkovsky again enduring the absurd theatre of a show trial, many observers believe that the rule of law remains an elusive goal in Russia, despite President Medvedev's exhortations about the importance of combating 'legal nihilism'. Indeed, in the 2010 Index of Economic Freedom, an annual guide published by The Wall Street Journal and The Heritage Foundation measuring economic openness, regulatory efficiency, the rule of law, and competitiveness, Russia placed 143rd out of 179 countries ranked.
 INSIDE THE TRIAL
Trial proceedings were halted for the first half of January due to the extended New Year's holiday celebrated in Russia. Khodorkovsky and Lebedev spent those two weeks in a Moscow pre-trial detention centre, forbidden from meeting with their lawyers and unable to see their families due to visiting restrictions.
A series of prosecution witnesses have been heard in court, including Viktor Ivanenko, former Yukos Vice-President (1993-1998), who essentially refuted the arguments of the indictment, and Sergey Uzornikov, who testified that Yukos production companies were paid for their crude oil - undermining a fundamental prerequisite of the embezzlement and therefore money laundering charges. A crucial tipping point, Defence lawyer Vadim Klyuvgant summarised Uzornikov's testimony as 'more than a nail in the indictment's coffin'.
The testimony of Alexey Golubovich also failed to go according to the prosecution's plans when he unequivocally stated that a first investigation into the disputed VNK share exchange had all the markings of having been ordered up against the company - and that Khodorkovsky's decision to protect VNK assets was well-founded. In response, the prosecution insisted upon reading transcripts of all interrogations that Golubovich had undergone in the out-of-court investigatory phase. After the transcribed interrogations had been read out, and the audio tapes of the same had been played back, the defence showed the court a detailed analysis of over 300 specific discrepancies, and asked the court to add this analysis to the case materials.
Meanwhile, a room in the courthouse previously reserved for journalists covering the trial has been turned into a lounge for the court bailiffs. The disappearance of television monitors from the room implies that the renewal of a live video feed from the courtroom is even less likely. At the prosecution's request, the live video feed was cut off in April, less than a month after the trial began.
YUKOS V. RUSSIAN FEDERATION
The opening hearing in the European Court of Human Rights case of Yukos versus the Russian Federation, initially scheduled for January 14th, was postponed to March 4th due to the unavailability of both Russia's ad hoc judge and its representative government agent. Andrei Bushev is the fifth judge appointed by Russia for the case, and this postponement appears to be the latest in a string of tactics aimed at delaying the ruling.
Shortly after the postponement, Russia's parliament voted in favour of passing the European Court of Human Rights Protocol 14, designed to streamline the Court's processes and reduce the backlog of pending cases. Russia was the final country to ratify Protocol 14. In doing so it reversed years of opposition to the reforms, which had delayed their implementation for the other signatories from the 47-country Council of Europe. Some political analysts suggested that Russia may be hoping to obtain a milder ruling in the Yukos case as a reward for its ratification of Protocol 14.
KHODORKOVSKY RECEIVES LITERARY AWARD
On January 13th, Znamya Magazine held a ceremony in Moscow at the Russian Library for Foreign Literature to present Khodorkovsky an award for his correspondence with Liudmila Ulitskaya. Khodorkovsky's daughter Anastasiya and his lawyer Yuri Schmidt accepted the award in his absence and the prize money was donated to the 150 children from military families that study at the Podmoskovny School in Koralovo.
A book featuring Khodorkovsky's correspondence with writers Boris Akunin, Boris Strugatsky and Liudmila Ulitskaya is soon to be published.
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